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Q51 (CDS-I/2017) Economy › Government Finance & Budget › Goods and Services Tax Answer Verified

Which one of the following statements is correct in relation to the GST Bill passed by the Rajya Sabha in August 2016?

Result
Your answer: —  Â·  Correct: B

Explanation

The Goods and Services Tax (GST) Bill, passed by the Rajya Sabha on August 3, 2016, and enacted as the 101st Constitutional Amendment Act, was designed to create a comprehensive indirect tax regime [4]. Its primary objective was to subsume various indirect taxes, duties, and cesses previously levied by both the Central and State Governments [5]. Central taxes subsumed include Central Excise Duty and Service Tax, while State taxes include VAT, Entry Tax, and Luxury Tax [5]. Regarding exclusions, alcoholic liquor for human consumption is constitutionally kept outside the ambit of GST, with States retaining the power to levy VAT on it [3]. While petroleum products are technically included in the GST framework, the Act specifies that they will only be subjected to GST from a future date notified by the GST Council; until then, existing Central Excise and State VAT continue to apply [3].

Sources

  1. [1] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Box 5.3: GST: One Nation, One Tax, One Market > p. 83
  2. [4] Indian Polity, M. Laxmikanth(7th ed.) > Chapter 47: Goods and Services Tax Council > ESTABLISHMENT > p. 434
  3. [2] Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 25: DISTRIBUTION OF FINANCIAL POWERS > The States, similarly, have their receipts from- > p. 392
  4. [5] https://cag.gov.in/uploads/download_audit_report/2019/Chapter_1_Implementation_of_GST_of_Report_No_11_of_2019_Compliance_Audit_of_Union_Government_Department_of_Revenue_Indirect_Taxes_Goods_and_Services_Tax.pdf
  5. [3] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > OTHER INDIRECT TAXES NOT REPLACED BY GST > p. 96
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