UPSC Prelims Practice Questions — Highs and lows

Q1. At the central level, the administration of GST — including the issue of instructions to field formations on the processing of taxpayer registration applications — is carried out by which one of the following?

  • A. The Central Board of Indirect Taxes and Customs, functioning under the Department of Revenue, Ministry of Finance
  • B. The Goods and Services Tax Network, a Section 25 company owned equally by the Centre and the State Governments
  • C. The Central Board of Direct Taxes, functioning under the Department of Revenue, Ministry of Finance
  • D. The GST Council Secretariat, functioning under the Department of Economic Affairs, Ministry of Finance

Q2. With reference to the GST Council constituted under Article 279A of the Constitution, consider the following statements: 1. It was to be constituted by the President within sixty days of the commencement of the Constitution (101st Amendment) Act, 2016. 2. Every decision of the Council must be taken by the unanimous consent of all the members present and voting. 3. The vote of the Central Government has a weightage of one-third of the total votes cast in the Council. 4. One-half of the total number of members of the Council constitutes the quorum for its meetings. Which of the statements given above is/are NOT correct?

  1. It was to be constituted by the President within sixty days of the commencement of the Constitution (101st Amendment) Act, 2016.
  2. Every decision of the Council must be taken by the unanimous consent of all the members present and voting.
  3. The vote of the Central Government has a weightage of one-third of the total votes cast in the Council.
  4. One-half of the total number of members of the Council constitutes the quorum for its meetings.
  • A. 1 and 3
  • B. 2 and 4
  • C. 1, 2 and 4
  • D. 3 only

Q3. On an inter-State supply attracting IGST, which one of the following has the first claim on the proceeds, to the extent of revenue equivalent to the CGST rate?

  • A. The Central Government, with the balance of the proceeds accruing to the State of consumption
  • B. The Central Government, with the balance of the proceeds accruing to the State of origin of the supply
  • C. The State of consumption, with the balance of the proceeds accruing to the Central Government
  • D. The State of origin of the supply, with the balance accruing to the State of consumption

Q4. With reference to the design and coverage of GST in India, consider the following statements: 1. It is a destination-based consumption tax under which revenue accrues to the State where goods or services are ultimately consumed. 2. Although it consolidated a large number of levies, it retains the cascading 'tax on tax' effect at each stage of the supply chain. 3. Five petroleum products, including high speed diesel, stand permanently excluded from GST by the Constitution and cannot be brought within it. 4. Alcoholic liquor for human consumption is outside the levy of GST. Which of the statements given above is/are NOT correct?

  1. It is a destination-based consumption tax under which revenue accrues to the State where goods or services are ultimately consumed.
  2. Although it consolidated a large number of levies, it retains the cascading 'tax on tax' effect at each stage of the supply chain.
  3. Five petroleum products, including high speed diesel, stand permanently excluded from GST by the Constitution and cannot be brought within it.
  4. Alcoholic liquor for human consumption is outside the levy of GST.
  • A. 2 and 3
  • B. 1 and 4
  • C. 2, 3 and 4
  • D. 1 only

Q5. Gross GST collections in July 2026, at over ₹2.11 lakh crore, recorded a year-on-year growth of approximately

  • A. 15.4 per cent
  • B. 10.1 per cent
  • C. 28.8 per cent
  • D. 9.2 per cent

Q6. With reference to GST collection data for July 2026, consider the following statements: 1. Gross domestic revenue grew by about 10.1 per cent over the corresponding month of the previous year. 2. Import-related gross revenue grew by about 28.8 per cent over the corresponding month of the previous year. 3. Net collections for the month fell below the year-earlier level of about ₹1.57 lakh crore. 4. All the 36 States and Union Territories recorded positive growth in collections during the month. Which of the statements given above is/are NOT correct?

  1. Gross domestic revenue grew by about 10.1 per cent over the corresponding month of the previous year.
  2. Import-related gross revenue grew by about 28.8 per cent over the corresponding month of the previous year.
  3. Net collections for the month fell below the year-earlier level of about ₹1.57 lakh crore.
  4. All the 36 States and Union Territories recorded positive growth in collections during the month.
  • A. 1 and 4
  • B. 2 and 3
  • C. 3 and 4
  • D. 1, 2 and 3

Q7. The statutory framework for facilitating external trade and payments and for promoting the orderly development and maintenance of India's foreign exchange market rests primarily on which one of the following enactments?

  • A. The Foreign Exchange Management Act, 1999, brought into force with effect from 1 June 2000
  • B. The Foreign Trade (Development and Regulation) Act, 1992, as amended from time to time
  • C. The Reserve Bank of India Act, 1934, together with its subsequent amendments
  • D. The Banking Regulation Act, 1949, as applicable to commercial banks in India

Q8. In the context of the rupee's movement against the US dollar during 2026, 'depreciation' of the rupee refers precisely to a situation in which

  • A. more rupees are needed to buy one US dollar, the exchange rate being market-determined
  • B. the central bank formally lowers the rupee's official parity against the dollar by an administrative decision
  • C. fewer rupees are needed to buy one US dollar as market demand for the rupee strengthens
  • D. the domestic purchasing power of the rupee declines on account of a rise in consumer prices

Q9. The law providing for apportionment of IGST proceeds between the Union and the States is to be made in which one of the following ways?

  • A. By Parliament, acting on the recommendation of the GST Council
  • B. By Parliament, acting on the recommendation of the Finance Commission
  • C. By each State legislature, acting on the recommendation of the GST Council
  • D. By the GST Council itself, subject to ratification by a majority of the State legislatures

Q10. With reference to the federal architecture of GST in India, consider the following statements: 1. Article 246A confers concurrent power on Parliament and the State legislatures to make laws on GST. 2. The GST Council may recommend special provisions with respect to the North-Eastern and Himalayan States. 3. The recommendations of the GST Council are confined exclusively to rates and exemptions, the Council having no role in determining which taxes are to be subsumed. 4. The Goods and Services Tax Network is wholly owned by the Central Government, the States holding no equity stake in it. Which of the statements given above is/are NOT correct?

  1. Article 246A confers concurrent power on Parliament and the State legislatures to make laws on GST.
  2. The GST Council may recommend special provisions with respect to the North-Eastern and Himalayan States.
  3. The recommendations of the GST Council are confined exclusively to rates and exemptions, the Council having no role in determining which taxes are to be subsumed.
  4. The Goods and Services Tax Network is wholly owned by the Central Government, the States holding no equity stake in it.
  • A. 3 and 4
  • B. 1 and 2
  • C. 2, 3 and 4
  • D. 4 only

Q11. The GST rolled out on 1 July 2017 effected the single largest consolidation of indirect levies in India, bringing together how many taxes and cesses?

  • A. 17 taxes and 13 cesses
  • B. 13 taxes and 17 cesses
  • C. 11 taxes and 15 cesses
  • D. 15 taxes and 11 cesses

Q12. Consider the following statements comparing India's purchasing managers' indices for July 2026 with the preceding month: 1. The HSBC India Manufacturing PMI fell to 53.5 in July 2026 from 54.2 in June 2026, its lowest reading since August 2021. 2. The Services PMI Business Activity Index fell to 53.3 in July 2026 from 57.4 in June 2026, marking the weakest expansion in 53 months. 3. Both these indices slipped below the 50-mark in July 2026, thereby signalling contraction in the respective sectors. Which of the statements given above is/are correct?

  1. The HSBC India Manufacturing PMI fell to 53.5 in July 2026 from 54.2 in June 2026, its lowest reading since August 2021.
  2. The Services PMI Business Activity Index fell to 53.3 in July 2026 from 57.4 in June 2026, marking the weakest expansion in 53 months.
  3. Both these indices slipped below the 50-mark in July 2026, thereby signalling contraction in the respective sectors.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3