In this article we are going to discuss various indirect tax that are levied in India.
1) Sale Tax (Levied by State)
This tax is same as VAT (Value addition tax) which will be known as State GST (After GST Implementation). It is a tax on selling goods and services by state government and is an indirect tax, paid by consumer (consumption tax). The tax is collected by seller from consumer at Point-Of-Purchase.
2) Excise duty (Centre)
This tax is same as CenVAT or Central VAT which will be known as Central GST (After GST Implementation). It is Levied on goods manufactured domestically also for domestic consumption. It is different from tax levied on goods imported, which is custom duty.
3) Central Sales Tax or CST (Integrated GST after GST Implementation)
Sale tax is levied on inter state good movement. It is levied by centre but collected by state in which Sale occur.
4) Service Tax:
An indirect tax which is quite similar to State VAT. The service providers are liable to pay service tax as they offer it to general public or institutions but the same amount is added to customer bill.
Octroi is a Local tax collected by some state or municipality in India (Bombay municipal). When a good enter through Rail, Ship, Road, Air etc into a city, Octroi is charged on the basis of Volume, and not on price of good, as in case of VAT.