Last updated: 14 Mar 2013

Taxation

India has a well-developed tax structure with a three-tier federal structure, comprising the Union Government, the State Governments and the urban/rural local bodies. The power to levy taxes and duties is distributed among the three tiers of government, in accordance with the provisions of the Indian Constitution.

The main taxes/duties that the Union Government is empowered to levy are Income Tax (except tax on agricultural income, which the State Governments can levy), customs duties, Central Excise and Sales Tax and Service Tax. Please see below for further information on specific Union Government [federal] taxes:

• Customs Duty - www.cbec.gov.in/customs/cst2012-13/cst1213-idx.htm
• Central Excise Tariff - www.cbec.gov.in/excise/cxt2012-13/cxt_1213-idx.htm
• Service Tax - www.servicetax.gov.in

The principal taxes levied by the State Governments are Sales Tax (tax on intra-state sale of goods), stamp duty (duty on transfer of property), state excise (duty on manufacture of alcohol), land revenue (levy on land used for agricultural/non-agricultural purposes), duty on entertainment and tax on professions and callings. The local bodies are empowered to levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within areas of the local bodies), tax on markets and tax/user charges for utilities like water supply, drainage, etc.

Excise duties are levied on a wide range of items manufactured in India. On imported goods this is known as countervailing duty. Information on Excise duties is available at http://www.cbec.gov.in/cae1-english.htm.

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