Types of Taxes By Finschool5paisa
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Further Anil explained to Ritika, what all types of Taxes exist.
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web story (1)
Consider a situation in which different groups of people pay some amount of their income to a security company.
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This company provides them with security and prevents robberies.
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These people include: -- Farmers [ Manufacturers] -- Traders -- Doctors [Service Providers] -- Employees -- Exporters -- Importers
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They paid the tax as follows: Manufacturers --> a % of their production known as Excise Tax. Traders --> a % of their sales known as Sales Tax.
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Service Providers --> a % of their charge known as Service Tax. Employees --> a % of their salary known as Income Tax.
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Exporter --> a % of their sales known as Export Tax. Importer --> a % of their sales known as Import Tax.
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In order to indirectly transfer taxes from the buyers (that are Excise, Service & Sales Taxes) to the company, the manufactures and the service providers increased the price of their services and goods. Therefore, they are called Indirect Taxes.
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But the salaried employees couldn't transfer the tax burden (i.e Income Tax) thus, they had to pay directly and these are known as Direct Tax.
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