The correct answer is: A. 1, 2 and 3
The Goods and Services Tax (GST) is a comprehensive indirect tax levied on goods and services supplied in India. It is a destination-based tax, which means that the tax is levied at the place where the goods or services are consumed. GST is a single tax that subsumes a number of indirect taxes levied by the central and state governments, such as excise duty, service tax, value-added tax (VAT), and central sales tax (CST).
The GST rate structure is as
follows:- 5%: Essential items such as food grains, milk, and medicines
- 12%: Intermediate goods and services
- 18%: Most goods and services
- 28%: Luxury goods and services
There is also a cess levied on certain
goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the rate of 28% for payment of compensation to the states.The GST regime was implemented in India on July 1, 2017. It is one of the biggest tax reforms in India and is expected to simplify the tax system and improve compliance.
Here is a brief explanation of each option:
- Option 1: Adoption of four slabs tax rate structure of 5%, 12%, 18% and 28%.
This is correct. The GST rate structure is as follows:
- 5%: Essential items such as food grains, milk, and medicines
- 12%: Intermediate goods and services
- 18%: Most goods and services
28%: Luxury goods and services
Option 2: There would be a category of exempt goods.
This is also correct. There are a number of goods that are exempt from GST, such as food grains, milk, and medicines.
- Option 3: A cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the rate of 28% for payment of compensation to the states.
This is also correct. A cess is levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the rate of 28% for payment of compensation to the states.