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CMA Intermediate · Direct and Indirect Taxation · Concept of Indirect Taxes

Which of the following is an indirect tax levied by the Union Government on the import of goods into India, as distinct from GST?

Basic customs duty is the indirect tax levied by the Union on goods imported into India. It is charged on the import transaction and recovered through the price of the goods, whereas advance tax and taxes on assets are direct taxes borne by the person assessed.

  1. ABasic customs dutyCorrect
  2. BSecurities transaction tax on income
  3. CWealth tax on net assets
  4. DAdvance tax on business profits

Explanation

Basic customs duty is charged on goods imported into India and is an indirect tax collected on the transaction of import. Advance tax is a mode of paying direct tax, and wealth-type taxes on assets are direct in nature. Securities transaction tax is not a tax on income in any sense that makes option B correct as stated.

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