Taxes - India - Introduction for Financial Management Course
Financial management revision article series
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Income tax
Sections 28 to 43 of Income Tax Act, 1961 cover provisions related to this head of income.
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Central Excise
Central excise duty is a levy on goods manufactured in the country. Central Excise Act, Central Excise Tariff Act, and Central Excise Rules govern this levy.
Excise duty is leviable on all goods, other than salt, which are produced or manufactured in India.
Classification of goods is based on a system of classification derived from the international convention of "harmonised commodity description" and "coding system".
There are two types of excise duties:
1. Specific: It is related to the quantum of manufacture. A specific amount for tonne of cement is an example.
2. Ad valorem: It is based on the value of goods manufactured. It is expressed as a percentage on the value.
Sales tax
Sales tax is leviable on sale of goods and it is levied by state governments in India. Every state has its own sales tax law.
For sale or purchase of goods outside the respective states, Central Sales Tax Act was enacted by the Parliament in 1956.
Customs Duty
It is levied by the Central government of India on import of goods into India or export of goods. The rates are specified in the Customs Tariff Act, 1975.
References
Prasanna Chandra, Financial Management, 5th Ed., Tata McGraw Hill, 2001
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