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Understanding US Sales and Use Tax: Key Differences from VAT! Curious about the difference between US sales and use tax and VAT? Unlike VAT, sales tax in the US is applied only to the final consumer, with no federal tax but varied state and local regulations. The "use tax" complements it, ensuring compliance when sales tax isn't collected. Learn how economic nexus rules impact remote sellers and more. Stay ahead on tax strategies! 📊 Read the full guide here: https://lnkd.in/d7j_Tv8u #Tax #VAT #SalesTax #IndirectTax #ECommerce #TaxCompliance #InternationalBusiness

Difference between sales tax and VAT Both sales tax and VAT are types of indirect tax – a tax collected by the seller who charges the buyer at the time of purchase and then pays or remits the tax to the government on behalf of the buyer. Sales tax and VAT are a common cause of confusion within the corporate tax community. To explain further, let’s outline the similarities and differences between these two types of indirect tax. Know More: https://lnkd.in/gHXiYibz #CharteredSkills #OnlineLearning #ElearningPlatform #DigitalEducation #SkillDevelopment #VirtualLearning #OnlineCourses #ProfessionalDevelopment #LifelongLearning #KnowledgeSharing #EducationalTechnology #RemoteLearning #Upskilling #DistanceLearning #FutureOfWork #ContinuingEducation #ElearningCommunity #DigitalSkills #OnlineTraining #CareerAdvancement

Understanding Value Added Tax: Comprehensive Guide for Businesses and Consumers Value Added Tax (VAT) is a widely implemented consumption tax that applies to goods and services at each stage of production or distribution. It is a critical aspect of the tax system in many countries, impacting both businesses and consumers. Understanding Value Added Tax is essential for compliance and effective financial planning. What is Value Added Tax? Value Added Tax, commonly referred to as VAT, is a tax levied on the value added to goods and services at each stage of production or distribution. Unlike a sales tax, which is only applied at the point of sale to the end consumer, VAT is collected incrementally at each stage of production and distribution. Each business in the supply chain charges VAT on its sales and can reclaim VAT on its purchases, ensuring that the tax is ultimately paid by the end consumer. For businesses, VAT compliance involves registering for VAT, charging the correct amount of VAT on sales, maintaining accurate records, and submitting regular VAT returns to the tax authorities. Failure to comply with VAT regulations can result in significant penalties and damage to a business's reputation. Ho... #businesses #consumers #pricing #profitability #taximplications

New Requirements For Taxpayer in Monthly Sales Tax Filing in 2025 To ensure accountability and enhance transparency in Tax reporting, Federal Board of Revenue-Pakistan has issued a new SRO 55(I)/2025 and has introduced a new Annexure-“H1” in monthly Sales Tax Return. This SRO primarily, focuses on tax reporting of manufacturers, commercial importers, distributors, and wholesalers. Retailers are notably excluded from this requirement. The Annexure-“H1” requires Taxpayer to provide specific details of business, including the HS code, product/unit descriptions, Measuring Unit, opening stock, product produced, purchases, sales, and closing stock values. This collection of data shall help FBR to curb tax evasion and reduce discrepancies by cross-checking/verifying monthly and annual tax filings. Under the Annexure-H1, the Businessman/Taxpayer is required to enter/provide: 1. Monthly Inventory Data Report; Manufacturers are required to declare opening stock, production capacity, units produced and closing stock. 2. Additional Details: For accuracy in tax calculation, specific data of products/units such HS codes, Sales tax rates, and measuring unit shall be required by the taxpayer/businessman. 3. Consistent Monthly and Annual Tax Returns: Sales Tax Return and Annual Tax Return must align with each other and must be consistent.

FBR Clarifies Temporary Sales Tax Registration Process FBR has issued a detailed explanation of the temporary sales tax registration process, which is already defined under Rule 5A of the Sales Tax Rules, 2006. Read More: https://lnkd.in/dnp_sZy3

*The Federal Board of Revenue (FBR) has finalised revised sales tax schedules, ie, Sixth Schedule (Exemption list) and Fifth Schedule (zero-rated goods) of the Sales Tax Act, 1990, for the upcoming budget (2024-25).* It is learnt that the number of exempted goods mentioned in the Sixth Schedule (Exemption Schedule) and Fifth Schedule (zero-rated items) has been proposed to be reduced under Finance Bill 2024. These items would be subjected to a standard rate of 18 percent sales tax in the budget (2024-25). The exemption available to diplomats and health/medical items and foreign investment including Chinese projects would remain exempt under government’s agreements. The budget makers have reviewed the entire list of zero-rated items and sales tax-exempted items for the purpose of charging sales tax on them. Sales tax exemption has also been proposed to be withdrawn from the local supply of many items. Sources stated budget makers have proposed 18 percent sales tax on many items presently charged at the rate of zero percent under the Sales Tax Act 1990. Sources added that a large number of items have been excluded from the Sixth Schedule (Exemption Schedule) and Fifth Schedule (Zero-Rated Schedule) under the proposed Finance Bill 2024. Hamid Ullah Khan CEO Unified Group 03004020902 www.ubespk.com

The case of M/s Shivbhola Filaments Private Limited v. Assistant Commissioner CGST involves a petition filed by Shivbhola Filaments Private Limited against the order of an appellate authority which had rejected their refund claims on Goods and Services Tax (GST) paid. The company, engaged in manufacturing Polypropylene Yarn and narrow woven fabric, faced a situation where the GST rate on inputs (18%) was higher than that on their outputs (12% and 5%), leading to an excess input tax credit, for which they sought a refund. The petition challenged the appellate authority's order dated November 18, 2021, which rejected the company's appeals against the adjudicating authority's decision to deny the refund applications. These applications had been rejected primarily due to discrepancies and mismatches between the claimed input tax credits and the details reflected in their GSTR 2A forms. Shivbhola Filaments contended that they were not given a proper opportunity to be heard before their claims were rejected, and they provided reconciliation statements attempting to clarify and adjust their claims in line with the GST returns filed. Despite these efforts, their refunds were denied based on findings of frequent and significant changes in the value of inverted rated supply of goods, mismatches in trading and inverted turnover, and inconsistencies in the total adjusted turnover and tax payable. The High Court of Delhi, presided by Justice Vibhu Bakhru and Justice Amit Mahajan, found merit in the petitioner's arguments. The court noted that the authorities did not allow the company a fair chance to reconcile the mismatches or explain the discrepancies. Consequently, the court set aside the order of the appellate authority as well as the original adjudicating authority's orders, and remanded the matter back to the adjudicating authority. The court instructed the adjudicating authority to reassess the refund applications after giving the petitioner an opportunity to be heard and to present a detailed reconciliation statement within two weeks. This decision underscores the importance of procedural fairness and the right of taxpayers to a hearing, particularly in complex tax matters involving reconciliations and adjustments of input tax credits against output liabilities.

Take a look at Kintsugi’s newest guide to "What is the Difference Between Sales Tax and VAT: What Sets Them Apart?" Read more here: https://lnkd.in/edRNZzty 1️⃣ Definition: Sales tax and VAT are both consumption taxes, but they apply differently. Sales tax is added at the point of sale, while VAT is applied at each stage of production. 🛒 2️⃣ Calculation: Sales tax is a percentage of the final sale price. VAT is calculated at each production stage based on value addition. 📊 3️⃣ Impact on Businesses: Sales tax is straightforward but requires careful tracking. VAT involves more documentation but allows for tax credits. 🧾 4️⃣ Global Perspective: Sales tax is common in the US, while VAT is prevalent in Europe and other parts of the world. 🌍 5️⃣ Compliance: Businesses must understand local tax laws to ensure compliance and avoid penalties. Regular updates and accurate record-keeping are crucial. 📚 6️⃣ Customer Experience: The way taxes are applied can affect pricing and customer perception. Clear communication helps in managing customer expectations. 💬 💬 Join the Kintsugi's Discussion: How is your business navigating these challenges? Follow Kintsugi for more sales tax tips every week and to share your strategies and insights on Sales Tax and VAT! #Ecommerce #SalesTax #VAT #BusinessInsights #TaxCompliance #Kintsugi #BusinessOperations #SmallBusinessTips #FinanceManagement #BusinessStrategy

The Federal Board of Revenue (FBR) has finalised revised sales tax schedules, ie, Sixth Schedule (Exemption list) and Fifth Schedule (zero-rated goods) of the Sales Tax Act, 1990, for the upcoming budget (2024-25). It is learnt that the number of exempted goods mentioned in the Sixth Schedule (Exemption Schedule) and Fifth Schedule (zero-rated items) has been proposed to be reduced under Finance Bill 2024. These items would be subjected to a standard rate of 18 percent sales tax in the budget (2024-25). The exemption available to diplomats and health/medical items and foreign investment including Chinese projects would remain exempt under government’s agreements. The budget makers have reviewed the entire list of zero-rated items and sales tax-exempted items for the purpose of charging sales tax on them. Sales tax exemption has also been proposed to be withdrawn from the local supply of many items. Sources stated budget makers have proposed 18 percent sales tax on many items presently charged at the rate of zero percent under the Sales Tax Act 1990. Sources added that a large number of items have been excluded from the Sixth Schedule (Exemption Schedule) and Fifth Schedule (Zero-Rated Schedule) under the proposed Finance Bill 2024.

Submitted on Sun, 01/26/2025 - 13:14 Submitted by: Anonymous Submitted values are: Category Others Subject The sellers collect GST from the seller but due to their failure to file returns the buyer is unable to avail the benefit of the input Issue Suggestion on buyer's problems in GST--------Respected, in GST putting the entire responsibility of mismatch in buying and selling on buyer is a practical option because seller files the return late, seller files the return late Whether the buyer does not pay the tax or the seller does not deposit the tax is not in the hands of the buyer. Apart from this, the buyer does not have the right to make the seller do so. To avoid losses of lakhs of rupees every year, some companies have started paying taxes. In the terms and conditions of the purchase order, the GST amount will be paid after one month on confirmation of filing of GST return by the seller. But this is not a permanent solution. This also causes loss to the good buyer. GST is VAT And GST was introduced to solve the problems of Central Excise but the problem of input credit not only exists but has become more serious. Let us see what is the problem of mismatch of input credit of GST. A dealer buys goods from his vendor and in this he pays GST along with the goods and out of the GST collected on his sales, he passes this GST on to his vendor, which is called ITC or input credit. Thus, he pays additional tax on his margin and this is the basic principle of GST. Now suppose that the input credit of a dealer is restricted because his dealer has to pay tax on his margin. ¤ �If the buyer has not filed the return on time or has not paid the tax or has made some other mistake, then a big problem arises for the buyer. The buyer has no control over whether his seller will pay the tax on time or not. But pay the tax and file the return on time. Saying that the credit for the delayed return will be available next time is not a solution to this problem. GST is a value addition tax and a dealer has to pay tax only on his value addition but sometimes if he has to pay tax on the entire sale in a month then it may take months to recover it. Understanding the problem of burden of working capital The government should identify the sellers for not filing returns and make them pay the tax and should compel them to file returns and tax and there is no justification in giving the penalty to the buyers by stopping the input credit because the buyers have no responsibility on this. There is no control while the government has the authority. The government should make strict laws to recover the GST from those vendors who do not pay it in the bill.