Excise duty is direct or indirect tax

Direct tax and Indirect tax are the two types of taxes in India levied by the Government on people, groups, and organizations. These taxes are imposed by the Government on its citizens to raise money for implementing initiatives that would strengthen the nation’s economy and increase the standard of living for its citizens. The Constitution of India, which grants the Central and State governments the ability to impose taxes, is the source of the government’s right to do so in India. There are two broad types of taxes in India which are direct tax and indirect tax, which includes further categorisation such as GST, Custom duty, Income and Wealth Tax, etc. The major difference between direct tax and indirect tax is that the former is a progressive tax in which the income of a person or firm affects the amount to be paid as tax, while the latter is a regressive tax in which the person’s income does not affect the tax amount. Indirect taxes include value-added tax, service tax, Goods and Service Tax, customs duty, etc., while direct taxes include income tax, gift tax, capital gain tax, etc. Let us learn more about the difference between direct and indirect tax here along with their definitions, examples, and features. Direct Tax and Indirect Tax The Central Government and the State Governments each levy their own taxes under the two main types of taxes in India levied by the Central and State governments are as follows: • Direct Taxes • Indirect Taxes In India, direct taxes ar...

The following three tax bills, originally presented by the Minister of Finance in the 2023 budget, were approved by the Parliament on 31 March 2023, and notified in the gazette on 3 April 2023: • The Growth and Sustainability Levy Act, 2023 (Act 1095), which widens the scope of the existing National Fiscal Stabilisation Levy (NFSL) by introducing the Growth and Sustainability Levy (GSL) to replace the NFSL • The Income Tax (Amendment) Act, 2023 (Act 1094), which introduces a withholding tax on the realization of assets and liabilities and on winnings from lottery, and revises income tax rates for resident individuals and the treatment of foreign exchange losses and motor vehicle benefits-in-kind • The Excise Duty (Amendment) Act, 2023 (Act 1093), which increases the excise duty for cigarettes and tobacco products, wine, malt drinks and spirits, and introduces an excise duty on sweetened beverages and electronic cigarette liquids, electronic cigarettes, and electronic smoking devices Read an

What is a Tax? Tax is a financial obligation, payable to the government for the cost of living in a society. It is a fee levied by the government of the respective country or territory on income, activities, goods, and services. It is broadly classified into direct tax and indirect tax. Why Tax is imposed? The main reason for imposing taxes is that they are the main source of government revenue. Revenue collected by the government is used for the purpose of providing public utility services like defense, education, infrastructure facilities, health care, etc. So, we can say that government imposes taxes to fulfill the socio-economic objective. In this post, we will talk about the difference between direct tax and indirect tax. Content: Direct tax Vs Indirect Tax • • • • • • • • Comparison Chart Basis for Comparison Direct Tax Indirect Tax Meaning Direct tax refers to financial charge, levied directly on the taxpayer, and paid outrightly to the authority which imposes it, by the taxpayer. Indirect tax is when the taxpayer is just the hands that deposit the amount of tax to the authority imposing it, while the burden of tax falls on the final consumer. Governed by Central Board of Direct Taxes (CBDT) Central Board of Indirect Taxes and Customs (CBIC) Who pays the tax? Individuals, HUF, and Companies Final Consumer Nature Progressive Regressive Incidence and Impact It falls on the same person. It falls on different persons. Liability A person on whom the tax is imposed is lia...

The Finance Act 2023 was signed into law on 28 May 2023. The Act, which has an effective date of 28 May 2023, introduces changes to the following pieces of tax legislation: • Capital Gains Tax Act • Companies Income Tax Act • Tertiary Education Tax Act • Customs, Excise Tariff, Etc. (Consolidation) Act • Personal Income Tax Act • Petroleum Profit Tax Act • Value Added Tax (VAT) Act • Stamp Duties Act • Corrupt Practices and Other Related Offences Act • Ministry of Finance Incorporated Act • Public Procurement Act Read a The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contac...

Bases of Difference Direct Taxes Indirect Taxes 1. Meaning If a tax levied on the income or wealth of. a person is paid by that person (or his office) directly to the Government, it is called direct tax. If tax is levied on the goods or services of a person is collected from the buyers by another person (seller) and paid by him to the Government it is called an indirect tax 2. Incidence and Impact It Falls on the same person. Imposed on the income of a person and paid by the same person. Falls on different persons. Imposed on the sellers but collected from the consumers and paid by sellers. 3.Burden More income attracts more income tax. The tax burden is progressive on people. The rate of tax is flat on all individuals. Therefore more income individuals pay a less and lesser portion of their income as tax. The tax burden is regressive 4.Evasion Tax evasion is possible. Tax evasion is more difficult 5.Inflation Direct Tax helps in reducing the inflation Indirect tax contributes to inflation 6. Shift ability Cannot be shifted to others Can be shifted to others 7. Examples Income Tax, Wealth Tax, Capital Gains Tax, Securities Transaction Tax, Perquisites Tax GST, Excise Duty

• Excise taxes are taxes required on specific goods or services like fuel, tobacco, and alcohol. • They are primarily taxes that must be paid by businesses, usually increasing prices for consumers indirectly. • Excise taxes can be ad valorem (paid by percentage) or specific (cost charged by unit). • Sin taxes are a form of excise tax on goods that have a high social cost, such as alcohol and tobacco. • Some excise taxes can be required directly from the consumer like property taxes and excise tax penalties on certain retirement account activities. How an Excise Tax Works Excise taxes are primarily for businesses. Many of them are paid by merchants who then pass the tax on to consumers through higher prices. Merchants pay excise taxes to As such, consumers may or may not see the cost of most excise taxes directly. But there are some excise taxes that are paid directly by consumers, including The largest revenue-producing excise taxes in the U.S. come from motor fuel, airline tickets, tobacco, alcohol, health-related goods, and health-related services. Ad Valorem Excise Taxes An ad valorem tax is charged on a percentage basis. This results in an excise tax that is based on the value of the product or service. Sin taxes on targeted goods like beer and alcohol will often be taxed at the federal level and also taxed again by the state, making the cost of these items higher. For example, New York has a specific excise tax of $4.35 per cigarette pack of 20. Combining this with th...

Taxes are one of the prime sources of revenue for the government. Tax earnings support government operations, such as financing public services. Taxes are collected at various levels like municipal, state, and national. India’s tax system can be essentially divided into two types: direct tax and indirect tax. This categorisation is based on how the tax payments are collected by the government. • • • • • • • • • • • • What is Direct Tax? As the name suggests direct tax is paid directly to the authority responsible for collecting it as it is imposed directly on the taxpayer. These taxes cannot be transferred to any other entity or person. There are several acts which govern direct taxes. For instance, the government levies an income tax, which individuals pay directly to the government. Direct taxes are administered in India by the CBDT (Central Board of Direct Taxes), which is governed by the Department of Revenue. In addition, the department provides input to the government regarding direct tax implementation. Also Read: What are the Types of Direct Tax? These are the various types of direct taxes imposed on citizens of India. • Income Tax and Capital Gains Tax: Income tax is the most popular kind of direct tax in India. It is the tax that is levied on the income earned by an individual, HUF, LLPs, companies, and local authorities, amongst others throughout a fiscal year. Whenever an asset like houses, investment properties, bonds, or securities are sold at a price higher ...