Practicing CA
86 Points
Joined April 2017
dear bimlesh sir,
direct tax i.e. Income Tax is tax in which person(assessee) have to bear.
indirect tax i.e. VAT , CST, Service Tax etc (or later it will be GST) are taxes consumer have to bear ultimatly.
burden to bear direct tax cannot be shifted to any other person and on other hand burden of indirect tax is shifted toward consumer.
For example:
1. Direct Tax:- Bimlesh earn 10,00,000/- p.a. u have to pay Income tax (ultimatly u have to bear).
2. indirect tax:- bimlesh purchases goods as a business man worth 1,00,000/- and pays VAT @ 12.5% i.e. 12,500/-. Bimlesh will collect the tax from customer and will deposit the balance amount to govt.