UPSC Prelims 2014 · GS Paper I
Question 27: Economy and Social Development
The sales tax you pay while purchasing a toothpaste is a
AnswerUPSC’s answer is (d).
In 2014, sales tax on goods sold within a state, such as toothpaste, was a state subject: the State List gave states the power to levy tax on sale or purchase of goods, and states imposed and collected it as sales tax or VAT. The Centre taxed only inter-state sales through the Central Sales Tax, whose proceeds were assigned to the states. So the tax was imposed and collected by the State Government.
Why each option is right or wrong
- (a) Wrong. Intra-state sales tax was not a Central tax.
- (b) Wrong. The Centre did not impose it and the state did not just collect it.
- (c) Wrong. States imposed it and also collected it.
- (d) Right. The State Government imposed and collected sales tax.
Worth knowing: Since GST began on 1 July 2017, a purchase like this carries both CGST and SGST, so the 2014 answer no longer holds.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2014, General Studies Paper I, Series A. The paper on upsc.gov.in.