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UPSC 2006: Which one of the following is the correct statement? Service tax is a/an
(a)direct tax levied by the Central Government
(b)indirect tax levied by the Central Government
(c)direct tax levied by the State Government
(d)indirect tax levied by the State Government
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Not attemptedCorrect Answer: (b) indirect tax levied by the Central Government
Service tax, introduced under the Finance Act 1994, was collected by the Union government on the value of specified services; the liability could be passed on to the consumer, so it was classified as an indirect (not direct) tax and was within the Centre’s residuary powers. Hence it is an indirect tax levied by the Central Government, making option (b) correct. ([aspireias.com](https://www.aspireias.com/upsc-general-study-10years-paper/2006?utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2006 Indian Economy question?▼
The correct answer is option (b): indirect tax levied by the Central Government. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Taxation question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2006, GS Paper 1, as Question 107. It falls under Indian Economy > Taxation.
What is the difficulty level of this UPSC question?▼
This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.
How many UPSC Prelims questions have been asked from Taxation?▼
UPSC has asked 19 questions from Taxation (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.