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Goods and Services Tax (GST) Interview Questions & Answers - Learning Mode

Goods and Services Tax (GST) Interview Questions & Answers - Learning Mode

GST stands for "Goods and Services Tax", and is proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. GST is a consumption based tax/levy. It is based on the ?Destination principle.? GST is applied on goods and services at the place where final/actual consumption happens. GST is collected on value-added goods and services at each stage of sale or purchase in the supply chain. GST paid on the procurement of goods and services can be set off against that payable on the supply of goods or services.

Try Goods and Services Tax (GST) Interview Questions & Answers - Exam Mode

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Goods and Services Tax (GST) Interview Questions & Answers - Learning Mode
Try Goods and Services Tax (GST) Interview Questions & Answers - Exam Mode
Question: Will cross utilization of credits between goods and services be allowed under GST regime?

Answer: Cross utilization of credit of CGST between goods and services would be allowed. Similarly, the facility of cross utilization of credit will be available in case of SGST. However, the cross utilization of CGST and SGST would not be allowed except in the case of inter-State supply of goods and services under the IGST model. Source:
Question: How GST will be levied in India with an effective administration?

Answer: The Indian government is comprised of a dual federal structure and with this anatomy, there will be two components formation:-

Central GST
State GST

Both of the components will levy the tax on their level across whole value chain. These components are responsible for collecting the taxes from their respective designated area of operation by applying the incurred GST. The input tax credit of CGST will be accessible for meeting the CGST liability on the outcoming at every Source:
Question: How will the GST make a change? Pls give an example?

Answer: There are various layers in pricing factors in India which are currently prevailing at every step of transfer of Goods and Services from manufacturer/service provider to the end consumer. By taking an example, let us understand that how the GST application will turn the scene for Indian consumers:-

Level 1 ? Manufacturer

Let?s say, a Good of Rs. 100 including tax of Rs. 10 and all the raw material. After the total manufacturing of that product he adds Rs. 30 to his value
Question: How will the rules for administration of CGST and SGST be framed?

Answer: The Joint Working Group has also been entrusted the task of preparing draft legislation for CGST, a suitable Model Legislation for SGST and rules and procedures for CGST and SGST. Simultaneous steps have also been initiated for drafting of legislation for IGST and rules and procedures. As a part of this exercise, the Working Group will also address to the issues of dispute resolution and advance ruling. Source:
Question: Will cross utilization of credits between goods and services be allowed under GST regime?

Answer: Cross utilization of credit of CGST between goods and services would be allowed. Similarly, the facility of cross utilization of credit will be available in case of SGST. However, the cross utilization of CGST and SGST would generally not be allowed except in the case of inter-State supply of goods and services under the IGST model. Source:
Question: How would GST be administered in India?

Answer: Keeping in mind the federal structure of India, there will be two components of GST ? Central GST (CGST) and State GST (SGST). Both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on every supply of goods and services. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State. The input tax credit of CGST would be available for discharg Source:
Question: What are the major milestones pertinent to GST Bill introduction in India?

Answer: GST is being introduced in the country after a 13 year long journey since it was first discussed in the report of the Kelkar Task Force on indirect taxes.

A brief chronology outlining the major milestones on the proposal for introduction of GST in India is as follows:-

a. In 2003, the Kelkar Task Force on indirect tax had suggested a comprehensive Goods and Services Tax (GST) based on VAT principle.

b. A proposal to introduce a National level Goods and Services Tax (GST) by Source:
Question: Which taxes at the Centre and State level are being subsumed into Goods and Services Tax (GST)?

Answer: At the Central level, the following taxes are being subsumed:-

a. Central Excise Duty,

b. Additional Excise Duty,

c. Service Tax,

d. Additional Customs Duty commonly known as Countervailing Duty, and

e. Special Additional Duty of Customs.

At the State level, the following taxes are being subsumed:-

a. Subsuming of State Value Added Tax/Sales Tax,

b. Entertainment Tax (other than the tax levied by the l Source:
Question: How can the burden of tax, in general, fall under GST?

Answer: The present forms of CENVAT and State VAT have remained incomplete in removing fully the cascading burden of taxes already paid at earlier stages. Besides, there are several other taxes, which both the Central Government and the State Government levy on production, manufacture and distributive trade, where no set-off is available in the form of input tax credit.

These taxes add to the cost of goods and services through ?tax on tax? which the final consumer has to bear. Since, with the int Source:
Question: What is the concept of providing threshold exemption into a tax regime?

Answer: Threshold exemption is built into a tax regime to keep small traders out of tax net. This has three-fold objectives:-

It is difficult to administer small traders and cost of administering of such traders is very high in comparison to the tax paid by them.
The compliance cost and compliance effort would be saved for such small traders.
Small traders get relative advantage over large enterprises on account of lower tax incidence.

The present thresholds prescribed in Source:
Question: Which Central and State taxes are proposed to be subsumed under GST?

Answer: The various Central, State and Local levies were examined to identify their possibility of being subsumed under GST. While identifying, the following principles were kept in mind:-

Taxes or levies to be subsumed should be primarily in the nature of indirect taxes, either on the supply of goods or on the supply of services.
Taxes or levies to be subsumed should be part of the transaction chain which commences with import/ manufacture/ production of goods or provision of services Source:
Question: Who bears the final tax in the process?

Answer: The GST is an indirect tax which means that the tax is passed on till the last stage wherein it is the customer of the goods and services who bears the tax. This is the case even today for all indirect taxes but the difference under the GST is that with streamlining of the multiple taxes the final cost to the customer will come out to be lower on the elimination of double charging in the system. Source:
Question: Will all goods and services be covered under the GST?

Answer: Except for a specific list of exempted items all the other goods and services will be covered under the GST making this a comprehensive tax in the Indian Economy. In fact this will be the main tax on the indirect tax side in the economy. Source:
Question: Why are states unhappy with the GST?

Answer: The replacement of the existing taxes with the GST will lead to a revenue loss for the states. The states want compensation for this and the matter is how they will be compensated. So there are efforts to arrive at a formula that is acceptable to the states. Source:
Question: Will the rate rise in case of GST making it costlier?

Answer: There will be a standard rate present under the GST. This will make the impact different for various goods and services across the country depending upon the current or existing rate. If the existing rate is higher then the GST will lead to a lower rate but if the rate is lower than the rate will be higher. However it is expected that with multiple taxes eliminated it will ultimately lead to savings for the consumer. Source:
Question: Why does introduction of GST require a Constitutional Amendment?

Answer: The Constitution provides for delineation of power to tax between the Centre and States. While the Centre is empowered to tax services and goods upto the production stage, the States have the power to tax sale of goods. The States do not have the powers to levy a tax on supply of services while the Centre does not have power to levy tax on the sale of goods. Thus, the Constitution does not vest express power either in the Central or State Government to levy a tax on the ?supply of goods and serv Source:
Question: What are the major features of the proposed payment procedures under GST?

Answer: The major features of the proposed payments procedures under GST are as follows:-

i. Electronic payment process- no generation of paper at any stage

ii. Single point interface for challan generation- GSTN

iii. Ease of payment ? payment can be made through online banking, Credit Card/Debit Card, NEFT/RTGS and through cheque/cash at the bank

iv. Common challan form with auto-population features

v. Use of single challan and single payment instrument

vi. Com Source:
Question: How are the legislative steps being taken for CGST and SGST?

Answer: A Joint Working Group has recently been constituted (September 30, 2009) comprising of the officials of the Central and State Governments to prepare, in a time-bound manner a draft legislation for Constitutional Amendment. Source:
Question: What is the best outcome Customers can expect, in case of GST?

Answer: Customer can expect transparency as regards taxes levied. By way of illustration, today, a customer buying an IT hardware or consumer durable at a retail store is oblivious to the customs / excise duties built into the price. Further, given that GST seeks to eliminate cascading effect of taxes, in the medium to long run, GST should essentially result in price reduction with businesses opting to pass on tax efficiency to customers in the form of price reduction, subject of course to a reasonabl Source:
Question: How to file GST Return Online?

Answer: The data is not disclosed yet but some hints suggest that the return online can be filed by the GST Portal. Source:

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