Question

Match the type of indirect tax with what it is imposed on.

• A. Purchase of products
• B. Manufacturing
• C. Imported goods
• D. Services availed

Answer 1

Indirect tax is the type of tax in which the tax burden can be shifted from one person to another. There are various types of indirect taxes. For example, the sales tax is paid on the purchase of goods and services. Excise duty is a tax levied on goods manufactured within India, while customs duty is a tax levied on goods imported from abroad. Service tax is imposed on services availed like mobile services, restaurant services, etc. Indirect taxes contribute majorly to the revenue of the government.