Tag: commerce

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Questions Related to commerce

Multiple choice commerce goods and services tax goods and service tax study of gst goods and services tax (gst)

The first committee to design GST model was headed by _____.

  1. Vijay Kelkar

  2. Asim Das Gupta

  3. Dr. Chidambaram

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

On February 28, 2006, GST appears in the Budget speech for the first time; Finance Minister P Chidambaram sets an ambitious April 1, 2010 as deadline for GST implementation. He said the Empowered Committee of finance ministers will prepare a road map for GST.

Multiple choice commerce goods and services tax goods and service tax study of gst goods and services tax (gst)

GST is applicable to all dealers with a turnover of over ______.

  1. Rs. 10 lakh

  2. Rs. 20 lakh

  3. Rs. 40 lakh

  4. Rs. 50 lakh
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A business whose aggregate turnover in a financial year exceeds Rs 20 lakhs has to mandatorily register under Goods and Services Tax. This limit is set at Rs 10 lakhs for North Eastern and hilly states flagged as special category states. 

Multiple choice commerce goods and services tax goods and service tax study of gst goods and services tax (gst)

GST is ______________.

  1. a value added tax

  2. tax on goods and services

  3. tax on consumer goods and services

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. This law has replaced many indirect tax laws that previously existed in India. GST is one indirect tax for the entire country.

Multiple choice commerce goods and services tax goods and service tax study of gst goods and services tax (gst)

The advantages of GST to the Citizens are listed as:

  1. Reduction in prices of goods and services due to elimination of cascading.

  2. Uniform prices throughout the country.

  3. Transparency in taxation system.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
  1. GST is a simplified transparent tax and has abolished a number of indirect taxes which was levied by the Centre and State Governments, including Central Excise duty, Service Tax, VAT, Purchase Tax, Central Sales Tax, Entry Tax, Local Body Taxes, Luxury Tax, etc.
  2. It focuses on removing the Cascading Effect, i.e. tax on tax.
  3. It has led to falling prices of many consumer goods as manufacturing cost of many good has reduced due to less burden of taxes.
  4. Items like a car, FMCG etc. are expected to become cheaper than before.
  5. As a simple rule of economics, with fall in prices of the items, there will be an increase in the demand or consumption of goods.
  6. This increase in demand will tend to increase the supply. Hence, will ultimately lead to the rise in production of goods.
  7. In the long run, it will be helpful for the common man, as increased production of goods will create more job opportunities.
  8. This will help in lowering the burden on the common man i.e. you will have to shed less money to buy the same products which were earlier costly.
Multiple choice commerce goods and services tax goods and service tax study of gst goods and services tax (gst)

GST minimizes the the tax impact on inflation.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
India implemented GST in July 2017. The inflation cycle turned from July 2017 and annual growth in CPI reached a 17-month high of 5.21% in December 2017. It has continued to hover above the 4% mark in the subsequent period. Purely based on numbers, GST seems to have had an inflationary impact on India.

There are two ways in which GST could have caused a spike in inflation: by raising the rate of tax on goods and services, and bringing within its coverage business activities outside the tax net earlier. The latter would push up inflation as any tax incidence on such businesses is bound to be passed on to consumers in terms of higher prices. In a country like India, with a huge informal sector, successful implementation of GST may have brought a lot of non-tax paying firms and transactions under the tax net.
Multiple choice commerce goods and services tax goods and service tax study of gst goods and services tax (gst)

Identify the objective(s) of implementing GST.

  1. Reducing economic distortions

  2. Consumption based tax instead of Manufacturing

  3. Subsume all indirect taxes at Centre and State Level under

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Objectives of implementing GST are:
  • One Country – One Tax
  • Consumption based tax instead of Manufacturing
  • Uniform GST Registration, payment and Input tax Credit
  • To eliminate the cascading effect of Indirect taxes on single transaction
  • Subsume all indirect taxes at Centre and State Level under
  • Reduce tax evasion and corruption
  • Increase productivity
  • Increase Tax to GDP Ratio and revenue surplus
  • Increase Compliance
  • Reducing economic distortions