Indirect tax system in India

All civilized countries need to collect taxes for several reasons, such as to finance developmental activities, to meet their day-to-day expenses related to maintenance of a free and fair society, to control the economy through fiscal measures, and to a certain extent, to change the economic behavior of people. The major sources of tax revenue for the federal government are duties of excise on manufactured commodities, duties of customs on imported goods, and newly levied service taxes. Other taxes, such as the wealth tax, the estate tax etc., though imposed does not contribute significantly to the national exchequer. This authority of national governments to collect monies from taxpayers must recognize a balance between the nations’ authority to tax and taxpayers’ rights. Ideally this direct tax collection can be analogized to the extraction of honey from the abode of honeybees where honeybees are not disturbed and careful extraction of the honey results in a circular process where more honey is deposited by honeybees giving better opportunity to the extractor to get the honey in perpetuity.