| Consider the following statements: |
| 1. States have exclusive power to tax sales and purchases of goods other than newspaper. |
| 2. Central government has exclusive power to tax sales and purchase of goods in the course of inter-state. Which of the above statements is/are correct? |
A) 1 only
B) 2 only
C) Both 1 & 2
D) neither 1 nor 2
Correct Answer: C
Solution :
[c] The Sixth Amendment of the Constitution of India, brought taxes on inter-State sales and purchases of goods other than newspapers within the exclusive legislative and executive power of the Union, and levied taxes on inter-state sales and purchase of goods other than newspapers. Although these taxes would be levied and collected in accordance with an Act of Parliament, they would not form part of the Consolidated Fund of India, but would accrue to the States themselves in accordance with such principles of distribution as may be formulated by Parliament by law.
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