Discuss the pre-GST indirect tax system in India
Pre-GST indirect tax system: Before the introduction of the GST in 2017, India had a complex indirect tax structure. It was characterized by multiple
Question: Discuss the pre-GST indirect tax system in India. (400 words) Introduction: Before the introduction of the Goods and Services Tax (GST) in 2017, India had a complex indirect tax structure. It was characterized by multiple taxes imposed by the central and state governments, leading to inefficiencies, cascading effects, and regional disparities. Body: 1. Components of the Pre-GST Indirect Tax System: Central Taxes: Central Excise Duty: Levied on the manufacturing of goods within India. Service Tax: Imposed on services like telecommunication, insurance, and hospitality. Customs Duty: Charged on imports and exports of goods. Central Sales Tax (CST): Levied on inter-state sale of goods, collected by the central government but appropriated by states. State Taxes: Value Added Tax (VAT): Imposed on the sale of goods within a state. Entry Tax/Octroi: Levied on goods entering a municipal jurisdiction. Luxury Tax: Charged on services or goods deemed luxurious, such as hotel stays. Entertainment Tax: …