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Board Question paper of Indirect Tax Laws for B.COM 6th semester of 2024, SOLVED

Solving B.com 6^th  semester question paper of Indirect Tax Laws As per CBCS Syllabus with Solutions Answers  in below .2024 Pdf of Indirect Tax Laws Download to understand the pattern of questions ask in the board exam.

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2024

COMMERCE

(Honours Core)

 

Paper: COM-HC-6026

(Indirect Tax Laws)

Marks: 80

Time: Three hours

The figures in the margin indicate full marks for the questions.

Answer either in English or in Assamese.

 

1. Answer the following questions as directed:                                                                                       1×10=10

(a) VAT is a type of----- Tax. (Fill up the blank with appropriate word/words)

Answer: Consumption

(b)------ was the first country to introduce Value Added Tax System. (Fill up the blank with appropriate word/words)

Answer: France

(c) Central Excise duty is levied and collected by -------(Fill up the blank with appropriate word/words)

Answer: The Central Government

(d) Excise duty is a form of direct tax. (State whether this statement is "True" or "False")

Answer: False Because Excise duty is a form of indirect tax.

(e) One of the objectives of the Customs Act, 1962 is to protect the domestic industries. (State whether this statement is "True" or "False")

Answer: True

(f) Prohibited goods cannot be exported. (State whether this statement is " True " or " False ")

Answer: True

(g) IGST stands for --------Services Tax. Goods and service Tax (Fill up the blank with appropriate word/words)

Answer: Integrated

(h) India is the first country in the world to introduce dual GST. (State whether this statement is " True " or " False ")

Answer: False. Some countries have dual GST systems, but the way they apply them differs.

(i) At present, there are three tax slabs under GST for goods. (State whether this statement is '"True " or " False ")

Answer: False Because India has multiple GST tax slabs for goods, including 0%, 5%, 12%, 18%, and 28%, and some special rates

(j)GSTIN is a -------number. digit alpha-numeric (Fill up the blank with appropriate word/words)

Answer: 15-digit

 

2. Answer the following questions:                                                                                                               2x5=10

(a) What is VAT?

Answer: VAT is a tax on the value added at each stage of production. Consumers pay it, businesses collect it, deduct previous taxes, and send the rest to the government. This avoids double taxation.

 (b) What is the meaning of 'Factory' under the Central Excise Act, 1944?

Answer: A factory is any place where excisable goods are made. It includes buildings, machinery, and other equipment used in the production process. Goods produced here are subject to excise duty under the law.

(c) What is the meaning of 'Manufacturer' under the Central Excise Act, 1944?

Answer: A manufacturer is a person or business involved in making excisable goods. This includes any process that changes raw materials into a new product, making it liable for excise duty under the Central Excise Act, 1944.

(d) Write any two objectives of implementation of GST in India.

Answer: The two objectives of implementation of GST in India are mention below:

1.       To create a unified national market by removing tax barriers between states, ensuring smooth trade.

2.       To simplify the tax structure, making compliance easier and reducing the tax burden on businesses and consumers.

(e) What is the meaning of 'Refund' under the GST Act?

Answer: A refund under GST refers to returning excess tax paid by a taxpayer. If the tax paid is more than the actual liability, the government refunds the extra amount, ensuring fair taxation and avoiding financial burden.

 

3. Answer any four questions:                                                                                                                        5×4=20

(a) What do you mean by excisable goods?

Answer: Excisable goods are products made within a country that are subject to excise duty. This is a type of tax applied to their production or manufacture. The cost of this tax is usually added to the product's price, meaning the consumer pays it indirectly. The government collects this tax to regulate certain industries and generate revenue. Excisable goods are listed under the Central Excise Act, and common examples include alcohol, tobacco, and petroleum products

(b) Explain the meaning of 'Anti-dumping Duty' as per Customs Law.

Answer: Anti-dumping duty is a tax placed on imported goods when they are sold at a lower price than their actual market value or cost of production. This tax is meant to prevent foreign companies from "dumping" cheap goods into the local market, which could harm domestic industries. By imposing this duty, the government ensures fair competition, protects local businesses, and prevents market imbalance. It helps maintain stable prices and supports the growth of domestic industries.

(c) Describe the various types of tax under Dual GST.

Answer: India follows a Dual GST system, which includes three types of taxes. CGST (Central GST) is collected by the central government on sales within a state. SGST (State GST) is collected by state governments on the same intra-state sales. IGST (Integrated GST) is charged on goods and services moving between states. The central government collects IGST and then shares it with the destination state. This system ensures fair tax distribution and a smooth nationwide tax process

(d) Explain the threshold limits for registration under the GST ACL GST

Answer: Businesses must register for GST if their annual turnover exceeds ₹40 lakhs for goods and ₹20 lakhs for services. However, in special category states, the limits are ₹20 lakhs for goods and ₹10 lakhs for services. Businesses below these limits are not required to register unless they voluntarily opt for it. These limits help small businesses by reducing tax compliance requirements, allowing them to operate more easily without the burden of additional taxation and paperwork.

(e) Briefly explain the persons who are not liable to registration under the GST Act.

Answer: Some persons and businesses do not need to register under GST. These include farmers selling their own produce, businesses dealing only in exempted goods or services, and small businesses with turnover below the GST threshold. Also, some non-resident suppliers without a fixed business location in India have different registration rules. This exemption helps reduce the tax burden on small traders and specific categories of businesses, allowing them to operate smoothly without unnecessary tax compliance

(f) Briefly explain the advantages of GST to the consumers.

Answer: The advantages of GST to the consumers are mention below:

1.  Removes Double Taxation – GST eliminates multiple indirect taxes like VAT and excise, reducing the overall tax burden. This lowers the final price of goods and services, benefiting consumers financially.
2. Simplifies Tax System – GST replaces complex tax structures with a single transparent system. Consumers can easily understand how much tax they are paying, ensuring better clarity and accountability in pricing.
3. Lowers Business Costs – A uniform tax system across India reduces compliance costs for businesses. Lower operational expenses often result in reduced product prices, making goods and services more affordable for consumers.
4. Uniform Pricing – GST helps reduce transport and logistics costs by eliminating state-specific taxes. This ensures consistent pricing of goods and services across different states, preventing regional price variations for consumers.

 

 

4. Answer any four questions:                                                                                                                      10×4=40

(a) Briefly describe the history of indirect taxes in India.

Answer: Indirect taxes in India date back to the British era, when taxes like customs duties and excise were imposed. After independence, the government introduced central excise duty and sales tax, which were levied on the production and sale of goods. However, the taxation system became complex with multiple indirect taxes at both the central and state levels. To simplify this, Value Added Tax (VAT) was introduced in stages, replacing state sales tax. Eventually, GST (Goods and Services Tax) was implemented on July 1, 2017, merging multiple indirect taxes into a single unified tax system. GST aimed to remove tax barriers between states and create a seamless national market.

(b) Explain the basis of valuation of petroleum products for levy of excise duty.

Answer: Excise duty on petroleum products is calculated based on their transaction value, following the ad valorem method, meaning it is levied as a percentage of the product’s value. The transaction value includes the ex-factory price (price at which it leaves the refinery) but excludes transportation costs and taxes. The government may also fix tariff values for specific petroleum products, setting a fixed duty per unit. Several factors influence the valuation, including global crude oil prices, refining costs, transportation expenses, and market demand. In some cases, different excise duty rates apply based on the product type and its end-use, ensuring efficient taxation and revenue collection.

(c) Explain the custom procedure for import of goods in India.

Answer: Importing goods into India involves several customs procedures to ensure compliance with tax and trade regulations. The process starts when the carrier (ship, plane, or truck) files an Import General Manifest (IGM) with customs upon arrival. The importer then submits a Bill of Entry, detailing the goods, their value, and origin. Customs officials assess the goods, determine applicable import duties and taxes, and conduct physical inspections if necessary. Once duties are paid, a "Let Export" order is issued, allowing the goods to be released for domestic use. Special procedures apply to perishable, hazardous, or restricted items, and electronic filing has made the process faster and more efficient.

(d) Briefly explain the history of introduction of Goods and Services Tax in India.

Answer: The idea of Goods and Services Tax (GST) was first discussed in the early 2000s to replace India’s complex indirect tax system. A task force recommended GST in 2004, and discussions continued for over a decade. The government introduced constitutional amendments, and after extensive deliberations, GST was officially implemented on July 1, 2017. It replaced excise duty, service tax, VAT, and other state and central taxes, creating a single, unified tax system. GST aimed to simplify tax compliance, reduce tax cascading, and promote seamless trade across states. Its introduction was a major economic reform, supported by advanced IT infrastructure and online tax filing systems.

(e) Briefly explain the salient features of Goods and Services Tax.

Answer: The salient Features of GST (Goods and Services Tax) are mention below :

1. Multi-Stage Tax – GST is levied at every stage of the supply chain, from production to sale, ensuring tax is collected fairly without increasing the burden on businesses or consumers.
2. Destination-Based Tax – GST is collected in the state where goods or services are consumed, ensuring fair tax distribution and eliminating complexities in interstate trade taxation.
3. Replaces Multiple Taxes – GST combines central and state taxes, replacing excise duty, VAT, and service tax, simplifying the tax structure and reducing compliance burdens for businesses.
4. Three-Tier Structure – GST is divided into CGST (Central GST), SGST (State GST), and IGST (Integrated GST), ensuring proper revenue sharing between central and state governments.
5. Input Tax Credit (ITC) – Businesses can claim credit for taxes paid on inputs, reducing their final tax liability and preventing double taxation at different stages of production and sales.
6. Technology-Driven System – GST registration, returns, and tax payments are entirely online, making compliance easier, reducing paperwork, and enhancing transparency in tax administration.
7. Eliminates Interstate Barriers – GST enables seamless trade across states, removing entry taxes and checkpoints, reducing logistics costs, and creating a unified national market for businesses.
8. Promotes Tax Efficiency – GST simplifies tax collection, improves compliance, and reduces tax evasion, ensuring better revenue generation for the government while keeping costs manageable for businesses and consumers.

 

(f) Explain the procedure for registration under the Goods and Services Tax Act.

Answer: The procedure for registration under the Goods and Services Tax Act

1.       Determine Eligibility – Businesses must check if their annual turnover exceeds ₹40 lakhs for goods and ₹20 lakhs for services (lower for special category states) to determine mandatory registration.

2.       Visit GST Portal – Applicants must go to the official GST portal (www.gst.gov.in) and select the option for new registration, providing basic business details.

3.       Submit Business Details – Enter PAN, Aadhaar, business address, bank account details, email ID, and mobile number for verification and communication purposes.

4.       Upload Required Documents – Submit necessary documents, including proof of business ownership, identity proofs, address proof, and bank statements, in the prescribed format.

5.       Verification via OTP – The system sends a one-time password (OTP) to the registered mobile number and email, which must be entered to verify the application.

6.       Receive Temporary Reference Number (TRN) – After verification, applicants receive a TRN, which allows them to track and complete the GST registration process.

7.       Fill Part B of Application – Using the TRN, applicants log in again and complete Part B of the GST registration form (GST REG-01) with additional business details.

8.       Application Submission – After filling the form and attaching documents, the application is digitally signed and submitted online through the GST portal.

9.       Processing by Authorities – The GST officer reviews the application and documents, and may ask for additional information or clarification within 3 working days if required.

10.   Issuance of GSTIN – Upon approval, the applicant receives a GST Identification Number (GSTIN), enabling them to legally charge GST and file returns under the GST system.

 

(g) Explain any five objectives of introduction of VAT.

Answer:  The five objectives of introduction of VAT are:

1.       Eliminating Tax Cascading – VAT ensures that tax is applied only to the value added at each stage, preventing multiple taxes on the same product.

2.       Improving Transparency – VAT makes the tax system clearer, as businesses and consumers can see the tax paid at each stage.

3.        Increasing Government Revenue – VAT broadens the tax base and reduces tax evasion, leading to higher revenue collection.

4.        Encouraging Fair Pricing – By removing multiple indirect taxes, VAT helps keep prices fair and predictable for consumers.

  5.  Simplifying the Tax System – VAT replaced complex state sales tax structures, making compliance easier for businesses and improving efficiency.

(h) Explain the following terms as per the Customs Act, 1962. 5×2=10

1)      High Seas

Answer: High seas refer to international waters beyond a country’s territorial boundaries. No single country has full jurisdiction over these waters, and all nations have equal rights for navigation, fishing, and trade. However, customs authorities can inspect goods on the high seas to prevent illegal trade and smuggling.

2)      Territorial Waters

Answer: Territorial waters extend 12 nautical miles from a country’s coastline. Within this area, a country has full sovereignty, meaning it can enforce its customs laws, inspect ships, and regulate trade. Any smuggling or unauthorized activities in these waters are subject to legal action by customs and maritime authorities