Budget presentation is just around the corner and one needs to be aware of basic finance terms to understand what our Finance Minister Nirmala Sitharaman has to propose to the citizens on the big day.
Ahead of the D-day we answer some of the FAQs related to finance. In this article, we will be looking at indirect taxes.
What is Indirect Tax?
Indirect tax is an amount paid by the manufacturer to the governemnt but the burden of the tax payment is on the end customer as they purchase the products.
Indirect tax in India
In India, there were a number of indirect taxes applied by the Centre. Taxes are imposed on manufacture, sale, import and purchases of goods and services.
However, after the introduction of the Goods and Services Tax (GST), all taxes have been bundled into a singular tax for the citizens.
Types of indirect tax
There are different types of indirect taxes in India - service tax, excise duty, value-added tax (VAT), custom duty, stamp duty, entertainment tax, securities transaction tax- are examples of indirect taxes. All these indirect taxes after the introduction of GST were brought under one tax for the citizens.
Features of Indirect Tax
Tax payment: The seller first pays the indirect tax to the government and recovers it from the consumer.
Nature: Indirect taxes are regressive in nature.
Saving and investment: Indirect taxes are growth oriented and encourages the consumers to save and invest.
Tax evasion: Indirect taxes are difficult to evade.
Convenience: This type of tax does not put the burden on the taxpayer as they are paid only if they are purchasing an item. State authorities too find it quite convenient to levy the tax as they are collected directly from the manufacturer or seller, saving time and effort.
The 'Halwa Ceremony' was held on Saturday at Finance Ministry to mark the beginning of printing of documents relating to Union Budget 2021-22. Union Finance Minister Nirmala Sitharaman and Union Minister of State for Finance & Corporate Affairs Anurag Thakur were present.
On Tuesday, Lok Sabha Speaker Om Birla said the first part of the Budget Session will start on January 29 and continue till February 15, and the second part of the session will be from March 8 to April 8.
Birla said Rajya Sabha will function from 9 am to 2 pm and Lok Sabha from 4 pm to 9 pm with Zero Hour and Question Hour.
This time there will be no printing of the Budget due to COVID-19 pandemic. There will also be no printing of economic survey which is going to be tabled in the Parliament on January 29.
The Union Budget will be presented by FM Sitharaman on February 1 at 11 am.