What are the demerits of VAT?
CS Professional · Advanced Tax Laws and Practice · PYQS · December 2016
What are the demerits of VAT?
Answer & Explanation:
VAT has some demerits, such as follows: VAT is a multipoint tax. Credit may not be eligible if there is no proper evidence. VAT increases the cost of administration. Price may not be neutralized if the dealer does not follow the principles of VAT. Input Tax Credit not allowed for interstate purchases which results in cascading effect. It decreases the revenue of the department if proper checking of records of dealer is missing.
Topics: Indirect Tax
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