The sales tax you pay while purchasing a toothpaste is a
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UPSC Civil Services preparation
- Atax imposed by the Central Government
- Btax imposed by the Central Government but collected by the State Government
- Ctax imposed by the State Government but collected by the Central Government
- Dtax imposed and collected by the State GovernmentCorrect
Explanation
Before the introduction of the Goods and Services Tax (GST) in India (which came into effect on July 1, 2017), Sales Tax was a prominent indirect tax. Under the constitutional division of powers, the authority to levy and collect sales tax on the sale of goods within a state rested with the respective State Governments. Therefore, when a consumer purchased a commodity like toothpaste, the sales tax component of its price was both imposed by and collected for the State Government where the transaction occurred. This structure existed prior to the comprehensive overhaul of indirect taxation by GST, which subsumed sales tax and many other levies.
