Indirect taxation refers to the imposition of taxes on the consumption of goods and services, rather than directly on an individual’s income. In this system, the tax is paid by the consumer along with the purchase price of the goods or services, and it is the responsibility of the seller to remit the tax to the government. It is important to note that the person paying the tax and the person who bears the liability to pay the tax are two distinct entities.

Various types of indirect taxes are implemented to regulate different aspects of economic activities:

1. Service Tax: This tax is applied to the services availed by customers. For instance, when an individual books a hotel accommodation, service tax is levied on the amount paid for the booking.

2. Excise Duty: This tax is imposed on the manufacturing of goods. For example, if a person engages in the production of cars, they are obligated to pay excise duty on the cars manufactured.

3. Value Added Tax (VAT): VAT is paid on the value added to the price of goods during their sale. For instance, when a wholesaler sells goods to a retailer, VAT is levied on the price difference.

4. Custom Duty: This tax is paid on goods imported from outside India.

5. Stamp Duty: Stamp duty is applicable to the sale of immovable property and is also mandatory for all types of legal documents.

   6. Entertainment Tax: This tax is imposed on transactions related to entertainment, such as movie tickets, video game arcades, stage shows,                 exhibitions, amusement parks, and sports activities.