wh is service tax and indirect tax

Dear Student
Service tax can be defined as the tax levied on the service providers by the government. The final burden of this tax is borne by customers. It is also a kind of indirect tax.

Indirect tax :

1. Indirect tax is a tax collected by intermediaries (for e.g. retailers) from the ultimate taxpayer i.e. consumers. The incidence and impact of the tax are on different persons.

2. Its burden can be shifted from one person to another. For e.g. the manufacturer shifts the burden of tax to retailers who shifts it to consumers.

3. An indirect tax may affect prices, as generally, consumers pay high prices which are inclusive of taxes.

Examples: VAT, customs duty.


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