The Government of India levies two types of taxes on the citizens of India –Direct and Indirect Tax.
Indirect taxes are usually transferred to another person after being initially levied as a direct tax. Common example of an indirect tax includes Goods and Services Tax (GST). GST is levied on the manufacturers or service providers as a direct tax, which is then transferred to the consumers when it is part of the final price of the goods or services, thus, making it an indirect tax for the consumers.
On the other hand, the burden of the direct taxes cannot be transferred to another person, such as Income Tax, which every individual is supposed to pay directly to the tax authorities in India. Both indirect and direct taxes are vital components that play an essential role in changing the course of the Indian economy.