Q331. Under which Constitutional Amendment Act was the GST Council created?
Indian Economy: RAS Prelims MCQs
848 RAS Prelims practice MCQs on the Indian economy are on this page, in 10 chapters. They cover economic growth and development, the Human Development Index, monetary and fiscal policy and the Union Budget, fiscal federalism, agricultural development, industrial reforms and LPG, the service sector, energy and transport, skill development and employment, and social justice. Each question has an answer and an explanation.
Practice questions based on the RPSC RAS Prelims syllabus. They follow the exam pattern but are not past-paper questions.
Showing 331–340 of 848 questions
Browse Indian Economy chapters
Q332. Consider the following statements about the composition of the GST Council:
I. The Union Finance Minister is the Chairperson.
II. The Union Minister of State in charge of Revenue or Finance is a Member.
III. The Minister in charge of Finance or Taxation of each State government is a Member.
IV. The Chief Economic Advisor serves as a non-voting Member.
V. The Governor of the Reserve Bank of India is a permanent special invitee.
Which of the combinations given above represents correct statements?
I. The Union Finance Minister is the Chairperson.
II. The Union Minister of State in charge of Revenue or Finance is a Member.
III. The Minister in charge of Finance or Taxation of each State government is a Member.
IV. The Chief Economic Advisor serves as a non-voting Member.
V. The Governor of the Reserve Bank of India is a permanent special invitee.
Which of the combinations given above represents correct statements?
Explanation
The GST Council consists of the Union Finance Minister as chairperson, the Union Minister of State for Finance, and the finance ministers from all State governments. This composition ensures that every state has a voice in the national tax policy. While experts may be consulted, the formal decision-making body remains restricted to these political representatives from both the Union and the States.
Q333. Arrange the hierarchy of the GST dispute resolution and appellate mechanism in the correct upward order:
I. GST Appellate Tribunal (GSTAT)
II. Adjudicating Authority
III. High Court
IV. Appellate Authority
Select the correct sequence:
I. GST Appellate Tribunal (GSTAT)
II. Adjudicating Authority
III. High Court
IV. Appellate Authority
Select the correct sequence:
Explanation
The GST dispute resolution process follows a clear hierarchy to ensure justice. It begins with the Adjudicating Authority, followed by an appeal to the Appellate Authority. If the dispute remains unresolved, it moves to the GST Appellate Tribunal. Finally, matters of law can be taken to the High Court and eventually the Supreme Court, providing a structured legal recourse for taxpayers.
Q334. Consider Statement I and Statement II regarding GST implementation in India.
Statement I: India adopted a dual GST model where both the Centre and the States simultaneously levy tax on a common base.
Statement II: The dual model was necessary because the Indian Constitution empowers both the Union and the States to levy and collect taxes concurrently.
Statement I: India adopted a dual GST model where both the Centre and the States simultaneously levy tax on a common base.
Statement II: The dual model was necessary because the Indian Constitution empowers both the Union and the States to levy and collect taxes concurrently.
Explanation
India’s dual GST model reflects the country’s federal structure, where both the Centre and States have the power to tax goods and services. Since both levels of government rely on these revenues, the dual model allows them to levy tax concurrently on a common base. This system maintains fiscal autonomy for the States while achieving the goal of a unified national market.
Q335. Match the GST components in List I with their respective levy or collection authorities in List II:
Choose the correct answer:
| GST Component | Levy/Collection Authority |
|---|---|
| A. CGST | i. Levied by States on intra-state supplies |
| B. SGST | ii. Levied by the Centre on intra-state supplies |
| C. IGST | iii. Levied by Union Territories without a legislature |
| D. UTGST | iv. Levied by the Centre on inter-state supplies |
Explanation
GST components are levied based on the nature of the transaction. CGST and SGST are collected by the Centre and States respectively on intra-state supplies. UTGST applies in Union Territories without a legislature. IGST is levied by the Centre on inter-state trade and imports, then apportioned between the Union and the destination State. This ensures a systematic and transparent tax distribution.
Q336. Consider the following regarding the Integrated Goods and Services Tax (IGST):
I. It is an additional tax levied exclusively to compensate states for revenue loss.
II. It is levied on inter-state trade or commerce and imports.
III. The revenue collected under IGST is apportioned between the Union and the States.
Which of the combinations given above is correct?
I. It is an additional tax levied exclusively to compensate states for revenue loss.
II. It is levied on inter-state trade or commerce and imports.
III. The revenue collected under IGST is apportioned between the Union and the States.
Which of the combinations given above is correct?
Explanation
IGST is levied on inter-state trade and imports to ensure that tax follows the destination of consumption. The revenue collected is shared between the Union and the state where the goods or services are consumed. It is not an additional compensation tax but a mechanism to manage the flow of credit across state borders, simplifying tax compliance for businesses operating nationally.
Q337. Which of the following taxes was subsumed under GST?
Explanation
The introduction of GST led to the subsuming of several indirect taxes. Most notably, the State-level Value Added Tax on the sale of goods was integrated into the new regime. However, certain items like alcoholic liquor for human consumption and petroleum products remain outside GST, allowing states to continue levying excise duties and VAT on these specific categories independently.
Q338. Which of the following statements about the Goods and Services Tax Network (GSTN) is incorrect?
Explanation
The Goods and Services Tax Network is a technological backbone that provides the IT infrastructure for GST registration, filing, and settlement. While it facilitates data sharing and manages the clearing house for IGST, it does not have administrative powers like auditing or tax enforcement. Those functions remain with the respective Central and State tax authorities who use the network’s data.
Q339. Find the odd one out with reference to items currently kept outside the purview of GST:
Explanation
Most fuels, including natural gas, aviation turbine fuel, and high-speed diesel, are currently kept outside the GST purview. This allows the Centre and States to continue levying their own taxes on these products. In contrast, edible oils are fully integrated into the GST regime with a specific tax rate, highlighting their status as essential goods within the unified national tax framework.
Q340. Given below are two statements, one labeled as
Assertion (A) and the other as Reason (R):
Assertion (A): The Goods and Services Tax (Compensation to States) Act provided for compensation to the States for a period of five years from the rollout of GST.
Reason (R): States feared a loss of revenue due to the shift from an origin-based taxation system to a destination-based consumption tax.
Assertion (A) and the other as Reason (R):
Assertion (A): The Goods and Services Tax (Compensation to States) Act provided for compensation to the States for a period of five years from the rollout of GST.
Reason (R): States feared a loss of revenue due to the shift from an origin-based taxation system to a destination-based consumption tax.
Explanation
States were concerned that shifting to a destination-based consumption tax like GST would lead to revenue losses, particularly for manufacturing-heavy regions. To address this, the GST Compensation Act promised to make up for any shortfall for five years. This guarantee was crucial for gaining the political support of the states, ensuring a smooth transition to the new tax system.Answer key for these questions
| Q | Correct answer |
|---|---|
| 331 | (b) 101st Amendment Act |
| 332 | (a) I, II, and III only |
| 333 | (a) II, IV, I, III |
| 334 | (a) Both Statement I and Statement II are correct |
| 335 | (a) A-ii, B-i, C-iv, D-iii |
| 336 | (b) II and III only |
| 337 | (c) Value Added Tax (VAT) on sales of goods |
| 338 | (b) It possesses the authority to audit businesses and enforce tax recovery directly. |
| 339 | (d) Edible Oils |
| 340 | (a) Both A and R are true and R is the correct explanation of A. |
Key facts from Indian Economy
- The RPSC syllabus lists economic concepts and the Indian economy as the first part of the Economy paper, followed by the economy of Rajasthan.
- Concept questions test definitions: nominal and real GDP, GNP and NDP, per capita income and the value-added method.
- Policy questions pair a tool with its effect, for example a rise in CRR reduces the lendable resources of banks.
- Scheme questions ask for the target group, ministry or year of schemes such as PMKVY, NAPS, PM SVANidhi and PM-SYM.
- Questions on Finance Commission and GST link the body to its Article, such as Article 280.
Frequently asked questions
How many RAS Prelims practice MCQs are there on Indian Economy?
This page has 848 practice MCQs on Indian Economy. Each has the correct answer, and most have an explanation.
Which chapters does the Indian economy set cover?
Ten chapters: economic growth, development and sustainable development; measurement of development (HDI); monetary and fiscal policy and the Union Budget; fiscal federalism and the Finance Commission; agricultural development; industrial growth and LPG reforms; the service sector; energy, transport and communication; skill development and employment; and social justice and empowerment.
Is the Indian economy in the RAS Prelims syllabus?
Yes. RPSC lists Economic Concepts and the Indian Economy as the first part of the Economy paper. The second part covers the economy of Rajasthan, which is on its own page.
How should I revise economy for RAS Prelims?
Learn the definitions and the cause-and-effect chains first, then the schemes with their year, ministry and target group. Attempt each chapter, read every explanation and keep a one-line note for each scheme and body.