TCS, GST - General awareness questions on current affairs

1)   What is the main tenet behind GST tax reform?

a. One Group, One Product
b. One Nation, One Tax
c. Both of the above
d. Neither of the above
Answer  Explanation 

ANSWER: Both of the above

Having opted for multiple rates under the upcoming goods and services tax (GST) regime, India is now looking to keep variations in rates on the same types of products at a minimum to ensure that the tax structure does not get any more complicated.

For example, all types of footwear or mobile phones could attract the same rate.

Single rate for one product group will bring simplicity in the structure and make implementation easier.

Globally, most regimes have a single rate. India has adopted a four-tier tax structure of 5%, 12%, 18% and 28%.

The rate applicable on most products will be 18%. The highest rate has been pegged in the GST law at 40%.

Many experts have said this structure will undermine the basic tenet of GST - a simple structure with at most two rates.

The GST Council now has to decide which goods and services go into which slabs.

The highly anticipated tax reform is expected to lift economic growth by 1-2 percentage points by removing inter-state barriers thus slashing cost and boosting efficiency.

2)   Which of the following is not among the 4 supporting legislations of the Goods and Services Tax?

c. Compensation
d. None of the above
Answer  Explanation 

ANSWER: None of the above

Rajya Sabha on 6 April 2017 passed all four supporting legislations of the Goods and Services Tax Bill, GST rollout 2017.

The four bills were passed by the Rajya Sabha by a voice vote as all parties were on board.

The four legislations are:

i. The Central Goods and Services Tax Bill, 2017 (The CGST Bill).
ii. The Integrated Goods and Services Tax Bill, 2017. (The IGST Bill).
iii. The Union Territory Goods and Services Tax Bill, 2017 (The UTGST Bill).
iv. The Goods and Services Tax (Compensation to the States) Bill, 2017 (The Compensation Bill).

The passage in the upper house of the Parliament has cleared the decks for the rollout of the historic GST Bill from 1 July 2017 and usher the one-nation-one-tax regime.

With this passage in Rajya Sabha, the Bill will be sent to President Pranab Mukherjee for the final nod. The bills will become the law after the President gives his assent to them.

The Bill was earlier passed by the Lok Sabha on 29 March 2017.

Now, the States can pass the State GST Bill in their assemblies.

Parliament passed all the four bills related to GST rollout unanimously.

The agricultural produce will not be taxed under the new indirect tax regime. All those items which are exempted as of now will continue to be so.

3)   Match the following GST bills correctly with their respective provisions:

IGSTLevy and collection of tax on intra-state supply of goods and services
CGSTLevy and collection of tax on inter-state supply of goods or services
UTGSTLevy on collection of tax on intra-UT supply of goods and services

a. 1-I, 2-ii, 3-iii
b. 1-ii, 2-i, 3-iii
c. 1-iii, 2-ii, 3-i
d. None of the above
Answer  Explanation 

ANSWER: 1-ii, 2-i, 3-iii

The Lok Sabha on 29 March 2017 passed four Goods and Services Tax (GST) Bills:

  • The Central Goods and Services Tax Bill, 2017 (The CGST Bill).
  • The Integrated Goods and Services Tax Bill, 2017 (The IGST Bill).
  • The Union Territory Goods and Services Tax Bill, 2017 (The UTGST Bill).
  • The Goods and Services Tax (Compensation to the States) Bill, 2017 (The Compensation Bill)
These four Goods and Services Tax (GST) Bills will subsume all the indirect taxes currently levied such as the Value Added Tax (VAT), excise duty, service tax and central sales tax.

It empowers the centre to impose an additional tax of up to 1 per cent on the inter-state supply of goods for two years or more.


IGST Bill makes provisions for levy and collection of tax on inter-state supply of goods or services or both by the Union Government.


The CGST Bill makes provisions for levy and collection of tax on intra-state supply of goods and services by the Union Government.


The UTGST Bill makes provisions for levy on collection of tax on intra-UT supply of goods and services in the Union Territories without legislature.


Union Territory GST is similar to States Goods and Services Tax (SGST), which shall be levied and collected by the States and Union Territories on intra-state supply of goods or services or both.

4)   Which of the following are part of the GST tax reform?

a. Central GST Bill
b. Integrated GST Bill
c. Union Territory GST Bill
d. All of the above
Answer  Explanation 

ANSWER: All of the above

Finance minister Arun Jaitley on 27th March 2017 introduced four bills on the Goods and Services Tax (GST) in the lower house of parliament.

This is paving the way for the government to launch the landmark tax reform.

The bills introduced are the Central GST Bill, the Integrated GST Bill, the Union Territory GST Bill, and the GST (Compensation to States) Bill.

The state assemblies will also have to pass the State GST bill before the new tax system can be rolled out later this year.

The new tax, which the government expects to implement from July 1, is the biggest tax reform since India got independence in 1947 from the British colonial rule.

The tax is expected to boost the rate of economic growth by about 0.5 percentage points, broaden the revenue base and cut compliance cost for firms.

5)   GST Council has approved the draft versions of which bills?

d. Both a and b
e. All the above
Answer  Explanation 

ANSWER: Both a and b

The Goods and Services Tax (GST) Council, in its meeting held in Vigyan Bhawan in New Delhi under the Chairmanship of the Union Minister for Finance & Corporate Affairs, Shri Arun Jaitley has approved the draft CGST Bill and the draft IGST Bill as vetted by the Union Law Ministry.

This clears the deck for the Central Government to take these two Bills to the Parliament for their passage in the ongoing Budget Session.

i. A State-wise single registration for a taxpayer forfiling returns, paying taxes,and to fulfil other compliance requirements. Most of the compliance requirements would be fulfilled online, thus leaving very little room for physical interface between the taxpayer and the tax official.
ii. A taxpayer has to file one single return state-wise to report all his supplies, whether made within or outside the State or exported out of the country and pay the applicable taxes on them. Such taxes can be Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Union Territory Goods and Services Tax (UTGST) and Integrated Goods and Services Tax (IGST).
iii. A business entity with an annual turnover of upto Rs. 20 lakhs would not be required to take registration in the GST regime, unless he voluntarily chooses to do so to be a part of the input tax credit (ITC) chain. The annual turnover threshold in the Special Category States (as enumerated in Article 279A of the Constitution such as Arunachal Pradesh, Sikkim, Uttarakhand, Himachal Pradesh, Assam and the other States of the North-East) for not taking registration is Rs. 10 lakhs.
iv. A business entity with turnover upto Rs. 50 lakhs can avail the benefit of a composition scheme under which it has to pay a much lower rate of tax and has to fulfil very minimal compliance requirements. The Composition Scheme is available for all traders, select manufacturing sectors and for restaurants in the services sector.
v. In order to prevent cascading of taxes, ITC would be admissible on all goods and services used in the course or furtherance of business, except on a few items listed in the Law.
vi. In order to ensure that ITC can be used seamlessly for payment of taxes under the Central and the State Law, it has been provided that the ITC entitlement arising out of taxes paid under the Central Law can be cross-utilised for payment of taxes under the laws of the States or Union Territories. For example, a taxpayer can use the ITC accruing to him due to payment of IGST to discharge his tax liability of CGST / SGST / UTGST. Conversely, a taxpayer can use the ITC accruing to him on account of payment of CGST / SGST / UTGST, for payment of IGST. Such payments are to be made in a pre-defined order.
vii. In the Services sector, the existing mechanism of Input Service Distributor (ISD) under the Service Tax law has been retained to allow the flow of ITC in respect of input services within a legal entity.
viii. To prevent lock-in of capital of exporters, a provision has been made to refund, within seven days of filing the application for refund by an exporter, ninety percent of the claimed amount on a provisional basis.
ix. In order to ensure a single administrative interface for taxpayers, a provision has been made to authorise officers of the tax administrations of the Centre and the States to exercise the powers conferred under all Acts.
x. An agriculturist, to the extent of supply of produce out of cultivation of land, would not be liable to take registration in the GST regime.
xi. To provide certainty in tax matters, a provision has been made for an Advance Ruling Authority.
xii. Exhaustive provisions for Appellate mechanism have been made.
xiii. Detailed transitional provisions have been provided to ensure migration of existing taxpayers and seamless transfer of underutilised ITC in the GST regime.
xiv. An anti-profiteering provision has been incorporated to ensure that the reduction of tax incidence is passed on to the consumers.
xv. In order to mitigate any financial hardship being suffered by a taxpayer, Commissioner has been empowered to allow payment of taxes in instalments.
Source: Press Information Bureau

The Council has also included a revised peak rate of 20 per cent under GST, instead from the earlier 18 per cent.

This would mean that the total incidence of the tax could go as high as 40 per cent.

But smoothening concerns, Revenue Secretary Hasmukh Adhia said that it would not impact the four-tier rate structure of 5, 12, 18 and 28 per cent.

The UT-GST Bill would be for levying of the new tax in Union Territories that do not have a legislature (excluding Delhi and Puducherry).

The four laws will be approved by the Union Cabinet and taken to the Parliament in the coming session,.

Finance Ministry officials said that the proposed anti-profiteering agency under GST would not send out inspectors to check on prices but will look at applications made consumers.

The remaining two Bills namely, State Goods and Services Tax (SGST) Bill and the Union territory Goods and Services Tax (UTGST) Bill, which would be almost a replica of the CGST Act, would be taken-up for approval after their legal vetting in the next meeting of GST Council scheduled on 16 March 2017

6)   TCS is the largest listed Indian company in terms of?

a. market cap
b. GDP
c. profits
d. sales
Answer  Explanation 

ANSWER: market cap

Tata Consultancy Services (TCS), which is the country’s largest listed company in terms of market capitalisation, has announced India’s biggest buyback offer till now.

The software major plans to buy back up to 5.61 crore equity shares at INR2,850 per share.

Assuming that 5.61 crore shares - equivalent to 2.85% of the company’s equity - are bought back, the offer size would be pegged at INR 16,000 crore, surpassing Reliance Industries Ltd.’s 2012 share buyback offer of INR 10,400 crore.

The buyback is being made through the tender offer route.

This means the existing shareholders can tender their shares through the stock exchange.

The buyback offer price of INR 2,850 represents a 13.7% premium to INR 2,506.50, the closing price on February 20 when the announcement was made.

Since the buyback announcement, the stock has lost nearly 1% to close at INR 2,481.65 on Thursday (the stock market was shut on Friday on account of Mahasivaratri).

The buyback offer price is at a premium of almost 15% over the current market price.

TCS has a cash pile of more than INR 38,000 crore as on December 31, 2016.

Given the tax rules of India, a buy back is a comparatively better way of rewarding shareholders than doling out hefty dividends.

While there is no additional tax in buyback, dividends come at a cost to the company and the shareholders.

There is a dividend distribution tax of more than 20% on the companies while individuals have to pay 10% tax if dividend received is more than INR 10 lakh.

Buy Backs in IT Space: Know More

  • The mega buyback offer and the response to it could lead to more such offers, mostly from the IT space.
  • Infosys is seeking shareholder approval for amending its Articles of Association to include the provision of buybacks - as mandated by the new Companies Act.
  • Wipro, Tech Mahindra and HCL Technologies might be still some time away from such offers because of the lower levels of cash and a historical trend of inorganic growth.
  • The board of NASDAQ-listed Cognizant has also approved a plan to return $3.4 billion to its shareholders over two years through buybacks and dividend.
  • The NYSE-listed Accenture Plc has a history of returning all its profits to its shareholders in the form of buybacks and dividend payouts.

7)   Who is the chairman of TCS as per appointment on 20th Feb 2017?

a. Natarajan Chandrasekaran
b. S. Ramadorai
c. Ishat Hussain
d. None of the above
Answer  Explanation 

ANSWER: Natarajan Chandrasekaran

Tata Sons Chairman-designate Natarajan Chandrasekaran will also hold the chairmanship of the group's crown jewel Tata Consultancy Services from 21st Feb 2017.

The country's largest software services provider has also named V Ramakrishnan as its Chief Financial Officer to succeed Rajesh Gopinathan, who will take over as the CEO and MD of the Tata Group company.

The nomination was duly noted by the directors at its meeting held on February 20, 2017.

Chandrasekaran, currently Chief Executive and Managing Director of TCS, will take charge as the Non-Executive Chairman of the board of directors of TCS with effect from tomorrow.

In a separate filing, TCS said its board of directors appointed V Ramakrishnan as the Chief Financial Officer with effect from February 21.

Ramakrishnan, or Ramki as he is popularly known, joined TCS Finance in 1999, and served as the Finance Head of TCS North America for seven years.

Earlier in the day, TCS also announced a Rs 16,000 crore buyback, the largest till date in the Indian corporate history.

Tata Sons had earlier appointed Ishaat Hussain as TCS Chairman on November 11.

TCS had said Hussain would hold office as the Chairman until a new Chairman is appointed in his place.

TCS: Know More

  • CEO: Rajesh Gopinathan (21 Feb 2017)
  • Revenue: 16.54 billion USD (2016)
  • Headquarters: Mumbai
  • Founders: J. R. D. Tata, F. C. Kohli

8)   Who has been appointed interim chairman of the TATA Group?

a. Ishaat Hussain
b. Ratan Tata
c. Cyrus Mistry
d. None of the above
Answer  Explanation 

ANSWER: Ishaat Hussain

TATA Sons Ltd on 9th Nov 2016 announced the appointment of Ishaat Hussain as Chairman of IT giant, TCS with immediate effect.

  • He will hold the position till the name of the new chairman is announced.
  • Announcement was delivered to the company TCS through the letter dated 9th Nov 2016 from TATA Sons Ltd.
  • Hussain succeeds Cyrus Mistry who was ousted from the position on 23rd Oct 2016 by the board of TATA Sons Ltd.
  • Ratan Tata has been chosen as the Interim Chairman of the group till another suitable candidate was chosen.
  • He is a member of the board of Tata Sons and director of several TATA Companies such as TATA Industries, TATA Steel and Voltas.
  • He is also a member of the SEBI committees on insider trading and primary capital markets.
  • He is also a member of the CII Finance Committee.
  • Prior to TATA Sons, Hussain has served as the senior Vice President and Executive Director of finance at TATA Steel for 10 years.
  • He joined the board of the Indian Tube Company (a TATA Steel Associate company) in 1981 and moved to TATA Steel in 1983 after the merger of both companies.

9)   The base year for calculating the revenue structure of the state according to the GST Council is:

a. 2014-2015
b. 2015-2016
c. 2016-2017
d. 2017-2018
Answer  Explanation 

ANSWER: 2015-2016

The Goods and Services Council on 18th October 2016 reached a consensus on the way in which states would be compensated for loss of revenue with a four slab structure of 6, 12, 18 and 26 along with lower rates for essential items and highest band for luxury goods

  • Base year for calculating the revenue of the state would be 2015-2016
  • Secular growth rate of 14% would be taken for calculating the likely revenue of each state in the first 5 years of implementation of the GST
  • A consensus was reached on definition of revenue to compensate the state for revenue loss due to GST implementation
  • Rate structure should be such that it does not lead to further inflation and both States and Centre have adequate funds to discharge their duty.
  • The rate is to be revenue neutral so that there is no need to burden consumers with additional tax
  • To ensure inflation remains under control, food items along with other 50 percent items of common usage are proposed for tax exemption
  • Lower rates would be levied on essential items and the highest for luxury and demerit goods

10)   GST rate of what percent has been suggested by the GST Council for single GST rate?

a. 18-19
b. 19-20
c. 16-17
d. 17-18
Answer  Explanation 

ANSWER: 17-18

India’s plan to implement a nation-wide GST entered the final stage with the GST Council coming up with a formula to compensate states in the event of revenue loss after the new system is adopted

  • On 18th Oct 2016, the council decided 2015-2016 will be taken as the base year for calculating revenue assuming secular and long term growth rate of 14 percent.
  • States will be fully compensated for potential revenue loss up to 5 years
  • GST Council has also finalised area based exemptions and 1 states including 8 NE states and three hilly states will be treated under the new tax regime.
  • The tax exemption provided by the states as incentives to the industry will be counted in the definition of revenue for calculation of revenue loss
  • Objective is to ensure rates will not be inflationary
  • There could be four slabs of GST rates namely 6,12,18 and 26 percent
  • The cess on the highest band could be for ultra luxury items and demerit items such as tobacco
  • The panel under CEA has recommended a revenue neutral rate of 15- 15.5 percent with a standard rate of 17-18 percent levied on most goods and all services

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