Indirect Tax

-
  • An indirect tax is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer).
  • The intermediary later files a tax return and forwards the tax proceeds to government with the return.
  • Here the incidence and impact are at two different points
  • Example: VAT, Service tax, GST, Excise duty, entertainment tax and Customs Duty.
(1) Sales Tax
(Tax on Consumption Stage. Tax on Intra-State sale (sale within State) (now termed as VAT) is by State Government – Change to goods to goods
Central Sales Tax (CST) – Interstate Sale by Union.
- Good Produced in TN & Sell in TN – Excess duty & Sales Tax by TN.
- Good produced in TN & Sell in Kerala – Excess duty by TN. CST & ST by Kerala. The CST given to TN (Manufacture state)).
  • Sales tax charged on the sales of movable goods.
  • Sale tax on Inter State sale is charged by Union Government, while sales tax on intra-State sale (sale within State) (now termed as VAT) is charged by State Government.
  • Sales tax is levied on the sale of a commodity that is produced or imported and sold for the first time.
  • If the product is sold subsequently without being processed further, it is exempt from sales tax. Sales tax is levied by either the Central or the State Government, Central Sales tax, or 4% is generally levied on all inter-State sales.
  • State sales taxes that apply to sales made within a State have rates that range from 4 to 15%. However, exports and services are exempt from sales tax.
(2) Service Tax
(Tax on Paid services)
  • Most of the paid services you take you have to pay service tax on those services. This tax is called service tax. Over the past few years, service tax been expanded to cover new services.
(3) Value Added Tax
(To avoid tax on tax, put tax on value added only)
  • The India’s indirect tax structure in sales tax regime was weak and produced cascading effects.
  • The structure was by, and large uncertain and complex and its administration was difficult.
  • As a result, various committees on taxation recommended ‘Value Added Tax’. The Indirect Taxation enquiry committee argued for VAT.
  • The VAT has a self-monitoring mechanism which makes tax administration easier.
  • It is levied only on the value addition done at each level of supply chain and the Input taxes are credited to the manufacturer
  • The VAT is properly structured removes distortions.
  • Accordingly, VAT has been introduced in India by all states and UTs (except UTs of Andaman Nicobar and Lakshadweep).
  • The State VAT being implemented till 1 July 2017, had replaced erstwhile Sales Tax of States.
  • The tax is levied on various goods sold in the state, and the amount of the tax is decided by the state itself.

(4) Custom duty & Octroi
(Custom Duty - On Goods Imported to India, Octroi Duty – Local tax on goods enter into municipality)
  • Custom Duty is a type of indirect tax charged on goods imported into India.
  • One has to pay this duty, on goods that are imported from a foreign country into India.
  • This duty is often payable at the port of entry (like the airport).
  • This duty rate varies based on nature of items.
  • Octroi is tax applicable on goods entering in to municipality or any other jurisdiction for use, consumption or sale.
  • In simple terms one can call it as Entry Tax.
(5) Excise Duty
(Tax by Union Government imposed on Production Stage & Given share to State.)
  • An excise duty is in the true sense is a commodity tax because it is levied on production of goods in India and not on the sale of the product.
  • This is opposite to custom duty which is charged on bringing goods from outside of country.
  • Another name of this tax is CENVAT (Central Value Added Tax).
  • If you are producer / manufacturer of goods or you hire labor to manufacture goods you are liable to pay excise duty.
One Nation, One Tax – GST, some goods are not under GST, Gold (VAT), Petrol (Excise Duty, Alcohol (Sales Tax))

Comments

Post a Comment

Popular posts from this blog

Indian Painting - Pre History

-
Image
    History and Evolution of Painting in India - An Overview India has a long tradition of artistic excellence and painting is one of the major mediums that has been used to express it. There is several evidence suggesting that painting flourished in India since ancient times. Archaeologists have found wall paintings in parts of India, which suggest that even the early historic man in India was engaged in activities of art and leisure The history of painting can be traced through the ancient and medieval period where the books were illustrated with paintings Then came the miniature style that dominated the Mughal and Rajput courts. With the coming of the Europeans, the art of painting and engraving took a western turn. Modern painters experimented with styles, colours and designs. Many Indian painters have gained worldwide recognition and are winning prizes and accolades for their vision. Principles of Painting The history of paintings can be known from primitive rock paintings of Bhim
Read more

Classification of Indian Paintings

-
Image
    Classification of Indian Paintings Indian Paintings have been broadly classified into two. Mural Paintings Miniature Paintings Mural Paintings The work on the walls or a solid structure are referred to as Murals. These have existed in India since ancient times and can be dated between 10th century BC and 10th century AD. The evidence of such paintings can be found at several locations in India. The beauty and the exquisiteness of mural paintings can be seen in places like Ajanta, Armamalai Cave, Ravan Chhaya Rock Shelter, Bagh Caves, Sittanavasal Caves and Kailash Temple in Ellora. Most of the mural paintings are either in natural caves or in rock cut chambers. The paintings follow a theme, the most common being Hindu, Buddhist and Jain. Mural paintings were also made to adorn any mundane premise. For e.g. Ancient theatre room in Jogimara Caves. Ajanta Cave Paintings One of the oldest surviving murals of Indian sub-continent, Ajanta caves were carved between 2nd century BC to 5th c
Read more

Solar system

-
Image
Galaxy Gravitational bound system of star, stellar remnants, interstellar gas, dust, and dark matter. Ex: Milky way. A galaxy is a huge system of billions of stars. Our solar system is a part of the milky way galaxy. Our Milky way galaxy was named “Akash ganga”. There are millions of galaxies that make the Universe. Distance galaxy: GN-z11 (March 2016) Hubble classification Eliptical (E) Spiral (S): Andromeda & Sombrero (unbarred) Lenticular Celestial bodies: Sun, Moon. Two types: Emit light (Star), Don’t Emit Light (Planets) North Star – Pole Star – Indicates north Direction Constellations (Group of star) – 88 Official Ursa Major – Big Dipper Tail – Alioth – Brightest in Ursa Major Saptarishi Mandal Polaris – Brightest in Ursa Minor The Sun Made up of extremely hot gases. The sun is about 150 million km away from the earth. 30 times greater than Earth. Black hole – It absorb light but does not emit due to high gravitational force. Corona – Outer surface of the sun (About 6000 k) S
Read more