Indirect Tax Consulting
What is Indirect Tax?
Indirect taxes are taxes levied by the central and state government on spending, consumption, services, rights and privileges, but not on property or income. This includes the customs tariff on the customs tariff, as well as the special tax paid on production and the value-added tax at certain stages of production and distribution of products.
All this includes the realization of indirect taxes since they are not directly applicable to the consumer’s income. Considering that indirect taxes are less than the income tax due to the invisibility of the payment, several state agencies tend to increase these taxes to generate higher income. Indirect tax is also a measure of payment in an application and is not rooted in the ability to pay.
Characteristics of indirect taxes
Payment and tax burden: the service provider makes the payment of indirect taxes and transfers it to a final consumer.
Tax liability: here the seller or service provider makes the payment of indirect taxes that are transferred to the final consumer.
Nature – Initially, indirect taxes used to be regressive. However, now with the arrival of GST, they have become quite progressive.
Evasion: Indirect taxes are difficult to evade due to direct implementation through goods and services.
Investment and savings: most indirect taxes are largely geared to growth, as they de-motivate the consumer and encourage savings.
Social coverage: the indirect tax has much greater coverage since its charge falls on each of the products or services that they buy.
Advantages of indirect taxes
A contribution of the poor.
Poor people are outside the scope of direct taxes and this is the only way that this section of society contributes. This goes along the basic principle of giving each person a part towards the growth of the country using state governments.
Taxpayers are spared indirect taxes because they are paid when buying things. In addition, it is easy for state authorities to collect this tax since they are charged directly from the factories/ports, saving effort and time.
The collection of these taxes is an automatic function that is performed when buying and selling goods and services.
Types of Indirect Taxes
Goods and Services Tax:
The law on GST was brought to action in July 2017, with 17 indirect taxes under its purview. All major services and service tax has been subsumed under the GST-
On the state level:
- State excise duty
- Additional excise duty
- Service tax
- Countervailing duty
- Special additional custom duties
At the central level, it covers:
- Sales Tax
- Entertainment Tax
- Central sales Tax
- Octroi and entry Tax
- Purchase Tax
- Luxury Tax
- Taxes on lottery gambling and betting
- Levies on products outside GST purview:
Taxes on products that use alcohol and petroleum products.
- Inter-State Sale
- Sale during import/export
- Intra-State Sale
Service tax are indirect indices which taxpayers pay on various paid services. These paid services include-
- Tour operator
- Interior decorator
- Health centre
- Banking and financial service
- Event management
- Maintenance service
- Consultancy service
- Service tax interest is 15%
Value Added Tax, Customs Duty, Excise Duty, Anti-Dumping Duty