8/19/2019 Introduction to Indirect Taxes Ch.I http://slidepdf.com/reader/full/introduction-to-indirect-taxes-chi 1/6 INTRODUCTION TO INDIRECT TAXATION Features of Indirect Taxes Government needs funds for various purposes like maintenance of law and order, defence, social/health services etc. Govt’s. main source of fund is taxation. Taxes are conventionally broadly classied as Direct Taxes and ndirect Taxes. Direct taxes are paid directly by the person concerned, and in case of indirect taxes, they are paid by one person !collectin" a"ent#, but he recovers the same from another person !consumer#. Direct Taxes $ ncome Tax, Gift Tax and %ealth Tax. ndirect Taxes $ &entral 'xcise !Duty on manufacture#, customs !duty on imports and exports#, (ales Tax, )ctroi, 'ntry Tax, (ervice Tax, 'xpenditure Tax etc.
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INTRODUCTION TO INDIRECT TAXATIONFeatures of Indirect Taxes
Government needs funds for various purposes like
maintenance of law and order, defence, social/healthservices etc. Govt’s. main source of fund is taxation.
Taxes are conventionally broadly classied as Direct Taxes and ndirect Taxes.
Direct taxes are paid directly by the personconcerned, and in case of indirect taxes, they arepaid by one person !collectin" a"ent#, but herecovers the same from another person !consumer#.
Direct Taxes $ ncome Tax, Gift Tax and %ealth Tax.ndirect Taxes $ &entral 'xcise !Duty onmanufacture#, customs !duty on imports andexports#, (ales Tax, )ctroi, 'ntry Tax, (ervice Tax,
6ill, 4ct, )rdinance and ules $ +ode of passin" the4ct7 )rdinances
%hat is dele"ated le"islation8
Trade &irculars and Trade 9otices
Taxation under &onstitution
:nion ist relevant to taxation $ ist $ called;:nion ist’ $ contains entries like defence of ndia,<orei"n a=airs, %ar and *eace, 6ankin" etc. !'ntry9o.>?@.'ntry 9o.AB3 4ny other matter not includedin ist , ist and any tax not mentioned in ist or ist . $ These are called Cesidual *owers’#
(tate ist pertainin" to taxation3 (tate Govt. hasexclusive powers to make laws in respect of mattersin ist of (eventh (chedule to our &onstitution. These
entries include *olice, *ublic ealth, 4"riculture,and etc. 'ntry 9o.EF@Taxes on a"riculturalincome7 'ntry 9o. H3 'xcise duty on alcoholic
liIuors, opium and narcotics7 'ntry 9o. ?3 Tax onentry of "oods into a local area for consumption,use or sale therein !usually called )ctroi#7 'ntry 9o.E3 Tax on sale or purchase of "oods other than
newspapers except tax on interstate sale orpurchase.J
ist of (eventh (chedule called Cconcurrent ist’includes matters where both &entral Govt. and
(tate Govt. can make laws. This list includes entrieslike &riminal aw and *rocedure, Trust and Trustees,civil procedures, economic and social plannin",trade unions, charitable institutions, price control,factories etc.