UPSC CSE Prelims
GST Previous Year Questions (PYQs)

Detailed Explanation:

Answer: Option 4 — 1, 2 and 4 only

This question tests knowledge of GST exemptions on various goods. Items 1 (cereal grains hulled), 2 (chicken eggs cooked), and 4 (newspapers with advertising) are exempted under GST, while item 3 (processed and canned fish) is taxable as a value-added product.

✅ Statement 1 – Correct: Cereal grains hulled (HSN 1104) are exempted from GST when not sold in branded unit containers, keeping basic food staples affordable.
✅ Statement 2 – Correct: Birds' eggs (including chicken eggs cooked) are specifically exempted under HSN 0407, regardless of whether they are fresh, preserved, or cooked.
❌ Statement 3 – Incorrect: While fresh fish is GST-exempt, processed and canned fish (HSN 1604) is a value-added product subject to GST at 5%.
✅ Statement 4 – Correct: Newspapers, journals, and periodicals (HSN 4902) are exempt from GST, whether or not they contain advertising material.

📝 Short Notes: GST Exemptions on Essential Goods

• Zero-rated vs Exempt: Zero-rated supplies allow input tax credit, while exempt supplies do not; most food items fall under exempt category.
• Exempted Food Items: Fresh vegetables, fruits, milk, curd, lassi, unbranded cereal grains, fresh fish/meat, jaggery, honey, and eggs are exempt from GST.
• Taxable Food Items: Processed, packaged, or branded food items attract GST; processed fish/meat products (5%), ice cream (18%), and branded packaged foods (5-18%) are taxable.
• Print Media: All newspapers, journals, and periodicals are exempt under HSN 4902, ensuring affordable access to information regardless of advertising content.
• HSN Classification: Harmonized System of Nomenclature (HSN) codes determine GST applicability; similar products may have different tax treatment based on processing level.

Detailed Explanation:

Answer: Option 1 — 1 only

The Goods and Services Tax (GST) is a comprehensive indirect tax reform that replaced multiple central and state taxes, creating a unified national market. This simplifies tax compliance, reduces cascading effects, and promotes ease of doing business across India.

✅ Statement 1 – Correct: GST replaced numerous indirect taxes levied by central and state authorities (like excise duty, VAT, service tax, etc.), creating a single unified market by removing inter-state barriers and simplifying the tax structure.

❌ Statement 2 – Incorrect: GST is a domestic indirect tax reform and has no direct mechanism to reduce Current Account Deficit, which depends on trade balance, foreign investments, remittances, and exchange rate dynamics.

❌ Statement 3 – Incorrect: While GST can contribute to economic efficiency and growth, it alone cannot drastically increase economy size to overtake China, as economic growth depends on multiple complex factors including capital formation, technology, demographics, and global economic conditions.