Indirect Tax

In India, indirect taxes are an essential source of revenue for government. The introduction of GST in 2017 has transformed the country's indirect tax system, bringing a unified tax regime. Before the implementation of GST, India's indirect tax system comprised various taxes like Central Excise Duty, Service Tax, State VAT, Central Sales Tax, etc. These taxes were levied by the central and state government separately, leading to a complex tax system that needed to be understood and complied with.

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Different Types of Indirect Taxes

Excise tax

The excise duty tax is imposed on specific goods such as tobacco, alcohol, and petrol. It is typically levied at the point of manufacture or importation. Suppose when a manufacturer purchases the raw materials for the company's goods and services, such as tobacco for cigarette makers. The manufacturer can transfer the cost to the consumer in the ordinary business course by raising the smoke's price.

Customs Duty

Custom tax is imposed on goods that are imported into a country. It is mainly calculated as a percentage of the value of the goods. For instance, a tax (customs tax) is paid by the importer of a container of bananas from another nation when it enters the US. This tax is then passed on to consumers.

Goods and Services Tax (GST)

GST is a value-added tax levied on the supply of goods and services at each stage of production and distribution. It replaced various indirect taxes, such as excise duty, service tax, and value-added tax (VAT). It creates a unified and integrated market by eliminating the cascading effect of taxes and reducing the compliance burden on taxpayers. This ensures that the end consumer bears the tax burden.

GST operates on a dual model, meaning the central and state governments administer it. The central government levies the Central GST (CGST), while the respective state government levies the state GST (SGST). Additionally, an integrated GST (IGST) is levied on inter-state supplies of goods and services.

Features of Indirect Tax

  • Tax liability: The buyer is now responsible for paying the Gov. indirect taxes instead of the service provider or seller

  • Tax payment: The Government receives indirect tax payments from the supplier, which are then passed on to the customer.

  • Nature: Although indirect taxes were initially regressive, they are now largely progressive due to the Goods and Services Tax.

  • Saving and investing: Because they encourage consumers to save and invest, indirect taxes are typically growth-oriented.

Service offered by Enterslice

  • Enterslice can help businesses with the Goods and Services Tax (GST) registration process, which is required for companies with yearly revenues of over Rs. 40 lakhs.

  • Enterslice can assist businesses with submitting their GST returns, which must be done monthly, quarterly, or annually depending on the business's turnover.

  • Enterslice can help businesses comply with GST laws by keeping the proper records and paperwork.

  • Enterslice offers GST advisory services on rates, exemptions, input tax credits, and other compliance problems.

  • Enterslice can support companies in getting import/export licenses, submitting customs declarations, and handling customs audits to comply with customs duty laws.

  • Enterslice can assist firms in getting licenses, submitting excise returns, and handling excise audits to comply with excise duty laws.

  • Enterslice may help companies register for VAT, which is necessary for companies selling goods.

  • Enterslice can assist businesses with filing their VAT returns, which must be submitted monthly or quarterly, depending on the company's turnover.

  • Enterslice can help businesses comply with VAT laws by keeping the correct Documents and paperwork.

  • To assist businesses in complying with legislation and minimize their tax responsibilities, Enterslice offers various indirect tax-related services.

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