UPSC Prelims 2001 · General Studies
Question 82: Economy and Social Development
Consider the following taxes: I. Corporation tax II. Customs duty III. Wealth tax IV. Excise duty Which of these is/are indirect taxes?
AnswerThe answer is (b).
Customs duty and excise duty are indirect taxes: they are levied on goods, collected from the importer or producer and passed on to the consumer in the price. Corporation tax and wealth tax are direct taxes, paid by the person or company on whom they are levied. Remember that GST, introduced in 2017, has since replaced excise duty on most goods.
- I. Corporation tax is a direct tax.
- II. Customs duty is an indirect tax on goods.
- III. Wealth tax is a direct tax.
- IV. Excise duty is an indirect tax on goods.
Why each option is right or wrong
- (a) Corporation tax is a direct tax.
- (b) Right: customs duty and excise duty.
- (c) Corporation tax and wealth tax are both direct taxes.
- (d) Wealth tax is a direct tax.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2001, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.