Customs duties, taxes imposed on goods imported into and exported out of India, are indirect taxes in the government budget. In national income accounting, export and import duties are classified as:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → product taxes
Export and import duties are paid per unit of the product traded, so they are product taxes, like excise tax and service tax.
Option (1) production taxes — Incorrect. Production taxes, like land revenue, do not depend on the volume of production.
Option (2) product taxes — Correct. Customs duties are charged on each unit traded, so they are product taxes.
Option (3) non-tax payments — Incorrect. Non-tax payments are payments like fines made by households.
Option (4) personal tax payments — Incorrect. Personal tax payments are taxes like income tax paid by households.
This question uses National Income Accounting and Government Budget and the Economy together.
NCERT (2026-27): “2.2.4 Factor Cost, Basic Prices and Market Prices … Production taxes and subsidies are paid or received in relation to production and are independent of the volume of production such as land revenues, stamp and registration fee. Product taxes and subsidies, on the other hand, are paid or received per unit or product, e.g., excise tax, service tax, export and import duties etc. Factor cost includes only the payment to factors of production, it does not include any tax. …” “Chapter 5: Government Budget and the Economy – 5.1.2 Classification of Receipts: … and indirect taxes like excise taxes (duties levied on goods produced within the country), customs duties (taxes imposed on goods imported into and exported out of India) and service tax. …” |