An Indirect Tax is a tax that is indirectly paid by the person benefiting of a Good / Service to the Revenue of Government via an intermediately / middle man.
- Service Tax is the tax on providing services (Ex: Service Tax Act, 1994)
- Central Excise Act, 1944
- Central Sales Tax Act, 1956 is the tax on inter-state trade
- Laws related to Valued Added Tax
- Indirect Tax collections often are far higher than Direct Tax collections for most Governments
- Indirect Taxes are paid even before the good reach the taxpayer.
- Some Governments combine different types of indirect taxes into one for simplicity sake. In India, for example, is considering merging taxes on Goods and Services into a consolidated Goods and Services Tax.