What is VAT ?
To put it simply, Value Added Tax or VAT for a dealer is the difference of tax payable on sales effected by him during a tax period after deducting therefrom the tax paid or payable on purchases effected from within West Bengal, during the same period.

The essence of VAT is in providing set-off through the concept of input tax credit or rebate for the tax paid or payable by a registered dealer while purchasing goods in West Bengal (input tax) against the tax payable on the sales effected by him in West Bengal (output tax). The VAT is based on the value addition to the goods, and the related VAT liability (net tax) of the dealer is calculated by deducting input tax credit from the tax collected on sales during the tax period (say, a month).

VAT is equivalent to the sales tax at retail level but is collected through the entire chain of production and distribution within the State.