QUICK RECAP

Internal Trade

Buying and selling of goods and services within the boundaries of a nation are referred
to as
No custom duties orimport duties are levied on such trade as goods are part of internal trade.
are meant for domestic consumption. domestic production and
Types of Internal Trade
Internal trade can be categorised into two broad categories (a)
wholesale trade; and (b) retailing trade
Wholesale trade: Purchase and sale of goods and services in large quantities for
intermediate use is referred to as wholesale trade. the purposes of resale
Wholesalers perform a number of f or
of distribution of goods and services and functions in the
proide valuable services to manufacturers and retailere process
Retail trade: A retailer is a business enterprise that is
the ultimate consumers. engaged in the sale of goods and services direrthe
Services of Wholesalers
Wholesalers are an important link between manufacturers and
place utility. retailers. They add value by creating time and
Services to manufacturers: The services provided by
I. facilitating lage scale
wholesalers to manufacturers include
production; 2. bearingrisk;
3. providing financial assistance;
4. expert advice;
5. help in marketing function;
6. facilitating continuity and;
7. storage.
Services to retailers: The services provided by
wholesalers to retailers include
I. availability of goods; 2. marketing support;
3. grant of credit; 4. specialised knowledge:
5. risk sharing.
Services of Retailers
Retailers are an important link between the producers and final
consumers, wholesalers and manufacturers in the distribution ofconsumers. They provide useful service to
products and services.
Services to manufacturers/wholesalers: Different services provided by
manufacturers include retailers to wholesalers and
I. helping distribution of goods;
2. personal selling,
3. enabling large scale operations;
4. collecting market information; and
5. help in promotion of goods and services.
Services to consumers: The different services provided by retailers to consumers include
i. regular availability of products; 2. new product information;
Business Studies-l!
9.20
 3. convenience of buying: 4. trade selection;
6 after sales services; and 6. providing credit facilities.
Trade
Types of Retail
Retail trade can be classified into different types according to their size, type of ownership, on the basis of
merchandise handled and whether they have fixed place of business or not.
Recailers can be categorised as (a) itinerant retailers and (b) fixed shop retailers.
Itinerant retailers: Itinerant retailers are traders who don't have a fixed place of business to operate from.
They are smaltraders operating with limited resources who keep on moving with their wares from
street to street or place to place in search of customers. The major types of such retailers are:
Peddlers and Hawkers: They are small producers or petty traders who carry the products on a
bicycle or handcat or on their heads and move from place to place, to sell their goods at the
doorstep of the customers.
) Market Traders: Market traders are small retailers who open their shops at different places on fixed
days dates, catering mainly to lower income group of customers and dealing in low priced consumer
items of daily use.
3 Street Traders: Street traders are the small retailers who are commonly found at places where huge
floating population gathers.
4. Cheap Jacks: Cheap jacks are those petty retalers who have independent shops of a temporary
nature in a business location. They deal in consumer items and provide services to consumers in
terms of making the products available where needed.
Fixed Shop Retailers
On the basis of size of operations, (fixed shop retailers can be classified as (a) small shopkeepers and (b) large
retailers.
Fixed Shop Small Retailers
I. General Stores: General stores carry stock ofvarietyof products such as grocery items, soft drinks.
toiletry products, confectionery, and stationery, needed to satisfy day-to-day needs of consumers,
residing in nearby localities.
2. Speciality Shops: Speciality shops specialise in the sale of specific line of products such as childrens
garments, men's wear, ladies shoes, school uniform, college books or consumer electronic goods,
etc.,
3. Street Stall Holders: These smallvendors are commonly found at street crossing or other places
where flow of traffic is heavy and deal mainly in goods of cheap variety like hosiery products, toys,
cigarettes, soft drinks, etc.
4. Second Hand Goods Shop: These shops deals in second hand or used goods of different kinds
like furniture, books, clothes and other household articles which are sold at lower prices.
FIxed Shop Large Stores: in fixed shop large stores, the volume and variety of goods stocked is large.
trample: (a) Departmental stores (b)Chain stores or multiple shops
Departmental Stores
Adepartmental store is a large establishment offering a wide variety of products, classified into wel-dedine
departments, aimed at satisfying practically every customer's need under one roof.
Advantages
I. Attracts large number of customers 2. Convenience in buying
3. Attractive services 4. Economy of large scale operation
5. Promotion of sales

Chain Stores or Multiple Shops

These shops are networks of retail shops that are owned and operated by manufacturers or intermediariee
dealing in standardised and branded consumer products having rapids sales turnover.
Advantages
I. Economies of scale 2.. Elimination of middlemen
3. No bad debts 4. Transfer of goods
5. Diffusion of risk 6. Low Cost
7. Flexibility
Mail Order Houses
Mail order houses are retail outlets that sell their merchandise through mail, without any direct personal
contact with the buyers.
Advantages
1. Limited capital requirements 2.. Elimination of middlemen
3. Absence of bad debts 4. Wide reach
5. Convenience

GST (Goods and Services Tax): Concept and Key Features

GST isa destination-based single tax on the supply of goods and services from the manufacturer to the
consumer, and has replaced multiple indirect taxes levied by the Central and the State governments, thereby,
converting the country intoa unified market.
Among other benefits, GST is expected to improve the ease of doing business in tax compliance, reduce the
tax burden by eliminating tax-on-tax, improve tax administration, mitigate tax evasion, broaden the organised
segment of the economy and boost tax revenues. The GST has replaced |7 indirect taxes (8 Central +9
State levels) and 23 cesses of the Centre and the States.
GST Comprises Central GST (CGST) and the State GST (SGST), subsuming levels previously charged by the
Central and the State governments respectively.
Key Features of GST
1. The territorial spread of GST is the whole country, including Jammu and Kashmir.
2. GST is applicable on the 'supply' of goods or services.
3. Itis
based on the principle of destination-based consumption tax.
nort of goods and services is treated as inter-State supplies and would be subject to IGST in
addition to the applicable customs duties.
5.
cGST, SGST and lGST are levied at rates mutually agreed upon by the Centre and the States.
6.
There are five tax slabs namely O per cent, 5 per cent, l2 per cent, 18 per cent and 28 per cent for
all goods or services.
1. Exports and supplies of Special Economic Zones (SEZ) are zero-rated.

R There are various modes of payment of tax available to the taxpayer, including Internet banking,
debitcredit card and National Electronic Funds Transfer (NEFTYReal Time Gross Settlement (RTGS).
 Typology of Questions
OBJECTIVE TYPE QUESTIONS

Multiple Choice Questions (MCQs)

Tick () the correct answWer
1. Which of the following is not a type of a itinerant retailers?
(a) Hawkers (b) Cheap Jacks
(c) Street traders (d) Street Stall Holders
2. Which of the following does not come under the category of fixed shop retailers?
(a) General stores (b) Chain stores
(c) Market traders (d) Departmental stores
3. In foreign trade, the tem CIF stand for
(a) Cost, Insurance, Figure (b) Cost, Investment, Freight
(0) Capital, Insurance, Finance (d) Cost, Insurance, Freight
4. 'Only selling children's garments is an example of
(a) General store (b) Single line store
() Speciality shops (d) Second hand goods shop
5. Wholesaler makes every sale in quantity.
(a) Small (b) Large
(c) Both of above (d) None of these
6. Find the odd one from the
following:
(a) Street Stall
Holders (b) Speciality Shops
(c) General Stores (d) Street Vendors
 7. Choose the corect group
() Hawkers (i) Franchise
() Peddlers (iv) Market traders
(a) ). () and (ii) (b) (i). (i) and (v)
(c) 0. (@) and (iv) (d) (). (i) and (v)
8. Aretail shop 'exclusively selling toys and gits' is a typical example of a
(a) Multiple shop (b) General store
(c) Speciality shop (d) Secondhand Goods Shop
9 is the link between wholesaler and customer.
(a) Manufacturer (b) Supplier
(c) Retailer
(d) None of these
I0. They are petty retailers who have
from one locality to another.
independent shops of atemporary nature and change their business
(a) Peddlers (b) Street traders
(c) Cheap jacks
(d) Market traders
||. Retailers who carry on trades at
different places on fixed dates usually of low priced
known by the name articles are
(a) Itinerant traders
(b) Fixed shop retailers
(c) Local traders
(d) Market traders
12. The type of retail trade which is
totally dependent on advertisement is
(a) Departmental store (b) Chain store
(c) Multiple shops (d) Mail order business
13. Bata shop company is an
example of
(a) Mail order business
(b) Multiple shops
(c) Super markets (d) General stores
II. Assertion-Reason Based Multiple Choice Questions (MCQS)
Given below are two statements (in each
question), one marked as Assertion (A) and other marked as
Reason (R). Read both the statements and choose one of the
correct alternatives in each question.
I. Assertion (A):A departmental store
purchases goods directly from manufacturers.
Reason (R) :Departmental stores are centrally located in the heart of a city.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True
and Reason (R) is the correct explanation of
Assertion (A)
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is
not the correct explanation ot
Assertion (A)
 Assertion (A) is True but Reason (R) is False
(c)
(d) Assertion (A) sFalse but Reason (R) is True
is
2. Assertion(A): A uniform pricing policy is not followed in multiple shops.
Reason (R): Multiple shops have the same decorations, layout, displays etc.
Alternatives:
A Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of
Assertion (A)
A Both Assertion (A) and Reason (R) are True but Reason (R) is not the correct explanation of
Assertion (A)
(c) Assertion (A) is True but Reason (R) is False
(d) Assertion (A) is False but Reason (R) is True
2 Assertion (A) : GST has replaced 27 indirect taxes.
Reason (R): The Government of India implemented GST from the year 2017.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct
explanation of
Assertion (A)
(b) Both Assertion (A)and Reason (R) are True but Reason (R) is not the correct explanation of
Assertion (A)
(c) Assertion (A) is True but Reason (R) is False
(d) Assertion (A) is False but Reason (R) is True
4. Assertion (A) :One of the tax rates from slabs of GST is 26 percent.
Reason (R) : IGST is payable on all inter-state supply of goods and services.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct
explanation of
Assertion (A)
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is not the correct
explanation of
Assertion (A)
(c) Assertion (A) is True but Reason (R) is False
(d) Assertion (A) is False but Reason (R) is True
5. Assertion (A): The chairperson of GST council is Finance Minister.
Reason (R) : The quorum of GST council is 75% of total members.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of
Assertion (A)
(b) Both Assertion (A) and Reason (R) are True but Reason (R) is not the correct explanation of
Assertion (A)
 (c) Assertion (A) is True but Reason (R) is Fase
(d) Assertion (A) is False but Reason (R) is True
I. Fill in the Blanks with appropriate words:
. GST has replaced number of indirect taxes.
2. Tax liability arises when the taxable person crosses exernption linit of lakh.
3. The CGST/SGST is payable on all supply of goods or services.
4. GST is applicable on the of goods or services.
5. Credit note is sent by the tothe

IV. True and False:

I. Under Cash on Delivery(COD) payment is made only when goods are delivered to buyer.
2. Lorry receipt is also called transport receipt.
3. E&OE stands for Error and Omissions Entertained.
4. GST comprises Central GST (CGST) and the State GST (SGST).
5. Internal trade is also known as 'Inland Trade'.

V. Matching Type Multiple Choice Questions (MCQs)

ColumnA Column B
A. Networks of retail shops that are owned () Wholesalers
and operated by manufacturers
B. Link between wholesalers and customers
(i) Multiple shops
C. Offering a wide variety of products (i) Retailers
D. Link between manufacturing and retailers
(iv) Departmental store
Choose the correct option:
(a) A-(i); B-(ii);,C-{(iM); D-(1) (b) A-(ii): B-(0): C-(iv);: D-(i)
(c) A-(iv); B-(i);: C-(): D-(i) (d) A-(i); B-(iv): C-(i); D-(0)
2. Column A
Column B
A. Helps them to manage their business
() Availability of goods
with relatively small amount of working
capital
B. Maintain adequate stock of commodities
to offer variety to customers
(i) Risk sharing
C. Undertake advertising and sales
(ii) Grant of credit
promotion activities
(iv) Marketing support
Choose the correct option:
(a) A-(ii); B-(i); C-(iv) (b) A-(iv); B-(): C-(i)
(c) A-(i); B-(i); C-(i) (d) A-(ü); B-(): C-()
926
3. Column A
Column B
A. Tax applicable on intra-state supply (0) GST
of goods and services
B. Indirect tax
(ii) IGST
C. Destination based tax
(ii) CGST/SGST
D. Tax applicable on inter-state supply
of goods and services
Choose the correct option:
(a) A-(ii); B-(i); C-(): D-(i) (b) A-(i): B-(ii); C-(); D-(ii)
(c) A-(0); B-(i); C-(i0);D-(0) (d) A-(ii); B-(i); C-(ü); D-(i)
OBJECTIVE TYPE QUESTIONS 9.1
Multiple Choice Questions
Choose the correct option to answer the following questions:
1. Buying and selling of goods and services within the boundaries of anation are referredto
as

(a) Internal trade (b) External trade

(c) Wholesale trade (d) Retail trade
2. Which of the following is not a service provided by retailers to manufacturers and
wholesalers?
(a) Personal selling (b) Help in promotion
(c) Regular availability of products (d) Help in distribution of goods
3. Which of the following will be considered as retailing?
(a) Sale of ball pens or some magic medicine or book ofjokes in the roadways buses
(b) Sale of cosmetics/detergent powder on door-to-door sales basis
(c) Sale of vegetables by the road side by a small farmer
(d) Allof the above
4. Which of the following is not a characteristic ofItinerant Retailers?
(a) They are smalltraders operating with limited resources
(b) They have fixed business establishment to operate from
(c) The emphasis of such traders is on providing greater customer service by making
the products available at the very doorstep of the customers
(d) They normally deal in consumer products of daily use such as toiletry produets,
fruits and vegetables, and so on
5. Akshit and Arnav are two brothers. Both are working as itinerant retailers. They are the
petty retailers who have independent shops of a temporary nature in a business locality.
They keep on changing their business from one locality to another, depending upon the
potentiality of the area.
Identify the type of itinerant retailers to which both the brothers are related.
(a) Pavement traders (b) Weekly market traders
(c) Cheap jacks (d) Peddlers and Hawkers
 14hhofthe following is not type of Itinerant Rotailers?
fa) Stret sfall}holders (b) Pavement vendrra
e Paidlers and hawkerg () Market traders
etiytrader small producers, who
productssuch astoys, vegetables and fruits, fabrics,
generallydeal non-standardised
in anet low-value
carpets,
They are
also found in streets of
residential areas, places ofsnacks and iee creams, ete.
exhibitions or meals, and
outsideschools, during a lunch break.
rant retailer highlighted
kdentifythe type of itinerant above.
(a) Market traders (b) Street traders
(c) Cheapjacks (Pavement vendors)
(d) Peddlers and hawkers
Which ofthe following is not a characteristic of chain stores?
ia) Allsales are made on credit basis
A The
manufacturing/procurement
at the head office
of merchandise for all the retail units is
centralised
io) All the branches are controlled by the head office
i) They are located in fairly populous localities,where
can be approached
sufficient number of customers
o Which of the following is not the type of goods sold by
speciality shops?
(a) Used books (b) Toys and gifts
(c) Children's garment (d) Ladies shoes
10 Which of the following is an example of chain stores or
multiple shops?
() Bata shoe stores (iü) Spencers
(iüi) McDonalds (iv) BigApple
(v) Nirula's (vi) Reliance Retail
(vii) Raymonds showrooms
(a) i), (iii) and (iv) (b) (ii), (vi)and(vii)
(c) (i), (iiü), (iv), (v), (vi) and (vii)
(d) (i), (v) and (vi)
State whether the following statements are "True' or False':
The multipleshops sell goods at fixed prices and maintain uniforming pricing policies for
all the shops.
Departmental stores aimn at satisfying all the needs of customers under one roof.
he wholesalers maysometimes pay money in advance to the producers.
Fillin the Blanks with appropriate words:
14.
trade is concerned with purchase and sale of goods and services in large
quantities for the purpose of resale or intermediate use.
5. delivery.
provide important after-sales services in the form of home
 OBJECTIVETYPE QUESTIONS$ 9.2
Multiple Choice Questions
he correct option to answer the following questions:
. Which one is not the tax slab of GST?
(a) 28% (b) 18% (c) 14% (d) 5%
a which type of GSTis payable on all inter-state supply of goodsand services?
(a) IGST (b) FGST (c) CGST (d) SGST
3 Which of the following is not a correct features of GST?
(a) GSTis applicable on the 'supply' of goods or services
(b) There are four tax slabs namely 5 per cent. 12 per cent, 18 per cent and 28 per cent
for all goods or services
(e) The territorial spread of GST is the whole country, excluding Jammu and Kashmir
(d) Itis based on the principle of destination-basedconsumption tax
State whether the following statements are True' or False':
4. GST isapplicable throughout the country with one rate for one type of goods/service.
5. The GST has replaced 17 indirect taxes (8 Central +9 State levels) and 23 cesses of the
Centre and the States.
Fill in the Blanks with appropriate words:
6. GST is based on the principle of consumption tax against the present
principle of origin-based taxation.
7. Exports and supplies to special Economic zones (SEZ) are rated.