DK Goel Solutions Class 11 Accountancy Chapter 10 Accounting for Goods and Service Tax

Short Answer Question

Question 1. 

Solution  1: Goods and services tax (GST) is a tax imposed indirectly on the goods and services supply.

Question 2. 

Solution  2: The two central taxes that have merged into GST are:-

(i) Custom duty

(ii) Excise duty

Question 3. 

Solution  3: The two central taxes that have merged into GST are:-

(i) VAT

(ii) Purchase Tax

Question 4. 

Solution  4: The two advantages of GST are :-

(i) GST reduce the sales without receipts and corruption.

(ii) GST reduce multiple tax evasion.

Question 5. 

Solution  5: CGST refers to Central Goods and Services Tax.

Question 6. 

Solution  6: SGST refers to State Goods and Services Tax.

Question 7. 

Solution  7: IGST refers to Integrated Goods and Services Tax.

Question 8. 

Solution  8: CGST refers to Integrated Goods and Service Tax. It is levied on intra-state or within state sales. The CGST is supervised by the central government and administered by the CGST Act. Example: A dealer of Rajasthan sells goods to a dealer of Rajasthan worth Rs. 50,000. Suppose the CGST and SGST rate is 12%. In the case the seller will charge 6% of CGST and 6% of SGST Rs. 3,000 as CGST and Rs. 3,000 as SGST.

Question 9. 

Solution  9: IGST refers to Integrated Goods and Service Tax. It is levied on inter-state sales. The IGST is supervised by the IGST act. For Example: A dealer of Rajasthan sells goods to a dealer in Uttar Pradesh worth Rs. 50,000. Suppose the IGST rate is 12%. In the case the seller will charge Rs. 6,000 as IGST.

Practical Question

Question 1. 

Solution 1: 

Point of Knowledge:-

The cost of goods will decrease since tax on tax is eliminated in GST regime. In the pre-GST regime, there were many indirect taxes levied by both centre and state. For example, Centre charged excise duty on goods manufactured and State charged VAT on the same goods. This lead to a tax on tax also known as cascading effect of taxes. GST avoid this cascading effect of taxes. GST avoids this casing effect as the tax is calculated only on the value added at each stage of transfer of ownership.

Question 2.

Solution 2 : 

Point of Knowledge:-

GST Rate Structure:- Goods and Service are divided into five slabs for collection of GST:

Essential items including food 0%

Common Use Items 5%

Standard Rate 12%

Maximum Goods and all services Standard Rate 18%

Luxury items and tobacoo 28%

Question 3.

Solution 3:

Point of Knowledge:-

CGST refers to Integrated Goods and Service Tax. It is levied on intra-state or within state sales. The CGST is supervised by the central government and administered by the CGST Act. Example: A dealer of Rajasthan sells goods to a dealer of Rajasthan worth Rs. 50,000. Suppose the CGST and SGST rate is 12%. In the case the seller will charge 6% of CGST and 6% of SGST Rs. 3,000 as CGST and Rs. 3,000 as SGST.

Question 4. .