Tax buoyancy is the dynamics between tax revenue generation and economic growth.
It gives insights into the effectiveness of a tax system in responding to economic changes, assisting policymakers in financial planning and policy formulation.
Which of the statements given above is/are correct?
Correct Answer:
(C)
Both 1 and 2
Tax buoyancy is a vital idea for experiencing the dynamics between tax revenue generation and economic growth.
It gives insights into the effectiveness of a tax system in responding to economic changes, assisting policymakers in financial planning and policy formulation.
A well-designed tax system ought to have a purpose for high buoyancy, ensuring stable and sustainable revenue technology aligned with economic growth even as maintaining fairness and efficiency.
Ques:
52
What kind of tax is G.S.T.?
Correct Answer:
(B)
Indirect Tax
GST is known as the Goods and Services Tax. It is a single, comprehensive, indirect tax which has subsumed almost all the indirect taxes (like Service Tax, Central Excise, State VATs etc.) except a few taxes. It is a multi-stage, destination-based tax that is levied on every value addition. The GST Act was passed in the Parliament on 29th March, 2017 and came into effect on 1st July, 2017. GST is levied on the supply of goods and services.
Note: Officially known as The Constitution (One Hundred and First Amendment) Act, 2016, this amendment introduced a National Goods and Services Tax (G.S.T.) in India from 1 July, 2017. It was introduced as the One Hundred and Twenty Second Amendment Bill of the Constitution of India.
Ques:
53
Consider the following statements :
GST Council is chaired by the Union Finance Minister and the Minister of State-in-charge of Revenue or Finance at the centre is a member.
The GST Council will decide the tax rate, exempted goods and the threshold under the new taxation regime.
State Governments will have the option to levy VAT, if they so decide.
Of these –
Correct Answer:
(D)
Only 1 and 2 are correct
Goods & Services Tax Council is a constitutional body (under Article 279A) for making recommendations to the Union and State Government on issues related to Goods and Service Tax. The GST Council is chaired by the Union Finance Minister and other members are the Union Minister of State-in-charge of Revenue or Finance and Minister-in- charge of Finance or Taxation of all the States. The GST Council will decide about the tax rate, exempted goods and will also determine the threshold under the new tax regime. The GST Council shall recommend the date on which the goods and service tax be levied on petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel. After the imposition of GST, State Government do not have the option to levy VAT.
Ques:
54
What has been kept under the purview of Goods and Services Tax (GST)?
Correct Answer:
(D)
Ghee
At present, Alcohol for human consumption, Electricity and Petroleum products are kept outside the purview of Goods and Services Tax (GST) in India, while Ghee has been kept under the purview of GST.
Ques:
55
Consider the following items :
Cereal grains hulled
Chicken eggs cooked
Fish processed and canned
Newspapers containing advertising material
Which of the above items is/are exempted under GST (Goods and Services Tax)?
Correct Answer:
(C)
1, 2 and 4 only
Presently, among the given options - hulled cereal grains, cooked chicken egg (in shell) and newspapers (with or without advertising material) are exempted (0% rate) under Goods and Services Tax (GST). Processed and canned fish and chicken eggs (not in shell) are taxable at 5% rate under GST.
Ques:
56
The term 'Revenue Neutral Rate' is related to :
Correct Answer:
(A)
Goods and Service Tax (GST)
Revenue Neutral Rate (RNR) is a structure of different rates established in order to match the previous revenue generation with revenue under Goods and Services Tax (GST). RNR calculations include the cascading effect on certain goods having no excise or sales tax implications. It is actually the rate of tax that allows the Government to receive the matching amount of money despite changes in the tax laws.
Ques:
57
Consider the following statements regarding the transfer pricing regulations:
Transfer Pricing (TP) is an accounting practice that enables subsidiaries of the same company to transact with each other.
Transfer pricing in India is governed under the companies act, 2013.
Which of the statements given above is/are correct?
Correct Answer:
(A)
1 only
Transfer pricing (TP) refers to the pricing of goods, services, or intangible assets exchanged between related businesses, subsidiaries, or divisions of the same multinational company. It is an accounting and taxation method applied to both domestic and cross-border transactions.
Transfer Pricing in India is dealt in Section 92 to 92F of Income Tax Act, 1961. As per Section 92 of the Act, any income arising from an international transaction or specified domestic transaction shall be computed having regard to the arm's length price.
Ques:
58
Consider the following statements regarding Authority for Advance Rulings (AAR):
AAR is a judicial tribunal.
It is for both direct and indirect taxes.
Which of the statements given above is/are correct?
Correct Answer:
(B)
2 only
Authority for Advance Rulings (AAR) is distinct quasi-judicial tribunal which delivers advance rulings in India regarding tax applicable.
It started initially for foreign investments later on both residents and non-residents could seek advance ruling where substantial tax impact involved.
It is for both direct and indirect taxes. Central Board of Direct Taxes (CBDT), the apex organisation of the direct tax administration, issues circulars for advance ruling on direct taxes.
Ques:
59
Consider the following statements regarding the Advance Pricing Agreement (APA):
It is an agreement between a taxpayer and tax authority.
APA helps determine arm's length price (ALP) of international transactions.
Which of the statements given above is/are correct?
Correct Answer:
(C)
Both 1 and 2
Advance Pricing Agreements (APAs) is an agreement between a taxpayer and tax authority.
APAs endeavors to provide certainty to taxpayers in domain of transfer pricing by specifying methods of pricing.
APA helps determine arm's length price (ALP) of international transactions in advance for a maximum of five future years.
Further, taxpayer has option to roll back APA for four preceding years, as a result of which, tax certainty is provided for nine years.
Ques:
60
Which of the following international transactions can be done by transfer pricing rules?
Correct Answer:
(D)
All of the above
International Transactions Done by Transfer Pricing Rules
Fees for technical services
Management fees
Fees for royalty
Corporate guarantee fees
Loan paid or received
Finished goods sales
Purchase of raw materials
Purchasing of fixed assets
Sale or purchase of machinery, intangibles, etc
Reimbursement of paid or received expenses
Services such as IT, support services, etc
Software development services