Question
UPSC Prelims 2014 Question:
The sales tax you pay while purchasing a toothpaste is a
Answer (Detailed Solution Below)
Option 4: Tax imposed and collected by the State Government.
Detailed Solution
Explanation:
- A sales tax is a consumption tax imposed by the Government on the sale of goods and services. A conventional sales tax is levied at the point of sale, collected by the retailer, and passed on to the Government. Sales tax is imposed and collected by the State Government.
- The tax on toothpaste will therefore be under the state government.
- However, now it has been subsumed under the ambit of GST.
Therefore, option (4) is the correct answer.
Subject: Economics | Taxation
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