The tax period for calculating VAT is. For dummies: VAT (value added tax). Tax return, tax rates and VAT refund procedure. Zero VAT rate, features of its application

Value added tax (VAT)– one of the most popular taxes among financiers and individual entrepreneurs. In this article we will analyze the formula for calculating VAT, who should pay it, who should not, how to calculate it correctly, how you can separate it from the amount and what is the main basis for making calculations. We will also consider equally interesting questions regarding the deadlines for paying VAT, submitting basic reports and the features of this procedure.

VAT calculation formula

VAT is calculated using a standard formula, which looks like this:

VAT = tax base * tax rate / 100%

Value added tax is calculated using a standard formula identical to all other types of taxes. The main differences are in the interest rates and calculation of the tax base.

Calculation of the VAT tax base

The tax base– the cost of products or services, which is determined on the day of shipment of goods or provision of services or on the day of receipt of an advance payment. The total amount of contributions for value added tax is calculated from the tax base.

VAT rate calculation

Tax rate– an interest rate that determines the amount of contributions for the sale of products or provision of services. In accordance with the Tax Code of the Russian Federation (Article 164 of the Tax Code of the Russian Federation), interest rates are 0%, 10% and 18%. Let us consider in more detail which goods/services these tax rates apply to.

Rate 0%

A tax rate of 0% is used when calculating VAT on the value of exported goods. This rate means that foreign buyers do not pay VAT to their suppliers. The export company does not charge VAT on the goods it sells and does not pay tax to the budget. At the same time, a zero rate does not mean that export organizations are completely exempt from paying tax on purchased goods. VAT on goods purchased by suppliers can be reimbursed from the budget.

To calculate VAT at a rate of 0%, an organization needs to collect all documents, a list of which can be seen in Article 165 of the Tax Code of the Russian Federation. According to the law, it is necessary to provide documents 6 months from the date of export of products. If the documents are not submitted on time, you will have to pay VAT to the budget at a tax rate of 10 or 18%. When issuing an invoice, the company provides the foreign partner with a zero interest rate.

This interest rate is also used for the sale of certain types of goods, the list of which is reflected in Article 164 of the Tax Code of the Russian Federation. This list includes such goods as: precious metals, machine tools, equipment used in the space industry, etc.

Rate 10%

The tax rate is used to calculate VAT on socially significant groups of goods. Their list is given in paragraph 2 of Article 164 of the Tax Code of the Russian Federation. There is a fairly extensive list of products, so it is better to familiarize yourself with it; this group includes:

• Food products.
• Medical products, including medical equipment and medicines.
• Products for children and teenagers.
• Printed products, etc.

The rate is 18%. Example of VAT calculation

In all cases where a rate of 0 or 10% is not used when calculating VAT, a tax rate of 18% is used. Let's give an example of calculating VAT on an amount.

In addition to the VAT tax rates of 0, 10 and 18%, two more rates are applied:

100% * 10% / 110%

100% * 18% / 118%.

These tax rates are applied when it is necessary to separate VAT from the amount.

Features of the VAT payment procedure. Deadline for submitting the VAT return

All organizations have a single reporting period – a quarter. At the end of the quarter, the amount of VAT that must be paid to the budget is taken into account. Based on the data received, a declaration is filled out and sent to the tax office. Payment is made before the 20th day of the month following the reporting quarter. This means that it is necessary to submit a declaration 4 times a year before the 20th of such months: April, July, October, January. Since 2015, the deadline for filing declarations for this type of taxes has been increased by 5 days, that is, documents must be submitted before the 25th of the above months.

The estimated amount is paid monthly. It is calculated in this way: the VAT indicator for the previous quarter is calculated, this amount is divided into three parts and paid over the next 3 months (until the 25th).

Let’s assume that for the first quarter, from January to March, a tax of 100 thousand rubles was calculated. Starting from the second quarter, the organization must pay 1/3 of this amount (33 thousand rubles) by April 25, another 1/3 of the amount by May 25, and the rest by June 25. Next, VAT for the second quarter is calculated and paid in similar equal parts. Payment is due by the 25th of July, August and September.

The tax period for VAT is specified in Art. 163 Tax Code of the Russian Federation. It is necessary to know it in order to pay tax on time and report on it. The duration of the VAT tax period has already changed more than once: it was equal to both a month and a quarter. From our article you will learn for what period the VAT return is currently being prepared and what time frames you need to report and pay for this tax.

What is the difference between a tax period and a reporting period?

The tax period is the time at the end of which the tax base is determined and the tax is calculated. Each type of tax has its own tax period, and each of them can contain several reporting periods.

The reporting period is the time at the end of which reports are compiled and submitted. In addition, a reporting period can also be established for taxes for which reporting is submitted only once per tax year, but during this year intermediate (advance) payments are calculated for them (for example, simplified tax system, land and transport taxes).

Read more about the tax and reporting period in this article.

Tax period for VAT

The tax period for VAT is quarterly (Article 163 of the Tax Code of the Russian Federation). If the enterprise was registered after January 1, then the beginning of its VAT tax period will be considered the day of its registration (Clause 2 of Article 55 of the Tax Code of the Russian Federation). If the company was liquidated or reorganized, then the last tax period will be considered the day of its liquidation (reorganization), i.e., the day when the procedure was formalized by the corresponding entry in the Unified State Register of Legal Entities (clause 3 of Article 55 of the Tax Code of the Russian Federation).

Tax period for VAT in 2019

The tax period for VAT in 2019 is still equal to a quarter. And no changes are expected here. Payment of VAT is made before the 25th in equal shares of 1/3 of the total amount of accrued tax over the 3 months following the tax period (clause 1 of Article 174 of the Tax Code of the Russian Federation).

VAT reporting period

The reporting period for VAT coincides with the tax period and is a quarter. This means that VAT reporting is prepared quarterly (that is, data is entered into the form not on an accrual basis, but separately for each quarter). In other words, the VAT return is submitted to the Federal Tax Service at the end of each quarter of the year and contains only data related to that specific quarter.

The deadline for filing VAT reports in 2019 is no later than the 25th day of the month following the tax period (Clause 5, Article 174 of the Tax Code of the Russian Federation). This provision applies to both VAT taxpayers and tax agents for this tax.

The declaration must be submitted electronically. If the declaration is submitted on paper, it is considered unsubmitted. In this case, a fine will be charged for failure to submit a declaration (Article 119 of the Tax Code of the Russian Federation), and the account may also be blocked (clause 3 of Article 76 of the Tax Code of the Russian Federation).

In addition to taxpayers, VAT returns are submitted (clause 5 of Article 174 of the Tax Code of the Russian Federation):

• tax agents who are not VAT payers or are exempt from performing duties related to the calculation and payment of VAT;
• enterprises that are not VAT payers, but have issued an invoice with the allocated VAT amount.

When liquidating or reorganizing an enterprise, it is better to coordinate the time for submitting VAT reports with the local tax authorities (clause 5 of Article 55 of the Tax Code of the Russian Federation). If there is no such agreement with the inspectors, then the declaration should be submitted within the prescribed period. But this must be done before the date of liquidation/reorganization, since after making an entry about this in the Unified State Register of Legal Entities, the enterprise no longer exists and there is no one to submit reports to.

Value added tax is the most significant of the indirect taxes at the federal level, which performs two important functions - fiscal (mobilizing tax revenues to the budget) and regulatory (strengthening control over the quality and timing of the promotion of goods and stimulating production accumulation).

The basis for collecting VAT is the added value that is created at each stage of production and turnover.

Object of taxation

The object of value added tax in Russia is the entire turnover of sales of goods (works and services) produced by an enterprise.

In order to allocate VAT and to avoid double taxation, the difference between the amount of tax paid to the supplier and received from the consumer is transferred to the budget. As a result, this amount is charged to the end consumer of the product and does not affect the interests of manufacturers and resellers.

Art. 146 of the Tax Code (TC) of the Russian Federation defines the following objects of VAT taxation:

1. Sales of goods (works, services), including transfer of ownership rights and sale of collateral. The exception is: the provision of premises for rent to foreign organizations that are accredited in Russia or to foreign citizens, the sale of medical goods according to the list approved by the Government of the Russian Federation, ritual goods and services included in the list approved by the Government of the Russian Federation, handicraft goods, except for excisable goods.
2. Transfer of goods for one’s own needs, the costs of which, in the process of calculating income as profit, are not deductible;
3. Construction and installation work that was performed for one’s own needs;
4. Import of products into the customs territory of Russia.

Payers of value added tax

According to paragraph 1 of Art. 143 of the Tax Code of the Russian Federation, the VAT payer is:

• absolutely all enterprises and organizations, regardless of their organizational and legal forms, types of activities, forms of ownership, etc., carrying out any commercial activity;
• individual entrepreneurs;
• international associations;
• institutions with foreign investment;
• persons moving goods across the customs border of the Russian Federation;
• tax agents are not VAT payers, however, according to Art. 161 of the Tax Code of the Russian Federation, in cases specified by law, they are obliged to withhold VAT from their suppliers and pay it to the budget, while they must submit reports on these transactions to the tax authorities.

Taxpayers who have switched to a simplified taxation system and agricultural enterprises using the single agricultural tax are not VAT payers. Organizations and individual enterprises that pay a single tax are not VAT payers. Moreover, if an organization conducts several types of activities, then it pays VAT on those types that are not subject to a single tax.

VAT defaulters do not submit reports and do not keep accounting records for this tax, do not allocate VAT amounts in settlement documentation, and do not issue invoices to their clients.

In 2014, new VAT benefits were introduced. Thus, from January 1, 2014, the following are exempt from taxation:

• sale of pension savings management services;
• operations that are carried out as part of clearing activities;
• operations on the assignment of rights under obligations that arose on the basis of financial instruments of futures transactions, which are exempt from taxation.

Clause 2 of Art. 143 of the Tax Code establishes organizations that are not recognized as VAT payers:

• organizations-international organizers of the XXII Olympic Winter Games and XI Paralympic Winter Games in 2014 in the city of Sochi or foreign partners of the International Olympic Committee, regarding operations that are carried out for the period and within the framework of the XXII Olympic Games and XI Paralympic Games 2014 in the city of Sochi;
• official broadcasting companies providing television and radio broadcasting for the period of the XXII Olympic Games and XI Paralympic Games 2014 in Sochi.

It should be noted that these provisions of paragraph 2 of Art. 143 of the Tax Code of the Russian Federation will be valid until 01/01/2017 (clause 6 of article 12 of the Federal Law of July 30, 2010 No. 242-FZ).

Tax exemption

The Tax Code of Russia has provided for the possibility of exemption from the calculation of value added tax. This requires certain conditions to be met.

Firstly, the amount of revenue for a certain period should not exceed the established limit.

The amount of revenue includes income from both taxable (including at a tax rate of 0 percent) and non-taxable goods.

When calculating the amount of revenue, the following are not taken into account:

• income from sales, if the activity carried out in this case is subject to a single tax;
• amounts of funds, the list of which is presented in Article 162 of the Tax Code of the Russian Federation;
• proceeds from sales free of charge;
• operations carried out by the tax agent, guided by Art. 161 Tax Code of the Russian Federation.

Secondly, in order to obtain an exemption from VAT, the payer must not be involved in the sale of excisable products for three consecutive months preceding the start of using the exemption.

Despite all its attractiveness, VAT exemption also has negative aspects - for example, strict restrictions on revenue volumes. That is, using this privilege is beneficial only for those enterprises whose turnover is consistently small.

VAT tax rate in 2014

Today, three tax rates are used in Russia, which began to operate in 2009: 0%, 10% and 18%.

A tax rate of 0 percent is applied to the sale and export of goods, international transportation of goods, in the oil and gas industry, electric power, precious metals, shipbuilding, space activities and a number of transport services (Clause 1 of Article 164 of the Tax Code of the Russian Federation). However, natural gas and oil that are transported to the CIS countries are taxed at a rate of 18 percent. In essence, applying a 0 percent rate is an exemption from VAT.

According to paragraph 2 of Art. 164 of the Tax Code of the Russian Federation, the rate of 10 percent is determined when:

• sales of food products (according to a special list);
• sales of children's goods (according to a special list);
• sales of periodicals and book products, in addition to advertising and erotic ones;
• when selling medical products of domestic or imported origin (according to a specific list).

Calculations at a tax rate of 18 percent are applied if the transaction performed does not belong to the lists taxed at a rate of 0 percent or 10 percent.

The procedure for calculating and calculating the tax base

The tax base for VAT is the sum of all profits received from the sale of goods. The following amounts may also be included in the tax base:

• advances received. The exception is advances received for goods (work, services), taxed at a rate of 0 percent;
• money for goods received as financial assistance;
• payments for insurance against the risk of unfulfilled obligations;
• interest on a trade loan, bonds, bills (the tax is taken only from a portion of the interest amount, which exceeds the refinancing rate of the Bank of Russia);

The amount that the taxpayer pays to the budget is the difference between the tax received on the sale of material assets and the tax paid on the purchase of goods.
In the process of calculating the tax base, it should be remembered that it depends on how much the tax rate is. If different VAT rates are applied when selling goods, then the tax base will be determined separately by type of activity.

Calculating the VAT amount is very simple. To do this, we introduce the following conventions:
X- the price of the product;
A- Price with VAT;
IN- Price without VAT;
WITH- VAT amount;
the tax rate is conventionally 18 percent.

If you need to find out how much a product will cost, including VAT, then we will use the formula
A = X + (X * 0.18)
To calculate how much a product will cost without VAT you need
C = A * 18/118
B = A - C
As you can see, you can calculate VAT even using a calculator. Recently, special VAT calculators have appeared that automatically carry out calculations; all the user needs to do is enter the initial data.

The Tax Code provides that the payer has the right to reduce the total amount of tax by established deductions. The procedure is such that the amounts that are subject to deduction are those that the taxpayer pays for goods (work, services) purchased by him on the territory of Russia, or for goods paid by him when imported into the customs territory of the Russian state. For an enterprise that is a VAT payer, you can also add to the deduction the amount of tax transferred to suppliers.

To fulfill this condition, it is important that the product was purchased for VAT-taxable transactions, was paid for, and had an invoice. VAT accrued on the sale, which is paid by the seller, is subject to deduction in the event of the return of the goods.

Payment procedure and terms

Based on actual sales over the past period, the VAT payer pays tax to the budget and submits a tax return to the tax authority. The payment deadline is the 20th of each month. When this date coincides with a weekend (holiday), the last deadline will be the first working day after it (that is, the tax period is a calendar month). Value added tax is paid by the taxpayer at the place of actual registration. This procedure is determined by Article 163 and Clause 1 of Article 174 of the Tax Code of the Russian Federation.

From the moment the payer submits a payment order to the bank to pay VAT, the tax is considered paid, and when paying in cash - from the moment the money is deposited at the bank cash desk. If payment is not made on time, the tax authority may charge the organization a penalty.

To calculate the amount that an enterprise pays to the budget, the following calculation is used:
Supl = Stotal + Srestort - Scalc
Supl- amount to be paid;
Stotal- tax amount;
Scalc- the amount of tax deduction;
Srestor- restored tax amount;
It should be noted that if the sale of goods was made in foreign currency on the territory of the Russian state, then the taxpayer pays VAT in the same currency.

This payment procedure does not apply to enterprises whose sales revenue does not exceed one million rubles during the quarter. The tax period for such organizations is one quarter.

As for the tax return, the rules for filing it in 2014 have changed somewhat. Thus, Federal Law No. 134-FZ dated June 28, 2013 amended Art. 80 of the Tax Code and in paragraph 5 of Art. 174 of the Tax Code of the Russian Federation “Procedure and deadlines for paying taxes to the budget”, according to which tax reporting in 2014 will be submitted via e-mail.

Value added tax or VAT is an indirect payment to the budget for each product or service, which is paid as enterprises sell their products. The cost of this tax is always included in the selling price, so it is generally accepted that it is paid by the end consumer.

The main advantage of using a system with value added tax is the elimination of a cascading increase in price at each stage of sales due to the withdrawal of payments from each link, including intermediaries.

Invented by the Frenchman Maurice Lauret back in 1954, and tested in colonial countries, the system is now used in 137 countries around the world. The exception among highly developed countries is the United States, which uses a sales tax system. VAT rates in different countries range from 5 to 30%; in Russia, since 2004, payment for the main deduction is 18%, for goods on a special list (preferential) - 10%.

Payers of value added tax

The chain of product sales stretches from the manufacturer to wholesale enterprises, from them to individual entrepreneurs and retail enterprises, only after that the products end up in the hands of the consumer. In the VAT system, it is important that the tax is collected once, and then its value is transferred throughout the chain.

VAT payers are recognized:

Financial and industrial enterprises, regardless of their form of ownership and affiliation, carrying out commercial and production activities are producers of goods and services.

Enterprises with foreign capital conducting production and commercial activities in the country

Insurance agencies and banks licensed to operate

Private enterprises created with the right of full management, whose activities include production and wholesale and retail sales of goods

Branches and subsidiaries that do not have a legal entity, but carry out the production and sale of services and goods

Individual entrepreneurs whose sales of goods provide a turnover of at least 2 million rubles per year

Individual entrepreneurs and organizations transporting goods between the countries of the Customs Union

Non-profit organizations involved in the sale of goods and services

In Russia, taxes are not collected from the organizers of international competitions and their foreign partners. Thus, all activities related to the Olympic Games in Sochi and the Eurovision Song Contest in Moscow were not subject to value added tax. Organizations and entrepreneurs may be exempt from paying VAT in cases where their revenue does not exceed 2 million rubles.

Objects of taxation

According to the Tax Code, the objects of VAT taxation are not the services and goods themselves, but transactions associated with a change of ownership:

Sales of services and products on the territory of the Russian Federation, including operations for the sale of collateral, transfer of goods and work performed, property rights

Import of goods into the territory of the Russian Federation

Construction and installation works

Purchasing goods and services for own consumption

Actually, value added tax is imposed on the sale of all goods and services from manufacturers and participants in international trade within the Customs Union, with the exception of situations included in the list of transactions that not subject to taxation:

Sales of medical products and equipment of domestic and imported production

Trade in goods and literature for religious purposes

Provision of medical services, with the exception of cosmetic, sanitary-epidemiological and veterinary private institutions. State organizations providing this range of services are not subject to value added tax.

Sales of food products by public canteens and buffets directly at enterprises

Sale of postage stamps and postcards, excluding collectibles, envelopes and lottery tickets

Sales of goods in duty-free shops

Sale of coins recognized as a payment instrument in Russia, exchanging them for paper

Providing commercial leases to foreign citizens and organizations accredited on the territory of the Russian Federation

All banking operations, except collection

Research and development activities carried out at the expense of the state budget

Operations with cash loans and securities turnover

Providing firefighting services and assistance to people in need

Carrying out diagnostics and repairs of production equipment abroad, previously purchased from foreign partners

Activities of lawyers

Taxable period

Value added tax is an indirect form of taxation, according to which part of the cost of a product or service is transferred to the budget as the product or service is sold.

A tax period is a period of time that applies to individual tax deductions. At the end of this time period, the total tax base is calculated, from which the amount of contributions to the tax service that must be paid is calculated.

In accordance with the provisions of Article 285 of the Tax Code of the Russian Federation, the tax period is a calendar year. In this case, the entire period is divided into several stages, after which it is necessary to report to the tax office. Such reporting periods are six months and 9 months. If the taxpayer makes payments monthly, based on actual profit, then the reporting period for him will occur every month, once every 2 and 3 months.

Based on the explanations of the Federal Tax Service specified in letter No. 3-1-11-730 dated September 14, 2009, the total amount of value added tax is recognized as actual if it is calculated from the current tax base that has developed for a specific period of time. However, this applies only in situations where the total tax indicator is displayed in the declaration that the payer submits to the tax service.

Article 163 of the Tax Code of the Russian Federation establishes that for all taxpayers the tax period is established as a quarter. Thus, contributions to the budget must be made quarterly, and must be supported by the relevant data specified in the declaration.

Concept of tax rate

The tax rate (also found in regulatory documentation under the name tax rate) is the specific amount of tax that falls on a unit of taxation. Rates are determined by the state and are considered one of the most universal instruments for regulating economic policy.

There are several types of tax rates.

Tax deductions for taxes and fees of federal significance are determined by the Government of the Russian Federation, as well as authorized federal services, but the Tax Code and its main provisions that affect the limits of deductions must be taken into account.

At the same time, those taxes that are intended to go to the regional budgets of the constituent entities of the Russian Federation are determined based on the regulatory documentation adopted in a particular subject, and taking into account all the requirements and restrictions specified in the Tax Code of the Russian Federation.

Taxation theory distinguishes several types of tax rates:

• equal rate, in which the amount of tax and the rate correspond to the same indicators and are established for tax payers in equal amounts;
• identical rate, at which a fixed tax amount is established per unit of tax, which cannot be changed;
• interest rate. At which the amount of deductions will be determined as a percentage of the taxation unit;
• proportional rate, in which the rate percentage is fixed and cannot be changed;
• progressive, characterized by the possibility of a sharp increase in the amount of tax with an increase in the tax base;
• regressive rate, characterized by a sharp reduction in the amount of tax.

In accordance with the provisions of Article 164 of the Tax Code of the Russian Federation, there are 4 types of tax rates: 0%, 10%, 18% and the estimated rate (10/110 and 18/118).

Sales of goods (works, services) at a tax rate of 0 percent

A tax rate of 0% is allowed in accordance with the provisions of Article 164 of the Tax Code of the Russian Federation. However, the regulations state that the use of such a rate is permissible only in situations where there is a specific justification.

In accordance with key legal provisions, a 0% rate can be set for the following transactions:

• sale of goods and services that are exported from the country during the export procedure;
• provision of services for the export and import of specific goods into the Russian Federation;
• provision of transport services for the transportation of goods across the territory of the Russian Federation using air transport;
• assistance in the transportation of passengers and their luggage, but on the condition that they are sent (directed) to places that are not under the control of Russia.

Based on this list, we can conclude that the income that is used for accumulation or investment will be exempt from VAT, which in turn is a positive moment for economic development.

In addition, the rate can be canceled in situations where the state provides social and economic protection to its citizens, and, as part of these measures, sets the rate at 0% for those goods and services that can be classified as socially significant (Article 149 Tax Code of the Russian Federation). However, there are some nuances here too.

The standard states that if the above-mentioned reasons exist, the VAT rate is canceled and not set at 0%, as per the provisions of Article 164 of the Tax Code of the Russian Federation.

In addition, it is worth paying attention to the fact that the 0% rate is used to create more favorable conditions for economic legal relations between different countries of the world, thereby not contributing to the weakening of concreteness in the markets.

It is worth noting that despite the legislative regulation of tax deductions for exporters, in arbitration courts one can increasingly encounter cases that relate to setting the rate at 0%. Analysts explain this phenomenon by the fact that zero taxation contributes to the development of abuses that affect tax refunds, the amount of which the budget never received.

Sales of goods (works, services) at a tax rate of 10 percent

Based on the possible VAT rates of 0, 10 and 18% indicated in Article 164 of the Tax Code of the Russian Federation, we can conclude that a rate of 10% is reduced and can be applied to those sectors of the national economy and production entities for which need to be stimulated to develop.

In accordance with the data specified in paragraph 2 of Article 164 of the Tax Code of the Russian Federation, a rate of 10% will be applied in the following situations:

• when selling food products (Resolution of the Government of the Russian Federation No. 908 of December 31, 2004). In this category you can find such products as agricultural products (poultry and livestock meat, dairy products, etc.), salt and sugar, cereals and pasta, fish products (with the exception of delicacies and exotic varieties of fish), vegetables, food food for children and diabetics, etc.;
• when selling goods for children (subclause 2, clause 2, article 164 of the Tax Code of the Russian Federation). The following goods are listed here: knitwear, clothing products (except for fur products and goods made of genuine leather), shoes (except for sports shoes), cribs and mattresses, toys, diapers, etc.;
• sale of printed products related to education, culture and science. However, it is worth noting that the reduced rate will not apply to periodicals, as well as publications related to erotic content. Also, those publications in which about 40% of the information relates to advertising will not fall into this category;
• goods for medical use (Government Decree No. 688 of September 15, 2008);
• sale of cattle, as well as breeding animals, their sperm and embryos;
• lease of breeding animals and birds with the right of subsequent purchase.

Cases of taxation at a tax rate of 18 percent

Setting a rate of 18% is typical for all situations that are not subject to the provisions specified in paragraph 3 of Article 164 of the Tax Code of the Russian Federation. Thus, if a product or service cannot be indexed at rates of 0% and 10% (clauses 1 and 2 of Article 164 of the Tax Code), then an 18% rate will be applied to them.

It is separately stated that intermediary services are also subject to a rate of 18%. Thus, if a person acts as an intermediary between companies and organizations, he will be obliged to pay to the budget 18% of the amount that he received as financial remuneration.

In accordance with legislative norms, this rate will be applied to intermediary operations because the taxation of intermediary services does not depend on the rates at which those goods and services in the sale of which he is directly involved are taxed.