Goods and Services Tax

Q. Assertion (A): The goods and services tax is free from the cascading tax effect.

Reasoning (R): The final price of goods increased unnecessarily after the introduction of the goods and services tax.

Choose the correct option.

1. Both A and R are true, and R is the correct explanation of A.
2. Both A and R are true, but R is not the correct explanation of A.
3. A is true, but R is false.
4. A is false, but R is true.

Q. What is the motto of the goods and services tax?

1. Tax on every good and service
2. More goods, more taxes
3. One Nation, One Government, One Tax
4. One Nation, One Market, One Tax

Q. Taxes as old indirect tax system (all amount in ₹):
Cost price 121
(+) Cost 9
(=) Value of output 130
(+) Taxes @ 10% 13
(=) Selling price 143

Assuming the same cost price, cost, and tax rate, what will the goods and services tax be?

1. ₹13
2. ₹0
3. ₹0.9
4. ₹14.3

Q. The goods and services tax is imposed on at each stage of the supply chain.

1. value of output
2. value addition
3. final price
4. MRP

Q. Suppose a retailer incurs the following expenses on selling a pack of noodles.
Cost price ₹20
(+) Cost and profit ₹10
(=) Value of output ₹30

What will happen if the retailer does not submit the bill after paying the GST?

1. The retailer has to pay a tax on ₹30.
2. The retailer has to pay a tax on ₹10.
3. The GST will be documented.
4. The retailer has to pay a penalty of ₹30.

Q. act(s) as proof for the manufacturer or the retailer for having paid GST.

1. Bills of purchase
2. Verbal consent
3. Goods purchased
4. Services used

Q. Assume that a manufacturer buys raw materials of ₹40 for making a sandwhich. He also adds ₹10 as the cost incurred on hiring waiters. Before selling, he levies 5% GST.
Calculate the final selling price.

1. ₹55
2. ₹52.5
3. ₹50.5
4. ₹42