Correct Option
Prior to the implementation of the Goods and Services Tax (GST) in 2017, sales tax (or Value Added Tax - VAT) on goods such as toothpaste was a state subject. Under the constitutional framework prevalent at the time, State Governments possessed the exclusive power to levy and collect sales tax on the sale of goods within their respective territories. Consequently, the tax was both imposed and collected by the State Government where the sale occurred.
Incorrect Options
Options A, B, and C are incorrect. In the pre-GST era, the Central Government's indirect tax levies primarily included excise duty on manufacturing and customs duty on imports. Sales tax on intra-state sales of goods like toothpaste, intended for final consumption, fell exclusively within the taxation domain of the State Governments. The Central Government did not impose or collect sales tax on such transactions. Therefore, any combination suggesting central imposition or collection for this specific type of tax on toothpaste is inaccurate based on the pre-GST division of taxation powers.