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GST > Chapter 1 Introduction And Basics > Flashcards

Chapter 1 Introduction And Basics Flashcards

1
Q

What does GST stand for?

A

Goods and Services Tax

GST is a comprehensive indirect tax on the supply of goods and services.

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2
Q

What is the primary responsibility of the Government in a Welfare State?

A

Fulfill the increasing developmental needs of the country and its people by way of public expenditure.

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3
Q

What is a tax?

A

A pecuniary burden laid upon individuals or property owners to support the Government, enforced by legislative authority.

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4
Q

Define direct tax.

A

A charge imposed directly on the taxpayer and paid directly to the Government, such as income tax.

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5
Q

Define indirect tax.

A

A tax that can be shifted by the taxpayer to someone else, with the incidence borne by consumers.

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6
Q

List some examples of indirect taxes that were levied in India before GST.

A
  • Excise duty
  • Customs duty
  • Service tax
  • Central sales tax (CST)
  • Value added tax (VAT)
  • Entry tax
  • Purchase tax
  • Entertainment tax
  • Luxury tax
  • Tax on advertisements
  • Tax on lottery, betting, and gambling
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7
Q

When was GST introduced in India?

A

1st July 2017

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8
Q

What was the significant amendment made to the Constitution of India to facilitate GST?

A

Constitution (101st Amendment) Act, 2016

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9
Q

What does GST aim to create in India?

A

A common national market.

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10
Q

What is the basic principle of GST?

A

A value added tax levied on supply, taxing only the value added at each stage of supply chain.

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11
Q

What is the cascading effect in taxation?

A

A situation where taxes are levied on taxes, leading to an increased overall tax burden.

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12
Q

What are the benefits of implementing GST in India?

A
  • Simplification of the tax structure
  • Elimination of cascading taxes
  • Unified indirect tax regime
  • Increased compliance and efficiency
  • Enhanced revenue for the government
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13
Q

What is the significance of the GST Council?

A

It recommends the CGST, SGST, IGST, UTGST & Compensation Cess Bill.

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14
Q

What was the first country to implement VAT/GST?

A

France in 1954.

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15
Q

True or False: GST is a single tax applicable throughout the country.

A

True

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16
Q

What does CENVAT stand for?

A

Central Value Added Tax

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17
Q

Fill in the blank: GST has subsumed multiple indirect taxes such as _______.

A

excise duty, service tax, VAT, CST, luxury tax, entertainment tax, entry tax

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18
Q

What are the components of the dual GST model adopted by India?

A
  • Central Goods and Services Tax (CGST)
  • State Goods and Services Tax (SGST)
  • Integrated Goods and Services Tax (IGST)
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19
Q

What year was the Constitution (122nd Amendment) Bill introduced in the Lok Sabha?

A

2014

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20
Q

What was the role of the task force formed in 2003?

A

To recommend a fully integrated GST on a national basis.

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21
Q

What does the term ‘input tax credit’ refer to in GST?

A

The credit for GST paid on purchases that can be set off against GST payable on sales.

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22
Q

What is the effect of the dual GST system on tax collection?

A

It allows both federal and state governments to levy GST, ensuring that tax accrues to the jurisdiction where consumption takes place.

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23
Q

What was a major deficiency in the earlier indirect tax regime?

A

Double taxation due to blurred distinctions between goods and services.

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24
Q

Who announced the introduction of GST during the Union Budget of 2006-2007?

A

Union Finance Minister, Shri P. Chidambaram

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25
Q

What type of tax is CST?

A

Origin-based tax

CST is against the principle that tax should accrue to the jurisdiction where consumption takes place.

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26
Q

What happens when a dealer in Delhi purchases goods from Punjab?

A

The dealer pays ` 150 as VAT after selling for ` 1200, with no credit for CST paid

CST paid was ` 20, but credit is not allowed.

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27
Q

What are some local levies not included in State VAT?

A
  • Luxury tax
  • Entertainment tax

These local taxes were not accounted for in the State VAT.

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28
Q

What issue does the GST address regarding cascading taxes?

A

It removes cascading effects of CENVAT and service tax

GST ensures a continuous chain of set-off from the producer to the consumer.

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29
Q

What is the basis for the new tax regime in India under GST?

A

Tax is levied on ‘Supply of Goods and/or services’

The earlier concepts of manufacture or sale are no longer applicable.

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30
Q

What is the Dual GST Model?

A

Centre and States simultaneously levy GST on the complete supply chain

This includes production to distribution stages.

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31
Q

What types of GST are applicable in India?

A
  • CGST
  • SGST
  • UTGST
  • IGST

Each type is levied by different authorities based on the supply location.

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32
Q

What determines whether a supply is intra-State or inter-State?

A

The location of the supplier and the place of supply

Intra-State occurs in the same State; inter-State occurs in different States.

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33
Q

What is IGST?

A

Integrated Goods and Services Tax, levied on inter-State supplies

IGST is the sum of CGST and SGST/UTGST.

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34
Q

What is the legislative framework for GST in India?

A

Single legislation for CGST and separate for SGST and UTGST

Different States and Union Territories have their own GST laws.

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35
Q

What is the purpose of the Composition Scheme under GST?

A

To provide relief to small businesses with a simpler tax payment method

It applies to manufacturers, service providers, and traders making intra-State supplies.

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36
Q

What is the threshold limit for GST registration for suppliers of goods and services?

A

Varies by State and type of supply, generally ` 20 lakh or ` 40 lakh

Specific limits apply for exclusive suppliers of goods or services.

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37
Q

What does seamless flow of credit under GST mean?

A

Credit can be utilized across intra-State and inter-State supplies

Unlike earlier scenarios, the credit chain does not break.

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38
Q

Fill in the blank: The order of utilization of ITC should be _______.

A

IGST, then CGST, then SGST/UTGST

ITC of CGST cannot be used for SGST and vice versa.

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39
Q

What does the GST Common Portal facilitate?

A

Integrates tax administrations and verifies claims

It acts as a clearing house for funds transfer among governments.

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40
Q

What is the HSN used for in GST?

A

Classifying goods for tax rates

HSN stands for Harmonised System of Nomenclature.

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41
Q

What is SAC used for in GST?

A

Classifying services under GST

SAC stands for Services Accounting Code.

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42
Q

What does GST stand for?

A

Goods and Services Tax

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43
Q

What is the primary feature of GST?

A

It is a destination-based tax

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44
Q

What is the role of the Common GST Electronic Portal?

A

To establish a uniform interface for taxpayers and a common IT infrastructure

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45
Q

What is the website for the Common GST Electronic Portal?

A

www.gst.gov.in

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46
Q

Which organization manages the GST portal?

A

Goods and Services Network (GSTN)

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47
Q

What is the purpose of the E-way bill?

A

To serve as an electronic document evidencing the movement of goods

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48
Q

What is the website for generating E-way bills?

A

www.ewaybillgst.gov.in

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49
Q

Who is required to issue e-invoices?

A

Businesses with an aggregate turnover greater than ₹5 crore

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50
Q

What do GSPs stand for?

A

GST Suvidha Providers

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51
Q

What is the role of GSPs?

A

To develop applications for taxpayers to interact with GSTN

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52
Q

What is the GST Compensation Cess?

A

A cess imposed on luxury items or demerit goods to compensate States for revenue loss

53
Q

What items are excluded from GST?

A

Alcoholic liquor for human consumption and petroleum products

54
Q

What is the duration for which the GST Compensation Cess was initially levied?

A

5 years, extended until March 31, 2026

55
Q

What are the benefits of GST to the economy?

A
  • Creation of a unified national market
  • Boost to ‘Make in India’ initiative
  • Increased investments and employment
56
Q

Which taxes were subsumed under GST?

A
  • Central Excise Duty
  • Service Tax
  • VAT/Sales Tax
  • Entertainment Tax
  • Luxury Tax
57
Q

True or False: Tobacco is outside the purview of GST.

A

False

58
Q

What is the significance of Article 265 of the Constitution of India regarding taxes?

A

It prohibits arbitrary collection of taxes

59
Q

What does Article 246 of the Constitution of India address?

A

It provides authority to Union and State Governments for levying taxes

60
Q

What is the purpose of the GST Council?

A

To decide the date from which GST will be applicable on certain products

61
Q

Fill in the blank: GST is a _______ based consumption tax.

A

destination

62
Q

What is the impact of GST on small traders and entrepreneurs?

A

Increased threshold limit for GST registration and benefits of a composition scheme

63
Q

What is a major advantage of GST for trade and industry?

A

Reduction in prices of goods and services

64
Q

What does the term ‘cascading’ refer to in taxation?

A

Tax on tax

65
Q

What is the primary goal of GST?

A

To simplify the tax structure and enhance compliance

66
Q

What are the three lists in the Seventh Schedule to Article 246?

A
  • Union List
  • State List
  • Concurrent List
67
Q

What does the Union List contain?

A

Matters in respect of which the Parliament (Central Government) has the exclusive right to make laws.

68
Q

What does the State List contain?

A

Matters in respect of which the State Governments have the exclusive right to make laws.

69
Q

What is included in the Concurrent List?

A

Matters in respect of which both the Central & State Governments have power to make laws.

70
Q

Which entries of the Union List enumerate subjects where the Central Government has power to levy taxes?

A

Entries 82 to 91.

71
Q

Which entries of the State List enumerate subjects where the State Governments have power to levy taxes?

A

Entries 45 to 63.

72
Q

What power does Parliament have regarding laws for parts of India not comprised in a State?

A

Parliament can make any law for any part of India not comprised in a State even if such matter is included in the State List.

73
Q

Which taxes does the Central Government levy according to the Union List?

A

Income tax and customs duty.

74
Q

What is the purpose of Article 246A of the Constitution?

A

It confers power to levy Goods and Services Tax (GST).

75
Q

What was the significant reason for the introduction of the Constitution (101st Amendment) Act, 2016?

A

To enable integration of various taxes into a comprehensive Goods and Services Tax.

76
Q

What does the GST Council do?

A

Makes recommendations on important issues like tax rates, exemptions, and dispute resolution.

77
Q

What are the products on which GST shall not be levied until notified?

A
  • Petroleum Crude
  • High Speed Diesel
  • Motor Spirit (Petrol)
  • Natural Gas
  • Aviation Turbine Fuel
78
Q

What power does Article 279A grant to the President?

A

To constitute the Goods and Services Tax Council.

79
Q

Who is the Chairman of the GST Council?

A

The Union Finance Minister.

80
Q

What does Article 246A specify about GST laws?

A

Parliament and State Legislatures have the power to make laws with respect to GST.

81
Q

What is the definition of ‘Goods and Services Tax’ under Article 366?

A

Any tax on supply of goods, or services or both except taxes on the supply of alcoholic liquor for human consumption.

82
Q

Which article was omitted that empowered the Union to levy service tax?

A

Article 268A.

83
Q

What does Article 269A state about GST on inter-State supply?

A

GST shall be levied and collected by the Government of India and apportioned between the Union and the States.

84
Q

What does Article 270 provide for?

A

Distribution of GST between the Centre and the States.

85
Q

What significant change was made to Article 286 regarding tax imposition?

A

Substituted ‘sale or purchase’ with ‘supply’ and ‘goods’ with ‘goods or services or both’.

86
Q

What is the role of the Finance Commission in relation to GST?

A

To make recommendations for the distribution of GST between the Centre and the States.

87
Q

True or False: The Union Government has the power to levy GST on intra-State transactions.

A

False.

88
Q

Fill in the blank: The _______ are responsible for making recommendations on tax rates under GST.

A

GST Council

89
Q

What is the role of the Union Government in imposing GST on inter-State supply?

A

The Union Government levies GST on inter-State supply of goods or services or both under Article 269A.

90
Q

What does clause (3) of Article 286 stipulate regarding State laws?

A

It stipulates restrictions and conditions for State laws imposing taxes on goods declared by Parliament as important in inter-State trade.

91
Q

What is the purpose of Article 279A?

A

It empowers the President to constitute the Goods & Services Tax Council.

92
Q

When did the provisions relating to the GST Council come into force?

A

12th September, 2016.

93
Q

Who is the Chairperson of the GST Council?

A

The Union Finance Minister.

94
Q

What are the members of the GST Council?

A

Members include the Union Finance Minister, Union Minister of State in charge of Revenue or Finance, and State Ministers in charge of Finance or Taxation.

95
Q

How is the Vice-Chairperson of the GST Council chosen?

A

Members choose one amongst themselves to be the Vice-Chairperson.

96
Q

What recommendations does the GST Council make?

A

Recommendations on taxes to be subsumed, goods/services to be taxed or exempted, model GST laws, turnover thresholds, tax rates, and special provisions for certain States.

97
Q

What is required for a quorum in GST Council meetings?

A

One-half of the total number of members.

98
Q

How are decisions made in the GST Council?

A

By a majority of not less than three-fourths of the weighted votes of members present and voting.

99
Q

What weightage does the vote of the Central Government have in GST Council decisions?

A

One-third of the total votes cast.

100
Q

What weightage do the votes of State Governments have in GST Council decisions?

A

Two-thirds of the total votes cast.

101
Q

What does Article 368 entail regarding GST Council amendments?

A

Requires two-thirds majority in each House of Parliament and ratification by half of the States for amendments.

102
Q

Which taxes are not subsumed in GST?

A

Service tax, customs duty, luxury tax, tax on lottery, betting and gambling, entertainment tax levied by local bodies.

103
Q

What are some benefits that GST may accrue to the economy?

A
  • Creation of a unified national market
  • Boost to ‘Make in India’ initiative
  • Boost to investments, exports, and employment
104
Q

How is GST levied on intra-State supply of goods or services?

A

Both Central GST (CGST) and State GST (SGST) are levied simultaneously.

105
Q

What are the examples of dual taxation under GST?

A

CGST and SGST are charged on the same transaction value.

106
Q

What necessitated the amendment of the Constitution for GST introduction?

A

To empower both Centre and States to levy and collect GST.

107
Q

What is the nature of GST as a tax?

A

GST is a destination-based tax on consumption of goods or services.

108
Q

What commodities are kept outside the purview of GST?

A
  • Alcoholic liquor for human consumption
  • Petroleum products
  • Tobacco
  • Opium and narcotics
109
Q

What is the definition of GST according to Article 366(12A)?

A

A tax on supply of goods or services or both, except supply of alcoholic liquor for human consumption.

110
Q

What does Article 269A stipulate regarding inter-State trade?

A

GST on inter-State trade shall be levied and collected by the Government of India.

111
Q

What is the Integrated GST (IGST)?

A

IGST is levied by the Centre on every inter-State supply of goods and/or services.

112
Q

What is the basis for apportioning the amount between the Union and the States?

A

As provided by Parliament by law on the recommendations of the Goods and Services Tax Council.

113
Q

How is the supply of goods or services treated during import into India?

A

Deemed to be supply in the course of inter-State trade or commerce.

114
Q

What happens to the amount apportioned to a State?

A

It shall not form part of the Consolidated Fund of India.

115
Q

If IGST is used for payment of SGST or vice versa, what is the status of that amount?

A

It shall not form part of the Consolidated Fund of India/State respectively.

116
Q

Who has the power to formulate principles for determining the place of supply?

A

Parliament.

117
Q

What does Article 246A stipulate regarding GST laws?

A

Parliament and State Legislatures have power to make laws with respect to GST imposed by the Union or the State.

118
Q

Who has exclusive power to make laws regarding GST in inter-State trade?

A

Parliament.

119
Q

Which products are specifically mentioned regarding the application of GST provisions?

A
  • Petroleum crude
  • High speed diesel
  • Motor spirit (petrol)
  • Natural gas
  • Aviation turbine fuel
120
Q

When will the provisions apply to certain petroleum products?

A

From the date to be notified by the Government on the recommendations of the GST Council.

121
Q

Fill in the blank: India has adopted ______ GST model because of its unique federal nature.

A

GST

122
Q

What is the Common GST Electronic Portal for furnishing way bills?

A

www.ewaybillgst.gov.in

123
Q

What is the website for uploading/reporting of e-invoices by notified persons?

A

www.gst.gov.in

124
Q

What is the nature of tax that GST represents?

A

A value-added tax.

125
Q

Who was the first country to implement VAT/GST?

A

France in 1954.

126
Q

According to Article 265 of the Constitution of India, what is required for tax levying?

A

No tax shall be levied or collected except by authority of law.

127
Q

What is the acronym used for classifying goods under GST?

A

HSN (Harmonized System of Nomenclature).

128
Q

True or False: Central excise duty is subsumed in GST.

A

False.

129
Q

True or False: State excise duties are subject to GST.

A

True.

GST (4 decks)

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