Skip to content

IIMB GST Assessment 3 Answers 2025

📘 Assessment 3

Due date: 14th September 2025, 23:59 IST
Status: Assignment not submitted

Q1. Which of the following is not a power of the GST Council?

  • Framing model GST laws

  • Recommending GST slabs

  • ✅ Imposing income tax

  • Recommending IGST apportionment

Explanation: The GST Council is empowered only for indirect tax matters (GST-related). Income tax is a direct tax, outside its jurisdiction.

Q2. What is the minimum majority required for a decision in the GST Council?

  • 50% of present members

  • 2/3 of total members

  • ✅ 3/4 of present and voting members

  • Unanimous approval

Explanation: Every decision requires 3/4th majority of members present and voting, with Centre’s vote carrying one-third weightage.

Q3. Which of the following best describes the role of the GST Council in fiscal federalism?

  • Imposing taxes on states

  • Enabling independent fiscal policy

  • ✅ Facilitating a balance between Centre and State interests in taxation

  • Determining direct tax policies

Explanation: The Council ensures collaborative decision-making between Centre and States on GST matters.

Q4. Which Act was amended to introduce the concept of Consolidated Credit Note?

  • Finance Act, 2023

  • ✅ GST Amendment Act, 2018

  • Income Tax Act

  • Companies Act

Explanation: The GST Amendment Act 2018 introduced changes including consolidated credit note provisions.

Q5. In the context of GST amendments, which of the following sequences represents the correct order of events for a law change?

  • Notification → Proposal → Parliament Approval → Implementation

  • ✅ Proposal → Parliament Approval → CBIC Notification → GSTN Implementation

  • GSTN Update → Notification → Proposal → Approval

  • Proposal → GSTN Update → CBIC Circular → Parliament Approval

Explanation: GST law changes follow a structured path: Proposal → Parliament approval → CBIC notification → GSTN (IT system) implementation.

Q6. Which of the following is a valid example of amendment under GST Council recommendation?

  • Introduction of GST Appellate Tribunal

  • GST exemption on gene therapy treatments

  • Biometric authentication for registration

  • ✅ Consolidated credit note provisions

Explanation: Such procedural and compliance-related amendments are based on GST Council’s recommendation.

Q7. Which of the following states is a special category state under GST?

  • Maharashtra

  • Gujarat

  • ✅ Tripura

  • Telangana

Explanation: North-eastern and hilly states like Tripura, Sikkim, Assam etc. are considered special category states.

Q8. A business in Assam provides services worth ₹15 lakhs in a year. Does it require GST registration?

  • ✅ Yes, because Assam is a special category state

  • No, it is below the threshold

  • Only if it sells goods

  • Only if it opts for composition scheme

Explanation: For special category states, the registration threshold is ₹10 lakhs. Since turnover is ₹15 lakhs → GST registration is mandatory.

Q9. What is the maximum turnover limit for opting into the composition scheme in normal states?

  • ₹50 lakhs

  • ₹75 lakhs

  • ₹1 crore

  • ✅ ₹1.5 crore

Explanation: The composition scheme limit is ₹1.5 crore for normal category states.

Q10. A business paid ₹12,000 GST on inputs and collected ₹20,000 on sales. What is the net GST payable, and what concept is being applied?

  • ₹8,000, Composition scheme

  • ₹8,000, Reverse charge

  • ✅ ₹8,000, Input Tax Credit

  • ₹20,000, without any credit

Explanation: GST payable = Output tax – Input tax = ₹20,000 – ₹12,000 = ₹8,000. This reflects the Input Tax Credit mechanism.

Q11. Why is cross-utilization of CGST and SGST not allowed?

  • It complicates compliance

  • It is technically not possible

  • ✅ It ensures separate revenue for Centre and State

  • It is meant only for small businesses

Explanation: Cross-utilization would mix Centre and State revenues, defeating federal revenue sharing.

Q12. What is the threshold turnover for GST registration in Karnataka for goods?

  • ₹10 lakhs

  • ✅ ₹20 lakhs

  • ₹30 lakhs

  • ₹40 lakhs

Explanation: In normal category states like Karnataka, the threshold for goods is ₹20 lakhs.

Q13. Input Tax Credit under SGST in Karnataka can be used to offset:

  • CGST only

  • ✅ SGST only

  • SGST and IGST

  • CGST and IGST

Explanation: SGST credit can be used only against SGST and IGST (not CGST). Correction: Actually, first adjust against SGST, then against IGST.

Q14. If a registered dealer in Karnataka sells goods worth ₹10,000 to a customer in Chennai, which GST applies?

  • CGST and SGST

  • SGST only

  • CGST and IGST

  • ✅ IGST only

Explanation: Sale from Karnataka to Tamil Nadu = Inter-state supply → IGST applies.

Q15. Which of the following statements is true about the role of Karnataka in GST Council?

  • Karnataka does not participate

  • Karnataka has veto power

  • Karnataka has no voting rights

  • ✅ Karnataka actively participates in policy discussions

Explanation: Every state including Karnataka has representation and voting rights in the GST Council.

✅ Summary of Assessment 3

  • GST Council balances Centre–State fiscal interests.

  • Major decisions need 3/4th majority.

  • Special category states (like Tripura, Assam) have lower thresholds.

  • Composition scheme limit = ₹1.5 crore.

  • Input Tax Credit reduces cascading effect.

  • Inter-state = IGST, Intra-state = CGST + SGST.

  • Karnataka, as a normal state, actively contributes to GST policymaking.