Indian Polity: Legislative Powers
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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 _______.

    <p>2005</p> Signup and view all the answers

    Match the following indirect taxes with their taxable events:

    <p>Excise Duty = Manufacture Customs Duty = Import &amp; Export of Goods Service Tax = Rendering of Service VAT = Transfer of ownership</p> 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?

    <p>Currency</p> Signup and view all the answers

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

    <p>True</p> Signup and view all the answers

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

    <p>Excise Duty</p> Signup and view all the answers

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

    <p>Developing applications for taxpayers to interact with GSTN</p> Signup and view all the answers

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

    <p>False</p> Signup and view all the answers

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

    <p>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.</p> 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.

    <p>PAN</p> Signup and view all the answers

    Match the following terms with their corresponding definitions:

    <p>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</p> Signup and view all the answers

    What is the primary reason for the State Compensation Mechanism?

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

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

    <p>False</p> Signup and view all the answers

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

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

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

    <p>Person engaged in exclusive supply of goods with aggregate turnover not exceeding Rs. 40 lakhs</p> 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.

    <p>True</p> Signup and view all the answers

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

    <p>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.</p> 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.

    <p>transferee or the successor</p> 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?

    <p>Persons engaged in making intra-state supplies in the State of Gujarat</p> 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.

    <p>True</p> Signup and view all the answers

    Match the following persons with their corresponding exemption from registration:

    <p>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</p> Signup and view all the answers

    Persons notified by the Government are ________________ from registration.

    <p>exempt</p> 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?

    <p>The registered person issues invoices without supplying goods or services.</p> 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.

    <p>True</p> 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?

    <p>Six months</p> 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.

    <p>6</p> Signup and view all the answers

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

    <p>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</p> Signup and view all the answers

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

    <p>False</p> Signup and view all the answers

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

    <p>The registered person must pay an amount by way of debit in the electronic credit ledger or electronic cash ledger.</p> 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?

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

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

    <p>14% p.a.</p> Signup and view all the answers

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

    <p>False</p> Signup and view all the answers

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

    <p>2015-16</p> Signup and view all the answers

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

    <p>Goods and Service Tax (Compensation to states) Act, 2017</p> 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:

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

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

    <p>Petroleum products and alcoholic liquor tax</p> Signup and view all the answers

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

    <p>True</p> Signup and view all the answers

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

    <p>VAT, sales tax, purchase tax, central sales tax, entry tax, etc.</p> 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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    Constitutional Framework of Indirect Taxes Before GST PDF

    Description

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

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