TAXSYSTEM I

NINDI
A

AnkushShar
ma
Tr
ipl
eS
I
NDI
A’STAXSYSTEM
Cor
eofFi
scalPoli
cyofGovernmenti
spowert
ocol
l
ectTax.Taxi
sa
pay
mentcompulsorycol
l
ectedfr
om i
ndi
vi
dual
sorf
ir
msbyGov er
nment
.

Taxescanbecl
assi
fi
edi
nsev
eral
way
s:

1.Progr
essi
veTax:Taxper
cent
agei
ncr
easeswi
thi
ncr
easei
nincome
egDir
ectTaxl
ikeIncomeTax

2.Pr
oporti
onalTax:Taxper
cent
ageremai
nssame/ constant
i
rr
especti
veofincome.Al
socal
ledasFl
atTax.Eg.SalesTax

3.Regr
essi
veTax:
Taxper
cent
agedecr
easeswi
thi
ncr
easei
nincome

Anot
herwayofcl
assi
fi
cat
ioni
sSpeci
fi
cTaxandAd-
val
orem Tax:

1.Specif
icTaxisthetaxwhi
chisfi
xedaspereachuni
tofgoodor
ser
vices,si
zerathert
hanbasedoni
tsval
ue.

2.Ad-val
orem t
axisl
evi
edasaper
centageofvalueofthei
tem i
tis
i
mposedon, andnotont
heit
em’squanti
ty,
size,wei
ghtorot
hersuch
fact
or.
Anot
herwayofcl
assi
fi
cat
ioni
spr
oduct
ionandconsumpt
ionbasedt
ax

1.Pr
oduct
ionTax:
isl
evi
edwher
egoodsandser
vicesar
epr
oduced.

2.Consumpti
onTax:
arel
evi
edwher
egoodsandser
vicesar
e
consumed.

Fur
therTaxescanbeSur
char
geandCesst
axes.

Sur charge: TheSur chargereferstoext rafeeorlevy.Thi

smoneyi snot
collectedf orsomespeci fi
cpur posebutcanbeusedf oranyreasont he
uniongov ernmentseesf it
.Itisappli
cabl eonthetaxpay abl
eandnott he
totaltax.Thi sext r
at axisimposedt or educeinequali
tyandmaket ax
structuremor epr ogressi
ve.Itisimposedonhi ghincomeslabsandul t
ra
weal thycor poratetax.Surcharger evenuegoest otheConsolidatedFundof
India.IfTot alIncomeorBookpr ofi
texceedsRs1crt oRs10cr orethen
surchar gei s7%.I ftotali
ncomeorbookpr ofi
texceedsRs10crt hen12%
surchar gei slevied.

Cess:ACessi saform oftaxlevi

edbyt hegovernmentont axwit
hspecific
purposest i
l
lthetimethegov ernmentgetsenoughmoneyf ort
hatpurpose.
Cessisgener all
yexpectedtobechar geduntil
thegovernmenthas
suffi
cientpurposeandbecomesdor mantafterthepurposeisful
fi
ll
ed.e.g.
Roadcess, cleanenergycess,Swachhbhar atcess,et
c.Cessrevenuealso
goestot heConsolidatedFundofIndia.

Anot
herwayofcl
assi
fi
cat
ionofTaxesi
sDi
rectTaxandI
ndi
rectTax:

1.Di
rectTax

2.I
ndi
rectTax
Dir
ectTax:i
nwhichther
eisi
nci
denceofTaxandi
mpactofTaxi
sont
he
sameperson/ent
it
yeg.I
ncomeTax

DirectTaxar
ethosewhi charepaiddir
ectlybyanindi
vi
dualoror
ganizat
ion
totheimposingenti
tyi
.e.thegovernment.Forexampleataxpayerpays
dir
ecttaxest
ot hegovernmentfordif
ferentpur
posesli
keincometax,
propertyt
axetc

Di
rectTaxi
sPr
ogr
essi
vei
.er
educedi
nequal
i
ty.

I
ndi
rectTax:
Inci
denceofTaxandi
mpactofTaxi
sondi
ff
erentent
it
ies.

I
nci
denceortheonebear
ingt
hebur
denofTaxi
.et
heconsumerandthe
I
mpacttheoneactual
l
ysubmit
ti
ngt
heTaxaret
wodif
fer
entent
it
ies.

Anindir
ectTaxisataxcol
lect
edbyanint
ermedi
ary(
suchasaret
ail
store)
fr
om thepersonwhobearstheul
ti
mateeconomi
cburdenoft
hetax(such
asconsumer )
.egGST
Di
ff
erencebet
weenDi
rectTaxandI
ndi
rectTax

Basi
sfor Di
rectTax I
ndi
rectTax
Compari
son

Meani
ng Dir
ectTaxisref
err
edt oas Indi
rectTaxisr
eferr
edtoas
thetaxlev
iedonperson’
s Taxleviedonapersonwho
i
ncomeandweal thandis consumesgoodsand
paiddir
ectl
ytogovt serv
icesandispaid
i
ndirectl
ytogovt

Nat
ure Pr
ogr
essi
ve Regr
essi
ve

I
nci
denceand Fal
l
sonsameper
son Fal
l
sondi
ff
erentper
sons
i
mpact

TaxBase I
ncomeandweal t
hof Fal
l
sondi
ff
erentper
sons
assessee

Ev
asi
on Taxev
asi
oni
spossi
ble Taxev asi
oni shardly
possiblebecausei ti
s
i
ncludedint hepriceof
goodsandser v
ices

I
nfl
ati
on DirectTaxhel
psin I
ndi
rectt
axpushesuppr
ice
control
li
ngi
nfl
ati
on i
nfl
ati
on

Imposi
tionand I
mposedonandcol l
ected Imposedonandcoll
ected
col
lect
ion from assesses,i
.e fr
om consumersofgoods
I
ndivi
duals,
HUF( Hi
ndu andservi
cesbutpai
dand
undi
videdfamily
), deposi
tedbyt
heAssesse.
Company ,Fi
rm etc.

Bur
den Cannotbeshi
ft
ed Canbeshi
ft
ed
Mer
it
sofDi
rectTax

1.Pr
ogr
essi
ve

2.Encour
agesav
ingandi
nvest
ment

3.El
ast
ici
ty

4.Cer
tai
n

5.Pr
omot
esaccount
abi
l
ity

Demer
it
sofDi
rectTax

1.Nar
rowbase

2.Canbeev
aded

3.Col
l
ect
ionexpensi
ve

4.Har
dshi
pnotcount
ed

5.Ext
ernal
i
tynotcount
ed

Di
rectTaxofcent
ral
Gov
ernment
1.Per
sonalI
ncomeTax:isi
mposedbycombini
ngallsourcesofthe
i
ndi
vidual
’
sincomel
ikesal
ary
,rent
ali
ncome,i
nter
estincome,etc.

OldTaxRegi
me: I
noldtaxregi
meat axpayerwil
lgetsomededuct
ionson
t
axpayabl
etolowerdownthetaxundersect
ion80.

NewTaxRegime:HereTaxratear
elesst
hant
heol
dtaxr
egi
mebutt
ax
pay
ercannotenj
oyanytaxdeduct
ionher
e.
 Taxsl
abs:
OldandNew

- Nochangeswer
emadei
nthet
axr
atesi
nrecentbudget2022.

- All
owingTaxpayer
stof
il
eupdat
edr
etur
nwi
thi
n2y
ear
sfor
corr
ecti
ngerr
ors.

-I
fseni
orci
ti
zenaged75ormor
e

Ear
ningonl
ypensi
onandi
nter
esti
ncome

Heneednotf
il
ethei
ncomet
axr
etur
nfor
m

Thepay
ingbankwi
l
ldeductt
henecessar
ytax

2.Corpor at
ionTax:Corpor
ati
ontaxislev
iedonNetProfit
.Corpor
ati
on
IncomeTaxi si
mposedont hepr
ofit
softhecorpor
ate/companies/
entit
ies.Allpr
ofi
tmakingcompaniesneedtopayaflatrat
eof
Corpor at
eincometax.

Tur
nov
er–(
expense+depr
eci
ati
on)=Netpr
ofi
t

Gov er
nmentofI
ndi
ainSeptember2019changedtheCorpor
ateIncome
TaxforDomesti
cCompanies(
Acompanyr egi
ster
edinIndi
aorOut si
de
I
ndiabuthasmadearr
angementsfort
hedeclar
ati
onandpay mentof
Div
idendi
nIndi
aunderI
ncomeTaxAct1961)
3.Mi nimum Al ternativeTax: Attimesi tmayhappent hatat axpayer
beingacompanymayhav egener atedincomedur i
ngt hey earbutby
takingt headv antageofv ar i
ouspr ovisi
onsofexempt i
onsundert he
I
ncomeTaxLaw( li
kedepr eci
ati
on, deductions,
exempt i
ons, et
c),it
mayhav ereducedi t
st axliabil
it
yormaynothav epai
danyt axatall
(zerot axcompani es) .Duet oincreaseint henumberofzer o
taxpay ingcompani es, MATwasi nt r
oducedbyt heFinanceAct ,1987
toensur et
hatcompani espayami nimum amountoft axt ot he
gov ernment .Theobj ectiveofintroductionofMATwast obringinto
thet axnet“zer ot axcompani es”.Latert hi
staxwaswi thdrawnbyt he
FinanceAct1990, butreintroducedi n1997.MATi sleviedon15%on
Bookpr ofi
t+Sur char ge+Cess.

4.Capi t
algainsTax: isat axonCapi t
algai
nsi.e.thegai
n/prof
itreal
i
zed
ont hesaleofanassett hatwaspurchasedatacostamountt hat
wasl owert hantheamountr eal
i
zedont hesale.Themostcommon
capitalgainsarer eali
zedf r
om thesaleofshares/st
ocks,
bonds,
preciousmet al
s,artwork,propert
y,pat
ent,t
rademark,pai
nti
ng,non
agri
cul t
uralland,etc.

5.Securit
yTransacti
onTax:i sataxl eviedatthet i
meofpur chaseand
saleofsecuri
ti
eslikeshares,bonds, debentures,mutualfundsetc.
l
istedonstockexchangesi nIndia.Ther at
eofSTTdi ff
ersbasedon
thetypeofsecuri
tytradedandwhet herthetransacti
onisapur chase
orasale.PurchaserandsellerbothpaySTT.
6.Equalizati
onTax/levy:before2016,onlyt
hosecompanieswhowere
regi
steredinIndiausedt opaytaxinIndiaaspert
heIncomeTaxAct
1961.Thi sisbecauset hosecompanieswhousedt oearnf
rom a
businessact i
vi
tyinIndia,t
heyhadt oregi
stert
hei
rbusi
ness/of
fi
ce
here,thenonlytheycoul ddobusinessinIndi
aasther
ewerehardly
anydigital
/onli
neser v
ices.

Butwiththeadv entofI nformat i

onTechnol ogy,itbecamepossi bl
e
that‘
Googl e’corporationi sregisteredinUSandhasaper manent
resi
dentstat usinUSbutt heirsourceofr evenuei sfrom I
ndiathrough
digi
taladvertisementsont heirwebsi t
es.SoI ncomeTaxAct1961
wasnotappl icabl
etot hei ncomegener at
edt oGoogl ethroughsale
ofadverti
sement sinIndi abecauset heydidn’thav eanyregist
ered
offi
ce/permanentr esidencei nIndiaandt heirstatuswasNon-
resi
dentinI ndia.So,tot axsuchi ncomegener ated(from I
ndiaor
I
ndianpeopl e)t osuchf ir
ms( Googl e)
,in2016I ndiabought
“Equal
izat
ionLev y”alsocal l
ed“Googl eTax” .

So,ifacompany“ A”isr egist

ered( permanentr esidence)inUSandi t
s
subsi diar y“B”isregisteredi nIndiaanddoi ngbusi nessinI ndiaand“ B”
i
sr egi steredi nIndiaanddoi ngbusi nessinIndiaand“ B”ispr ov idi
ng
digi
t al services(adv ert
isement s/e-commer cepl atfor
m)t hen
equal izat i
onl ev
ywi llnotbeappl i
cabl eon“B”and“ B”wil
lpaynor mal
IncomeTaxunderI ncomeTaxAct1961.Buti f“B”isnotr egisteredin
India,andhasnophy si
cal presence, butst
illsell
ingdigit
al services
(adv ertisement s/e-commencepl atform)inIndiat henequal i
zation
l
ev ywi l
l beappl i
cableon“ B”butnoI ncomeTax.

Threeyearsbackthe“sal
eofdigi
tal
servi
ces(
ads)”wasnotif
ied.And
st
fr
om 1 Apr i
l2020,“
Equali
zat
ionLevy”(
of2%)isappl
icabl
eone-
commer cefi
rmsalso.

So,i
fane-commercefi
rm( sayAmazonwhi chi
sregist
eredi
nUS, and
i
nIndiait
sstat
usi
snon-resident)ear
nsaRevenue(andnotprofi
t)of
say Rs.100fr
om i
tsonl
inepl at
form(e-
commerce)bysaletoIndian
 peopl
e(I
ndi
anresi
dent
)thenoutofRs.100theyneedtogi
veRs.2
(2%)t
oGovt
.ofIndi
aasEquali
zat
ionLevybutnoIncometaxunder
I
ncomeTaxAct1961.

See,ifAmazonwoul dber
egister
edi
nIndia(andhasphysi
cal
presence)t
hentheywouldautomati
cal
lypay“IncomeTax”onthei
r
profi
tsaspertheIncomeTaxAct1961.

“Equal
izat
ionLevy”i
saDi r
ectTaxandislev
iedon“Revenue”andnot
“Prof
it
”.Thisi
sbecauseforIndiai
tisv
erydif
fi
cul
ttochecktheprof
it
ofAmazonasi thaslotofoperati
onsi
nUSandot hercount
ri
es.

7.Divi
dendDistr
ibut
ionTax( DDT) :Divi
dendi sthedistri
but i
onofa
porti
onofcompany ’spr
of i
ts/earni
ngst oitsowner s/shar eholder
s.
Whenacompanyannouncesdi vi
dends, i
thastopayt ax,(DDT)ont he
divi
dendwhichistobedi stri
butedtot heowner sandt heowner salso
paytax(aspertheiri
ncomet axslab)ont hedivi
dendr eceived.DDT
wasabolishedinthebudget2019- 2020anddi vi
dendwasmade
taxabl
einthehandsoft heshar eholders.

I
NDI
RECTTAXES
I
nci
denceofTaxandi
mpactofTaxi
sondi
ff
erentent
it
ies.

I
nci
denceortheonebear
ingt
hebur
denofTaxi
.et
heconsumerandthe
I
mpacttheoneactual
l
ysubmit
ti
ngt
heTaxaret
wodif
fer
entent
it
ies.

Anindir
ectTaxisat
axcoll
ect
edbyanint
ermedi
ary(
suchasaret
ail
store)
fr
om thepersonwhobear
stheul
ti
mateeconomi
cburdenoft
hetax(such
asconsumer
).egGST

Alli
ndirecttaxesar eRegressiv
ei nnature.Letusconsideranexampl e.
Supposear i
chper son( i
ncome10l acs)i spurchasi
ngabr eadworthRs.25
(i
ncludi
ngRs5t ax).Thenheispay i
ngt axRs5.Buti ft
hesamebr eadis
purchasedbyapoorper sonwhosei ncomei sRs1l acthenheisalso
payingthesamet axofRs5.Thi smeanst hatthepoorpersonispayi
ng
highertaxper centagewithrespecttohisi ncomeandr ichper
sonispay i
ng
taxpercentagewi threspecttohisincome.

CentralBoar dofIndir
ectTaxesandCust oms(CBI C)isapar tof
DepartmentofRev enue, Mini
str
yofFi nance,Gov ernmentofI ndi
a.I tdeal
s
withthet asksofformul ati
onofpol i
cyconcerni nglevyandcol l
ectionof
customs, CentralExciseDut i
es,CentralGoodsandSer vi
ceTax, IGST, and
Narcotics.TheBoar dist headministr
ativeauthorit
yfori tssubordinat e
organizationsi
ncludingCust om Houses, CentralExciseandCent ral GST
Commi ssioner
atesandt heCentralRevenuesCont rol Laboratory.

GoodsandSer
viceTax(
GST)
:
GoodsandSer
vicei
tisanI
ndi
rectTax.I
tcamei
ntoef
fecton1stJul
y2017.

Til
l30thJune2017,CentralGovtusedtoimposei t
sowni ndi
recttaxesli
ke
Servi
ceTax, Exci
seTaxet candtheStategovernmentsimposedt heirown
i
ndirecttaxesli
keVAT,Entert
ainmentTaxetc.So, whenaproducerusedt o
produceapr oductt
henheusedt opayExciseDut ytotheCentreaswel las
VATt othestatewhichusedt ocreat
etaxont axandwhenBusedt osell
theproducttosomeot hersuppli
eritr
esul
tedi ncascadi
ngeffectand
makest heproductmorecost l
yinthemarket.EvenincaseofVAT, t
he
creditwasnotav ail
abl
eacrossthestates.Furt
her,di
ff
erentstat
eshad
di
f f
erentVATr at
esandgav eexempt i
onsondi ff
erentcategor
yofproduct
s.
Thisf r
agmentedt hewhol
eofI ndi
aintoahet er
ogeneousmar ketaf
fect
ing
businessandinvestment.

Theint
roductionofGSThasbeenthemostimport
antindi
recttaxrefor
m
si
nceindependence.Theant
ici
pat
edadditi
onal
gainsinef
ficiency,
competit
iveness,
easeofdoi
ngbusinessandover
allt
axcollecti
onsare
whatdrovethisbargai
n.

GSTsubsumed17Cent ral
andStat esindi
recttaxesvi
z.Cent
ralExci
seDuty,
Addit
ionalExci
seDuty,Ser
v i
ceTax, andStateTaxesli
keVAT,
Enter
tainmentTax,Ent
ryTax,PurchaseTax, LuxoryTaxet
cont hesupply
ofgoodsandser vi
cesforthewholenat i
on,whichmakesIndiaoneunif
ied
commonmar ket.

Sonowwhenapr oductorser vi
cewil
lbesoldtotheconsumeracrossI ndi
a,
onlyoneindi
recttaxwil
lbeimposedi .
e.GSTwhichconsistsofCentr
al GST
(CGST),Stat
eGST( SGST).Ifaproductissol
dacrossStatethenI
ntegrated
GST( I
GST)wi l
lbelev
iedbyt heCentr
e.GSTisbasical
l
yav al
ueaddedTax
i
mposedonl yincaseofv al
ueadditi
on.

Toi
mposeGST,theconsti
tut
ion(101)AmendmentAct2016waspassed
t
h
on8 Sept
ember2016.Itcameintoefecton1stJul
f y2017.

On7thjul
y2017t heJammuandKashmi rTaxBil
l2017,waspassedbythe
stat
elegi
slatur
eempower i
ngthestat
etolev
yStateGSTonintrast
ate
t
h
suppli
eswitheffectf
rom 8 Jul
y2017.Thebasi
cfeatur
esofGSTare:

- GSTisaValueAddi
ti
onTax-GSTisaval
ueaddedTaxlevi
edon
manufact
ure,
sal
eandconsumpti
onofgoodsandser
vices.

- Bur
deni
sbor
nebyf
inal
consumer
.

- Cont
inuousf
lowofcr
edi
t–GSTof
fer
scompr
ehensi
veand
 conti
nuouschai
noft axcr
edi
tsf
rom t
heproducer
spointuptothe
ret
ail
ersl
evelt
herebytaxi
ngonl
ytheval
ueaddedateachstageof
suppl
ychain.

- NoCascading-onl
ythev
alueaddedateachstageistaxedunderGST,
hencet
hereisnotaxontaxorcascadi
ngoftaxesunderGST.

- GSThasaDual
GSTModel
–Cent
reandSt
ate

GSTwi
llbei
mposedassoonast
hesuppl
yofgoodsbegi
ns.Suppl
yher
eis
cal
l
edasTaxabl
eevent
.

Or
igi
n:or
igi
nisf
rom wher
ethemov
ement
/suppl
yoft
hegoodsbegi
n.

Dest
inat
ion:
wher
ethemov
ementofgoodsi
sst
opped.

I
for
igi
nandDesti
nat
ionar
einsamestat
eorUTi
scal
l
edI
ntr
aSt
ate
(
CGST+SGST)egwit
hinStat
eHary
ana.

I
fOr i
ginandDestinati
onareint
wodi f
ferentstatescal
ledasInt
er-st
ate
(GSTi sal
socall
edDest i
nat
ionbasedanddest inati
ontaxasallt
heSGSTi s
passedont otheconsumptionStat
es).[
IGST=CGST+SGST] .I
GSTwi l
l goto
Centre.Cent
rewil
l keepi
tsshar
eandr estwill
gi vei
ttoDesti
nati
onSt ate.

Exempt
ionsunderGST

Al
cohol

El
ect
ri
cit
y

Pet
rol
eum

Real
Est
ate
Rat
esofGST
Fi
veRat
esofGST

0%

5%

12%

18%

28%

HSN( HarmonizedSystem ofNomenclatur

e)Codethi
ssy st
em hasbeen
i
ntroducedforthesyst
emat i
cclassi
fi
cati
onofgoodsallovert
heworld.I
tis
usedf orGSTdistr
ibut
ion.I
twasdev el
opedbytheWorldCustoms
Organizat
ion.

TheTaxesatt
heCent
reandSt
atel
evel
bei
ngsubsumedi
ntoGSTar
e:

AtCent
rel
evel
:

a.Cent
ral
Exci
seDut
y,

b.Addi
ti
onal
Exci
seDut
y

c.Ser
vicet
ax

d.Addi
ti
onal
Cust
omsDut
yknownasCount
erv
ail
i
ngDut
y,

e.Speci
alAddi
ti
onal
Dut
yonCust
oms
Att
heSt
atel
evel
,thef
oll
owi
ngt
axessubsumed:

a.Subsumi
ngofSt
ateVal
ueAddedTax/
Sal
esTax

b.Ent
ert
ainmentTax(
othert
hanthetaxlev
iedbythelocal
bodi
es),
Cent
ralSal
esTax(l
evi
edbythecentr
eandcollect
edbytheStat
es.)

c.Oct
roi
andEnt
ryTax

d.Pur
chaseTax

e.Luxur
yTax

f
.Taxesonl
ott
ery
,bet
ti
ngandgambl
i
ng.

Exci
sedut
y:i
tisani
ndi
rectt
ax.Thi
swasi
mposedonmanuf
act
ured
goodsandwasl eviedwhent hegoodsmov edoutofthef actoryarea.I
tis
thetaxlev
iedonthemanuf actur
eofgoodswi thi
nthecount ry.GSThas
subsumedanumberofi ndi r
ecttaxesincl
udingExcisedut yexceptonaf ew
i
temsl i
keli
quorandpetroleum.Excisedutyisnowal socal l
edasCent ral
ValueAddedTax( CENVAT) .Thi
sindir
ectTaxi sgovernedbyCBI CCentral
BoardofIndir
ectTaxesandCust oms.Att heCentreexcisedut yearl
ier
usedtobel ev
iedasCentralExci
seDut y,Addit
ionalExci
seDut y
,etc.
howeverGSTi nt
roducedinJuly2017subsumedmanytypesofexci seduty
.
Now,excisedutyisappli
edononlyfewproduct
ssuchasli
quor .Excise
dutyi
sleviedont hemanufact
ureofgoodsandatthet
imeofr emov alof
goodsfrom thefactor
ywhileGSTorSalesTaxorVATarelev
iedont he
suppl
yofgoodsandser v
ice.

Cust
omsDut
y:I
tisal
soani
ndi
rectt
ax.I
tisi
mposedonexpor
tand
i
mpor tofgoods.Iti
simposedongoodswhent heycrossint
ernat
ional
borders.CustomsTarif
fAct1975-tell
srat
esondiff
erentgoods(i
mpor t
s
andexpor t
s).All
mattersrel
atedt
ot hi
sfal
lsundert
heCent r
alBoardof
Indi
rectTaxesandCust oms(CBIC).

Ty
pesofCust
omsDut
y:

Basi
cCustomsDut
y(BCD):i
sthedut
yimposedont
heval
ueoft
heal
lor
mostoft
hegoodsataspeci
fi
crat
eimport
edint
oacount
ry.

Count
ervail
ingCustom Duty: i
saspeci
ficform ofdutyt
hatthegovernment
i
mposesi nordertoprotectdomesti
cpr oducersbycounteri
ngthenegati
ve
i
mpactofi mportsubsidi
es.CVDi st
husani mpor tt
axbyt heimpor
ting
count
ryoni mport
edpr oducts.CVDisi
mposedt orai
sethepr i
ceofthe
i
mportedproductandbr ingitparwi
ththepr i
ceofthedomest i
cproductt
o
makeitcompet i
ti
ve.

Anti
-DumpingDuty:
isaprotecti
onisttari
ffthatadomesticgover
nment
i
mposesonf orei
gnimportsthatitbeli
evesar epri
cedbel
owf ai
rmarket
val
ue.Dumpingisaprocesswher einacompanyexpor tsaproductata
pri
cethati
ssigni
fi
cantl
ylowerthant hepriceitnormal
lychar
gesinit
s
home( ori
tsdomesti
c)mar ket.
VAT-Val ueAddedTax: anindi
recttaxwasimposedont hesaleofgoods
withinthest
ateandwasi mposedonv alueadditi
on.I
ncaseofVATev er
y
entityi
nthevaluechainneedt opaytaxtothegov er
nmentaccor di
ngto
theirval
ueadditi
on.ThisTaxwasi mposedon1Apr il2005.VATwas
i
ntroducedasar eplacementforSalesTaxsot hataunifiedtaxrat
efor
productsandserv i
ceswaspossi bl
eacrossIndia.I
tisalsocall
edasMulti
PointSalesTax.Itisdest
inati
onbasedTax.

Ser
viceDut
y:wasi
mposedonsal
eofser
vices.Nowi
thasbeen
subsumedunderGST.

Centr
eSalesTax: CSTwaslevi
edbythecentr
eonsal
eofgoodsfrom one
st
atetoanotherbutthetaxpr
oceedswerecoll
ect
edandkeptbyt
heor i
gin
st
ate,soi
twasal socall
edori
gin-
basedTax.

Entr
yTax:
wasat axonthemov ementofgoodsf
rom onestat
etoanother
i
mposedbyt hestat
egovernmenti
nIndi
a.I
twaslev
iedbythereci
pient
stat
etopr
otectit
staxbase.

StampDut y:i
mposedbyt hestatei
sanindirectt
aximposedonalllegal
propert
ytransacti
ons.Aphysi
calstamphadt obeattachedtoor
i
mpr essedupont hedocumenttodenotethatthest
ampdut yhadbeen
paid.Si
nceitisimposedbystates,
therat
ev ari
esfr
om statetost
ate.
Li
stofI
n-Di
rectTax

GST(
Cent
re)

SGST(
stat
e)

Cust
om Dut
y(cent
re)

Exci
seDut
y(cent
reandst
ate)

Ser
viceDut
y/t
ax(
cent
re)

Cent
reSal
esTax(
lev
iedbyCent
re,
col
l
ect
edbyst
ate)

VAT(
stat
e)

Oct
roi
andEnt
ryTax(
stat
e)

St
ampDut
y(st
ate)

Ent
ert
ainmentTax(
stat
e)

Pur
chaseTax(
stat
e)

Taxesonl
ott
ery
/bet
ti
ng/
gambl
i
ng(
stat
e)

Di
rectTaxl
evi
edbySt
ateGov
ernment
:

HouseTax/
Proper
tyTax:
Propert
yTaxlevi
edbyStateGovernmentthroughMuni cipalCorporat
ions.
I
nI ndi
aispaidonrealpr
opert
ywhichincl
udesl andandi mprovement son
l
and, wi
ththegover
nmentapprai
singthemonet aryvalueofeachsuch
propert
yandassessingt
hetaxinproport
iontoitsvalue.Iti
sthedut yof
theMunici
pali
tyofaparti
cul
arareatodot hi
sassessmentanddet ermine
thePr opertyTax, whichcanbepai donanannual basis.Thi
staxisusedto
dev el
opl ocalameni ti
esincl
udi ngroadrepair
s, maintenanceofparksand
publ i
cschool s,garbage/sewagedi sposalsystem etc.Proper
tyTaxv ar
ies
from locationandcanbedi fferenti
ndiffer
entcitiesandmuni ci
pali
ti
es.
Ur banlocal bodiesli
keMuni cipalbodi
es/Muni cipalCorpor
ati
ons/town
areaCommi tt
eesl evyPr
oper tyTaxundert herelevantActs.

Thelar
gesti
tem ofI
ncome/Recei
ptsoft
heGovernmentofIndi
aon
rev
enueAccountisGSTfol
l
owedbyCor por
ateTaxandIncomeTax.
Cent
ral
Boar
dofDi
rectTaxes:
For
mat
ion:
1963-
64

TheCentralBoardofDir
ectTaxesi sastatutor
yauthor
it
yfunct
ioni
ngunder
theCent
ralBoar dofRevenueAct,1963.Itdeal
sinmatterr
elat
ingt
olevy
andcoll
ecti
onofdi r
ectTaxes.I
tisapar tofDepart
mentofRevenueinthe
Mini
str
yofFi nance.

Hi
stor
ical
Backgr
ound:

TheCent ralBoardofRev enueast heapexbodyoft heDepar tmentcharged

wit
ht headmi ni
strat
ionoft axes,camei nt
oexi stenceasar esultt
heCentral
BoardofRev enueAct ,1924.Initi
all
ytheBoar dwasi nchargeofbot hdi
rect
andindirecttaxes.Howev erwhent headmi nistr
ationoftaxesbecamet oo
unwieldyforoneBoar dtohandl e,theBoardwasspl itupintot wo,namely
TheCent ralBoardofDi rectTaxesandCent ralBoar dofExci seand
Customswi t
hef fectfr
om 1. 1.1964.

Composi
ti
on

TheCent
ral
Boar
dofDi
rectTaxesconsi
stsofaChai
rmanandsi
xmember
s.

MsSangeet
aSi
nghi
spr
esentChai
rmanofCBDTappoi
ntedon04-
May
-
2022

Shr
iJBMohapat
raChai
rman2021r
eti
redon30-
Apr
il
-2022

Fi
rstChai
rmanwasShr
iJamunaPr
asadSi
ngh(
1964-
67)

Headquar
ter
:NewDel
hi
Funct
ionsofCBDT:

I
tdeal
swi
thmat
ter
srel
atedt
olev
yingandcol
l
ect
ingDi
rectTaxes.

For
mul
ati
onofv
ari
ouspol
i
cies.

Super
visi
onoft
heent
ir
eIncomeTaxDepar
tment
.

Suggest
slegi
slat
ivechangesi
nDi
rectTaxEnact
ment
s.

Suggestchangesi
nTaxr
ates.

Proposeschangesi
nthet
axat
ionst
ruct
urei
nli
newi
tht
hegov
ernment
poli
cies.