Tag: government and taxes

Arun Goyal was appointed as the Additional Secretary in the GST Council. This is a factual question regarding government appointments.

Stamp duty is a tax levied by the central government (under the Constitution) but is collected and retained by the state governments.

The practice of the RBI lending to the government through ad hoc treasury bills was abolished in 1997 to ensure greater fiscal discipline and central bank independence.

Direct taxes are those where the incidence and impact fall on the same person. Income tax, Gift tax, and Wealth tax are direct taxes, while GST and Custom Duty are indirect taxes.

GDP at factor cost is calculated by taking GDP at market price, subtracting indirect taxes, and adding subsidies, as market prices include the tax burden and exclude government subsidies.

To arrive at market price from factor cost, you must add indirect taxes (which increase price) and subtract subsidies (which decrease price). Thus, Factor Cost + Indirect Tax - Subsidies = Market Price.

All the listed taxes (Excise, Customs, Service, Sales, etc.) are indirect taxes because they are levied on goods and services and their burden is shifted to the final consumer.

Income tax was first introduced in India in 1860 by James Wilson to compensate for the losses incurred by the British government during the 1857 uprising.

Income tax is a direct tax because the person who pays the tax to the government is the same person who bears the financial burden of the tax.

Income tax is a direct tax levied on the income of individuals and entities. Property tax is also a direct tax, but among the options, Income Tax is the most standard example.