| Consider the following taxes: |
| 1. Corporation tax |
| 2. Customs duty |
| 3. Wealth tax |
| 4. Excise duty |
| Which of these is/are indirect taxes? |
A) 1 only
B) 1 and 3 only
C) 2 and 4 only
D) 2 and 3 only
Correct Answer: C
Solution :
[c] An indirect tax is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer). The intermediary later files a tax return and forwards the tax proceeds to government with the return. For eg: Service Tax is levied on Services, Excise Duty is levied on Manufacturing, Customs Duty is levied on Import of Goods etc.
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