Winmeen Online Course - Subscribe Here

Tnpsc Test Series - Group 1, 2, 4 & VAO Exams
Book Back QuestionsTnpsc

Tax and Its Importance Book Back Questions 7th Social Science Lesson 27

7th Social Science Lesson 27

27] Tax and Its Importance

Book Back Questions with Answer and Do You Know Box Content

Do You Know?

Central Board of Revenue bifurcated and a separate Board for Direct Taxes known as Central Board of Direct Taxes (CBDT) constituted under the Central Board of Revenue Act, 1963.

Introduction to GST: Previous Indirect Tax Structure and its difficulties: The history of India taxation goes back to ancient period. According to Arthashastra, the book written by Kautilya, in ancient time taxes were levied and collected in both cash and kind. The modern history of Indirect taxes starts from the early 20th century when Central Excise Duty was imposed on Salt, Sugar, Motor Spirit, etc. Gradually the base of Excise duties was widened. At the time of independence, the system of Central Excise Duty at the national level and the Sales Tax at the State level was prevailing. After prolonged efforts and amendments, VAT was introduced first in Indian State of Haryana in 2003and thereafter in 24 States/UTs including Punjab, Chandigarh, HP, J&K and Delhi in 2005. If the VAT was a major improvement over the pre-existing Sales Tax regime, then the Goods and Services Tax (GST) is indeed a remarkable improvement and the next logical step towards realising perfection in taxation system in the country. Initially, it was proposed that there would be a single and national level GST. However, the GST tax regime has been finally implemented from 1st July, 2017 across India. With thus there is a economic union of the country with ONE TAX, ONE MARKET AND ONE NATION.

Goods and Services Tax (GST) is a tax on all the goods and services that we buy. It has two parts, the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) . It is a transparent tax. If you get a bill for the products you buy, you will find the following information:

Value of the Product = Rs. 100 SGST 9% = Rs. 9 CGST 9% = Rs. 9 Total = Rs. 118

In the bill, the GST is 18%, and it is divided equally as 9% for the Central and State Governments. Therefore, Rs 9 will go to Tamil Nadu Government. If a seller in Tamil Nadu sells a commodity to a buyer in other state (for example Karnataka) , it is called inter-state trade. In the case of inter-state trade, the bill will be as given below:

Value of the Product = Rs. 100 IGST 18% = Rs. 18 Total = Rs. 118

Rs 18 will go to Central government. Central government will take Rs 9 and send another Rs 9 to Karnataka government. The tax is divided into five slabs – 0 per cent, 5 per cent, 12 per cent, 18 per cent, and 28 per cent. Although GST is collected by the central government, taxes on petroleum products, alcoholic drinks, electricity are separately collected by the state government and almost all the necessities of life like vegetables and food grains are exempted from this tax.

Toll Tax & Road Tax: Toll tax is a tax you often pay to use any form of infrastructure developed by the government, example roads and bridges. The tax amount levied is rather negligible which is used for maintenance and basic upkeep of a particular project.

Swachh Bharat Cess: This is a cess imposed by the government of India and was started from 15 November 2015. This tax is applicable on all taxable services and the cess currently stands at 0.5%. Swachh Bharat cess is levied over and above the 14% service tax that is prevalent in the present times.

Choose the best answers:

1. Taxes are _____________ payment.

(a) Voluntary

(b) Compulsory

(c) a & b

(d) None of the above

2. Minimum possible amount should be spent in the collection of taxes is

(a) Canon of equality

(b) Canon of certainty

(c) Canon of economy

(d) Canon of convenience

3. This taxation is a very opposite of progressive taxation.

(a) Degressive

(b) Proportional

(c) Regressive

(d) None

4. Income tax is a

(a) Direct tax

(b) Indirect tax

(c) a & b

(d) Degressive tax

5. Which tax is raised on provision of service?

(a) Wealth

(b) Corporate

(c) Wealth

(d) Service

Fill in the blanks:

1. _______________ is a term for when a taxing authority usually a government levies or imposes a tax.

2. _______________ is the method, where the rate of tax is same regardless size of the income.

3. ___________ is paid to the Government by the recipient of gift depending on value of gift.

4. ____________ tax burden cannot be sifted by tax payers.

5. Indirect tax is _____________ elastic.

Match the following:

1. Principle of taxation – Direct tax

2. Estate tax – Goods and Service tax

3. Excise tax – Adam Smith

4. 01.07.2017 – Less elastic

5. Direct tax – Indirect tax

Odd one out:

1. Which one of the following is not an indirect tax?

(a) Service tax

(b) Value Added tax (VAT)

(c) Estate duty

(d) Excise duty

Correct one out:

1. Which one of the following tax is a direct tax?

(a) Service tax

(b) Wealth tax

(c) Sales tax

(d) Progressive tax

Answers:

Choose the best answers:

1. Compulsory 2. Canon of equality 3. Regressive 4. Direct tax 5. Service

Fill in the blanks:

1. Taxation 2. Proportional taxation 3. Gift tax 4. Indirect 5. More

Match the following:

1. Adam Smith 2. Direct Tax 3. Indirect tax 4. Goods and Service tax 5. Less elastic

Odd one out: Estate Duty

Correct one out: Progressive tax

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
error: Content is protected !!