As the name suggests, indirect tax is not directly levied on the taxpayers. This tax is often levied on goods and services which results in their higher prices. This tax is basically levied on the seller of goods or the provider of service but in most cases, it gets passed on to the end consumer and therefore, it is generally the consumer paying the tax, indirectly.
Examples of indirect taxes in India include service tax, central excise and customs duty, value added tax (VAT) and most importantly goods and services Tax (GST). In an effort to merge most indirect taxes and thus reduce compliance issues, the Centre introduced GST. An indirect tax increases the price of the product or the service and is levied at the same rate to everyone irrespective of the income of the person.
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