Value added tax mean?

Value added tax mean?
Value-added tax (VAT) is an indirect tax on the supply of goods and services by a person (called a vendor). It is normally charged at a flat rate, based on the amount paid for the goods or services. Usually it is included in the price so that the price you see is the price you pay. So, for example, if VAT is 10% and the goods are sold for $100 plus VAT, the selling price will be $110 and the vendor will have to pay the $10 to the Fiscal or Revenue authorities.If the vendor had bought the goods from someone else for $60 plus VAT (a total of $66), he would be able to claim a VAT refund from the Fiscal or Revenue authorities of this $6. The net effect is that he has paid over $4 ($10 minus $6) on the transaction, hence the term 'value-added'. He has only paid tax on the value added by him.