GST & Tax Structure — Set 4

Correct Answer: B. ₹1.5 lakh crore

India crossed the ₹1.5 lakh crore monthly GST collection milestone for the first time in April 2022, with collections of ₹1.68 lakh crore. This marked a significant milestone in the maturation of the GST system. Monthly collections have since remained in the range of ₹1.6-1.8 lakh crore, reflecting improved compliance and economic growth.

Correct Answer: B. Union Territory Goods and Services Tax

UTGST (Union Territory Goods and Services Tax) is the equivalent of SGST but applies to Union Territories without a legislature (Andaman & Nicobar, Lakshadweep, Dadra & Nagar Haveli and Daman & Diu, Chandigarh). Union Territories with legislatures (Delhi, Puducherry, J&K) levy SGST. UTGST is administered by the Central Government.

Correct Answer: C. ₹40 lakh annual turnover (goods) / ₹20 lakh (services)

The GST registration threshold is ₹40 lakh annual turnover for goods suppliers (for most states) and ₹20 lakh for service providers. For special category states (hill states, northeastern states), the threshold is ₹20 lakh for goods and ₹10 lakh for services. Businesses below these thresholds are exempt from mandatory GST registration.

Correct Answer: B. Tax levied on already-taxed goods at multiple stages

The cascading effect (tax on tax or double taxation) occurred under the pre-GST system when taxes like Excise, VAT, and CST were levied at different stages of the supply chain without full credit for taxes already paid. This inflated the final price of goods. GST with its seamless ITC mechanism eliminated this cascading effect, reducing the effective tax burden.

Correct Answer: C. Petroleum products (crude oil, petrol, diesel, ATF, natural gas)

Petroleum products — crude oil, petrol, diesel, aviation turbine fuel (ATF), and natural gas — are currently outside the GST regime in India. These five petroleum products are still taxed under the old system (Excise Duty and VAT), which gives them revenue significance for both Centre and States. Their inclusion in GST has been deferred repeatedly.

Correct Answer: C. A non-profit company (GSTN) with government ownership

GSTN (Goods and Services Tax Network) is a non-government, non-profit private limited company that provides the shared IT infrastructure and services to Central and State Governments, taxpayers, and other stakeholders for implementation of GST. It is owned 50% by the Government (Centre 24.5%, States/UTs 24.5%) and 50% by financial institutions.

Correct Answer: B. Taxed under state-specific taxes (outside GST)

Alcoholic beverages for human consumption are outside the GST regime and continue to be taxed by State Governments under their own tax laws (Excise Duty on alcohol). This exemption gives states significant autonomy in taxing alcohol, which is a major source of state revenue. Including alcohol in GST would reduce states' control over this lucrative revenue source.

Correct Answer: B. Quarterly Return Monthly Payment scheme for small taxpayers

QRMP (Quarterly Return and Monthly Payment) Scheme is for small taxpayers with aggregate annual turnover up to ₹5 crore. Under QRMP, taxpayers file GSTR-1 and GSTR-3B quarterly but pay GST monthly using Form PMT-06 for the first two months of the quarter. This reduces compliance burden while ensuring regular tax payment.

Correct Answer: B. 3%

Gold jewellery, precious metals, and precious stones attract 3% GST. This special rate (separate from the standard 5%, 12%, 18%, 28% slabs) was set to balance industry concerns with revenue collection. The making charges for jewellery also attract 5% GST. Gold bullion is taxed at 3%, while investment gold coins above a certain weight face 3% GST.

Correct Answer: B. Zero-rated supply with full ITC benefit

Under GST, exports are treated as zero-rated supplies. Zero-rating means GST is levied at 0% but the exporter can claim a full refund of ITC on inputs used in export production. This makes Indian exports competitive in global markets. Exporters can either export under Bond/LUT (without paying IGST and claim ITC refund) or pay IGST and claim refund.