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Indirect Tax

31 January 2019

why we need to pay both direct and indirect taxes?
Is indirect taxes is not enough, from my income , I was buying goods and services and paying taxes .
Then why I need to pay direct tax?

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3 Replies

v k s supraja (intermediate) (216 Points)
Replied 31 January 2019

sir,

we need to pay indirect taxes (GST) when we purchase goods or when we receive services....

whereas we need to pay direct tax (income tax) in addition to indirect taxes on income earned from sale of such goods or receipts from providing services.... subject to claiming allowable expenditure..

Nitesh bind (Student CA Final ) (12692 Points)
Replied 01 February 2019

Think it from this way;

Suppose You go to Haldiram and have food, now you pay bill which is inclusive of taxes (indirect tax). Agree with you that you paid there indirect tax here. But at the same time if there is no Direct tax then income of Haldiram would be 100% tax free because Haldiram is not paying any tax and all it is doing is just taking tax (indirect) from customer and paying it to Govt.

Now, to avoid such kind of disparity direct tax is there. Otherwise same public would say that we are bearing all taxes and business houses are paying nothing.

Now, You apply this example in your case too. Maybe it would be clear why Direct and Indirect taxes. Why not any one ?

Thanks, Be Helpful to One Another.

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