Indirect Tax
- Navodaya Institute
- Aug 6, 2018
- 1 min read
An indirect tax is collected by one entity in the supply chain (usually a producer or retailer) and paid to the government, but it is passed on to the consumer as part of the purchase price of a good or service. The consumer is ultimately paying the tax by paying more for the product.
Advantages of Indirect Taxes
1. Indirect taxes can be spread over a wide range
2. They are easy to collect.
Disadvantages of Indirect Taxes
They are uneconomical.
The cost of collection is quite heavy.
They discourage industries if raw materials are taxed.
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