VAT is a tax that is levied on services and goods and is paid to the government by producers although the actual tax is levied from the end-user or consumers who purchase the services and goods. This is important for GDP.
Taxation refers to the process of an authority levying certain charges on goods, services and transactions. It is one of the foremost powers held by the government of any country. Various types of taxes are applicable at various stages of the sale of goods and services; VAT is one such tax.
Source bankbazaar
