INDIRECT TAXATION

ANSWER KEY II B.Com (G)

1. Define indirect tax.

Indirect tax is the tax levied on the consumption of goods and services. It is not directly
levied on the income of a person.

2. What do you meant by GST?

GST or goods and services tax is an indirect tax imposed on the supply of goods and
services. It is a multi-stage, destination-oriented tax imposed on every value addition,
replacing multiple indirect taxes, including VAT, excise duty, service taxes, etc.

3. What is direct tax?

A direct tax is a tax that a person or organisation pays directly to the entity that
imposed it. Examples include income tax, real property tax and taxes on assets all of which
are paid by an individual taxpayer directly to the government.

4. Who are considering as person in taxation?

The term person is defined under section 2(31) of the income tax act. There are seven
categories covered under the term “person”.

5. Write short note on tax system in India.

The tax structure in India is divided into direct and indirect taxes. While direct taxes
are levied on taxable income earned by individuals and corporate entities, the burden to
deposit taxes is on assesses them.

6. Define provision of GST.

Under the Indian GST, goods and services are categorised into different tax slabs,
including 5%, 12%, 18% and 28%. Some essential commodities are exempted from GST,
gold and job work for diamond attract low rate of taxation.

7. Write short note on jah committee.

Jah committee is a member of economist finance and members of parliament. The

committee is a statutory body of authority to conduct research survey on improvement,
development of taxation and need for GST.

8. What are the commercial areas covers under GST?

The GST is usually charged on the rent of the property at an18% rate. In addition, the
rent-paying individual has to deduct the income tax at 10% if the rent is more than
2.4lakh/year. The GST for the sale of under-construction or newly constructed commercial
properties is 12% as per the revised 2022 update.

9. Who are the experts of committee to decide taxation?

Keep under review and update as necessary the united nations model double taxation
convention between developed and developing countries and the manual for the negotiation
of bilateral tax treaties between developed and developing countries.

10. What is CGST?

CGST stands for central goods and services tax. It is levied by the central government
on the intrastate movement of goods and services, i.e., transactions within one state the
central goods and services tax act 2017 govern CGST, with applies to the entire country
except Jammu and Kashmir.

11. What is concurrent tax?

In the concurrent dual GST model the taxes are levied by both the centre and states
simultaneously but independently. It is based on the place of supply of goods an servies.

12. What is UGST?

UGST or union territory goods and service tax replaces SGST in union territories like
Chandigarh.

13. Bring out the objectives of taxation.

 Economic development
 Full employment
 Price stability
 Control of cyclical fluctuations
 Reduction of BOP difficulties
 Non-Revenue objectives

14. Briefly explain the reason of introduction GST.

 Subsumed majority of the indirect taxes

 Removed the cascading effect of taxes
 Stopped evasion of taxes
 Increased taxpayer base
 Provided online procedures to increase the ease of doing business
 Made the distribution system and logistics better
 Promoted consumption and competitive pricing.

15. Write short note on history of taxation.

 Taxation is imposition of compulsory levies on individuals or entities by governments.
Taxes are levied around the world, primarily to raise revenue for government expenditures all
through they serve other purposes as well.

16. What is the difference between direct and indirect tax.

 Nature
 Basis
 Rate
 Transferability
 Impact on cost and price
 Department of revenue
 Revenue goes to
 Tax collection
 Examples

17. List out the business impact of GST.

 Simplified calculations
 Lower tax burden
 Fraud-Prevention
 Easier to start or expand your business
 Distinction between goods and services

18. Bring out the benefits of CGST and SGST.

1. Benefits of CGST:
a. Duties and revenue imposed by central government
b. No negligence between authority
c. Power of commissioner subject to conditions
d. Centralised and decentralised of power
2. Benefits of SGST:
a. State union officer determine the duties and power
b. Negligence of act by subordinate
c. Amendment of duties discharge is subject to condition.

19. Tabulate the rate structure of GST.

Category Old GST rates New GST rates

Railways goods and parts under chapter 86 12% 18%
Pens 12% 18%
Metal concentrates an ores 5% 18%
Certain renewable energy devices 5% 12%
Recorded media reproduction and print 12% 18%
Broadcasting, sound recording and licensing 12% 18%
Printed material 12% 18%
Packing containers and boxes 12% 18%
Scrap and polyurethanes 5% 18%
20. Detail the classification of tax.

I. Direct tax
1) Income tax
2) Corporate tax
3) Wealth tax
4) Gift tax
5) Expenditure tax
II. Indirect tax
1) Service tax
2) Excise duty
3) Entertainment tax
4) Customs duty

21. Detail the objectives and need of GST.

A. Need for GST:

1) Seamless flow of credit
2) Boosts in exports
3) Competitive prices
4) Increase in revenue
5) Easy straight forward tax structure
B. Objectives of GST:
1) Simplify the tax structure
2) Create a common market
3) Promote economic growth
4) Improve tax compliance
5) Ensure social justice

22. Discuss in detail about powers of state and central government to levy tax.

1) Central government tax:

a. Collect and kept by the state government
b. Money collected is given to the state government
c. Split between the centre and the state
2) State government tax:
a. Sales tax and VAT
b. Professional tax
c. Stamp duty
d. Luxury tax
e. Entertainment tax
f. Motor vehicles tax
g. Tax on land and buildings
h. Tax on mineral rights
23. Enumerate the benefits of GST.

1. Make in India
 Unified national market
 Avoid imputed taxes
 Harmonies law
2. Business start up
 Reduction of multiple taxes
 Reduction of compliance
 Digital transaction
 Common procedure to all entity
3. Consumers
 Lower price
 Convert retailer into organised sector
 Participate in tax

24. Write an essay on scope and coverage of tax under GST.

1. Scope of supply
 Supplier for supply
 Supplier is even to supply
 Supplier to supply goods
 Supplier to supply.