impact of collection of direct and indirect tax

Group 2 Group 2 RollRoll NameName 425 Subek425 Subek 426 Gaurav426 Gaurav 427 Udbhav427 Udbhav 428 Harsh Kanodia428 Harsh Kanodia 430 Amit Jaiswal430 Amit Jaiswal 431 Manish Aggarwal431 Manish Aggarwal 432 Kallol Kr. Sarkar432 Kallol Kr. Sarkar 433 Hitesh Manot433 Hitesh Manot 434 Hemant Banthia434 Hemant Banthia 436 Vineet Verma436 Vineet Verma 437 Ayush437 Ayush

St.Xavier's college, KolkataSt.Xavier's college, Kolkata

Impact of collection of Direct and Indirect Tax on Indian Economy

St.Xavier's college, Kolkata

IntrouctionIntrouction The title of the project presents the framework The title of the project presents the framework

of mind that it deals with the two types of tax of mind that it deals with the two types of tax that encircles our economy, albeit direct tax that encircles our economy, albeit direct tax and indirect tax.and indirect tax.

Tax is a kind of payment that is made to the Tax is a kind of payment that is made to the government. Its not a voluntary payment, but a government. Its not a voluntary payment, but a forced and compulsory payment. It is the most forced and compulsory payment. It is the most important revenue for the Indian Government.important revenue for the Indian Government.


1. What is a tax?1. What is a tax? --tax is a fee charged by a government on a product, --tax is a fee charged by a government on a product,

income or activity.income or activity. 2. Types of taxes---2. Types of taxes--- -- Direct tax and Indirect tax-- Direct tax and Indirect tax 3. Why are taxes levied?3. Why are taxes levied? -- the reason for levy of taxes is that they constitute the -- the reason for levy of taxes is that they constitute the

basic source of revenue to the government. Revenue so basic source of revenue to the government. Revenue so raised is utilizedraised is utilized

for meeting the expenses of the government like defense, for meeting the expenses of the government like defense, provision of education, healthcare, infrastructure facilities provision of education, healthcare, infrastructure facilities like roads, dams etc.like roads, dams etc.

4. Structure of taxation4. Structure of taxation -- In India, there is federal structure of taxation. -- In India, there is federal structure of taxation.


Purposes and effects of taxationPurposes and effects of taxation ------- The four R’s------- The four R’s -- -- Taxation has four main purposes or effects: Revenue, Taxation has four main purposes or effects: Revenue,

Redistribution, Repricing, and Representation. Redistribution, Repricing, and Representation. The main purpose is revenue: taxes raise money to spend The main purpose is revenue: taxes raise money to spend

on armies, roads, schools and hospitals, and on more on armies, roads, schools and hospitals, and on more indirect government functions like market regulation or indirect government functions like market regulation or legal systems. This is the most widely known function. legal systems. This is the most widely known function.

A second is redistribution. Normally, this means A second is redistribution. Normally, this means transferring wealth from the richer sections of society to transferring wealth from the richer sections of society to poorer sections.poorer sections.

A third purpose of taxation is repricing. Taxes are levied to A third purpose of taxation is repricing. Taxes are levied to address externalities: tobacco is taxed, for example, to address externalities: tobacco is taxed, for example, to discourage smoking.discourage smoking.

A fourth, consequential effect of taxation in its historical A fourth, consequential effect of taxation in its historical

setting has been representation. setting has been representation. St.Xavier's college, KolkataSt.Xavier's college, Kolkata

Recent examplesRecent examples --Funds utilized in Common Wealth Games--Funds utilized in Common Wealth Games

The government has made investments to the tune of Rs 15,000 crore The government has made investments to the tune of Rs 15,000 crore to improve infrastructure ahead of the upcoming to improve infrastructure ahead of the upcoming Commonwealth Commonwealth Games 2010Games 2010. . The Government is facing financial crisis as it had reported a fall of The Government is facing financial crisis as it had reported a fall of over Rs 1,300 crore in tax revenue collection in the last fiscal due to over Rs 1,300 crore in tax revenue collection in the last fiscal due to the economic downturn. the economic downturn.

The Delhi government, in its budget, had earmarked Rs 2,105 crore The Delhi government, in its budget, had earmarked Rs 2,105 crore for the financial year 2009-10 for for the financial year 2009-10 for projects related to the Gamesprojects related to the Games. . The city Government had withdrawn subsidy to certain categories of The city Government had withdrawn subsidy to certain categories of power consumers, increased bus fare and hiked water tariff last year power consumers, increased bus fare and hiked water tariff last year in view of its financial constraints. in view of its financial constraints.

The Government had also increased VAT on 120 items to improve its The Government had also increased VAT on 120 items to improve its financial resources which will come into effect from Thursday i.e 14th financial resources which will come into effect from Thursday i.e 14th Jan 2010.Jan 2010.

--Inaugration of New Delhi Airport --Inaugration of New Delhi Airport St.Xavier's college, KolkataSt.Xavier's college, Kolkata

Objective of our studyObjective of our study

In this project we are analyzing the impact of In this project we are analyzing the impact of direct and indirect tax on our economy. We direct and indirect tax on our economy. We have also projected the increase in revenue have also projected the increase in revenue from the different modes of tax like the from the different modes of tax like the income tax, customs, excise, service etc… income tax, customs, excise, service etc… However it is followed by analysis & However it is followed by analysis & interpretation. interpretation.


Direct tax may double on collection of DTC Direct tax may double on collection of DTC & GST& GST

Tax has four main purposes or effects Tax has four main purposes or effects Revenue, Revenue, Redistribution, Repricing, and Representation.Redistribution, Repricing, and Representation.

According to According to Central Board of Direct Taxes (CBDT) Central Board of Direct Taxes (CBDT) Chairman, S S N Moorthy, “We are moving towards a Chairman, S S N Moorthy, “We are moving towards a scenario, where I think there will be a substantial scenario, where I think there will be a substantial increase in collection of taxes. The Direct Tax Code and increase in collection of taxes. The Direct Tax Code and Goods and Service Tax will be in place. The GST will Goods and Service Tax will be in place. The GST will help us in Direct Tax collection.”help us in Direct Tax collection.”

The govt. is aiming for a revenue of about 4,30,000 The govt. is aiming for a revenue of about 4,30,000 crore after surrendering about 26,000 crore in the form crore after surrendering about 26,000 crore in the form of streamlining and TDS in the last budgetof streamlining and TDS in the last budget. .


Impact of Indirect tax on the current fiscal yearImpact of Indirect tax on the current fiscal year Indirect tax is generally consumption based. The fast Indirect tax is generally consumption based. The fast

growth of the sub-continent is marked by a whooping growth of the sub-continent is marked by a whooping growth of 43% to around 56,900 crore in the 1growth of 43% to around 56,900 crore in the 1stst quarter quarter of the current fiscal year.of the current fiscal year.

Moreover the recovery of Indian economy from the Moreover the recovery of Indian economy from the globe engulfing recession is even showed by the globe engulfing recession is even showed by the increased customs revenue to 60% to touch 28,135 increased customs revenue to 60% to touch 28,135 crore while excise showed a growth of 55 % to touch crore while excise showed a growth of 55 % to touch 19,530 crore.19,530 crore.

However service tax remained flat at about 9,500 However service tax remained flat at about 9,500 crore.crore.

The total revenue expected is about 7.46 lacs, and out The total revenue expected is about 7.46 lacs, and out of this 3.16 lacs is expected from indirect tax.of this 3.16 lacs is expected from indirect tax.


Dell

Reference IRS data book

Departmental StructureDepartmental Structure

1. Chairman1. Chairman 2. Board Members of Direct Taxes2. Board Members of Direct Taxes 3. Chief Commissioner3. Chief Commissioner 4. Commissioner4. Commissioner 5. Additional Commissioner5. Additional Commissioner 6. Joint Commissioner6. Joint Commissioner 7. Deputy Commissioner7. Deputy Commissioner 8. Assistant Commissioner8. Assistant Commissioner 9. Income Tax Officer9. Income Tax Officer 10. Tax Inspector10. Tax Inspector 11. Tax Assistant11. Tax Assistant 12. Constable12. Constable


Analysis and InterpretionAnalysis and Interpretion


ConclusionConclusion


Bibliography and WebliographyBibliography and Webliography Tax reform in India---M. Govind RaoTax reform in India---M. Govind Rao IRS data bookIRS data book IRS master file systemIRS master file system Asia-pacific Development journalAsia-pacific Development journal


impact of collection of direct and indirect tax

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