How is the method of calculation of determining the tax liability under the present Sales Tax system different from this method ?
In the present Sales tax system, tax liability of a dealer for a particular period is determined using the multiplication method i.e. The taxable turnover of a dealer for a particular period is multiplied by the rate of tax applicable to that turnover. In VAT, the method adopted is Input Tax Credit method as stated above. This is the only difference between the present Sales Tax system and the VAT.
