ANSWER:1

Indirect tax is a tax that can be passed on to another individual or entity. Indirect tax is
generally imposed on suppliers or manufacturers who pass it on to the final consumer.
Excise duty, customs duty, and Value-Added Tax (VAT) are examples of Indirect taxes.

There are many indirect taxes applied by the government of India. Taxes are levied on
manufacture, sale, import and even purchases of goods and services. These laws aren’t also
well-defined Acts from the government, rather orders, circulars and notifications are given
out by relevant government bodies to this end. As such, it can be cumbersome trying to
understand every feature of indirect taxes in India.
there are different types of indirect tax:
Service Tax, Excise duty, Value added Tax, Custom Duty, stamp duty, entertainment tax
and much more.

ANSWER:2
Issues faced in GST implementation
These include onerous requirements on businesses on collecting and reporting transaction-
wise date onto the electronic portal for all businesses with turnover over 7.5 million rupees a
year. Issues also arise due to identification of the goods and services with a HSN code to
arrive at the correct tax rate to apply. Exporters who earlier had benefited from tax
exemptions on their inputs are now required to pay taxes on inputs up front and claim their
refunds after filing of tax returns. Exporters are required to also collect tax on exports as it
were a domestic sale if they do not have a Letter of Undertaking or Bond. This is putting
pressure on the working capital of small exporters. Informal businesses are under severe
pressure having to now pay taxes (and the additional cost of compliance) and marginal
businesses are likely to close thus having a real economic impact which could spread down
the value chain. Some of these issues such as classification and uploading of returns are
transitory, however structural issues on multiple rates and treatment of exporters and
marginal businesses will continue.
The Government has been attempting to address the issues faced by businesses. A Committee
of Ministers headed by the Deputy Chief Minister of Bihar has been constituted to look at
online filing system performance issues and a Committee headed by the Revenue Secretary,
Government of India on resolving problems faced by exporters. Additional time if being
given to businesses to file tax returns.

ANSWER:3
two types of GST exemptions on goods.

 Absolute exemption - under this type of exemption, the supply of specific types of
goods would be exempted from GST without considering the details of the supplier
or receiver and whether the good is supplied within or outside the State.
  Conditional exemption – under this type of exemption, supply of specific types of
goods would be GST exempt subject to certain terms and conditions which have
been specified under the GST Act or any amendment or notification.

Live animals, Meat, Fish, Asses, cows, sheep, goat, poultry, etc. Fresh and frozen

meat of sheep, cows, goats, pigs, horses, etc. Fresh or frozen
fish Natural products Live trees and plants, Vegetables, Honey, fresh and pasteurized
milk, cheese, eggs, etc. Bulbs, roots, flowers, foliage, etc. Tomatoes, potatoes, onions,
etc. Fruits, Dry fruits, Bananas, grapes,apples, etc Cashew nuts, walnuts,etc. Tea,
coffee and spices, Grains, Coffee beans, tea, leaves, turmeric, ginger, etc. Wheat, rice,
oats,

ANSWER:4
The Dual GST which would be implemented in India will subsume many consumption taxes.
The objective is to remove the multiplicity of tax levies thereby reducing the complexity and
remove the effect of Tax Cascading. The objective is to subsume all those taxes that are
currently levied on the sale of goods or provision of services by either Central or State
Government. Subsumation of large number of taxes and other levies will allow free flow of
larger pool of tax credits at both Central  and State level. 1. PRINCIPLES OF TAX
SUBSUMATION The various Central, State and Local levies were examined to identify their
possibility of being subsumed under GST. While identifying, the following principles were
kept in mind: Taxes or levies to be subsumed should be primarily in the nature of indirect
taxes, either on the supply of goods or on the supply of services. Taxes or levies to be
subsumed should be part of the transaction chain which commences with import/
manufacture/ production of goods or provision of services at one end and the consumption of
goods and services at the other. The subsumation should result in free flow of tax credit in
intra and inter-State levels. The taxes, levies and fees that are not specifically related to
supply of goods & services should not be subsumed under GST. Revenue fairness for both
the Union and the States individually would need to be attempted. 2. CENTRAL TAXES TO
BE SUBSUMED IN GST On application of the above principles and various papers which
have been released in this regard, it is deduced that the following Central Taxes should be, to
begin with, subsumed under the Goods and Services Tax: Central Excise Duty (CENVAT)
Additional Excise Duties The Excise Duty levied under the Medicinal and Toiletries
Preparations (Excise Duties) Act 1955 Service Tax Additional Customs Duty, commonly
known as Countervailing Duty (CVD) Special Additional Duty of Customs – 4% (SAD)
Surcharges and Cesses levied by Centre are also likely to be subsumed wherever they are in
the nature of  taxes on goods or services. This may include cess on rubber, tea, coffee,
national calamity contingent duty etc. Central Sales Tax to be phased out.
3. STATE TAXES TO BE SUBSUMED IN GST
Following State taxes and levies would be, to begin with, subsumed under GST: VAT / Sales
tax Entertainment tax (unless it is levied by the local bodies) Luxury tax Taxes on lottery,
betting and gambling State Cesses and Surcharges in so far as they relate to supply of goods
and services Octroi and Entry Tax Purchase Tax.

ANSWER:5
Even though the customs act 1962 regulates the duties and taxation, The Constitution of India
provides for the provisions relating to the taxation. Article 265 to Article 289 deals with the
constitutional provisions relating to taxation.

Taxation Only By Authority of Law:

Article 265 provides that no tax shall be levied or collected except by the authority of
law .No tax can be imposed by an executive order. In the case of Chhotabhai v/s Union Of
India, it was held that the law providing for imposition of tax must be a valid law that it
should not be prohibited by any provisions of the constitution.

Restriction On The States Taxing Power

The state has like the union, power to levy tax on supply of goods or services or both other
than of newspapers. Article 286 however imposes the following restrictions on the state’s
power to impose sales tax on goods.
Sale Or Purchase of Goods Which Take Place Outside The State:
Article 286 (1) (a) prohibits a state to impose a tax on the supply of goods or services or
both which take place outside the state.
Sale Or Purchase of Goods In The Course of Import And Export
Article 286(1)(b) prohibits state to impose tax in the course of import of goods and
services or export of goods and services out of the territory of India.

Coffee Board Banglore v/s Joint Coomercial Tax Officer in this case it was held that there
must be a sale the goods must be actually exported and the sale must be part and parcel
of export.

State Of Orissa v/s MMTC export of sale become complete only after reaching the
destination. Article 287 prohibits state from imposing tax on consumption or sale of
electricity supplied to government utilized for constructions, maintenance of railway

Levy of duty or tax:

Article 268 - duties levied by union but collected and appropriated by states.
Example :stamps duties mentioned in union list shall be levied by central government but
collected by the state .Article 269 deals with taxes levied and collected by the union and
assigned to the states that is money collected will not go to the consolidated fund but used
and distributed among state in accordance with principle formulated by the parliament.
Article 270 deals with the tax levied and collected by the state example: taxes and duties
referred in the union list shall be distributed.

Grants In Aid:

 Article 273 grants in aid will be given to the states of Assam, Bihar and West Bengal
in lieu of export of duty on the jute products.
 Article 275 empowers the parliament to make such grants.
 Article 275 empowers the parliament to make such grants.
  Article 282 –both the union and the state makes grant for any public purpose
 Article 274 deals with the prior recommendations of the president is required to bills
affecting taxation in which states are interested

Taxes For The Purpose of State:

Articles 276 and 277 are saving provisions .Article 276 empowers the state to impose taxes
on profession, trades, callings and employment for the benefit of state or municipality,
district board etc. But the provision of Article 277 does not extend to taxes levied under a
law passed after the constitution came into force.

Taxes For The Purpose of The Union:

Article 271 provides that if parliament at any any time increases any of the duties or taxes
mentioned in Article 269 and 270 except Article 246A by imposing a surcharge.

At last Article 279 deals with the calculation of net proceeds and Article 284 deals with
custody of suitor’s deposits and other moneys received by public servants and courts. These
are the constitutional provisions regarding taxation embodied in the constitution. 

ANSWER:6
Key differences between Direct and Indirect Tax are 

1. Direct tax is levied and paid for by individuals, Hindu undivided Families (HUF), firms,
companies etc. whereas indirect tax is ultimately paid for by the end-consumer of
goods and services.
2. The burden of tax cannot be shifted in case of direct taxes while burden can be
shifted for indirect taxes.
3. Lack of administration in collection of direct taxes can make tax evasion possible,
while indirect taxes cannot be evaded as the taxes are charged on goods and
services.
4. Direct tax can help in reducing inflation, whereas indirect tax may enhance inflation.
5. Direct taxes have better allocative effects than indirect taxes as direct taxes put
lesser burden over the collection of amount than indirect taxes, where collection is
scattered across parties and consumers’ preferences of goods is distorted from the
price variations due to indirect taxes.
6. Direct taxes help in reducing inequalities and are considered to be progressive
while indirect taxes enhance inequalities and are considered to be regressive.
7. Indirect taxes involve lesser administrative costs due to convenient and stable
collections, while direct taxes have many exemptions and involve higher
administrative costs.
8. Indirect taxes are oriented more towards growth as they discourage consumption
and help enhance savings. Direct taxes, on the other hand, reduce savings and
discourage investments.
9. Indirect taxes have a wider coverage as all members of the society are taxed through
the sale of goods and services, while direct taxes are collected only from people in
respective tax brackets.
 10. Additional indirect taxes levied on harmful commodities such as cigarettes, alcohol
etc. dissuades over-consumption, thereby helping the country in a social context.

Direct and indirect taxes are defined according to the ability of the end taxpayer to shift the
burden of taxes to someone else. Direct taxes allow the government to collect taxes directly
from consumers and is a progressive type of tax, which also allows for cooling down of
inflationary pressure on the economy. Indirect taxes allow the government to expect stable
and assured returns and brings into its fold almost every member of the society – something
which the direct tax has been unable to do.
Both direct and indirect taxes are important for the country as they are intricately linked
with the overall economy. As such, collection of these taxes is important for the government
as well as the well-being of the country. Both direct taxes and indirect taxes are collected by
the central and respective state governments according to the type of tax levied.