Which one of the following is not a feature of Value Added Tax?

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Q: 16 (IAS/2011)
Which one of the following is not a feature of “Value Added Tax”?

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,68,125,24,56,45,68

keywords: 

{'taxation': [0, 0, 0, 3], 'tax': [0, 0, 0, 1], 'value': [0, 0, 1, 0], 'goods': [0, 1, 5, 27], 'productiondistribution chain': [0, 0, 0, 1], 'state governments': [3, 4, 3, 22], 'government': [5, 0, 0, 1], 'point destination': [0, 0, 0, 1], 'final consumption': [0, 0, 0, 1], 'consumer': [1, 2, 2, 5], 'central government': [1, 0, 0, 1], 'transaction': [0, 0, 1, 4], 'services': [0, 0, 7, 17], 'feature': [1, 0, 0, 2]}

The statement that is not a feature of Value Added Tax (VAT) is:

"It is basically a subject of the Central government and the State governments are only a facilitator for its successful implementation."

VAT is not basically a subject of the Central government. It is a concurrent subject, which means that both the Central and State governments have the power to levy and collect VAT. The Constitution of India empowers the Central government to levy tax on the manufacture of goods, while the State governments have the power to levy tax on the sale of goods.

The features of VAT include:

It is a multi-point destination-based system of taxation.

It is a tax levied on value addition at each stage of the transaction in the production-distribution chain.

It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer.

Therefore, the correct option is: "It is basically a subject of the Central government and the State governments are only a facilitator for its successful implementation."