Page 6 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Pooja, Lovely Professional University
Unit 1: Introduction to Indirect Taxes

Unit 1: Introduction to Indirect Taxes Notes

CONTENTS
Objectives
Introduction
1.1 Basic Features of Indirect Taxes
1.1.1 Advantages/Merits of Indirect Taxes

1.1.2 Disadvantages/Demerits of Indirect Taxes
1.2 Indirect Tax System in India
1.3 Indirect Taxes in Post Reforms
1.4 Service Tax
1.5 Customs Duty
1.6 What is the difference between Direct Tax and Indirect Tax?
1.7 Indian Taxation Structure

1.8 Double Tax Avoidance Treaty
1.9 Summary
1.10 Keywords
1.11 Review Questions
1.12 Further Readings

Objectives

After studying this unit, you should be able to:

 Know about Indirect Taxes
 Understand the basic features of Indirect Taxes
 Know the difference between Direct and Indirect Taxes

 Describe about Indian Taxation structure
Introduction

The indirect tax in India constitutes a group of tax laws and regulations. The indirect taxes in
India are enforced upon different activities including manufacturing, trading and imports. Indirect
taxes influence all the business lines in India. Charge levied by the State on consumption,
expenditure, privilege, or right but not on income or property. The indirect tax system in India
has undergone extensive reforms for more than two decades. One of the most important reasons
for recent tax reforms in many developing and transitional economies has been to evolve a tax
system to meet the requirements of international competition.

1.1 Basic Features of Indirect Taxes

An indirect tax is one in which the burden can be shifted to others. The tax payer is not the tax
bearer. The impact and incidence of indirect taxes are on different persons. An indirect tax is

LOVELY PROFESSIONAL UNIVERSITY 1