Question

The sales tax you pay while purchasing a toothpaste is a __________________.

• A. tax imposed by the Central Government
• B. tax imposed by the Central Government, but collected by the State Government
• C. tax imposed by the State Government, but collected by the Central Government
• D. tax imposed and collected by the State Government

Answer 1

The correct option is D tax imposed and collected by the State Government

Sales tax is imposed and collected by the state governments the sale of goods at the consumer's end. Centre also imposes sales tax (i.e., CST), but it is collected at the time the goods are leaving the manufacturing points - being and 'origin-based' tax this will be phased out once the GST (a destination based tax) is implemented.