GST & Tax — Set 3
Economics · GST और कर · Questions 21–30 of 60
In the GST regime, what does the 'Input Tax Credit' (ITC) allow a taxpayer to do?
Correct Answer: D. Reduce the tax paid on purchases from the tax payable on sales
Input Tax Credit allows a business to deduct the tax already paid on inputs from the tax it must pay on its final output. This prevents the double taxation of the same product at different stages of production. It is the core mechanism that ensures GST is a tax only on 'value addition'.
What is the official date of GST implementation in India?
Correct Answer: C. July 1, 2017
GST was launched in India at midnight on July 1, 2017, in a special session of Parliament. It replaced a complex web of central and state indirect taxes. This date is now celebrated as 'GST Day' in India.
Which of the following taxes is levied and collected by the Union but assigned to the States under Article 269?
Correct Answer: D. Taxes on inter-state trade or commerce
Under Article 269, taxes on the inter-state sale of goods (other than GST) are levied and collected by the Union but assigned to states. For GST, a new Article 269A was inserted specifically for Integrated GST. This ensures a coordinated distribution of revenue between the Centre and States.
The 'Equalisation Levy' in India is popularly known as which tax?
Correct Answer: B. Google Tax
The Equalisation Levy, introduced in 2016, is often called the 'Google Tax' as it targets digital advertising revenue of foreign companies. It aims to tax business transactions of non-resident e-commerce operators. This ensures a level playing field for domestic digital companies.
Which of the following is an example of an 'Ad Valorem' tax?
Correct Answer: B. A tax based on a percentage of the value of the item
Ad Valorem is a Latin phrase meaning 'according to value'. Most GST rates and customs duties are ad valorem taxes because they are calculated as a percentage of the price. This differs from 'specific duties' which are based on physical units like weight or volume.
The 'GSTN' portal for filing returns is managed as what kind of entity?
Correct Answer: D. Section 8 non-profit company
GSTN was originally incorporated as a Section 8 (not-for-profit), non-government, private limited company. However, the government later decided to convert it into a fully government-owned entity. It handles the complex technology infrastructure needed for GST implementation.
What is 'Tax Buoyancy'?
Correct Answer: D. Responsiveness of tax revenue to changes in GDP
Tax buoyancy measures how much tax revenue increases in response to an increase in the Gross Domestic Product. A buoyancy greater than 1 means tax revenue is growing faster than the economy. It is a key indicator of the efficiency of a country's tax system.
Which body replaced the National Anti-profiteering Authority (NAA) after its tenure ended?
Correct Answer: A. Competition Commission of India (CCI)
The Competition Commission of India (CCI) took over the functions of the National Anti-profiteering Authority in late 2022. NAA was established to ensure that businesses pass on the benefit of reduced GST rates to consumers. The CCI now handles complaints regarding profiteering under GST.
The 'Tobin Tax' is a tax suggested on which type of transactions?
Correct Answer: A. Foreign currency conversions
The Tobin Tax is a tax on all spot conversions of one currency into another. It was proposed by economist James Tobin to reduce short-term financial speculation in currency markets. It aims to stabilize exchange rates and provide revenue for international development.
Which of the following is considered a 'Direct Tax' because its impact and incidence are on the same entity?
Correct Answer: A. Corporate Tax
Corporate Tax is a direct tax levied on the net income or profit of companies. The company that earns the profit is the one responsible for paying the tax to the government. It is one of the major sources of revenue for the Central Government in India.