GENERAL KNOWLEDGE

GK

TAXES IN INDIA

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Service tax was introduced in India in the year:
A
1992
B
1994
C
1996
D
1998
Explanation: 

Detailed explanation-1: -Service tax was imposed on the services provided to the customers. It was introduced in India for the first time in the year 1994-95. It is an indirect tax, that means, the burden of tax can be shifted to other person.

Detailed explanation-2: -In Budget 1994-95, Dr. Manmohan Singh introduced Service Tax at the rate of 5 per cent as the sector was contributing 40 per cent of GDP. The idea was to widen the indirect tax base. The tax was levied on telephones, non-life insurance and stockbrokers.

Detailed explanation-3: -On July 1, 1994, the service tax was introduced on 3 services only. These were Telephone Services, Non-Life Insurance Services and Stock Brokers’ Services.

Detailed explanation-4: -It is a tax levied on the transaction of certain services specified by the Central Government under the Finance Act, 1994.It is an indirect tax (akin to Excise Duty or Sales Tax) which means that normally, the service provider pays the tax and recovers the amount from the recipient of taxable service.

There is 1 question to complete.