Answer any TEN questions:
1. Define Tax:
Tax is a compulsory financial charge or levy imposed by a government on
individuals or entities to fund public expenditures and services.
2. What is Direct Tax?
Direct tax is a tax imposed directly on an individual or organization’s income
or wealth, such as income tax or corporate tax.
3. What is Progressive Taxation?
Progressive taxation is a tax system where the tax rate increases as the
taxable amount (income) increases, ensuring higher-income earners pay
more.
4. What is Proportional Taxation?
Proportional taxation is a system where the tax rate remains constant
regardless of income levels. For example, a flat tax rate of 20%.
5. Define the meaning of Central Excise Duty:
Central excise duty is a tax levied on the manufacture or production of goods
within the country, payable by the manufacturer.
6. Give examples of Indirect Taxes:
Examples include Goods and Services Tax (GST), customs duty, excise duty,
and value-added tax (VAT).
7. What is PLA?
PLA (Personal Ledger Account) is an account maintained by manufacturers to
deposit excise duty before clearing goods from the factory.
8. What is CENVAT?
CENVAT (Central Value Added Tax) is a system that allows manufacturers or
service providers to claim credit for taxes paid on inputs or services used in
production.
9. What do you understand by ‘Tariff Value’?
Tariff value refers to the fixed value determined by the government for the
purpose of calculating taxes, irrespective of the actual transaction value.
10. What do you mean by Multiple Tax System?
A multiple tax system refers to a structure where different types of taxes are
imposed at various levels, such as federal, state, and local taxes.
11. Who is a Manufacturer?
A manufacturer is a person or entity engaged in the production or fabrication
of goods using raw materials and resources.
12. What is Estate Duty?
Estate duty is a tax levied on the total value of a deceased person’s estate
before it is distributed to heirs.
Answer any FIVE questions:
13. What are the features of tax?
It is compulsory and legally enforced.
Imposed by the government.
Used for public welfare and state functions.
Does not guarantee direct benefits to the taxpayer.
Levied on individuals, businesses, or transactions.
14. Discuss the exemption from Customs Duty:
Exemptions from customs duty include:
Goods imported for charitable purposes.
Goods covered under free trade agreements.
Personal effects and gifts within prescribed limits.
Relief materials during natural disasters.
15. Briefly explain the basic conditions for levy of Excise Duty:
Goods must be manufactured or produced.
The goods must be movable and marketable.
Duty applies at the time of removal of goods from the factory.
16. Merits and Demerits of Taxes: Distinguish
Merits:
Generates revenue for public services.
Promotes economic equality through redistribution.
Demerits:
High taxes may discourage investment and productivity.
Complex tax systems can lead to evasion.
17. Briefly explain about Deemed Manufacture:
Deemed manufacture refers to processes that are considered manufacturing
under excise law, even if they do not involve actual production, such as
labeling or repacking.
18. Explain the Taxation System in India:
India’s taxation system includes:
Direct Taxes: Income tax, wealth tax.
Indirect Taxes: GST, customs, and excise duty.
Centralized and decentralized collection at federal and state levels.
19. Discuss the Exemption from Excise Duty:
Exemptions include:
Small-scale industries within prescribed turnover limits.
Goods used for exports.
Goods produced for defense or charitable purposes.
Answer any THREE questions:
20. What are the canons of taxation? Explain.
The canons of taxation are principles for a sound tax system:
Canon of Equity: Taxes should be fair and based on ability to pay.
Canon of Certainty: Tax liabilities should be clear and certain.
Canon of Convenience: Tax collection should be convenient for taxpayers.
Canon of Economy: Tax collection costs should be minimal.
21. Explain the various classifications of Excise Duty:
Excise duty can be classified as:
Basic Excise Duty: Levied on all goods manufactured in India.
Special Excise Duty: Additional duty on specific goods.
Education Cess: Levied on excise duty for education funding.
State Excise Duty: Levied on alcohol and narcotics by state governments.
22. Explain the procedure of getting registration under the Central
Excise Duty Act 1944:
Submit an application online through the ACES portal.
Provide required documents (e.g., PAN, proof of business).
Verification by the department.
Issuance of registration certificate.
23. Explain Direct Taxes and Indirect Taxes:
Direct Taxes: Levied directly on income or wealth, e.g., income tax, corporate
tax.
Indirect Taxes: Levied on goods and services, e.g., GST, customs duty.
24. Explain the valuation rules to determine assessable value:
Assessable value is calculated based on:
Transaction Value: Price at which goods are sold.
Cost of Goods: Including raw materials, labor, and overheads.
Additional Charges: Freight, insurance, and other costs related to delivery.
