TCS, GST - Current Affairs Questions and Answers

1)   Union Cabinet has given an approval for ordinance to amend which GST legislation?

a. Goods and Services Tax (Compensation to States) Act 2017
b. Goods and Services Tax (Assistance to States) Act 2017
c. Goods and Services Tax (Support to States) Act 2017
d. Goods and Services Tax (Legislation for States) Act 2017
Answer  Explanation 

ANSWER: Goods and Services Tax (Compensation to States) Act 2017

Explanation:
The Union Cabinet chaired by Prime Minister Shri Narendra Modi has given its approval to the proposal of the Finance Ministry to promulgate an ordinance to suitably amend the Goods and Services Tax (Compensation to States) Act, 2017.

The approval would allow to increase the maximum rate at which the Compensation Cess can be levied from 15% to 25% on:

a. motor vehicles for transport of not more than thirteen persons, including the driver [falling under sub-headings 870210, 8702 20, 8702 30 or 8702 90]; and

b. motor vehicles falling under headings 8703.

The GST Council, in its meeting held in August 2017, taking into consideration the fact that post introduction of GST, the total incidence on motor vehicles [GST+ Compensation Cess] has come down vis-a-vis pre-GST total tax, incidence.

It had recommended increase in the maximum rate at which Compensation Cess can be levied on motor vehicles falling under headings 8702 and 8703 from 15% to 25%.

The issue regarding the increase in effective rate of Compensation Cess on motor vehicles will be examined by the GST Council in due course.


2)   Case Study on birth of which tax system in India was launched by the FM on 25th July 2017?

a. Indirect Tax
b. Direct Tax
c. Sales Tax
d. None of the above
Answer  Explanation 

ANSWER: None of the above

Explanation:
A Case Study on the birth of the Goods and Services Tax (GST) in India – “The GST Saga: A Story of Extraordinary National Ambition” was released on 25th July 2017 by the Union Finance Minister, Shri Arun Jaitley in his office in North Block in the national capital.

In view of the successful roll-out of the GST on 1 July 2017, it was felt that there was a need for the public to know of the story of how GST evolved, its timeline, the different stakeholders involved and how it eventually culminated in its inauguration in the Central Hall of the Parliament of India on the midnight of 30th June,2017 and 1st July, 2017 by the President and Prime Minister of India.

This case study accordingly captures the entire journey of GST right from its ideation in the Kelkar Task Force Report in 2003.

Other salient features such as the dates on which the SGST Laws were enacted in the 31 States, peculiarity of the Indian GST model, how the fitment of rates was done and the IT backbone of GST have also been addressed in the case study.

This makes it a concise yet comprehensive repository of the GST story.


3)   GoI has launched which app to verify tax rate on commodities and services under GST?

a. GST Rates Finder
b. GST Rates Searcher
c. GST Rates Revealer
d. GST Rates Locator
Answer  Explanation 

ANSWER: GST Rates Finder

Explanation:
Government has launched an App - GST Rates Finder to verify the accurate tax rate on commodity and services under the Goods and Services Tax (GST) regime.

This will empower not only the taxpayers, but every citizen of the nation, to ascertain the correct GST rate on goods and services.

Through this app, user can determine GST rate by entering the name of the commodity or service.

The search result will list all the Goods and Services containing the name which was typed in the search box.

A taxpayer can search for applicable CGST, SGST, UTGST rate and Compensation Cess on a supply.

Finance Ministry said, this mobile app can be downloaded on any smart phone and can work in offline mode, once downloaded.

The application has been launched on Android platform, and will soon be available on iOS platform.

Central Board of Excise and Customs (CBEC) has taken these initiatives for ease of doing business under the GST regime.

CBEC has also provided a GST rate finder on its portal - cbec-gst.gov.in to help taxpayers know applicable GST rate on their supplies.


4)   President of India promulgated two ordinances for which state to join GST?

a. Mizoram
b. Manipur
c. J&K
d. HP
Answer  Explanation 

ANSWER: J&K

Explanation:
The President of India has promulgated today two ordinances, namely, the Central Goods and Services Tax (Extension to Jammu and Kashmir) Ordinance, 2017 and the Integrated Goods and Services Tax (Extension to Jammu and Kashmir) Ordinance, 2017.

This was for extending the domain of Central GST Act and the Integrated GST Act to the State of Jammu and Kashmir, with effect from 8th July, 2017.

With this, the State of Jammu and Kashmir has become part of the GST regime, making GST truly a “one nation, one tax” regime.

Earlier, the Goods and Services Tax was launched in the country from the midnight of 1st July, 2017.

However, because of the special provisions applicable to the State of Jammu and Kashmir extra steps had to be taken before the State could join the GST fold.

On 6th July 2017, the State of Jammu and Kashmir had taken the first step towards adopting the GST regime with the President of India giving assent to the Constitution (Application to Jammu and Kashmir) Amendment Order, 2017.

Resultantly, the One Hundred and First Amendment Act, 2016 to the Constitution of India that paved the way for introduction of GST in the country, became applicable to the State of Jammu and Kashmir also.

Following this, on 7th July, 2017, the Jammu and Kashmir Goods and Services Tax Bill, 2017 was passed by the State Legislature, empowering the State to levy State GST on intra-state supplies with effect from 8th July, 2017.

Concomitantly, the President of India has promulgated two ordinances, namely, the Central Goods and Services Tax (Extension to Jammu and Kashmir) Ordinance, 2017 and the Integrated Goods and Services Tax (Extension to Jammu and Kashmir) Ordinance, 2017.


5)   When are traders exempt from GST registration?

a. When annual turnover is more than 20 lakhs and does not involve interstate supply
b. When annual turnover is less than 20 lakhs and does not involve interstate supply
c. When annual turnover is more than 15 lakhs and does involve interstate supply
d. When annual turnover is more than 13 lakhs and does involve interstate supply
Answer  Explanation 

ANSWER: When annual turnover is less than 20 lakhs and does not involve interstate supply

Explanation:
The government on July 6, 2017 conducted the first GST "masterclass" for all stakeholders including citizens.

These "masterclasses" are in the form of hour-long programs and will be held for six days.

Here are key takeaways from the first GST masterclass:

1) Registration on GST portal:

The government clarified that it is mandatory for the traders and dealers to complete the Part-B of their GST registration within the period of 90 days.

If an individual is not hands-on with online registration, then she/he can visit any excise, VAT or Service Tax office of state and central government where officials will get the job done.

There is no charge involved in this process.

Responding to a query on problems regarding registration of names bearing special characters (e.g. D'Souza or L&T), the government said that the software of the GST portal has been fixed to overcome the hiccup.

2) Updating details after registration:

The GST masterclass also discussed the updation of details of a business in the GST portal.

The government said that for minor details like bank account number, phone number, e-mail ID, updation can be done by the trader herself/ himself by visiting the GST registration portal.

However, modification like change in legal name of business, address of place of business, addition or deletion of partners or directors etc. can be done only by tax officials.

3) Exemption on turnover of INR 20 lakh

Trader class by now are well-versed with the fact that they are exempt from GST registration if their annual turnover is less than Rs 20 lakh.

However, the GST Council officials clarified that if a business involves inter-state supply, then GST registration is mandatory even if the turnover is below the threshold.

However, it was pointed out that if a business has a turnover below INR 20 lakh currently and happens to cross the threshold over time, then it needs to get itself registered within 30 days of it.

4) Items outside GST purview:

The Revenue Secretary on Wednesday reiterated the items which are outside the ambit of GST.

Following is the list of such products and the competent authority which can charge tax on them:

  • 5 petroleum commodities- VAT can be levied by state government while excise duty by the centre government
  • Stamp duty and registration charges- By state government
  • Vehicle Tax- By state government
  • Electricity Duty- By state government
  • Potable alcohol- By state government
  • Entertainment Tax- By state government in order to benefit local bodies
5) Miscellaneous
  • The provisional ID number received at the time of registration will be the same as the ID number received at the completion of registration.
  • All registered dealers will have to furnish their GSTN registration numbers on signboards.
  • In case, a dealer is facing problems in uploading Digital Signature Certificate (DSC), he/she can also opt to authenticate using an OTP (One Time Password) sent to his/her mobile number and e-mail ID.


6)   What rates are the 4 slab service tax structures proposed by the GST council?

a. 5,12,18,28
b. 6,13,19, 29
c. 7, 14, 20, 30
d. None of the above
Answer  Explanation 

ANSWER: 5,12,18,28

Explanation:
The GST Council headed by finance Minister Arun Jaitley has finalised a 4-slab service tax structure at the rates of 5, 12, 18 and 28 per cent as against the single rate of 15% levied on all taxable services.

GST regime is scheduled to be implemented from July 1.

In the next GST Council meeting, tax rates on gold and other precious metals will be taken up for discussion.

Luxury hotels, gambling, race club betting and cinema services will attract a tax rate of 28%.

Education, healthcare and non-AC rail travel will remain exempted from the GST tax regime.

However, the states will be given the option to levy additional taxes on cinema to compensate for the revenue losses entailed due to merging of entertainment tax with GST.

At present, the total tax incidence on cinema including entertainment and 4-slab service tax is in the range of 55%.

The states need to use the legislative route if it wants to levy additional tax on cinema. States will also be permitted to levy any new tax as the taxation powers of the states have only been restricted and not abolished after the rollout of GST.

Telecom and financial services will be taxed at a rate of 18%. Transport services will be taxed at the rate of 5%.

Cab aggregators like Ola and Uber will have to pay 5% under GST in place of 6%. AC rail travel will attract 5% tax. Economy class air travel will attract 5% GST while business class will attract 12%.

Travelling on metro, local train and religious travel such as Haj Yatra would be exempted from GST.

The e-commerce players like Flipkart and Snapdeal would be required to shell out 1% Tax Collected at Source (TCS).

Non-AC restaurants and AC restaurants will attract a GST of 12% and 18% respectively.

Advertisements published in newspapers will attract 5% GST. At present it is exempt from 4-slab service tax.

GST Council: Know More

  • ST Council is a federal forum with both centre and states in India on board formed in September 2016.
  • It is made of: The Union Finance Minister (as Chairman), The Union Minister of State in charge of Revenue or Finance, and The Minister in charge of Finance or Taxation or any other Minister, nominated by each state government.
  • The decisions of the GST Council are made by three-fourth majority of the votes cast. The centre has one-third of the votes cast, and the states together have two-third of the votes cast.
  • Each state has one vote, irrespective of its size or population.
  • The Secretary (Revenue) will be appointed as the Ex-officio Secretary to the GST Council. The Chairperson, Central Board of Excise and Customs (CBEC), will be included as a permanent invitee (non-voting) to all proceedings of the GST Council.
  • One post of Additional Secretary to the GST Council in the GST Council Secretariat (at the level of Additional Secretary to the Government of India) will be created.
  • Four posts of Commissioner in the GST Council Secretariat (at the level of Joint Secretary to the Government of India) will also be created.


7)   GST council has finalised tax rates and approved ___ rules of the GST regime.

a. 5
b. 6
c. 7
d. 8
Answer  Explanation 

ANSWER: 7

Explanation:
The GST Council headed by finance Minister Arun Jaitley has finalised tax rates and has approved all the seven rules for the GST regime that is scheduled to be implemented from July 1.

The remaining two rules of the GST pertaining to transition and return is under the examination of the legal committee.

In total, the council has fixed the rates of 1211 items. It will decide rates of some other items and services in the coming days.

Out of 1211 items, 81% of the items will attract tax of 18% or less. Only the remaining 19% of items will attract a highest rate of 28%.

Household items like Sugar, Tea, Coffee and edible oil will attract 5% levy. Cereals and milk will be exempted from the tax.

Manufactured goods will attract 18% levy. Luxury cars will attract 28% GST in addition to a cess of 15%.

Small petrol cars will attract 28% GST plus a 1% cess, and diesel cars will be taxed at 28% plus 3% cess.

Capital goods, a key asset for the manufacturing sector, will be taxed at 28%. Aerated drinks will fall under the 28% tax bracket.

GST Council Overall Tax: Know More

  • The GST Council has not increased the overall tax in any of the 1211 items but have reduced tax on many items.
  • For example, Soap, which is now taxed at the rate of 22-24%, will be taxed at 18%. The present tax incidence in excess of 28% on luxury items will be treated as cess and will be deposited in the corpus for compensating states if they suffer any revenue loss.
  • Food items are expected to become cheaper. Daily use items like hair oil, toothpaste, and soap are kept in the 18% tax slab instead of 28%.
  • The cost of energy generation is expected to become less as tax incidence on coal has been reduced from 11% to 5%.
  • GST regime is expected to unify the whole of the country into a common market eliminating both Central and State levies.
  • GST is also expected to increase state and federal tax revenues, ease inflation and boost economic growth by 1-2% points in the medium term.


8)   What value will India grow to this fiscal (2017) as bankruptcy and GST laws help, according to ADB?

a. 7.3
b. 7.4
c. 7.5
d. 7.6
Answer  Explanation 

ANSWER: 7.4

Explanation:
The Indian economy will grow 7.4 per cent this fiscal and 7.6 per cent in the next as the bankruptcy and GST laws will help create a better business friendly environment.

This is as per the Asian Development Bank (ADB).

Ahead of its 50th annual meeting to be attended by finance minister and central bank governors of member nations, ADB indicated new bankruptcy law will make it easier to do business in India.

The growth rate compares to 7.1 per cent of the previous fiscal.

Over 7 per cent growth rate is high if one compares it to other emerging market economies and also China.

Behind this is cyclical factor, improved terms of trade. The Indian government adopted new bankruptcy law that improved the business enabling environment.

That is the a short-term and medium-term factor behind the gross acceleration in India.

On the impact of demonetisation of old 500 and 1,000 rupee notes that took out 86 per cent of the currency in circulation, it obviously generated short-term decline in cash-based transactions and consumer sentiment.

ADB has not studied if the demonetisation had any consequences on black money.

The GST, the biggest indirect tax reform since independence, together with the new bankruptcy law are big positives for India.

The bankruptcy law and the GST will help in creating a better business enabling environment, which seems to be a factor behind this gross acceleration of India,.

The rupee strengthened to 64.2 against the US dollar and has been gaining strength as compared to other emerging economy currencies.

The rupee has appreciated by over 5 per cent against the US dollar since January.

ADB: Know More

  • Headquarters: Mandaluyong, Philippines
  • President: Takehiko Nakao
  • Founded: 19 December 1966
  • Membership: 67 countries
  • Staff: 2997 employees
  • Purpose: Economic development
  • Motto: Fighting poverty in Asia and the Pacific


9)   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

Explanation:
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.


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

a. CGST
b. IGST
c. Compensation
d. None of the above
Answer  Explanation 

ANSWER: None of the above

Explanation:
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.


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