Background of Sales Tax
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The concept of value added tax adopted in most of the countries over the world are some how a replacement of the existing sales tax system. It is an indirect form of taxation.
A sales tax can be simply defined as a tax imposed at the time of selling retail goods and services. The tax is generally collected by the retailer and passed to the Government. Sales tax is a percentage of the sell prices of the goods and services.
Sometimes the sales tax is also called as the consumption tax as it is collected from the customers directly.
The concept of value added tax adopted in most of the countries over the world are some how a replacement of the existing sales tax system. It is an indirect form of taxation.
A sales tax can be simply defined as a tax imposed at the time of selling retail goods and services. The tax is generally collected by the retailer and passed to the Government. Sales tax is a percentage of the sell prices of the goods and services.
Sometimes the sales tax is also called as the consumption tax as it is collected from the customers directly.
The practice of sales tax differs from one country to another. Some times various goods and services are also exempted from the taxation.
The practices of various types of taxation over the world are as follows:
In Canada the practice is such that, the sales tax are of three types, such as the Provincial sales tax, federal goods and services tax, and harmonized sales tax.
In United States most of the states impose the sales tax at the time of selling of goods and services. The present federal tax system is trying to adopt the value added tax in the country with a view to maintain higher equality.
In Australia the goods and services tax is a part of the value added tax.
