The sales tax you pay while purchasing a toothpaste is a

The correct answer is D. In 2014, a sales tax paid on an ordinary retail purchase like toothpaste was a state VAT on an intra-state sale. The State Government imposed it under its own VAT law and collected it, and the money went to the state treasury.

Why the others are wrong:

• A is wrong because the Centre does not levy tax on a local retail sale. Its sales tax role was limited to the Central Sales Tax on inter-state sales.
• B is wrong because the Centre's inter-state tax was levied and collected by the Centre under Article 269, then assigned to the states. The Centre did not hand collection to states for a local retail sale.
• C is wrong because the state does not levy a tax that the Centre collects. This reverses the logic of Article 269.

The concept is the division of taxing powers under the Seventh Schedule and fiscal federalism. This is a standard Mains topic on Centre-state financial relations, and it is where Article 269 and Article 270 come up.

Update: Since 1 July 2017, GST has replaced this structure. Toothpaste now attracts CGST and SGST, levied jointly by the Centre and the state, with IGST for inter-state supply. The 2014 answer holds only for the exam year.

Trap: Aspirants often pick B because it sounds like a clever split of levy and collection. Remember that a local retail sale falls under state VAT, and Central Sales Tax applies only to inter-state sales.