GST & Tax — Set 1
Economics · GST और कर · Questions 1–10 of 60
Which constitutional amendment act paved the way for the introduction of Goods and Services Tax (GST) in India?
Correct Answer: B. 101st Amendment Act
The 101st Constitutional Amendment Act of 2016 introduced GST in India. It allowed both the Centre and States to levy taxes on the same base of goods and services. This amendment was a landmark step in India's fiscal federalism.
What is the primary nature of Goods and Services Tax (GST) in terms of its point of collection?
Correct Answer: C. Destination-based tax
GST is a destination-based tax because it is collected at the point of consumption. This means the revenue accrues to the state where the goods or services are actually consumed. It replaced the earlier origin-based tax system like Central Sales Tax.
Which of the following is NOT one of the standard tax slabs under the GST regime in India?
Correct Answer: C. 15%
The standard tax slabs for GST in India are 5%, 12%, 18%, and 28%. A rate of 15% is not a standard slab used in the current structure. Additionally, some essential items are taxed at 0% to keep them affordable.
Who serves as the Chairperson of the Goods and Services Tax (GST) Council?
Correct Answer: C. Union Finance Minister
The Union Finance Minister acts as the Chairperson of the GST Council as per Article 279A. The council includes the Union Minister of State in charge of Revenue or Finance and ministers from all states. It is the primary decision-making body for all GST-related matters.
What does 'IGST' stand for in the context of the Indian taxation system?
Correct Answer: C. Integrated Goods and Services Tax
IGST stands for Integrated Goods and Services Tax which is levied on all inter-state supplies of goods and services. It is collected by the Central Government and then distributed between the Centre and the consuming state. It ensures a seamless flow of input tax credit across state borders.
Under the GST system, the tax levied by the Central Government on an intra-state supply is called?
Correct Answer: B. CGST
CGST or Central Goods and Services Tax is levied by the Union Government on transactions happening within a single state. It is collected simultaneously with SGST, which goes to the state government. This dual GST model helps maintain the fiscal autonomy of both tiers of government.
Which of the following items is currently kept outside the purview of GST in India?
Correct Answer: C. Petroleum products
Petroleum products like petrol and diesel are currently excluded from GST and continue to attract traditional duties. The GST Council has the power to bring them into the GST net at a later date. This exclusion helps states maintain a stable source of independent revenue.
Which Article of the Indian Constitution provides for the establishment of the GST Council?
Correct Answer: B. Article 279A
Article 279A of the Constitution empowers the President to constitute the GST Council. Article 246A gives the power to make laws with respect to GST. The council ensures coordination and consensus between the Centre and the States.
The concept of 'Value Added Tax' (VAT) was first introduced in India by which state?
Correct Answer: D. Haryana
Haryana was the first state in India to implement VAT in April 2003. VAT was a precursor to GST and aimed to eliminate the cascading effect of taxes. By 2005, most other states had adopted the VAT system.
A 'Cascading Effect' of taxation refers to?
Correct Answer: D. Tax on Tax
A cascading effect occurs when a tax is levied at every stage of the supply chain without credit for taxes paid earlier, leading to 'tax on tax'. GST was specifically designed to remove this effect by providing Input Tax Credit. This leads to a reduction in the final price of goods for consumers.