A value-added tax (VAT) is a consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. It is collected by VAT-registered traders on their supplies of goods and services affected within the State, for consideration, to their customers. It is charged and collected by dealers on the price paid by the customer. It is an indirect Tax on domestic consumption of goods and services. It is levied at each stage in the chain of production and distribution from raw materials to the final sale based on the value (price) added at each stage.
TIN stands for Tax-Payer Identification Number, A TIN is an identifying number used for tax purposes. It is also known as a Tax Identification Number. It is used to identify entities for tax-related purposes such as filing tax returns, or other actions such as opening a bank account. TIN Registration provides to the manufacturer or trader with a unique 11 digit number that is the same as VAT Registration Number. Therefore, VAT Registration, TIN Registration and CST Registration are one and the same.
- Tax Evasion - As compared to other taxes, there is a less chance of tax evasion. VAT minimizes tax evasion due to its catch-up effect.
- Easing Business Dealings –The advantage of voluntary VAT registration is issued with a VAT registration number and can more easily deal with external businesses.
- Reclaiming The Past – Being VAT registered means that we can reclaim the tax which have been charged when buying goods for the company. There are some goods and expenses which do not incur VAT. Voluntary VAT registration allows you to reclaim VAT from the last 4 years.
- Boosting Your Business Profile – starting out as a small business or new limited company it can be tough to compete against the big boys. VAT registered adds more credibility to your business, making it appear larger than it is, as well as creating a more professional image
- Simple and Transparent -VAT is simple to administer as compared to other indirect tax. VAT is transparent and has minimum burden to consumers as it is collected in small fragments at various stages of production and distribution.