Budget FAQs: What is indirect tax?

Indirect taxes are imposed on goods and services. They are paid by consumers indirectly at the time of buying goods and services. Tax levied on the seller of goods and service providers but often gets passed on to the end consumer and hence the consumer bears the tax. An indirect tax is levied at the same rate for everyone irrespective of their income. Service tax, excise duty, entertainment tax, customs duty, securities transactions tax, stamp duty are some of the widely applied indirect taxes.

These are of two kinds Goods and Services Tax (GST) and customs duty. GST Council is the decision-making body for GST and the Union Budget has nothing to do about it. GST is mentioned in an invoice when a purchase is made.