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Home » MCQs » Commerce MCQs

Goods and Services Tax (GST) MCQs

The Goods and Services Tax (GST) is a circuitous government deals charge that is applied to the expense of specific labor and products. The business adds the GST to the cost of the item, and a client who purchases the item addresses the business cost comprehensive of the GST. The GST segment is gathered by the business or dealer and sent to the public authority. It is additionally alluded to as Value-Added Tax (VAT) in certain nations.

Goods and Services Tax (GST) MCQs: This section contains multiple-choice questions and answers on GST. It will help the students to prepare well for their exams and to test their skills on Goods and Service Tax.

List of GST MCQs

1. What is the full form of GST?

  1. General Sales Tax
  2. Goods & Service Tax
  3. Government Sourced Tax
  4. General Supply Tax

Answer: B) Goods & Service Tax

Explanation:

The goods and service tax (GST) is a circuitous government deals charge that is applied to the expense of specific labor and products.

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2. When did GST come into action in India?

  1. 1st Jan 2015
  2. 1st April 2014
  3. 1st July 2017
  4. 30th September 2017

Answer: C) 1st July 2017

Explanation:

The duty happened from 1st July 2017 through the execution of the One Hundred and First Amendment of the Constitution of India by the Indian government. The GST supplanted existing numerous charges collected by the focal and state legislatures.

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3. Which country's GST dual model has been adopted in India?

  1. USA
  2. Canada
  3. Australia
  4. Japan

Answer: B) Canada

Explanation:

The double GST model alludes to an idea where both the Center and states at the same time demand charges on the stock of labor and products while the organization is run independently. It is not at all like the Single National GST model, where the assessments are required simply by the Center including imparting such income to the territories/states. It is taken on in nations like Australia. It is likewise not the same as the Single State GST model, where states have selective freedoms to require and gather charges, for example, in the USA.

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4. How many structures does Indian GST System have?

  1. 1
  2. 5
  3. 6
  4. 4

Answer: D) 4

Explanation:

The GST charge structure includes Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Integrated Goods and Services Tax (IGST) and Union Territory Goods and Services Tax (UTGST). Four section levels are going from 5% to 28 per cent wherein the most minimal is for fundamental things and the most noteworthy for extravagance products.

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5. What is the maximum CGST Rate in India?

  1. 28
  2. 15
  3. 12
  4. 20

Answer: D) 20

Explanation:

The maximum CGST Rate in India is 20%.

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6. What is the GST rate slab for Goods & Services?

  1. 0% 5% 12% 18% 26%
  2. 0% 6% 12% 18% 28%
  3. 0% 5% 12% 18% 28%
  4. 0% 5% 12% 16% 28%

Answer: C) 0% 5% 12% 18% 28%

Explanation:

The GST gathering has fitted north of 1300 products and 500 administrations under four duty sections of 5%, 12%, 18% and 28% under GST. This is aside from the assessment on gold that is kept at 3% and harsh valuable and semi-valuable stones that are put at an extraordinary pace of 0.25% under GST.

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7. CGST and SGST are levied as a part of which purchase?

  1. Inter Continent
  2. Intra State
  3. Inter-State
  4. None of the above

Answer: B) Intra State

Explanation:

At the point when the stock of labour and products occurs inside a state called intra-state exchanges, then, at that point, both the CGST and SGST will be gathered.

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8. In which purchase is IGST Payable?

  1. Intra State
  2. Inter State
  3. Inter Continents
  4. Inter Union Territories

Answer: B) Inter State

Explanation:

Under GST, IGST is a duty collected on all Inter-State supplies of products and additional benefits and will be administered by the IGST Act. IGST will be relevant on any stock of merchandise and additionally benefits in the two instances of import into India and commodity from India.

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9. Goods & Service Tax replaced which tax?

  1. VAT
  2. Excise Duty
  3. Central Sales Tax
  4. All of the above

Answer: D) All of the above

Explanation:

GST is an objective-based duty, which is gotten by a State wherein the products are devoured yet not by a state wherein such merchandise is made. In contrast to prior when there were different duties, for example, Central Excise, Service Tax and State VAT and so on, under GST, there is only one duty with three parts CGST, SGST, and IGST.

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10. On which of the following items VAT is still applicable?

  1. Tobacco
  2. Baby Products
  3. Alcohol
  4. Clothes

Answer: C) Alcohol

Explanation:

Liquor was not brought under the domain of the GST system fundamentally because of two reasons:

  • To guarantee that the State Governments keep on having a solid inflow of income (other than whatever they get from GST). It's assessed that charges on alcohol and lager get the state legislatures almost INR 90,000 crores yearly.
  • To keep the costs of alcohol and brew high to restrict utilization.

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11. What is a Mixed Supply?

  1. A blend of at least two labour and products made together at a solitary cost.
  2. At least two labour and products that are just sold as a set and can't be sold independently.
  3. The stock of labour and products starts with one state then onto the next.
  4. The area of the provider and the spot of supply i.e., the area of the purchaser are in a similar state.

Answer: A) A blend of at least two labour and products made together at a solitary cost

Explanation:

Mixed Supply is a blend of at least two labour and products made together at a solitary cost.

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12. IGST is applicable in which goods?

  1. Inter-Country
  2. Inter-State
  3. Inter UT
  4. None of the above

Answer: A) Inter-Country

Explanation:

Under GST, IGST is a duty collected on all Inter-State supplies of products and additional benefits and will be administered by the IGST Act. IGST will be material on any inventory of products or potentially benefits in the two instances of import into India and commodity from India.

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13. When was the Introduction of GST in India announced first?

  1. 2014
  2. 2010
  3. 2006
  4. 2008

Answer: C) 2006

Explanation:

In 2000, the thought of taking on GST was first recommended by the Atal Bihari Vajpayee Government. In February 2006 - The first declaration of GST was made by the union minister during the 2006-2007 spending plan, which would be presented on April 1, 2010.

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14. How might the labour and products be ordered under the GST system?

  1. GST
  2. HSN/ SAC
  3. SAC
  4. HSN

Answer: B) HSN/ SAC

Explanation:

GST for labour and still up in the air dependent on the HSN code or SAC code of a thing. Under GST, general labour and products executed in India are grouped under the HSN code framework or SAC Code framework. Products are characterized under HSN Code and administrations are ordered under SAC Code.

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15. What does HSN stand for in GST?

  1. Harmonised System Number
  2. Home Shopping Network
  3. Home State Number
  4. Harmonised System of Nomenclature

Answer: D) Harmonised System of Nomenclature

Explanation:

HSN code means "Harmonized System of Nomenclature". This framework has been presented for the methodical arrangement of merchandise everywhere. HSN code is a 6-digit uniform code that arranges 5000+ items and is acknowledged around the world.

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16. What does SAC stand for in GST?

  1. Service Application Code
  2. Service Access Code
  3. Services Accounting Code
  4. Software Accounting Code

Answer: C) Services Accounting Code

Explanation:

Services Accounting Codes (SAC) is an extraordinary code that accommodated acknowledgement, estimation and tax assessment from administrations.

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17. Is PAN Number mandatory for GST Registration?

  1. Yes
  2. No
  3. Not Applicable
  4. Non-Mandate

Answer: A) Yes

Explanation:

Any type of GST enrolment will require the PAN (Permanent Account Number) of the approved signatories/candidate (Directors, Partners, Proprietors, and so forth) An Aadhar card is additionally a significant archive for GST enlistment of people or sole owners, notwithstanding the proprietor's PAN card.

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18. What is an area of supply in the event of importation of products?

  1. Owner of the Goods
  2. Importer Location
  3. Place where goods are being delivered after customs clearance
  4. Custom Port

Answer: B) Importer Location

Explanation:

The spot of supply of any products brought into India is the area of the shipper. Subsequently, assuming that a merchant is situated in the territory of Tamil Nadu, the state's portion of IGST will go to Tamil Nadu.

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19. What is the edge furthest reaches of turnover in the previous monetary year for picking to pay a charge under creation conspire?

  1. 10 Lakh
  2. 10 Crore
  3. 1 Crore
  4. 1.5 Crore

Answer: D) 1.5 Crore

Explanation:

Organizations managing just in merchandise can select a piece plot. Administration's suppliers have been kept external to the extent of this plan. Notwithstanding, café area citizens may likewise settle on the plan. This remains constant on the off chance that your yearly turnover is beneath Rs 1.5 crore. Prior GST turnover edge for getting the organization plot was 1 crore which is currently raised to 1.5 crores and in certain states, it is 75 lakhs.

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20. What is used for GST Registration?

  1. FORM GST REG-01
  2. FORM GST 20
  3. FORM GST REG
  4. FORM GSTR

Answer: A) FORM GST REG-01

Explanation:

Other than a non-occupant available individual, an individual providing on the web data and data set access or recovery administrations from a spot outside India to a non-available internet-based beneficiary alluded to in segment 14 of the Integrated Goods and Services Tax Act, an individual is needed to deduct the charge at source under segment 51 and an individual needed to gather charge at source under area 52.

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21. What is the threshold limit for an E-Commerce Operator?

  1. 10 Lakhs
  2. 20 Lakhs
  3. 50 Lakhs
  4. Not Applicable

Answer: D) Not Applicable

Explanation:

Web-based business administrators need to enroll paying little mind to the turnover. Edge cutoff of Rs. 20 lakh/10 lakh isn't pertinent to web-based business administrators. They are not permitted to enroll under the synthesis plot.

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22. For what period is a registration certificate valid?

  1. 5 Years
  2. 10 Years
  3. Till Not Cancelled
  4. 1 Year

Answer: C) Till Not Cancelled

Explanation:

However long the GST enlistment is substantial and not given up or dropped, it stays legitimate. For a relaxed available individual, since the GST enrollment stays legitimate for a limit of ninety days, the enlistment authentication turns invalid later that.

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23. Under what conditions actual check of business premises is obligatory?

  1. When asked information is not provided in time by the firm.
  2. If the facts are irrelevant.
  3. It is the sole discretionary power of the officer.
  4. None of the above.

Answer: C) It is the sole discretionary power of the officer.

Explanation:

Where the appropriate official is fulfilled that the actual check of the business environment of an individual is needed because of the disappointment of Aadhaar validation or due to not selecting Aadhaar confirmation before the award of enrollment, or because of some other explanation later the award of enlistment, he might get such check of the business environment, within the sight of the said individual, done and the confirmation report alongside different archives, including photos, will be transferred in FORM GST REG 30 on the normal entryway inside a time of fifteen working days following the date of such confirmation.

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24. Could an enrolled individual select a structured plot just for one out of his 5 business various units having the same Permanent Account Number?

  1. Approval from Central Government is required.
  2. Approval from State Government is required.
  3. Yes
  4. No

Answer: D) No

Explanation:

Given that where more than one enlisted people are having a similar Permanent Account Number (given under the Income-charge Act, 1961), the enrolled individual will not be qualified to settle on the plan except if all such enlisted people pick to pay a charge under that sub-area.

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25. When goods are supplied in which case does the GST increase?

  1. At the time of delivery
  2. At the time of payment
  3. At the time of invoice generation
  4. All of the above

Answer: D) All of the above

Explanation:

When goods are supplied the GST can increase at any point of the above-stated examples.

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26. What is a Transaction Value?

  1. Value of supply of goods and services
  2. The highest price can be charged for a product.
  3. Value of a company according to the stock market.
  4. None of the above

Answer: A) Value of supply of goods and services

Explanation:

The term transaction value alludes to the cost to be paid or paid for imported products when sold for the commodity to the traditional domain of the EU.

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27. What derivations are permitted from the exchange esteem?

  1. Packaging Charges.
  2. Discounts
  3. Freights
  4. Loss

Answer: B) Discounts

Explanation:

Limits given previously or at the hour of supply will be permitted as an allowance from the exchange esteem. Such limits should be referenced on the receipt.

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28. Regardless of whether credit on capital merchandise can be taken promptly on receipt of the products?

  1. Yes
  2. No
  3. After usage of goods
  4. Never

Answer: A) Yes

Explanation:

At the point when you are buying any apparatus for your plant, you will pay the material GST rate. This GST paid can be guaranteed as a credit similarly to data sources. Nonetheless, on the off chance that you guarantee deterioration on the GST paid while buying the capital resource, you can't guarantee the info tax break.

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29. If the provider has stored the duties however the collector has not gotten the products, is the beneficiary qualified for benefit credit?

  1. Yes
  2. No
  3. If the goods received are proved
  4. None of the above

Answer: B) No

Explanation:

The beneficiary is not qualified for benefit credit as one of the conditions of Section 16(2) is not fulfilled.

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30. What is the maximum limit to pay the value of goods inclusive of taxes?

  1. 15 Days
  2. 30 Days
  3. 180 Days
  4. 90 Days

Answer: C) 180 Days

Explanation:

As far as possible endorsed is hundred and eighty days (180 days) from the date of issue of receipt by the provider of administration/products. If the beneficiary neglects to do pay the worth of supply (with charge) within 180 days, such information tax reduction would be payable by the beneficiary alongside material interest.

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31. For capital merchandise, proportionate credit is permitted?

  1. Business Purpose
  2. Personal Purpose
  3. Business & Personal Purpose
  4. None of the above

Answer: C) Business & Personal Purpose

Explanation:

Proportionate Credit on capital merchandise is permitted for business & personal use.

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32. Could a Banking Company or Financial Institution pull out the choice of benefiting real credit or half-credit whenever in the monetary year?

  1. Yes
  2. No
  3. Once a year
  4. Twice a year

Answer: B) No

Explanation:

As indicated by Rule 38 of Central Goods and Service Tax Act, Banks, monetary establishments and non-banking monetary organizations (NBFC) occupied with the business of stores, broadening advances or advances have a choice to profit a sum equivalent to fifty percent of the qualified information tax break on inputs, capital products, and information administrations in that month or to assume Input charge praise just on buys made for selling available or zero evaluated labor and products and leave out the assessment paid on buys made for absolved supplies. Choice once practiced can not be changed during the monetary year.

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33. When the goods are supplied is the input tax reversed?

  1. To the extent of credit taken
  2. No
  3. Fully
  4. To the extent of the value of goods

Answer: A) To the extent of credit taken

Explanation:

Where an ordinary citizen selects to pay a charge under an arrangement plan or products/administrations provided by him become absolved. In the event of an inventory of capital products or plant and apparatus, on which info tax reduction has been taken. Each enrolled individual whose enlistment is dropped.

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34. As far as possible past which assuming products are not returned, the information sent for work will be treated as supply?

  1. One Quarter
  2. One Year
  3. Six Months
  4. Five Years

Answer: B) One Year

Explanation:

According to arrangements contained in area 143 of the CGST Act, If the data sources or capital products are neither gotten back to the head nor provided from the gig specialist premises inside one year if there should arise an occurrence of sources of info and three years in the event of capital merchandise, the chief would give a receipt for something similar, pay GST and pronounce.

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35. Is the chief entitled to a credit of products however he has not gotten the merchandise and has been shipped off work specialist straight by the seller?

  1. The vendor should be in the same place
  2. Yes
  3. No
  4. None of the above

Answer: C) No

Explanation:

According to area 16(2) assuming the products are gotten by the outsider for the purchaser then it is blessed to receive be ownership of merchandise with the purchaser. thus he is qualified for input credit.

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36. Self Assessed output tax liability can be utilized against?

  1. Interest
  2. Fine
  3. Any Tax Liability
  4. Provisional Input Tax

Answer: D) Provisional Input Tax

Explanation:

From first January 2022, ITC cases will be permitted provided that it shows up in GSTR-2B. In this way, the citizens can don't guarantee 5% temporary ITC under the CGST Rule 36(4) and guarantee each ITC esteem asserted was reflected in GSTR-2B.

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37. Matching of the Input Tax credit on internal stockpile by the beneficiary is embraced with?

  1. Inward Supply Filed
  2. Outward Supply Filed
  3. Monthly Supplies Filed
  4. None of the above

Answer: B) Outward Supply Filed

Explanation:

An enlisted individual (counting an Input Service Distributor) can guarantee Input charge credit on the strength of the accompanying conditions:

  • He should have a Tax receipt given by the provider of labor and products or both or Debit notes given by a provider.
  • He probably got a supply of labor and products or both.
  • He more likely than not pay the expense for it in real money or as info charge as under area 41 of GST Act.
  • He probably documented legitimate returns under segment 39 of the GST Act.

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38. Input Tax credit as credited in Electronic Credit record can be used for?

  1. Fine Payment
  2. Tax Payment
  3. Interest Payment
  4. Penalty Payment

Answer: B) Tax Payment

Explanation:

Credit in Electronic Cash Ledger can be utilized uniquely for the installment of expense. This implies that the equilibrium of Electronic Credit Ledger can't be used for the installment of interest, punishment, or late expenses. Premium and Penalty can be paid uniquely through genuine money installment.

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39. Who can issue a Tax Invoice?

  1. Every Supplier
  2. Every Tax Payable person
  3. Persons not paying tax under TCS
  4. None of the above

Answer: C) Persons not paying tax under TCS

Explanation:

Area 31 of the CGST Act has made it compulsory for each enrolled provider to give a duty receipt for each supply of labor and products. If the provider is unregistered, the purchaser needs to give an installment voucher and an expense receipt.

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40. In which case an Invoice must be issued?

  1. Transfer of Goods
  2. Date of Payment
  3. At the time of goods purchased
  4. Time of removal of goods.

Answer: D) Time of removal of goods.

Explanation:

The receipt should be given previously or alter the arrangement of administration in the event of available administrations. In any case, such a receipt should be given inside a time of most extreme 30 days from the arrangement of administration.

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41. The books and different records U/S 35 are to be kept up with at?

  1. Accounts Section
  2. Office of Owner
  3. Place of Incorporation
  4. Any of the above

Answer: C) Place of Incorporation

Explanation:

According to Section 35 of the Act, each enrolled individual is needed to keep and keep up with books of record at his chief business environment that is referenced in the authentication of enrolment.

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42. In which form accounts are required to be maintained?

  1. Electonic
  2. Manual
  3. Either of two
  4. Both forms

Answer: C) Either of two

Explanation:

Accounts can be maintained in both electronic and manual form.

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43. How can all the accounts be recorded in electronic form?

  1. Digital Signature
  2. Few
  3. All
  4. None

Answer: A) Digital Signature

Explanation:

All the accounts of a firm can be recorded in electronic form provided they are authenticated by a digital signature.

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44. What is the first GST Filing called?

  1. GSTR
  2. GSTR-3B
  3. GSTR 4
  4. GSTR 2

Answer: B) GSTR-3B

Explanation:

Each enrolled individual who has made outward supplies in the period between the date on which he became responsible to enlistment till the date on which enrollment has been allowed will pronounce something very similar in the principal return outfitted by him later award of enlistment.

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45. The subtleties of outward supplies of labor and products will be put together by?

  1. Every Month
  2. Every Quarter
  3. 10th of every month
  4. Half Yearly

Answer: C) 10th of every month

Explanation:

The subtleties of outward supplies are needed to be outfitted by every one of the ordinary and relaxed enlisted citizens in a month-to-month Statement ie GSTR 1. Area 37 of the CGST Act read with Rule 59 covers the arrangements and endorsed way of outfitting such subtleties in GSTR 1.

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46. Each enlisted available individual will be qualified for assuming praise of info charge in his return and such information tax reduction will be credited to?

  1. Refund Account
  2. Cash Ledger
  3. Personal Ledger
  4. Electronic Credit Ledger

Answer: D) Electronic Credit Ledger

Explanation:

Each enlisted available individual will, likely to such conditions and limitations as might be endorsed and in the way determined in segment 49 of CGST Act, be entitled to assume praise of information charge charged on any stock of labor and products or both to him which are utilized or expected to be utilized in the course or promotion of his business also the said sum will be credited to the electronic credit record of such individual - area 16(1) of CGST Act.

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47. Which of these Ledgers are maintained online?

  1. Cash Ledger
  2. Credit Ledger
  3. Tax Liability
  4. All of the above

Answer: D) All of the above

Explanation:

Cash Ledger, Credit Ledger, and Tax Liability records are to be maintained online.

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48. Installment made through challan will be credited to which registers/records?

  1. Tax Liability Ledger
  2. Credit Ledger
  3. Cash Ledger
  4. All of the above

Answer: C) Cash Ledger

Explanation:

Installment made through challan is credited to electronic money records. a cash record is primarily a business machine that for the most part has a cash cabinet, determines how much individual deals, and records how much cash is set up.

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49. Balance in electronic credit record under IGST can be utilized against which obligation?

  1. IGST
  2. CGST
  3. SGST
  4. All of the above

Answer: D) All of the above

Explanation:

A credit of IGST can be used against all any expense responsibility in a specific order – IGST, CGST, or SGST/UTGST.

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50. Balance in electronic credit record under CGST can be utilized against which obligation?

  1. CGST
  2. CGST and IGST
  3. CGST, IGST, SGST
  4. All of the above

Answer: B) CGST and IGST

Explanation:

A credit of CGST can be used against CGST and IGST only.

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