1. tax 1.

A compulsory contribution to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions 2. Money paid to the government other than for transaction-specific goods and services; A burdensome demand; To impose and collect a tax from (a person); To impose and collect a tax on (something); To make excessive demands on

A fee charged ("levied") by a government on a product, income, or activity. If tax is levied directly on personal or corporate income, then it is a direct tax. If tax is levied on the price of a good or service, then it is called an indirect tax. The purpose of taxation is to finance government expenditure. One of the most important uses of taxes is to finance public goods and services, such as street lighting and street cleaning. Since public goods and services do not allow a non-payer to be excluded, or allow exclusion by a consumer, there cannot be a market in the good or service, and so they need to be provided by the government or a quasigovernment agency, which tend to finance themselves largely through taxes. A TAX IS A PAYMENT MADE BY THE PERSON WHO HAS EARNED INCOME DURING A YEAR TO THE GOVERNMENT.

What is a tax? Tax is the charge which has to be given by the citizen to the government in support. Tax must be paid on your income and on your assets according to each government. Government runs through proper tax payments by the people of that country. What is the difference between Direct and Indirect Taxation? Direct Taxation is the tax which is collected directly from the individuals who earns an income has to pay this tax examples of direct tax are ( corporation taxes, income taxes etc.) Indirect taxation is the tax which is collected indirectly these taxes are known as indirect taxation. If you do a business you tend to pay (service tax, sales tax) for your sales. And in other areas we need to pay indirect taxes such as in the products ( Petrol , alcohol and cigarettes) when it comes to vehicles excise duty must be paid for vehicles, road tax etc.

What is VAT? This tax is an indirect tax as far as consumers are concerned.In contrast to the service tax / sales tax VAT is value added tax for the goods a person purchased. How to calculate the Principal of VAT? Formula is (% on the price of the product all tax previously paid on the goods.) with 10% charged for VAT for each 100$ product manufacturer has to pay 10$ as VAT. Seller of the materials has to pay 10$ to the government. Manufacturer will charge the retailer as 132$(120$ + 120$ x 10%) and pays the government 2$ , keeping the same profit margin of 20$. Then retailer charge the end consumer 165$ (150$ +150$ x 10%) and pay the government 3$ having the profit of 30$ (165-132-3). You can imagine the end consumer has paid 10% extra on the product where as the business people have not lost anything. Only advantage VAT can have, the businesses cannot hide their invoices, they cannot show false accounts to the government. For example if VAT rates are 10% of the total cost of the goods, i.e. if you want to buy a burger which costs 20$ in the market, 10% of VAT for 20$ is charged as VAT. You need to show the difference in tax between the invoices passed and received is VAT tax. VAT tax has been greatly criticized as the poor pay more than the rich. Direct tax

, a direct tax is one paid directly to the government by the persons (juristic or natural) on whom it is imposed (often accompanied by a tax return filed by the taxpayer). Examples include some income taxes, some corporate taxes, and transfer taxes such as estate (inheritance) tax and gift tax. In this sense, a direct tax is contrasted with an indirect tax or "collected" tax (such as sales tax or value added tax (VAT)); a "collected" tax is one which is collected by intermediaries who turn over the proceeds to the government and file the related tax return. Some commentators have argued that "a direct tax is one that cannot be shifted by the taxpayer to someone else, whereas an indirect tax can be."[1] Direct Tax

What A tax that cannot be shifted onto others.

Does Direct

Tax Mean?

Investopedia explains Direct An example of direct taxes is income and property taxes.

Tax

Indirect tax The term indirect tax has more than one meaning. In the colloquial sense, an indirect tax (such as sales tax, a specific tax [a tax per unit], value added tax(VAT), or goods and services tax (GST)) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer). The intermediary later files a tax return and forwards the tax proceeds to government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by government from the persons (legal or natural) on which it is imposed. Some commentators have argued that "a direct tax is one that cannot be shifted by the taxpayer to someone else, whereas an indirect tax can be."[1] An indirect tax may increase the price of a good so that consumers are actually paying the tax by paying more for the products.[2] Examples would be fuel, liquor, and cigarette taxes. An excise duty on motor cars is paid in the first instance by the manufacturer of the cars; ultimately the manufacturer transfers the burden of this duty to the buyer of the car in form of a higher price. Thus, an indirect tax is such which can be shifted or passed on. The degree to which the burden of a tax is shifted determines whether a tax is primarily direct or primarily indirect. This is a function of the relative elasticity of the supply and demand of the goods or services being taxed. Under this definition, even income taxes may be indirect. Indirect Tax

What Does Indirect Tax Mean? A tax that increases the price of a good so that consumers are actually paying the tax by paying more for the products.

Investopedia explains Indirect Fuel, liquor and cigarette taxes are just a few examples of this.

Tax

Indirect taxes: Examples

Excise Tax: It is an indirect tax levied on the sale of a specific good. It is a vital source of revenue for the Government of India.

Stamp duty: This is an additional charge levied on documents, like promissory notes, bills of exchange, insurance policies and debentures .

Sales tax: It is an indirect tax levied by the government at the point of sale on retail goods and services. Sales tax is collected by the retailer, which ultimately forwarded to the state of India. Sales tax is regarded as one of the vital sources of revenue to the states of India. In India, each state has its own sales tax act.

Expenditure tax: This indirect tax is enforced under the Expenditure Tax Act, 1987. The hotels in India collect expenditure tax from their customers and eventually deposit to the Central Government.

What is excise duty all about? In the Indian tax structure, there are a lot of taxes that people pay for different reasons. Income tax, sales tax, entertainment tax, value added tax etc. All these taxes are existent because in some way or the other it impacts and helps the economy. One such tax that is prevalent in any manufacturing sector is the excise duty. What is excise duty? An excise or excise tax (sometimes called an excise duty) is a type of tax charged on goods produced within the country (as opposed to customs duties, charged on goods from outside the country). It is a tax on the production or sale of a good. This tax is now known as the Central Value Added Tax (CENVAT). Though the collection of tax is to augment as much revenue as possible to the government to provide public services, over the years it has been used as an instrument of fiscal policy to stimulate economic growth. Thus it is one of the socio-economic objectives. What are the types of excise duty? There are three different types of central excise duties which exist in India [ Images ] which are as follows:

Basic - Excise Duty, imposed under section 3 of the 'Central Excises and Salt Act' of 1944 on all excisable goods other than salt produced or manufactured in India, at the rates set forth in the schedule to the Central Excise tariff Act, 1985, falls under the category of basic excise duty in India. Additional - Section 3 of the 'Additional Duties of Excise Act' of 1957 permits the charge and collection of excise duty in respect of the goods as listed in the schedule of this act. This tax is shared between the central and state governments and charged instead of sales tax. Special - According to Section 37 of the Finance Act, 1978, Special Excise Duty is levied on all excisable goods that come under taxation, in line with the Basic Excise Duty under the Central Excises and Salt Act of 1944. Therefore, each year the Finance Act spells out that whether the Special Excise Duty shall or shall not be charged, and eventually collected during the relevant financial year. Which goods are excisable goods? The term 'excisable goods' means the goods which are specified in the first schedule and the second schedule to the Central Excise Tariff Act, 1985, as being subject to a duty of excise and includes salt. Who is liable to pay excise duty? The liability to pay tax excise duty is always on the manufacturer or producer of goods. There are three types of parties who can be considered as manufacturers:

Those who personally manufacture the goods in question Those who get the goods manufactured by employing hired labour Those who get the goods manufactured by other parties

Is it mandatory to pay duty on all goods manufactured? Yes, it is mandatory to pay duty on all goods manufactured, unless exempted. For example, duty is not payable on the goods exported out of India. Similarly exemption from payment of duty is available, based on conditions such as kind of raw materials used, value of turnover (clearances) in a financial year, type of process employed etc. What is the consequence of evading payment of excise duty? Under the different sections of the central excise act, the fines for evading tax can range from twenty-five to fifty per cent of the amount of duty evaded. When you look at the amount of excise you may have to pay, this is a rather large amount and along with the financial repercussions, you also have to encounter a tarnished image.

A customs duty is a tariff or tax on the importation (usually) or exportation (unusually) of goods. In the Kingdom of England, customs duties were typically part of the customary revenue of the king, and therefore did not need parliamentary consent to be levied, unlike excise duty, land tax, or other forms of taxes.

Balance of payments

Cumulative Current Account Balance 19802008 based on IMF data Since independence, India's balance of payments on its current account has been negative. Since economic liberalisation in the 1990s, precipitated by a balance of payment crisis, India's exports rose consistently, covering 80.3% of its imports in 200203, up from 66.2% in 199091.[106] However, the global economic slump followed by a general deceleration in world trade saw the exports as a percentage of imports drop to 61.4% in 2008 09.[107] India's growing oil import bill is seen as the main driver behind the large current account deficit,[91] which rose to $118.7 billion, or 9.7% of GDP, in 200809.[108] Between January and October 2010, India imported $82.1 billion worth of crude oil.[91] Due to the global late-2000s recession, both Indian exports and imports declined by 29.2% and 39.2% respectively in June 2009.[109] The steep decline was because countries hit hardest by the global recession, such as United States and members of the European Union, account for more than 60% of Indian exports.[110] However, since the decline in imports was much sharper compared to the decline in exports, India's trade deficit reduced to 25,250 crore (US$5.63 billion).[109] As of June 2011, exports and imports have both registered impressive growth with monthly exports reaching $25.9 billion for the month of May 2011 and monthly imports reaching $40.9 billion for the same month. This represents a year on year growth of 56.9% for exports and 54.1% for imports.[19] India's reliance on external assistance and concessional debt has decreased since liberalisation of the economy, and the debt service ratio decreased from 35.3% in 199091 to 4.4% in 200809.[111]In India, External Commercial Borrowings (ECBs), or commercial loans from non-resident lenders, are being permitted by the Government for providing an additional source of funds to Indian corporates. The Ministry of Finance monitors and regulates them through ECB policy guidelines issued by the Reserve Bank of India under the Foreign Exchange Management Act of 1999.[112] India's foreign exchange reserves have steadily risen from $5.8 billion in March 1991 to $283.5 billion in December 2009. [113]