Charge to Tax- VAT
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Charge to Tax
VAT is collected on supply of goods or services if there is charge to VAT, i.e., levy of VAT. In simple words, whenever there is a supply of goods or services by any taxable person, then such supply will create a levy/charge to VAT.
Charge will enable the authorities to collect tax.
Now, in UK, VAT shall be charged in accordance with provisions of Value Added tax Act, 1994-
- on supply of goods or services in UK (including anything treated as such a supply)
- on the importation of goods into the UK
Once the charge is created, then next question might arise, then who is liable to pay VAT.
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- VAT on any supply of goods or services is a liability of the person making the supply and (subject to provisions about accounting and payment) become due at the time of supply
There might be certain situation where VAT shall be liable to pay by recipient and such situation called as reverse charge of VAT.
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