CA Sanjeev Digumarti (fresher) (32 Points)
23 November 2012My doubt is as follows, suppose i am an employee, i receive salary after tax is deducted by my employer.Now with that salary if i buy any commodity or receive any service why should tax(indirect tax) be again charged from me, as i have already paid tax to the government. Dont you think there is any flaw/loophole in this system?
please justify! any positive clarifications are most welcomed
@*CS Siddharth Bumb. *
(B.Com, CA Final, CS )
(5270 Points)
Replied 23 November 2012
Sir,
Both things are different. On salary you are paying tax which you earned. It is paid on your income.
and you are paying tax on commodity on which you are spending, as it is indirect tax, it is burden on final consumer.
You paid tax on income (tax on income EARNED) and not on expenditure to the Government.
CA Sanjeev Digumarti
(fresher)
(32 Points)
Replied 24 November 2012
thanks Siddharth! but i am not fully convinced/cleared to your explanation, again i would like to ask in response to your message that in relation to the above example, the end consumer is myself only so the burden of tax is ultimately upon me when i buy a commodity with my tax deducted salary. i feel that rather than shifting the burden to the end consumer the incidence of tax should be restricted within the distribution and supply chain(manufacturer-wholesaler-retailer).
again i may be wrong conceptually but why and is there a difference between tax on earning and tax on spending.
Ps : u can address me Sanjeev, no need of salutation :)
any feedbacks is most welcomed
polamsandeep
(article assistant)
(21 Points)
Replied 19 December 2012
Income tax = (Income earnned -expenses)*specified rates , so while paying IT we are not paying tax on the amount we are expending which is our part of total income , hence govt is collecting indirectly on our income while spending...
Sonu Kumar
(Account Manager)
(665 Points)
Replied 19 December 2012
Dear Mr Sanjeev,
I am Agree with your View on this Matter....... But we Know well that only Income Tax is Not enough for the Goverment expenditure so Government Impose Indirect Tax also. we Pay Direct Taxes on Our Income to the Central govt and Indirect Taxes on Sales, Services, Import and Export to Central and State Govt Both.
in Both Cases we are Finally Effected...........Means Final Consumer.............
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
CAclubindia
