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The Constitution provides for a division of taxation powers between Centre and States. Among the several taxes, service lax is
- a)Levied by the Centre but Collected and Appropriated by the States
- b)Levied by the Centre but Collected and Appropriated by the Centre and the States
- c)Levied, collected and retained by the Centre
- d)Levied, collected and retained by the States
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
The Constitution provides for a division of taxation powers between C...
Taxation Powers in the Constitution
The Constitution of India provides for a division of taxation powers between the Centre (i.e., the central government) and the States. This division is outlined in the Seventh Schedule of the Constitution. The Seventh Schedule contains three lists: the Union List, the State List, and the Concurrent List. Each list enumerates the subjects on which the Centre and the States have the power to levy taxes.
Service Tax
Service tax is a tax levied on the provision of services. It was introduced in India in 1994 and is governed by the Finance Act. Service tax is an indirect tax and is levied on the value of services provided. It is collected by the government from service providers or recipients and is ultimately borne by the end consumer.
Division of Taxation Powers for Service Tax
In the case of service tax, the power to levy and collect the tax is vested with the Centre. This means that the Centre has the authority to impose the tax on the provision of services. However, the Constitution also provides for the sharing of revenue between the Centre and the States.
Option B: Levied by the Centre but Collected and Appropriated by the Centre and the States
Option B states that service tax is levied by the Centre but collected and appropriated by both the Centre and the States. This is the correct answer.
Explanation:
- The Centre levies the service tax and collects it from the service providers or recipients.
- The revenue collected from service tax is shared between the Centre and the States.
- The Centre retains a portion of the revenue as its share, while the remaining amount is appropriated to the States.
- This sharing of revenue is done through a mechanism called the Goods and Services Tax (GST) compensation cess.
- The GST compensation cess is levied on certain goods and services to compensate the States for any revenue loss due to the implementation of the GST.
- The revenue collected from the GST compensation cess is used to compensate the States for their share of service tax revenue.
Conclusion
In conclusion, service tax is levied by the Centre but collected and appropriated by both the Centre and the States. This allows for a division of taxation powers and ensures a fair sharing of revenue between the Centre and the States.
The Constitution of India provides for a division of taxation powers between the Centre (i.e., the central government) and the States. This division is outlined in the Seventh Schedule of the Constitution. The Seventh Schedule contains three lists: the Union List, the State List, and the Concurrent List. Each list enumerates the subjects on which the Centre and the States have the power to levy taxes.
Service Tax
Service tax is a tax levied on the provision of services. It was introduced in India in 1994 and is governed by the Finance Act. Service tax is an indirect tax and is levied on the value of services provided. It is collected by the government from service providers or recipients and is ultimately borne by the end consumer.
Division of Taxation Powers for Service Tax
In the case of service tax, the power to levy and collect the tax is vested with the Centre. This means that the Centre has the authority to impose the tax on the provision of services. However, the Constitution also provides for the sharing of revenue between the Centre and the States.
Option B: Levied by the Centre but Collected and Appropriated by the Centre and the States
Option B states that service tax is levied by the Centre but collected and appropriated by both the Centre and the States. This is the correct answer.
Explanation:
- The Centre levies the service tax and collects it from the service providers or recipients.
- The revenue collected from service tax is shared between the Centre and the States.
- The Centre retains a portion of the revenue as its share, while the remaining amount is appropriated to the States.
- This sharing of revenue is done through a mechanism called the Goods and Services Tax (GST) compensation cess.
- The GST compensation cess is levied on certain goods and services to compensate the States for any revenue loss due to the implementation of the GST.
- The revenue collected from the GST compensation cess is used to compensate the States for their share of service tax revenue.
Conclusion
In conclusion, service tax is levied by the Centre but collected and appropriated by both the Centre and the States. This allows for a division of taxation powers and ensures a fair sharing of revenue between the Centre and the States.
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The Constitution provides for a division of taxation powers between C...
- Service Tax Levied by the Centre but Collected and Appropriated by the Centre and the States (Article 268-A): Taxes on services are levied by the Centre. But, their proceeds are collected as well as appropriated by both the Centre and the states. The Parliament formulates the principles of their collection and appropriation.
- Taxes Levied and Collected by the Centre but Assigned to the States (Article 269): The following taxes fall under this category:
(i) Taxes on the sale or purchase of goods (other than newspapers) in the course of inter-state trade or commerce.
(ii) Taxes on the consignment of goods in the course of inter-state trade or commerce.
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The Constitution provides for a division of taxation powers between Centre and States. Among the several taxes, service lax isa) Levied by the Centre but Collected and Appropriated by the Statesb) Levied by the Centre but Collected and Appropriated by the Centre and the Statesc) Levied, collected and retained by the Centred) Levied, collected and retained by the StatesCorrect answer is option 'B'. Can you explain this answer?
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The Constitution provides for a division of taxation powers between Centre and States. Among the several taxes, service lax isa) Levied by the Centre but Collected and Appropriated by the Statesb) Levied by the Centre but Collected and Appropriated by the Centre and the Statesc) Levied, collected and retained by the Centred) Levied, collected and retained by the StatesCorrect answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about The Constitution provides for a division of taxation powers between Centre and States. Among the several taxes, service lax isa) Levied by the Centre but Collected and Appropriated by the Statesb) Levied by the Centre but Collected and Appropriated by the Centre and the Statesc) Levied, collected and retained by the Centred) Levied, collected and retained by the StatesCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The Constitution provides for a division of taxation powers between Centre and States. Among the several taxes, service lax isa) Levied by the Centre but Collected and Appropriated by the Statesb) Levied by the Centre but Collected and Appropriated by the Centre and the Statesc) Levied, collected and retained by the Centred) Levied, collected and retained by the StatesCorrect answer is option 'B'. Can you explain this answer?.
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