What is vat and its use?

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Currently set at 14%, Value Added Tax (VAT) is included in the price of most goods and services. Foreign visitors are not excempt for paying VAT on purchased goods. They may, however, claim back VAT paid on items taken out of the country when the total valued exceeds R250. The refund may be claimed at the airport of departure, at various harbors and at customs offices.

Who Can Claim?

Non-residents on a temporary visit to South Africa are eligible to claim a VAT refund.

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How to Go About Claiming Your Refund

Documentation

Simply identify yourself as a tourist to shop assistants, and request a Tax Invoice or an Export Tax Invoice (also known as a VAT 263 Certificate), for the goods you have purchased. A Tax Invoice must contain all the following information:

The amount of VAT charged, or a statement that VAT is included in the total cost of the goods.

The words "Tax Invoice" or "Export Tax Invoice"
The seller's VAT registration number

The seller's name and address

A full description of the goods purchased

A Tax Invoice Number

Date of issue of the Tax Invoice

The buyer's name

The cost of goods in Rands

Note: An Export Tax will not include the seller's name, address or VAT registration number.

Inspection: Be sure to have your purchases readily available for inspection on your departure from South Africa. NO INSPECTION, NO REFUND!

What documentation do you need to claim a VAT refund?

You need an original tax invoice reflecting the seller's name, address VAT registration number, invoice number, your name and full postal address, a complete description of the item/s purchased, the cost of the item/s in Rand with the VAT reflected separately or the cost including VAT with a statement that the price includes VAT.

NOTE: Carbon copies, photostat copies or facsimiles of the original tax invoices are not acceptable. You must insist on the correct documentation when purchasing an item.

You need to complete a VAT refund control sheet (VAT 255) which is obtainable at the international airports, harbours, certain endorse, the offices of the Receivers of Revenue and the offices of the VAT Refund Administration.

You must hold a foreign passport reflecting your country of residence/citizenship as other than South Africa.

What procedure must be followed when claiming a VAT refund?

When departing from South Africa, you must present the above documentation, together with all the items on which a VAT refund is claimed, at the VAT Refund Administration or Custom Office, as the case may be.

NOTE: It is essential that all the items on which VAT Refund is claimed, are presented for examination. If you cannot display the items and documents, you will not obtain a VAT Refund.

Vat
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Vat and VAT may refer to:

Value added tax
a type of barrel used for storage
a tank, often constructed of welded sheet stainless (corrosion resistant) steel, used for holding, storing and processing liquids such as milk, wine and beer
Virtual Allocation Table, a component of the Universal Disk Format
a form of Vietnamese wrestling

Value Added Tax - VAT. One Tax system all over India. It is applying 1st April 2004, we are using 4% VAT to purchase & sale of all raw & ready materials.With out VAT we can't supplied any Materials.

VAT refers to VALUE ADDED TAX RULES.

VAT will replace the present sales tax in India. Under the current single-point system of tax levy, the manufacturer or importer of goods into a State is liable to sales tax. There is no sales tax on the further distribution channel. VAT, in simple terms, is a multi-point levy on each of the entities in the supply chain with the facility of set-off of input tax - that is, the tax paid at the stage of purchase of goods by a trader and on purchase of raw materials by a manufacturer. Only the value addition in the hands of each of the entities is subject to tax. For instance, if a dealer purchases goods for Rs 100 from another dealer and a tax of Rs 10 has been charged in the bill, and he sells the goods for Rs 120 on which the dealer will charge a tax of Rs 12 at 10 per cent, the tax payable by the dealer will be only Rs 2, being the difference between the tax collected of Rs 12 and tax already paid on purchases of Rs 10. Thus, the dealer has paid tax at 10 per cent on Rs 20 being the value addition in his hands.

Purchase price - Rs 100
Tax paid on purchase - Rs 10 (input tax)
Sale price - Rs 120
Tax payable on sale price - Rs 12 (output tax)
Input tax credit - Rs 10
VAT payable - Rs 2

VAT levy will be administered by the Value Added Tax Act and the rules made there-under.

VAT can be computed by using either of the three methods detailed below

The Subtraction method:- The tax rate is applied to the difference between the value of output and the cost of input.
The Addition method: The value added is computed by adding all the payments that is payable to the factors of production (viz., wages, salaries, interest payments etc).
Tax credit method: This entails set-off of the tax paid on inputs from tax collected on sales.
India opted for tax credit method, which is similar to CENVAT.

Note : Also look for MODVAT

States such as Andhrapradesh, Kerala, Maharashtra, Madhyapradesh, Delhi and Haryana have experimented with VAT albeit in a limited manner, covering only limited goods. The experiments never had the full-fledged features of VAT and were only concoctions. These states have even called off their experiments owing to different reasons. If one analyses why VAT or its variant failed in Maharashtra, which was the only state to come closer to a true VAT regime, the following reasons emerge:

1. Dual methodologies of computation of VAT credit Error! Hyperlink reference not valid. , one for the Manufacturing stage and the other for the trading stage, thus breaking the audit trail. It may be noted that one of the advantages of VAT system, as we would be dealing later on, is the audit trail that is created in the VAT chain.

2. Presence of a large number of tax deferral and holiday schemes, which resulted in a narrow base. It may again be noted that under VAT, which is multi-point, the tax rates have to be reasonably low, and lower tax rates presupposes that the tax base is wide. These two features were not present in the Maharashtra tax regime.

3. Low level of awareness among traders, and even administrators, giving rise to fears and apprehensions. Owing to this, there was considerable consternation among the trade, which gave rise to open revolt against the system.

4. Partial implementation of the ideal VAT with the existing system coexisting even under this regime.

5. Increased burden on retailers of Bookkeeping and compliance.

6. Multiplicity of rates of tax under the VAT regime.

7. Drop in revenue for the State Government, though there are no studies attributing such reduction to the system of taxation.

Thus States had indeed tried some variations of VAT, but eventually gave up due to a variety of reasons..

Value Added Tax, which is levid on the producer of goods, when they pass through the production process from one producer to another. eg.cotton to thread ,thread to cloth......

Hi,
If U have PC or If U can browse PC at Cybercafe at yr place, Pl log on to Yahoo or Google web site...Pl search for VAT ...you will get lots of information at free/nominal of cost.

Value added tax (VAT) is tax on exchanges. It is levied on the value added that results from each exchange. It differs from a sales tax because a sales tax is levied on the total value of the exchange. For this reason VAT is neutral with respect to the number of passages that there are between the producer and the final consumer.

VAT is an indirect tax, in that the tax is collected from someone other than the person who actually bears the cost of the tax (namely the seller rather than the consumer). To avoid double taxation on final consumption, exports (which are, by definition, consumed abroad) are usually not subject to VAT or VAT is refunded which led to such consequenses.

VAT was invented by a French economist in 1954. Maurice LaurÃ©, joint director of the French tax authority, the Direction gÃ©nÃ©rale des impÃ´ts, as taxe sur la valeur ajoutÃ©e (TVA in French) was first to introduce VAT with effect from 10 April 1954 for large businesses, and extended over time to all business sectors. In France, it is the most important source of state finance, accounting for approximately 45% of state revenues.

Personal end-consumers of products, consumers and services cannot recover VAT on purchases, but businesses are able to recover VAT on the materials and services that they buy to make further supplies or services directly or indirectly sold to end-users. In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state. VAT was invented because very high sales taxes and tariffs encourage cheating and smuggling. It has been criticized on the grounds that it is a regressive tax

value added tax. four percent of buying cost is to be paid by purchser

Click on the link below for all about VAT of all the States of India
http://allindiantaxes.com/vat.php

plz call 9844562541
it is vast subject value add tax

The VAT Model

The VAT regime being implemented in India is based on the fundamental norm of â€œset-offâ€ for the tax paid earlier through the input tax credit mechanism. In the existing sales tax structure, there are problems of double taxation of commodities and multiplicity of taxes, resulting in a cascading tax burden. For instance, under the original system, before a commodity is produced, inputs are first taxed, and then after the commodity is produced with input tax load, output is taxed again. This causes double taxation. Under the VAT regime, however, a set-off is given for input tax as well as tax paid on previous purchases. Entities engaged in the manufacturing and trading of goods are able to claim tax credit on the materials and services that they buy to make further supplies or services directly or indirectly sold to end-users. This prevents the â€˜cascading effect of taxesâ€™ on the production and distribution processes of goods and services and encourage economic growth. In essence, this prevents overall distortions in the taxation regime.

The impact of VAT on the Integration of the Domestic Market

However, it is essential that we ensure that regional disparities do not distort the benefits of this economic boom. To ensure regional parity in national development, there is need for intergrating domestic markets to ensure smooth inter-state trade and commerce. In this context, the introduction of the state level VAT system is a laudable change in the indirect taxation system as it leads to harmonization of state taxation regimes across the board. As experiences in the European Union have shown, the harmonization of the taxation system through intiatives like VAT is a crucial step in the unification of domestic markets. I am confident that even in India, VAT will play an important role in the intergration of the domestic market and boost inter-state trade and commerce.

VAT Leads To Better Tax Administration and Compliance

The VAT design will significantly bring in simplicity and transparency in the tax structure, thereby improving tax-compliance and eventually boosting the revenue growth of state governments. The hallmark of the VAT system is that VAT liability will be self-assessed by the dealers themselves in terms of submission of returns upon setting off the tax credit. The existing system of compulsory assessment at the end of each year will be discontinued. Compulsory assessments will now be limited to a few cases where a specific notice is issued. This would make tax administration simpler and reduce the costs involved in revenue collection.

This system of self-assessment will be supplemented by audited mechanism where the assessments of a certain number of traders, selected on a scientific basis, will be assessed every year. This will ensure accountability and transparency in the system while avoiding undue harassment of traders and dealers.

Due to the inherent transparency and accountability in the system, VAT leads to not only better tax administration but also higher levels of compliance and lesser evasion. Tax evasion is a grave problem in a developing country like ours as it leads to a creation of a â€˜resource crunchâ€™ for developmental activities of the state. Reputed international institutions like the World Bank and IMF point out that the VAT regime prevents tax evasion and boosts revenues to help cash starved governments to come out of their debt-trap.

It is because of these benefits that VAT has been adopted in every region of the world, and by so many different kinds of nations. The system was initiated first in Brazil mid 1960â€™s while Europe adopted the system in 1970â€™s. In Asia, a large number of countries including our neighboring countries like China and Sri Lanka have been following this system for a number of years. We too have modified our tax regime to the VAT model and it seems that the experience so far by those states which have adopted VAT has been very positive.

If is seen that in states where VAT has been implemented there has been a substantial increase in the tax revenues of the government. There has been an increase of 20% of revenues in 2003-04 & 30% increase in 2004-05 in Haryana, Delhi has seen 29% rise in tax collection under VAT . Several other states have also reported significant increase in tax revenues after the introduction of the new system. In the years to come, it seems, VAT may provide greater revenue to the State governments.
Issues that need to be addressed

The Kelkar Committee Task Force has, however, highlighted some important issues that need to be addressed for the successful transformation to a VAT regime. To ensure that the immediate benefits accrued so far from this system are not lost, those issues should be examined.

Preparedness for State VAT : There is a manifest need for public awareness amongst the general populace. Joint Programme should be undertaken by all stakeholders to disseminate information about VAT and its benefits.

Uniformity of definitions : A conscious and earnest attempt needs to be made by all state governments to ensure uniformity of all State legislations, procedures and documentation relating to VAT. This would ensure greater harmonization between the taxation regimes of different states, eliminate unhealthy
competition and lead to the integration of the domestic market.

Compensation to States : The issue of compensation is possibly the most controversial and problematic point of contention in debate surrounding VAT. It must be tackled through mutually acceptable mechanisms.

Unification of all local taxes : The introduction of VAT should be supplemented by rationalization of the overall tax structure.

Credit on Inter-state transactions : The recommendation of the task force that needs to be effectively considered is the grant of credit of duty by the importing State for the duty paid in the exporting State, in the course of inter-State movement of goods. The implementation of this measure would ensure smooth inter-state trade and benefit the economy.

Stability and continuity of the VAT regime : Another aspect is step about the creation of a VAT Council. The Empowered Committee of State Finance Ministers has done good work in the implementation of VAT. A permanent suitable committee should be considered and may be vested with adequate powers to take steps against discriminatory taxes and practices and eliminate barriers to free flow of trade and commerce across the country.

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