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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?
Verified Answer
The Constitution provides for a division of taxation powers between Ce...
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 Ce...
Understanding the Division of Taxation Powers
The Constitution of India delineates the powers of taxation between the Centre and the States. This framework is crucial for understanding how different taxes are levied, collected, and appropriated.
Service Tax Overview
- Service Tax is a significant source of revenue for the government.
- It is primarily levied on services provided by service providers.
Taxation Authority
- According to the Constitution, Service Tax is levied by the Centre.
- This means that the central government has the exclusive right to impose this tax.
Collection and Appropriation
- While the Centre levies the Service Tax, it is collected and appropriated by both the Centre and the States.
- The revenue generated from this tax is shared between the two levels of government, which is essential for funding various services and developmental projects.
Significance of Option B
- The correct answer, option 'B', reflects that Service Tax is levied by the Centre but collected and appropriated by both the Centre and the States.
- This dual role ensures that both governments can benefit from the tax, enhancing fiscal federalism.
Conclusion
Understanding this division of taxation powers is vital, as it underscores the collaborative financial relationship between the Centre and the States in India. This framework allows for a more balanced distribution of resources, which is essential for the effective functioning of both levels of government.
The Constitution of India delineates the powers of taxation between the Centre and the States. This framework is crucial for understanding how different taxes are levied, collected, and appropriated.
Service Tax Overview
- Service Tax is a significant source of revenue for the government.
- It is primarily levied on services provided by service providers.
Taxation Authority
- According to the Constitution, Service Tax is levied by the Centre.
- This means that the central government has the exclusive right to impose this tax.
Collection and Appropriation
- While the Centre levies the Service Tax, it is collected and appropriated by both the Centre and the States.
- The revenue generated from this tax is shared between the two levels of government, which is essential for funding various services and developmental projects.
Significance of Option B
- The correct answer, option 'B', reflects that Service Tax is levied by the Centre but collected and appropriated by both the Centre and the States.
- This dual role ensures that both governments can benefit from the tax, enhancing fiscal federalism.
Conclusion
Understanding this division of taxation powers is vital, as it underscores the collaborative financial relationship between the Centre and the States in India. This framework allows for a more balanced distribution of resources, which is essential for the effective functioning of both levels of government.
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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?.
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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