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Taxation in India - Tax Structure in India

Direct Tax:

Direct Tax, are taxes that are directly paid to the government by the taxpayer. It is a tax applied on individuals and organizations. A direct tax is borne entirely by the entity that pays it, and cannot be passed on to  another entity.
Example: Income Tax, Corporation Tax, Wealth or Property tax

Indirect Tax:

Indirect tax is directly levied on the taxpayers. This tax is often levied on goods and services via third party.
Example: An indirect tax such as Sales tax, VAT or GST is a tax collected by an intermediary (such as retail store) from consumer.
Excise Duty: Excise is levied by the government and the goods and products that are manufactured in the Country.
Custom Duty: Customs duty is imposed on goods when transported across the country. It is a tax imposed on the import/export of goods across International borders.
Service Tax: Service tax is a tax levied by the government on services provided in India.
CST: CST (Central Sales Tax) is imposed only on goods sold from one state to another state.
VAT: VAT (value added tax) is a consumption tax levied on products at every point of sale.
Entertainment Tax: Entertainment Tax is a tax imposed by the government on films like movie ticket, large commercial show..etc.
Luxury Tax: This tax is chargeable on the room rented or the overall stay charged of the hotel, resort or spa, but not on the food and beverages served.
Entry Tax/Octroi charges : Some state government levy something called an OCTROI when your purchase enters the state.

GST Advantages:
  • Simplified and Transparent tax system to all
  • It will remove cascading effect. (means tax on tax)
  • All the goods and services will be given at same price in all the states.
  • Double taxation will be End. No Tax over the Tax Now
  • One India One Market
  • Simplified Tax System.
  • As the tax rate will be equal in all over India.
  • It will reduce the flow of Black money.
GST Disadvantages:
  • The Service Tax in India is 15% but after implementation of  GST now it is 18%.
  • All credits will be online, Small traders may not have access to internet or computers and may be left out.
  • All assets will be online and some fines are like criminal activity.
  • Local dealers have to pay CGST in addition to SGST (earlier they had to pay just VAT).
  • Tax rates are increased on some products

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