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Indirect Tax Laws MCQs for CA Final
Chapter-wise Indirect Tax Laws MCQs with answers and explanations. Try the sample questions below, then practise a set of 10 with instant right/wrong.
Practise 10 IDT MCQsSample Indirect Tax Laws MCQs with answers
Q1 · Charge of GST
Under the CGST Act, 2017, which of the following is the correct expansion of 'GST'?
- (a) Goods and Services Tax
- (b) General Sales Tax
- (c) Government Service Tax
- (d) Goods and Standard Tax
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Answer: (a) Goods and Services Tax
(a) is correct: GST stands for Goods and Services Tax, a comprehensive indirect tax on supply of goods and services. 'General Sales Tax' is the pre-GST concept and is not the correct expansion.
Q2 · Input Tax Credit
Which of the following is a basic principle of GST that ensures tax is levied on value addition at each stage?
- (a) Cascading of taxes
- (b) Input tax credit mechanism
- (c) Tax on tax
- (d) Taxation only at the manufacturing stage
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Answer: (b) Input tax credit mechanism
(b) is correct: the input tax credit mechanism allows registered persons to set off tax paid on inputs, so tax is levied only on value addition and cascading is avoided. Cascading and tax on tax are what GST removes, and GST is not confined to manufacturing.
Q3 · Time of Supply
Which of the following is the meaning of 'Time of Supply' under GST?
- (a) The time when goods are physically delivered
- (b) The point of time when liability to pay GST arises
- (c) The period within which returns must be filed
- (d) The date on which the e-way bill is generated
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Answer: (b) The point of time when liability to pay GST arises
(b) is correct: Time of Supply determines the point at which GST liability arises on a supply. Physical delivery, return filing period and e-way bill generation are different concepts.
Q4 · Charge of GST
Under the CGST Act, 2017, which section deals with the levy and collection of Central Goods and Services Tax?
- (a) Section 7
- (b) Section 9
- (c) Section 12
- (d) Section 16
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Answer: (b) Section 9
(b) is correct: Section 9 of the CGST Act is the charging section for the levy and collection of CGST. Section 7 is the closest wrong option because it defines the scope of 'supply' and does not levy the tax.
Q5 · Levy of and Exemptions from Customs Duty
Under the Customs Act, 1962, which section empowers the levy of customs duty on goods imported into or exported from India?
- (a) Section 25
- (b) Section 14
- (c) Section 12
- (d) Section 46
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Answer: (c) Section 12
(c) is correct: Section 12 is the charging section for customs duty on imports and exports. Section 14 is the closest wrong option because it deals with the valuation of goods, not the levy of duty.
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