Types of Indirect Taxes in India [GST Law & Practice B.Com 6th Sem CBCS Pattern Notes]

Types of Indirect Taxes in India
GST Law & Practice Notes
B.Com 6th Sem CBCS Pattern Notes

At present, there are mainly two indirect taxes which are leviable in India - Goods and Service Tax (GST) & Custom Duty.

1. Goods and Service Tax (GST): Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every stage of value addition, from the manufacturer to the consumer. GST is a uniform domestic indirect tax law for the entire country.

Before the Goods and Services Tax could be introduced, the structure of the indirect tax levy in India was inefficient and complicated, cluttered with various levies at various stages. GST subsumed the following Indirect Taxes:

Taxes have been subsumed by GST includes both Central and State Taxes. Following is the list of taxes, both Central and State, subsumed by the GST:

Central Taxes:

a. Central Excise Duty.

b. Duties of Excise (Medicinal & Toilet Preparation).

c. Additional Duties and Excise (Goods of Special Importance).

d. Additional Duties of excise (Textile & Textile Products).

e. Additional Duties of Customs (CVD).

f. Special Additional Duty of Customs (SAD).

g. Central Surcharges and Cesses so far as they relate to supply of goods and service.

h. Service Tax.

State Taxes:

a. State Value Added Tax (VAT)/Sales tax.

b. Central Sales Tax.

c. Luxury tax.

d. Entry tax (All forms)

e. Entertainment Tax (other than the tax levied by the local bodies).

f. Taxes of Advertisement.

g. Purchase Tax.

h. Taxes on lotteries, betting and gambling.

i. State Surcharges and Cesses so far as they relate to supply of goods and services.

Under the GST regime, tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. Cases of inter-state sales are chargeable to the Integrated GST.

2. Customs Duty

Customs Duty is defined under the Customs Act, 1962 and enables the government to levy duty on exports and imports, prohibit export and import of goods, prescribe procedures for importing and exporting, and determine offenses, penalties, assessments, etc.

Customs duty-related matters fall under the Central Board of Excise & Customs (CBEC). The CBEC, in turn, is a division of the Department of Revenue of the Ministry of Finance. CBEC also formulates policies that concern the collection or levying of customs duties, customs duty evasion, smuggling prevention, and administrative decisions related to customs formations.