Answer / satish

Vat tax cycle

Consumer - retailer - wholeseller - company = government

(1) a company on purchase of raw material pays (rs.40/-) as vat
(2) the same company on sale of finished goods receives (rs.45/-) as vat

Now on purchase (rs.40/-) is input vat
On sales (rs.45/-) is out put tax
Calculation vat input- vat out put
40 - 45 = rs.5/-
The rs.5/- has to be paid by the company to the govt as they received from the customer (purchaser)

So the ultimate vat payer is (the consumer or the purchaser or the ultimate product user )

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