This is a tax on business transactions and is collected from all the registered dealers, who, in turn collect it from consumers. It has been replaced by VAT. It is value added tax. It has come in to effect in India from 1 April 2005.it is a multistage levy and is collected in transactions involving the sale of goods each time they change hands or value. It reduces the cascading the effect of taxes by providing for set-off of taxes that have already been paid or collected.
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