Static Quiz 15 April 2022
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Static Quiz 15 April 2022 for UPSC Prelims
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- Question 1 of 5
1. Question
Which of the following statements about Direct taxes are correct?
1. The incidence and impact of the direct tax fall on the same person.
2. The direct tax is regressive in nature
3. Income Tax, Corporation Tax and Wealth Tax are direct taxes
CorrectAns; – c) Only 1 and 3
Explanation; –
• The 2nd statement is incorrect because Direct taxes are progressive in nature.
About Direct Taxes
• The tax that is levied by the government directly on the individuals or corporations are called Direct Taxes.
• The incidence and impact of the direct tax fall on the same person.
• Income Tax, Corporation Tax and Wealth Tax are direct taxes
• They are progressive in nature.
• Both Social and Economical. Social objective of direct tax is the distribution of income. A person earning more should contribute more in the provision of public service by paying more tax. This provision is also known as progressive taxation.
• Not at all Inflationary the Direct tax.
IncorrectAns; – c) Only 1 and 3
Explanation; –
• The 2nd statement is incorrect because Direct taxes are progressive in nature.
About Direct Taxes
• The tax that is levied by the government directly on the individuals or corporations are called Direct Taxes.
• The incidence and impact of the direct tax fall on the same person.
• Income Tax, Corporation Tax and Wealth Tax are direct taxes
• They are progressive in nature.
• Both Social and Economical. Social objective of direct tax is the distribution of income. A person earning more should contribute more in the provision of public service by paying more tax. This provision is also known as progressive taxation.
• Not at all Inflationary the Direct tax.
- Question 2 of 5
2. Question
Which out of the following is phenomenon that leads to Stagflation?
CorrectAns;- b) It is a situation of persistent rise in inflation along with dip in growth and increase in unemployment
IncorrectAns;- b) It is a situation of persistent rise in inflation along with dip in growth and increase in unemployment
- Question 3 of 5
3. Question
Which of the following statements about Indirect Taxes are correct?
1. The tax that is levied by the government on one entity (Manufacturer of goods), but is passed on to the final consumer by the manufacturer.
2. The incidence and impact of the tax fall on different persons.
3. They are regressive in nature.CorrectAns;- d) All of the above
Explanation;-
• All of the statements are indirect taxes are correct.About Indirect Taxes
• The tax that is levied by the government on one entity (Manufacturer of goods), but is passed on to the final consumer by the manufacturer.
• The incidence and impact of the tax fall on different persons.
• VAT, Service tax, GST, Excise duty, entertainment tax and Customs Duty.
• They are regressive in nature.
• When an indirect tax is levied on a product, both rich and poor must pay at the same rate. A person earning 10 lakh a month pays the same tax on the Wheat purchase as the person earning 3000 Re a month. This principle is called regressive taxation.
• The Indirect tax is inflationaryIncorrectAns;- d) All of the above
Explanation;-
• All of the statements are indirect taxes are correct.About Indirect Taxes
• The tax that is levied by the government on one entity (Manufacturer of goods), but is passed on to the final consumer by the manufacturer.
• The incidence and impact of the tax fall on different persons.
• VAT, Service tax, GST, Excise duty, entertainment tax and Customs Duty.
• They are regressive in nature.
• When an indirect tax is levied on a product, both rich and poor must pay at the same rate. A person earning 10 lakh a month pays the same tax on the Wheat purchase as the person earning 3000 Re a month. This principle is called regressive taxation.
• The Indirect tax is inflationary - Question 4 of 5
4. Question
Which one of the following is not a feature of “Value Added Tax”?
CorrectAns;- d) It is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation
Explanation;-
• The statement d is not a feature of VAT
• The value added tax was introduced as a n indirect tax into the Indian taxation system from April 1 2005.
• The existing general sales tax laws were replaced with the Value Added Tax Act 2005 and associated VAT rules.
• Haryana became the first state in the country that adopted the taxation on April 1 2003.
• As of 2 june 2014 , VAT has been implemented in all the states and Union territories of india.
VAT is for sates and CENVAT is for centre.IncorrectAns;- d) It is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation
Explanation;-
• The statement d is not a feature of VAT
• The value added tax was introduced as a n indirect tax into the Indian taxation system from April 1 2005.
• The existing general sales tax laws were replaced with the Value Added Tax Act 2005 and associated VAT rules.
• Haryana became the first state in the country that adopted the taxation on April 1 2003.
• As of 2 june 2014 , VAT has been implemented in all the states and Union territories of india.
VAT is for sates and CENVAT is for centre. - Question 5 of 5
5. Question
Which of the following statements regarding GST are correct?
1. Goods and Services Tax (GST) is an indirect tax (or consumption tax) used in India on the supply of goods and services.
2. The tax came into effect from 1 July 2016 through the implementation of the One Hundred and First Amendment of the Constitution of India by the Indian government. The GST replaced existing multiple taxes levied by the central and state governments.CorrectAns;- a) Only 1
Explanation;-
• The 2nd statement is incorrect because GST amended in 2017 not 2016.
About GST
• It is a destination-based taxation system.
• It has been established by the 101st Constitutional Amendment Act.
• It is an indirect tax for the whole country on the lines of “One Nation One Tax” to make India a unified market.
• It is a single tax on supply of Goods and Services in its entire product cycle or life cycle i.e. from manufacturer to the consumer.
• It is calculated only in the “Value addition” at any stage of a goods or services.
• The final consumer will pay only his part of the tax and not the entire supply chain which was the case earlier.
• There is a provision of GST Council to decide upon any matter related to GST whose chairman in the finance minister of India.
IncorrectAns;- a) Only 1
Explanation;-
• The 2nd statement is incorrect because GST amended in 2017 not 2016.
About GST
• It is a destination-based taxation system.
• It has been established by the 101st Constitutional Amendment Act.
• It is an indirect tax for the whole country on the lines of “One Nation One Tax” to make India a unified market.
• It is a single tax on supply of Goods and Services in its entire product cycle or life cycle i.e. from manufacturer to the consumer.
• It is calculated only in the “Value addition” at any stage of a goods or services.
• The final consumer will pay only his part of the tax and not the entire supply chain which was the case earlier.
• There is a provision of GST Council to decide upon any matter related to GST whose chairman in the finance minister of India.
