Global MCQ Practice

Part of: Miscellaneous Indian Gk set 234

If the wholesaler is in Mumbai and the Retailer is in Delhi, the GST paid by retailer will be in the form of

Category: Miscellaneous Indian Gk

Hint: Consider the nature of the transaction between different states.

Correct Answer: B) IGST

Exam Relevance: UPSC, SSC, Banking, Railways

Difficulty: Moderate

Explanations:
  • CGST (Central Goods and Services Tax): This tax is levied on intra-state transactions, where both the supplier and the recipient are within the same state. The revenue from CGST is collected by the central government.
  • SGST (State Goods and Services Tax): This tax is also levied on intra-state transactions, but the revenue is collected by the respective state government. In some cases, such as in union territories, the equivalent tax is called UTGST (Union Territory Goods and Services Tax).
  • IGST (Integrated Goods and Services Tax): This tax is levied on inter-state transactions, where the supplier and the recipient are in different states or union territories. The revenue from IGST is initially collected by the central government and then distributed to the respective state governments based on the destination of the goods or services.
    • Option Analysis:
    • Option A: This option is incorrect because CGST (Central Goods and Services Tax) is applicable only on intra-state transactions, not inter-state transactions. The transaction between Mumbai and Delhi is an inter-state transaction.
    • Option B: This option is correct because IGST (Integrated Goods and Services Tax) is applicable on inter-state transactions. Since the wholesaler is in Mumbai and the retailer is in Delhi, the transaction is inter-state, and IGST will be paid by the retailer.
    • Option C: This option is incorrect because SGST (State Goods and Services Tax) is applicable only on intra-state transactions, not inter-state transactions. The transaction between Mumbai and Delhi is an inter-state transaction.
    • Option D: This option is incorrect because CGST and IGST are not both applicable in inter-state transactions. CGST is applicable only on intra-state transactions, while IGST is applicable on inter-state transactions.

    Mnemonic: IGST: Inter-State GST

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