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GST & RECENTLY ASKED QUESTIONS ON GST

1. In India, GST rate for various goods and services are

A) 5%, 12%, 18%, 28%
B) 6%, 12%, 18%, 28%
C) 5%, 12%, 18%, 26%
D) None of the above

Reference: Treasury Officer,2022

Answer: A

2. The 122nd Constitutional Amendment Bill of India is related to the introduction of which of
the following?
A) Rural Local Bodies
B) VAT
C) GST
D) Urban Local Bodies

Reference: Sec Assistant,2022

Answer: C

3. GSTN stands for

A) Goods and Services Tax Network
B) Goods and Services Trade Network
C) Goods’ Source Tax Network
D) Goods and Services Transport Network

Reference: Sec Assistant,2022

Answer: A

4. Who will exercise veto power over all the key aspects of GST including rates?
A. President
B. Prime Minister
C. Union Finance Minister

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D. Chief Minister

Reference: Assistant Jailor,2022

Answer: C

5. Term Input Tax credit is associated with

A. Value Added Tax
B. Goods & service Tax
C. Income Tax
D. Corporate Tax

Reference: Excise Inspector,2022

Answer: C

6. Of the following which is/are not included in the list of centre indirect taxes subsumed in to
the Goods and Services Taxes (GST) in India?
I. Entry Tax and Entertainment Tax (other than taxes levied by local bodies).
II. Excise duty levied under medical and toilet preparations.
III. Service Tax.
IV. Tax on Lottery, Betting and Gambling.
A. Only (I and IV)
B. Only (I and III)
C. Only (II and III)
D. Only (II and IV)

Reference: Sub Inspector,2022

Answer: A

Key Points on GST

1. The Goods and Services Tax (GST) was first implemented in France.
2. India's GST is based on the Canadian model.
3. GST in India was made on the recommendation of Vijay Kelkar Committee.
4. GST in India was implemented on July 1, 2017
5. The first state which implemented the GST was Assam.
6. Amitabh Bachchan has been made the brand ambassador of GST.
7. GST has been implemented under Article 279 of the Indian constitution.
8. GST Council was formed by the President of India in September 2016.
9. At present Finance Minister Nirmala Sitaraman is the Chairman of the GST Council.
10. At present GST Council has 33 members.
11. GST has been implemented by the 101st Constitution Amendment Act, 2016.
12. The GST was the 122nd constitutional amendment bill to be introduced in the Parliament of
India.
13. The President of India approved GST bill on 8th September 2016.
14. During passing of GST bill in parliament; 336 votes casted in the favour of GST bill and 11
votes were against it.

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15. There is a provision of 5 years imprisonment for those who do not pay GST.
16. There are 5 rates of taxes in GST i.e. 0%, 5%, 12%, 18% and 28%.
17. GST is an indirect tax in more broader terms it can be said a federal tax.
18. After the implementation of GST, sales tax, service tax, customs duty, excise duty, VAT,
Octroi tax etc. will not exist.
19. The biggest reason behind the implementation of the GST is to bring uniformity in the tax
system of the country.
20. After the implementation of GST, tradition of 'Tax upon Tax' will be eliminated.

Detailed Explanation

 GST is one indirect tax for the whole nation, which will make India one unified common market.
 GST is a value-added tax levied on most goods and services sold for domestic consumption.
 GST is a single tax on the supply of goods and services, right from the manufacturer to the
consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of
value addition, which makes GST essentially a tax only on value addition at each stage. The final
consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off
benefits at all the previous stages.
 The GST is paid by consumers, but it is remitted to the government by the businesses selling the
goods and services.
 It is a destination-based taxation system.
 It has been established by the 101st Constitutional Amendment Act.
 There is a provision of the GST Council to decide upon any matter related to GST whose
chairman is the finance minister of India.
 It is an indirect tax for the whole country on the lines of “One Nation One Tax” to make India a
unified market.

Taxes incorporated into the GST

At the Central level, the following taxes are being subsumed:

a. Central Excise Duty
b. Additional Excise Duty,
c. Service Tax,
d. Additional Customs Duty commonly known as Countervailing Duty
e. Special Additional Duty of Customs.

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At the State level, the following taxes are being subsumed:

a. Subsuming of State Value Added Tax/Sales Tax

b. Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax
(levied by the Centre and collected by the States)
c. Octroi and Entry tax
d. Purchase Tax
e. Luxury tax
f. Taxes on lottery, betting and gambling.

Principle of GST

 The Centre will levy and collect the Central GST.

 States will levy and collect the State GST on the supply of goods and services within a state.
 The Centre will levy the Integrated GST (IGST) on the interstate supply of goods and services,
and apportion the state’s share of tax to the state where the good or service is consumed.
 The 2016 Act requires Parliament to compensate states for any revenue loss owing to the
implementation of GST.

Types of GST

Legislative Basis of GST

 In India, GST Bill was first introduced in 2014 as The Constitution (122nd Amendment) Bill.
 This got an approval in 2016 and was renumbered in the statute by Rajya Sabha as The
Constitution (101st Amendment) Act, 2016. Its provisions:
o Central GST to cover Excise duty, Service tax etc, State GST to cover VAT,
luxury tax etc.
o Integrated GST to cover inter-state trade. IGST per se is not a tax but a system to
coordinate state and union taxes.
o Article 246A – States have power to tax goods and services.

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o GSTCouncil

i. Article 279A - GST Council to be formed by the President to administer

& govern GST. Its Chairman is Union Finance Minister of India with
ministers nominated by the state governments as its members.
ii. The council is devised in such a way that the center will have 1/3rd voting
power and the states have 2/3rd.
iii. The decisions are taken by 3/4th majority.

GST Council

 It is the 1st Federal Institution of India, as per the Finance minister.

 It will approve all decisions related to taxation in the country.
 It consists of the Centre, 28 states, Delhi and Puducherry.
 Centre has 1/3rd of voting rights and states have 2/3rd of voting rights.
 Decisions are taken after a majority in the council.

What is GSTN?

 GSTN is registered as a not-for-profit company under the Companies Act.

 It has been formed to set up and operate the information technology backbone of the GST.
 While the Central (24.5%) and the state (24.5%) governments hold a combined stake of 49%, the
remaining 51% stake is divided among five financial institutions—LIC Housing Finance with
11% stake and ICICI Bank, HDFC, HDFC Bank and NSE Strategic Investment Corporation Ltd
with 10% stake each.
 GSTN had awarded Infosys Ltd the contract to develop the hardware and software for GST.

Timeline of GST

 1986: VishwanathPratap Singh, Finance Minister in Rajiv Gandhi’s government, proposed in the
Budget a major overhaul of the excise taxation structure. This was similar to GST in a theoretical
sense.
 2000: Initiating discussions on GST, Vajpayee government appoints an Empowered Committee
headed by the then finance minister of West Bengal Asim Gupta.
 2004: Vijay Kelkar, then advisor to the Finance Ministry, recommends GST to replace the
existing tax regime.
 Feb 28, 2006: GST appears in the Budget speech for the first time. Finance Minister
Chidambaram sets an ambitious task of implementing GST by April 1, 2010.
 Feb 28, 2007: Chidambaram said in his Budget speech that the Empowered Committee of
finance ministers will prepare a road map for GST.
 April 30, 2008: The Empowered Committee submits a report titled ‘A Model and Roadmap
Goods and Services Tax (GST) in India’ to the government.
 Nov 10, 2009: Empowered Committee submits a discussion paper in the public domain on GST
welcoming debate.
 Feb 2010: Government launches project for computerisation of commercial taxes. Finance
Minister Pranab Mukherjee defers GST to April 1, 2011.

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 March 22, 2011: Constitution Amendment Bill (115th) to GST introduced in the LokSabha
 March 29, 2011: Bill referred to Standing Committee on Finance.
 Nov 2012: Finance minister and state ministers decide to resolve all issues by Dec 31, 2012.
 Feb 2013: Declaring the government’s resolve to introduce GST, the finance minister makes
provisions for compensation to states in the Budget.
 Aug 2013: The standing committee submits a report to Parliament suggesting improvements. But
the bill lapsed as the 15th LokSabha was dissolved.
 Dec 18, 2014: Cabinet approval for the Constitution Amendment Bill (122nd) to GST.
 Dec 19, 2014: The Amendment Bill (122nd) in the LokSabha
 May 6, 2015: The Amendment Bill (122nd) passed by the LokSabha.
 May 12, 2015: The Amendment Bill presented in the RajyaSabha
 May 14, 2015: The Bill forwarded to a joint committee of RajyaSabha and LokSabha
 Aug 2015: Government fails to win the support of the Opposition to pass the bill in the
RajyaSabha where it lacks sufficient numbers.
 Aug 3, 2016: RajyaSabha passes the Constitution Amendment Bill by a two-thirds majority.
Note: GST constitutional amendment bill needs to pass by at least 50% of state legislatures to be
implemented. Assam is 1st State to pass the GST bill.
 1 July 2017: GST to be applicable across India.

Supporting Laws to implement GST

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