TERMINAL TEST MARCH 2018

FACULTY NAME – Shivangi Bhatia

TERMINAL TEST March 2018

B.Com (Hons) - Semester - VI

Paper Code: BCOM - 304 Time: 2 ½ Hours

Subject: Indirect Tax Max. Marks: 60

MCQ: Select the most appropriate answer: (1 x 10)

1. Tax is levied under VAT at:

a) Last stage of sale
b) Multi Stage
c) First stage of sale
d) First and last stage of sale
2. VAT is calculated by deducting tax credit from tax collected:
a) during the payment period
b) during the financial year
c) during any period
d) None of the above
3. The benefit of VAT is:
a. elimination of taxes
b. reduction of tax evasion
c. higher tax revenues
d. all of the above
4. Registration in VAT is compulsory for dealers having an annual turnover of
a. 1 lakhs
b. 5 lakhs
c. 10 lakhs
d. 25 lakhs

5. What is the full form of TIN?

a. Tax Investigation Number
b. Tax Identity Network
c. Taxpayer’s Identification Number
d. None of the above
6. VAT rate on silver and gold is :
a. 2%
b. 1%
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c. 3%
d. 4%
7. VAT is introduced in India on:
a. 1st April 2005
b. 1st June 2005
c. 1st April 2006
d. 1st June 2006

8. What is the full form of CST?

a. Central System Tax
b. Consolidated Sales Tax
c. Consolidated System Tax
d. Central Sales Tax

9. Solve the below question:

Purchase price is Rs.100, Tax paid on purchase is 10%, Sales price is Rs.180 and
tax on sales price is 12.5%. Calculate the amount of VAT to be paid
a. Rs 22.5
b. Rs 12.5
c. Rs 10
d. Rs 20
10) Contents of VAT invoice include:
a) Date of issue of invoice
b) Amount of VAT charge
c) Quantity and description of goods sold
d) All of the above

11) The compulsory registration limit under VAT Act can be raised by states a
maximum of
a) Rs 15 lakhs
b) 10 lakhs
c) 7 lakhs
d) 12 lakhs

12) Number of new dealer is generally allowed days time from date of liability
to get registered under VAT Act:
a. 15 days
b. 10 days
c. 30 days
d. 12 days
 TERMINAL TEST MARCH 2018

13) The old taxation system had problems of

a. Multiplicity of taxes
b. double taxation of commodities
c. Cascading effect
d. All of the above

14) The invoice method of VAT calculation is also known as:

a) Voucher Method
b) Cash Memo Method
c) Bill Method
d) Tax Credit Method

15) What is the full form of GST?

a) Goods and service tax
b) General Sales Tax
c) Goods and sales tax
d) General Service tax

16) Service tax was introduced in India in the year:

a) 1993
b) 1995
c) 2004
d) 1994

17) Service tax was initially levied in India by the Constitution vide entry No.
a. Union List
b. State List
c. Concurrent List
d. All of the above

18). Service tax is applicable to:

a) Whole of India
b) Whole of India except Jammu and Kashmir
c) Whole of India except Mumbai
d) Only in Delhi

19) Service tax rate is:

a) 14%
b) 20%
 TERMINAL TEST MARCH 2018

c) 12.5%
d) 14.5%
20) Service tax is levied in India by following the:
a) Practical approach
b) Selective approach
c) Comprehensive approach
d) Assessment approach
21) Services provided by diplomatic mission of any country in India is covered
under:
a) Declared Service
b) Exception of declared service
c) Negative List
d) Mega Exemption Notification
22) Renting of immovable property for agriculture purpose is
a) Declared Service
b) Exception of declared service
c) Negative List
d) Mega Exemption
23) In case services are provided by an HUF to a business entity under works
contract, the service tax shall be paid by:
a) Service Provider
b) Service Receiver
c) Both (a) & (b)
d) none of the above

24) Services provided to RBI are:

a) Covered under negative list
b) Declared service
c) Exception to negative list
d) None of the above
25) Any process amounting to manufacturing or production of goods are
covered under-
a) Service Tax
b) VAT
c) Excise Duty
d) Custom Duty

26) What is point of taxation if the invoice is issued within 30 days from
completion of service?
a) Date of service
 TERMINAL TEST MARCH 2018

b) Date of invoice
c) Date of completion of the service
d) Date of advance payment
27) No service tax is levied on ________ Bank

a) Reserve
b) State
c) HDFC
d) None

28) Who is liable to pay service tax-

a) Service Receiver
b) Service provider
c) Company
d) Small service providers

29) Who administers the Service Tax-

a) CBEC
b) CBDT
c) ST
d) Central government

30) What is full form of ACES?

a) Automation of central excise and sales tax
b) Accounting of central excise and service tax
c) Automation of central excise and service tax
d) Accounting of custom duty and service tax

1(a) 2(b) 3(d) 4(b) 5(c) 6 (b) 7(a) 8 (d) 9(b) 10(d)
11 (b) 12 (c) 13(d) 14(d) 15(a) 16(d) 17(a) 18 (b) 19(d) 20( c)
21 ( c) 22 (b) 23 (c) 24 (c) 25 ( c) 26 (b) 27 (a ) 28 (b) 29 (a) 30( b)

Short Questions (5 Marks Each)

(4*5)

Short Notes

1. Declared service of renting of immovable property

2. Negative list agriculture
 TERMINAL TEST MARCH 2018

3. Features of service tax

4. Reverse charge mechanism
5. Input Tax Credit

Long Questions (10 Marks each)

1. What are the administrative procedures followed in VAT Act?
2. X ltd is a manufacturing co. It purchases raw materials from P and Q and
sells manufactured goods to Y ltd. Y ltd. Sells them to retailer Z and goods
are finally sold to consumer by Z.
The details of transactions are as follows:
P to X Ltd (Vat 12.5%) Rs 1,000 ( excluding VAT)
Q to X ltd (Vat 4%) Rs 6,000( excluding VAT)
X to Y ltd (VAT 12.5%) Rs 10,000( excluding VAT)
Y to Z (12.5%) Rs 17,000( excluding VAT)
Z to consumer (12.5%) Rs 22,000 ( excluding VAT)

Compute the amount of total VAT collected by government and VAT liability on
each stage.
Q 3 What are declared services? Explain 10 categories covered under the negative
list.
Q.4 Explain the concept reverse charge mechanism. Explain one practical example
of reverse charge mechanism.
Q.5.Who is small service provider? Explain elaborately.
Q.6. Explain 10 categories under Mega Exemption Notification.
Q.7. (a) X purchases input worth Rs. 15,00,000 and record sales of rs.22,00,000 in
the month of January 2016. Input tax rate and output tax rate is 12.5 percent.
Calculate set-off in indirect tax.
(b) X purchases input worth Rs. 16,00,000 and records sales of Rs. 21,00,000 in
the month of January 2016. Input tax rate and output tax rate are 4 percent and
12.5% respectively. Calculate set-off in indirect tax.