A value-added tax (VAT) is a type of consumption tax that
is placed on a product whenever value is added at a stage of production and at
final sale. VAT is
most often used in the European Union.
The amount of VAT that the user pays is the cost of the product, less any of
the costs of materials used in the product that have already been taxed.
Tax Deducted at Source (TDS) is a means of collecting income tax in India, under the
Indian Income Tax Act of 1961. Any payment covered under these provisions shall
be paid after deducting prescribed percentage. It is managed by the Central Board for Direct Taxes (CBDT)
and is part of the Department of Revenue managed by Indian Revenue Service (IRS). It has a
great importance while conducting tax audits. Assessee is also required to file
quarterly return to CBDT. Returns states the TDS deducted & paid to
government during the Quarter to which it relates.