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(1) When a trader sales to public so Output VAT is burden on him. Can you explain this?
(2) some time it also says that when selling to general public we have no further scope for any price increase.Can you explain these two.
When selling to another trader the burden of VAT is offset by the input VAT and it is passed on to the trader. When selling to the public – the public cannot reclaim the VAt as they are not registered and the burden falls on the trader.
Sometimes in this situation it may be hard to increase prices as the burden increases too.
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