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DAILY CURRENT AFFAIRS IAS | UPSC Prelims and Mains Exam – 20th May 2022

  • IASbaba
  • May 20, 2022
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(PRELIMS & MAINS Focus)


Goods and Service Tax

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Syllabus

  • Prelims – Polity
  • Mains – GS 2 (Appointment to various Constitutional Posts, Powers, Functions and Responsibilities of various Constitutional Bodies)

In News: SC says Centre and States have equal powers to make GST-related laws

  • It confirms Gujarat HC ruling that government can’t levy IGST on ocean freight imports
  • The Supreme Court in a judgment championing the importance of “cooperative federalism” for the well-being of democracy held that Union and State legislatures have “equal, simultaneous and unique powers” to make laws on Goods and Services Tax (GST) and the recommendations of the GST Council are not binding on them.

Reasons

  • The recommendations of the GST Council are the product of a collaborative dialogue involving the Union and the States.
  • They are recommendatory in nature
  • The recommendations only have a persuasive value. To regard them as binding would disrupt fiscal federalism when both the Union and the States are conferred equal power to legislate on GST,”

Background

What is ocean freight?

  • Ocean freight is a method of transport by which goods and cargo is transported by ships via shipping lines. Most of the world’s trade is carried out via sea.

Which are the sections of GST laws governing ocean freight?

  • The CGST Act requires the importers to pay IGST at 5% on ocean freight under the Reverse Charge Mechanism (RCM).
  • Section 5(3) of the IGST Act: This section notifies the supplies which are taxable to GST under the reverse charge mechanism. Under the reverse charge mechanism, a recipient of goods/services is liable to pay GST instead of the supplier.
  • Under the notification Integrated Tax (Rate) dated 28th June 2017, the Government has included the term importer under recipient category.

Gujarat High Court judgment explained

Mohit Minerals vs Union of India (UOI)

  • The importer was liable to make payment of IGST at 5% under on ocean freight service. Here, both the importer and the supplier are located in non-taxable territory.
  • The importer was required to pay IGST on ocean freight which leads to double taxation, and thus, the aggrieved taxpayer filed a writ petition before the Gujarat High Court.

Judgment

  • The notification is subordinate to the GST Act.
  • Such notifications making the taxpayer liable to IGST under reverse charge are ultra vires to the IGST Act.
  • The High Court held that it is unconstitutional as there is no statutory sanction for levy and collection of such tax.

GST Council

  • It is a constitutional body under Article 279A.
  • It makes recommendations to the Union and State Government on issues related to Goods and Service Tax and was introduced by the Constitution (One Hundred and First Amendment) Act, 2016.
  • The GST Council is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in charge of Finance or Taxation of all the States.
  • It is considered as a federal body where both the center and the states get due representation.
  • Every decision of the Goods and Services Tax Council shall be taken at a meeting by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:
  • the vote of the Central Government shall have a weightage of one-third of the total votes cast, and
  • the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting.

Previous Year Questions (PYQs)

Q.1) Consider the following statements:

  1. Goods and Services Tax Network (GSTN) is a non-profit organisation formed to provide IT infrastructure and services to the Central and State Governments, taxpayers and other stakeholders for the implementation of GST.
  2. The government of India holds a 51% stake in GSTN.

Select the correct code:

  1. 1 and 2
  2. 1 only
  3. 2 only
  4. None of the above

Source: The Hindu


Fuel Blending

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Syllabus

  • Prelims – Economy; Environment
  • Mains – GS 3 (Conservation, Environmental Pollution and Degradation)

Why in News: The Union Cabinet advanced by five years its target for achieving 20% ethanol blending in petrol.

  • The amended National Biofuel Policy-2018 has now set the new target for 2025-26 instead of 2030, apart from allowing more feedstock for the production of biofuels and export of biofuels in specific cases

National Biofuel Policy

  • The National Biofuel Policy is aimed at reducing dependence on imports by encouraging fuel blending.
  • With bioethanol, biodiesel and bio-CNG in focus, its key parts include the Ethanol Blending Programme (EPB), production of second-generation ethanol (derived from forest and agricultural residues), increasing capacity for production of fuel additives, R&D in feedstock, which is the starting material for ethanol production, and financial incentives for achieving these goals.
  • Molasses is the sticky liquid formed during sugar production from cane juice, and depending on the percentage of sugar left, it is categorized as B heavy and C. Molasses is the feedstock used by sugar mills to produce ethanol.
  • The policy also allows usage of excess rice or damaged foodgrains as feedstock for ethanol production.
  • The National Biofuel Coordination Committee (NBCC), with the Union Minister for Petroleum and Natural Gas as its head, is the agency to coordinate this blending programme.

What amendments have been made?

  • The most important amendment has been advancing the 20% blending date by five years from Ethanol Supply Year (ESY) 2030 to 2025-26.
  • Introduction of more feedstock for production of biofuels; production of biofuels under the ‘Make in India’ programme in Special Economic Zones, Export Oriented Units; and permission to allow export of biofuels in specific cases are some other changes.
  • NBCC, the Committee has now been given the permission to change the policy which it earlier lacked.

What is the current blending status?

  • As on May 8, the all India average blending as per the Ministry of Petroleum and Natural Gas stands at 9.90%.
  • Ethanol derived from sugarcane juice/sugar syrup and from C heavy molasses forms the bulk of this supply, with that from surplus rice and damaged foodgrains being a distant second.

Source: Indian Express


North Atlantic Treaty Organization (NATO)

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Syllabus

  • Prelims – International Relation
  • Mains – GS 2 (Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests)

In News: Finland and Sweden have applied for membership of NATO.

  • Finland and Sweden have formally applied for membership of the North Atlantic Treaty Organization (NATO), the US-led security alliance forged during the Cold War to defend its members from Soviet expansion.

Transforming Europe

  • The war in Ukraine has already changed the geopolitics of Europe and the world.
  • The admission of Finland and Sweden to NATO would bring about a transformation in the continent’s security map by giving NATO a contiguous long frontier in western Russia —Finland and Russia share a 1,300-km border — and doubling it from the present 1,200 km, parts of it in northern Norway, Latvia and Estonia, and Poland and Lithuania.
  • In addition, Sweden’s island of Gotland in the middle of the Baltic Sea would give NATO a strategic advantage.
  • Furthermore, when Sweden and Finland join NATO, the Baltic Sea — Russia’s gateway to the North Sea and the Atlantic Ocean — would be ringed entirely by members of the western security alliance – Finland, Estonia, Latvia, Lithuania, Poland, Germany, Denmark and Sweden.

Neutrality history

  • In seeking NATO membership, Sweden and Finland have abandoned their long history of neutrality, when their foreign policy and security priority was to stay out of superpower rivalry during the Cold War, and maintain cordial ties with both blocs.

Opposition

  • At the moment the main obstacle to their applications is Turkey, a member since 1952 and which has NATO’s second largest army after the US.
  • Turkey’s president has objected to their applications on the ground that the two countries had provided safe haven to the leaders of the Kurdish group PKK, an armed movement fighting for a separate Kurdistan, comprising Kurdish areas in Turkey, Iraq, Iran and Syria.
  • Membership of NATO is open to all European nations that fulfil certain criteria that include “a functioning democratic political system based on a market economy; fair treatment of minority populations; a commitment to resolve conflicts peacefully; an ability and willingness to make a military contribution to NATO operations; and a commitment to democratic civil-military relations and institutions”.
  • New members are admitted with the unanimous consent of all members.

What is NATO?

  • North Atlantic Treaty Organization (NATO) is a military alliance established by the North Atlantic Treaty (also called the Washington Treaty) of April, 1949, by the United States, Canada, and several Western European nations to provide collective security against the Soviet Union.
  • There are currently 30 member states.
  • Its original members were Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the United Kingdom, and the United States.
  • Joining the original signatories were Greece and Turkey (1952), West Germany (1955, from 1990 as Germany), Spain (1982), the Czech Republic, Hungary, and Poland (1999), Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia (2004), Albania and Croatia (2009), Montenegro (2017), and North Macedonia (2020).
  • Headquarters: Brussels, Belgium.
  • Headquarters of Allied Command Operations: Mons, Belgium.

What are the Objectives of NATO?

  • NATO’s essential and enduring purpose is to safeguard the freedom and security of all its members by political and military means.
  • Political objectives: NATO promotes democratic values and enables members to consult and cooperate on defense and security-related issues to solve problems, build trust and, in the long run, prevent conflict.
  • Military Objectives: NATO is committed to the peaceful resolution of disputes. If diplomatic efforts fail, it has the military power to undertake crisis-management operations.
  • These are carried out under the collective defence clause of NATO’s founding treaty – Article 5 of the Washington Treaty or under a United Nations mandate, alone or in cooperation with other countries and international organisations.
  • NATO has only once invoked Article 5, on September 12, 2001 following the 9/11 attacks on the World Trade Center in the US.

How does NATO Function?

  • NATO has an integrated military command structure but very few forces or assets are exclusively its own.
  • Most forces remain under full national command and control until member countries agree to undertake NATO-related tasks.
  • All 30 allies have an equal say, the Alliance’s decisions must be unanimous and consensual, and its members must respect the basic values that underpin the Alliance, namely democracy, individual liberty and the rule of law.
  • NATO’s protection does not extend to members’ civil wars or internal coups.
  • NATO is funded by its members. The U.S. contributes roughly three-fourths of NATO’s budget.

Previous Year Questions (PYQs)

Q.1) With reference to ‘Organization for the Prohibition of Chemical Weapons (OPCW)’, consider the following statements:

  1. It is an organization of the European Union in working relation with NATO and WHO.
  2. It monitors the chemical industry to prevent new weapons from emerging.
  3. It provides assistance and protection to States (Parties) against chemical weapons threats.

Select the correct code:

  1. 1 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3

Source: Indian Express


Baba’s Explainer – National Register of Citizens (NRC)

National Register of Citizens (NRC)

Syllabus

  • GS-2: Citizenship, Federalism
  • GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Why in News: The State Coordinator of the National Register of Citizens (NRC), Assam has requested members of foreigner’s tribunals across the state not to consider the draft NRC and supplementary list as reliable evidence for disposal of cases under it.

Read Complete Details on National Register of Citizens – CLICK HERE


Daily Practice MCQs

Daily Practice MCQs

Q.1) Consider the following statements about ‘GST Council’

  1. It is a constitutional body under Article 279A
  2. It is chaired by the Union Finance Minister
  3. In making decision the vote of the Central Government shall have a weightage of one third of the total votes cast

Which of the statements given above is/are correct?

  1. 1 and 2
  2. 2 and 3
  3. 1, 2 and 3
  4. 1 and 3

Q.2) Consider the following statements:

  1. National Biofuel Policy allows the usage of excess rice or damaged foodgrains as feedstock for ethanol production
  2. The National Biofuel Coordination Committee (NBCC) is the agency to coordinates the Ethanol blending program.
  3. National Biofuel Coordination Committee (NBCC) is headed by the Union Minister of Environment

Which of the statements given above is/are incorrect?

  1. 1, 2 and 3
  2. 3 only
  3. 1 and 2
  4. 2 only

Q.3) Island of Gotland, recently in news, is located in?

  1. North Sea
  2. Baltic Sea
  3. White Sea
  4. Black Sea

ANSWERS FOR 20th MAY 2022 – Daily Practice MCQs

Answers- Daily Practice MCQs

Q.1) – c    Q.2) – b   Q.3) – b 

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