GST Development AFCAT Questions

AFCAT Indian Economy

GST Development MCQ Questions


7.
Adam Smith's classical 'Canons of Taxation' include which of the following key principles?
A.
Profit, Loss, Risk, and Reward
B.
Import, Export, Tariff, and Quota
C.
Equity, Certainty, Convenience, and Economy
D.
Speed, Secrecy, Severity, and Surveillance
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ANSWER :
C. Equity, Certainty, Convenience, and Economy
8.
Adam Smith's 'Canon of Equity' specifically holds that taxation should be based mainly on:
A.
A person's ability to pay, so that those with greater financial capacity contribute a fairer share
B.
The geographic distance between the taxpayer's home and the nearest tax office
C.
The taxpayer's preferred political party
D.
The exact number of children a taxpayer has
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ANSWER :
A. A person's ability to pay, so that those with greater financial capacity contribute a fairer share
9.
'Tax buoyancy' is a concept used to measure:
A.
The physical weight of currency notes printed by the central bank
B.
The exchange rate between two countries' currencies
C.
The number of new taxes introduced by a government in a single year
D.
How responsive a country's total tax revenue collection is to changes in its national income or GDP
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ANSWER :
D. How responsive a country's total tax revenue collection is to changes in its national income or GDP
10.
Indirect taxes such as GST are often considered relatively easier to collect and administer compared to direct taxes mainly because:
A.
They are collected at the point of sale or transaction by businesses themselves, reducing the scope for evasion compared to relying on individuals to self-report their income
B.
Indirect taxes can only ever be collected from government employees
C.
Indirect taxes are entirely voluntary, with no legal obligation to pay them
D.
Indirect taxes are collected only once every ten years
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ANSWER :
A. They are collected at the point of sale or transaction by businesses themselves, reducing the scope for evasion compared to relying on individuals to self-report their income
11.
The Goods and Services Tax (GST) is best defined as:
A.
A one-time tax paid only when a business is first registered
B.
A tax levied exclusively on agricultural produce
C.
A direct tax levied only on the income of large corporations
D.
A comprehensive, multi-stage, destination-based indirect tax levied on the supply of goods and services, replacing several earlier separate indirect taxes
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ANSWER :
D. A comprehensive, multi-stage, destination-based indirect tax levied on the supply of goods and services, replacing several earlier separate indirect taxes
12.
GST is described as a 'destination-based' tax, meaning that:
A.
Tax revenue is divided equally among all states regardless of where consumption occurs
B.
Tax is paid only by tourists travelling to a particular destination
C.
Tax revenue accrues to the state or Union Territory where the goods or services are ultimately consumed, rather than to the state where they were produced or manufactured
D.
Tax applies only to goods being exported to a foreign destination
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ANSWER :
C. Tax revenue accrues to the state or Union Territory where the goods or services are ultimately consumed, rather than to the state where they were produced or manufactured