Question

Excise Duty, Customs Duty, Service Tax, Sales Tax, Purchase Tax, Entry Tax, etc. are examples of ______________.

• A. direct taxes
• B. indirect taxes
• C. both (a) and (b)
• D. neither (a) nor (b)

Answer 1

The correct option is B indirect taxes

Excise Duty :

Excise duty is a form of tax imposed on goods for their production, licensing and sale.

Excise Duty is a form of indirect tax which is generally collected by a retailer or an intermediary from its consumers and then paid to the government.

Customs Duty :

Customs duty is a form of indirect tax which is imposed at the time of both import and export of goods and services.

Service Tax :

Service tax was an indirect tax levied by the government on services offered by service providers.

Sales Tax :

Sales tax is an additional amount of money you pay based on a percentage of the selling price of goods and services that are purchased.

For example, if you purchase a new refrigerator for $400andliveinanareawherethesalestaxis7$28 in sales tax. Your total bill would be $428. It is an indirect tax.

Purchase Tax :

It is an indirect tax. Purchase tax is the tax levied by the state government on the purchase of goods. The buyer pays the tax for the goods that are procured from the dealer. The dealer remits the collected tax to the tax authorities.

Entry Tax :

It is an indirect tax.Entry tax is a fee levied by the state governments on the transfer of goods from one state to another. The state to which the goods are being moved levies entry tax to protect its tax base.

$\therefore$ Excise Duty, Customs Duty, Service Tax, Sales Tax, Purchase Tax, Entry Tax, etc. are examples of indirect taxes.