Taxation: UPSC Previous Year Questions (Indian Economy)
1 previous year UPSC Prelims question on Taxation (Indian Economy). Choose an option to see the answer and explanation.
Explanations state facts as of the year each question was asked; words like “recently” refer to that year.
Showing 1–1 of 1 question
UPSC 2011Indian Economy · Taxation
Q1. Which one of the following is not a feature of "Value Added Tax"?
Explanation
In reference to the year in which questions has been asked details of the options are given below Statement (a) is correct: VAT is a multi-point tax system be-cause it is levied at each stage of the production and distribution process. However, it is destination-based, meaning the tax is ultimately collected in the state where the goods or services are consumed. Statement (b) is correct: VAT is applied to the value added at each stage of the production and distribution process, which means businesses pay tax on the difference between the cost of inputs and the selling price of their products. Statement (c) is correct: VAT is ultimately a consumption tax, and it is the consumer who bears the final burden of the tax, even though businesses collect it at each stage. Statement (d) is incorrect: VAT is a joint subject of both the Central Government and State Governments in India. The Central Government implements Central VAT (CENVAT), and State Governments levy the State VAT. The system requires coordination between both levels of government.
Additional insight:
However, With the arrival of Goods and Services Tax (GST) in India on July 1, 2017, Value Added Tax (VAT) was largely replaced by the new tax system.
Answer key for these questions
Q
UPSC year
Correct answer
1
2011
(d) It is basically subject of the Central Government and the State Governments are only a facilitator for its successful implementation
Frequently asked questions
How many previous year UPSC questions are there on Taxation?
This page covers 1 previous year UPSC Prelims GS Paper-I questions on Taxation (Indian Economy), asked from 1996 to 2025. Each has the correct answer and an explanation.
How should I use previous year UPSC questions for Prelims?
Attempt each question first, then open the answer and read the explanation for every option. Repeat by chapter, and track which statements UPSC reuses across years. Previous year questions show the exam pattern and difficulty level.
Which years are covered for Taxation?
Questions on Taxation (Indian Economy) are available for 15 years, from 1996 to 2025. Use the Year filter to practise a single paper.
