GST & Tax Structure — Set 1

Correct Answer: B. July 1, 2017

Goods and Services Tax (GST) was implemented in India on July 1, 2017. It replaced 17 major indirect taxes including Central Excise Duty, Service Tax, VAT, CST, Entry Tax, and Octroi. The rollout was launched with a special midnight Parliament session — a symbolic beginning at midnight akin to India's independence celebration.

Correct Answer: C. 101st Constitutional Amendment

The 101st Constitutional Amendment Act, 2016 enabled the implementation of GST in India. It amended Articles 246A, 269A, and 279A of the Indian Constitution. Article 246A gave both Parliament and State Legislatures the concurrent power to make laws with respect to GST.

Correct Answer: B. Subramanian Committee

The Subramanian Committee (officially the 'Committee on the Revenue Neutral Rate and Structure of Rates for the Goods and Services Tax') under Arvind Subramanian, the then Chief Economic Adviser, recommended the GST rate structure for India. It suggested a revenue-neutral rate (RNR) of 15-15.5% and a standard rate of 17-18%.

Correct Answer: A. Central Goods and Services Tax

CGST stands for Central Goods and Services Tax, which is levied by the Central Government on intra-state (within a single state) supply of goods and services. In an intra-state transaction, both CGST (central share) and SGST (state share) are charged simultaneously. The CGST Act, 2017 governs its administration.

Correct Answer: B. Integrated Goods and Services Tax

IGST (Integrated Goods and Services Tax) is levied on inter-state (between two states) supply of goods and services and on imports. IGST = CGST + SGST. It is collected by the Central Government and subsequently distributed between the Centre and the destination state. The IGST model ensures seamless input tax credit across states.

Correct Answer: B. GST Council

Article 279A of the Indian Constitution (inserted by the 101st Constitutional Amendment) provides for the establishment of the GST Council. The GST Council is a constitutional body that makes recommendations on GST rates, exemptions, threshold limits, and dispute resolution between the Centre and States.

Correct Answer: C. Union Finance Minister

The Union Finance Minister is the Chairperson of the GST Council. Members include the Finance Ministers (or designated ministers) of all state governments and Union Territories with legislatures. The GST Council is the apex body for all decisions related to GST in India, making it a model of cooperative federalism.

Correct Answer: B. One-third

In the GST Council, the Centre's vote has a weightage of one-third (1/3) of the total votes cast. The votes of all State Governments together have a weightage of two-thirds (2/3). Decisions require a majority of not less than three-fourths (75%) of the weighted votes of members present and voting.

Correct Answer: C. 0% (Nil)

Essential food items such as fresh fruits, vegetables, unprocessed grains (rice, wheat), unbranded milk, eggs, and fish are placed in the Nil (0%) GST slab. This is done to ensure that basic food items remain affordable for the common man. Branding and processing can shift an item to a higher slab.

Correct Answer: B. 5%

Tea, coffee (except instant), spices, processed food items, edible oils, coal, and medicines for chronic diseases generally attract 5% GST. The 5% slab is designed for items of daily necessity that are commonly used but not strictly essential. This slab balances revenue collection with affordability.