Question

What is an indirect tax? How is it different from a direct tax?

Answer 1

Indirect tax: Tax in which burden of tax and responsibility to deposit tax does not lie on the same person. For example, VAT, sales tax, service tax, GST, etc. are indirect taxes.

Direct tax: Tax in which burden of tax and responsibility to deposit tax lies on the same person. For example, income tax, corporate tax, wealth tax, etc. are direct taxes.