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VALUE ADDED TAX (VAT)
VAT is the indirect tax on the consumption of the goods, paid by its original producers upon the change in goods or upon the transfer of the goods to its ultimate consumers. It is based on the value of the goods, added by the transferor. It is the tax in relation to the difference of the value added by the transferor and not just a profit.
All over the world, VAT is payable on the goods and services as they form a part of national GDP.
It means every seller of goods and service providers charges the tax after availing the input tax credit. It is the form of collecting sales tax under which tax is collected in each stage on the value added of the goods. In practice, the dealer charges the tax on the full price of the goods, sold to the consumer and at every end of the tax period reduces the tax collected on sale and tax charged to him by the dealers from whom he purchased the goods and deposits such amount of tax in government treasury.
Service Tax has been introduced in order to explore new avenues for taxation and to bring more people into the tax net. Service Tax generated revenue of Rs 2612 crores in 2000-2001. In 2001-2002 it is estimated at 3600 crores.
The rationale for the levy of Service can be traced to recommendations made in early 1990's by the Tax Reforms Committee headed by Dr. Raja Chelliah which envisaged that as the central excise duties on goods would get gradually transformed into a value added tax at the manufacturing level, service tax would get woven into that system. The Committee emphasized the importance of moving towards VAT, for making the system of indirect taxation broadly revenue neutral in relation to production and consumption and widening the tax base by covering exempted commodities. The basic objective of Service Tax is broadening the tax base, augmentation of revenue and larger participation of citizens in the economic development of the nation.
It therefore did not come as a surprise when in 1994 the then Finance Minister Sh. Manmohan Singh introduced the concept of Service Tax stating thus:
"There is no sound reason for exempting services from taxation, therefore, I propose to make a modest effort in this direction by imposing a tax on services of telephones, non-life insurance and stock brokers."
Personal Law is basically on the "Will", a will is an important document whereby any living person can bequeath (leave behind) his property to other persons after his death. A will is enforceable only after the death of the person who has made the will. The person who makes the will is known as the testator. In India, the Indian Succession Act, 1925 is applicable to Hindus, Sikhs, Jains or Buddhists. However, most of it doesnt apply to Muslims as Muslims are largely covered by Muslim Personal Law.
Under the Indian Succession Act 1925, a will has been defined as follows:-
"A Will is the legal declaration of the intention of the testator, with respect to his property which he desires to be carried into effect after his death." It is a document whereby a person makes a disposition of property, which is to take effect after his death. In other words, it is a testamentary disposition of property. A testamentary disposition of property means that the property gets disposed only after the death of the person making the disposition. When a person intends to dispose of his property by making a document, other than a Will, then the disposition of the property takes place, either immediately or, on a specifically mentioned date, if any.
Some important features of a will are as follows:
Legal declaration: It is a legal declaration. Certain formalities must be complied with in order to make a valid will. It must be signed and attested, as required by law.
Disposition of property: There must be some property which is being given to others after the death of the testator.
Operation after death: A will becomes enforceable only after the death of the testator. It gives absolutely no rights to the legatee (the person who inherits) until the death of the testator. It has no effect during the lifetime of the testator. The testator can change his will, at any time prior to his death, in any manner he deems fit.
Lord Justice Lindley has defined a company as "an association of many persons, who contribute money or, money's worth to a common stock and employs it in some trade or business and who share the profit and loss arising there from."
Chief Justice Marshall of the United States Supreme Court defined a company as "an artificial being, invisible, intangible and existing only in contemplation of the law. Being a mere creation of the law, it possesses only those characteristics which the Charter of its creation confers upon it either expressly or as incidental to its very existence."
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