Page 6 - Ch1_Introduction

CCP 01.02.08.00
Write a short note on Goods and Services Tax (GST) Council. [ICAI RTP]
Answer:
Ü Article 279A of the Constitution empowers the President to constitute a joint forum of the Centre and
States called GST Council.

Ü Constitution of Council:-
Ø The Union Finance Minister is the Chairman of this Council,
Ø Ministers in charge of Finance/ Taxation or any other Minister nominated by each of the States & UTs
with Legislatures are members of council.

Ø The Union Minister of State in charge of Revenue or Finance is also a member of council.
Ü Function of Council:- To make recommendations to the Union and the States on important issues like
tax rates, exemptions, threshold limits, dispute resolution, etc. The GST Council has decided the threshold
exemption, composition threshold, GST rates, GST legislations including rules and notifications.

03.Introduction to Goods & Services Tax
CCP 01.03.09.00
Explain the concept & principle of GST? .(Study Mat)

Answer: The Concept & Principles of GST are as under:-
1 Value Added Tax GST is a Broad-based value added tax levied on value added to goods &/or
services at each stage of supply chain.
Destination based tax GST is the revenue of that state which has jurisdiction over the place of
2
on consumption consumption of goods &/or services which is also termed as place of supply.
3 Tax on business activity GST is a tax on the consumption of products/services from business

sources, and not on personal/ hobby activities.
4 Continuous Chain of It is available from producer's/service provider's point up to the retailer's/

tax Credits consumer's level thus taxing only the value added at each stage of supply chain.
5 Burden borne by final Only the final consumer bears the GST charged by the last supplier in supply
consumer chain as at all the previous stages- set off benefits are available to the suppliers.
6 No cascading of taxes As GST is charged only on value added at each stage, there is no cascading
of taxes in this system & it avoids double taxation.

CCP 01.03.10.00
List some of the benefits that GST may accrue to the economy. (Study Mat)

Answer: GST may accrue following benefits to the economy:
a) Creation of unified national market:
GST aims to make India a common market with common tax rates and procedures and remove the
economic barriers, thereby paving the way for an integrated economy at the national level.
b) Boost to 'Make in India' initiative:

GST may give a major boost to the 'Make in India' initiative of the Government of India by making goods
and services produced in India competitive in the national as well as international market. This would
make India a manufacturing hub.

c) Boost to investments, exports and employment:
Ü Under the GST regime, the principle of exporting only the cost of goods or services and not taxes is

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