Question

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.

Answer 1

(b) All taxes which are the personal liability of an assessee come under direct taxes. They include income tax, professional tax, wealth tax, securities transaction tax, commodity transaction tax and the like. On the other hand, the taxes which a person can recover from some other person but the liability of which *** of the person collecting such taxes are indirect taxes. These are custom duty, excise, service tax, vat, CST and the like.