Indirect tax is a tax that is imposed on goods and services and is paid by an intermediary like prouder or seller but the burden of the tax is usually borne by the consumer. Indirect taxes are not imposed based on ability to pay. Differentiating factor of indirect tax compared to direct tax is that in the case of indirect tax, the tax burden can be shifted from the consumer to the producer or seller. But in the case of direct taxes, the burden will be borne by the same tax payer.
