Understanding Taxation and Fiscal Policy in India
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Questions and Answers

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?

    <p>Leviable under GST as well as central excise duty.</p> Signup and view all the answers

    How does GST registration benefit small businesses?

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

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

    <p>Minimal investment requirement for expanding nationally.</p> Signup and view all the answers

    How does GST contribute to improving liquidity of businesses?

    <p>&quot;By allowing a set-off of prior-stage taxes for transactions across the entire value chain.&quot;</p> Signup and view all the answers

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

    <p>&quot;Provides an opportunity to expand nationally with minimal investment.&quot;</p> Signup and view all the answers

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

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

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

    <p>Whether the elements are integral to one overall supply.</p> 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?

    <p>Examine each case individually based on various factors.</p> Signup and view all the answers

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

    <p>'The nature of the supply would be affected.'</p> Signup and view all the answers

    How does GST help in classifying composite supplies?

    <p>By enabling individual examination of each case.</p> Signup and view all the answers

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

    <p>'Readymade shirts packed in designer boxes.'</p> 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?

    <p>'Elements are available for customization.'</p> Signup and view all the answers

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

    <p>'Due to the unique nature of each case.'</p> Signup and view all the answers

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

    <p>'The nature of the supply would be altered.'</p> 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?

    <p>Integrity of elements into one overall supply.</p> Signup and view all the answers

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