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As VAT is a multi-point tax with set-off for tax paid on purchases, it prevents repeated taxation of the same product.
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Simple and Transparent: In the Sales tax system the amount of tax levied on the goods at all stages is not known. However, in VAT, the amount of tax would be known at each and every stage of goods sale or purchase.
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VAT has the flexibility to generate large and buoyant revenues, as it levies tax on value additions.
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Zero rating of tax on exports is possible in case of VAT.
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Fair and Equitable: VAT introduces uniform tax rates across the state so that unfair advantage cannot be taken while levying the tax.
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Procedure of simplification: Procedures related to filing of returns, payment of tax, furnishing declaration and assessment are simplified under the VAT system so as to minimize any interface between the tax payer and the tax collector.
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Ability to provide same revenue to the Government with lower rates of tax.
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Tax does not become a cost of doing business.
