gs1easy
The sales tax you pay while purchasing a toothpaste is:
- A.tax imposed by the Central Government
- B.tax imposed by the Central Government but collected by the State Government
- C.tax imposed by the State Government but collected by Central Government
- D.tax imposed and collected by State Government
▶ Answer & Explanation
Correct answer: D. tax imposed and collected by State Government
Historically, sales tax on goods was a primary source of revenue for state governments in India. While the Central Government levies excise duties and customs duties, and later the Goods and Services Tax (GST) has subsumed many indirect taxes, the direct 'sales tax' on final consumption of goods at the point of sale was an impost levied and collected by the respective state governments. This formed a significant part of their fiscal autonomy.
Source: UPSC gs1 2014