Understanding Taxes

What is tax?

• An additional amount of money we pay over the selling price of goods and services

• An extra amount that sellers keep for themselves

• A fixed percentage of the buying price of goods and services

• A discount given by the government

Why do we need to pay tax?

• To provide better facilities and services to citizens

• To make sellers rich

• To reduce the selling price of goods and services

• To increase the government's profit

How is tax calculated?

• As a fixed percentage of the selling price of goods and services

• As a fixed percentage of the buying price of goods and services

• As a random amount decided by the seller

• As a discount on the selling price

What happens to the tax amount collected by sellers?

• It is deposited to the government

• It is kept by the sellers as profit

• It is used to reduce the selling price of goods and services

• It is given back to the buyers as a discount

Why does the government collect tax?

• To provide good infrastructure, education, and healthcare services

• To make the sellers rich

• To reduce the selling price of goods and services

• To increase the government's profit

Which tax system is followed in India since July 1, 2017?

• Goods and services tax (GST)

• Value-added tax (VAT)

• Sales tax

• Income tax

What is the price of an article before adding VAT if the price including VAT is Rs. 1664 and the VAT rate is 4%?

• Rs. 1600

• Rs. 1664

• Rs. 1700

• Rs. 1728