GS IAS Logo

< Previous | Contents | Next >

PURCHASE TAX


A tax collected by states in India on goods. This is imposed on the purchases done by traders/manufacturers—basically collected by the seller and given to the concerned states). This is deducted once the traders/manufacturers pay value added tax (VAT) to the states—as VAT is paid on the differential value of the traded/manufactured goods. This tax is among the 8 taxes to be merged into the upcoming indirect tax, the GST.