Indirect tax collection may fall short, says Garg

  1. The Central government has said that it may fall short of the Goods and Services tax(GST) target this financial year.However,government is confident of reaching its direct tax collection target for the current financial year.
  2. The government had targeted GST collections at Rs 1.3 lakh crore and direct tax collections at Rs 12 lakh crore for the current financial year 2018-19.
  3. GST (Goods and Services Tax) is an indirect tax that has replaced many Central and State taxes like excise duty,VAT and service tax.It is a single comprehensive tax levied on all goods and services produced in India as well as those imported from other countries.
  4. Indirect tax can be defined as a type of tax where the incidence and impact of taxation does not fall on the same entity. It is collected by the government from an intermediary such as a retailer or a manufacturer. The eventual tax amount is paid by the buyer of the goods and services. 
  5. Direct taxes are levied on a person’s or a firm’s income or wealth.The incidence and impact of the direct tax fall on the same person.Example: Income Tax, Corporation Tax, capital gains tax and Wealth Tax.The impact of direct tax is not Inflationary.