Consider the following taxes : 1. Stamp Duty 2. Property Tax 3. Exc

Consider the following taxes :

1. Stamp Duty

2. Property Tax

3. Excise Duty

Which of the above is/are the production taxes ?

1 and 2 only
2 and 3 only
3 only
1, 2 and 3
This question was previously asked in
UPSC Combined Section Officer – 2024
The correct answer is 3 only (C).
Production taxes are taxes on goods and services as they are produced, sold, or used, independent of income and property. Excise Duty is a tax on the manufacture or production of goods. Stamp Duty is a tax on the execution of certain documents (like sale deeds, agreements). Property Tax is a tax levied on the ownership of property. Therefore, among the given options, only Excise Duty is directly related to the act of production.
While India has largely moved to the Goods and Services Tax (GST) which subsumed most excise duties, the concept of excise duty as a production tax is fundamental. Stamp duty is a transaction tax, and property tax is a wealth or ownership tax. The question asks which is a production tax, and Excise Duty fits this definition.
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