Are you know that what are the Indirect taxes and what is the role of this tax for indian economy? Indirect taxes are recovered from the end user of goods and services, it is not liable on individual directly. These taxes are different from direct taxes because these taxes affects both poor and rich persons simultaneousely.
The Indirect taxes those are the taxes which is not visible for the person who pays the tax. The Price of goods and services includes the indirect taxe. Here the people pay the tax without knowing that they are paying the tax to the government. This tax is collected from an entity or person who does not bear the final tax. The person or the entity pays the amount for Government and this tax is collected from the end user. The Service Provider pays the service tax to the government when the service is provided to the users and they recovers the amount from the person or entity for the service.
There are many types of indirect taxes-
1. Customs Duty – Customs Duty is a tax on imports.
2. Excise Duty – Excise Duty is levied on the manufacture of goods.
3. Service Tax – Service Tax is also levied on services provided to the users.
Each of these targets a specific area for the pupose of raising tax revenue for the government. This allows to target a large range of activities for the increasing the revenue and they may become the important source for government revenue. This is very important to drive the Indian Economy. There are very big collection of indirect taxes for India. The Service Tax is also increasing and have big role in indian economy.
1. Financial Year 2000-01 – The figure of Customs Duty was Rs. 45,000 Crore and Excise Duty was Rs. 56,000 Crore.
2. Financial Year 2012-13 – Now The Customs Duty is Rs. 186,000 Crore and Excise Duty is Rs. 194,000 Crore. The Service Tax is also Rs. 124,000 Crore. The Overall Indirect taxes are expected to contribute 44% to the overall tax of central government. The Total Revenue collection of india from both taxes (Indirect and direct taxes) is Rs. 10,77,612 crore for the financial year 2012-13.