GATE CSE 2020 | Question: GA-6

Question

Goods and Services Tax (GST) is an indirect tax introduced in India in $2017$ that is imposed on the supply of goods and services, and it subsumes all indirect taxes except few. It is a destination-based tax imposed on goods and services used, and it is not imposed at the point of origin from where goods come. GST also has a few components specific to state governments, central government  and Union Territories (UTs).

Which one of the following statements can be inferred from the given passage?

• A. GST is imposed on the production of goods and services.
• B. GST includes all indirect taxes.
• C. GST does not have a component specific to UT.
• D. GST is imposed at the point of usage of goods and services.

Answer 1

Let us look at some important points given in the paragraph

1. GST is imposed on supply of goods and services
2. It subsumes all indirect taxes except few
3. It is a destination based tax implied on goods used
4. It is not imposed at point of origin from where good comes
5. GST also has few components specific to state government , central government and union territories

Now we can eliminate the options based on above points

A. GST is imposed on production of goods and services

    It is FALSE due to point $1$. To make it correct, in place of production it should be supply

B. GST includes all indirect taxes.

    It is FALSE due to point $2$ due to except few words

C. GST does not have component specific to UT

     It is FALSE due to point $5$ since it has few components specific to UT.

D. GST is imposed at point of usage of goods and services.

     It is TRUE due to point $3$. we can relate point of usage to goods used at destination

Hence Option $D$ is the correct option.

Comments

Yes it is not imposed at point of origin so option D

Answer 2

Option D

A. It imposed on usage(supply) of goods and services not on production so option A wrong

GST include all indirect taxes except few So option B wrong

It has few components specific central,state and UT government so option c eliminated

Word usage make option D correct.