Q1. Consider the following statements regarding the GST mechanism in India:
- CGST and SGST/UTGST are generally levied on an intra-State supply, while IGST is generally levied on an inter-State supply.
- GST is designed as a destination-based tax, meaning that the tax revenue is generally associated with the place of consumption rather than the place of production.
- The GST Council itself administers and collects CGST, SGST and IGST from individual taxpayers.
- Input Tax Credit allows a registered taxpayer, subject to prescribed conditions, to set off eligible tax paid on inputs/input services against tax liability on outward supplies.
Which of the statements given above are correct?
(a) Only one
(b) Only two
(c) Only three
(d) All four
Answer: (c)
Explanation:
- Statement 1 is Correct: This is the basic dual-GST structure for intra-State and inter-State supplies.
- Statement 2 is Correct: GST follows the destination principle, with taxation linked to consumption.
- Statement 3 is Incorrect: The GST Council makes recommendations on specified GST matters; it is not the tax-collection authority for individual taxpayers.
- Statement 4 is Correct: ITC prevents cascading by allowing eligible input taxes to be credited against output tax liability, subject to statutory conditions.
