Which of the following is an indirect tax levied in India?

Correct option is D

The correct answer is (d) Goods and Services Tax

• Goods and Services Tax (GST) is an indirect tax levied in India on the supply of goods and services.

• It is a destination-based tax and is paid by the end consumer, making it an indirect tax. Businesses collect GST on behalf of the government and remit it.

• GST replaced several indirect taxes like Value Added Tax (VAT), excise duty, service tax, and sales tax.

• It is one of the most significant tax reforms in India to create a single unified tax system across the country.

Information Booster:
• Indirect Tax: A tax that is collected by an intermediary (e.g., retailer, manufacturer) from the person who bears the ultimate economic burden of the tax (consumer).
• GST Structure: The GST system has three components: Central GST (CGST), State GST (SGST), and Integrated GST (IGST), which apply depending on the nature of the transaction (intra-state or inter-state).
• Other Indirect Taxes: Other examples of indirect taxes in India include customs duties, excise duties, and service tax (which was subsumed under GST).

Additional Information:

• (a) Capital Gain Tax: This is a direct tax imposed on the profits from the sale of assets like property, stocks, and bonds.

• (b) Equalisation Levy: This is also a direct tax levied on specified digital transactions, primarily targeting non-resident companies providing online services.

• (c) Corporate Tax: This is a direct tax levied on the income or profits of corporations and businesses.