Daily Current Affairs for CA Foundation — 30 May 2026

Exam-ready economy and business knowledge for CA Foundation Paper 4. Today we revise the Goods and Services Tax (GST) — the backbone of India's indirect tax system and a recurring theme in Business & Commercial Knowledge. Each item ends with a practice MCQ.

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1. GST — Structure and Slabs

The Goods and Services Tax (GST) is a destination-based, value-added indirect tax introduced on 1 July 2017, replacing a web of central and state levies (excise duty, service tax, VAT, etc.). It is a dual GST: on intra-state supply both CGST (Centre) and SGST (State) apply, while on inter-state supply IGST is levied and collected by the Centre.

The main GST rate slabs are 0%, 5%, 12%, 18% and 28%, with a compensation cess on a few luxury/demerit goods.

MCQ: Q1. On an inter-state supply of goods, which tax is levied?

• (a) CGST + SGST
• (b) IGST only
• (c) SGST only
• (d) CGST only

Answer: (b) IGST only

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2. Input Tax Credit (ITC)

A core feature of GST is the Input Tax Credit mechanism: a registered business can set off the GST it pays on purchases (inputs) against the GST it collects on sales (outputs), paying tax only on the value added. This removes the cascading effect ("tax on tax") of the earlier regime.

MCQ: Q2. The Input Tax Credit mechanism under GST primarily helps to:

• (a) Increase the tax rate
• (b) Remove the cascading effect of taxes
• (c) Exempt all small businesses
• (d) Replace direct taxes

Answer: (b) Remove the cascading effect of taxes

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One-Liner Revision Section

1. GST launched: 1 July 2017; destination-based, value-added tax.
2. Dual GST: Intra-state = CGST + SGST; inter-state = IGST (Centre).
3. Slabs: 0%, 5%, 12%, 18%, 28% (+ cess on select goods).
4. ITC: Credit for tax on inputs against tax on outputs — removes cascading.

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