Question 1

The GST Council has the power to directly pass and amend tax laws.

Accepted Answer

The GST Council, under Article 279A, only makes recommendations to the Union and State Governments. The actual legal changes take effect only when the CBIC issues official notifications or when Parliament and State Legislatures pass amendment acts.

Question 2

The 'as is where is' regularization means the government will refund taxes that were paid during the disputed period.

Accepted Answer

The 'as is where is' principle means the status quo is maintained. Taxpayers who did not pay the tax are pardoned from demand notices, but those who already paid it are explicitly barred from claiming refunds.

Question 3

Consider the following statements regarding the GST framework and the 55th GST Council recommendations:
1. The GST Council is a statutory body constituted under the Central Goods and Services Tax (CGST) Act, 2017.
2. The Input Service Distributor (ISD) mechanism allows a head office to distribute Input Tax Credit (ITC) for both common input goods and common input services to its branch offices.
3. The CBIC regularized the GST liability on skilling services provided by NSDC-approved partners for the interim period between October 2024 and January 2025 on an 'as is where is' basis.
How many of the above statements are correct?

Accepted Answer

(a) Only one — Statement 1 is incorrect: The GST Council is a Constitutional body created under Article 279A, not a statutory body. Statement 2 is incorrect: The ISD mechanism is strictly for the distribution of credit on input SERVICES, not input goods. Statement 3 is correct: CBIC applied the 'as is where is' principle for the Oct 2024-Jan 2025 window to prevent refund litigation.

Question 4

Match the goods/services with their revised GST treatment as clarified following the 55th GST Council recommendations:

List I (Item):
A. Gene Therapy
B. Fortified Rice Kernels (FRK)
C. Used Electric Vehicles
D. Penal charges by banks for loan non-compliance

List II (GST Treatment):
1. 18% GST on margin value
2. Fully Exempt from GST
3. 5% GST
4. Outside the scope of GST (Not a consideration for 'tolerating an act')

Select the correct code:

Accepted Answer

(a) A-2, B-3, C-1, D-4 — Gene therapy was made fully exempt to support advanced medical care (A-2). FRK GST was reduced to 5% to support government nutrition programs (B-3). Used EVs saw an increase to 18% GST on margin to align with other used vehicles (C-1). Penal charges by regulated entities were clarified to be outside the purview of GST as they are meant for deterrence, not as a service of 'tolerating an act' (D-4).

Question 5

Assertion (A): The CBIC applied the 'as is where is' principle for regularizing GST payments on NSDC-approved skilling services for the period between October 2024 and January 2025.
Reason (R): The 'as is where is' principle allows taxpayers who have already paid the disputed tax to claim full refunds while waiving the tax demand for those who have not paid.
Select the correct answer:

Accepted Answer

(c) A is true, but R is false. — The Assertion is true as the CBIC utilized this principle to manage the interim period where the exemption was technically suspended. The Reason is false because 'as is where is' explicitly prohibits the claiming of refunds for taxes already paid; it merely freezes the status quo so no new demands or refunds are processed.

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