Indian History

Indirect Taxes

If the burden of tax imposed by the government is transferable to others, it is called Indirect Tax. Generally, indirect taxes are imposed on goods and services. For ex. the government imposes tax on the manufacturer of goods and services at the time of producing such goods and services. The manufacturer transfers this burden to the trader. The trader transfers this burden to the consumer. This means that if the government imposes tax on the producer, the burden of the tax is ultimately borne by the consumer. The main forms of indirect taxes are Central Excise Duty, Import-Export Taxes, Service Tax and Foreign Travel Tax etc. In this way, the government imposes various types of direct and indirect taxes to collect its revenue. Through taxation, the government aims at increased revenue collection.