Consider the following items:Cereals grains hulledChicken eggs cookedFish processed and cannedNewspa

Q: What is UPSC Prelims?

UPSC Prelims is a competitive examination conducted in India. This question is from the 2018 UPSC Prelims Economy paper.

Q: How can I prepare for UPSC Prelims Economy?

To prepare for UPSC Prelims Economy, practice previous year questions (PYQs), understand concepts thoroughly, and solve mock tests regularly. This 2018 question covers Taxation – Direct & Indirect Taxes, GST topic.

Q: What is the difficulty level of this question?

This UPSC Prelims 2018 Economy question has a medium difficulty level and is marked as an important question.

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You can find more UPSC Prelims previous year questions on AspirantMitraa. Browse by subject, topic, year, and difficulty level to practice effectively.

Question

Consider the following items:Cereals grains hulledChicken eggs cookedFish processed and cannedNewspapers containing advertising materialWhich of the above items is/are exempted under GST (Goods and Services Tax)?

Accepted Answer

Correct Answer: A — 1 onlyStep-by-step Solution:GST (implemented from July 1, 2017) has a complex exemption framework. The key distinction here is between basic/unprocessed agricultural commodities (generally exempt) and processed/value-added versions (generally taxed):Item 1 — Cereals grains hulled: This is GST-exempt. Basic food grains and cereals in their natural or minimally processed form (including hulled grains — where only the outer husk is removed) are exempt from GST. This includes rice, wheat, barley, etc. in hulled/husked form without further branding. ✓ (Exempt)Item 2 — Chicken eggs cooked: This is NOT exempt. While raw/fresh eggs are generally exempt from GST, cooked chicken eggs would be considered a prepared/processed food item — typically available in restaurants or as ready-to-eat products — and would attract GST (5% at restaurants, or applicable rate for packaged products). The keyword 'cooked' makes this taxable. ✗Item 3 — Fish processed and canned: This is NOT exempt. Fresh fish is generally exempt, but processed and canned fish is a value-added processed product that attracts GST. Processing and canning adds economic value beyond the basic agricultural commodity status. ✗Item 4 — Newspapers containing advertising material: This is NOT exempt. Newspapers and periodicals (blank printed matter) were generally exempt from GST. However, newspapers containing advertising material have a specific GST treatment — the newspaper publisher pays 5% GST on advertising revenue (space selling), though they can claim input tax credit. The government issued a specific clarification that newspapers with advertisements attract GST on the advertisement component. ✗Why other options are incorrect:Option B (2 and 3 only): Cooked eggs and processed canned fish are both taxable — not exempt.Option C (1, 2 and 4 only): Cooked eggs (item 2) are not exempt; newspapers with ads (item 4) are not fully exempt.Option D (1, 2, 3 and 4): Items 2, 3, and 4 are not exempt under GST.Key Concept: GST exempted food items (general principle): fresh fruits and vegetables; fresh meat, fish, eggs (unprocessed); milk (non-branded); cereals, pulses (unbranded, unpackaged); salt; fresh bread (not packaged); jaggery. GST-taxable food: branded/packaged cereals (5%); processed/canned foods (12-18%); restaurant meals (5% without ITC, 18% with ITC for 5-star hotels); sweets (5%). The key distinction is: raw/natural/unprocessed vs processed/packaged/cooked. The GST Council periodically revises these rates.

Consider the following items:Cereals grains hulledChicken eggs cookedFish processed and cannedNewspapers containing advertising materialWhich of the above items is/are exempted under GST (Goods and Services Tax)?

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Consider the following items:Cereals grains hulledChicken eggs cookedFish processed and cannedNewspapers containing advertising materialWhich of the above items is/are exempted under GST (Goods and Services Tax)?

Master UPSC Prelims with Our Test Series

More Questions from Taxation – Direct & Indirect Taxes, GST

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