INSIGHTS CURRENT AFFAIRS ( 24 December 2020) REVISION THROUGH MCQS

Ans: (c)

Explanation: here the directive word is nor correct!!

• What was the case?
  • Cairn had challenged the Indian government seeking taxes over an internal business reorganisation using the 2012 retrospective tax law, under the UK-India Bilateral Investment Treaty.
  • In 2011, Cairn Energy sold its majority stake in Cairn India to Vedanta Ltd, reducing its stake in the Indian company to about 10 per cent.
  • In 2014, the Indian tax department had demanded Rs 10,247 crore ($1.4 billion) in taxes.
  • Cairn’s claim was brought under the terms of the UK-India Bilateral Investment Treaty, the legal seat of the tribunal was the Netherlands, and the proceedings were under the registry of the Permanent Court of Arbitration.
• Permanent Court of Arbitration (PCA) is founded in 1899. It is an intergovernmental organization located at The Hague, the Netherlands.
• It provides a forum for the resolution of international disputes through arbitration and other peaceful means.
• It provides services of arbitral tribunal to resolve disputes between member states, international organizations, or private parties arising out of international agreements. In PCA, parties can themselves select the arbitrators.
• The organization is not a United Nations agency but has observer status in the UN General Assembly. The rulings of PCA are binding but the tribunal has no powers for enforcement. India is a party to it.

Refer: https://www.insightsonindia.com/2020/12/24/cairn-energy-wins-arbitration-award-against-india-in-tax-dispute/

Ans: (b)

Explanation:

• RBI has released an advisory on digital lending apps.
• Background:
  • The advisory comes in the backdrop of at least three borrowers in Telangana committing suicide in the recent past, following alleged harassment by personnel of such lenders, and many more complaining of being subjected to coercive methods after defaulting on repayments.
• Highlights:
  • Public should be wary of unauthorised digital lending platforms and mobile apps.
  • Public should verify antecedents of the company/ firm offering loans online or through mobile apps.
  • Consumers should never share copies of KYC documents with unidentified persons or unverified/unauthorised apps.
  • They can report such apps/bank account information associated with the apps to law enforcement agencies concerned or use sachet portal (https://sachet.rbi.org.in) to file complaint.

Refer: https://www.insightsonindia.com/2020/12/24/beware-of-illegal-digital-lending-apps-rbi/

Ans: (c)

Explanation: 100% FDI in DTH services:

• The Union Cabinet has given its nod to the following changes in Direct-to-Home (DTH) broadcasting services:
  • 100% foreign direct investment (FDI).
  • Licenses will be issued for a period of 20 years, compared to 10 years at the moment, and will be renewed for a 10-year period.
  • The license fee has been revised from 10 per cent of gross revenue (GR) to 8 per cent of adjusted gross revenue (AGR), which will be calculated by deduction of GST from GR.
  • Broadcasting firms will have to pay the license fee on quarterly basis, rather than the annual basis as of now.
  • DTH operators can share infrastructure.
• FDI policy in India:
  • Automatic Route
    • Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from Government of India for the investment.
  • Government Route
    • Under the Government Route, prior to investment, approval from the Government of India is required. Proposals for foreign investment under Government route, are considered by respective Administrative Ministry/Department.
  • PROHIBITED SECTORS
    • Lottery Business including Government/private lottery, online lotteries, etc.
    • Chit Funds
    • Trading in Transferable Development Rights (TDR)
    • Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
    • Nidhi Company
    • Real Estate Business or Construction of farm houses (Real estate business shall not include development of town shops, construction of residential/ commercial premises, roads or bridges and Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations, 2014)
    • Sectors not open to private sector investment- atomic energy, railway operations (other than permitted activities mentioned under the Consolidated FDI policy).

Refer: facts for prelims: https://www.insightsonindia.com/2020/12/24/insights-daily-current-affairs-pib-summary-24-december-2020/

Ans: (c)

Explanation:

• FDI and FPI routes are used by foreign funds for entirely different purposes. Investments through the FDI route are strategic in nature, and meant for the long term. Several FDI investors also get a say in the management of the investee company, including board seats.
• By contrast, portfolio investments are short-term in nature, with investors having the liberty to buy or sell stock on the bourses. Also, FPIs are allowed to invest only in listed securities, while FDI investments can be made even in unlisted assets.

Refer: facts for prelims: https://www.insightsonindia.com/2020/12/24/insights-daily-current-affairs-pib-summary-24-december-2020/

Ans: (d)

Explanation: Merger of four of its film media units:

• Cabinet has approved the merger of four of its film media units with the National Film Development Corporation (NFDC) Ltd.
• These include:
  • Films Division.
  • Directorate of Film Festivals.
  • National Film Archives of India.
  • Children’s Film Society, India.
• Need for: There was “duplication” between some of these organisations. After coming together, the governance will become better.

Refer: facts for prelims: https://www.insightsonindia.com/2020/12/24/insights-daily-current-affairs-pib-summary-24-december-2020/

Ans: (c)
Explanation:

• Products such as milk are tax-free, but milk in tetra pack is taxed at 5% and condensed milk is taxed at 12% GST.
• Plain roti and parotta served in a restaurant or provided in takeaway will attract only 5% GST, unlike a frozen product sold under a brand and in sealed cover with a shelf life. Hence, such frozen and preserved parotta (or parantha) is not a like product when compared to plain roti, khakra, etc.
• GST: physical verification of premises is now mandatory:
  • The government has introduced mandatory physical verification of business premises for the purposes of obtaining GST registration.
  • The move is aimed at controlling the menace of GST fake invoice frauds.
  • Now there must be in-person verification before registration is granted to an applicant. Further, in case an applicant opts for Aadhaar authentication, he will undergo biometric-based Aadhaar authentication at one of the facilitation Centres notified by the Commissioner.

Refer: facts for prelims: https://www.insightsonindia.com/2020/12/24/insights-daily-current-affairs-pib-summary-24-december-2020/

Ans: (b)

Explanation:

• Goods and Services Tax (Compensation to States) Act, 2017 provide for compensation to the States for the loss of revenue arising on account of implementation of the goods and services tax in pursuance of the provisions of the Constitution (One Hundred and First Amendment) Act, 2016.
• Compensation cess was introduced as relief for States for the loss of revenues arising from the implementation of GST. States, in lieu of giving up their powers to collect taxes on goods and services after local levies were subsumed under the GST, were guaranteed a 14 per cent tax revenue growth in the first five years after GST implementation by the Central government. States’ tax revenue as of FY 2016 is considered as the base year for the calculation of this 14 per cent growth. Any shortfall against it is supposed to be compensated by the Centre using the funds specifically collected as compensation cess.
• Compensation cess is levied on products considered to be ‘sin’ or luxury goods.

Refer: facts for prelims: https://www.insightsonindia.com/2020/12/24/insights-daily-current-affairs-pib-summary-24-december-2020/

Ans: (c)

Explanation:

• Reverse charge is a mechanism under which the recipient of the goods or services is liable to pay the tax instead of the provider of the goods and services. Under the normal taxation regime, the supplier collects the tax from the buyer and deposits the same after adjusting the output tax liability with the input tax credit available. But under reverse charge mechanism (RCM), liability to pay tax shifts from supplier to recipient.
• The reverse charge clause is the most powerful check that had been inserted into the regulations by the architects of GST.
• The intention of RCM was to check tax evasion and expand the tax base. The first few months of GST rollout witnessed sharp expansion in indirect taxpayer base mainly due to the presence of the reverse charge feature.
• The other impact of RCM was that smaller vendors who wished to supply to larger clients, voluntarily registered on the GST NETWORK. They were afraid that if unregistered, larger clients might spurn them.

Refer: facts for prelims: https://www.insightsonindia.com/2020/12/24/insights-daily-current-affairs-pib-summary-24-december-2020/

Ans: (c)

Explanation:

• “To develop a consensus, we passed the Constitution amendment enabling the GST unanimously. All legislations enabling the GST were passed unanimously. The rules were put before the GST Council. The have been approved unanimously. We have held 27 meetings of the GST Council so far where every decision has been taken by consensus and unanimity. All the rates are fixed through consensus on the recommendation of the Rates Committee. Whenever there are contrarian views in the Council, a representative Group of Ministers of the State is constituted to work out a via media and we try to evolve consensus one way or the other. I do realise that the delicate federal balance in India has to be maintained. The GST Council is India’s first experience at cooperative-federalism based decision-making authority. We cannot afford to risk a failure and, therefore, it is functioning as to arouse confidence amongst all States. The meetings have always been consensus based. The only area where unanimity seems to be lacking is the television bites that some Ministers’ give after the meeting, which may be necessary for their own political positon. I am willing to live with the experience of a healthy debate and unanimity within the Council and a show of dissent outside the Council meetings..”

Refer: facts for prelims: https://www.insightsonindia.com/2020/12/24/insights-daily-current-affairs-pib-summary-24-december-2020/

Ans: (c)

Explanation:

• The National Anti-Profiteering Authority (NAA) has been constituted under Section 171 of the Central Goods and Services Tax Act, 2017.
• The Authority’s main function is to ensure that traders are not realizing unfair profit by charging high price from consumers in the name of GST.
• The Authority’s core function is to ensure that the benefits of the reduction is GST rates on goods and services made by GST Council and proportional change in the Input tax credit passed on to the ultimate consumers and recipient respectively by way of reduction in the prices by the suppliers.
• The National Anti-Profiteering Authority shall be headed by a senior officer of the level of a Secretary to the Government of India and shall have four technical members from the Centre and/or the States.
• In the event the National Anti-profiteering Authority confirms the necessity of applying anti-profiteering measures, it has the power to order the business concerned to reduce its prices or return the undue benefit availed along with interest to the recipient of the goods or services.
• If the undue benefit cannot be passed on to the recipient, it can be ordered to be deposited in the Consumer Welfare Fund.
• In extreme cases the National Anti-profiteering Authority can impose a penalty on the defaulting business entity and even order the cancellation of its registration under GST.

Refer: facts for prelims: https://www.insightsonindia.com/2020/12/24/insights-daily-current-affairs-pib-summary-24-december-2020/