Indirect Tax

What is an Indirect Tax?

An indirect tax such as Excise, Customs, Sales Tax, Service Tax, Value Added Tax (VAT), etc is a tax collected by an intermediary (such as service provider) from the person who bears the ultimate economic burden of the tax (such as the consumer/client). The intermediary later files a tax return and forwards the tax proceeds to government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by government from the persons on which it is imposed. A direct tax is one that cannot be shifted by the taxpayer to someone else, whereas an indirect tax can be.

Indirect Taxes in India is administered and collected by the Central Board of Excise and Custom (CBEC) which operates under the Ministry of Finance, Department of Revenue. Company formation services in India

What are the types of Indirect Tax applicable in India?

The various types of indirect taxes applicable in India as on date are:

Service Tax

Service tax refers to tax collected by the government of India from certain service providers for providing certain services. The person who pays service tax can be either a service provider or a service receiver or any other person who is responsible for providing certain services. Company formation Gurgaon

Value Added Tax

A value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. VAT is most often used in the European Union. The amount of VAT that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed.
    For example, when a television is built by a company in Europe, the manufacturer is charged VAT on all of the supplies it purchases to produce the television. Once the television reaches the shelf, the consumer who purchases it must pay the applicable VAT. wholly owned subsidiary in Delhi

Central Excise Duty

 Central Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the goods are manufactured. Foreign company registration in Delhi

Customs Duty

Customs Duty is a type of indirect tax levied on goods imported into India as well as on goods exported from India. Taxable event is import into or export from India. Import of goods means bringing into India of goods from a place outside India. Setting up a subsidiary in Delhi 

Under all the laws applicable for indirect taxes, certain registration are required to be obtained and periodical returns are required to be filed by the assesses with respect to the indirect taxes collected from third parties failing which penalties may be levied by the authorities.