interview questions

20 GST Related Interview Questions You Must Know About

In this compilation of GST interview questions, we delve into the core aspects of GST, exploring its impact on businesses, its role in sectors like e-commerce, and the intricacies of compliance. These questions aim to assess the depth of knowledge and practical understanding that candidates possess about GST, a tax framework that has redefined the way goods and services are taxed in many countries, fostering transparency, simplicity, and economic growth.

  1. What is GST?
    GST is a comprehensive indirect tax levied on the supply of goods and services in India, replacing multiple taxes to create a unified taxation system.
  2. Explain the Dual GST Model.
    The Dual GST model involves taxation at both the central and state levels. CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) are levied concurrently on intra-state transactions.
  3. What are IGST, CGST, and SGST?
    IGST (Integrated Goods and Services Tax) is levied on inter-state transactions. CGST is the central component, and SGST is the state component of GST applicable within a state.
  4. How does GST differ from the previous tax system?
    GST replaces the complex and cascading tax structure with a unified, transparent, and destination-based tax system, promoting ease of doing business.
  5. What are the different GST slabs in India?
    GST in India has multiple slabs: 5%, 12%, 18%, and 28%. Certain items, such as essential goods and services, may be taxed at 0% or fall under exempt categories.
  6. Explain the concept of ‘Reverse Charge Mechanism’ in GST.
    Reverse Charge Mechanism requires the recipient of goods or services to pay the tax instead of the supplier. This is applicable in specific scenarios outlined under the GST law.
  7. How does GST benefit businesses and consumers?
    GST streamlines taxation, reduces tax cascading, enhances compliance, and promotes a more transparent and efficient tax system, ultimately benefiting both businesses and consumers.
  8. What is Input Tax Credit (ITC)?
    ITC allows businesses to offset the tax they have paid on inputs against the tax liability on the output. It prevents the cascading effect of taxes and promotes the concept of “tax on value addition.”
  9. What is the Composition Scheme under GST?
    The Composition Scheme is designed for small businesses, allowing them to pay a fixed percentage of their turnover as tax and file simplified returns, reducing compliance burdens.
  10. How is GST different for goods and services?
    While the basic principles apply to both goods and services, there are differences in the classification, rates, and treatment of certain transactions under GST for goods and services.
  11. Explain the term ‘GSTN’ and its role in the GST system.
    GSTN (Goods and Services Tax Network) is the IT backbone that facilitates the processing of GST transactions, including registration, filing returns, and payments.
  12. What is the threshold limit for GST registration, and are there any exemptions?
    The threshold limit for GST registration varies for different states and Union Territories. Small businesses with an annual turnover below the threshold may be exempt, but this varies.
  13. How does GST impact the e-commerce sector?
    GST has introduced specific provisions for e-commerce operators and sellers. It mandates registration for e-commerce operators and imposes collection responsibilities on them.
  14. Explain the concept of ‘HSN Code’ in the context of GST.
    HSN (Harmonized System of Nomenclature) code is a globally accepted system for classifying goods. It helps in systematic categorization and uniform coding of products for tax purposes.
  15. What is the role of the GST Council?
    The GST Council is a constitutional body responsible for making recommendations on GST-related issues, including tax rates, exemptions, and other policy matters.
  16. How does GST impact exports and imports?
    GST aims to make exports more competitive by providing refunds on taxes paid on input goods and services. Imports are subject to IGST, with benefits available through Input Tax Credit.
  17. Explain the concept of ‘Time of Supply’ under GST.
    Time of Supply determines when a transaction is considered to have occurred for tax purposes. It is crucial for determining the applicable tax period.
  18. What is the significance of the GST Return Filing process?
    GST Return Filing is essential for businesses to report their sales, purchases, and tax liabilities accurately. It ensures compliance with GST regulations and helps maintain transparency.
  19. How does GST impact small businesses and the informal sector?
    GST brings small businesses into the formal economy, promoting transparency and reducing the impact of the informal sector. The Composition Scheme is designed to ease the compliance burden.
  20. Explain the concept of ‘Place of Supply’ in the GST framework.
    Place of Supply determines whether a transaction is intra-state or inter-state, influencing the applicable GST (CGST/SGST or IGST).

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