Exporting goods from one part of India to another has become a regular affair. The importance of entry tax payment is evident from the imposition of different rates by various State Governments. The goods importing the products from another state to the state concerned is liable to pay the entry tax. In Odisha, for instance, the entry tax liability does not exceed 12%. However, in Madhya Pradesh, the tax rate might reach about 15% on selected items such as electronics and automobiles.
The concepts of TDS, GST and Deferred taxes might be helpful to analyse the entry tax meaning further. Individual workers are usually liable to pay Tax Deducted at Source (TDS) and organisations pay it to the government after deducting from the employee salaries. Moreover, in the case of importing and exporting, the TDS deduction entry is included in the invoice if the providers or foreign partners do not have establishments in India.
Thus, when inter-state transactions are within India, TDS payment is not mandatory. However, they can keep track of the TDS payable entry and TDS accounting entry based on employees' salaries. On the other hand, deferred tax refers to the income tax amount payable in the future. Therefore, the amount of deferred tax entry for such companies will depend upon the difference between their taxable income and accounting earnings made before paying taxes.
Apart from the entry tax, this calculation gives organisations a wholesome idea of the other taxes they will be liable to pay in the future. In addition, since July 2017, Goods and Service Tax (GST) has been applicable on entry tax. Under this regime, inter-state movement of goods is liable to attract IGST (Integrated GST).