Which of the following pairs is correctly matched?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Service tax – Product tax
Production taxes do not depend on the volume of production: land revenue, stamp and registration fee. Product taxes are paid per unit: excise tax, service tax, export and import duties.
Option (1) Stamp and registration fee – Product tax — Incorrect. Stamp and registration fee is a production tax.
Option (2) Service tax – Product tax — Correct. Service tax is paid per unit, so it is a product tax.
Option (3) Excise tax – Production tax — Incorrect. Excise tax is a product tax.
Option (4) Land revenue – Product tax — Incorrect. Land revenue is a production tax.
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. …” |