What is concept of consideration?
Answer: As provided under section 4 of the Federal VAT Bill, 2010, “consideration” means the total of the following amounts:
(a) the amount in money paid or payable by any person, whether directly or indirectly, in respect of, in response to, or for the inducement of the supply; and
(b) the open market price of anything paid or payable in kind, whether directly or indirectly, by any person in respect of, in response to, or for the inducement of the supply.
Consideration includes the amounts of Federal and Provincial taxes
(including VAT) paid or payable by the supplier. However, price discounts/rebates available under open market conditions are permissible under VAT.
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