Question

35. Indirect taxes have an element of:
(A) Equitable
(B) Certainty
(C) Economical
(D) Encourage honesty​

Answer 1

Answer:

Indirect taxes have an element of : Equitable

Answer 2

Indirect taxes have an element of Equitable (option a)

Indirect taxes

In this, the entity on whom the tax was levied is allowed to charge it from someone else which means the burden is shifted.

Types of indirect taxes:

VAT ( Value Added Tax):

• Is an ad-valorem tax on domestic final consumption, levied and collected at all stages between production and the point of the final sale.

• It covers both manufacturings as well as distribution stages and does away with the multiplicity of domestic indirect taxes like sales tax, excise duty, wholesale tax, turnover tax, etc.

MODVAT (Modified VAT):

• Under MODVAT, a producer has to pay tax on the value of final output but the excise duty paid on inputs in earlier stages of production is reimbursed back to the producer on the presentation of sales invoices.

CENVAT (Central VAT):

• It was introduced in the form of revamped MODVAT. It had all the features of MODVAT, with the only exception of a uniform tax rate and its coverage was extended to include capital goods.