S1: GST is a comprehensive indirect tax. S2: GST is levied on the supply of goods and services. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: GST is a comprehensive indirect tax. S2: GST is levied on the supply of goods and services. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. Both S1 and S2
C. S2 only
D. S1 only
Answer: Option B
Solution (By JKSSB Mock Tests)
GST is a comprehensive, multi-stage, destination-based indirect tax. It is levied on every value addition, specifically on the supply of goods and services. Both statements are correct.
S1: Under Ind AS 115, a 'Contract Asset' is an entity's right to consideration in exchange for goods or services that the entity has transferred to a customer, when that right is conditioned on something other than the passage of time. S2: A 'Contract Liability' is an entity's obligation to transfer goods or services to a customer for which the entity has received consideration from the customer. Which statement(s) is/are correct?
Explanation:
Both statements correctly define Contract Asset and Contract Liability as per Ind AS 115. A contract asset is conditional on future performance, while a receivable is unconditional. A contract liability is the obligation to perform after receiving payment.
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