VAT is an indirect tax on goods. VAT is consumption-based tax and it imposed only on the amount of value addition.
It is a multi-point tax levied as a proportion of value addition, where the tax burden can be shifted from one person to another person until the ultimate consumer can consume the goods.
How Does It Work?
NAV considers below basic components for VAT implementation
Create G/L accounts for VAT Payable, VAT receivable and VAT settlement
Set up VAT business posting groups.
Set up VAT product posting groups.
Enter VAT posting setup combinations.
Assign VAT posting groups to Items/ Resources/vendors/customers
Reverse Charge VAT