Union Budget: Terminology Direct and Indirect Taxes In India the tax structure is divided amongst the Central Government and State Government. Central Government Taxes : Income Tax, Custom Duties, Central Excise and Service Tax. State Government Taxes : State Excise, Stamp Duty, VAT (Value Added Tax), Land Revenue and Professional Tax. Direct Taxes : Taxes directly paid by the tax payers, an individuals or organizations, are direct taxes, eg Income Tax, Capital Gains Tax, Property Tax etc. Central Board of Direct Taxes (CBDT), a division of Department of Revenue, Ministry of Finance under the Revenue Act 1963 has the authority to implements and administers direct taxes in India. Direct taxes are not charged on the basis of citizenship but on the basis of residential status like Resident and Nonresident etc. Indirect Taxes : Taxes paid by consumers on purchasing goods and services. These include service tax, VAT and Excise and Customs Duties. Service Tax is levied on services provided in India, except the State of Jammu and Kashmir. Value Added Tax (VAT) is a tax on value addition and levied at multi point, ie levied at every stage of sale. Customs Duties are the charges levied for goods imported and Excise Duties are paid by manufacturer on their products. Ultimately these charges are passed on to consumers. The Ministry of Finance (Department of Revenue) through the Central Board of Excise and Customs (CBEC), an apex indirect tax authority, implements and administers excise (central excise), customs and service tax laws.
Posted on: Sun, 13 Jul 2014 09:15:08 +0000
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