Consider the following statements with respect to Base erosion and profit shifting
It refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.
Base Erosion and Profit Shifting (BEPS) Action plan was adopted by the Organisation for Economic Co-operation and Development (OECD) and G-7 countries.
Which of the statement(s) given above is/are correct?
Correct Answer:
(A)
a. 1 only
The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) brings together over 125 countries and jurisdictions to collaborate on the implementation of the BEPS Package.
BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity.
Ques:
12
At present, where from the maximum resources are mobilised for India's public expenditure under plans?
Correct Answer:
(D)
From borrowings
At present, the maximum resources are mobilised from borrowings for India’s public expenditure under plans. Public debt is the total amount, including total liabilities, borrowed by the government to meet its development budget. The sources of public debt are dated government securities (G-Secs), treasury bills, external assistance, short-term borrowings and securities issued against small savings (Public account).
Ques:
13
Consider the following statements:
Revenue expenditures incurred for the basis other than the creation of physical or financial assets of the central government.
These are associated with the expenses incurred for the normal operations of the government divisions.
Which of the statements given above is/are correct?
Correct Answer:
(C)
Both 1 and 2
Revenue expenditures are the expenditures incurred for the basis other than the creation of physical or financial assets of the central government. These are associated with the expenses incurred for the normal operations of the government divisions and various services, interest payments on debt sustained by the government, and grants given to state governments and other parties (even though some of the endowments might be meant for the creation of assets).
Ques:
14
Consider the following statements:
A plan revenue expenditure is associated with central plans (the Five-Year Plans), and central aid for state and union territory plans.
Non-plan expenditure covers a broad degree of general, economic, and social services of the government.
Which of the statements given above is/are correct?
Correct Answer:
(C)
Both 1 and 2
Budget documents allocate total expenditure into plan and non-plan expenditures. These are shown in item 6 on the table within revenue expenditure, a distinction is made between plan and non-plan. According to this categorisation, a plan revenue expenditure is associated with central plans (the Five-Year Plans), and central aid for state and union territory plans.
Non-plan expenditure, the more significant component of revenue expenditure, covers a broad degree of general, economic, and social services of the government. The main objects of a non-plan expenditure are interest payments, defence services, subsidies, salaries, and pensions.
Ques:
15
The main objects of a non-plan expenditure are:
Correct Answer:
(D)
All of the above
Non-plan expenditure, the more significant component of revenue expenditure, covers a broad degree of general, economic, and social services of the government. The main objects of a non-plan expenditure are interest payments, defence services, subsidies, salaries, and pensions.
Ques:
16
The classification of government expenditure is closely linked to the goals of the government, such as:
Correct Answer:
(D)
All of the above
There are two categories of revenue expenditure: both expenditures for development and non-developmental purposes. The classification of government expenditure is closely linked to the goals of the government, such as price stability, financial control, economic growth, and so on. For instance, the accounting classification of expenditure into "Plan" and "Non-Plan" categories, as well as "Capital" and "Revenue," enables Parliament to exercise financial control over expenditure and the government's spending departments. Classification of Costs: There are four broad categories of government expenditures: Functional or budget classification, economic classification, cross classification, and accounting classification are the four types of classification.
Ques:
17
Which committee was constituted to review the existing tax structure in India and recommend changes?
Correct Answer:
(C)
The Chelliah Committee
The Tax Reforms Committee, chaired by Prof. Raja J. Chelliah, was established to examine the existing tax system and suggest reforms, including simplifying tax rates and reducing exemptions.
Ques:
18
Consider the following recommendations regarding Kelkar Committee:
It recommends simplifying tax laws to reduce complexity and improve compliance.
Broaden the tax base by including more individuals and entities within the tax net.
Which of the statements given above is/are correct?
Correct Answer:
(C)
Both 1 and 2
Kelkar Committee (2002) recommendations:
Simplify tax laws to reduce complexity and improve compliance.
Rationalize tax rates by reducing the number of tax slabs.
Broaden the tax base by including more individuals and entities within the tax net.
Phasing out tax exemptions and deductions to eliminate tax avoidance loopholes.
Encourage voluntary compliance through taxpayer education and awareness programs.
Gradual reduction of corporate tax reforms and rates to make Indian industry more competitive globally.
Ques:
19
Consider the following recommendations regarding Parthasarathi Shome Committee:
1. Simplified tax structure with fewer tax slabs and deductions.
2. Recommended aligning GAAR provisions with international best practices to attract foreign investment.
Which of the statements given above is/are correct?
Correct Answer:
(B)
2 only
Parthasarathi Shome Committee (2012):
Suggested safeguards to prevent the misuse of GAAR provisions.
Recommended clear and objective criteria for determining tax avoidance.
Proposed a time limit for invoking GAAR provisions to provide certainty to taxpayers.
Advocated for a panel of experts to review GAAR cases to ensure fairness.
Proposed that GAAR should not be invoked in cases where tax treaties exist.
Recommended aligning GAAR provisions with international best practices to attract foreign investment.
Ques:
20
Consider the following recommendations regarding Direct Tax Code (DTC) Committee:
1. Lowering corporate tax rates to make India more attractive for investments.
2. Encourage voluntary compliance through taxpayer education and awareness programs.
Which of the statements given above is/are correct?
Correct Answer:
(A)
1 only
Direct Tax Code (DTC) Committee (2009):
Simplified tax structure with fewer tax slabs and deductions.
Introduction of a single code governing direct taxes to reduce complexity.
Phasing out various exemptions and deductions to broaden the tax base.
Lowering corporate tax rates to make India more attractive for investments.
Measures to reduce tax evasion and improve tax administration, including enhanced use of technology.
Simplified procedures for filing tax returns and assessments.