GST MCQ Questions

What is GST in explain?

GST stands for "Goods and Services Tax." It is a value-added tax that is applied to goods and services in India. GST is intended to simplify and streamline the taxation system by replacing a number of different taxes that were previously imposed at the state and federal levels. Under GST, goods and services are taxed at a single rate, rather than at multiple rates, as was the case under the previous system. GST is administered by the Central Board of Indirect Taxes and Customs (CBIC) and is governed by the GST Council, which is made up of representatives from the central and state governments.

History of GST

The concept of a Goods and Services Tax (GST) in India has been under consideration for several decades. In 2000, the then Union Finance Minister, presented the first GST model in India. The Empowered Committee of State Finance Ministers was set up in 2000 to examine and make recommendations on GST.

In 2006, the Empowered Committee proposed the introduction of GST in India by April 1, 2010, but the deadline was not met. In 2009, the Empowered Committee proposed a dual GST model, where the central and state governments would simultaneously levy GST on the supply of goods and services.

Finally, on July 1, 2017, , the GST was implemented in India, replacing multiple taxes such as Value Added Tax (VAT), Central Sales Tax (CST), Service Tax, and Excise Duty. The GST Council, comprising representatives of the central and state governments, was set up to make recommendations on GST rates for various goods and services.

The GST has undergone several changes and modifications since its implementation, including changes in tax rates and the simplification of the GST, return filing process.

Types of GST

There are three types of GST in India:

1. Central GST (CGST): This is collected by the central government on all intra-state supplies of goods and services.
2. State GST (SGST): This is collected by state governments on all intra-state supplies of goods and services.
3. Integrated GST (IGST): This is collected by the central government on all inter-state supplies of goods and services. It is also applicable on imports and exports.

All three types of GST are applied at the same rate, but the revenue collected is divided between the central and state governments. CGST and SGST are applicable on intra-state supplies, while IGST is applicable to inter-state supplies and imports.

Additionally, there are two more types of GST:

1. Union Territory GST (UTGST) applicable for Union Territories
2. GST (Compensation to States) Act, 2017 which is to compensate the states for any loss of revenue in the first five years of the GST implementation.