Resource sharing between union and state governments goods and services tax. - Question Bank

1. What is the primary role of the Finance Commission in relation to GST?
A) To administer GST collection
B) To recommend the distribution of GST revenue between the Union and States
C) To set GST rates
D) To audit GST compliance
2. The 'Composition Scheme' under GST offers a simplified compliance option for:
A) Large corporations
B) Small businesses with a turnover below a certain threshold
C) Exporters
D) Government undertakings
3. The GST regime aims to improve tax buoyancy by:
A) Reducing the tax base
B) Expanding the tax base and ensuring better compliance
C) Increasing exemptions
D) Lowering tax rates significantly
4. Which of the following is NOT a category of GST rates in India?
A) 0%
B) 5%
C) 12%
D) 18% (except for specific items)
5. What is the significance of the 'destination principle' in GST?
A) Tax is levied where the goods are produced
B) Tax is levied where the goods are consumed
C) Tax is levied where the company is registered
D) Tax is levied based on the origin of the service provider
6. The GST Council's recommendations are binding on:
A) Only the Central Government
B) Only the State Governments
C) The Central Government and the State Governments
D) No one, they are merely advisory
7. What is the typical rate of CGST and SGST on intra-state supplies?
A) The rates are independent and can vary widely
B) They are equal to the IGST rate
C) They are half of the IGST rate each
D) One is 5% and the other is 10%
8. The GST legislation in India follows a model that is largely based on:
A) The US model of state-level GST
B) The Canadian model of a federal and provincial GST
C) The UK model of a single national VAT
D) The French model of a multi-stage VAT
9. Which of the following is a tax that is NOT subsumed under GST?
A) Central Sales Tax
B) Octroi
C) Entertainment Tax (levied by local bodies)
D) Service Tax
10. What is the primary goal of the GST regime concerning 'Ease of Doing Business'?
A) To increase regulatory hurdles
B) To reduce compliance costs and streamline indirect taxation
C) To introduce complex procedures
D) To create state-specific tax laws
11. Which Article of the Constitution empowers the Parliament to make laws with respect to GST?
A) Article 245
B) Article 246A
C) Article 265
D) Article 270
12. The GST Council has representation from:
A) Only the Central Government
B) Only the State Governments
C) The Union Finance Minister, Union Minister of State for Revenue, and State Finance Ministers
D) The Prime Minister and Chief Ministers of all states
13. What is the meaning of 'Input Tax Credit' (ITC) in GST?
A) The tax paid by the final consumer
B) The tax paid on inputs (purchases) that can be deducted from the output tax liability
C) The tax levied on exports
D) The tax collected by the government
14. The Goods and Services Tax (Compensation to States) Act, 2017, was enacted to:
A) Increase the tax burden on states
B) Provide compensation to states for revenue loss due to GST implementation
C) Introduce new state-level taxes
D) Reduce the powers of the GST Council
15. Which of the following is NOT considered a 'supply' under GST?
A) Sale of goods
B) Provision of services
C) Activities specified by the Government or GST Council
D) Purchase of shares
16. What is the primary impact of GST on the 'Make in India' initiative?
A) It has increased the cost of manufacturing
B) It aims to create a seamless national market, potentially boosting manufacturing
C) It has led to higher import duties
D) It has discouraged foreign investment
17. The concept of 'Reverse Charge Mechanism' under GST applies when:
A) The supplier pays the tax
B) The recipient of goods or services is liable to pay the tax
C) Tax is levied at the point of origin
D) Tax is exempted
18. Which entity administers UTGST?
A) The respective State Government
B) The Central Government
C) The Administrator of the Union Territory
D) The GST Council
19. What is the tax rate for services under GST, generally?
A) A single rate for all services
B) Multiple rates depending on the type of service
C) No tax on services
D) A flat 10% rate
20. The GST Council has the power to recommend:
A) Changes in direct tax laws
B) Exemptions and thresholds for goods and services
C) Changes in the Reserve Bank of India's monetary policy
D) The appointment of the Prime Minister
21. Which of the following is a benefit of GST for businesses?
A) Increased compliance burden
B) Reduced logistics costs and improved supply chain efficiency
C) Complexity in inter-state trade
D) Higher tax rates on most goods
22. The GST regime replaced the previous indirect tax system which was characterized by:
A) A single point of taxation
B) A unified national market
C) Multiple layers of taxes and inter-state barriers
D) Minimal compliance burden
23. What is the role of the GST Network (GSTN)?
A) To formulate GST policies
B) To provide IT infrastructure and services for GST implementation
C) To collect GST revenue
D) To audit GST compliance
24. Which of the following is a major challenge in the implementation of GST?
A) Simplicity of tax structure
B) Uniformity across states
C) Complexity of IT infrastructure and compliance
D) Reduced tax evasion
25. What is the minimum percentage of votes required to pass a resolution in the GST Council?
A) A simple majority
B) Three-fourths of the votes cast
C) Two-thirds of the total votes cast
D) More than 50% of the total votes cast
26. In the GST Council, who has a weightage of two-thirds of the total votes cast?
A) Central Government
B) State Governments combined
C) Each State Government individually
D) Union Territories
27. In the GST Council, who has a weightage of one-third of the total votes cast?
A) Central Government
B) State Governments combined
C) Each State Government individually
D) Union Territories
28. What is the 'cascading effect' of taxes that GST aims to eliminate?
A) Tax on tax, where tax is levied on the tax component of the previous stage
B) Tax exemptions for certain goods
C) Tax collected at the point of origin
D) Tax levied only on final consumption
29. Which sector was initially kept out of the GST regime due to its complexity and revenue significance?
A) Information Technology
B) Petroleum Products
C) Pharmaceuticals
D) Textiles
30. The GST regime aims to simplify the tax administration by:
A) Increasing the number of tax forms
B) Creating a single point of taxation for goods and services
C) Maintaining separate tax laws for each state
D) Exempting all small businesses from taxation
31. Which of the following is levied on the import of goods into India and is aligned with GST?
A) Central Excise Duty
B) Service Tax
C) Integrated GST (IGST)
D) Value Added Tax (VAT)
32. Which body handles disputes between the Union and State governments regarding GST?
A) Supreme Court of India
B) High Courts of respective states
C) The GST Council
D) Finance Commission
33. What does 'CAS' stand for in the context of GST?
A) Centralized Accounting System
B) Common Accounting Standard
C) Continuous Assessment Scheme
D) Computerized Audit System
34. The GST Council makes recommendations on:
A) Direct taxes only
B) Indirect taxes, including the structure, principles, and model laws for GST
C) Monetary policy and inflation
D) Fiscal deficit management
35. Which of the following is a key principle of GST regarding the destination of goods and services?
A) Origin-based taxation
B) Destination-based taxation
C) Consumption-based taxation
D) Production-based taxation
36. What is the threshold limit for small businesses to be exempted from GST registration in most states?
A) Rs. 10 Lakhs
B) Rs. 20 Lakhs
C) Rs. 40 Lakhs
D) Rs. 50 Lakhs
37. Who is responsible for administering and collecting SGST?
A) Central Government
B) State Governments
C) The GST Council
D) District Collectors
38. Who is responsible for administering and collecting CGST?
A) State Governments
B) Central Government
C) Local Municipalities
D) Union Territories
39. What is the main objective of subsuming multiple indirect taxes into GST?
A) To increase the number of tax slabs
B) To create a unified national market and reduce cascading effect of taxes
C) To increase the tax burden on consumers
D) To give more autonomy to individual states in taxation
40. Which of the following is NOT a component of the GST regime in India?
A) CGST
B) SGST
C) UTGST
D) Petroleum Tax
41. The GST compensation mechanism is designed to protect states from revenue loss for a period of:
A) 5 years
B) 7 years
C) 10 years
D) 15 years
42. What is the purpose of the Integrated Goods and Services Tax (IGST)?
A) To tax intra-state supplies
B) To tax inter-state supplies and imports
C) To collect taxes for local bodies
D) To provide tax exemptions to specific industries
43. When goods or services are supplied within a State, which two types of GST are levied?
A) IGST and UTGST
B) CGST and IGST
C) CGST and SGST
D) SGST and UTGST
44. Which type of GST is levied and collected by the Central Government on inter-state supply of goods and services?
A) CGST
B) SGST
C) IGST
D) UTGST
45. What is the dual structure of GST in India, meaning it is levied by both the Union and State governments?
A) Integrated GST (IGST) and Union Territory GST (UTGST)
B) Central GST (CGST) and State GST (SGST)
C) Compensation GST (CGST) and State Compensation Tax (SCT)
D) Local GST (LGST) and National GST (NGST)
46. Which of the following taxes were subsumed under GST in India?
A) Income Tax, Corporate Tax, and Property Tax
B) Central Excise Duty, Service Tax, and VAT
C) Customs Duty, Stamp Duty, and Road Tax
D) Taxes on petroleum products, alcohol, and tobacco
47. Who chairs the Goods and Services Tax Council meetings?
A) The Prime Minister of India
B) The Finance Minister of India
C) The Governor of the Reserve Bank of India
D) The Chief Economic Advisor
48. The Goods and Services Tax Council is a constitutional body established under which Article of the Constitution?
A) Article 269A
B) Article 279A
C) Article 280
D) Article 246A
49. Which constitutional amendment paved the way for the implementation of GST in India?
A) 101st Amendment Act, 2016
B) 99th Amendment Act, 2015
C) 100th Amendment Act, 2015
D) 102nd Amendment Act, 2018
50. What is the primary constitutional basis for the Goods and Services Tax (GST) in India?
A) Article 246 of the Constitution of India
B) Article 279A of the Constitution of India
C) Article 301 of the Constitution of India
D) Article 115 of the Constitution of India
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