Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: VAT Audit :: empanelment :: due date for vat payment :: list of goods taxed at 4%
 
 
News Headlines »
 Is government tapping your phone?
 Income tax department to use analytics to look for discrepancies in bank accounts
 GST Council fails to break deadlock over indirect tax regime, next meet on Dec 11 and 12 to hammer out differences
 Invoking Writ Jurisdiction For Income Tax Matters
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government

Five facts about tax regime
November, 12th 2009

Today, we still pay tax-on-tax as Centrally levied indirect taxes such as Central excise are not offset when VAT is paid.

What is indirect tax?

When your salary is taxed, its direct tax. When goods and services you consume are taxed, its indirect tax.

Which are the main indirect taxes?

The major indirect taxes levied by the Central government are customs duty (on imports), Central excise (at factory gates) and services tax. State governments collect value-added tax (VAT) at the point of purchase.

What was sales tax?

Initially, states levied a sales tax at the point of purchase. They had many sales tax categories, more than 10 in some cases. India was politically united but did not have a common market.

How is VAT different from sales tax?

Under VAT, states compressed multiple categories of taxation to just three. They also provided input tax credit on VAT, which means if a manufacturer buys inputs for Rs100 on which tax has already been paid, and sells it for Rs120, it pays tax on the value addition of Rs20. The transition to VAT was an intermediate step to a common market. It was a far-reaching change as it partially reduced the cascading impact of multiple taxes, which makes your purchases costlier.

By the time states introduced VAT, the Union government was providing input tax credit for the indirect taxes under its control. However, because the Constitution gives the Centre and the states exclusive tax domains, the cascading impact of indirect taxes continues, making you pay more than you really need to.

What is the goods and services tax (GST)?

The current situation of a fragmented market makes you pay a higher price for consumption and gives Indias indirect tax architecture an unwarranted influence on business decisions.

Today, we still pay tax-on-tax as Centrally levied indirect taxes such as Central excise are not offset when VAT is paid. Despite VAT, states still function as independent islands when it comes to indirect taxes.

GST is an attempt to completely integrate the indirect tax structure and create a common market for most goods and services. In the proposed system, tax will be levied at the point of consumption and a predetermined amount will be split between the Centre and the states.

The major indirect taxesCentral excise, service tax and VATwill be bundled into GST, which should eventually translate into a lower tax rate. Other indirect taxes such as entertainment tax and cess on taxes are also likely to be bundled into GST.

The state finance ministers discussion paper is the first attempt to come out with a formal proposal for GST to widen participation to other stakeholders such as industry, trade and consumers.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Website Ranking Website Ranking Company Website Positioning Alexa Ranking Website Promotion Website top 10 ranking website top 10 promotion search engine result promotion Strategic Internet Marketing Website Optimization Website Ranking Factors

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions