In India, indirect taxes encompass every area of an Indian business. Any transaction, whether in goods or services, attracts indirect tax. Indirect taxes are usually borne by the final consumer. Therefore, if a business entity fails to anticipate the applicability of an indirect tax and does not recover the same from the consumer it becomes a cost to the entity and is a direct hit to the bottom line. Consequently indirect taxes have a direct bearing on the costs, pricing policy, cash flow and profitability and ultimately the competitiveness of an organisation. Hence it becomes critical to evaluate the impact of various indirect taxes on any given transaction.
Presently in India, in view of ease of doing business, government has rolled out One Nantion One Tax Policy ie. GST. All goods and service are liable to pay GST though with certain exceptions. All Imports attract customs duty. Certain specific goods like petrol and diesel electricity, alcohol are kept outside the ambit of GST.