What is the difference between VAT and CENVAT?
Well……VAT – Value Added Tax While CENVAT – Central Value Added Tax VAT- Value Added Tax VAT is a sales tax collected by the government (of the state in which the final consumer is located) – which is the government of destination state on consumer expenditure. Over 120 countries worldwide have introduced VAT over the past three decades and India is amongst the last few to introduce it. India already has a system of sales tax collection wherein the tax is collected at one point (first/last) from the transactions involving the sale of goods. VAT would, however, be collected in stages (instalments) from one stage to another. The mechanism of VAT is such that, for goods that are imported and consumed in a particular state, the first seller pays the first point tax, and the next seller pays tax only on the value-addition done – leading to a total tax burden exactly equal to the last point tax. CENVAT – Central Value Added Tax CENVAT is the new name for MODVAT. Basically they are the sam
