Question

What is value Added Tax (VAT)?

• A. A new initiative taken by the Government to increase the tax-burden of high income groups
• B. A simple, transparent, easy to pay tax imposed on consumers
• C. A single tax that replaces State tax like surcharge, turnover tax, etc.
• D. A new tax to be imposed on the producers of capital goods.

Answer 1

The Correct Option is C

The correct option is (C): A single tax that replaces State tax like surcharge, turnover tax, etc.
Explanation: Value Added Tax (VAT) is A single tax that replaces State tax like surcharge, turnover tax, etc. It is designed to streamline the tax system by consolidating various indirect taxes into one, making it easier for businesses and consumers.