The Hindu RC for IBPS PO/RRB/SBI PO- Pre/Mains

Quiz: Reading Comprehension

The crucial question about how and where auditors should get access to GST data continues to hang fire, even as hundreds of CAG auditors are being put through specialised training in anticipation of the implementation of the new tax regime from July 1. Various government officials, including ministers, have been insisting that the proposed tax 
ministers, have been insisting that the proposed tax regime will come into force as scheduled. The GST Network (GSTN), which is the nationwide electronic backbone of the tax regime, will go live for testing in early May.
For full implementation of the GST regime, to decide the compensation for States and to determine their revenue share, auditors of the CAG (Comptroller and Auditor General) will require access to two different datasets, which are proving difficult to come by. One of them is data pertaining to revenue that would accrue to States from alcohol and petrochemicals, both of which are outside GST for now. The second issue of where and how CAG auditors will get access to the GST data continues to vex officials. Senior officials say the government needs to quickly settle it.
An official pointed out that the GSTN has refused to give the CAG access to its network, saying it is only holding the data in a fiduciary capacity since the tax data originally belongs to the Centre and States. Officials also pointed out that the GSTN is owned by a private company, and thus cannot be audited by CAG. “The government will have to sort it out, or we would have serious problem on our hands,” another senior official said.
The GSTN claims it is a private company as 51% stake in the company is held by private companies such as HDFC and ICICI Bank. The CAG has pointed out in official communications in recent times that under the new Companies Act, GSTN can be counted as government-controlled company since its strategic control will be with the government. Like any PSU, the CAG could depute chartered accountants to audit GSTN. “But that is a minor issue. The real issue is where would auditors get access to the data,” he said.
“We are not so much interested in auditing GSTN, but the real issue to be sorted out is the massive tax data from all over the country that GSTN’s network will have,” he said. Accessing the data at various points — point of manufacture, point of sale etc. —would make the GST audit a complicated and almost impossible task, and will hamper other functions, which would include CAG certification about the share of GST for States.

Centralised location 
“There is no way out, other than auditors getting access to the entire GST data in a centralised location. Don’t forget the fact that all that tax data, whether it belongs to States or Centre, is already available to CAG under existing constitutional provisions,” the official said. Meanwhile, the auditors would be using data available from individual States to assess their share of taxes earned from alcohol and petrochemicals, which would be kept out of GST.
Under the agreed terms, the States will be given full compensation for the first five years for any shortfall in revenue because of GST. The States’ revenue in 2015-16 will be used as the basis for calculating the compensation, with an assumption of 14% revenue growth in the subsequent five years.The total revenue of a State would be the total of income of States and local bodies from sales tax, value added tax, purchase tax, central sales tax, octroi etc.
( Source: The Hindu)

(1). GSTN has refused to give the CAG access to its network because
(a) GSTN is owned by State Government.
(b) GSTN is owned by a private company.
(c) CAG wants to interfere in GSTN's matter in a wrong way.
(d) GSTN had won a case in Delhi High Court against sharing of its network with government organizations. 

(2). Why auditors of the CAG need access to GST data? 
I. To decide the compensation for States.
II. To determine their revenue share.
Select the correct statement/statements using the code given below.
(a) None is Correct
(b) I only
(c) II only
(d) Both I and II 

(3). Why CAG Auditors are going through specialised training? 
(a) Due to notice given by senior CAG officers.
(b) Due to the implementation of new tax regime in India i.e. GST.
(c) Due to the request of private companies to understand new business rules.
(d) None is Correct 

(4). CAG wants data of revenue of States accrued from 
I. Alcohol
II. Pharmaceuticals
III. Petrochemicals
Select the correct option using the code given below.
(a) I and III only
(b) All are Correct
(c) I and II only
(d) II and III only

(5). Which year will be used as the basis for calculating the compensation of States? 
(a) 2015-2016
(b) Not decided yet
(c) 2014-2015
(d) 2016-2017

(6). Choose the word which is Most Opposite to the word printed in bold in the passage. 
Vex
(a) Disturb
(b) Assist
(c) Peeve
(d) Irk 

(7). Choose the word which is Most Opposite to the word printed in bold in the passage. 
Regime
(a) Disorder
(b) System
(c) Administration
(d) Fraction 

(8). Choose the word which is Most Similar to the word printed in bold in the passage. 
Sorted
(a) Unsolved
(b) One
(c) Solved
(d) Singled 

(9). Choose the word which is Most Similar to the word printed in bold in the passage. 
Octroi
(a) Tax
(b) Responsibility
(c) Onus
(d) None of the above

(10). Choose the word which is Most Similar to the word printed in bold in the passage. Comptroller
(a) Governor
(b) Actuary
(c) Secretary
(d) Accountant