The sales tax you pay while purchasing a toothpaste is a

Q: What is UPSC Prelims?

UPSC Prelims is a competitive examination conducted in India. This question is from the 2014 UPSC Prelims Indian Polity & Governance paper.

Q: How can I prepare for UPSC Prelims Indian Polity & Governance?

To prepare for UPSC Prelims Indian Polity & Governance, practice previous year questions (PYQs), understand concepts thoroughly, and solve mock tests regularly. This 2014 question covers Federalism & Inter-State Relations topic.

Q: What is the difficulty level of this question?

This UPSC Prelims 2014 Indian Polity & Governance question has a easy difficulty level and is marked as an important question.

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You can find more UPSC Prelims previous year questions on AspirantMitraa. Browse by subject, topic, year, and difficulty level to practice effectively.

Question

The sales tax you pay while purchasing a toothpaste is a

Accepted Answer

Correct Answer: D — Tax imposed and collected by the State GovernmentStep-by-step Solution:Under the pre-GST constitutional framework, the power to impose Sales Tax on the 'sale or purchase of goods other than newspapers' was a State subject under Entry 54 of the State List (List II) of the Seventh Schedule of the Constitution of India.This meant: (1) State Governments had the exclusive legislative power to impose sales tax on goods; (2) State Governments also collected the sales tax through their own commercial tax departments; (3) The Central Government had no role in imposing or collecting this sales tax. It was entirely a state prerogative — both the imposition and collection were within the state's domain.Note: This was the position until July 1, 2017, when the Goods and Services Tax (GST) came into effect. GST subsumed most indirect taxes including State VAT (which replaced Sales Tax), Central Excise Duty, Service Tax, etc. Under GST: CGST (Central GST) is imposed and collected by the Centre; SGST (State GST) is imposed and collected by States; IGST (Integrated GST) applies to interstate transactions and is collected by the Centre but shared. For a question set in 2014, when sales tax was still in existence, the correct answer is that it was imposed AND collected by the State Government.Key Concept: Constitutional distribution of tax powers (pre-GST, still relevant for understanding): Union List — Customs duty, Excise duty on manufactured goods, Corporation tax, Income tax; State List — Sales tax/VAT, Stamp duty, Land revenue, Entertainment tax, Professional tax; Concurrent List — No significant tax in this list. Post-GST (2017): Most indirect taxes merged into GST under Article 246A (added by 101st Constitutional Amendment 2016). The GST Council (chaired by Union Finance Minister, with State FMs as members) decides GST rates and policies.

The sales tax you pay while purchasing a toothpaste is a

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The sales tax you pay while purchasing a toothpaste is a

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