Consider the following statements:
1. While VAT is imposed by state governments, Sales Tax is imposed by Central Government
2. While sale of goods within a state comes under state list, inter-state sale of goods is a union list subject
Which among the above is / are correct statements?

Answer: [B] Only 2

Under Entry 54 of List II (State List) of the Seventh Schedule of the Constitution of India, “tax on sale or purchase of goods within a State” is  a State subject. The entry 92A of List-I (Union List) empowers the Central Government to impose tax on inter-State sale of goods. Further, Article 269 (3) empowers the Parliament to formulate principles for determining when a sale or purchase of goods takes place in the course of inter-State trade of commerce. Similarly, Article 286 (2) of Constitution empowers the Parliament to formulate principles for determining when the sale or purchase of goods takes place outside a State or in the course of imports into or exports from India. Besides, Article 286(3) of Constitution authorizes the Parliament to place restrictions on the levy of tax by the States on sale or purchase of goods, declared by the Parliament by law to be goods of special importance in the inter-State trade or commerce.

This question is a part of GKToday's Integrated IAS General Studies Module