MAY 2022 TO JUNE 2022

Goods and Service Tax (GST)

Prelims 2018 Prelims 2017

Consider the following items : What is/are the most likely advantages of implementing
1. Cereal grains hulled 'Goods and Services Tax (GST)'?
2. Chicken eggs cooked 1. It will replace multiple taxes collected by multiple
3. Fish processed and canned authorities and will thus create a single market in
4. Newspapers containing advertising material India.
2. It will drastically reduce the 'Current Account Deficit'
Which of the above items is/are exempted under GST of India and will enable it to increase its foreign
(Goods and Services Tax)? exchange reserves
(a) 1 only 3. It will enormously increase the growth and size of
(b) 2 and 3 only economy of India and will enable it to overtake China
(c) 1, 2 and 4 only in the near future.
(d) 1, 2, 3 and 4
Select the correct answer using the code given below :
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
 GST COUNCIL- COMPOSITION, ROLES AND RESPONSIBILITIES
Establishment • Constitutional body under Article 279A
• Recommend Taxes, surcharge and Cess to be subsumed into GST
• Recommend GST Rates.
• Recommend the date on which the goods and services tax be levied on petroleum crude, high
Role
speed diesel, petrol, natural gas and aviation turbine fuel.
• Recommend threshold limit of turnover below which GST may be exempted.
• Establish mechanism to adjudicate on dispute between Centre and States and between States.
• Union Finance Minister: Chairperson
• Union Minister of State in charge of Revenue or Finance: Member
• Minister in charge of Finance or taxation or any other member nominated by State: Members
• Minister in charge of Finance or taxation or any other member nominated by UTs with Legislative
Composition
assemblies: Members ( Delhi, J&K, Puducherry)
(33 Members) Note:
Vice Chairperson: Chosen by and amongst members of GST Council
Revenue Secretary acts as Ex-officio secretary to the GST Council.
Chairperson of CBEC is a permanent invitee to the GST Council without any voting rights
Quorum • Half of the total number of members
Voting • Every decision of the GST council shall be taken by majority which is not less than (3/4) of the
weighted votes of the members present and voting.
• Voting Weightage: Centre (1/3); States (2/3). All the states get equal voting rights.
 Practice MCQ No. 1 Practice MCQ No. 2
With respect to GST Council, consider the following Which among the following is/are roles and responsibilities of the GST
statements: Council?
1. The GST Council has been empowered to recommend to 1. To notify the GST Rates on different Goods and Services
bring petroleum products under GST without the need for 2. To bring Petroleum Products under GST
constitutional amendment. 3. Establishment of Adjudicating mechanism to handle disputes.
2. None of the Union Territories (UTs) have been given
representation in the GST council. Select the correct answer using the code given below:
(a) 1 only
Which of the statements given above is/are correct? (b) 1 and 2 only
(a) 1 only (c) 1 and 3 only
(b) 2 only (d) 3 only
(c ) Both 1 and 2
(d) Neither 1 nor 2
 Practice MCQ No. 3
Which among the following taxes is/are subsumed under the
Goods and Services (GST) in India?
1. Alcohol for Non-Human Consumption
2. Additional Excise duty on Tobacco
3. Octroi Duty
4. Entertainment Tax
Practice MCQ No. 4
Consider the following statements related to GST Council:
1. The GST Council is headed by Union Finance Minister.
2. The Union Minister of State for Finance acts as Vice Chairperson of
GST Council
3. The Chairman of Central Board of Excise and Customs (CBEC) acts as
Ex-officio secretary to the GST Council.

Select the correct answer using the code given below: Which among the statements given above is/are incorrect?
(a) 1 and 3 only (a) 1 only
(b) 2 and 3 only (b) 2 and 3 only
(c) 2 and 4 only (c) 2 only
(d) 1, 2, 3 and 4 only (d) 3 only
 Prelims: Prelims 2021
• Difference between Cooperative Banks and Commercial With reference to “Urban Cooperative Banks” in India, consider
Banks the following statements:
• Structure and Regulation of Cooperative Banks
1. They are supervised and regulated by local boards set up by
• Details about PACS the State Governments.
2. They can issue equity shares and preference shares.
3. They were brought under the purview of the Banking
Regulation Act, 1949 through an Amendment in 1966.

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
 Scheduled Commercial Banks Cooperative Banks
Regulated by RBI RBI: Scheduled Urban Coop. Banks
NABARD: Dist. Coop Banks and State Coop. Banks
State Government: PACS
+
Management functions regulated by respective
state Government
Banking Regulation Yes Yes. Made applicable from 1966 onwards.
Act, 1949 applicable?
Minimum Capital Rs 5 lakhs and above Rs 1 lakh and above (Scheduled Primary UCBs)
CRR and SLR Applicable Yes. Yes.
Non-Scheduled Banks given flexibility to either
maintain CRR with themselves or with RBI.
 Practice MCQ No. 5 Practice MCQ No. 6
With respect to Primary Agriculture Credit Societies (PACS), With respect to Urban Cooperative Banks, consider the following
consider the following statements: statements:
1. The Primary Agricultural Credit Societies (PACS) are within 1. All the Urban Cooperative Banks have been categorised as
purview of Banking Regulation Act, 1949. Scheduled Banks by the RBI.
2. The PACS are under the dual regulation and control of RBI 2. The Urban Cooperative Banks are under the complete control and
and Registrar of Cooperative societies. regulation of RBI alone.

Which among the statements given above is/are correct? Which among the statements given above is/are correct?
(a) 1 only (a) 1 only
(b) 2 only (b) 2 only
(c) Both 1 and 2 (c) Both 1 and 2
(d) Neither 1 nor 2 (d) Neither 1 nor 2

Practice MCQ No. 7

Which of the following statements is/are correct regarding the Banking
Regulation (Amendment) Act, 2020?
1. This amendment has done away with the dual regulation of Cooperative
Banks and has brought them under the complete control of the RBI.
2. It has empowered the RBI to supersede the Board of Directors of the
Cooperative Banks.

Select the correct answer using the code given below:

(a)1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
 Mains Question for Practice
A big bang approach of privatization of Public Sector Banks (PSBs) may do more harm than good. Argue in
the favour of the statement (15 Marks, 250 Words)
 Factsheet on Public Sector Banks (PSBs)
Number of Public Sector 12 (including State Bank of India)
Banks
Dominance of PSBs in the 70% of the market share in the Banking Sector
Banking Sector
Poor Financial Position of PSBs • 80% of the overall NPAs of the Banking sector.
• Total losses worth Rs 66,000 crores in 2019-20. This was equivalent to budgetary
allocation for Primary Education.
• Every one rupee of the taxpayers' money which is invested in PSBs fetches a market
value of 71 paise. In case of Private Banks, it fetches a market value of Rs 3.70 i.e., more
than five times as much value as that of a rupee invested in PSBs. (Eco Survey 2019-20)
Underdeveloped Banking • India’s banking sector has remained dwarf when compared to size of the economy
Sector (GDP), development of the economy (GDP per capita) and population.
(Eco Survey 2019-20) • India has only one bank in the global top 100. India's top ranked Bank, SBI has been
placed at 55th Position at the global level.
 Criteria Private Banks Public Sector Banks
Regulated under Banking Regulation Act, 1949 • Banking Regulation Act, 1949
• Banking Company (Acquisition and Transfer of
undertakings) Act, 1970
• Banking Company (Acquisition and Transfer of
undertakings) Act, 1980
Regulated by RBI RBI
Government
Role of RBI • Issue Licenses Limited role of the RBI.
• Supersede Board of Directors
• Remove the Chairman
• Force the mergers of Private Banks
Present Status of Public Sector Banks (PSBs)
 Practice MCQ No. 8 Practice MCQ No. 9
Consider the following statements: Which among the following is/are not the likely effects of Privatisation
1. The Public Sector Banks (PSBs) do not require license from of Public Sector Banks (PSBs)?
the RBI for their operations. 1. Hurt Financial Inclusion
2. The Public sector Banks are regulated by the RBI under the 2. Make Indian Economy more immune to global external shocks.
Bank Nationalisation Acts. 3. Increase financial burden on Government

Which among the statements given above is/are correct? Select the correct answer using the code given below:
(a) 1 only (a) 1 only
(b) 2 only (b) 2 and 3 only
(c) Both 1 and 2 (c) 3 only
(d) Neither 1 nor 2 (d) 1 and 2 only

Practice MCQ No. 10

Consider the following statements related to Public Sector Banks in India:
1. The Public Sector Banks are under dual regulation of both RBI and
Government.
2. The Bank Nationalization Acts require the Government to hold majority
ownership in the Public Sector Banks.

Which among the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
 Mains Question for Practice
A big bang approach of privatization of Public Sector Banks (PSBs) may do more harm than good. Argue in the favour of
the statement (15 Marks, 250 Words)