TCS, GST - General awareness questions on current affairs

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

a. CGST
b. IGST
c. SGST
d. Both a and b
e. All the above
Answer  Explanation 

ANSWER: Both a and b

Explanation:
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


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

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

ANSWER: market cap

Explanation:
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.


3)   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

Explanation:
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


4)   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

Explanation:
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.


5)   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

Explanation:
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


6)   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

Explanation:
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


7)   Union Cabinet approved the formation of the GST Council as per which article of the amended Constitution?

a. 279A
b. 279B
c. 279C
d. 279D
Answer  Explanation 

ANSWER: 279A

Explanation:
Union Cabinet on 12th September 2016 approved the process, formation and functioning of the Goods and Services Tax Council

  • Council will comprise FM and state Finance Ministers making recommendations on important issues pertaining to GST including items and rates
  • Creation of the GST Council is as per A279A of the amended Constitution
  • Creation of the GST Council Secretariat took place with its office in New Delhi
  • Appointment of the Secretary (Revenue) as the Ex Officio Secretary to the GST Council also took place
  • Chairpersons were included while CBEC was a permanent invitee (non-voting) on all proceedings of the GST Council
  • A post of additional secretary to the GST Council in the GST Council Secretariat and 4 posts of Commissioner in the GST Council Secretariat was also approved
  • As per Article 279A of the amended Constitution, GST Council shall comprise the following members:
  • Union Finance Minister- Chairperson
  • Member: Union Minister of State in Charge of Revenue of Finance
  • Members: Minister in charge of finance or taxation or any other minister nominated by the state government
  • On September 8, 2016 President Pranab Mukherjee have assent to the 122nd Constitutional Amendment Bill paving the way for the rollout of GST
  • The new tax regime will do away with indirect taxes ushering in one tax for the entire country
  • Around 18 states have ratified the bill
  • GST is a single indirect tax which will subsume most of the central and state taxes as VAT, excise duty, service tax and CST


8)   GST Bill was passed in LS with how many members voting in favour of it in August 2016?

a. 443
b. 442
c. 441
d. 440
Answer  Explanation 

ANSWER: 443

Explanation:
Greatest tax reform since independence received the nod of Parliament as LS on 8th August 2016 passed all amendments to landmark Goods and Services Tax Bill passed by RS

  • Bill was passed by 2/3rd majority with 443 members in LS voting in favour of the GST Constitution Bill
  • AIADMK has staged a walkout when voting began
  • Bill now has to be ratified by atlas 16 states in 30 days after it is passed by Parliament
  • While LS passed the GST Constitutional Amendment Bill in may 2015, separate amendments to the clauses were proposed in the Upper House which has been ratified in the Lower House
  • GST is a uniform indirect tax levied on goods and services revived across the nation and replace various taxes imposed on goods and services.


9)   Which of the following subjects will be omitted from the Seventh Schedule?

1) Entry 54 from State List
2) Entry 55 from State List
3) Entry 92 and 92C from Union List


a. 1, 2
b. 2, 3
c. 1, 3
d. All of the above
Answer  Explanation 

ANSWER: 2, 3

Explanation:

  • GST Constitutional Amendment Bill omits Entry 92 and 92C from the Union List and Entry 52 and 55 of the State List of the Seventh Schedule.
  • 92 of Union list – Taxes on the sale or purchase of newspapers and on advertisements published therein.
  • 92C of Union List – Taxes on services
  • 52 of State List – Taxes on the entry of goods into a local area
  • 55 of State List – Taxes on advertisements other than advertisements published in the newspapers and advertisements broadcast by radio or television
  • 54 of state list is reworded but nor omitted.


10)   What shall constitute quorum of the GS Council meeting?

a. One half of the total number of its members
b. Two-thirds of the total number of its members
c. One Fourth of the total number of its members
d. One Third of the total number of its members
Answer  Explanation 

ANSWER: One half of the total number of its members

Explanation:

  • One half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings.
  • Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the Members present and voting, in accordance with the following principles, namely :-
(a) the vote of the Central Government shall have a weightage of one-third of the total votes cast, and
(b) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast in that meeting.


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