Internal Trade Test

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Internal Trade Test - 21

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Weekly Quiz Competition

Question 1
1 / -0

After the implementation of GST, many services of ______ have become costlier.

A
telecom

B
airline

C
banking

D
all of the above

Solution

After implementation of GST, telecom, airline and banking have become a lot more costlier. This is because of the increase in the service charges.
Question 2
1 / -0

GST is ______________.

A
a value added tax

B
tax on goods and services

C
tax on consumer goods and services

D
none of the above

Solution

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.
Question 3
1 / -0

Identify the objective(s) of implementing GST.

A
Reducing economic distortions

B
Consumption based tax instead of Manufacturing

C
Subsume all indirect taxes at Centre and State Level under

D
All of the above
Solution
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
Question 4
1 / -0

GST has the disadvantage(s) as follows:

A
Complete lack of adaptation mechanisms and trained staff.

B
Unclear estimate of the exact impact of GST.

C
No clear mechanisms to control tax evasion.

D
All of the above
Solution
Some Economist say that GST in India would impact negatively on the real estate market. It would add up to 8 percent to the cost of new homes and reduce demand by about 12 percent.
Some Experts says that CGST(Central GST), SGST(State GST) are nothing but new names for Central Excise/Service Tax, VAT and CST. Hence, there is no major reduction in the number of tax layers.
Some retail products currently have only four percent tax on them. After GST, garments and clothes could become more expensive.
The aviation industry would be affected. Service taxes on airfares currently range from six to nine percent. With GST, this rate will surpass fifteen percent and effectively double the tax rate.
Adoption and migration to the new GST system would involve teething troubles and learning for the entire ecosystem.
Question 5
1 / -0

The advantages of GST accruing to the Central/State Government are listed as:

A
A unified common national market to boost Foreign Investment and Make in India campaign.

B
Improving the overall investment climate in the country which will benefit the development of states.

C
Uniform SGST and IGST rates to reduce the incentive for tax evasion.

D
All of the above
Solution
Simple and easy to administer
GST replaces multiple indirect taxes at the Central and State levels. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of the Centre and State. All the management of GST would be handled by the GSTN.
Better control on leakage
Because of the Advanced IT platform, it would be difficult to evade GST. The system of GST also promotes the tax payment.A businessman can claim tax credit only if it has the tax invoice for the purchase. If it doesn’t have tax invoice of a purchase, It has to bear whole tax. Thus, a retailer would ask tax invoice from the dealer and in return dealer would ask tax invoice from the manufacturer.The in-built mechanism in the design of GST incentivizes tax compliance by the traders.
Higher revenue efficiency
GST is expected to decrease the cost of tax collection. It will lead to higher revenue efficiency. The duplication of indirect tax collection would end after the GST. It would finally decrease the cost of revenue collection. Both, the centre and state government would benefit.
Question 6
1 / -0

The advantages of GST accruing to the Trade/ industry are listed as:

A
Reduction in multiplicity of taxes.

B
Mitigation of cascading/double taxation.

C
More efficient neutralization of taxes especially for exports.

D
All of the above
Solution
Transparent compliance: A robust and comprehensive IT system would be the foundation of the GST regime in India. Therefore, all tax payer services such as registrations, returns, payments, etc. would be available to the taxpayers online, which would make compliance easy and transparent.
Uniform tax rates and structures: GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business.
Minimal cascading: A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes. This would reduce hidden costs of doing business.
Benefits to manufacturers and exporters: The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. The GST would decrease the cost of locally manufactured goods because of the following reasons.
Most of the central and state taxes would go away
Central Sales Tax would not be charged
Complete and comprehensive set-off of the input goods and services.
This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost.
Reduce Hassle and Expense: The GST not only replaces various taxes but also It would be easier for the businessmen. Currently, a Businessman has to various taxes, file return and reply for the scrutiny. The businessman has to visit many tax offices. The GST would end all these hassles.
There would be an advanced IT platform for the GST. It will handle the all related issue of GST. This platform would be used in the whole country. This platform would facilitate Single registration, Single payment, and Single return. All the process would be online. It would make the whole system of GST payment and return filing easy and transparent.
Question 7
1 / -0

With the introduction of GST, imports will be ______.

A
more expensive

B
cheaper

C
neutral with no change

D
None of the above

Solution

With the introduction of GST, imports will be more expensive. The high tax rates on imports increased the total cost of imported products.
Question 8
1 / -0

The Chairperson of GST Council is _____.

A
the Union Finance Minister

B
the Union Minister of State

C
Minister nominated by a State

D
all of the above

Solution

According to the article, GST Council will be a joint forum for the Centre and the States. It consists of the following members:

The Union Finance Minister, Arun Jaitley will be the Chairperson
As a member, the Union Minister of State will be in charge of Revenue of Finance
The Minister in charge of finance or taxation or any other Minister nominated by each State government, as members.
Question 9
1 / -0

A credit note is issued by ___________ and it is a document accepted for GST purposes.

A
Recipient, for reducing the tax/ taxable value;

B
Supplier, for reducing the tax/ taxable value;

C
Supplier, for increasing the tax/ taxable value;

D
Recipient, for increasing the tax/ taxable value.

Solution
Question 10
1 / -0

The GST Council dictates __________.

A
tax rate

B
tax exemption

C
tax laws

D
all of the above

Solution

The GST council is the key decision-making body that will take all important decisions regarding the GST. The GST Council dictates tax rate, tax exemption, the due date of forms, tax laws, and tax deadlines, keeping in mind special rates and provisions for some states.

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Internal Trade Test - 21

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Internal Trade Test - 21

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SHARING IS CARING

Question 1

telecom

airline

banking

all of the above

Solution

Question 2

a value added tax

tax on goods and services

tax on consumer goods and services

none of the above

Solution

Question 3

Reducing economic distortions

Consumption based tax instead of Manufacturing

Subsume all indirect taxes at Centre and State Level under

All of the above

Solution

Question 4

Complete lack of adaptation mechanisms and trained staff.

Unclear estimate of the exact impact of GST.

No clear mechanisms to control tax evasion.

All of the above

Solution

Question 5

A unified common national market to boost Foreign Investment and Make in India campaign.

Improving the overall investment climate in the country which will benefit the development of states.

Uniform SGST and IGST rates to reduce the incentive for tax evasion.

All of the above

Solution

Question 6

Reduction in multiplicity of taxes.

Mitigation of cascading/double taxation.

More efficient neutralization of taxes especially for exports.

All of the above

Solution

Question 7

more expensive

cheaper

neutral with no change

None of the above

Solution

Question 8

the Union Finance Minister

the Union Minister of State

Minister nominated by a State

all of the above

Solution

Question 9

Recipient, for reducing the tax/ taxable value;

Supplier, for reducing the tax/ taxable value;

Supplier, for increasing the tax/ taxable value;

Recipient, for increasing the tax/ taxable value.

Solution

Question 10

tax rate

tax exemption

tax laws

all of the above

Solution

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