Question

Q. With regard to the GST system, which of the following statements correctly describes the term “Inverted tax structure”?

• A.
  Rate of tax imposed on imports of raw materials is more than that of the rate of tax imposed on the final goods manufactured with these raw materials.
• B.
  Rate of tax on purchased inputs is more than the rate of tax on outward supplies.
• C.
  Rate of tax on goods is more than the services.
• D.
  Rate of tax on private goods is more than the public goods.

Answer 1

The correct option is B

Rate of tax on purchased inputs is more than the rate of tax on outward supplies.
Explanation:

Inverted tax structure is said to exist in India after the implementation of the GST. It means imposing a higher rate of tax on inputs purchased than the rate of tax on outward supplies.