Question

Which one of the following is not a feature of “Value Added Tax” ?  

(a) It is 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 1

(d) VAT, being a 'tax on sale or purchase of goods within a State' is a State Subject by virtue of Entry 54 of State List of the Seventh Schedule of the Constitution of India. Since VAT/Sales tax is a State subject, the Central Government has been playing the role of a facilitator for successful implementation of VAT.