Multiple choice

Which among the following does not form the rules under new Value Added Tax regime to be implemented from April 1, 2005?

  1. It will have two rates of 4 per cent and 12.5 per cent

  2. Petrol, diesel, aviation fuel and liquor will be exempted from VAT

  3. A special VAT rate of one per cent only for gold and silver ornaments etc will be introduced

  4. Medicines will attract a 2% health surcharge besides 4% VAT
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Value Added Tax (VAT) regime introduced in April 2005 featured standard rates of 4 percent and 12.5 percent, with special low rates for gold and silver. Essential items like petrol and liquor were kept outside the VAT net to be taxed separately by states. There was no national rule mandating a 2 percent health surcharge specifically on medicines under the VAT framework.

Keep practicing — related questions