CMA Intermediate Taxation Flashcards

24 sample cards from the Taxation deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. What is the entertainment allowance deduction limit for government employees u/s 16(ii)?

   Least of: (a) Rs. 5,000, (b) 20% of basic salary, (c) actual entertainment allowance received. Available only to government employees.

2. What is GST and what taxes did it subsume in India?

   GST is a destination-based, comprehensive indirect tax on supply of goods and services. It subsumed Central Excise, Service Tax, VAT, CST, Entry Tax, Luxury Tax, Octroi, etc.

3. What are the components of GST in India (dual model)?

   CGST (Central GST) and SGST/UTGST (State/UT GST) on intra-State supplies, and IGST (Integrated GST) on inter-State supplies and imports. CGST+SGST together equal the IGST rate.

4. What is the 'taxable event' under GST?

   'Supply' of goods or services or both, as defined in Section 7 of the CGST Act, is the taxable event under GST.

5. How is the place of supply principle used to determine whether GST is intra-State or inter-State?

   If location of supplier and place of supply are in the same State/UT, it is intra-State (CGST+SGST). If in different States/UTs (or import/export), it is inter-State (IGST).

6. What is Input Tax Credit (ITC) under GST?

   Credit of GST paid on inward supplies of goods/services used in the course or furtherance of business, which can be set off against output GST liability, avoiding cascading of taxes.

7. What is the order of utilisation of IGST input tax credit under GST?

   IGST credit must first be used to pay IGST, then CGST and SGST/UTGST in any order. CGST credit cannot be used for SGST, and SGST credit cannot be used for CGST.

8. What is the Composition Scheme under GST and its threshold?

   A scheme for small taxpayers (aggregate turnover up to Rs. 1.5 crore, Rs. 75 lakh for special category states) to pay tax at a flat low rate without ITC and file quarterly. Cannot make inter-State supplies or collect tax from customers.

9. What is the Reverse Charge Mechanism (RCM) under GST?

   A mechanism where the recipient of goods/services, instead of the supplier, is liable to pay GST to the government (e.g., specified goods/services and supplies from unregistered dealers as notified).

10. What is the threshold limit for compulsory GST registration?

    Aggregate turnover exceeding Rs. 40 lakh for goods (Rs. 20 lakh in special category states) and Rs. 20 lakh for services (Rs. 10 lakh in special category states).

11. What is the GST rate structure (slabs) in India?

    Main slabs are 0% (exempt), 5%, 12%, 18% and 28%. Special rates apply to gold (3%) and rough diamonds (0.25%); a cess applies on luxury/sin goods.

12. What is a 'zero-rated supply' under GST?

    Exports of goods/services and supplies to SEZ units/developers. Tax is charged at 0% but ITC is allowed, and refund can be claimed (unlike exempt supplies where ITC is not allowed).

13. Distinguish 'exempt supply' from 'zero-rated supply' under GST.

    Exempt supply attracts NIL rate and ITC is NOT allowed/must be reversed. Zero-rated supply (exports/SEZ) is taxed at 0% but ITC IS allowed and refundable.

14. What is the GSTIN and its structure?

    GSTIN is a 15-digit PAN-based registration number: first 2 digits = State code, next 10 = PAN, 13th = entity/registration number, 14th = 'Z' by default, 15th = checksum digit.

15. What is Customs Duty and on what is it levied?

    Customs Duty is an indirect tax levied under the Customs Act, 1962, and Customs Tariff Act, 1975, on goods imported into and exported out of India.

16. What is the taxable event for Customs Duty on imports and exports?

    For imports: when goods cross the customs barrier and reach the customs area / on date of bill of entry. For exports: when goods cross the customs barrier of India for export (let export order).

17. What is Basic Customs Duty (BCD)?

    The primary duty levied under the Customs Tariff Act, 1975, on imported goods at rates specified in the First Schedule (Import Tariff), computed on the assessable value.

18. What is the Social Welfare Surcharge (SWS) on customs duty?

    A surcharge levied at 10% on the aggregate of customs duties (mainly BCD) on imported goods, to fund social welfare schemes; replaced the earlier education cesses.

19. What is IGST in the context of import of goods?

    Imported goods attract IGST under the GST regime (in lieu of CVD/SAD), levied on the value = assessable value + BCD + applicable duties; this IGST is available as ITC to the importer.

20. What is 'Assessable Value' for customs duty purposes?

    The value on which customs duty is computed, generally the CIF value (Cost + Insurance + Freight) of the goods determined under the Customs Valuation Rules (transaction value method).

21. What is Anti-Dumping Duty under customs law?

    A duty levied on imported goods that are 'dumped' (sold below normal value) to protect domestic industry from injury; the margin of dumping is the difference between normal value and export price.

22. What is a 'Bill of Entry' in customs procedure?

    A legal document filed by an importer (or agent) with customs for clearance of imported goods, declaring description, quantity and value; required for assessment and payment of import duty.

23. What is a 'Shipping Bill' in customs procedure?

    The document filed by an exporter for clearance of goods for export; on the basis of which the 'let export order' is granted and export duty (if any) is assessed.

24. What is Safeguard Duty under customs law?

    A temporary duty imposed on a sudden surge of imports of a particular article that causes or threatens serious injury to domestic producers, to give the domestic industry time to adjust.

What this deck covers

Taxation flashcards FAQ