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| INDIAN TAX STRUCTURE |
TYPE OF TAXES
Direct Tax Income Tax,Property Tax,Gift and Wealth Tax etc.
Indirect Tax Sales Tax,Excise Duty,Custom Duty etc.
Taxes Imposed by the Central Government Income tax,corporate tax,property tax,succession tax,wealth tax,gift tax,custom duty,tax on agriculture wealth etc.
Taxes Imposed by the State Government Land revenue,agriculture income tax,agriculture land revenues,excise duty,entertainment tax,stamp duty,road tax,motor vehicle tax etc.
Indirect Tax Sales Tax,Excise Duty,Custom Duty etc.
Taxes Imposed by the Central Government Income tax,corporate tax,property tax,succession tax,wealth tax,gift tax,custom duty,tax on agriculture wealth etc.
Taxes Imposed by the State Government Land revenue,agriculture income tax,agriculture land revenues,excise duty,entertainment tax,stamp duty,road tax,motor vehicle tax etc.
DISTRIBUTION OF TAX
The distribution of tax between center and state has been clearly mentioned in the provisions of Indian Constitution. For rationalizing it from time to time, Finance Commission has been constituted.
Levied and Retained by Center Custom duty,corporation tax,taxes on capital (other than agriculture land ) etc.
Levied and Collected by Center but Shared with States Taxes On income other than agricultural income and union excise duties on goods included in Union excise duties on goods included in Union List, excepting medicinal and toilet preparations.
Levied and Collected by Center but Distributed among States Succession and estate duties in respect of property other than agricultural land, terminal tax on goods and passengers,tax on railway fares and freights, taxes on sale or purchase of newspaper and advertisement.
Levied by Center but Collected and Appropriated by the States Stamp duties other than included in the Union List and excise duties on medicinal and toilet preparations.
Taxes belonging to states exclusively are land revenue,stamp duty etc.
Levied and Retained by Center Custom duty,corporation tax,taxes on capital (other than agriculture land ) etc.
Levied and Collected by Center but Shared with States Taxes On income other than agricultural income and union excise duties on goods included in Union excise duties on goods included in Union List, excepting medicinal and toilet preparations.
Levied and Collected by Center but Distributed among States Succession and estate duties in respect of property other than agricultural land, terminal tax on goods and passengers,tax on railway fares and freights, taxes on sale or purchase of newspaper and advertisement.
Levied by Center but Collected and Appropriated by the States Stamp duties other than included in the Union List and excise duties on medicinal and toilet preparations.
Taxes belonging to states exclusively are land revenue,stamp duty etc.
FINANCE COMMISSION
Finance commission is constituted by the President under Article 280 of the Indian Constitution. Since independence thirteen Finance Commissions have been constituted so far.
FUNCTIONS
The distribution of net proceeds of taxes to be shared between the Union and the States and the allocation of share of such proceeds among the states.
The principle which should govern the payment of grant-in-aid by the center to the states.
Any other matter concerning financial relations between the center and the states.
The principle which should govern the payment of grant-in-aid by the center to the states.
Any other matter concerning financial relations between the center and the states.
INFLATION
It is that state in which the prices of goods and services rise on the one hand and the value of money falls on the other hand.When money circulation exceeds the production of goods and services,the state of inflation takes place in the economy.There are several types of inflation-demand pull inflation, cont pull inflation,stagflation and hyper inflation.
MEASUREMENT OF INFLATION
It is measured by the general price index.General price index measures the change in average prices of goods and services.
Inflation rates and the volume of money (or the purchasing power of money) are inversely correlated.Hence,two value of money can also by measured with the help of price indices.The value of money declines when price index goes up and vice-versa.
Inflation rates and the volume of money (or the purchasing power of money) are inversely correlated.Hence,two value of money can also by measured with the help of price indices.The value of money declines when price index goes up and vice-versa.
DEFLATION
Deflation is that state in which the value of money rises and the price of goods and services falls.
The state of economy may appear due to following reasons.
The state of economy may appear due to following reasons.
- When the government imposes heavy direct taxes or takes heavy loans from the public.
- When the Central Bank sells the securities in open market (which reduces the quality of money in circulation).
- When the Central Bank increases the bank rate (which curtails the quality of credit in the economy).
- When the Central Bank controls the credit money and adopt various measures such as increase i.e., CRR credit rationing and direct action.
- When the state of over production (excess supply over demand) takes place in the economy.
FOREIGN TRADE
After independence, Indian foreign trade has made cumulative progress,both qualitatively and quantitatively though the Indian share in total foreign trade of the world has remained remarkable low.
In 1950, the Indian share in the total trade was 1.78% which came down to 0.6% in 1995. Share percentage of 0.6% continued in years 1997 and 1988.Since 1970,this share has remained around 0.6% which clearly indicates that India has failed to increase its share in the total world trade.Trade policy of 2004-07 had set a target of achieving 15% share in global trade by 2009.The present trade policy (2009-14) aims to achieve an annual export growth rate of 15% with an annual export growth target of US $200 billion by March 2011.
In 1950, the Indian share in the total trade was 1.78% which came down to 0.6% in 1995. Share percentage of 0.6% continued in years 1997 and 1988.Since 1970,this share has remained around 0.6% which clearly indicates that India has failed to increase its share in the total world trade.Trade policy of 2004-07 had set a target of achieving 15% share in global trade by 2009.The present trade policy (2009-14) aims to achieve an annual export growth rate of 15% with an annual export growth target of US $200 billion by March 2011.
COMPOSITION OF INDIA'S FOREIGN TRADE
Imports have been classified into bulk and non-bulk imports.
Bulk imports are further sub-divided into petroleum,oil and lubricants,(POL) and non POL items such as consumption goods,fertilizers and iron and steel.
Non-Bulk items comprises capital goods (which include electrical and non electrical machinery), pearls,precious and semiprecious stones and other items.
Exports of India are broadly classified into four categories.
Bulk imports are further sub-divided into petroleum,oil and lubricants,(POL) and non POL items such as consumption goods,fertilizers and iron and steel.
Non-Bulk items comprises capital goods (which include electrical and non electrical machinery), pearls,precious and semiprecious stones and other items.
Exports of India are broadly classified into four categories.
- Agriculture and allied products
- Ores and minerals
- Manufactured goods
- Mineral fuels and lubricants
DIRECTION OF FOREIGN TRADE
The direction of Indian trade registered a change during recent past years.Indian trade has been partially shifted from West-Europe to East Asia and OECD countries.
India is having maximum trade with OECD countries (mainly the USA,EU and Japan).
India is having maximum trade with OECD countries (mainly the USA,EU and Japan).
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