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: empanelment :: form 3cd :: due date for vat payment :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: VAT RATES :: cpt :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: TDS :: ACCOUNTING STANDARD
« News Headlines »
 New Opening Financial Controller Chartered Accountant (Manufacturing Plant) A Leading Company
 Income Tax Filing 2017: All you want to know about the single page ITR form SAHAJ
 How to benefit from investments in tax saving mutual funds
 60 per cent of income tax notices on fishy cash deposits returned
 All about income tax return form Sahaj
 Why seeing Form 26AS is a must before filing tax return and how to access it
 No tax on notice period pay cut
 Interpretation Of Central Goods And Services Tax (Cgst) Act (Part-1)
 What to do if you haven’t filed your taxes
 Income Tax Declaration To Employer: 10 Changes You Should Be Aware Of
 What your income tax says about you

Hidden taxes discolour white & brown goods
February, 24th 2007

Consumers in India are hoping for a better deal from finance minister P Chidambaram this time round as he gives final touches to Budget 2007. Indian consumers are paying a hefty lot more than their counterparts in China or the UK for a refrigerator or when simply filling fuel in their cars.

And thats because the taxmen in the country have loaded a huge tax component in the retail price of your personal and home appliances. While 21% of the retail prices of washing machines, refrigerators and microwaves in India are on account of excise and sales tax levies, the corresponding figure is only 15% for China and the UK.

Put simply, if a consumer is paying Rs 100, maximum retail price, for a washing machine in India, then Rs 21 is on account of the indirect tax levies such as VAT and excise the duty levied on goods manufactured within the country. However, in China and the UK, only Rs 15 of Rs 100 is on account of taxes.

According to a KPMG study, the total indirect tax as a percentage of the price to the end consumer for automobiles is almost 85% higher in India compared to the UK, and marginally higher than in China. For instance, 24% of the retail price of a small car is on account of the indirect tax component in India, and for other cars, the corresponding figure is 28%. In China, the corresponding figures are 17% and 27% for small cars and larger cars respectively. In the UK, it is a flat 15%. The study is based on several assumptions, a KPMG official indicated.

A comparison of the indirect tax component in the final prices of consumer durables can be made only after taking into account purchasing power parity. In China, the indirect tax component may be lower, but the levies may be made up through some direct tax, said PricewaterhouseCoopers (PwC) principal consultant MS Mani. In China, for instance, entrepreneurs are given land free of cost and water, and electricity supply at concessional rates, which amounts to a subsidy. This may be made up through some direct tax levy on consumers, he explained.

The final price a consumer pays on a product includes its cost plus several indirect taxes such as excise and VAT. Higher tax levies inflate the final price of the product for the retail consumer. Thus, a reduction in tax levies benefits consumers through cuts in retail prices.

Mobile phones are the only item where Indias levies are lower than those in China and the UK. While only 3.8% of the final price of a cellphone is on account of indirect taxes in India, the levies account for 15% of the retail selling price in China and the UK.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

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