MACRO ECONOMICSTRADE AGENDA – BI LATERAL & MULTI LATERAL

SuryaKumar TVIT BS

GATTGATT- General Agreement on Tariff and TradeIt is formed by 1947 at Geneva which involved

47 countries by that time. It is closed by 1995 with 195 countries followed

in GATTIt has an agreement of reducing 10% tax on

every year. GATT had no legal status, separate agreement

on separate issues. These were not binding on all members. Any member could stay out of any agreement.

GATT Rules were applicable only to trade in goods, they did not include on service

VATVAT- Value Added Tax. It is a consumption tax.When the product is passed from single

retailer/manufacturer to another retailer/ manufacturer or to the final customer the VAT is applied.

VAT◦ Buyer: Tax on purchase price◦ Seller: Tax only on the value added product/service.

The value for the product is added in each situation where the tax is applied on that condition.

VAT is applied as CENVAT and STATEVAT

CENVAT & STATEVATCENVAT- Central Value TaxCENVAT is paid to the central

government, where it involves a B2B process.

CENVAT is applied on all the stages of product/service development except sales of the product to the end customer.

STATEVAT is paid to the state government

It is the tax paid while selling the end product to the customer.

IMPORTER & DOMESTIC PRODUCER TAX TERMS:

◦ BCD- Basic Customs Duty◦ AD- Advalorem Duty◦ ADD- Antidumping Duty◦ CUD- Countervailing Duty

Importer tax is levied with BCD+CUD+AD. Domestic producer tax is levied with Cenvat+

Excise Duty+ AD If Importer tax is greater than the Domestic

producer tax, Anti dumping duty tax is levied for the Importer.

Even after adding the Anti Dumping duty, if the importer tax is greater the particular product is banned from the market.

Thank you