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Indirect taxes in India
are taxes that are not directly levied on income or wealth but are imposed on
goods and services. Here are some of the major types of
indirect taxes in India:
Goods and Services Tax
(GST): GST is the most significant indirect tax in India. It is a
comprehensive, multi-stage, destination-based tax that subsumed various
indirect taxes such as Central Excise Duty, Service Tax, Value Added Tax (VAT),
and others and GST is levied at each stage of the supply chain, from the manufacturer to the consumer.
Customs Duty: Customs
duty is levied on the import and export of goods. Customs
duty aims to regulate trade, protect domestic industries, and generate revenue
for the government.
Central Excise Duty: Central Excise Duty was levied on the
manufacturing of goods. It was a production-based tax imposed on the
manufacturer of goods. However, the introduction of GST, Central Excise Duty has
been subsumed into the GST regime.
Value Added Tax (VAT): Each state in India levied VAT on the sale of
goods within its jurisdiction. VAT was a state-level tax, and rates varied
across states. GST has replaced VAT and other state-level taxes on goods.
Central Sales Tax
(CST): CST was a tax on the sale of goods in the course of inter-state trade or
commerce. With the implementation of GST, CST has been phased out.
Excise Duty on Alcohol
and Tobacco: Excise duties are imposed on the manufacturing of alcohol and
tobacco products. These duties are intended to regulate the consumption of
these goods and generate revenue for the government.
