The main sources of the Union Tax revenue are customs duties, Union excise duties, service tax, corporate and income taxes. Non-tax revenues largely comprise interest receipts, including interest paid by the Railways, dividend, and profits. The main heads of revenue in States are taxes and duties levied by the respective State Governments, the share of taxes levied by the Union and grants received from the Union. Property taxes, octroi, and terminal taxes are the mainstay of local finance.
India's indirect tax system is unique. While the Centre has the authority to impose Union excise duties on goods, state governments are assigned the power to levy a tax on the sale of goods. Tax on services is independently levied by the Centre, now under the Union List.