NAME :- SHRADDHA

BAGAL.

ROLL NO :- 20303A0062. DIV :- A . DIRECT TAXATION .TOPIC :- INDIRECT TAX

DEFINATION
 Indirect tax is defined as the tax imposed by the
government on a taxpayer for goods and services
rendered. Unlike direct taxes, indirect tax is not levied on
the income, revenue or profit of the taxpayer and can be
passed on from one individual to another. Indirect tax can
be defined as a type of tax where the incidence and impact
of taxation does not fall on the same entity. It is collected by
the government from an intermediary such as a retailer or a
manufacturer. ... Some examples of indirect taxes include
sales tax, entertainment tax, excise duty, etc
TYPES OF INDIRECT TAXES
Goods and Services Tax:
Sales Tax:
Service Tax:
Value Added Tax:
Custom Duty and Octroi Tax:
Excise Duty:
Anti-Dumping Duty:
Newly Implemented Indirect Tax (GST)
 Features of Indirect Tax
 Tax liability: The service provider or seller pays indirect taxes to the
government, and the liability is transferred to the consumer.
 Payment of tax: The seller pays indirect taxes to the government and the same is
transferred to the consumer.
 Nature: Indirect taxes were initially regressive in nature, but thanks to the
implementation of the Goods and Services Tax, they are now pretty progressive.
 Saving and investment: Indirect taxes are generally growth-oriented considering
the fact that they encourage consumers to save and invest.
 Evasion: It is difficult to evade indirect taxes because they are now implemented
directly through products and services.
Advantages of Indirect Tax
Convenience: Indirect taxes do not burden the taxpayer and are convenient as they are paid only at the
time of making a purchase. Moreover, state authorities find it convenient to levy indirect taxes
because they are collected directly at the stores/factories which helps in saving a lot of time and effort.
Ease of collection: Indirect taxes are easy to collect in comparison with direct taxes. Since indirect
taxes are only collected at the time of making purchases, the authorities need not worry about their
collection.
Collection from the poor: Those who earn less than Rs.2.5 lakh p.a. are exempt from income tax,
which means that they do not contribute to the government. Since indirect taxes are charged at the
point of sale, all individuals, regardless of the income tax slab under which they fall, contribute
towards the growth of the economy.
Equitable contributions: Indirect taxes are directly related to the costs of products and services. What
this essentially means that the basic necessities attract lower rates of tax while luxury items are
charged at higher tax rates, thereby ensuring that contributions are equitable.
 Disadvantages of Indirect Tax
 Indirect Tax charged sometimes are cumulative. This means that in a point-
based transaction system, middlemen involved are likely to charge their own
service tax which may result in the overall price of the product increasing.
 Indirect Tax can be regressive in nature. For example, salt tax remains the

same for both poor and rich, However, if a rich person defaults the payment,
then the penalties imposed will be higher as well.
 Indirect Tax are not industry friendly. Taxes are levied on raw materials and

goods which in turn increases the cost of production, thus not allowing
industries to expand as their competitive capacity is restricted.
Why GST is Indirect Tax?
 The Goods and Services Tax, or GST as it is commonly known, was
implemented on July 1st, 2017 to subsume the various indirect taxes in the
country. The taxes that were once compulsory are now done away with due to
the introduction of the new tax regime. One of the main benefits of GST is that
it has eliminated the cascading effect of tax, thereby ensuring that they do not
end up paying for every value addition.

 The taxes subsumed under GST on the state level include service tax, state
excise duty, countervailing duty, additional excise duty, and special additional
custom duties. The taxes subsumed under GST at the central level include sales
tax, central sales tax, purchase tax, entertainment tax, luxury tax, octroi and
entry tax, and taxes on betting and lottery gambling.
 Indirect tax collections by the government up by
12% in FY21
 The central government has collected Rs.10.71 lakh crore as indirect tax including
GST and non-GST for the 2020-2021 fiscal year. The total collections had increased
by 12% compared to the previous fiscal year at Rs.9.54 lakh crore. According to the
statement released by the finance ministry, the provisional collections show 108.2% of
the revised estimates of Rs.9.89 lakh crore for FY21.
 The net GST collections which include central GST, compensation cess, and
integrated GST was Rs.5.48 lakh crore in FY21. The net GST collections were 8%
lower than the amount collected in FY20 at Rs.5.99 lakh crore.
 An all-time high GST collection was seen in March at Rs.1.24 lakh crore after the
collections crossed the Rs.1 lakh crore in January and February 2021. The net tax
collections on central excise and service tax which were arrears were Rs.3.91 lakh
during FY21 compared to Rs.2.45 lakh crore during the same period in FY20.
THANK YOU.