Wednesday, 21 March 2018

Connected Thinking: VAT in UAE and India

Last many years, The UAE and India have a good relationship and its become to be very strong, mostly in trade and commerce. The relation between two countries has got better with similar laws and regulations implemented by both countries it to possible only both region.

While Value Added Tax(VAT) have talk past in India now India not allow the VAT, The UAE launched the new tax government to drive the economic development of the country.

India first introduced Central Excise (Central VAT) with the objective of levying duty on creative activity. At the beginning limited to raw materials and components, after that, the scope of the VAT was the increase because extended to include capital goods.

Many years, the government announced the introduction of a State VAT in 2005 to levy VAT on sale of goods.

The VAT Rates in India had differed in every state and were based on the type of goods sold. The VAT is multistage Tax which is denoted at each stage of supply of goods which involve sale/purchase.

Every person is required to VAT Register because any person will be earning an annual turnover of more than Rs.5 lacs (around 29,000 AED) by supplying goods.The VAT was taxable both on local as well as an inter-state supply of goods.
Normally, in the UAE VAT was announced at a starting rate of 5% in this year. while not every item under the to the vat, there were a few exceptions including healthcare and education.Besides, only those businesses crossing the defined annual aggregate the turnover threshold was liable to register under VAT.

The companies in the UAE that report a yearly turnover of over Dh375,000 or more were grateful to be registered with the UAE VAT system. Companies whose turnover is around Dh187,500 had the option to register for VAT during the first phase of the VAT Implementation.

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