Corporate Taxation

Section 2(43) of Income Tax Act 1961, defines Tax. There are two kinds of Direct and Indirect tax.

Direct Tax: It is paid directly to the revenue of the Government. Such as Income Tax, Wealth Tax and Gift tax. It is a tax on an individual and which cannot be avoided but certain deduction can be claimed.

Indirect Tax: It is paid indirectly to the revenue of the Government. Here the amount is collected by middle men as part of a transaction in buying and selling of product or service. Such as GST, VAT, Sales Tax, Central Sales Tax and Central Excise.

(A) Income Tax Act 1961: (Direct Tax)

Income Tax Act 1961, lays down the provisions for levy, administration, collection and recovery of Income

Tax in India. According to the Income Tax Act, there are five sources of income that are liable to tax.

1) Income from Salaries

2) Income from House Property

3) Profits and Gains of business or Profession

4) Income from Capital Gains

5) Income from Other Sources.

 

(B) Customs Act, 1962 (Indirect Tax)

Custom Duty is an indirect tax, imposed under the Customs Act formulated in 1962. The Customs Act, 1962 is the basic statute which governs entry or exit of different categories of vessels, aircrafts, goods, passengers etc., into or outside the country. The growth of country is heavily dependent on Customs Act,1962 as taxation related to Export and Import is governed by this Act moreover it protect  Domestic companies from unhealthy competition with International companies and unfair trade practices. The Act extends to the whole of the India.

Customs Act, 1962 just like any other tax law is primarily for the levy and collection of duties but at the same time it has the other and equally important purposes such as:

  • regulation of imports and exports;
  • protection of domestic industry;
  • prevention of smuggling;
  • conservation and augmentation of foreign exchange and so on.

 

(BA) THE GOODS AND SERVICES TAX ACT, 2017(Indirect Tax)

The Goods and Service Tax Council (GSTC) was formed by the government of India to ensure that there was a single unified tax system across the country. This is regarded as one the biggest reform in Indirect Taxation. In order to simplify the complex system of indirect taxation and to boost the development of the country the Government introduced 3 types of GST which are given below.

  1. CGST (Central Goods and Service Tax)
  2. SGST( State Goods and Service Tax)
  3. IGST(Integrated Goods and Services Tax)

CGST(Central Goods and Service Tax)

Revenue under CGST is collected by the Central Government. CGST subsumes the below given central taxations and levies.

  1. Central Excise Duty
  2. Services Tax
  3. Central Sales Tax
  4. Excise Duty
  5. Additional Excise Duties Countervailing Duty (CVD)

SGST(State Goods and Service Tax)

Revenue under SGST is collected by the State Government. SGST subsumed the following state taxations.

  1. Luxury Tax
  2. State Sales Tax
  3. Entry tax
  4. Entertainment Tax
  5. Levies on Lottery

IGST(Integrated Goods and Service Tax)

IGST is charged when there is movement of goods from one state to another state or Interstate. The revenue will be collected by the central government and accordingly will be shared between the Union and states in the manner prescribed.

In a situation where the taxpayers do not agree with the outcome of audits or tax assessments, they may appeal accordingly to the Appellate Authority.

read more