Laxmikanth MCQs: Goods and Services Tax Council | Indian Polity for UPSC CSE PDF Download

Ans: (b)

• Statement 1: True. The GST Council was established under Article 279-A, introduced through the 101st Constitutional Amendment Act, 2016, to provide a structured framework for the implementation and governance of GST in India.
• Statement 2: False. The GST Council's main office is located in New Delhi, not Mumbai. The New Delhi office is the nerve center for coordinating and managing GST-related discussions and decisions.
• Statement 3: True. The Union Revenue Secretary acts as the Secretary to the GST Council and plays a pivotal role in managing its meetings and communications.

The combination of Statements 1 and 3 being correct leads to the correct answer.

Ans: (a)

• Statement 1: True. The GST Council has the authority to recommend dates for applying GST on items currently excluded, such as petroleum products, alcohol, and electricity. This is part of its role in expanding the GST coverage.
• Statement 2: False. Foreign trade policies fall under the jurisdiction of the Ministry of Commerce and Industry, not the GST Council. The Council’s scope is limited to GST-related issues.

Thus, only Statement 1 is correct.

Ans: (d)

• Statement 1: False. Decisions in the GST Council require a three-fourths majority. This is designed to ensure that significant decisions have broad consensus among the members, reflecting cooperative federalism.
• Statement 2: False. The central government’s vote in the GST Council carries a weightage of one-third, while the state governments collectively have a weightage of two-thirds. This structure ensures a balance of power between the center and the states.

Since neither statement is correct, the answer is (d).

Ans: (b)

• Assertion (A): True. The GST Council, established under Article 279-A, is a constitutional body tasked with decision-making powers on GST-related matters, including tax rates, exemptions, and the list of taxable goods and services.
• Reason (R): True. The GST Council's structure promotes cooperative federalism, enabling the center and states to work together for a harmonized tax regime. However, cooperative federalism is not the direct reason for its constitutional status.

Both are true, but R does not directly explain A.

Ans: (a)

The GST Council's primary functions occur in the following order:

1. Deciding on goods and services included in GST (C): The Council first identifies the scope of GST by determining which goods and services are taxable.
2. Setting GST rates (A): Once the scope is defined, it sets the applicable tax rates.
3. Recommending compensation to states (B): The Council addresses revenue losses for states due to GST implementation by recommending compensation mechanisms.
4. Recommending application dates for GST on certain items (D): It finalizes the timeline for including items like petroleum in GST.

Thus, the correct order is C, A, B, D.

Ans: (a)

• Statement 1: True. The GST Council formulates Model GST Laws, which provide a framework for GST implementation across India.
• Statement 2: True. The Council determines the threshold turnover limit for GST exemption, which protects small businesses from compliance burdens.
• Statement 3: False. The Council has the authority to recommend special GST rates during natural calamities to address specific economic challenges.

Hence, Statements 1 and 2 are correct.

• Statement 1: True. The GST Council comprises the Union Finance Minister (Chairperson), the Union Minister of State for Revenue or Finance, and state-level representatives.
• Statement 2: False. Each state nominates its Finance or Taxation Minister, not the Chief Minister, to the GST Council.

Thus, only Statement 1 is correct.

Ans: (a)

• Assertion (A): True. The GST Council can make special provisions for states under its authority, especially for states like the northeastern states, hill states, and Union Territories, recognizing their unique challenges.
• Reason (R): True. These challenges include geographical isolation, infrastructure deficits, and economic issues, which require tailored solutions.

Since the reason justifies the assertion, the answer is (a).

Ans: (c)

• The GST Council performs key functions like deciding the list of goods and services under GST, determining tax rates, and setting rules for the place of supply.
• However, setting the national minimum wage is beyond its purview, as this falls under the domain of labor policies managed by the Ministry of Labor and Employment.

Hence, the answer is (c).

Ans: (b)

• Statement 1: False. A vacancy or issue in the Council’s membership does not invalidate its proceedings, as the Constitution ensures the continuity of its functioning.
• Statement 2: True. The GST Council recommends compensation to states for revenue loss due to GST, which is funded by the GST Compensation Cess.

Thus, only Statement 2 is correct.

Ans: (a)

• Statement 1: True. The GST Council was established through the 101st Constitutional Amendment Act, 2016, which introduced Article 279-A.
• Statement 2: False. The Council operates under the framework of cooperative federalism, involving the central and state governments in decision-making.

Thus, the correct answer is (a).

Ans: (c)

The GST Council includes:

1. Union Finance Minister (Chairperson).
2. Union Minister of State for Revenue or Finance.
3. State Ministers in charge of Finance or Taxation, representing their respective states.

Hence, the correct answer is (c).

Ans: (b)

The GST Council aims to establish a harmonized tax structure across India by promoting cooperative federalism, where the central and state governments collaborate to streamline tax administration.

Thus, the correct answer is (b).

Ans: (b)

• The central government has a voting weight of one-third (33%).
• The state governments collectively share a voting weight of two-thirds (67%).
  This ensures a balance of power while maintaining cooperative federalism.

Thus, the correct answer is (b).

Ans: (a)

• Assertion (A): True. The GST Council sets the threshold turnover limit to determine which businesses are exempt from GST.
• Reason (R): True. This protects small businesses from the burden of GST compliance by excluding those below the threshold limit.

Since R explains A, the correct answer is (a).

Ans: (c)

The GST Council is responsible for formulating Model GST Laws to provide a consistent framework for GST implementation across India. Functions like appointing judges or setting foreign policies are beyond its purview.

Thus, the correct answer is (c).

Ans: (b)

• Statement 1: False. Decisions in the GST Council require a three-fourths majority, not unanimity.
• Statement 2: True. The Council can decide on special GST rates for addressing economic challenges during natural calamities.

Thus, the correct answer is (b).

Ans: (c)

The Vice-Chairperson of the GST Council is elected from among the State Finance Ministers, reflecting the federal structure of the Council.

Thus, the correct answer is (c).

Ans: (d)

Disagreements among members on GST rates are a natural part of the Council's functioning and do not invalidate its proceedings. However, vacancies, procedural mistakes, or appointment issues do not invalidate the proceedings either, as per constitutional provisions.

Thus, the correct answer is (d).

Ans: (d)

The quorum for GST Council meetings requires the presence of at least half of the total members, ensuring adequate representation for decision-making.

Thus, the correct answer is (d).