SSC Economics Sample Paper NCERT Sample Paper-1

  • question_answer
    Consider the following statements:
    1. Service tax was introduced in 1994-95 on three services
    2. At present rate of service tax is 10 percent.

    A)  Only 1 

    B)  Only 2

    C)  Both 1 and 2    

    D)  neither 1 nor 2

    Correct Answer: C

    Solution :

    [c] In Budget 1994-95, Dr. Manmohan Singh introduced Service Tax at the rate of 5 percent as the sector was contributing 40 per cent of GDP. The idea was to widen the indirect tax base. The tax was levied on telephones, non-life insurance and stockbrokers. The coverage of the levy has since been expanded year after year. In June 2015, the government had increased the service tax rate to 14% (inclusive of all cess) from 12.36% earlier, making services more expensive for the end user. In budget 2015, a provision was made for levying a Swachh Bharat cess on all or any of the services, for the purposes of financing and promoting Swachh Bharat initiatives. With the addition of 0.5%, the service tax will go up from 14% to 14.50%. This means for every Rs. 100 paid for a service you will be taxed Rs. 14.50.

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