GST & Tax Structure — Set 3

Correct Answer: C. ₹50,000

The e-Way Bill (Electronic Way Bill) is a document required for the movement of goods worth more than ₹50,000 within or between states. It must be generated on the GST portal before the commencement of the movement of goods. The e-Way Bill is valid for varying periods based on the distance and mode of transportation.

Correct Answer: A. Monthly/quarterly outward supplies (sales)

GSTR-1 is the return for reporting all outward supplies (sales) made by a registered taxpayer. It includes details of invoices, debit notes, credit notes, and export information. Monthly filers must file GSTR-1 by the 11th of the following month. Quarterly filers (under QRMP scheme for turnover below ₹5 crore) file it quarterly.

Correct Answer: B. Monthly summary return for tax payment

GSTR-3B is a monthly self-declaration summary return where taxpayers declare their outward and inward supply details, net tax liability, and ITC claimed, and make the GST payment. It is filed by the 20th of the following month. GSTR-3B is simpler than GSTR-1 and is used for tax payment purposes.

Correct Answer: C. Annual GST return

GSTR-9 is the Annual GST Return that consolidates all monthly/quarterly returns filed during a financial year. It is filed by December 31 of the following year. GSTR-9C is the annual audit/reconciliation statement that is required for taxpayers with turnover exceeding ₹5 crore. GSTR-9 helps in reconciling tax paid and ITC claimed.

Correct Answer: B. Tax liability shifts to the recipient instead of the supplier

Under the Reverse Charge Mechanism (RCM), the recipient (buyer) of goods or services is liable to pay GST instead of the supplier. RCM applies in specific situations notified by the Government, such as when services are received from unregistered persons, or in specific categories like legal services, goods transport agency, and imported services. ITC can be claimed on RCM tax paid.

Correct Answer: B. Small taxpayers with annual turnover up to ₹1.5 crore

The Composition Scheme under GST is a simplified tax compliance scheme for small taxpayers with annual turnover up to ₹1.5 crore (₹75 lakh for special category states). Under this scheme, taxpayers pay a flat tax rate (1% for traders, 2% for manufacturers, 5% for restaurants) and cannot claim ITC. They cannot issue tax invoices and cannot collect GST from customers.

Correct Answer: B. 2%

Under the GST Composition Scheme, manufacturers pay 2% tax (1% CGST + 1% SGST) on their turnover. Traders pay 1%, restaurants pay 5%, and service providers (under composition) pay 6%. Composition scheme taxpayers cannot avail ITC, cannot issue tax invoices, and cannot collect GST from customers. They file quarterly returns (CMP-08) and annual return (GSTR-4).

Correct Answer: C. 17 taxes

The correct answer is 17 taxes. GST replaced 17 major indirect taxes — including 7 Central taxes (Central Excise Duty, Service Tax, Additional Customs Duty (CVD), Special Additional Duty, Central Sales Tax, Central surcharges) and 10 State taxes (VAT/Sales Tax, Entry Tax, Octroi, Entertainment Tax, Luxury Tax, Advertisement Tax, Lottery Tax). This unified taxation under GST simplified India's complex indirect tax structure. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.

Correct Answer: B. GST levied simultaneously by both Centre (CGST) and State (SGST)

India's GST follows a 'dual structure' where both the Centre (CGST) and the State/UT (SGST/UTGST) levy GST concurrently on the same transaction for intra-state supplies. For inter-state supplies, IGST (which is CGST + SGST combined) is levied by the Centre. This dual structure preserves the fiscal autonomy of both the Centre and States within a unified tax system.

Correct Answer: C. All online gaming irrespective of skill or chance (from October 2023)

From October 1, 2023, the GST Council decided to levy 28% GST on online gaming (including fantasy sports, online casinos, and all forms of online gaming), irrespective of whether it involves skill or chance. This was a major change from the earlier position where skill-based games attracted 18% GST. The implementation has faced legal challenges from gaming companies.