Goods and Services Tax (GST) MCQs

What is Goods and Services Tax (GST)? A) A tax on income B) A tax on the sale of goods and services at each stage of production or distribution C) A tax on capital gains D) A tax on real estate transactions Answer: B) A tax on the sale of goods and services at each stage of production or distribution 2. What are the main components of GST? A) VAT and Income Tax B) CGST, SGST, and IGST C) Sales Tax and Property Tax D) Excise Duty and Customs Duty Answer: B) CGST, SGST, and IGST 3. What does CGST stand for? A) Central Goods and Services Tax B) Comprehensive Goods and Services Tax C) Consumer Goods and Services Tax D) Capital Goods and Services Tax Answer: A) Central Goods and Services Tax 4. What does SGST stand for? A) State Goods and Services Tax B) Special Goods and Services Tax C) Sales Goods and Services Tax D) Standard Goods and Services Tax Answer: A) State Goods and Services Tax 5. What is IGST? A) Integrated Goods and Services Tax B) International Goods and Services Tax C) Income Goods and Services Tax D) Import Goods and Services Tax Answer: A) Integrated Goods and Services Tax 6. Which tax is levied on intra-state transactions under GST? A) CGST and SGST B) IGST C) VAT D) Excise Duty Answer: A) CGST and SGST 7. Which tax is levied on inter-state transactions under GST? A) IGST B) CGST C) SGST D) VAT Answer: A) IGST 8. What is the main objective of GST? A) To simplify and unify the tax system B) To increase the rate of taxation C) To provide exemptions for certain goods D) To reduce corporate tax rates Answer: A) To simplify and unify the tax system 9. What is a “GST invoice”? A) A document issued to customers detailing the amount of GST paid and collected B) A receipt for GST payments C) A statement of income D) A tax return document Answer: A) A document issued to customers detailing the amount of GST paid and collected 10. What is “input tax credit” under GST? A) The credit for GST paid on inputs which can be set off against GST payable on output B) The credit for income tax paid C) The credit for taxes on capital goods D) A rebate on GST paid for exempt goods Answer: A) The credit for GST paid on inputs which can be set off against GST payable on output 11. What is “GST registration”? A) The process of registering a business with tax authorities to collect and pay GST B) The submission of GST returns C) The payment of GST liabilities D) The recording of GST transactions Answer: A) The process of registering a business with tax authorities to collect and pay GST 12. What is a “GST return”? A) A document filed with tax authorities reporting GST collected and GST paid B) A report on business profits C) A summary of sales transactions D) An application for GST exemption Answer: A) A document filed with tax authorities reporting GST collected and GST paid 13. What is “GST refund”? A) The return of GST paid on purchases if it exceeds GST collected from sales B) A discount on GST for early payment C) The reimbursement of GST paid on exempt goods D) The refund of GST to end consumers Answer: A) The return of GST paid on purchases if it exceeds GST collected from sales 14. What is “GST-inclusive pricing”? A) Prices that include GST in the total amount charged to the customer B) Prices that are exclusive of GST and GST is added at the point of sale C) Prices that exclude GST and GST is refunded to the customer D) Prices with GST applied as a discount Answer: A) Prices that include GST in the total amount charged to the customer 15. What is a “GST exempt supply”? A) Goods or services that are not subject to GST B) Goods or services that are zero-rated C) Goods or services eligible for GST refunds D) Goods or services with reduced GST rates Answer: A) Goods or services that are not subject to GST 16. What is “reverse charge mechanism” in GST? A) A mechanism where the recipient of goods or services is responsible for paying GST instead of the supplier B) A process where GST is charged twice on the same transaction C) A tax credit for GST paid on imports D) A special rate applied to international transactions Answer: A) A mechanism where the recipient of goods or services is responsible for paying GST instead of the supplier 17. What is the standard GST rate for most goods and services? A) 5% B) 10% C) 18% D) 28% Answer: C) 18% 18. What is “GST threshold limit”? A) The minimum turnover amount at which a business must register for GST B) The maximum GST rate applied to products C) The limit on GST refunds D) The level of GST exempt from taxation Answer: A) The minimum turnover amount at which a business must register for GST 19. What does “input GST” refer to? A) GST paid on business expenses and purchases B) GST collected from customers C) GST payable to tax authorities D) GST on exempt goods Answer: A) GST paid on business expenses and purchases 20. What does “output GST” refer to? A) GST collected from sales to customers B) GST paid on business expenses C) GST refunded to the business D) GST on imports Answer: A) GST collected from sales to customers 21. What is “GST compliance”? A) Adhering to GST laws and regulations, including proper reporting and payment B) Avoiding GST payments through legal loopholes C) Ignoring GST regulations D) Claiming GST on exempt goods Answer: A) Adhering to GST laws and regulations, including proper reporting and payment 22. What is “GST on imports”? A) GST levied on goods brought into the country from abroad B) GST applied to domestic sales C) GST paid on services provided from abroad D) GST refunded on exported goods Answer: A) GST levied on goods brought into the country from abroad 23. What is “zero-rated GST”? A) Goods or services that are taxable but at a 0% GST rate B) Goods or services that are exempt from GST C) GST charged on imports at a zero rate D) GST reduced to the lowest possible rate Answer: A) Goods or services that are taxable but at a 0% GST rate 24. What is a “GST audit”? A) An examination of a business’s GST records and returns to ensure compliance with tax laws B) A review of GST exemptions C) A procedure for applying for GST refunds D) A report on GST rates Answer: A) An examination of a business’s GST records and returns to ensure compliance with tax laws 25. What is a “GST invoice”? A) A document showing the amount of GST paid and collected B) A receipt for GST payments C) A tax return document D) A summary of sales transactions Answer: A) A document showing the amount of GST paid and collected 26. What is “GST grouping”? A) A system allowing businesses under common control to file a single GST return B) A method of applying different GST rates to different groups of goods C) A process for grouping GST refunds D) A regulation on grouping GST rates for exports Answer: A) A system allowing businesses under common control to file a single GST return 27. What is “input GST credit”? A) The amount of GST paid on business purchases that can be deducted from GST owed on sales B) The GST rate applied to business expenses C) A credit for GST paid on personal goods D) A rebate of GST paid on imported goods Answer: A) The amount of GST paid on business purchases that can be deducted from GST owed on sales 28. What is a “GST certificate”? A) A document issued to businesses upon successful GST registration B) A receipt for GST payments C) An exemption certificate for GST D) A statement of GST compliance Answer: A) A document issued to businesses upon successful GST registration 29. What is “GST on capital goods”? A) GST applied to the purchase of long-term assets used in business operations B) GST deducted from the sale of capital assets C) GST on short-term expenses D) GST refunded on capital investments Answer: A) GST applied to the purchase of long-term assets used in business operations 30. What does “GST compliance cost” refer to? A) The cost incurred by businesses to ensure adherence to GST regulations B) The cost of GST itself C) The amount of GST paid on compliance services D) The cost of GST exemptions Answer: A) The cost incurred by businesses to ensure adherence to GST regulations 31. What is “GST exemption”? A) A relief from paying GST on certain goods or services B) A refund of GST paid on exempt goods C) A reduction in the GST rate for specific transactions D) A discount on GST for early payment Answer: A) A relief from paying GST on certain goods or services 32. What does “GST adjustment” involve? A) Correcting errors or changes in GST calculations and reporting B) Increasing GST rates C) Adjusting GST exemption levels D) Changing GST registration details Answer: A) Correcting errors or changes in GST calculations and reporting 33. What is “GST audit trail”? A) The documentation and records that support GST transactions and reporting B) The process of tracking GST refunds C) A report on GST compliance D) An audit of GST rates Answer: A) The documentation and records that support GST transactions and reporting 34. What is “GST on services”? A) GST applied to the sale of services, similar to GST on goods B) GST exempted on all types of services C) GST reduced for professional services D) GST applied only to international services Answer: A) GST applied to the sale of services, similar to GST on goods 35. What is “GST on rental income”? A) GST applied to income from renting out property or equipment B) GST exempt on rental income C) GST refunded on rental expenses D) GST charged on sales of rental properties Answer: A) GST applied to income from renting out property or equipment 36. What does “GST treatment of exports” involve? A) Exports are generally zero-rated for GST purposes, meaning GST is charged at 0% B) Exports are exempt from GST C) GST is charged at the same rate as domestic sales D) GST on exports is non-refundable Answer: A) Exports are generally zero-rated for GST purposes, meaning GST is charged at 0% 37. What is “GST partial exemption”? A) A system where businesses can claim GST refunds on only a portion of their expenses B) A reduction in the GST rate for certain goods C) A full exemption from GST for specific transactions D) A refund of GST on exempt goods Answer: A) A system where businesses can claim GST refunds on only a portion of their expenses 38. What does “GST threshold” mean for small businesses? A) The sales amount above which a small business must register for GST B) The maximum GST rate applicable to small businesses C) The limit on GST deductions for small businesses D) The amount of GST paid by small businesses Answer: A) The sales amount above which a small business must register for GST 39. What is “GST direct debit”? A) A payment method where GST liabilities are automatically deducted from a business’s bank account B) A refund of GST paid on business expenses C) A method for collecting GST from customers D) A credit for GST overpaid Answer: A) A payment method where GST liabilities are automatically deducted from a business’s bank account 40. What is “GST compliance risk”? A) The potential for errors or issues in adhering to GST laws and regulations B) The risk of tax fraud C) The risk of GST rates increasing D) The risk of GST refunds being delayed Answer: A) The potential for errors or issues in adhering to GST laws and regulations 41. What is “GST simplification”? A) Measures to make GST administration and compliance easier for businesses B) Reducing the GST rate on certain goods C) Increasing the complexity of GST regulations D) Eliminating GST on all transactions Answer: A) Measures to make GST administration and compliance easier for businesses 42. What is “GST on digital services”? A) GST applied to services provided electronically or online B) GST exemption on digital services C) GST on physical goods sold online D) GST reduction for digital services Answer: A) GST applied to services provided electronically or online 43. What is a “GSTable supply”? A) Goods or services that are subject to GST B) Goods or services that are exempt from GST C) Supplies eligible for GST refund D) Supplies excluded from GST regulations Answer: A) Goods or services that are subject to GST 44. What is “GST direct registration”? A) The process of registering directly with tax authorities for GST B) The registration of GST for indirect taxes C) The process of registering for GST through a third-party service D) The registration of GST for international transactions Answer: A) The process of registering directly with tax authorities for GST 45. What is “GST refund claim”? A) A request for the return of GST paid on purchases that exceed GST collected from sales B) A claim for GST exemption on specific goods C) A claim for GST reduction on capital investments D) A refund of GST paid on personal expenses Answer: A) A request for the return of GST paid on purchases that exceed GST collected from sales 46. What is “GST on imports”? A) GST levied on goods brought into the country from abroad B) GST applied to domestic sales C) GST paid on services provided from abroad D) GST refunded on exported goods Answer: A) GST levied on goods brought into the country from abroad 47. What is “GST on capital goods”? A) GST applied to the purchase of long-term assets used in business operations B) GST deducted from the sale of capital assets C) GST on short-term expenses D) GST refunded on capital investments Answer: A) GST applied to the purchase of long-term assets used in business operations 48. What does “GST compliance” involve? A) Adhering to GST laws and regulations, including proper reporting and payment B) Avoiding GST payments through legal loopholes C) Ignoring GST regulations D) Claiming GST on exempt goods Answer: A) Adhering to GST laws and regulations, including proper reporting and payment 49. What is “GST credit”? A) The amount of GST paid on inputs that can be deducted from GST owed on sales B) The credit for GST paid on personal expenses C) The GST refund on exempt goods D) The credit for GST collected from customers Answer: A) The amount of GST paid on inputs that can be deducted from GST owed on sales 50. What is “GST on rental income”? A) GST applied to income from renting out property or equipment B) GST exempt on rental income C) GST refunded on rental expenses D) GST charged on sales of rental properties Answer: A) GST applied to income from renting out property or equipment