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English · हिन्दी · తెలుగు · தமிழ் · മലയാളം · मराठी · ಕನ್ನಡ

Quick recap: Taxation and GST on one page

मराठीत स्पष्टीकरण

Taxation and GST · Quick recap · Fact-checked on · how we check

Written with AI from the sources listed at the bottom of this page, then fact-checked by a separate AI.

Both parts of Taxation and GST condensed for quick revision: Article 265 and the types of taxes, taxing powers in the Seventh Schedule, income and corporation tax, cesses and surcharges, the 101st Amendment, CGST, SGST and IGST, the GST Council, GST 2.0 and compensation, with a one-table overview and eight mixed questions.

Each idea is explained first in Marathi (मराठी), ending with the English and Hindi exam terms, followed by the same point in exam English. UPSC Prelims is in English or Hindi, so understand it in Marathi and revise it in English.

सरकारच्या उत्पन्नात कर सर्वात मोठे — केंद्राच्या महसुली जमा मधला मुख्य भाग. पहिला भाग कराची तत्त्वे आणि केंद्राचे कर; दुसरा भाग जीएसटी. इथे दोन्ही एका पानावर. (→ English: revenue receipts · हिन्दी: राजस्व प्राप्तियाँ)

In exam EnglishTaxes are the largest of the Union's revenue receipts. Part 1 of this chapter set out the principles and the main Union taxes; Part 2 explained the Goods and Services Tax. This recap puts both on one page.

कर सक्तीचा, त्या बदल्यात खास काही मिळत नाही; कायद्याशिवाय कर नाही (अनुच्छेद 265). उत्पन्न वाढले की दरही वाढतो तो प्रगतिशील कर; गरिबांवर जास्त भार टाकतो तो प्रतिगामी. भरणाराच सोसतो तो प्रत्यक्ष कर (आयकर), किमतीतून ग्राहकावर ढकलला जातो तो अप्रत्यक्ष कर (जीएसटी). प्रत्यक्ष करांचा वाटा वाढणे हे न्यायाचे लक्षण. (→ English: progressive tax, direct tax, indirect tax · हिन्दी: प्रगतिशील कर, प्रत्यक्ष कर, अप्रत्यक्ष कर)

In exam EnglishA tax is a compulsory payment with no specific return, and Article 265 forbids any tax without the authority of law. A good tax is equitable, certain, convenient and cheap to collect. A progressive tax rate rises with income; a regressive tax weighs more on the poor. A direct tax is borne by the person who pays it, such as income or corporation tax; an indirect tax is passed on to the buyer, such as GST, customs or excise. A rising share of direct taxes is usually read as a sign of a fairer system.

कोणता कर कोणाचा हे सातवी अनुसूची सांगते: केंद्राला बिगरशेती उत्पन्न, कंपनी नफा, आयात; राज्यांना शेती उत्पन्न, जमीन, मद्य, पेट्रोल विक्री. व्यवसाय कर वर्षाला ₹2,500 पेक्षा जास्त नाही. नवा आयकर अधिनियम, 2025 — 1 एप्रिल 2026 पासून एकच 'कर वर्ष'; नव्या पद्धतीत ₹12 लाखांपर्यंत कर नाही. 2019 मध्ये कंपनी कर 22%, नव्या उत्पादक कंपन्यांना 15%. संपत्ती कर, लाभांश वितरण कर, समानीकरण आकारणी बंद झाल्या. (→ English: income tax · हिन्दी: आयकर)

In exam EnglishThe Seventh Schedule decides who taxes what: the Union taxes non-agricultural income, company profits, imports and excise on goods outside GST; the States tax agricultural income, land and buildings, liquor and the sale of petroleum products; residuary taxes belong to Parliament, and Article 276 caps professions tax at ₹2,500 a year. Income tax now runs on the Income-tax Act, 2025, in force from 1 April 2026 with a single tax year; the new regime is the default and, after the Budget 2025-26, leaves income up to ₹12 lakh tax-free for resident individuals. Corporation tax was cut in 2019 to 22 per cent, or 15 per cent for new manufacturing companies, outside MAT. Wealth tax (2015), dividend distribution tax (2020) and the equalisation levies (2024 and 2025) have ended.

अधिभार म्हणजे करावर कर (अनुच्छेद 271); उपकर म्हणजे ठरावीक उद्देशासाठी कर, उदा. 4% आरोग्य व शिक्षण उपकर. दोन्ही केंद्राकडेच, राज्यांशी वाटल्या जाणाऱ्या सामायिक भांड्यात जात नाहीत. उत्प्लावकता दरबदलांसह, लवचिकता त्यांच्याशिवाय मोजते; फक्त कर टाळण्यासाठी केलेल्या व्यवस्था GAAR (2017) अडवतो. (→ English: surcharge, cess · हिन्दी: अधिभार, उपकर)

In exam EnglishA surcharge is a tax on a tax (Article 271) and a cess is a tax for a stated purpose, such as the 4 per cent Health and Education Cess; both stay with the Union, outside the divisible pool of Article 270. Tax buoyancy measures how revenue grows with GDP including policy changes, elasticity excludes them, and GAAR, in force from 1 April 2017, targets arrangements made mainly to avoid tax.

जीएसटीपूर्वी केंद्र-राज्य करांमध्ये क्रेडिट नसल्याने करावर कर. 101 वी घटनादुरुस्ती (8 सप्टेंबर 2016): 246A — दोघेही जीएसटी कायदे करू शकतात, आंतरराज्यसाठी फक्त संसद; 269A — IGST; 279A — परिषद; 366(12A) — मद्य वगळून. 1 जुलै 2017 पासून: राज्याच्या आत CGST+SGST, राज्यांदरम्यान आणि आयातीवर एकात्मिक वस्तू व सेवा कर; इनपुट कर वजावट मुळे फक्त वाढवलेल्या मूल्यावर कर. पाच पेट्रोलियम पदार्थ परिषदेच्या तारखेची वाट पाहत आहेत; वीज बाहेर; तंबाखूवर जीएसटी + उत्पादन शुल्क. (→ English: Integrated Goods and Services Tax, input tax credit · हिन्दी: एकीकृत माल और सेवा कर, इनपुट कर प्रत्यय)

In exam EnglishBefore GST, separate Union and State taxes with no cross-credit caused tax on tax. The 101st Amendment (assent 8 September 2016) inserted Article 246A (both levels make GST laws; Parliament alone for inter-State supply), Article 269A (IGST) and Article 279A (the Council), and defined GST in Article 366(12A) to exclude alcoholic liquor for human consumption. GST began on 1 July 2017 as a dual, destination-based tax: CGST and SGST within a State, Integrated Goods and Services Tax between States and on imports, with input tax credit so that tax falls only on value added. Five petroleum products await a Council date, electricity is outside, and tobacco bears GST plus excise.

जीएसटी परिषद चे अध्यक्ष केंद्रीय अर्थमंत्री; निर्णयासाठी भारित मतांचे तीन-चतुर्थांश, केंद्राला एक-तृतीयांश, राज्यांना दोन-तृतीयांश. मोहित मिनरल्स (2022): शिफारशी मार्गदर्शक, बंधनकारक नाहीत. 22 सप्टेंबर 2025 पासून जीएसटी 2.0 — 5%, 18%, काहींना 40%. राज्यांना पाच वर्षे 14% वाढीची हमी (जून 2022 पर्यंत), जीएसटी भरपाई उपकर मधून; कर्जफेडीसाठी मार्च 2026 पर्यंत मुदतवाढ; तंबाखूवर 1 फेब्रुवारी 2026 ला समाप्ती. देश एक बाजारपेठ झाला, राज्यांचा स्वतःचा अधिकार कमी झाला — म्हणून परिषद सहकारी संघराज्य पद्धती चे केंद्र. (→ English: GST Council, GST compensation cess, federalism · हिन्दी: माल और सेवा कर परिषद, जीएसटी प्रतिकर उपकर, संघवाद)

In exam EnglishThe GST Council, chaired by the Union Finance Minister, decides by three-fourths of weighted votes, the Union holding one-third and the States two-thirds; in Mohit Minerals (2022) its recommendations were held persuasive, not binding. Rates of 5, 12, 18 and 28 per cent gave way under GST 2.0, from 22 September 2025, to 5 and 18 per cent plus 40 per cent for select goods. States were promised 14 per cent annual growth over 2015-16 for five years to June 2022, paid from a GST compensation cess that was extended to March 2026 to repay pandemic loans and ended on tobacco on 1 February 2026. GST built one national market but narrowed the States' own taxing power, which is why the Council is the centre of cooperative federalism in taxation.
Taxation and GST at a glance
LevyDirect or indirectLevied byShared with States?
Income tax (non-agricultural)DirectUnionYes, divisible pool (Art 270)
Corporation taxDirectUnionYes, divisible pool
Customs dutyIndirectUnionYes, divisible pool
Surcharge (Art 271) and cessAdd-ons to taxesUnionNo
CGSTIndirectUnionYes, divisible pool
SGSTIndirectStateKept by the State
IGSTIndirectUnionDivided under Art 269A
Tax on agricultural income; excise on liquorDirect; indirectStateKept by the State

Exam traps

Recap

Practice questions

Q1. Which one of the following is an indirect tax?

  1. Corporation tax
  2. Personal income tax
  3. Customs duty
  4. Securities transaction tax
Show answer

Answer: C. Customs duty

Customs duty is paid by the importer but passed on to buyers in the price, so it is indirect. Corporation tax, personal income tax and securities transaction tax fall on the person who pays them and are direct taxes.

Q2. Consider the following statements:
1. Under Article 276, a State may levy a tax on professions of up to ₹2,500 a year per person.
2. Taxes on agricultural income are levied by Parliament.
Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
Show answer

Answer: A. 1 only

Statement 1 is correct. Statement 2 is wrong: taxes on agricultural income are in the State List, so States levy them. Hence '2 only', 'both' and 'neither' are wrong.

Q3. The Health and Education Cess levied on income tax is:

  1. Shared with the States through the divisible pool
  2. Kept by the Union, outside the divisible pool
  3. Levied by the States and collected by the Union
  4. Part of the Goods and Services Tax
Show answer

Answer: B. Kept by the Union, outside the divisible pool

Article 270 excludes cesses from the divisible pool, so the Union keeps the Health and Education Cess. It is not shared, it is a Union levy rather than a State one, and as a cess on income tax it has nothing to do with GST.

Q4. Consider the following statements about the Income-tax Act, 2025:
1. It came into force on 1 April 2026.
2. It uses a single 'tax year' in place of the 'previous year' and 'assessment year'.
Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
Show answer

Answer: C. Both 1 and 2

Both statements are correct: the Income-tax Act, 2025, passed by Parliament in August 2025, replaced the Income-tax Act, 1961 from 1 April 2026 and introduced a single tax year. The options leaving out either statement, or both, are therefore wrong.

Q5. Under GST, a supply of goods from Maharashtra to Gujarat attracts:

  1. CGST and SGST of Maharashtra
  2. IGST
  3. SGST of Gujarat only
  4. Central sales tax
Show answer

Answer: B. IGST

An inter-State supply attracts IGST, levied and collected by the Union under Article 269A. CGST plus SGST applies only within a State, Gujarat's SGST alone is never charged on such a supply, and central sales tax was subsumed in GST.

Q6. Consider the following statements about the GST Council:
1. It is chaired by the Union Finance Minister.
2. Its recommendations are binding on State legislatures.
3. The States together hold two-thirds of the weighted votes cast.
Which of the statements given above are correct?

  1. 1 and 2 only
  2. 1 and 3 only
  3. 2 and 3 only
  4. 1, 2 and 3
Show answer

Answer: B. 1 and 3 only

Statements 1 and 3 are correct. Statement 2 is wrong: in Mohit Minerals (2022) the recommendations were held persuasive, not binding. Every option including statement 2 is therefore wrong.

Q7. Match List I with List II:
List I (Event) — List II (Date)
A. GST comes into force — 1. 8 September 2016
B. President's assent to the 101st Amendment — 2. 1 July 2017
C. GST 2.0 rates take effect — 3. 30 June 2022
D. Compensation guarantee period ends — 4. 22 September 2025
Select the correct answer using the code given below:

  1. A-2, B-1, C-4, D-3
  2. A-1, B-2, C-4, D-3
  3. A-2, B-1, C-3, D-4
  4. A-2, B-4, C-1, D-3
Show answer

Answer: A. A-2, B-1, C-4, D-3

GST began on 1 July 2017, the President assented to the 101st Amendment on 8 September 2016, GST 2.0 rates applied from 22 September 2025, and the compensation guarantee ended on 30 June 2022. The second code swaps the start of GST and the assent, the third swaps GST 2.0 and the end of compensation, and the fourth misplaces the assent and GST 2.0.

Q8. Which one of the following best describes 'tax buoyancy'?

  1. The response of tax revenue to GDP growth, including the effect of policy changes
  2. The response of tax revenue to GDP growth, excluding the effect of policy changes
  3. The share of direct taxes in gross tax revenue
  4. Revenue given up through tax exemptions
Show answer

Answer: A. The response of tax revenue to GDP growth, including the effect of policy changes

Buoyancy measures how tax revenue responds to GDP growth with policy changes included. The version without policy changes is tax elasticity, the share of direct taxes is a different indicator, and revenue given up through exemptions is tax expenditure.

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