Question

UPSC Prelims 2014 Question:

The sales tax you pay while purchasing a toothpaste is a

1. Tax imposed by the Central Government
2. Tax imposed by the Central Government but collected by the State Government.
3. Tax imposed by the State Government but collected by the Central Government.
4. Tax imposed and collected by the State Government.

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

Latest UPSC Exam 2027 Updates

Last updated on Sep, 2026

→ UPSC 2027 Notification will be released on 13 January 2027 at upsconline.nic.in.

→ Asian Games 2026 are being held in Aichi-Nagoya, Japan, from 19 September to 4 October.

→ Check out the latest UPSC Syllabus here.

→ Download UPSC Model Answers for Mains 2026

→ UPSC Mains Question Paper 2026 is out now for Essay & GS Paper 1, 2, 3 & 4.

→ UPSC Calendar 2027 has been released.

→ Enroll in Vajiram & Ravi’s UPSC Mains Test Series 2027 for structured answer writing practice, expert evaluation, and exam-oriented feedback.

→ Join Vajiram & Ravi’s UPSC Mentorship Program 2027 for personalized guidance, strategy planning, and one-to-one support from experienced mentors.

→ Go through the UPSC Mains Previous Year Papers to enhance your preparation.

→ UPSC has released UPSC Toppers List 2025 with the Civil Services final result on its official website.

→ Also check Best UPSC Coaching in India

Tags: factual

Abhishek Singh

Abhishek Singh is an SEO Specialist and content strategist with over 4.5 years of experience in driving organic growth across education and service-based industries. He specializes in on-page SEO, technical SEO, content optimization, and data-driven strategies that improve search visibility and organic traffic. His work focuses on creating accurate, well-researched, and search-optimized content that helps students, professionals, and online audiences find reliable information. By combining SEO expertise with a strong understanding of search intent and evolving search technologies, he works to build content that delivers visibility, engagement, and long-term trust.