Value added Tax (VAT) is ___?

A. Again tax will be imposed on the cloth Equal to the value Addition from Yarn to Cloth
B. Thus under VAT tax is imposed on value Addition in Each and Every stage of Production
C. On each stage the tax is imposed only to the Amount of Value Added
D. All of these

Answer

Correct Answer: C. On each stage the tax is imposed only to the Amount of Value Added

Detail about MCQs

Value Added Tax (VAT) is a type of consumption tax that is imposed at each stage of the production and distribution chain. It is applied to the value added by each economic agent in the production and distribution process. This is in contrast to traditional sales taxes that are applied only at the final sale to the end consumer. Option C correctly describes how VAT operates.

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