UPSC Prelims Practice Questions — Notebook makers seek govt. aid to avert ‘existential crisis’

Q1. In the context of the GST rate structure that took effect on 22 September 2025, which one of the following correctly describes the treatment of a supply of goods placed under the 'nil' rate?

  • A. The output bears no GST, and the supplier must reverse input tax credit on the inputs used, absorbing the embedded input taxes as a cost
  • B. The output bears no GST, while the supplier retains full input tax credit on inputs and may claim a cash refund of the accumulated credit
  • C. The output bears GST at the lowest positive slab, and the supplier may claim refund of credit accumulated on account of an inverted duty structure
  • D. The output bears no GST, and the supplier's input tax credit is neither reversed nor refunded but carried forward indefinitely for set-off against other supplies

Q2. Consider the following statements comparing the position of a domestic exercise-book manufacturer before and after the GST rate revision effective 22 September 2025: 1. Before the revision, exercise books and graph books attracted GST at 12 per cent; the 56th GST Council placed them at the nil rate. 2. Because the output rate is now nil, the manufacturer must reverse input tax credit on inputs, whereas under the earlier positive rate that credit was available for set-off. 3. Under the revised structure, every good moved from a positive rate to the nil rate becomes eligible for refund of accumulated input tax credit on account of an inverted duty structure. Which of the statements given above is/are correct?

  1. Before the revision, exercise books and graph books attracted GST at 12 per cent; the 56th GST Council placed them at the nil rate.
  2. Because the output rate is now nil, the manufacturer must reverse input tax credit on inputs, whereas under the earlier positive rate that credit was available for set-off.
  3. Under the revised structure, every good moved from a positive rate to the nil rate becomes eligible for refund of accumulated input tax credit on account of an inverted duty structure.
  • A. 1 and 2 only
  • B. 2 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q3. Finished notebooks entering India at zero Basic Customs Duty under the ASEAN–India Trade in Goods Agreement have been traced principally to which one of the following ASEAN member states, against which the Indian notebook industry has sought an anti-dumping investigation?

  • A. Indonesia, also among India's leading sources of uncoated writing and printing paper
  • B. Vietnam, also among India's leading sources of coated paperboard and packaging
  • C. The Philippines, also among India's leading sources of recovered and recycled paper
  • D. Myanmar, also among India's leading sources of unbleached kraft paper and pulp

Q4. Consider the following statements regarding the ASEAN–India Trade in Goods Agreement (AITIGA) and its ongoing review: 1. The Agreement was signed in 2009, and in September 2022 the two sides tasked the AITIGA Joint Committee with undertaking a review to make it more trade-facilitative. 2. ASEAN accounts for about 11 per cent of India's global trade, and India–ASEAN bilateral trade stood at about USD 128 billion in 2025-26. 3. Under the Agreement, all goods traded between India and ASEAN member states enter at zero Basic Customs Duty, no product being retained on an exclusion list. Which of the statements given above is/are correct?

  1. The Agreement was signed in 2009, and in September 2022 the two sides tasked the AITIGA Joint Committee with undertaking a review to make it more trade-facilitative.
  2. ASEAN accounts for about 11 per cent of India's global trade, and India–ASEAN bilateral trade stood at about USD 128 billion in 2025-26.
  3. Under the Agreement, all goods traded between India and ASEAN member states enter at zero Basic Customs Duty, no product being retained on an exclusion list.
  • A. 1 only
  • B. 2 and 3 only
  • C. 1 and 2 only
  • D. 1, 2 and 3

Q5. An anti-dumping investigation in India is required to be concluded within what period, and up to what maximum extension?

  • A. Within 12 months, extendable up to 18 months
  • B. Within 6 months, extendable up to 9 months
  • C. Within 18 months, extendable up to 24 months
  • D. Within 9 months, with no provision for any extension

Q6. With reference to the Directorate General of Trade Remedies (DGTR), consider the following: 1. It is a quasi-judicial body functioning under the Department of Commerce, Ministry of Commerce and Industry. 2. It was constituted in 2018 as a single national authority dealing with anti-dumping, countervailing duty and safeguard measures. 3. Its recommendation for imposition of an anti-dumping duty is considered by the Department of Revenue under the Ministry of Finance. 4. Its final findings are binding on the Central Government, which is obliged in every case to notify the recommended duty. Which of the above is/are NOT correct?

  1. It is a quasi-judicial body functioning under the Department of Commerce, Ministry of Commerce and Industry.
  2. It was constituted in 2018 as a single national authority dealing with anti-dumping, countervailing duty and safeguard measures.
  3. Its recommendation for imposition of an anti-dumping duty is considered by the Department of Revenue under the Ministry of Finance.
  4. Its final findings are binding on the Central Government, which is obliged in every case to notify the recommended duty.
  • A. 1 and 3
  • B. 4 only
  • C. 2 and 4
  • D. 3 and 4

Q7. The Minimum Import Price (MIP) mechanism was first resorted to in India in February 2016, as a temporary protective measure, for which one of the following?

  • A. Steel, against predatory pricing of imports of steel products
  • B. Virgin multi-layer paper board, against low-priced imports from ASEAN suppliers
  • C. Man-made staple fibre, against under-invoiced imports from East Asian suppliers
  • D. Cement clinker, against subsidised imports from West Asian suppliers

Q8. Consider the following statements distinguishing a Minimum Import Price (MIP) from an anti-dumping duty: 1. An MIP fixes a floor price below which import of the specified goods is not permitted, whereas an anti-dumping duty is a levy quantified with reference to the margin of dumping and the injury caused to the domestic industry. 2. An MIP is notified under the foreign trade policy framework administered by the Ministry of Commerce and Industry, whereas an anti-dumping duty is notified by the Department of Revenue. 3. Unlike an MIP, an anti-dumping duty may be imposed only after an investigation by the Directorate General of Foreign Trade, whose final findings are given effect to by the Ministry of Steel. Which of the statements given above is/are correct?

  1. An MIP fixes a floor price below which import of the specified goods is not permitted, whereas an anti-dumping duty is a levy quantified with reference to the margin of dumping and the injury caused to the domestic industry.
  2. An MIP is notified under the foreign trade policy framework administered by the Ministry of Commerce and Industry, whereas an anti-dumping duty is notified by the Department of Revenue.
  3. Unlike an MIP, an anti-dumping duty may be imposed only after an investigation by the Directorate General of Foreign Trade, whose final findings are given effect to by the Ministry of Steel.
  • A. 1 only
  • B. 1 and 2 only
  • C. 3 only
  • D. 1, 2 and 3

Q9. Refund of input tax credit accumulated on account of an inverted duty structure is provided for under which one of the following provisions?

  • A. Clause (ii) of the first proviso to Section 54(3) of the CGST Act, 2017
  • B. Section 17(5) of the CGST Act, 2017, which enumerates blocked credits
  • C. Section 16(2) of the CGST Act, 2017, which lays down conditions for availing credit
  • D. Section 171 of the CGST Act, 2017, read with Chapter XV of the CGST Rules, 2017

Q10. Consider the following classes of supply and the input tax credit treatment stated against each: 1. Exercise books placed under the nil rate — the supplier cannot claim credit on inputs and must reverse it. 2. Export of goods, treated as a zero-rated supply — the supplier retains credit on inputs and may claim a refund. 3. Assistive devices and rehabilitation aids taxed at 5 per cent with inputs at a higher rate — the manufacturer may claim refund of accumulated credit. 4. Goods whose output rate has been reduced over time from a higher to a lower positive rate — the credit so accumulated qualifies for an inverted-duty refund. Which of the above is/are correctly identified?

  1. Exercise books placed under the nil rate — the supplier cannot claim credit on inputs and must reverse it.
  2. Export of goods, treated as a zero-rated supply — the supplier retains credit on inputs and may claim a refund.
  3. Assistive devices and rehabilitation aids taxed at 5 per cent with inputs at a higher rate — the manufacturer may claim refund of accumulated credit.
  4. Goods whose output rate has been reduced over time from a higher to a lower positive rate — the credit so accumulated qualifies for an inverted-duty refund.
  • A. 1, 2 and 3 only
  • B. 2 and 4 only
  • C. 1 and 4 only
  • D. 1, 2, 3 and 4

Q11. Following the amendments to Sections 171 and 109 of the CGST Act, 2017 recommended by the GST Council, anti-profiteering cases under GST are to be handled by which one of the following?

  • A. The Principal Bench of the Goods and Services Tax Appellate Tribunal
  • B. The Competition Commission of India, acting under Chapter XV of the CGST Rules, 2017
  • C. The National Anti-profiteering Authority, constituted under Section 171 of the CGST Act, 2017
  • D. The Directorate General of Anti-Profiteering under the Central Board of Indirect Taxes and Customs

Q12. In its 2026 representation to the Union Government, the organised notebook manufacturing industry put forward which one of the following as its principal demand for immediate relief?

  • A. A minimum import price on finished notebooks, together with an anti-dumping investigation into imports from Indonesia
  • B. Withdrawal of India's tariff concessions to ASEAN on the entire range of paper and paperboard products
  • C. Restoration of the pre-September 2025 concessional GST rate on exercise books in place of the nil rate
  • D. Inclusion of notebook manufacturing under a production-linked incentive scheme of the Ministry of MSME