In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in the last five years?
- AService tax
- BPersonal income tax
- CExcise dutyCorrect
- DCorporation tax
Explanation
The correct answer is excise duty because of the structural change in Indias indirect tax system following the implementation of the Goods and Services Tax in 2017. Before GST, excise duty was levied on a wide range of manufactured goods, making it a major contributor to gross tax revenue. After the introduction of GST, most goods that were previously under excise duty were subsumed into the GST framework. Currently, excise duty is primarily restricted to a few items like petroleum products and tobacco. As a result, its share as a percentage of the total gross tax revenue has seen a significant and steady decline compared to other taxes like income tax or corporation tax, which have either remained stable or grown.
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