| Which of the following taxes come under the state lists: |
| 1. Taxes on the consumption and sale of electricity. |
| 2. Taxes on vehicles, animals and boats. |
| 3. Taxes on capital value of assets except agricultural land of individuals and companies. |
| Which of these statements is/are correct? |
A) Only 1 and 2
B) Only 2 and 3
C) Only 1 and 3
D) All 1, 2 and 3
Correct Answer: A
Solution :
[a] The authority to levy a tax is derived from the Constitution of India which allocates the power to levy various taxes between the Centre and the State. An important restriction on this power is Article 265 of the Constitution which states that "No tax shall be levied or collected except by the authority of law" 121. Therefore, each tax levied or collected has to be backed by an accompanying law, passed either by the Parliament or the Stat Legislature. Taxes on capital value of assets except agricultural land of individuals and companies is included in the Union List.
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