Economics · General Awareness

Indian Taxation System

2,325 Questions

The Indian taxation system comprises direct and indirect levies including income tax, goods and services tax, and property tax. Understanding these tax structures is crucial for general awareness sections in banking and government exams. The practice set covers central and state tax collections, exemptions, and capital gains rules.

Goods and Services TaxIncome tax rulesProperty tax assessmentsTax exemptionsCentral versus state taxes

Indian Taxation System Questions

Multiple choice civics introduction to gst fundamentals of gst tax journal

Input IGST is the only type of GST which can be used in setting off all types of output GST i.e., CGST, SGST and IGST.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

True , IGST can be used in setting off all types of output GST.

Wef 1.2.2019, the Government has changed the order in which ITC of IGST, CGST & SGST/UTGST can be adjusted from the liability payable of IGST, CGST & SGST/UTGST. Now IGST has to be fully exhausted before other taxes can be utilised. 

Multiple choice civics introduction to gst fundamentals of gst tax journal

More MCQs on Foreign Exchange Management 1. The subsumption of which taxes will make the GST-a pucca Destination based Consumption Tax _________________.

  1. CST and Central Excise

  2. VAT and Luxury Tax

  3. Service Tax and Purchase Tax

  4. Taxes on Lotteries and Entertainment Tax
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

GST is a destination-based tax that replaced various indirect taxes, most notably the Central Sales Tax (CST) and Central Excise Duty, to create a unified market.

Multiple choice civics introduction to gst fundamentals of gst tax journal

Which of the following is true in respect of events after the applicability of GST? Transitional Provisions 271 Indirect Taxes Committee _____________.

  1. Proceedings under earlier law will be disposed of under the earlier law

  2. Any default due to proceedings in the earlier law will be recovered in the earlier law

  3. Proceedings under the earlier law will be disposed of under the new law

  4. Any refund due to the proceedings will be admissible as input tax credit
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Transitional provisions ensure that legal proceedings initiated under the previous tax regime continue to be governed by that regime until their conclusion.

Multiple choice civics introduction to gst fundamentals of gst tax journal

What are the non-appealable orders or decisions in GST?
(i) File Transfer from authority to another
(ii) Order related to seizure or retention of books of accounts and other documents
(iii) Prosecution sanctioning order
(iv) Installment Order Codes.

  1. i only

  2. i & iv only

  3. ii, iii & iv only

  4. i, ii, iii & iv
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Goods and Services Tax is an indirect tax used in India on the provider of goods and services. It is an inclusive, multistage, reason-based tax inclusive because it has subsumed approximately all the indirect taxes apart from a few state taxes. 

Multi-staged as it is, the GST is compulsory at each step in the manufacturing process, but is supposed to be refund to all party in a variety of stage of manufacture other than the final customer and as a purpose base tax, it is together from point of utilization and not point of origin like preceding taxes. 

Goods and services are separated into five dissimilar tax slabs for collected works of tax - 0%, 5%, 12%, 18% and 28%.

Thus, the correct option is D.

Multiple choice civics introduction to gst fundamentals of gst tax journal

Where supply has been made before the date of implementation of GST, no tax shall be Payable ________________.

  1. If tax/duty has been paid under the earlier law

  2. If goods were exempted under the earlier law

  3. If the goods were non-taxable under the earlier law

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

No tax shall be payable on the supply of goods and /or services made before the introduction of GST where a part of consideration for the said supply is received on or after the introduction of GST, but the full duty or tax payable on such supply has already been paid under the earlier law.

Multiple choice civics introduction to gst fundamentals of gst tax journal

Input tax credit on capital goods and Inputs can be availed in _____________.

  1. In thirty six installments

  2. In twelve installments

  3. In one installment

  4. In six installments
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under the GST Act, the input tax credit for both inputs and capital goods can be claimed in one installment, provided the conditions for eligibility are met.

Multiple choice civics introduction to gst fundamentals of gst tax journal

A registered taxable person is eligible to claim refund in respect of export of goods and services in the following cases _________________.

  1. Under bond, without payment of IGST and claim refund of unutilized input tax credit.

  2. On payment of IGST and claim refund of IGST paid on such goods and services.

  3. None of the above

  4. Both (a) and (b)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under GST law, exporters can claim a refund either by exporting under bond without paying IGST and claiming a refund of unutilized input tax credit, or by paying IGST and claiming a refund of the tax paid. Both methods are valid legal procedures for exporters.

Multiple choice civics introduction to gst fundamentals of gst tax journal

In GST, the eligible Refund amount otherwise ineligible due to some prescribed reasons are credited _______________.

  1. To the declared bank account of the dealer automatically

  2. To the Cash Deposit Ledger of the dealer

  3. To the ITC Credit Ledger Account

  4. To the Consumer Welfare Fund
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under the GST framework, if a refund claim is found to be ineligible or if there is an excess amount that cannot be directly refunded to the taxpayer, the law mandates that such amounts be credited to the Consumer Welfare Fund to prevent unjust enrichment.

Multiple choice civics introduction to gst fundamentals of gst tax journal

When an e-commerce operator is required to register under GST?

  1. When he is required to collect tax at source u/s 52

  2. When his aggregate turnover exceeds the threshold limit

  3. When he is required to discharge tax on the taxable supply or services made by the supplier through him u/s 9(5)

  4. It is mandatory to register irrespective of the threshold limit.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

E-commerce operators are required to register under GST mandatorily, regardless of their aggregate turnover, because they are responsible for collecting tax at source (TCS) or discharging tax on specific supplies made through their platform.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Custom Duties are levied on ______________.

  1. Exports and Imports

  2. Manufacture of excisable goods / commodities

  3. Services Rendered

  4. Sale made by a Dealer in the course of inter-state or intra-state or commerce
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Custom Duties are levied on exports and imports. Custom duty can also be defined as a type of tax which should be paid by people for exporting to foreign countries and importing goods from foreign countries.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which one of the following taxes belong exclusively to the State Governments?

  1. Income Tax

  2. Agricultural Tax

  3. Excise Tax

  4. Wealth Tax
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Agricultural tax belong exclusively to the State Governments. This means that tax from agricultural sector or primary sector of the economy is collected only by the state government. Central government has no authority of collecting agricultural tax.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which of the following is an objective of VAT?

  1. To avoid double taxation effect or cascading effect

  2. To promote cost-efficiency, by permitting credit on inputs

  3. To ensure equitable distribution of tax impact amongst Dealers

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
VAT stands for Value Added Tax. Enactment of VAT on goods has certain objectives:
a) To avoid double taxation effect or cascading effect
b) To promote cost-efficiency, by permitting credit on inputs
c) To ensure equitable distribution of tax impact amongst Dealers
Multiple choice social science food security in india need for nregs rural development and employment guarantee scheme food security and nutrition

Process of reviewing official records and determining whether state reported expenditures reflect the actual monies spent on the ground is called ___________.

  1. property tax

  2. social audit

  3. flat tax

  4. gift tax
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Social audit is a process of reviewing official records and determining whether state reported expenditures reflect the actual monies spent on the ground. The basic objective of a social audit is to ensure public accountability in the implementation of projects, laws and policies.