Indirect Taxation-Preamble

Indirect Taxation covers:
.Excise
.Customs
.VAT-CST
.Service Tax

In coming days Excise , Service Tax and VAT/CST will merge to have GST. Proposed date is 1st April 2010 but may end up getting implemented one year late.

Coverage of questions will be:

.Conceptual

.Numerical

.Procedural

.Powers, Penalties, Assessment

Major differences in Direct and Indirect taxes.

Major difference in Direct and Indirect tax is that burden of taxation cannot be passed on in case of direct tax. In other words in case of Indirect taxes though the tax is on you as importer or producer or seller you can pass on the burden of tax to another person.

There are to many ifs and buts in Direct taxes which you will find missing in Indirect taxes. This is more of conceptual nature. You need to get your understanding right .

Not much planning is possible in Indirect Taxation though a lot of Tax avoidance does happen. If something is possible it is mostly at a strategic level say putting up plant in SEZ area.

Indirect taxes are regressive in nature. They do not distinguish among rich and poor.

Traditionally Indirect taxes have been a major source of revenue for the government. Though the government is trying to increase share of Indirect Taxes.