Mention the methods which are generally used for computation of VAT.

VAT can be computed by using any of the three methods detailed below: Subtraction method: Under this method the tax rate is applied to the difference between the value of output and the cost of input. Addition method: Under this method, value added is computed by adding all the payments that are payable to the factors of production and business expenses (viz., wages, salaries, interest payments, etc.). Input Tax Credit method: Under this method, it entails set-off of the tax paid on inputs from tax collected on sales. Indian states opted for tax credit method, which is similar to Cenvat. (output tax- input tax)