Correct Option
Service Tax, operational prior to the Goods and Services Tax (GST) regime, was an indirect tax. It was levied and collected by the Central Government of India. The characteristic feature of an indirect tax is that its burden can be shifted from the person on whom it is legally imposed to the final consumer. Service tax exemplified this, as its incidence ultimately fell on the recipient of the service. It was introduced in 1994 and later subsumed into GST in 2017.
Incorrect Options
Option (a): Direct taxes are those where the burden of the tax cannot be shifted to another person. Examples include income tax and corporate tax, where the taxpayer directly bears the incidence. Service tax, by contrast, allowed for the shifting of its burden.
Options (c) and (d): Under the pre-GST tax structure, Service Tax was exclusively a Central Government levy. State Governments were not empowered to impose or collect service tax. Therefore, any statement suggesting state government involvement in service tax collection is incorrect.