The sales tax you pay while purchasing a toothpaste is a
[amp_mcq option1=”tax imposed by the Central Government” option2=”tax imposed by the Central Government but collected by the State Government” option3=”tax imposed by the State Government but collected by the Central Government” option4=”tax imposed and collected by the State Government” correct=”option4″]
This question was previously asked in
UPSC IAS – 2014
The correct option is D. The sales tax you pay while purchasing a toothpaste is a tax imposed and collected by the State Government (in the pre-GST era or as a conceptual understanding).
Prior to the implementation of the Goods and Services Tax (GST) in India, Sales Tax (or Value Added Tax – VAT) on the sale of goods within a state was a state subject. This meant that the power to levy and collect sales tax on intra-state sales rested with the State Government, as per the State List (List II) of the Seventh Schedule of the Constitution of India.