Question

Indirect Taxes are imposed on __________.

• A. income /wealth of the Taxpayer
• B. purchase / sale/ manufacture of goods and Provision of Services
• C. both (a) and (b)
• D. neither (a) nor (b)

Answer 1

Answer: (B)

purchase / sale/ manufacture of goods and Provision of Services

$\Rightarrow$ An indirect tax is collected by one entity in the supply chain (usually a producer or retailer) and paid to the government, but it is passed on to the consumer as part of the purchase price of a good or service.

$\Rightarrow$ The consumer is ultimately paying the tax by paying more for the product.

$\therefore$ Indirect Taxes are imposed on purchase / sale/ manufacture of goods and Provision of Services.