Indian Polity: Legislative Powers

Questions and Answers

What is the authority that makes laws in India regarding defense, atomic energy, and railways?

Central Government (correct)

State Government

Local Government

Supreme Court

The State Government has the exclusive right to make laws on public health and sanitation.

True

What is the taxable event for excise duty?

Manufacture

The Value Added Tax (VAT) was introduced in India in the year _______.

2005 Signup and view all the answers

Match the following indirect taxes with their taxable events:

Excise Duty = Manufacture Customs Duty = Import & Export of Goods Service Tax = Rendering of Service VAT = Transfer of ownership Signup and view all the answers

Which of the following is NOT a matter in respect of which the State Government has the exclusive right to make laws?

Currency Signup and view all the answers

Both Central and State Governments have powers to make laws on criminal procedure.

True Signup and view all the answers

Entry No. 84, List I, Schedule VII refers to _______.

Excise Duty Signup and view all the answers

Which of the following is NOT a function of the GSTN?

Developing applications for taxpayers to interact with GSTN Signup and view all the answers

GST Suvidha Providers (GSPs) are authorized to directly collect taxes from taxpayers.

False Signup and view all the answers

What is the purpose of the GST Suvidha Providers (GSPs)?

GSPs develop applications for taxpayers to interact with the GSTN, facilitating the uploading of invoices, filing of returns, and providing a one-stop shop for GST-related services. Signup and view all the answers

The Goods and Services Tax Identification Number (GSTIN) is a unique number that includes the taxpayer's ______ number and codes denoting the state of registration, entity number, alphabet Z, and a check code.

PAN Signup and view all the answers

Match the following terms with their corresponding definitions:

GSTN = A unique number assigned to each registered taxpayer under the GST regime GSPs = Companies authorized to develop applications for taxpayers to interact with the GSTN GSTIN = The organization responsible for managing and facilitating the GST system IGST = Tax levied on goods and services that are consumed within the same state State Compensation Mechanism = A mechanism to compensate states for revenue loss due to the shift from production-based to consumption-based taxation in the GST regime Signup and view all the answers

What is the primary reason for the State Compensation Mechanism?

To compensate states for revenue losses incurred due to the transition to consumption-based taxation Signup and view all the answers

The GSTN is responsible for determining the amount of compensation that each state receives.

False Signup and view all the answers

What is the key difference between the tax system before GST and the GST system?

The GST system shifted from a production-based tax system to a destination/consumption-based tax system. Signup and view all the answers

Who is not required to register under the Act with effect from 1-4-2019?

Person engaged in exclusive supply of goods with aggregate turnover not exceeding Rs. 40 lakhs Signup and view all the answers

Every person who, on the day immediately preceding the appointed day, is registered or holds a license under an existing law, shall be liable to be registered under this Act with effect from the appointed day.

True Signup and view all the answers

Who is exempt from registration under Section 23 of the Act?

Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Act. Signup and view all the answers

Where a business carried on by a taxable person registered under this Act is transferred whether on account of succession or otherwise to another person as a going concern, the ________________ shall be liable to be registered with effect from the date of such transfer or succession.

transferee or the successor Signup and view all the answers

Which of the following is not an exception to the rule of registration not being required for persons engaged in exclusive supply of goods with aggregate turnover not exceeding Rs. 40 lakhs?

Persons engaged in making intra-state supplies in the State of Gujarat Signup and view all the answers

The transferee shall be liable to be registered with effect from the date of which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High court or tribunal, in case of amalgamation or de-merger.

True Signup and view all the answers

Match the following persons with their corresponding exemption from registration:

i) Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Act = a) Exempt from registration ii) Any agriculturist to the extent of supply of produce out of cultivation of land = a) Exempt from registration Signup and view all the answers

Persons notified by the Government are ________________ from registration.

exempt Signup and view all the answers

Which of the following scenarios can lead to the cancellation of a registered person's registration under the CGST Rules, 2014?

The registered person issues invoices without supplying goods or services. Signup and view all the answers

The cancellation of a registered person's registration under SGST/UTGST is deemed to be a cancellation of registration under CGST.

True Signup and view all the answers

What is the period for which a registered person must continuously fail to furnish returns for their registration to be cancelled?

Six months Signup and view all the answers

A voluntary registered person who does not commence business within ______ months from the date of registration is liable to have their registration cancelled.

6 Signup and view all the answers

Match the following situations with the corresponding actions related to cancellation of registration:

The registered person has not furnished returns for a continuous period of six months. = Cancellation of registration The registered person has obtained registration by fraud. = Cancellation of registration The registered person has violated conditions of taking ITC. = Cancellation of registration The registered person has paid the required amount by way of debit in the electronic credit ledger or electronic cash ledger. = Settlement of electronic ledgers The registered person has violated the provisions of Rule 10A. = Cancellation of registration The registered person has not commenced business within 6 months of registration. = Cancellation of registration Signup and view all the answers

Cancellation of registration under the CGST Rules, 2014, automatically releases the registered person from all tax liabilities.

False Signup and view all the answers

What is the specific requirement for a registered person whose registration has been cancelled, regarding their electronic ledgers?

The registered person must pay an amount by way of debit in the electronic credit ledger or electronic cash ledger. Signup and view all the answers

What happens to a registered person's liability on capital goods or plant and machinery after their registration is cancelled?

They must pay the higher of the two options in (b) and (c). Signup and view all the answers

What is the projected nominal growth rate for state revenue during the transition under the GST law?

14% p.a. Signup and view all the answers

The GST compensation period for states is limited to 10 years.

False Signup and view all the answers

What is the base year for calculating the revenue under the GST compensation provisions?

2015-16 Signup and view all the answers

The Act providing for GST compensation to states is known as the __________.

Goods and Service Tax (Compensation to states) Act, 2017 Signup and view all the answers

Match the following types of taxes to whether they are included or excluded in the base year revenue calculation:

Sales Tax = Included Entertainment Tax collected by local bodies = Excluded Luxury Tax = Included Petroleum Products Sale Tax = Excluded Signup and view all the answers

What type of taxes are excluded from calculation of base year revenue?

Petroleum products and alcoholic liquor tax Signup and view all the answers

States and union territories with legislatures must be compensated for revenue loss due to GST implementation.

True Signup and view all the answers

What types of revenue are included in the base year revenue calculation according to the provisions?

VAT, sales tax, purchase tax, central sales tax, entry tax, etc. Signup and view all the answers

Study Notes

Parliament and Law Making

Parliament makes laws in India, with specific areas of legislation divided into three lists: Union List (List I), State List (List II), and Concurrent List (List III)

Union List (List I)

Includes defense of India, atomic energy, mineral resources, central bureau of intelligence and investigation, railways, highways, currency, RBI, post office saving bank, taxes on income other than agricultural income, duties of customs, corporation tax, etc.

State List (List II)

Includes public order, police, local government, public health and sanitation, hospital, burials and burial grounds, cremation ground, libraries, water, fisheries, betting and gambling, etc.

Concurrent List (List III)

Includes criminal laws, criminal procedure, marriage and divorce, contracts including partnership, agency, bankruptcy and insolvency, trust and trustees, trade unions, industrial and labour disputes, etc.

Indirect Taxes

Major indirect taxes include excise duty, customs duty, service tax, and VAT
These taxes are summarized as follows:
- Excise Duty: Taxable event is manufacture (Entry No. 84, List I, Schedule VII)
- Customs Duty: Taxable event is import and export of goods (Entry No. 83, List I, Schedule VII)
- Service Tax: Taxable event is rendering of service (Residuary Entry No. 97, List I, Schedule VII)
- Sales Tax/VAT: Taxable event is transfer of ownership (Entry Nos. 54 of List II and 92A of List I)

Goods and Services Tax (GST)

Introduced in India in 2005
Facilitates the registration of persons, forwarding of returns to central and state authorities, computation and settlement of IGST among union and states, etc.

GST Suvidha Providers (GSPs)

Selected IT, ITes, and Financial technology companies that develop applications for tax payers to interact with GSTN
Facilitate uploading of invoices and filing of returns, and act as a single stop shop for GST-related services

Goods and Services Tax Identification Number (GSTIN)

Unique number assigned to each taxpayer upon registration
Comprises of PAN number, codes denoting state, entity number, and a check code

State Compensation Mechanism

In GST era, there is a paradigm shift from production-based tax to destination/consumption-based tax
Section 18 of the Constitution Amendment Act provides for compensation to states for loss of revenue arising from implementation of GST
The period of compensation is restricted to 5 years

Calculation and Release of Compensation

Projected growth rate is 14% p.a. (Section 3)
Base year is 2015-16 (Section 4)
Base year revenue includes VAT, sales tax, purchase tax, tax collected on works contract, and other similar taxes (Section 5)

Registration under GST

With effect from 1-4-2019, registration is not required for persons who exclusively supply goods and have an aggregate turnover in the financial year not exceeding Rs. 40 lakhs
Exceptions to this rule include persons required to make compulsory registration under Section 24, persons engaged in making supplies of certain products, and persons engaged in making intra-state supplies in certain states

Cancellation of Registration

Registration is liable to be cancelled if the registered person contravenes provisions of the Act or the prescribed rules
Reasons for cancellation include not conducting business from the declared place of business, issuing invoices or bills without supply of goods or services, etc.

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This quiz covers the legislative powers of the Parliament and State Government in India, including matters in the Union List and State List.

Indian Polity: Legislative Powers

Questions and Answers

What is the authority that makes laws in India regarding defense, atomic energy, and railways?

The State Government has the exclusive right to make laws on public health and sanitation.

What is the taxable event for excise duty?

The Value Added Tax (VAT) was introduced in India in the year _______.

Match the following indirect taxes with their taxable events:

Which of the following is NOT a matter in respect of which the State Government has the exclusive right to make laws?

Both Central and State Governments have powers to make laws on criminal procedure.

Entry No. 84, List I, Schedule VII refers to _______.

Which of the following is NOT a function of the GSTN?

GST Suvidha Providers (GSPs) are authorized to directly collect taxes from taxpayers.

What is the purpose of the GST Suvidha Providers (GSPs)?

The Goods and Services Tax Identification Number (GSTIN) is a unique number that includes the taxpayer's ______ number and codes denoting the state of registration, entity number, alphabet Z, and a check code.

Match the following terms with their corresponding definitions:

What is the primary reason for the State Compensation Mechanism?

The GSTN is responsible for determining the amount of compensation that each state receives.

What is the key difference between the tax system before GST and the GST system?

Who is not required to register under the Act with effect from 1-4-2019?

Every person who, on the day immediately preceding the appointed day, is registered or holds a license under an existing law, shall be liable to be registered under this Act with effect from the appointed day.

Who is exempt from registration under Section 23 of the Act?

Where a business carried on by a taxable person registered under this Act is transferred whether on account of succession or otherwise to another person as a going concern, the ________________ shall be liable to be registered with effect from the date of such transfer or succession.

Which of the following is not an exception to the rule of registration not being required for persons engaged in exclusive supply of goods with aggregate turnover not exceeding Rs. 40 lakhs?

The transferee shall be liable to be registered with effect from the date of which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High court or tribunal, in case of amalgamation or de-merger.

Match the following persons with their corresponding exemption from registration:

Persons notified by the Government are ________________ from registration.

Which of the following scenarios can lead to the cancellation of a registered person's registration under the CGST Rules, 2014?

The cancellation of a registered person's registration under SGST/UTGST is deemed to be a cancellation of registration under CGST.

What is the period for which a registered person must continuously fail to furnish returns for their registration to be cancelled?

A voluntary registered person who does not commence business within ______ months from the date of registration is liable to have their registration cancelled.

Match the following situations with the corresponding actions related to cancellation of registration:

Cancellation of registration under the CGST Rules, 2014, automatically releases the registered person from all tax liabilities.

What is the specific requirement for a registered person whose registration has been cancelled, regarding their electronic ledgers?

What happens to a registered person's liability on capital goods or plant and machinery after their registration is cancelled?

What is the projected nominal growth rate for state revenue during the transition under the GST law?

The GST compensation period for states is limited to 10 years.

What is the base year for calculating the revenue under the GST compensation provisions?

The Act providing for GST compensation to states is known as the __________.

Match the following types of taxes to whether they are included or excluded in the base year revenue calculation:

What type of taxes are excluded from calculation of base year revenue?

States and union territories with legislatures must be compensated for revenue loss due to GST implementation.

What types of revenue are included in the base year revenue calculation according to the provisions?

Study Notes

Parliament and Law Making

Union List (List I)

State List (List II)

Concurrent List (List III)

Indirect Taxes

Goods and Services Tax (GST)

GST Suvidha Providers (GSPs)

Goods and Services Tax Identification Number (GSTIN)

State Compensation Mechanism

Calculation and Release of Compensation

Registration under GST

Cancellation of Registration

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