Multiple choice

The canon of co-ordination is very essential in India because in India

  1. taxes are imposed by central, state and local governments

  2. tax rates vary in different states

  3. every city has municipal corporation and it imposes taxes

  4. None of these
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A Correct answer
Explanation

It is correct. In India, taxes are imposed by central, state and local governments. The income tax is imposed by the central government, the Value Added Tax is imposed by the state government and municipal tax is imposed by the local self-government. Hence, it is essential that there is co-ordination between these three types of government so that there is no overlapping of tax in order to safeguard the interest of tax payer and the government.

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