Question

“Indirect taxes are also called as taxes in the dark.” Justify the statement with the suitable reasons.

Answer 1

Indirect taxes are known as “taxes in the dark” because the taxpayer is often not aware of the exact amount of tax being paid. These taxes are included in the price of goods and services, so consumers pay them indirectly when they buy products without making a separate payment to the government. For example, GST is built into the price of many goods and services, and the vendor collects it from the customer and deposits it with the government. As a result, the consumer bears the tax burden unintentionally, which is why indirect taxes are known as “taxes in the dark”.