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Question 1. Which constitutional article introduced the special provision for GST in India? A) Article 246 B) Article 246A C) Article 265 D) Article 269 Answer: B Explanation: Article 246A of the Constitution was inserted by the 101st Amendment to empower the Parliament and States to legislate on GST. Question 2. The term “One Nation, One Tax” primarily refers to which feature of GST? A) Uniform tax rates across all states B) Single tax on both goods and services C) Elimination of all state taxes D) Central government collecting all GST revenue Answer: B Explanation: “One Nation, One Tax” signifies that GST subsumes multiple indirect taxes into a single tax on the supply of goods and services. Question 3. Which of the following is NOT a type of GST? A) CGST B) SGST C) UTGST D) VATGST Answer: D Explanation: CGST, SGST, UTGST, and IGST are the four components; VATGST does not exist.
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Question 4. Under GST, a “taxable person” is defined as a person who: A) Is a resident Indian only B) Carries out any business activity, irrespective of turnover C) Supplies goods or services for consideration and is registered under GST D) Only supplies goods, not services Answer: C Explanation: A taxable person is anyone who supplies goods/services for a consideration and is required to be registered under GST. Question 5. Which of the following activities is treated as a supply even though no consideration is received? A) Permanent transfer of business assets where ITC has been availed B) Gift of goods to a friend C) Donation to a charitable trust D) Free samples given to customers Answer: A Explanation: Schedule I of the GST Act treats permanent transfer/disposal of business assets (where ITC has been availed) as a supply even without consideration. Question 6. Services rendered by an employee to his employer are classified under which schedule? A) Schedule I B) Schedule II C) Schedule III D) Schedule IV
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B) The location of the immovable property C) The location of the recipient D) The location where the contract is signed Answer: B Explanation: Services directly related to immovable property (e.g., construction, repair) are deemed supplied at the location of the property. Question 10. The “transaction value” method of valuation is not applicable when: A) The supplier and recipient are unrelated parties B) The price is the sole consideration C) The transaction is between related parties and the price is not at arm’s length D) The supply is of goods only Answer: C Explanation: If the transaction is between related parties and the price is not at arm’s length, valuation must resort to other methods. Question 11. The turnover threshold for mandatory GST registration for a service provider in a special category state is: A) ₹20 lakh B) ₹10 lakh C) ₹40 lakh D) ₹5 lakh Answer: B Explanation: Special category states have a lower threshold of ₹10 lakh for service providers (as per the latest GST rules).
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Question 12. Which of the following persons must obtain GST registration irrespective of turnover? A) A retailer with turnover of ₹5 lakh B) An e‑commerce operator supplying goods on its own account C) A manufacturer with turnover of ₹15 lakh D) A freelance consultant with turnover of ₹8 lakh Answer: B Explanation: E‑commerce operators are required to register irrespective of turnover under GST law. Question 13. Under the forward charge mechanism, who is liable to pay GST? A) The recipient of goods/services B) The supplier of goods/services C) The customs authority D) The bank facilitating the transaction Answer: B Explanation: In forward charge, the supplier is responsible for collecting and remitting GST. Question 14. Which of the following is a scenario where Reverse Charge Mechanism (RCM) applies? A) Sale of goods by a registered dealer to another registered dealer within the same state B) Purchase of legal services from an unregistered supplier C) Import of goods into India D) Supply of food grains by a farmer to a retailer Answer: C
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(C) Manual entry by the taxpayer (D) Annual return data only Answer: A Explanation: GSTR‑2A/2B auto‑populate based on the supplier’s GSTR‑1 details, matching them with the recipient’s records. Question 18. ITC on motor vehicles is blocked under Section 17(5) except when the vehicle is used for: A) Personal commuting only B) Transportation of passengers C) Sale of the vehicle within a month of purchase D) Agricultural activities only Answer: B Explanation: ITC on motor vehicles is allowed if the vehicle is used for transportation of passengers or for further supply of motor vehicles. Question 19. Which of the following statements about blocked ITC on food items is correct? A) ITC is always allowed on food items for resale B) ITC is blocked on food items used for personal consumption only C) ITC on food items is blocked unless used in a restaurant business D) ITC is blocked on food items irrespective of the purpose of use Answer: D Explanation: Section 17(5) blocks ITC on food items irrespective of the purpose, unless a specific exception applies (e.g., restaurant under certain conditions, but generally blocked).
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Question 20. The order of set‑off of ITC against output liability is: A) IGST → CGST → SGST B) CGST → SGST → IGST C) SGST → CGST → IGST D) CGST → IGST → SGST Answer: B Explanation: The statutory order is to first set off CGST, then SGST, and finally IGST against respective liabilities. Question 21. A tax invoice must contain all of the following EXCEPT: A) GSTIN of the supplier B) Date of issue C) Name of the bank where tax is deposited D) HSN code of the goods Answer: C Explanation: The tax invoice does not need to show the bank name where tax is deposited. Question 22. A Bill of Supply is required when: A) The supplier is a regular taxable dealer making taxable supplies B) The supplier is a composition dealer making exempt supplies C) The supplier is a regular taxable dealer making exempt supplies D) The supplier is an unregistered person making taxable supplies Answer: C Explanation: Bill of Supply is issued by a regular taxable dealer for exempt supplies (or by composition dealers for any supply).
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Explanation: Validity = distance (in km) / 100, rounded up, with a minimum of 1 day. For 500 km, it is 5 days (500/100 =5). However, the rule caps at 365 days; the correct answer is 5 days, which is not listed. Since the closest listed option is C) 3 days, the question should be revised. Correct answer: None of the above; actual validity is 5 days. Question 26. Which document is NOT required to be retained for a period of six years under GST? A) Tax invoices B) Debit/credit notes C) Delivery challans for exempt supplies D) Bank statements Answer: D Explanation: While bank statements are important for overall accounting, GST law specifically mandates retention of tax invoices, debit/credit notes, and delivery challans for six years. Question 27. GSTR‑1 is a return that primarily contains information about: A) Outward supplies (sales) B) Input tax credit claimed C) Tax payment made D) Annual turnover summary Answer: A Explanation: GSTR‑1 is the monthly/quarterly return where a taxpayer reports details of outward supplies. Question 28. GSTR‑3B is filed by a taxpayer to: A) Reconcile annual turnover B) Pay tax liability and claim ITC for the month
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C) Submit audit report to tax authorities D) Register for GST Answer: B Explanation: GSTR‑3B is a summary return used for tax payment and ITC claims for the relevant period. Question 29. Under the QRMP scheme, a taxpayer can: A) File quarterly returns and make monthly payments B) File monthly returns and make quarterly payments C) File and pay both returns annually D) Opt out of filing any returns Answer: A Explanation: QRMP (Quarterly Return Monthly Payment) allows filing of returns quarterly while paying tax monthly. Question 30. A refund for excess tax paid on zero‑rated supplies can be claimed using which form? A) RFD‑ 01 B) GSTR‑9C C) GST‑R D) FORM‑ 36 Answer: A Explanation: RFD‑01 is the online application form for claiming refunds under GST. Question 31. Which of the following is a ground for denial of a GST refund? A) The taxpayer has a pending tax demand
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B) Fixed ₹5,000 per return C) 10% of the tax liability for that month D) No penalty, only interest on tax payable Answer: C Explanation: Late filing of GSTR‑1 attracts a penalty of 10% of the tax liability for that period. Question 35. Which authority is the first level of appeal for a taxpayer aggrieved by a demand notice? A) Appellate Authority (AA) B) First Appellate Authority (FAA) C) GST Appellate Tribunal (GAT) D) Supreme Court of India Answer: B Explanation: The First Appellate Authority (FAA) is the initial forum for appealing a demand or order. Question 36. Under GST, a “casual taxable person” is defined as: A) A person who carries out business occasionally in a state where they have no fixed place of business B. A person who supplies goods only to government agencies C. A person who manufactures goods for export only D. A person who operates an e‑commerce platform Answer: A Explanation: A casual taxable person supplies goods/services in a state where they do not have a fixed place of business and operates for a limited period.
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Question 37. The “Compensation Cess” levied under GST is intended to: A. Fund the development of infrastructure in the Union Territories only B. Compensate states for the loss of revenue due to GST implementation C. Provide subsidies to exporters D. Finance the GST Council’s operations Answer: B Explanation: Compensation Cess was introduced to compensate states for revenue loss during the transition to GST. Question 38. Which of the following supplies is considered “intra‑state” for GST purposes? A. Sale of goods from Maharashtra to Gujarat B. Supply of services from a Delhi‑based IT firm to a client in Delhi C. Export of goods from Kerala to Singapore D. Transfer of goods from a warehouse in Karnataka to a warehouse in Tamil Nadu Answer: B Explanation: Supply of services within the same state (Delhi to Delhi) is intra‑state, attracting CGST and SGST/UTGST. Question 39. The “place of supply” rule for transportation of goods by road is determined by: A. The location of the supplier only B. The location of the recipient only C. The location where the goods are handed over to the carrier D. The location of the goods at the time of delivery Answer: D
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B. When the capital goods are used to make exempt supplies C. When the capital goods are used for taxable supplies and the supplier is not a composition dealer D. When the capital goods are gifted to a charitable trust Answer: C Explanation: ITC on capital goods is allowed if they are used for making taxable supplies and the supplier is not a composition dealer. Question 43. The “reverse charge” on services supplied by an unregistered supplier to a registered recipient is applicable when: A. The service is related to transportation of goods B. The service is legal services C. The service is an advertisement service provided by an unregistered person D. The service is an IT support service from an overseas vendor Answer: C Explanation: Advertising services supplied by an unregistered person to a registered recipient attract reverse charge. Question 44. Under GST, a “deemed export” is: A. Supply of goods to a SEZ unit within India B. Supply of goods to a foreign airline operating in India C. Supply of services to a foreign diplomatic mission in India D. All of the above Answer: D Explanation: All listed transactions qualify as deemed exports under GST.
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Question 45. The GST Council’s decision on tax rates requires: A. Simple majority of its members B. Two‑thirds of the total votes of the states C. Unanimous consent of all members D. Approval by the President of India Answer: B Explanation: Decisions on tax rates need the approval of at least two‑thirds of the total votes of the states in the Council. Question 46. The “GST Compensation Cess” is levied on which of the following items? A. All taxable supplies B. Only on luxury items such as cigarettes and aerated drinks C. Only on petroleum products D. Only on exported goods Answer: B Explanation: The compensation cess is levied on specific luxury and sin goods such as cigarettes, aerated drinks, and pan masala. Question 47. Which of the following statements about “input services” is correct? A. Input services are always blocked for ITC B. Input services can be claimed as ITC only if they are used for taxable supplies C. Input services are not subject to GST D. Input services are only available to manufacturers Answer: B Explanation: ITC on input services is allowed only when the services are used for making taxable supplies.
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Explanation: E‑Way Bills can be generated on the GSTN portal or state‑specific portals, depending on the state’s implementation. Question 51. Which of the following is NOT a permissible exemption under GST? A. Services by an employee to his employer B. Sale of agricultural produce by a farmer to a trader C. Supply of electricity to a residential consumer D. Funeral services Answer: C Explanation: Supply of electricity is taxable under GST; the other options are exempt or not treated as supply. Question 52. The “GST (Compensation to States) Act, 2017” provides compensation for a period of: A. 3 years B. 5 years C. 7 years D. 10 years Answer: B Explanation: The compensation under the Act is for a period of five years from the commencement of GST. Question 53. A taxpayer who has a turnover of ₹12 lakh for goods and ₹8 lakh for services in a special category state must: A. Register under GST for both goods and services B. Register only for goods
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C. Register only for services D. Not register as the combined turnover is below ₹20 lakh Answer: A Explanation: The threshold for goods in special category states is ₹10 lakh, and for services is ₹10 lakh. Since goods turnover exceeds ₹10 lakh, registration is mandatory for both. Question 54. Which of the following is a “mixed supply” under GST? A. Sale of a laptop with pre‑installed software B. Sale of a car with optional insurance C. Sale of a combo pack containing a TV and a DVD player, where both are sold at a single price and neither is a principal supply D. Sale of a mobile phone with a free cover Answer: C Explanation: When multiple items are sold together without a principal supply, it is a mixed supply. Question 55. The “GSTIN” is a: A. Unique identification number for every bank account holder B. 15‑digit number assigned to a registered taxpayer under GST C. 10‑digit PAN number of the taxpayer D. 12‑digit Aadhaar number of the business owner Answer: B Explanation: GSTIN (Goods and Services Tax Identification Number) is a 15‑digit unique number assigned to every registered entity.
