Tamilnadu State Board New Syllabus Samacheer Kalvi 11th Commerce Guide Pdf Chapter 33 Indirect Taxation Text Book Back Questions and Answers, Notes.
Tamilnadu Samacheer Kalvi 11th Commerce Solutions Chapter 33 Indirect Taxation
11th Commerce Guide Indirect Taxation Text Book Back Questions and Answers
I. Choose the Right Answer:
Question 1.
Who is the chairman of the GST council?
a) RBI Governor
b) Finance Minister
c) Prime Minister
d) President of India
Answer:
b) Finance Minister
Question 2.
GST Stands for ………………
a) Goods and Supply Tax
b) Government Sales Tax
c) Goods and Services Tax
d) General Sales Tax
Answer:
c) Goods and Services Tax
Question 3.
What kind of Tax the GST is?
a) Direct Tax
b) Indirect Tax
c) Dependence on the Type of Goods and Services
d) All Business Organisations
Answer:
b) Indirect Tax
Question 4.
What is IGST?
(a) Integrated Goods and Service Tax
(b) Indian Goods and Service Tax ‘
(c) Initial Goods and Service Tax
(d) All the Above
Answer:
(a) Integrated Goods and Service Tax
Question 5.
In India, GST became effective from?
a) 1st April 2017
b) 1st January 2017
c) 1 st July 2017
d) 1 st March 2017.
Answer:
d) 1 st March 2017.
II. Very Short Answer Questions:
Question 1.
Define Indirect tax.
Answer:
Indirect Tax is levied on goods and services. It is collected from the buyers by the sellers and paid by the sellers to the Government. Since it is indirectly imposed on the buyers it is called an indirect tax.
Question 2.
List out any four types of indirect taxes levied in India.
Answer:
Goods and Services Tax, Excise Duty
Question 3.
What do you mean by Goods and Services Taxes?
Answer:
Goods and Services Tax (GST) is the tax imposed on the supply (consumption) of goods and services. It is a destination-based consumption tax and collected on those value-added items at each stage of the supply chain.
Question 4.
Write a note on SGST.
Answer:
State Goods and Services Tax – imposed and collected by the State Governments under State GST Act. (Tamil Nadu GST Act 2017 passed by Tamil Nadu Govt.) SGST means State goods and service tax, replace the existing tax like sales tax, luxury tax, entry tax, etc. and it is levied by the state government.
Question 5.
What is CGST?
Answer:
CGST – Central Goods and Services Tax – is imposed and collected by the Central Government on all supply of goods within a state (intrastate) under CGST Act 2017.
III. Short Answer Questions
Question 1.
Write any two differences between direct taxes and indirect taxes.
Answer:
Basis of Difference | Direct Taxes | Indirect Taxes |
1. Meaning | If a tax levied on the income or wealth of a person is paid by that person directly to the Government it is called direct tax | If tax is levied on the goods or services of a person is collected from the buyers by another person(seller) and paid by him to the Government it is called an indirect tax |
2. Evasion | Tax evasion is possible | Tax evasion is more difficult |
Question 2.
What are the objectives of GST?
Answer:
- To create a common market with uniform tax rate in India. (One Nation, One Tax, One Market)
- To eliminate the cascading effect of taxes, GST allows set-off of prior taxes for the same transactions as input tax credit.
- To boost Indian exports, the GST already collected on the inputs will be refunded and thus there will be no tax on all exports.
- To increase the tax base by bringing more number of tax payers and increase tax revenue.
- To simplify tax return procedures through common forms and avoidance of visiting tax departments.
- To provide online facilities for payment of taxes and submission of forms.
Question 3.
Briefly explain the functions of GST council.
Answer:
The GST Council will oversee the implementation of the GST. But the Central Board of Excise and Customs is responsible for administration of the CGST and IGST Acts. The Council makes recommendations on rate of GST, apportionment of IGST, exemptions, model GST laws, etc. The Chairman of the Council is the Union Finance Minister.
The Minister of State in the Finance Ministry and all Finance Ministers of the State Governments shall be its members.The Central Government shall have l/3rd voting power and all State Governments shall have 2/3rd voting powers. All decisions of the Council can be passed only with 3/4h of the total votes. Each state has one vote, irrespective of its size or population. Twenty four council meetings were held until 2017.
Question 4.
Explain IGST with an example.
Answer:
IGST – Inter-State Goods and Services Tax is imposed and collected by the Central Government and the revenue is shared with States under IGST Act 2017.
Question 5.
Write any three demerits of UGST.
Answer:
The demerits of GST are :
Several Economists says 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. Another criticism is that CGST, SGST 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. A number of retail products currently have only four percent tax on them. After GST, garments and clothes could become more expensive.
IV. Long Answer Questions
Question 1.
Distinguish between direct taxes and indirect taxes.
Answer:
Bases of Difference |
Direct Taxes |
Indirect Taxes |
1. Meaning | If a tax levied on the income or wealth of. a person is paid by that person (or his office) directly to the Government, it is called direct tax. | If tax is levied on the goods or services of a person is collected from the buyers by another person (seller) and paid by him to the Government it is called indirect tax |
2. Incidence and Impact | Falls on the same person. Imposed on the income of a person and paid by the same person. | Falls on different persons. Imposed on the sellers but collected from the consumers and paid by sellers. |
3.Burden | More income attracts more income tax. Tax burden is progressive on people. | Rate of tax is flat on all individuals. Therefore more income individuals pay less and lesser portion of their income as tax. Tax burden is regressive |
4.Evasion | Tax evasion is possible. | Tax evasion is more difficult |
5.Inflation | Direct Tax helps in reducing the inflation | Indirect tax contributes to inflation |
6. Shift ability | Cannot be shifted to others | Can be shifted to others |
7.Examples | Income Tax,Wealth Tax, Capital Gains Tax, Securities Transaction Tax, Perquisites Tax | GST, Excise Duty |
Question 2.
Discuss the different kinds of GST.
Answer:
GST is of three kinds: CGST, SGST/UGST, and IGST.
1. CGST – Central Goods and Services Tax – imposed and collected by the Central Government on all supply of goods within a state (intra-state) under CGST Act 2017.
2. SGST – State Goods and Services Tax – imposed and collected by the State Governments under State GST Act. (Tamil Nadu GST Act 2017 passed by Tamil Nadu Govt.)
3. UGST – Union Territory Goods and Services Tax – imposed and collected by the five Union Territory Administrations in India under UGST Act 2017.
4. IGST – Inter-State Goods and Services Tax – imposed and collected by the Central Government and the revenue shared with States under IGST Act 2017.
5. IGST on exports – All exports are treated as Inter-State supply under GST. Since exports are zero-rated, GST is not imposed on all goods and services exported from India. Any input credit paid already on exports will be refunded.
Question 3.
Elucidate the merits of GST.
Answer:
A. To the Society and country:
- A unified common national market will attract more foreign investment. GST has integrated the economy of all States and Union Territories.
- It brings parity in taxation among imported goods and Indian manufactured goods. All imported goods will be charged with IGST which will be more or less equivalent to the total of CGST and SGST levied on manufactured goods. Removal of several taxes will make the price of Indian products more competitive in the world market.
- It will boost manufacturing, export, GDP leading to economic growth through an increase in economic activity.
- The creation of more employment opportunities will result in poverty eradication.
- It will bring more tax compliance (more taxpayers) and increase revenue to the Governments.
- It is transparent and will improve India’s ranking in the Ease of Doing Business in the world.
- Uniform rates of tax will reduce tax evasion and rate arbitrage between States.
B. To Business Community:
- Simpler Tax System with fewer exemptions. 17 taxes were abolished and one tax exists today.
- The input tax credit will reduce cascading effect of taxes. Reduction in average tax burden will encourage manufacturers and help the “Make in India” campaign and make India a manufacturing hub.
- Common procedures, common classification of goods and services, and timelines will lend greater certainty to the taxation system.
- GSTN facility will reduce multiple record-keeping, lesser investment in manpower and resources and improve efficiency.
- All interactions will be through a common GSTN portal and will ensure corruption-free administration
- Uniform prices throughout the country. Expansion of business to all states is made easy.
C. To Consumers:
- The input tax credit allowed will lower the prices to the consumers.
- All small retailers will get exemptions and purchases from them will cost less for the consumers.
Question 4.
Compare CGST, SGST, and IGST.
Answer:
Basis of Difference | CGST | SGST | IGST |
1.Meaning | CGST means Central goods and service tax to replace the existing tax like service tax, excise, etc. and It is levied by the central government | SGST means State goods and service tax, replace the existing tax like sales tax, luxury tax, entry tax,-etc. and it is levied by the state government | IGST refers to the Integrated Goods and Services Tax and it is a combined form of CGST and IGST and it is levied by the central government |
2. Collection of Tax | Central Government | State Government | Central Government |
3. Applicability | Intra-State supply | Intra-state supply | Inter-State supply |
4.Registration | No registration till the turnover crosses 20 lakhs (10 lakhs for northeastern states) | No registration till the turnover crosses 20 lakhs (10 lakhs for northeastern states) | Registration is mandatory |
5.Composition | The dealer can use the benefit upto 75 lakhs under the composition scheme | The dealer can use the benefit up to 75 lakhs under the composition scheme | The composition scheme is not applicable in interstate supply |
11th Commerce Guide Indirect Taxation Additional Important Questions and Answers
I. Choose the Correct Answer:
Question 1.
GST is a …………….. based tax on consumption of goods and services.
a. duration
b. destination
c. dividend
d. development
Answer:
b. destination
Question 2.
India GST model has …………….. rate structure.
a. 3
b. 5
c.4
d. 6
Answer:
c. 4
Question 3.
What is the maximum rate prescribed under GST?
a. 12
b. 20
c. 28
d. 18
Answer:
b. 20
Question 4.
When does liability to pay GST arise in the case of a supply of goods?
a. on raising of invoice
b. At the time of supply of goods
c. On receipt of payment
d. Earliest of any of above
Answer:
d. Earliest of any of above
Question 5.
Special provisions are there in the GST Act for the …………….. north-eastern states.
a. 8
b. 9
c. 6
d. 18
Answer:
a. 8
II. Very Short Answer Questions:
Question 1.
What do you mean by UGST?
Answer:
Union Territory Goods and Services Tax is formed to impose and collect tax from the five union territory administrations in India under UGST Act 2017.
III. Long Answer Questions
Question 1.
Write a note on GST Council:
Answer:
The GST Council will oversee the implementation of the GST. But the Central Board of Excise and Customs is responsible for the administration of the CGST and IGST Acts. The Council makes recommendations on the rate of GST, apportionment of IGST, exemptions, model GST laws, etc. The Chairman of the Council is the Union Finance Minister.
The Minister of State in the Finance Ministry and all Finance Ministers of the State Governments shall be its members. The Central Government shall have l/3rd voting power and all State Governments shall have 2/3rd voting powers. All decisions of the Council can be passed only with 3/4h of the total votes. Each state has one vote, irrespective of its size or population. Twenty four council meetings were held until 2017.
Question 2.
Who are all the officials involved in GST Secretariat?
Answer:
The following are the officials involved in GST officials:
- 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 a permanent invitee (non-voting).
- One post of Additional Secretary to the GST, and
- Four posts of Commissioner in the GST Council Secretariat will also be created.
Question 3.
What are all the limitations of GST?
Answer:
The limitations/disadvantages of GST are stated below:
- Several Economists say that GST in India would impact negatively the real estate market. It would add up to 8 percent to the cost of new homes and reduce demand by about 12 percent.
- Another criticism is that CGST, SGST 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.
- A number of 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 learn for the entire ecosystem.