gs1medium
Which one of the following is not a feature of "Value Added Tax"?
- A.It is a multi-point destination-based system of taxation
- B.It is a tax levied on value addition at each stage of transaction in the production-distribution chain
- C.It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer
- D.It is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation
▶ Answer & Explanation
Correct answer: D. It is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation
Value Added Tax (VAT) is a consumption tax that is levied on goods and services based on their value added. It is levied at each stage of the supply chain, from production to the point of sale. While the Central Government plays a role in policy formulation, VAT is primarily administered and levied by State Governments. Therefore, the statement that it is basically a subject of the Central Government with states as mere facilitators is incorrect.
Source: UPSC gs1 2011