Tax and Central Excise

ICWAI Objective Type questions and acts on Indirect measure 1. Multiple superior Questions (1) delete occupation dismiss be levied on those goods which argon a) settled in India b) Sold in India a) Removed from the milling machinery b) nary(prenominal)e of the above (2)Dutiable goods intend a) Goods atomic number 18 result to commutation hit craft b) Goods which be remedyed from take up great deal c) no(prenominal) excisable goods d) Goods non at each(prenominal) menti atomic number 53d in the key run into Tariff (3)Place of Removal on a lower floor primal scrub path a) Removing the goods from the byplay office of distri furtheror b) Removing the goods from the caution of customs enumerate c) Removing the goods from the tail of pulverisation ) nary(prenominal)e of the above (4) n whiz-Dutiable goods heart and soul a) Name of the increase non mentioned in the Tariff procedure b) Name of the carrefour mentioned in the Tariff telephone number c) Name of the harvest-feast mentioned in the Tariff Act with the put of transaction d) Name of the harvesting mentioned in the Tariff Act with the nought grade (5)Payment of fundamental come upon occupation depends up on a) Removal goods from the office of removal b) Manufacture of goods in the factory c) Deemed industriousness of goods d) Removal goods for separate transfer (6)The rub craft on alky goods make by the manufacturing furrow is c alone toldable to a) evince government ) primordial Government c) Corporation d) Local authority (7)Which of the pursual duties is covered downst zephyrs the starting time catalogue of the at a lower stupefylying collide with Tariff Act? a) back endonical run into responsibleness b) modified gougecel valuate income Duty c) Additional come to Duty d) Education Cess (8)Which of the side by side(p) duties is down the stairs the pur hitch of the State Government? a) commutation move responsibleness b) customs responsibility c) function impose revenue d) bathtub (9)Which argon the goods still low the physical control? (a)Plastic products (b)Cig bette products (c)App arl products (d) crank products (10) At the beat of create of product X attracts 14% BED.At the eon of removal the rate of profession is 8%. Which is the work attracts for the product X a) 14% b) 8% c) 11% (Average) d) home in (Because the rate has changed) take (a) (a) (c) (d) (a) (a) (a) (d) (b) (b) 2. binge in the Blanks 1) substitution strickle avocation faecal matter be levied at the time of 2) Goods at the time of manufacture, non mentioned in the interchange impress Tariff Act, sack be c solelyed 3) exchange fret Tariff Act, 1985 contains subdivisions 4) Goods ar classified infra central expunge Tariff Act found on theof nary(prenominal)enclature havingdigit classification 5)The goods taked in the instrument of rudimentary Excise Act atomic number 18 equal as those on whic h engrave job is collectable chthonian element 4A of the Act. 6) Goods at the time of manufacture, mentioned in the Central Excise Tariff Act, skunk be called 7) Goods atomic number 18 classified infra Central Excise Tariff Act based on thesystem 8) in that location be Chapters chthonian the Central Excise classification 9) Labelling and relabelling comes chthonic 10) serve well levy came into force fromFinance Act assist Manufacture of goods in India no(prenominal) excisable goods 20-sections harmonical System Eight terce. Excisable goodsHarmonized System of no.enclature 96 chapters threesome scroll of Central Excise 1994 3. produce Yes or no(prenominal) fo chthonian Reasons All goods make are subject to primal hit responsibleness. All Excisable goods are dutiable goods No duty fuck be levied if the goods manufactured by the maker is non movable but marketable Goods has been define in the Central Excise Act Manufacturer includes deemed maker at that place is no struggle in the midst of levy and collection 7) Duty ass too be collected horizontal if the goods are non-excisable at the time of manufacturing strain, but are excisable at the time of removal of goods from the place of removal.Duty judge are stipulate in the Central Excise Act, 1944 Central Excise Duty Rate is indicated against each tariff item and non against heading or sub-heading. Manufacture includes any(prenominal) process incidental or ancillary to the issue of a manufactured product. Marketability is essential to levy the primeval excise duty 12) Goods mentioned in the First record or Second Schedule to the Central Excise Tariff Act, 1985 are called non-excisable goods. Manufacturer is not defined under Central Excise Tariff Act. 14) Brand name owner is a conveyr compensate though under contract a third fellowship completely manufactures the productClassification is irrelevant, since all products attract 14% duty Circulars enkindle be yieldd b y the Government of India firmness 1) No. Goods manufactured in India whitethorn be excisable goods or non-excisable goods. No underlying excise duty, if the goods are non-excisable. No. Excisable goods whitethorn be dutiable or non-dutiable goods. 3) Yes. No duty understructure be levied if the goods manufactured by the manufacturer is not movable but marketable as per the decision of the Supreme court of India in the moorage of Union of India v Delhi Cloth and General Mills Ltd. No.The precondition goods has not been defined in the Central Excise Act, 1944. Yes. Manufacturer includes deemed manufacturer 6) No. The margin LEVY mean imposition of revenue/duty. Collection of duty is postponed to the fix up of removal of goods. expression 4 of the Central Excise receives, 2002 7) No. Duty sack up not be collected if the goods are non-excisable at the time of manufacture, but are excisable at the time of removal. No. Duty rates are contract in the Central Excise Tariff Ac t, 1985. Yes. Duty Rate is indicated against each tariff item and not against heading or sub-heading. 10) Yes.Manufacture includes any process incidental or ancillary to the completion of a manufactured product. Yes. Marketability is essential to levy the aboriginal excise duty. 12) No. Goods mentioned in the First Schedule or Second Schedule to the Central Excise Tariff Act, 1985 is called excisable goods. 13) No. The bound manufacturer has been defined under section 2(f) in the Central Excise Act, 1944. The definition under section 2(f) is not exhaustive but inclusive. 14) No. Brand name owner is not a manufacturer even though under contract a third authorityy completely manufactures the product.No. Classification is relevant, even though all products attract 14% duty. No. Circulars provoke be issued by the Central Board of Excise and Customs (CBEC). 4. Multiple pickaxe Questions (1) As per Rule 15 the Central Excise Rules, 2002, the option of reaching duty is visible(preno minal) to those manufacturers who manufacture (a)Aluminium circles (b)Plastic Products (c)Gold Products (d) Agriculture Products (2) Goods specified under Standards of Weights and Measures Act, 1976 as well as in the poster issued by the Government of India along with rate of abeyance put forward be assessed under a) Maximum Retail wrong (b) doing Value (c) Retail Price (d) Whole Sale Price (3) Captively Consumed Goods means (a) Goods manufactured and consumed with in the factory (b)Goods manufactured (c) Goods purchased and used in the factory (d) Goods received from branch (4) Interconnected undertakings means (a) Head office and beginning office (b) Holding and subsidiary companies (c) Group of companies (d) Companies under the same vigilance (5) Which one of the undermentioned leave behind come under the Specific Rate of Duty? (a)Cigarette product (b) Wood product (c)Plastic product d)Diesel product (6) What dowery should be added to the monetary measure of production in the campaign of un turn inspiration? (a) 15% (b) 10% (c) 0% (d) 20% (7) MRP product Assessable re comfort forget be forecastd as (a)Transaction introduction (b)MRP little hiatus (c) Percentage of tariff place (d) no(prenominal) of the above (8) Which one of the quest go away gain part of transaction rank (a) Transportation drag downs from the place of removal to the place of purchaser (b) Transportation charges from the place of factory to the place of branch (c) Transportation charges from the place of distributor to the place of buyer d) Transportation charges from the place of buyer to any some other(a) place (9) Assessable does not include one of the pursuance (a) court of material (b) speak to insurance (c) Cost of transportation (d) Interest on heisted defrayal (10) As per Rule 10 of the Central Excise valuation Rules, the concept of interconnected undertakings means (a) Associate companies (b) Group companies (c) Holding and Subsidiary companies (d ) none of the above Answer (1) (a) (2) (a) (3) (a) (4) (b) (5) (a) (6) (b) (7) (b) (8) (b) (9) (d) (10) (c) 5. pack in the Blanks 1) Specific Duty means duty is account collectable based on the____________and__________by the assessee (2) Provisions under section 4A take over___________effect over section 4 of the Central Excise Act (3) Production cl0 building blocks, quantity sell 510 wholes 250 per unit, 840 units 200 per unit, sample clearances 35 units and the balance cl units are in stock. because, the assessable observe is Rs. _________ (4) Excisable goods consumed at bottom the factory for the manufacture of last-place product is called___________ (5) X Ltd (Holding Company) exchange goods to Y Ltd (Subsidiary Company) at Rs. , 00,000. In turn Y Ltd sold goods to Z Ltd (unrelated soulfulness) at Rs. 1, 10,000, then the assessable reppute in the glide bys of X Ltd________. (6) Assessable in vitrine of mantled consumption is the cost of production prescribed___ ____ (7) The transaction place cannot be considered as assessable value if, any one or part of the conditions____________. (8) MRP provisions are not applicable for packaged commodities meant for________. (9) Compound Levy Scheme is an___________ stratagems. (10) Dharmada Charges acquire from the buyer is fix part of__________. Answer (1) Length and weight of the product 2) Overriding (3) Rs. 3, 02,500 (4) Captive consumption (5) Rs. 1, 10,000 (6) 10% (7) Not satisfied (8) industrial or institutional consumers. (9) Optional (10) Assessable Value 6. Say Yes Or No, father Reasons (1) Specific Duty means duty is payable by the assessee on excisable goods based on the value of goods. (2) Compound levy scheme means an optional scheme (3) Maximum Retail Price means not exclusive of duties and measure revenuees (4) Transaction value is applicable sole(prenominal) when conditions specified in the provisions are satisfied. 5) Dharmada charges collected from the buyer are not includib le in the assessable value. (6) Excise duty and gross revenue measure has to be included in the assessable value (7) at that place is no theme of valuation under Central Excise jurisprudence (8) Insurance charges from the place of depot to the place of buyer shall draw part of assessable value (9) Captive consumption goods request not be certified by the Cost accountant (10) Cash synthesis does not form part of assessable value. Answer (1) No.Specific Duty means duty is payable by the assessee on excisable goods based on the length and weight of the products. (2) Yes. Compound levy scheme means an optional scheme (3) Yes. Maximum Retail Price means not exclusive of duties and taxes (4) Yes. Transaction value is applicable besides when conditions specified in the provisions are satisfied. (5) No. Dharmada charges collected from the buyer are includible in the assessable value. (6) No. Excise duty and trades tax has to be excluded in the assessable value (7) No.There are fi n basis of valuation under Central Excise Law (8) No. Insurance charges from the place of depot to the place of buyer shall not form part of assessable value (9) No. Captive consumption goods need be certified by the Cost Accountant (10) Yes. Cash discount does not form part of assessable value. 7. Multiple excerpt Questions (1) argon -1 resile should withdraw avocation colors (a) White buffer intercept and Green (b) White Buff Red and Green (c) White Buff Black and Green (d) White Buff Rose and Green 2) CT- 1 form exit be issued by the Merchant tradeer to the Manufacturer for modify the goods (a) Without requital of Central Excise (b) Avoidance of Central Excise duty (c) With wages of reduced rate of Central Excise Duty (d) With compensation of full kernel of Central Excise Duty. (3) Certificate of attainment of goods under procedure for trade Warehousing can be done under the (a) CT-3 figure of speech (b) CT-2 puzzle out (c) atomic number 18 -1 (d) wedge -1 (4) The Letter of Undertaking is effectual for a period of (a) 12 calendar months from the exit of quotation by the department. b) 15 months from the insure of acknowledgement by the department (c) 24 months from the discover of acknowledgement by the department (d)6 months from the run across of acknowledgement by the department (5) Excisable goods outside for re-warehousing and merchandise therefrom without defrayal of duty by using the (a) B-3 Bond (b)B-2 Bond (c) B-4 Bond (d)B-7 Bond (6) both(prenominal) times if in the view of the Central Excise Department the manufacturer carries risk (namely discrepancies) the Department may ask him to submit the Bond in. (a)B-l with security measure or surety (b)B-2 with security and surety c)B-3 with security (d) B-4 with surety (7) CT-1 form received by the manufacturer from (a)Merchant tradeinger (b)EOU unit (c)Manufacturer (d)First stage corpus (8) The exportation Oriented Units can procure indigenous material without ear nings of central excise duty. These units have to issue (a)CT -3 enfranchisement (b)CT-4 certificate (c)CT-1 certificate (d)CT-2 certificate (9) If proper invoice for export along with the packing list and ARE -1 form in (a) sextettetuplicate (b) reproduction (c) Triplicate (d) quadruple (10) No discount rate is allowed if the rebate amount is slight than a)Rs. 500 (b)Rs. 1,000 (c) Rs. 2,000 (d) Rs. 4,000 Answer (1) (a) (2) (a) (3) (b) (4) (a) (5) (a) (6) (a) (7) (a) (8) (a) (9) (a) (10) (a) 8. Fill in the Blanks (1) No rebate is allowed if the rebate amount is little than________ (2) Goods can be outside by penalise a fastening in causal agency of merchant exporter with____________or without (3) Proof of export which is issued by the customs authorities by certifying the_______________ (4) ________________certificate is required only when oblige is executed by the merchant exporter. 5) The goods exported to_______________and_________not eligible for rebate (6) An export er who executes a bond to exempt himself from payment of excise duty pull up stakes not be eligible to direct___________ (7) Bond is executed by the Merchant exporter he may be required to obtain a_________from his banker for a specified amount. (8) __________is called as common bond with Surety/Security for removal of goods without payment of duty (9) In case of security bond in the form of cash repair no________can be allowed (10) If goods are sealed by excise officer much(prenominal)(prenominal)(prenominal) a close is called __________ Answer 1) Rs. 500 (2) with sealing or without sealing (3) ARE-1 Form (4) CT-1 (5) Nepal and Bhutan (6) Rebate (7) Bank Guarantee (8) B-l Bond (9) Interest (10) sensation Time Bottle Seal 9. Say Yes or No, overtake Reasons (1) exportation of goods with invoice but without the packing list can be exported (2) ARE -1 Form need not be vigilant if the goods are exported under Bond. (3) Merchant exporter means a someone engaged in manufacturi ng of goods for merchandise or intending to export goods. 4) CT-1 forms will be issued by the superintendent of Customs to the merchant exporter on execution of bond (namely B 1) (5) ARE-1 Form is to be prepared by the exporter in quadruplicate (6) Bonds under Central Excise are always secured (7) No duty is payable on exported goods. therefore there is no need of valuation and classification (8) Self-sealing can be done by any individual of the unit (9) ARE-1 form is not required to be prepared by the exporter. (10) Export has to be completed in spite of appearance 3 months from the fitting stamp of removal from the factory Answer 1) No. Export of goods with invoice and with the packing list can be exported (2) No. ARE -1 Form need to be prepared even if the goods are exported under Bond. (3) No. Merchant exporter means a person engaged in purchase of excisable goods for the purpose of exporting or intending to export goods. (4) No. CT-1 forms will be issued by the superint endent of central excise to the merchant exporter on execution of bond (namely B-l) (5) No. ARE-1 form is to be prepared by the exporter in sixtuplicate (6) No. Bonds under Central Excise may be secured or unsecured. 7) No. classification and valuation is required for the purpose of determining the duty d painful-back or DEPB license etc. (8) No. Sealing of Goods for Export which may be self-sealing or under seal of Central Excise. (9) No. ARE-1 form is required to be prepared by the exporter. (10) No. Export has to be completed within 6 months from the ascertain of removal from the factory 10. Multiple Choice Questions (1) The un employ CEN ad valorem tax accredit can be carried forward (a) Up to 6 months (b) Up to 8 geezerhood (c) Without any time frontier (d) Up to 10 stratums. 2) Cenvat Credit on capital goods can be claimed in the grade in which it is purchased (a) Up to 50% (b) Up to hundred% (c) Up to 25% (d) Up to 75% (3) Cenvat Credit on goods other than capital go ods can be utilized (a) As soon as goods received into the factory (b) Only later payment actually make (c) Only afterward the goods actually sold (d) As soon as manufacture takes place (4) Cenvat Credit is not applicable if the pursual goods are purchased (a) Light Diesel Oil (b) nerve products (c) Plastic products (d) Wood products 5) Cenvat Credit can be adjusted against (a)Dutiable goods manufactured (b)Non-dutiable goods manufactured (c) Non-excisable goods manufactured (d)All excisable goods manufactured (6) Which of the next items is a capital goods (a) Tools, hand tools (b)Raw materials (c) Consumables (d) Accessories (7) Depreciation under section 32 of the Income-tax Act, 1961 should not have been claimed (a) On the cost portion of the with child(p) Goods (b)On the excise portion of the Capital Goods. (c) On the portion of other than Capital Goods d) On the portion of Factory construct (8) Cenvat credit can be utilized for payment of excise duty levied on any (a) Fi nal products (b) stimulant drug products (c) Exempted products (d)Intermediary non-dutiable products (9) Personal Ledger Account must be prepared in (a) Triplicate (b) wizard (c) Double (d) Quadruplicate (10) Cenvat credit on infixs other than capital goods can be allowed at (a) 100% (b)50% (c)25% (d) 0% (11) A unit servinging SSI exemption can service of CEN value-added tax credit on capital goods but such credit can be utilized only (a) if the value of apital goods exceeds Rs. 100 lakh (b) after clearance of Rs. one hundred fifty lakh (c) if the capital goods are exported Answer (1) (c) (2) (a) (3) (a) (4) (a) (5) (a) (6) (a) (7) (b) (8) (a) (9) (a) (10) (a) (11) (b) 11. Fill in the Blanks (1) Motor vehicles are not_____________goods for purpose of Manufacture (2) In take note of capital goods sent for job work these should be brought back within_________ eld from the date of dispatch. 3) The Second Stage lead means a trader who purchases goods from a_______________ (4) T he PLA is attribute when duty is deposited in bank by_________challan (5) Depreciation should not be claimed by the manufacturer who avails the Cenvat credit on___________ (6) The term ___________ means raw-materials, consumables, accessories used to manufacture the stainless product. (7) Dont maintain separate set of accounts but pay an amount fitted to ___________of the value of exempted goods and forego the Cenvat credit of commentarys utilized exclusively for manufacture of exempted concluding product. 8) Balance of CENtub Credit Receivable (stimulations) Account and PLA Account are shown as ____________in the Assets side of the Balance Sheet. (9) Due date of payment of Central Excise Duty for the month of March is______________ (10) excitant tax credit on capital goods can be______________against the duty payable final products. Answer (1) Capital (2) 180 daylights. (3) First Stage head teacher (4) GAR-7 (5) Capital Goods (6) In the manufacture (7) 10% (8) Current Asset s. (9) 31st March (10) Claimed. 12. Say Yes or No, Give Reasons 1) Cenvat credit can be taken as soon as the inputs are dispatched by the supplier (2) Cenvat cannot be utilized for payment of duty on waste matter (3) Cenvat credit on capital goods is restricted to 50% of the duty in the social class of the receipt (4) If there is no excise duty final products, cenvat credit cannot be claimed in the case of trade in DTA (5) When credit has been taken on input goods and the same is removed for home consumption, excise duty is not payable (6) In phratry 2008, the Government came out with the Cenvat Credit Rules, 2004 by merging the Cenvat Credit Rules, 2002 and the expediency valuate Credit Rules, 2002. 7) The term Capital goods under Cenvat Rules is DIFFERENT from the term capital goods as understood in story or in income-tax (8) In the case of goods modify for DTA for input credit to be claimed, the sunk product should graden at least Re 1 of excise duty (9) If a single i nvoice covers goods smoothing under assorted sub-heading, separate entries shall be do for each of such sub-heading (10) In case of inputs and capital goods Cenvat credit is usable as soon as input is received in the factory. Answer (1) Yes. Cenvat credit can be taken as soon as the inputs are received by the manufacturer. 2) No. Cenvat can be utilized for payment of duty on waste (3) Yes. Cenvat credit on capital goods is restricted upto 50% of the duty in the course of instruction of the receipt and the balance in the subsequent year or years. (4) Yes. Cenvat credit cannot be claimed in the case of sale in DTA if the final products are non-dutiable. (5) No. Cenvat credit not allowed on those goods which are cleared as such for domestic tariff area. (6) No. In phratry 2004, the Government came out with the Cenvat Credit Rules, 2004 by merging the Cenvat Credit Rules, 2002 and the proceeds value Credit Rules, 2002 (7) Yes.The term Capital goods under Cenvat Rules is DIFFERE NT from the term capital goods a understood in accounting or in income-tax (8) Yes. goods cleared for DTA for input credit to be claimed, the finished product should suffer at least Re 1 of excise duty (9) Yes. Single invoice covers goods falling under different sub-heading, separate entries shall be made for each of such sub-heading (10) Yes. Input goods and capital goods Cenvat credit is available as soon as input is received in the factory. 13. Multiple Choice Questions 1)A manufacturer beingness eligible for SSI related exemptions is linked to his dollar volume rate in the previous year a) less(prenominal) than Rs. 400 Lakhs b) slight than Rs. 150 Lakhs c) Less than Rs. 90 Lakhs d) Less than Rs. 350 Lakhs (2)SSI Exemption scheme adopted by the manufacturer he is not required to pay the central excise duty up to a) Rs. 150 Lakhs on dutiable goods b) Rs. 300 Lakhs on dutiable goods c) Rs. 400 Lakhs on dutiable goods d) Rs. 100 Lakhs on dutiable goods (3)Value of captive consum ption goods is forming part of the Rs. 400 Lakhs disorder, if the final product a) Exempt in any notification ) Not exempt in any notification c) Exempt under presentation 8/2003 d) none of the above (4)Industries are not eligible for SSI exemption ir look uponive of their turnover. a) Automobiles b) Plastic c) Paper d) electronic and Electrical (5)The due date for filing Quarterly exceed ER -3 under Central Excise is a) 20th of the following month. b) tenth of the following month c) fifth of the following month d) fifteenth of the following month (6)The due date for payment of Central Excise Duty by the SSI unit for the month of April is a) 15th of the following month b) 15th of October c) tenth of the following month ) 5th of the following month (7)Frequency of audit for SSI unit paying central excise duty is less than Rs. 10 Lakhs. a) at a time in 2 years b) Once in 5 years c) Once in 10 years d) Every year. (8) business concern worker is exempt from basic excise duty if the supplier of raw material had undertaken payment of excise duty under a) Notification 24/86 Central Excise Law b) Notification 214/86 Central Excise Law c) Notification 8/2003 Central Excise Law d) Notification 18/2003 Central Excise Law (9)Registration is not required if the turnover for piffling scale units a) Less than Rs. 15 0 Lakhs ) Less than Rs. 90 Lakhs c) Less than Rs. 100 Lakhs d) Less than Rs. 10 Lakhs (10)What is to be done if turnover exceeds Rs 90 lakhs but is less than Rs 150 lakhs? a) contract to be filed b) No Declaration to be filed c) Declaration may be filed d) Declaration must be filed after attaining Rs. 150 Lakhs Answer 1) (a) 2) (a) 3) (a) .. 4) (a) 5) (a) 6) (a) 7) (b) 8) (b) 9) (a) 10) (a) 14. Fill in the Blanks 1) SSI exemption is available only when the turnover in the previous year turnover is less than 2) SSI unit can clear the excisable goods uptowithout payment of duty. ) Quarterly subjectto be filed forwards the due dateof the following month by th e SSI units claiming the exemption notification (4)Payment of duty is on periodic basis and has to be made on or in the leadof the following month 5) No declaration needs to be give to the department if the previous year turnover is less than 6) A Job worker is exempt from basic excise duty if the supplier of raw material had undertaken payment of excise duty under Notificationof Central Excise 7) SSI units will get the Cenvat Credit only over and above rateable turnover during the watercourse year. ) Registration is not required for SSI units if the turnover during the previous year is less than of assessable turnover. 9) Audit of SSI units is conducted once innumber of years 10) Export turnover isfor the deliberateness of turnover under the notification 8/2003. Answer Rs. 400 Lakhs Rs. 150 Lakhs ER-3, 20th 15th of the following month Rs. 90 Lakhs 214/1986 Rs. 150 Lakhs. Rs. 150 Lakhs. Two to five Exempted. 15. Say Yes or No, Give Reasons 1) The Government of India issued Not ification No. 8/2003 providing relaxation from central excise duty, without any conditions. ) If in a previous year the turnover of a manufacturer is follow to Rs. 4 crores then he can in the actual year claim the exemption improvements available to a SSI. 3) SSI units opted the exemption notification benefit can pay duty if the dutiable goods cleared from the factory exceeds Rs. 150 lakhs and claim Cenvat credit on inputs. 1) Manufacturers who have Cenvat credit (on capital goods confirming on other than capital goods) which is to a greater extent than the duty payable on exempted turnover will opt for SSI exemption benefit. ) Clearance of excisable goods without payment of duty to 100% EOU unit will form part of turnover to calculate the threshold limit of Rs. 4 crores. Sales to Nepal and Bhutan is considered as an export gross revenue. Export procedures are very tough for SSI units. Exempted units from central excise duty are also exempted from adaption. Audit of SSI unit i s conducted every year. There is no conflict between regularity of calculation of Rs. 400 Lakhs and Rs. 150 Lakhs. Answer 1) No. The Government of India issued Notification No. 8/2003 providing relaxation from central excise duty, with conditions. ) No. Previous year the turnover of a manufacturer is stir to Rs. 4 crores then he cannot claim in the up-to-date year exemption benefits available to a SSI. 3) Yes. SSI units opted the exemption notification benefit can pay duty if the dutiable goods cleared from the factory exceeds Rs. 150 lakhs and claim Cenvat credit on inputs. 4) No. Manufacturers who have Cenvat credit (on capital goods addition on other than capital goods) which is more than the duty payable on exempted turnover may not opt for SSI exemption benefit. 5) No.Clearance of excisable goods without payment of duty to 100% EOU unit will not form part of turnover to calculate the threshold limit of Rs. 4 crores. No. Sales to Nepal and Bhutan considered as home clearance . No. Export procedures are not tough for SSI units. Yes. Exempted units from central excise duty are also exempted from allowance. No. Audit of SSI unit is conducted not on yearly basis. Yes. There is a difference between system of calculation of Rs. 400 Lakhs and Rs. 150 Lakhs. 16. Multiple Choice Questions (1)Registration is unequivocal for the head who intends to act as a) First Stage Dealer ) Third Stage Dealer c) Dealer d) Purchaser (2)An application for allowance under central excise law is required to be made in a) Form A-l b) Form B-1 c) Form CT-1 d) Form ARE-1 (3)The DSA shall be preserved for a) quintuplet Years b) Two Years c) One Year d) sextuplet Months (4)The excise duty payable by the manufacturer is based on a) handbill b) Gate Pass c) Lorry receipt d) Debit Note (5)Which one of the following is to be submitted by the manufacturer on a periodic basis a) ER 1 b) ER 3 c) ER 5 d) ER 7 (6)Original invoice has to be issued to the a) Buyer b) Transporter c) C entral Excise Department ) Consignment Agent (7)The penalization for non-readjustment is a) measuring stick of duty of contravening goods or Rs 10,000 whichever is higher b) Amount of duty of contravening goods or Rs 10,000 whichever is less c) Amount of duty of contravening goods or Rs 1,000 whichever is higher. d) Amount of duty of contravening goods or Rs 5,000 whichever is higher (8)The due date of payment of tax through e-payment is a) 6th of the following month b) 5th of the following month c) 31 st of every month d) 15th of the following month (9)LTU will be headed by a) Chief Commissioner of CBDT or of CBEC ) Chief Commissioner of CBEC c) Commissioner of Central Excise d) Commissioner of Income evaluate. (10)CIN stands for a) Challan assignment get along b) Cash realisation Number c) Commission Identification Number d) Central Information Number. Answer (a) (a) (a) (a) (a) (a) (a) (a) 1) (a) 2) (a) 17. Fill in the Banks The 15 digit PAN based enrolment number is calle d 2) Registration under Central Excise can be granted in the name of a minor, provided a legal shielder undertakes to The penalty for detain submission of harvesting can extend upto The term GAR meansA LTU is an undertaking which has paying central excise or run tax of more thanduring the previous year. (6)The first rapscallion and the last page of the DSA shall be duly authenticated by the orperson LTUs will get facilities of payment of tax throughsystem. 8) Every assessee mandatorily files the annual installed capacity statement in advance 30th April of the win financial year in theForm 7) The due date of payment of tax through e-payment is 6th of the following month by the manufacturers and by 16th of the following month in the case of SSI units.In the case of March month the due is 8) When goods are removed from the factory of the manufacturer to some other premises for purposes of Testing or for any other process not amounting to manufacture, excise duty need not be gai nful provided the permission ofof Central Excise is obtained. Answer Excise control code Conduct the business Rs. 5,000 Government Account (Receipt and Payment) Rules Rs. 5 crore. manufacturer or his authorized person single window ER 7 31st March Commissioner 18. Say Yes or No, Give ReasonsApplication for allowance as a manufacturer should be made Form A-l A 5 digit PAN based allowance number (ECC) will be distribute to the assessee There is no penalty for non- fitting, even when registration under the statute is needful Daily logical argument Account can be updated once in month Invoice under central excise law is required to be made in reproduce Payment of duty can be made once in six months 7) E-payment is authorisation for those manufactures who have stipendiary central excise duty is Rs 50 lacs or more during the front financial year. ) If the assessee mentions CIN in the Return, it is not necessary to attach the copy of challan with the Return. Challan Identificatio n Number (CIN) has three parts. 100% EOU has to submit the monthly make it in ER-2 Form. Answer Yes. Application for registration as a manufacturer should be made in Form A-l No. A 15 digit PAN based registration number (ECC) will be allotted to the assessee 3) No. There is penalty for non-registration which is Rs. 10,000 or duty on contravening goods whichever is higher No. Daily Stock Account should be updated on daily basis, devil days delay is allowed. Yes.Invoice under central excise law is required to be made in triplicate No. Payment of duty can be made on monthly basis 7) Yes. E-payment is mandatory for those manufactures who have nonrecreational central excise duty is Rs 50 lacs or more during the preceding financial year. 8) Yes. If the assessee mentions CIN in the Return, it is not necessary to attach the copy of challan with the Return. Yes. Challan Identification Number (CIN) has three parts. Yes. 100% EOU has to submit the monthly gift in ER-2 Form. 19. Multiple Ch oice Questions (1)Desk Review audit is a part of a) Special Audit b) C & AG Audit c) Excise Audit 2000 ) probe (2)In the case of Excise Audit 2000, selection of assessee is based on a) put on the line factor b) Non-risk factor c) Merit of assessee d) Value of goods (3)Time period to issue fall upon before commencing the audit. a) 20 days b) 5 days c) 25 days d) 15 days (4)Cenvat credit audit can be reproducible by a) The Chief Commissioner of Central Excise. b) The Commissioner of Central Excise c) The Assistant Commissioner of Central Excise d) The Deputy Commissioner of Central Excise (5)Yearly audit is applicable for those units who pay the central excise duty by way of cash more than a) Rs. 300 Lakhs b) Rs. 150 Lakhs ) Rs. 100 Lakhs (d) Rs. 90 Lakhs Answer 1) (c) 2) (a) 3) (d) 4) (b) 5) (a) 20. Fill in the Blanks 1) Units paying duty more than Rs 3 crore has audit 2) C & A G submits the report to the, who causes these to be primed(p) before each mansion of Parliament. 3) Valuation Audit carried out by. 4) The expenses of Cenvat credit audit and audit fees shall be compensable by. 5) The maximum time limit for submission of such cost audit report isdays from the date of receipt of cost audit come in by the manufacturer (6) C & AG submits the report to the, who causes these to be laid before each House of Parliament. 7) The audit plan should be documented in the. (8) The Cost Accountant has to submit his audit report within the time specified by the______________. (9) Road checks are carried out by the department authorities to check whether all goods moving are attach to bydocuments or not. (10)A minimum ofnotice should be given to the assessee before commencing the audit. (11)Stock taking can be done by the superintendent or Inspector of central excise for ______________and___________. Answer Yearly The President of India. Cost Accountant Excise Department 180 days The President of India.Working papers Commissioner or Commissioner of Central Exc ise. Duty paying. 15 days. Finished goods and Cenvat goods 21. Say Yes or No, Give Reasons 1. Excise audit is compulsory every year if the payment of excise duty is more than 3 crores. 2. There are three types of excise audits under Central Excise Law. 3. Desk reexamine audit can be conducted by a practicing leased Accountant or a practicing Cost Accountant in the premises of manufacturer. 4. Valuation audit can be lucid by the Superintendent of Central Excise 5. The expenses and audit fees shall be salaried by Assessee . Returns are filed by the assessee without verification by the Excise department. Hence no audit is required to be conducted. 7. Central Excise tax revenue Audit (known as CERA Audit) conducted by the Cost Accountant or Chartered Accountant. 8. The desk review is a part of the sexual audit procedure and the go of the professionals are taken to help the department. 9. Valuation Audit can be ordered only with the prior laudation of Chief Commissioner of Centra l Excise. 10. The desk review audit should be completed in 5-7 work days Answer 1) Yes.Excise audit is compulsory every year if the payment of excise duty is more than 3 crores. 2) Yes. There are three types of excise audits under Central Excise Law. 1) No. Desk review audit can be conducted by a practicing Chartered Accountant or a practicing Cost Accountant in the premises of Department. 2) No. Valuation audit can be ordered by the Assistant or Deputy Commissioner of central excise after getting the prior permission of Chief Commissioner of Central Excise. 3) No. The expenses and audit fees shall be pay by the department. 3) No.Returns are filed by the assessee without verification by the Excise department. Hence audit is required to be conducted. 4) No. Central Excise Revenue Audit (known as CERA Audit) conducted by the C and A G department. 4) Yes. The desk review is a part of the internal audit procedure and the run of the professionals are taken to help the department. 5) Y es. Valuation Audit can be ordered only with the prior approval of Chief Commissioner of Central Excise. 5) Yes. The desk review audit should be completed in 5-7 working days. 22. Fill in the Blanks gain valuate is a tax on. expediency Tax is applicable to the whole of India except the statue of. Registration is mandatory if the value of nonexempt chip ins exceeds Rs. during the financial year. 4) Form________________is used for applying for registration under military returns Tax. 5) The Due date of payment of go tax for the month is________________of the succeeding month. 6) The effective rate of religious divine portion tax including Education Cess is________________. 7) Registered premises means all premises from where an assessee is providing____________________. ) The present rate of emolument tax is___________ plus_______________plus. 9) The avail tax supplier is required to issue (within 14 days of completion of armed inspection and repair) an_____________ sig ned by him or a person authorized by him. (10)If receipts tax payment is made through internet banking, such e-payment can be made by__________ of the following month or following quarter as the case may be. Answer 1. Value of rateable serve 2. Jammu and Kashmir 3. Rs. 9,00,000 4. ST-1 5. 5th 6. 12. 36% 7. Taxable work 8. 12% plus 2% plus 1% 9. Invoice. 10. 6th 23. Say Yes Or No, Give Reasons ) The list of records needs to be maintained is not provided in the value Tax Rules 2) Single registration in the case of nonuple operate rendered is feasible subject to conditions 3) The due date for monthly return for servicing tax is the twenty-fifth of the succeeding month in the case of a company 4) A service supplier is the person who renders the service 5) GAR-7 is the form used to pay suffice tax 6) Service tax records are to be maintained at the registered premises of the service provider. 7) For any delayed payment of service tax, interest cannot be levied. 8) If Service ta x paid during the previous year is in excess of Rs. 0 lakhs then e-payment is mandatory 9) Single Registration is possible with the permission from Department, only when the assessee maintains centralized direction or centralised accounting for multiple function provided from more than one premises. 10) If the last day of payment and filing return is a exoteric holiday, tax should be paid and return filed on the previous working day. Answer 1) No. This list is to be submitted once at the time of filing his first S. T. 3 return. Sales register, Purchase register, Cash book, small cash book, General ledger, etc. 2) Yes.Single registration in the case of multiple go rendered is possible subject to conditions 3) No. The due date for submitting the return is half yearly 25th October and 25th April. There is no monthly return concept in the service tax provisions. 4) Yes. A service provider is the person who renders the service 5) Yes. GAR-7 is the form used to pay Service tax 6) Yes. Service tax records are to be maintained at the registered premises of the service provider. 7) No. For any delayed payment of service tax, interest mandatory. 8) Yes. If Service tax paid during the previous year is in excess of Rs. 0 lakhs then e-payment is mandatory 9) Yes. Single Registration is possible with the permission from Department, only when the assessee maintains centralized billing or centralised accounting for multiple run provided from more than one premises. 10) No. If the last day of payment and filing return is a globe holiday, tax can be paid and return can be filed on the adjacent working day. 24. Multiple Choice Questions (1)Service tax can be levied on the a) Taxable function b) Exempted run c) Partly exempted and part nonexempt function d) On purchase of input goods (2)Value of works contract includes ) Cost of consumables, electrical energy b) Value of transfer of property in goods c) Value of bathing tub or Sales Tax on the above d) none of the ab ove (3)A person who neither intends to hold nor holds any title to the goods or services is called a) everlasting(a) Agent b) Dealer c) Service tax provider d) Manufacturer (4)Under Service Tax (Determination of Value) Rules, 2006, Act means a) The Finance Act, 1994 b) The Central Excise Act, 1944 c) Central Excise Tariff Act, 1985 d) Central Sales Tax Act, 1956 (5)Service tax is not applicable to the state of a) Jharkhand b) Himachal Pradesh c) Tripura d) Jammu and Kashmir 6)The importer of service is credible to pay service tax only when the service provider having a) No place of business in India b) Place of business in India c) Permanent address in India d) None of the above (7)The service tax paid on input services claimed as Cenvat credit after the export of service a) Can be claimed rebate (i. e. duty drawback) b) Cannot be claimed any rebate c) Can be claimed as refund d) None of the above (8)If the immovable property in respect of which service is rendered outside India t he service is considered an export a) Irrespective of where the payment has come from ) Only when payment came from overseas. c) Partly from overseas d) Even without payment received from an importer. (9)The value of any taxable service, as the case may be, does not include a) The sound off fare collected by declaim travel promoter b) Value of services collected by rail travel agent c) Services provide by the consultant d) None of the above (10)Which of the following services does not come under export of service? a) Air transport of passengers embarking for international travel b) Export of services with respect to immovable property c) Export of services with respect to watchfulness consultancy services d) None of the above.Answer (a) (a) (a) (a) (d) (a) (b) (a) (a) (a) 25. Fill in the Blanks 1. Service tax financial obligation is dependent upon the type of thewho provides the taxable service 2. Service tax can be levied on theand 3. Services provided by Central or State Gove rnment are taxable unless these services are 4. If the value is not ascertainable thenshould be referred for arriving the value of such services. 5. Out of pocket expenses incurred arein the value of taxable service. 6. The expenditure or costs incurred by the service provider as aof the recipient of service shall be excluded from the value of the taxable service . Receipt of advance money is not 8. Taxable event in the case of import is the date of 9. Service tax is payable onof taxable service actually received and not on amount billed, even though taxable event arises. 10. The costs incurred by the service provider as aof the recipient of service shall be excluded from the value of the taxable service Answer 1) Person. 2) Taxable Service and Value of Taxable Service 3) statutory services 4) Service Tax (Determination of Value) Rules, 2006. 5) Includible. 6) Pure Agent 7) a taxable event 8) actual import 9) The value. 10) Pure Agent 6. Say Yes or No, With Reasons 1) If a service i s rendered free service tax is not payable because the value of the service is cypher and no amount is received from the customer. 2) There is concept of pure agent that exists for the purpose of service tax valuation. 3) The value of goods transferred to the job worker is not included in the assessable value of service. 4) Service Tax can be levied on an advance payment received. 5) The central excise officer has the power to determine the value of the services after providing an opportunity to be heard to the assessee. ) Services delivered by a person having a place of business in Jammu and Kashmir to a person having a place of business in Andhra Pradesh is subject to service tax. 7) statutory services are also taxable services. 8) Some services are taxable when provided to any person. If a service falls in that category, service provided on sub-contract basis will be liable to pay service tax. 9) A person having a place of business in Andhra Pradesh provides to a person having a place of business in Jammu and Kashmir. such service is liable to service tax law. 0) The airfare collected by air travel agent in respect of service provided by him does not include in the value of services. Answer 1) Yes. If a service is rendered free service tax is not payable because the value of the service is zero and no amount is received from the customer. 2) Yes. There is concept of pure agent that exists for the purpose of service tax valuation. 3) Yes. The value of goods transferred to the job worker is not included in the assessable value of service. 4) Yes. Service Tax can be levied on an advance payment received. 5) Yes.The central excise officer has the power to determine the value of the services after providing an opportunity to be heard to the assessee. 6) Yes. Services delivered by a person having a place of business in Jammu and Kashmir to a person having a place of business in Andhra Pradesh is subject to service tax, place of delivery of service is important. 7) No. Statutory services are not taxable services 8) Yes. Some services are taxable when provided to any person. If a service falls in that category, service provided on sub-contract basis will be liable to pay service tax. 9) No.A person having a place of business in Andhra Pradesh provides to a person having a place of business in Jammu and Kashmir. Such service is liable to service tax law. 10) Yes. The airfare collected by air travel agent in respect of service provided by him does not include in the value of services. 27. Multiple Choice Questions 1. Service tax financial obligation arises only when the taxable turnover of the previous year exceeds a) Rs. 10,00,000 b) Rs. 9,00,000 c) Rs. 8,00,000, d) Rs. 7,00. 000 2. No service tax will be levied on value of goods and material supplied to the service recipient while roviding service, provided Cenvat Credit on such goods and material is a) not taken b) taken c) partly reversed d) none of the above 3. One of the following serv ices is a reverse charge a) Mutual Fund distributors services b) Management consultancy services c) Telecommunication services d) Information Technology services 4. Services rendered to the Reserve Bank of India is a) taxable service b) exempted service c) partly exempted d) none of the above 5. Importer of service is liable to pay service tax only when a) provider of service has no place of business in India b) provider of service has place of business in India ) import of service is not taxable in India d) provider of service is related to the importer 6. Services are taxable only when defined under a) Section 65( 105) of Finance Act, 1994 b) Section 64( 105) of Finance Act, 1994 c) Service Tax Rules d) Section 4 of the Central Excise Act, 1944 7. Which one of the following service is called reverse charge a) Service provider is liable to pay service tax b) Service receiver is liable to pay service tax c) No one is liable to pay service tax d) Whose services are exempted from serv ice tax 8. Services provided to United Nations employees for their personal purposes is a) conceivable to pay service tax ) Not liable to pay service tax c) Partly liable to pay service tax d) None of the above 9. ACA firm had a turnover of Rs. 17 lakhs in Yl. Its turnover was Rs. 5 lakhs in Y2, Rs. 8 lakhs in Y3 and Rs. 5 lakhs in Y4. In which years is the firm liable to pay service tax? a) Yl and Y2 b) Yl,Y2andY3 c) Y2 and Y3 d) None of the above 10. Exemption turnover of Rs. 10 lakhs for previous year it is the value of taxable service rendered and for the current year a) Value of taxable service received b) Value of taxable services rendered c) Value of taxable services partly received and partly rendered d) None of the above. Answer 1) (a) 2) (a) 3) (a) ) (b) 5) (a) 6) (a) 7) (b) 8) (b) 9) (a) 10) (a) 28. Fill in the Blanks 1. If the taxable services exceedbut is less thanthen the service provider will have to register with the Superintendent of Central Excise under the Servic e Tax provisions. 2. For certain services service tax liability is to be paid by the service receiver is called 3. Services provided to Special Economic Zones (or) services provided by Special Economic Zones are 4. Service tax liability is exempted if the turnover is less than or equal to 5. If the taxable turnover during the current year 2008-09 exceedsthen there is no exemption limit in the year 2009-10.Answer 1) Rs. 9,00,000 but less than Rs. 10,00,000 2) Reverse charge 3) Non Exempted Services 4) Rs. 10,00,000 5) Rs. 10,00,000. 29. Multiple Choice Questions 1. What is the due date for payments of service tax in the case of a partnership firm? a) 5th day of the month immediately following every month b) 25th day of the month immediately following every quarter c) 5th day of the month immediately following every quarter d) 25th day of the month immediately following every month 2. A Ltd enters into an advertising contract with B Ltd. for a sum of Rs. 15,000 on 5-6-2006. A Ltd. r eceives an advance of Rs. 10,000 on 06. 6. 2006 and the balance amount on the completion services of service on 12. 07. 2006. The service tax payable by AB Ltd. is a) Rs. 1836 by 25-8-2006 a) Rs. 1224 by 25-6-2007 and Rs. 612 by 25-8-2006 b) Rs. 1836 by 5-8-2006 b) Rs. 1224 by 5-7-2006 and Rs. 612 by 5-8-2006 3. Y Ltd provides management consultancy services to X for a esteem of Rs. 20,000 . Y Ltd. raises the bill on X on 05. 06. 2006. Y Ltd. receives the payment from X on 15. 07. 2006. When should Y Ltd. pay the service tax? a) on or before 5-8-2006 b) on or before 5-7-2006 c) on or before 31 -7-2006 d) on or before 30-6-2006 . Service tax is payable to the credit of the Central Government in a) Form ST-3 b) GAR -7 challan c) Form F d) None of the above 5. Adjustment of excess of service tax can be allowed on the basis of a) Pro-rata b) measure amount at time c) Only 80% d) Only 50% 6. Penalty for not maintaining the proper books of accounts may extend to a) Rs. 5,000 b) Rs. 50,000 c) Rs. 2,500 d) Rs. 1,000 7. An assessee is allowed to rectify mistakes and file revised return a) Within 90 days from the date of filing of the original return b) Within 180 days from the date of filing of the original return c) Without any time limit ) None of the above 8. E- payment of service tax is mandatory only when the payment of service tax exceeds a) Rs. 50 Lakhs b) Rs. 5 Lakhs c) Rs. 10 Lakhs d) Rs. 15 Lakhs 9. How much abatement will be allowed to Mandap Keeper, Hotels and Convention Services providing full catering services a) 40% b) 60% c) 100% d) 50% 10. Cenvat credit is not allowed if the input services are exclusively used in the output services a) Exempted service b) Export of services c) Taxable export of services Answer (c) (d) (a) (b) (a) (a) (a) (a) (a) (b) 30. Fill in the Blanks 1.Abatement is an amount that can befrom the value of the service. 2. In the case of Individuals the due date for payment of service tax for the III quarter is 3. In the case of companies the service tax for October is payable on or before of 4. For all assessees the due date for payment of service tax for the service rendered in the month of March is 5. E-payment of service tax has been made mandatory for assessees who have paid service tax of more than Rs. during the last financial year or during the current financial year 6. Half yearly return has to be filed using Form The number of copies should be _____ 7.The time limit for filing revised return isdays from the date of 8. Penalty for not obtaining registration is Rs. per day for every day of default or Rs. whichever is higher. 9. The penalty will be reduced to%, if tax, interest and penalty are paid within 30 days from the date of receipt of order of Central Excise Officer. 10. The facility of e-payment of service tax has also been introduced from Answer Deducted 5th of January 5th of November 31st March 1) Rs. 50,00. 000 2) ST 3 , triplicate 3) 90 days from the date of filing the original return. 4 ) Rs. 00 per day or Rs. 5, 000. 5) 25%. 6) 11. 05. 2005 31. Say Yes or No, Give Reasons It is necessary to specify the heading under which the service being provided is falling. 2) Service provided from India with respect to immovable property situated abroad is called export of services. 1) There can be no reversal of Cenvat credit on input service towards Interior decorator services used to produce partly dutiable goods as well as non dutiable goods. 2) There can be no reversal of Cenvat credit on input services for an output service provider if the final services are deemed exports. ) Due date of payment of service tax for e-payer is the 6th of following month including the dues for March month. Service tax will be paid by an individual on monthly basis Due date of submission of half yearly return ST 3 is 30th kinsfolk Revised returns can be filed with in 90 days from the date of original return filed by the assessee E- payment of service tax is compulsory for every assessee Pr ovisional assessment is not applicable at any given case under service tax provisions. Answer 1) Yes. contract the heading under which the service being provided is falling is necessary for the purpose of classification. ) Yes. Service provided from India with respect to immovable property situated abroad is called export of services. 3) No. There should be reversal of Cenvat credit on input service towards Interior decorator services used to produce partly dutiable goods as well as non dutiable goods. 4) Yes. There can be no reversal of Cenvat credit on input services for an output service provider if the final services are deemed exports. 5) No. Due date of payment of service tax for e-payer is the 6th of following month except the dues for March month. No. Service tax will be paid by an individual on quarterly basis No.Due date of submission of half yearly return ST-3 is 25th October and 25th April. Yes. Revised returns can be filed within 90 days from the date of original retur n filed by the assessee No. E- payment of service tax is not compulsory for every assessee No. Provisional assessment is applicable under service tax provisions. 32. Multiple Choice Questions (1) willful registration if turnover does not exceed a) Rs. 10,00,000 b) Rs. 1. 00,000 c) Rs. 12,00,000 d) Rs. 50,00,000 (2)Registration is Compulsory based on transactions (irrespective of turnover) if the dealer falls under the following categories ) Dealer is an importer b) Dealer selling goods within the state c) Dealer is dealing with the exempted goods d) None of the above. (3)Dealer is liable to pay tax at Special rates as specified in Schedule. a) legal to avail the VAT credit b) Not eligible to avail the VAT credit c) 50% of VAT eligible for credit d) Eligible to avail the VAT credit after registered under VAT (4)The prescribed authority may cancel the registration of a VAT dealer, where the VAT dealer a) Has no fixed place of business b) Has place of business c) Has place of residenc e d) None of the above 5)Compulsory registration under VAT applicable if the dealer a) deals with inter-state sales b) deals with exempted goods c) buying and selling goods in the state d) none of the above Answer 1) (a) 2) (a) 3) (b) 4) (a) 5) (a) 33. Say Yes or No, With Reasons 1) There are two types of registration (i) Compulsory Registration (ii) Voluntary Registration. 2) Dealers whose Voluntary Registration always rejected by the department 3) Dealer dealing with inter-state sales has to compulsorily register under the State VAT. 4) Registration is also available under VAT for TOT dealers or compounding tax opted dealer. ) A certificate of registration under VAT is not available. Answer Yes. There are two types of registration (i) Compulsory Registration (ii) Voluntary Registration. No. Dealers whose Voluntary Registration always not rejected by the department Yes. Dealer dealing with inter-state sales has to compulsorily register under VAT. Yes. Registration is also available under APVAT for TOT dealers Yes. A certificate of registration under VAT is in the Form VAT 105 34. Multiple Choice Questions (1)How many Schedules are there under the VAT Act. a) Five Schedules b) cardinal Schedules c) Seven Schedules ) Eight Schedules (2)Goods specified under Schedule V will be taxed at the rate of a) 0% b) 1% (c) 4% (d) 12. 5% (3)Under which Schedule do Bullion and Specie come? a) Schedule 1 b) Schedule II c) Schedule III d) Schedule IV (4)The microscope stage of levy of tax for Aviation and other motor spirit is the read of a) First sale in the State b) Second sale in the State c) First and Second sale in the State d) Third sale in the State (5)Sale of taxable goods in the course of inter-state trade or commerce falling within the scope of section 3 of the Central Sales Tax Act, 1956 are called ) Zero rated sales b) Exempted sales (c). Non-exempted sales (d) Taxable sales (6)VAT rate on all kinds of Pulses and Dhalls is a) 1% b) 4% c) 12. 5% d) 0% (7)At the point of first sale in the state the following product attracts 32. 55% of VAT a) Petrol b) Machinery c) hard drink d) Diesel Oil (8)Abbreviate ITC a) Input Tax Code b) Input Tax Credit c) Initial Tax Credit d) In-house Tax Credit (9)Sale of vegetables and fruits other than those cured, frozen, preserved, processed, dried, dehydrated or canned are called a) Exempted sales b) Taxable sales c) Partly exempted sales d) Special sales 10)Kerosene sold through public distribution system will attract VAT rate a) 0% b) 1% c) 4% d) 12. 50% Answer 1) (b) 2) (d) 1) (c) 3) (a) 4) (d) 5) (b) 6) (a) 7) (b) 8) (a) 9) (c) 35. Say Yes or No, Give Reasons 1) Input Tax Credit can be allowed in respect of Schedule VI goods 2) Gold and Jewellery are liable to tax under VAT 1% 3) Goods that fall under the Schedule I will get Input Tax Credit 4) Generally sale of books, periodicals and journals are exempted goods under VAT. 5) VAT rates are common for all the products specified in Schedule V 6) The firs t seller of supererogatory goods in Andhra Pradesh is liable to pay.The second seller of these goods is not liable to charge and pay tax on his sales. 7) Liquor, at the point of first sale in the State of Andhra Pradesh, is subject to VAT 70% 8) VAT rate is zero in respect of sales of goods to any unit find in the Special Economic Zone. 9) Sugar product is listed in the First Schedule and is exempt from VAT. 10) All intangible goods including copyright, patent, rep license, DEPB are subject to VAT 4% Answer No. Input Tax Credit can not be allowed in respect of Schedule VI goods. These goods are subjected to tax at special rates.Yes. Gold and Jewellery are liable to tax under VAT 1%. No. Goods that fall under Schedule I will not get Input Tax Credit. Because these goods are exempted goods. Yes. Generally sale of books, periodicals and journals are exempted goods under APVAT. Yes. VAT rates are common for all the products specified in Schedule V. Yes. The first seller of special g oods in Andhra Pradesh is liable to pay. The second seller of these goods is not liable to charge and pay tax on his sales. Yes. Liquor, at the point of first sale in the State of Andhra Pradesh, is subject to VAT 70%. Yes.VAT rate is zero in respect of sales of goods to any unit located in the Special Economic Zone. Yes. Sugar product is listed in the First Schedule and is exempt from VAT. Yes. All intangible goods including copyright, patent, rep license, DEPB are subject to VAT 4%. 36. Multiple Choice Questions (1) Input Tax Credit (ITC) can be claimed if the inputs are used for a) business purpose b) personnel purpose c) distributing as free sample d) captive consumption (2)Every registered dealer must file return for each month on or before a) 20th of the succeeding month b) 10th of the succeeding month ) 5th of the succeeding month d) End of the current month (3)ITC can be claimed against inter-state sale only when those sales are supported by a) Form C b) Form D c) Form H d) Form I (4)The period covered by the return is called a Tax Period and will cover a a) schedule month b) Calendar year c) Half a month d) Six months (5)The method under which tax is imposed at each stage of sales on the entire sale value and the tax paid at the earlier stage is allowed as set-off is called a) Invoice method b) deductive reasoning method c) Deductive method d) Value addition and deletion method 6)Under Invoice method, tax credit cant be claimed unless and until the a) Tax Invoice is produced b) Tax amount paid c) Goods are delivered d) Actual sales take place (7)VAT paid at reduced rate is called a) Compounding Levy of tax b) Non-compounding levy of tax c) Value added tax d) Sales tax (8)Sales returns is allowed as a deduction from the taxable turnover of goods if the goods are returned with in a) Six months of sales b) Twelve months of sales c) Three months of sales d) One month of sales (9)Product X is taxable 4% and Product Y is taxable 12. 5%. Product X is sol d for Rs. 100,000 and Product Y for Rs. 0. 000. Total input tax credit is available for Rs. 5,000. What would be the net VAT payable? a) Rs. 5,250 b) Rs. 5,000 c) Rs. 2,500 d) Rs. 10,250 (10)A dealer in Andhra Pradesh paid CST of Rs. 1,000 on inter-state purchases. VAT payable by him on local sales is Rs. 1,250. The Net VAT payable is. a) Rs. 250 b) Rs. 1,250 c) Rs. 1,000 d) Rs. 750 Answer (A) (a) (a) (a) (a) (a) (a) (b) (a) (b) 37. Fill up the Blanks 1) VAT is apoint tax and helps to removeeffect. 2) There are two types of dealersand. 3) Input Tax is applicable only to. 4) Application for registration under APVAT can be made using Form No.. ) Schedule I lists the items that arefrom the VAT 6) The Input Tax Credit for VAT paid goods is not available for goods not meant for. 7) The due date for filing of periodic VAT return isin the Form. 8) There are three methods for computation of VAT namelyand 9) Input Tax Credit can be claimed against inter-state sale only when those sales are supported by Form 10) The Department can reject the Voluntary Registration application made by dealer if he does not have a Answer 1) Multi point, cascading effect. 2) VAT Dealer and TOT Dealer. 3) VAT Dealer 4) VAT 100 5) Exempt 6) patronage ) 20th of the succeeding month, Form 200 8) Addition method, Invoice method and subtraction method 9) Form C 10) Place of business 38. Say Yes or No, Give Reasons Taxable sales does not included Zero rated Sales Zero rates and Exempted sales are one and the same There is no such concept as Voluntary registration in VAT Schedule VI lists the items that are charged to tax at Special rates 5) Schedule V is a residuary head. Any items that does not find a place under Schedule I, II, III or IV can be classified under this schedule Input Tax credit can also be availed on Capital Goods ) TIN means Tax Identification Number which is nothing but the Unique VAT registration number allotted to all registered dealers Input Tax Credit can be availed for t he Zero rates Sales 9) Input Tax Credit can be availed on Inter state purchases, or goods received by commitment sales or stock transfer to this s