MCQ
upsc-p1-economy-taxation-gst MCQ - Practice Questions with Answers
Solve 10 upsc-p1-economy-taxation-gst questions for RAS/RPSC preparation.
Practice questions
Q1Consider the following two statements: Statement I: A zero-rated supply may retain a refund or input tax credit route under GST law. Statement II: An exempt supply generally blocks or reverses input tax credit. Which one of the following is correct?
Both statements are correct, but they describe distinct credit outcomes and Statement II does not explain why Statement I is true. Zero-rated supplies may preserve credit or refund routes, whereas exempt supplies generally interrupt the credit chain.
Q2With reference to the constitutional framework of GST, consider the following statements: 1. Article 265 requires authority of law for both levy and collection of a tax. 2. Article 246A gives Parliament exclusive power over GST on inter-State supplies. 3. Article 269A provides for inter-State GST to be levied and collected by the Union and apportioned between the Union and the States. 4. Article 366(12A) excludes alcoholic liquor for human consumption from the definition of GST. Select the correct answer using the code given below.
All four statements are correct. Article 265 supplies the legality rule. Article 246A creates concurrent GST law-making power but reserves inter-State supplies to Parliament. Article 269A governs Union levy, collection and apportionment of inter-State GST, while Article 366(12A) excludes alcoholic liquor for human consumption.
Q3With reference to the GST credit chain, consider the following statements: 1. Eligible input tax credit may be set off against output tax liability, subject to statutory conditions. 2. Exempt supplies generally preserve input tax credit in the same manner as zero-rated supplies. 3. An inverted duty structure can cause input tax credit to accumulate. 4. Input tax credit is broad but not absolute because some categories face blocked-credit restrictions. Select the correct answer using the code given below.
Statements 1, 3 and 4 are correct. Credit of eligible input tax can reduce output liability, and higher input rates than output rates can produce accumulated credit. Credit remains subject to blocked categories. Statement 2 is incorrect because exempt supplies generally block or reverse credit, whereas zero-rated supplies may preserve a refund or credit route.
Q4Arrange the following constitutional developments in chronological order, from the earliest to the latest: A. Article 268A was inserted for service tax. B. Article 268A was omitted and the constitutional GST framework was created. C. The GST Compensation to States Act was enacted. D. The Supreme Court delivered its judgment in Mohit Minerals. Select the correct answer using the code given below.
The 88th Amendment inserted Article 268A in 2003. The 101st Amendment omitted it and created the GST framework in 2016. The compensation law followed in 2017, and Mohit Minerals was decided in 2022. Thus option B gives the correct chronology.
Q5Match List I with List II and select the correct answer using the code given below. List I A. Kelkar Task Force B. VKC Footsteps C. Mohit Minerals D. Income-tax Act, 2025 List II 1. GST Council recommendations have persuasive value 2. Tax simplification and a wider base 3. Simplified direct-tax framework effective from 2026-27 4. Statutory formula restricting refund of unutilised input tax credit upheld
The Kelkar Task Force promoted simplification and a wider tax base. VKC Footsteps upheld the statutory refund formula in inverted-duty cases. Mohit Minerals treated GST Council recommendations as persuasive, and the Income-tax Act, 2025 provides the simplified framework effective from 2026-27. Therefore option D is correct.
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6With reference to the GST Council, consider the following statements: 1. Its quorum is one-half of its total membership. 2. The Union's vote has one-third weight, while all States together have two-thirds weight. 3. A decision requires at least three-fourths of the weighted votes of members present and voting. 4. Its recommendations bind Parliament and State Legislatures in the same manner as enacted legislation. Select the correct answer using the code given below.
7Match List I with List II and select the correct answer using the code given below. List I A. Article 270 B. Article 271 C. Union List Entry 83 D. State List Entry 46 List II 1. Taxes on agricultural income 2. Customs duties 3. Distribution of specified Union taxes between the Union and the States 4. Surcharges for Union purposes
8Consider the following two statements: Statement I: Basic customs duty ordinarily remains outside the GST input tax credit chain. Statement II: Integrated GST levied on imports is integrated into the GST credit chain. Which one of the following is correct?
9Arrange the following developments in chronological order, from the earliest to the latest: A. Kelkar Task Force recommended tax simplification and a wider base. B. Azadi Bachao Andolan distinguished lawful treaty-based tax planning from sham transactions. C. Jindal Stainless upheld non-discriminatory entry taxes. D. The Income-tax Act, 2025 provided a simplified direct-tax framework for 2026-27. Select the correct answer using the code given below.
10Consider the following statements about taxation and revenue: 1. In a direct tax, the legal incidence and final economic burden broadly rest on the same person. 2. The burden of an indirect tax can be shifted through prices. 3. Tax buoyancy describes the response of tax revenue to growth in income, output or the tax base. 4. A rise in GST collections necessarily proves an equal rise in real economic growth. Select the correct answer using the code given below.