Note: The Sales Tax Act 1990 MCQs (Up to date). These MCQs publish accordingly to the pattern and syllabus of the Inspector Inland Revenue test in the Federal Board of Revenue Department. If you don’t know about the Syllabus, then first check the syllabus Click Here. In case of any error, mentioned it in the comment box below.

 

1. The purpose/purposes of the Sales Tax Act 1990 is/are?

A. An Act to Consolidate and amend the law relating to the levy of a tax on the sale of commodity
B. Tax on Importation and Exportation
C. Tax on Production and Manufacturing
D. Consumption of goods
E. All of these

Answer

Correct Answer: E. All of these

 

2. This Act is implemented in which area?

A. Punjab
B. Sindh
C. KPK
D. Baluchistan
D. Whole of Pakistan

Answer

Correct Answer: D. Whole of Pakistan 

 

3. Under Section 2(1) of the Sales Tax Act, 1990 by which law Appellate Tribunal Inland Revenue be established?

A. S.130 of the Income Tax Ordinance 2001
B. S.140 of the Income Tax Ordinance 2001
C. S.145 of the Income Tax Ordinance 2001
D. S.150 of the Income Tax Ordinance 2001

Answer

Correct Answer: A. S.130 of the Income Tax Ordinance 2001 

 

4. Under S.2 of the Sales Act 1990 officer means?

A. Inspector Customs
B. Officer of Inland Revenue
C. Inspector Police
D. None of these

Answer

Correct Answer: B. Officer of Inland Revenue 

 

5. By which section of the Sales Act 1990 arrears means, the Sales Tax due and payable dues which have not yet been paid?

A. Section 2A
B. Section 3
C. Section 4
D. Section 5

Answer

Correct Answer: A. Section 2A 

 

6. Associates or Associated Person means?

A. Where Two Persons Associates and Relationship between the Two is such that one may Act in Accordance with the Intention of the other or intention of the Third Person
B. An individual and a Relative of the Individual
C. Member of an Association of Persons
D. Where the Associated Control fifty Percent or more of the rights to Income or Capital of the Association
E. Shareholder in a Company
F. Two Companies
G. All of these

Answer

Correct Answer: G. All of these 

 

7. When Two Companies becomes Associates?

A. Where Fifty Percent or more of the Voting Power in both Companies
B. Where Fifty Percent or more of the Rights to Dividends in both the Companies
C. Where Fifty Percent or more of the Rights to Capital in both Companies
D. All of these

Answer

Correct Answer: D. All of these 

 

8. According to Section2 (4) of the Sales Tax Act, 1990, Board means?

A. Provincial Board of Revenue
B. Local Government Board
C. Both a & b
D. Federal Board of Revenue

Answer

Correct Answer: D. Federal Board of Revenue 

 

9. Section2 [(4(A)] speaks about:

A. Inspector
B. Taxpayer
C. Lawyer
D. Chief Commissioner

Answer

Correct Answer: D. Chief Commissioner 

 

10. By which law the Chief Commissioner Inland Revenue is appointed by the Federal Board of Revenue?

A. Section 25 of the Sales Tax Act 1990
B. Section 30 of the Sales Tax Act 1990
C. Section 32 of the Sales Tax Act 1990
D. Section 40 of the Sales Tax Act 1990

Answer

Correct Answer: B. Section 30 of the Sales Tax Act 1990 

 

11. By which section of the Sales Tax Act 1990 Common Taxpayer Identification Number is allotted?

A. Section 4
B. Section 4(A)
C. Section 5
D. Section 5 (A)
E. Section 2 (5A)

Answer

Correct Answer: E. Section 2 (5A) 

 

12. Company mean?

A. A Company as defined in the Companies Ordinance, 1984 (XLVII of 1984)
B. A Body Corporate Formed by or Under any Law in Force in Pakistan
C. A modaraba
D. A Body Incorporated by or under the Law of a Country Outside Pakistan relating to Incorporation of Companies
E. A Trust a Cooperative Society or a Finance Society or any Other Society Established or Constituted by or under any law for the time being in force
F. A foreign Association Whether Incorporated or not which the Board has By General or Special Order, Declared to be a Company for the purpose of the Income Ordinance 2001 (XLIX of 2001)
G. All of these

Answer

Correct Answer: G. All of these 

 

13. According to the Sales Tax Act 1990 Cottage Industry means:

A. Where Tax Does not Exceed Five Million Rupees
B. Whose Annual Utility Bills do not Exceed Seven Hundred Thousand Rupees
C. Both A & B
D. None of these

Answer

Correct Answer: C. Both A & B 

 

14. What is meant by the Term CREST?

A. The Computerized Programme for Analyzing Cross-Matching of Sale Tax Returns
B. It is Referred to as Computerized Risk-Based Evaluation of Sales Tax
C. Both A & B
D. None of these

Answer

Correct Answer: C. Both A & B 

 

15. The Present Customs Act Enforced in which year?

A. 1949
B. 1965
C. 1966
D. 1969

Answer

Correct Answer: D. 1969 

 

16. Generally, the term Defaulter means a person, company, or firm every director or Partner of the company who fails to pay the arrears in which section of the said Act it is mentioned?

A. Section 5
B. Section 2[6(A)] C. Section 2 [6(B)] D. Section 7

Answer

Correct Answer: B. Section 2[6(A)] 

 

17. By which section of the Sales Act, the default surcharge leveled?

A. Section 34
B. Section 35
C. Section 36
D. Section 40

Answer

Correct Answer: A. Section 34  

 

18. According to Section 2(7) of the Sales Act distributor means?

A. A Person Appointed by a Manufacture
B. Appointed by Importer
C. A Person Who is Engaged in Supply of goods as a wholesale or a Retailer
D. All of these

Answer

Correct Answer: D. All of these  

 

19. According to Section 2(8) of the Sales Act the term Documents includes?

A. Any Electronic Data
B. Computer Programme, Tapes, Disks, Micro-Films
C. Any Other Medium for the Storage of Such Data
D. All of these

Answer

Correct Answer: D. All of these  

 

20. Input Tax means?

A. Tax Levied under this Act on Supply of Goods to the Person
B. Tax Levied under this Act on the Import of goods by the person
C. In Relation to Goods, or Services Acquired by the Person, Tax Levied under the Federal Excise Act 2005 in Sales tax Mode as a Duty of excise on the Manufacture or Production of the Goods or the Rendering or Providing of the Services
D. Provincial Sales Tax Levied on Services Rendered or Provided to the Person
E. Levied under the Sales Tax Act 1990 as Adapted in the State of Azad Jammu and Kashmir, on the Supply Goods Received by the Person
F. All of these

Answer

Correct Answer: F. All of these  

 

21. Goods Includes:

A. Every Kind of Movable Property other than Actionable Claims
B. Money, Stocks
C. Shares and Securities
D. All of these

Answer

Correct Answer: D. All of these  

 

22. KIBOR means?

A. Karachi Inter-Bank Offered Rate
B. Karachi Inter-Board of Relation
C. Both a & b
D. None of these

Answer

Correct Answer: A. Karachi Inter-Bank Offered Rate  

 

23. According to Section 2(16) Manufacture or Produce means?

A. Any Process in which an Article Singly or in Combination with other Articles materials Components is Either Converted into another Distinct Article or Products or it so Changed, Transformed or Reshaped that it becomes capable of being put to Use Differently or Distinctly and Includes any Process Incidental or Ancillary to the Completion of a Manufactured Product
B. Process of printing Publishing Lithography and Engraving
C. Process and Operations of Assembling, Mixing, Cutting, Diluting, Bottling, Packaging, Repacking or Preparation of Goods in any Other Manner
D. All of these

Answer

Correct Answer: D. All of these  

 

24. Section 2(17) of the Sales Act by which defines the terms manufacture or producer?

A. A Person who by any Process or Operation Assembles, Mixes, Cuts, Dilutes, Bottles, Packages, Replaces or Prepares Goods by any other Manner
B. An Assignee or Trustee in Bankruptcy Liquidator, Executor, or Curate or any Manufacturer or Producer and any Person Who Disposes of his Assets an any Fiduciary Capacity
C. Any Person Firm or Company which Owns Holds Claims or uses any Parent Proprietary, or other Right to Goods being Manufactured Whether in his or names or on his or its Behalf as the Case may be Whether or not Such Person, Firm or Company Sells Distributes Consigns or otherwise Disposes of the Goods
D. All of these

Answer

Correct Answer: D. All of these  

 

25. Output Tax means?

A. Tax Levied under this Act on a Supply of Goods, made by the Person
B. Tax Levied under the Federal Excise Act 2005 in Sales Tax Made as a Duty of Excise on the Manufacture or Production of the Goods or the Rendering or Providing of the Services by the Person
C. Provincial Sales Tax Levied on Services Rendered or Provided by the Person
D. All of these

Answer

Correct Answer: D. All of these  

 

26. According to Section 2(21) Person means?

A. An Individual
B. A Company or Association of Persons Incorporated, Formed, Organized or Established in Pakistan or Elsewhere
C. The Federal Government
D. A Provincial Government
E. A Local Authority in Pakistan
F. A Foreign Govt, a Political Subdivision of a Foreign Government or Public International Organization
G. All of these

Answer

Correct Answer: G. All of these  

 

27. What does Provincial Sales Tax mean?

A. Tax Levied Under Provincial Laws
B. Tax Levied Under Islamabad Capital Territory
C. Both A & B
D. None of these

Answer

Correct Answer: C. Both A & B 

 

28. Who is liable to Pay Sales Tax?

A. Registered Person Under the Sales Tax Act 1990
B. Every Return Filer
C. Both A & B
D. None of these

Answer

Correct Answer: C. Both A & B 

 

29. ___ with reference to the Third Schedule means the price fixed by the manufacturer Inclusive of all duties charges and taxes (other than Sales Tax) at which any particular brand or variety of any article should be sold nor the general body of consumers or if more than one such price is so fixed for the same brand or variety the highest of such price?

A. Retail Price
B. Net Price
C. Average Price
D. None of these

Answer

Correct Answer: A. Retail Price 

 

30. What does Sales Tax mean?

A. The Tax Additional Tax or Default Surcharge Levied under This Act
B. A Fine Penalty or Fee Imposed or Charged under This Act
C. Any other Sum Payable under the Provisions of this Act or the rules made thereunder
D. All of these

Answer

Correct Answer: D. All of these 

 

31. The Special Audit conducted under which section of this Act?

A. 31
B. 32
C. 32A
D. 35

Answer

Correct Answer: C. 32A 

 

32. Special Judge for the disposal of cases of Sales Tax appointed by which section of this Act?

A. Section 2(32)
B. Section 31
C. Section 37(C)
D. Section 24

Answer

Correct Answer: C. Section 37(C)  

 

33. What does taxable Activity mean:

A. Any Economic Activity Carried on by a Person whether or Not for Profit
B. Includes an Activity Carried on in the form of a Business Trade or Manufacture
C. An Activity that Involves the Supply of Goods the Rendering or Providing of Services or both to another Person
D. A One of Adventure or Concern in the Nature of a Trade
E. Anything did or Undertaken during the Commencement or Termination of the Economic Activity
F. All of These

Answer

Correct Answer: F. All of These  

 

34. Under which Section of the Sales Act Directorate General of Training and Research?

A. Section 30C
B. Section 30
C. Section 29
D. Section 28

Answer

Correct Answer: A. Section 30C 

 

35. Tax Activity does not Includes:

A. The Activities of an Employees Providing Services in that Capacity to an employer
B. AN activity of Carried on by an Individual as a private Recreational Pursuit or Hobby
C. An Activity Carried on by a person other than an Individual which if carried on by an Individual would Fall within Sub-Clause
D. All of these

Answer

Correct Answer: D. All of these 

 

36. Mention the Tax Fraction Formula?

A. 8/100 + 8
B. B/100 + 8
C. f/100 + a
D. a/100 + b

Answer

Correct Answer: A. 8/100 + 8 

 

37. Tax Fraud means:

A. Knowingly dishonestly or fraudulently a without lawful excuse burden of proof of which excuse shall be upon the accused.
B. Doing any Act or Causing to do an Act
C. Omitting to take any Action or Causing the Omission to take any Action, Including the making of Taxable Supplies without getting Registration under this Act
D. Falsifying or Causing Falsification of the Sales Tax Invoices
E. All of these

Answer

Correct Answer: E. All of these 

 

38. By which Section Tax Invoice is issued?

A. Section 20
B. Section 23
C. Section 24
D. None of these

Answer

Correct Answer: B. Section 23 

 

39. What is the Tax Period under Sales Tax Act 1990?

A. One Month
B. Specify by the Federal Government
C. Both A & B
D. None of these

Answer

Correct Answer: C. Both A & B 

 

40. What is meant by the term Time of Supply?

A. A Supply of Goods other than under hire Purchase Agreement means the same at Which the Goods are Delivered or made Available in the recipient of the Supply or the Time when any Payment is Received by the Supplier in respect of that supply Whichever is Earlier
B. A Supply of Goods under a hire Purchase Agreement means the time at which the Agreement is Entered Into
C. Services means the Time at Which the Services are Rendered or Provided
D. All of these

Answer

Correct Answer: D. All of these 

 

41. Value Supply means?

A. It is a Consideration in Money Including all Federal and Provincial duties and Taxes
B. It is The Tax Amount Received by City Direct Government
C. Both A & B
D. None of these

Answer

Correct Answer: A. It is a Consideration in Money Including all Federal and Provincial duties and Taxes 

 

42. Value of imported goods determined by which Law?

A. Under Section 25 of Sales Tax Act 1990
B. Under Section 25 of the Customs Act 1990
C. Both A & B
D. None of these

Answer

Correct Answer: B. Under Section 25 of the Customs Act 1990 

 

43. Zero-rated Supply means?

A. A Taxable Supply which is Charged to Tax at the Rate of Zero Percent under Section 4
B. A Taxable Supply Which is Charged to Tax at the Rate of Zero Percent under Section 5
C. A Taxable Supply Which is Charged to Tax at the Rate of Zero Percent under 6
D. None of these

 

Scope and Payment of Tax

44. By which Section Scope of Tax is defined?

A. Section 3
B. Section 4
C. Section 5
D. Section 6

Answer

Correct Answer: A. Section 3 

 

45. Scope of Tax means?

A. There shall be Charged, Levied, and paid a Tax Known as Sales Tax at the Rate of Seventeen Percent of the Value of-
(I)Taxable supplies made by Registered Person in the course or Furtherance of any Taxable activity carried on by him
(II)Goods imported into Pakistan
B. Subject to the Provision of Sub-Section (6) of Section 8 or any Notification issued There under, Where Taxable Supplies are made to the person who has not obtained Registration Number
C. There shall be Charged, Levied, and Paid a Further Tax at the rate of one percent of the Value in addition to the Rate Specified in Sub-Section (1), (1B), (2), (5), and (6)
D. All of these

Answer

Correct Answer: D. All of these 

 

46. Collection of Excess Sales Tax ex. (Section 3B) means?

A. Any Person Who has Collected or Collects any Tax or Change
B. Whether under Misapprehension of any Provision of This Act or Otherwise
C. Which was not payable as tax or Charge or which is in excess of the Tax or Charge Actually Payable and the Incidence of which has been Passed on to the Consumer
D. Shall Pay the Amount of Tax or Charge so Collected to the Federal Government
E. All of these

Answer

Correct Answer: E. All of these 

 

47. According to the Provisions of Section 3 which goods shall be charged to Tax at the Rate of Zero percent?

A. Goods Exported or the Goods Specified in the Fifth Schedule
B. Supply of Stores and Provisions for Consumption aboard a Conveyance Proceeding to a Destination Outside Pakistan as Specified in Section 24 of the Customs Act 1969 (IV of 1969)
C. Such other Goods as the Federal Government May, by Notification in the Official Gazette
D. All of these

Answer

Correct Answer: D. All of these 

 

48. Under which of the following Section of the Sales Act ‘Change in the Rate of Tax’ defined?

A. Section 5
B. Section 4
C. Section 3
D. Section 2

Answer

Correct Answer: A. Section 5 

 

49. Time and manner of payment” (Section 6) means?

A. The Tax in Respect of Goods Imported Into Pakistan Shall be Charged and Paid in the Same Manner and at the same time as if it were a Duty of Customs Payable under the Customs Act 1990
B. The Provisions of the Sales Act Including Section 31 A Thereof Shall so far as they Relate to Collection Payment and Enforcement of tax under this Act on Such Goods where no Specific provision Exists in this Act Apply
C. Both A & B
D. None of these

Answer

Correct Answer: C. Both A & B 

 

50. For the Purpose of Determination of tax liability (Section 7)?

A. To the Provisions of Section 8 and 8B for the Purpose of Determining his Tax Liability in Respect of Taxable Supplies made During a Tax Period. A Registered Person Shall Subject to the provisions of Section 73
B. Be Entitled to deduct input Tax Paid or Payable during the Tax Period For the Purpose of Taxable Supplies made or to be made
C. By him from the Output tax Excluding the amount of Further Tax under Sub-Section(1A) of Section 3 that is due from him in respect of that Tax Period and make Such other Adjustments as are Specified in Section 9
D. All of these

Answer

Correct Answer: D. All of these 

 

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