Which two of the following taxes are indirect taxes?

The correct answer is  Sales tax and Excise duty

Key Points Sales tax and excise duty both are indirect taxes.

• Sales tax is paid to the government for the sale of goods and services.
• Excise duty is levied on domestically produced goods and services

Important Points Tax is a compulsory payment to the government by an individual or an organization to generate public funds to manage public sector expenditure.

• Direct taxes are those taxes that are imposed and paid by the same person.
  • The burden of these taxes can not be transferred.
  • Examples of direct taxes are income tax, corporate tax, gift tax, and property tax
• Indirect taxes are those taxes that are imposed and paid by different people.
  • Indirect taxes are those taxes imposed on a person but he transfers his burden to other.
  • For example, excise duty is imposed on the producer of the goods
  • Producers include the tax value in the good's price and it is paid by the consumer of the goods.

Additional Information Goods & Services Tax

• Goods and services tax was implemented in India through the 122^nd constitutional amendment bill.
• It was enforced from 1^st July 2017.
• It is a single or comprised tax on the supply of goods and services, from the end of the producer to the consumer.
• The credit of input taxes paid on each stage of value addition in goods and services tax.
• It implies a single tax on each stage of value addition.
• All indirect taxes are aggregated with goods and service tax.
• Some products such as petrol and alcohol are exempted from goods and services tax.