Union Budget 2019: Indirect taxes imposed by govt to generate revenue; levied equally upon all taxpayers

Indirect taxes can be defined as taxation on an individual or entity, which is ultimately paid for by another person.

FP Research June 21, 2019 16:05:07 IST
Union Budget 2019: Indirect taxes imposed by govt to generate revenue; levied equally upon all taxpayers
  • Any taxes or fees imposed by the govt at the manufacturing or production level is an indirect tax

  • The most common example of an indirect tax is import duties

  • GST implementation had helped increase indirect taxpayer base by more than 50%

Indirect taxation is a policy that is commonly used to generate tax revenue for the government. They are essentially fees that are levied equally upon taxpayers, no matter their income—be they rich or poor, everyone has to pay them.

Indirect taxes can be defined as taxation on an individual or entity, which is ultimately paid for by another person. The body that collects the tax will then remit it to the government.

Essentially, any taxes or fees (such as sales tax, per unit tax or Goods and Services Tax (GST ), excise, tariff) imposed by the government at the manufacturing or production level is an indirect tax.

Union Budget 2019 Indirect taxes imposed by govt to generate revenue levied equally upon all taxpayers

Representational image. Reuters.

Import duties, fuel, liquor and cigarette taxes are all considered examples of indirect taxes.

The most common example of an indirect tax is import duties. The duty is paid by the importer of a good at the time it enters the country. If the importer goes on to resell the good to a consumer, the cost of the duty, in effect, is hidden in the price that the consumer pays. The consumer is likely to be unaware of this, but he will nonetheless be indirectly paying the import duty.

The total net indirect tax collection (inclusive of CGST, IGST and GST-Compensation Cess) in the financial year during April-November 2018-19 was Rs. 6,12,653.47 crore.

The government was targeting to mop up Rs 11.16 lakh crore as indirect tax collection from the levy of Central and Integrated GST and compensation cess in 2018-19.

An analysis showed that the share of indirect tax had been growing over the years, increasing to nearly 50 percent in 2018-19 from a little less than 45 percent four years ago.

The GST implementation, which was rolled out in July 2017, had helped increase indirect taxpayer base by more than 50 percent with 34 lakh businesses coming into the tax net, the Economic Survey had said.

Follow full coverage of Union Budget 2019-20 here

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Hisense 55A71F UHD Smart TV Review: A good all-round Android TV with excellent sound output
News & Analysis

Hisense 55A71F UHD Smart TV Review: A good all-round Android TV with excellent sound output

Hisense debuts in India with an impressive smart TV series that offers great value for money and is one of the best in sound output.

Apple iPhone SE, OnePlus 7T to iQOO 3: Best phones under Rs 40,000 (Sept 2020)
News & Analysis

Apple iPhone SE, OnePlus 7T to iQOO 3: Best phones under Rs 40,000 (Sept 2020)

It is time to consider a few flagship devices and also get a bite of the Apple in a budget of Rs 40,000 this month.

OnePlus accidentally puts up guide pages for 5 unannounced handsets including OnePlus 8T Pro
News & Analysis

OnePlus accidentally puts up guide pages for 5 unannounced handsets including OnePlus 8T Pro

According to tipster Evan Blass, these models include OnePlus 8T, OnePlus 8T Pro and two Nord models.