Understanding Taxation and Fiscal Policy in India

How does GST help in mitigating the ill effects of cascading?

By allowing a set-off of prior-stage taxes for transactions in the same value chain. (correct)

By imposing an additional tax on small traders and entrepreneurs.

By increasing the threshold for GST registration for small businesses.

By subsuming all Central taxes but not State taxes.

What benefit does GST provide to small traders and entrepreneurs?

Exemption from paying any taxes.

Mandatory registration in multiple states.

Requirement to pay extra taxes compared to larger businesses.

Access to the composition scheme. (correct)

Which states are categorized as Special Category States?

Kerala, Tamil Nadu, and Karnataka.

Bihar, Odisha, and West Bengal.

Arunachal Pradesh, Assam, and Sikkim. (correct)

Goa, Gujarat, and Maharashtra.

What is the tax status of tobacco under GST?

Leviable under GST as well as central excise duty. Signup and view all the answers

How does GST registration benefit small businesses?

It reduces compliance burden by requiring only one registration per state. Signup and view all the answers

What is one of the benefits of the composition scheme for small enterprises?

Minimal investment requirement for expanding nationally. Signup and view all the answers

How does GST contribute to improving liquidity of businesses?

"By allowing a set-off of prior-stage taxes for transactions across the entire value chain." Signup and view all the answers

What impact does GST have on a seamless national market for small enterprises?

"Provides an opportunity to expand nationally with minimal investment." Signup and view all the answers

What are some indicative indicators of services being bundled in the ordinary course of business?

The different elements are integral to one overall supply. Signup and view all the answers

Which factor affects whether a service is naturally bundled in the ordinary course of business?

Whether the elements are integral to one overall supply. Signup and view all the answers

What must be done to determine if a service is naturally bundled in the ordinary course of business under GST?

Examine each case individually based on various factors. Signup and view all the answers

What should be done if one element is removed from a bundled service?

'The nature of the supply would be affected.' Signup and view all the answers

How does GST help in classifying composite supplies?

By enabling individual examination of each case. Signup and view all the answers

In the example of Poshaak Manufacturers and Cheeku Ltd., what constitutes the composite supply?

'Readymade shirts packed in designer boxes.' Signup and view all the answers

Which of the following is NOT an indicative indicator of services being bundled in the ordinary course of business?

'Elements are available for customization.' Signup and view all the answers

Why is there no fixed formula for determining naturally bundled services in business under GST?

'Due to the unique nature of each case.' Signup and view all the answers

What action should be taken if one element of a bundled service is removed?

'The nature of the supply would be altered.' Signup and view all the answers

What plays a crucial role in determining if a service is naturally bundled in the ordinary course of business under GST?

Integrity of elements into one overall supply. Signup and view all the answers