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A value-added tax, or VAT, is a tax on products or services when sellers add value to them. In some countries, VAT is called goods and services tax, or GST. Similar to a sales tax or excise tax, consumers pay the VAT tax, which is typically a percentage of the sale price. There is no VAT in the United States.

As with other consumption taxes, including goods and services tax (GST) or retail sales taxes, consumers pay value-added tax. VAT is not a charge on businesses — though sellers are responsible for collecting and remitting it.

A Value-Added Tax (VAT) is a consumption tax assessed on the value added in each production stage of a good or service. Every business along the value chain receives a tax credit for the VAT already paid. The end consumer does not, making it a tax on final consumption.

The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid on the inputs. The purpose of VAT is to generate tax revenues to the government similar to the corporate income tax or the personal income tax.

Value added tax is a general tax that applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services.

No, the United States has no VAT. The federal government raises money primarily through the income tax system. The states and local governments establish and collect their own sales taxes. Local governments rely primarily on property taxes.

Value Added Tax (VAT) is a kind of tax levied by the Central Government of India on the sale of goods/services to customers. Though it is supposed to be paid by the producers of goods and services, it is ultimately levied on the customers who purchase the goods/services when they tend to purchase and pay for them.

VAT (value-added tax), on the other hand, is collected by all sellers in each stage of the supply chain. Suppliers, manufacturers, distributors, and retailers all collect VAT on taxable sales. Similarly, suppliers, manufacturers, distributors, retailers, and end consumers all pay VAT on their purchases.