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FINANCIAL MANAGEMENT
PRESENTED BY-
RACHITA DE
MBA SEM-1
ENROLLMENT NO.7NBGW041
INTRODUCTION
= HISTORY OF VAT(VALUE ADDED TAX)
The VAT was invented by a French
economist in 1954 Maurice Lauré, joint
director of the French tax authority .It was
first introduced 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.
VAT IN INDIA AND ASSAM
= In 1991 the Tax Reforms Committee headed by Dr. Raja J.
Chelliah, in the sphere of indirect taxes recommended gradual
switch over to the value added tax and withdrawal of the tax
related incentives. Since then many discussions were held at
the Govt of India level and many committees looked into the
gamut of introduction of VAT in the respective states. An
Empowered Committee of State Finance Ministers were formed
under the chairmanship of Dr. Asim Dasgupta. At that meeting
where all finance ministers were invited a broad a consensus
among the states to implement VAT from April l, 2005 was
taken. Meanwhile, the Central Government has promised its
full support and has also agreed to compensate the states
according to an agreed formula in the event of any revenue
loss. Ultimately, the VAT Act of 2003, with some amendments,
was implement in Assam on and from lst May 2005.
= ë
Value added tax °VAT goods and services tax °GST is tax
on exchanges. It is levied on the added value 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, a
VAT is neutral with respect to the number of passages that
there are between the producer and the final consumer.
= 2. Secondary Data:
= Secondary data collection method was also implemented where
data was collected both from books and internet.
=
=
LIMITATIONS
= !
=
=
"
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FINDINGS AND ANALYSIS
= The survey was conducted in Business units Numbers
the city of Guwahati with a
sample size of 50 persons Automobile 8
categorized into 30 dealers and
20 customers. The findings can Pharmaceuticals 6
be analyzed as under:
(a) 30 business units were Jewelry 1
grouped into following
categories:- Computers 1
Household goods 4
Groceries 5
Luxurious items 5
° #$ upation Numbers
Student 3
Professional employee 7
Senior citizen 2
Service holder 5
AGE GROUPS ± THE AGE GROUPS OF
THE SAMPLE HAS BEEN DIVIDED INTO
AS FOLLOWS:
O e roup Number
Below 20 3
20-30 7
30-40 13
40-50 17
Above 50 10
= DIFFERENT INCOME GROUPS AND
THEIR AWARENESS LEVEL
"
Income / month( Rs) Number Aware Not aware
Below 5000 6 0 6
5000-10000 18 3 15
10000-15000 14 4 10
15000-25000 8 5 3
Above 25000 4 4 0
aotal 50 16 34
= AWARENESS ÷ate ory Per enta e Per enta e
(aware) (unaware
LEVEL OF VAT )
ACCORDING
TO Business units 36.7 63.3
CATEGORY:
Out of 30
business units
only 11 and out of Consumers 25 75
20 consumers
only 5 are to
some extent
aware of what the
VAT is all about.
h h
150
h h
100 Unaware
50 Aware
0
Business Consumers
units
h
= EFFECT OF VAT ON THE
TURNOVER / ? e ts Per enta e
PURCHASING CAPACITY
OF THE BUSINESS
UNITS & CONSUMERS:
%$%
° Positive 10
&
Negative 6
'%$
&(# Same as 84
earlier
FFC F
U
DUCH
CC Y
j
= SATISFACTION LEVEL
?PN? P?÷?Na
OF THE BUSINESS O?
UNITS ABOUT THE
RESPONSE THEY ARE Good 46.7
GETTING FROM THE
CONCERNED
Poor 10
AUTHORITY
Out of 30,14 units are very much
satisfied about the response they Average, 43.3
are getting from tax authority, need some
other 13 units are though satisfied improvement
with the response but they need
some more improvement., rest 3
are not at all satisfied with the
authority.
SUGESSTION
=
= )
*
=
CONCLUSION
= VAT is easy to comply and tax collection under the system is
better. VAT is the modern and scientific way of taxing on final
consumption. This tax system is simple, tax payer friendly,
transparent, anti cascading, neutral, self policing and
inherently high compliant
= Under VAT system goods exported is not taxable. Thus the
system makes export competitive. As the VAT system captures
value addition and is taxed at every stage of value addition, it
provides a larger tax base. Under VAT system tax credit is
allowed on capital goods, thus it encourages investment. VAT
is considered to be better indirect tax system then the
prevailing erstwhile Sales Tax.
= The imposition of VAT has brought in some clarity in the tax
paying system and the dealers are generally satisfied whereas
the consumer are not so concerned about VAT.
=a