Taxes in India: Excise Duty, VAT, and Custom Duty

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Questions and Answers

Which of the following taxes was passed on 29th March 2017 in the Parliament of India?

Stamp Duty

Entertainment Tax

Custom Duty

Goods and Services Tax (GST) (correct)

What is the primary objective of implementing the GST Act?

To increase tax revenue

To replace multiple layers of taxation with one tax (correct)

To reduce tax rates

To increase the number of taxes

Which of the following taxes is levied on the transfer of immovable property in a state of India?

Stamp Duty (correct)

Custom Duty

Entertainment Tax

Central Goods and Services Tax (CGST)

What type of tax is levied by the Centre on the Intra-State supply of goods or services?

Central Goods and Services Tax (CGST) Signup and view all the answers

How many goods were taken into consideration when GST was implemented?

1300 goods Signup and view all the answers

Which of the following is NOT a type of tax under GST?

Custom Duty Signup and view all the answers

How many services were taken into consideration when GST was implemented?

500 services Signup and view all the answers

What is the name of the tax that replaces multiple layers of taxation with one tax?

Goods and Services Tax (GST) Signup and view all the answers

What is the formula for calculating GDP?

GDP = C + I + G + (X-M) Signup and view all the answers

What does the 'Q' in the GDP formula represent?

Quantity of goods and services Signup and view all the answers

What is Net National Product (NNP) at Market Price?

The market price of the net output of final goods and services produced by an economy within a financial year Signup and view all the answers

What does National Income (NI) represent?

The total income earned by the contribution of factors of production Signup and view all the answers

What is the primary objective of public businesses?

To make a profit Signup and view all the answers

What is the formula for calculating National Income (NI)?

NI = NNP + Subsidies – Interest, Taxes Signup and view all the answers

What is Gross National Product (GNP)?

The total value of all the final products and services turned out in a given period by the means of production owned by a country's residents Signup and view all the answers

What is the external sector of a country's economy?

International economic interactions Signup and view all the answers

What are the two types of foreign investment?

Foreign direct investment and portfolio investment Signup and view all the answers

What is the difference between GDP and GNP?

GDP includes income earned by foreigners, while GNP includes income earned by citizens Signup and view all the answers

What is the formula for calculating NNP?

NNP = C + I + G + (X-M) + NFIA + IT - Depreciation Signup and view all the answers

What is reinvested earnings in the context of foreign direct investment?

Retained earnings of FDI businesses Signup and view all the answers

What is the primary component of portfolio investment?

GDRs/ADRs raised by Indian firms Signup and view all the answers

What is the exchange rate?

The rate at which one currency is exchanged for another Signup and view all the answers

Since when has the definition of FDI been broadened to include reinvested earnings?

2000-01 Signup and view all the answers

What is not a component of the external sector?

GDP calculation Signup and view all the answers

Study Notes

Types of Taxes

Excise duty is levied on specific items like petrol and diesel.
Value-Added Tax (VAT) is applicable to movable products sold directly to customers and is collected by the respective state government.
Custom Duty is charged on imported goods, depending on their value and type.
Stamp Duty is levied on the transfer of immovable property and includes legal documents.
Entertainment Tax is charged on transactions related to entertainment, such as video games, movie shows, and sports activities.

Goods and Services Tax (GST)

GST is a single, indirect tax that integrates all indirect taxes in the Indian economy.
GST replaced 17 indirect taxes and 23 cesses, including Central excise duty, Service tax, and VAT.
The aim of GST is "One Nation and One Tax".
GST has three types of taxes: Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), and Integrated Goods and Services Tax (IGST).
CGST is levied by the Centre on the intra-state supply of goods or services.

National Income

Gross Domestic Product (GDP) = P × Q, where P is the price of goods and services, and Q is the quantity of goods and services.
GDP has four components: Consumption, Investment, Government expenditure, and Net foreign exports.
Net National Product (NNP) at Market Price is the market value of the net output of final goods and services produced by an economy within a financial year.
National Income (NI) is the total income earned by the factors of production, including rent, interest, wages, and profit.

External Sector

The external sector refers to international economic interactions between a country's inhabitants and the rest of the world.
Components of the external sector include export, import, foreign investment, external debt, current account, capital account, and balance of payment.
Foreign investment has two types: Foreign Direct Investment (FDI) and Portfolio Investment.
FDI includes equity capital, reinvested earnings, and other direct capital.
Portfolio investment includes investments made by Foreign Institutional Investors (FIIs), Global Depository Receipts (GDRs), and American Depository Receipts (ADRs).
Exchange rate is the rate at which one currency is exchanged for another, and it has two types.

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Description

This quiz covers the basics of taxes in India, including excise duty, Value-Added Tax, and custom duty, and how they are levied on different products.