MCQs on The Central Sales Tax Act, 1956
Multiple-Choice Questions (MCQs) based on The Central Sales Tax Act, 1956 and The Taxation Laws (Amendment) Act, 2017:
SET-I
Central Sales Tax Act, 1956 (CST Act)
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Which of the following transactions is subject to Central Sales Tax (CST)?
- A) Intra-state sale of goods
- B) Export of goods to foreign countries
- C) Inter-state sale of goods
- D) Sale of goods within the same state
Answer: C) Inter-state sale of goods
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What is the standard CST rate for inter-state sales, provided the buyer furnishes a C Form?
- A) 1%
- B) 2%
- C) 5%
- D) 10%
Answer: B) 2%
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Which form is used by a buyer to avail concessional tax rates under the CST Act?
- A) F Form
- B) H Form
- C) I Form
- D) C Form
Answer: D) C Form
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Which of the following is considered a 'Declared Goods' under the CST Act?
- A) Iron Ore
- B) Gold
- C) Coal
- D) Real Estate
Answer: C) Coal
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Who is liable to pay Central Sales Tax (CST) in an inter-state sale?
- A) Seller
- B) Buyer
- C) Both buyer and seller
- D) State government
Answer: A) Seller
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Which of the following is covered under the CST Act?
- A) Inter-state sales of goods
- B) Sales of goods within the same state
- C) Exports of goods to foreign countries
- D) Sales of services
Answer: A) Inter-state sales of goods
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Under the CST Act, which of the following forms is used for stock transfers between branches in different states?
- A) C Form
- B) F Form
- C) G Form
- D) H Form
Answer: B) F Form
Taxation Laws (Amendment) Act, 2017
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Which of the following is one of the main objectives of the Taxation Laws (Amendment) Act, 2017?
- A) To introduce a new form of indirect tax
- B) To replace CST for all goods
- C) To make provisions for the implementation of Goods and Services Tax (GST)
- D) To eliminate VAT and Sales Tax
Answer: C) To make provisions for the implementation of Goods and Services Tax (GST)
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The Taxation Laws (Amendment) Act, 2017 primarily aims to phase out which of the following taxes?
- A) Central Excise Tax
- B) Central Sales Tax (CST)
- C) Service Tax
- D) State VAT
Answer: B) Central Sales Tax (CST)
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Post-GST, the Central Sales Tax (CST) applies to which of the following?
- A) All goods
- B) Goods that remain outside the GST purview, such as petroleum products
- C) Services
- D) All inter-state sales of goods
Answer: B) Goods that remain outside the GST purview, such as petroleum products
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Which of the following forms became obsolete after the introduction of GST in India?
- A) C Form
- B) F Form
- C) H Form
- D) All of the above
Answer: D) All of the above
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Which of the following is NOT a transitional provision under the Taxation Laws (Amendment) Act, 2017?
- A) Carry-forward of CST credits
- B) Continuation of CST for non-GST goods
- C) Introduction of GST returns
- D) Phasing out of VAT for all goods
Answer: D) Phasing out of VAT for all goods
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Which of the following goods is excluded from the purview of GST and still subject to CST?
- A) Coal
- B) Petrol
- C) Steel
- D) Smartphones
Answer: B) Petrol
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Which of the following forms is still required for transactions related to export sales under the CST Act after the introduction of GST?
- A) C Form
- B) F Form
- C) H Form
- D) I Form
Answer: C) H Form
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Which of the following tax rates is applicable to inter-state sales of goods under the CST Act, provided no C Form is presented by the buyer?
- A) 2%
- B) 5%
- C) The VAT rate applicable in the seller's state
- D) 10%
Answer: C) The VAT rate applicable in the seller's state
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The Taxation Laws (Amendment) Act, 2017 was introduced to align existing tax laws with which major reform?
- A) Demonetization
- B) Goods and Services Tax (GST)
- C) Income Tax Reforms
- D) Corporate Tax Reforms
Answer: B) Goods and Services Tax (GST)
General Comparison: CST vs. GST
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Which of the following is a key difference between CST and GST?
- A) CST applies only to services; GST applies to both goods and services
- B) CST is applicable only to inter-state sales, while GST applies to both intra-state and inter-state sales
- C) CST is collected by the consuming state, while GST is collected by the exporting state
- D) CST applies to both goods and services, while GST applies only to goods
Answer: B) CST is applicable only to inter-state sales, while GST applies to both intra-state and inter-state sales
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Which of the following taxes was replaced by GST, as per the Taxation Laws (Amendment) Act, 2017?
- A) Service Tax
- B) VAT
- C) Central Sales Tax (CST)
- D) All of the above
Answer: D) All of the above
These MCQs cover the key provisions and changes introduced by both The Central Sales Tax Act, 1956 and The Taxation Laws (Amendment) Act, 2017.
SET-II
Additional Multiple-Choice Questions (MCQs) covering key issues related to The Central Sales Tax Act, 1956 (CST) and The Taxation Laws (Amendment) Act, 2017.
Central Sales Tax Act, 1956 (CST Act)
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Which of the following is the primary objective of the Central Sales Tax (CST) Act, 1956?
- A) To regulate the taxation on services provided within India
- B) To impose tax on inter-state sales of goods
- C) To collect a uniform tax on goods within a state
- D) To harmonize tax rates on imports and exports
Answer: B) To impose tax on inter-state sales of goods
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In which scenario would the seller be exempted from collecting CST under the CST Act?
- A) When the buyer is located in a foreign country
- B) When the seller is a registered dealer in the same state
- C) When the buyer provides an 'H' form for export
- D) When the transaction involves declared goods
Answer: A) When the buyer is located in a foreign country
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Which of the following statements is true about the CST Act?
- A) CST is applicable only to state government-owned businesses
- B) The CST Act provides for tax credits on interstate sales
- C) CST is levied only on transactions involving declared goods
- D) CST applies to inter-state sales of goods and is collected by the seller's state
Answer: D) CST applies to inter-state sales of goods and is collected by the seller's state
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Under the CST Act, when is a sale considered an inter-state sale?
- A) When the seller and the buyer are located in different cities
- B) When goods are transferred between two different states
- C) When the sale involves the export of goods
- D) When goods are purchased for resale
Answer: B) When goods are transferred between two different states
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Which of the following is a requirement for a buyer to avail the concessional CST rate of 2% under the CST Act?
- A) The seller must be a registered dealer under the CST Act
- B) The buyer must provide a valid C Form
- C) The sale must involve export goods
- D) The sale must involve a dealer from a neighboring state
Answer: B) The buyer must provide a valid C Form
Taxation Laws (Amendment) Act, 2017
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What is the primary goal of the Taxation Laws (Amendment) Act, 2017?
- A) To introduce a new tax on imported goods
- B) To amend the provisions related to CST and align them with GST
- C) To increase taxes on luxury goods
- D) To provide tax credits for domestic sales
Answer: B) To amend the provisions related to CST and align them with GST
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Which of the following is directly impacted by the Taxation Laws (Amendment) Act, 2017?
- A) Income Tax on Individuals
- B) Central Sales Tax (CST)
- C) Corporate Tax for foreign companies
- D) Custom Duty on Imports
Answer: B) Central Sales Tax (CST)
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The Taxation Laws (Amendment) Act, 2017 resulted in the introduction of which major tax reform in India?
- A) Income Tax Reforms
- B) Goods and Services Tax (GST)
- C) Capital Gains Tax Reforms
- D) Corporate Tax Reduction
Answer: B) Goods and Services Tax (GST)
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Which of the following taxes was abolished following the implementation of GST in 2017, as per the Taxation Laws (Amendment) Act, 2017?
- A) Value Added Tax (VAT)
- B) Central Excise Duty
- C) Service Tax
- D) All of the above
Answer: D) All of the above
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Which of the following statements about the Taxation Laws (Amendment) Act, 2017 is incorrect?
- A) It applies to both goods and services
- B) It completely phased out CST for all goods
- C) It provides the framework for the introduction of GST
- D) It applies to intra-state sales of goods
Answer: D) It applies to intra-state sales of goods (Intra-state sales now fall under GST, not CST)
Impact of GST on CST and Transition Issues
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Post-GST, which of the following continues to be taxed under the CST Act?
- A) Sale of goods within a state
- B) Export of goods
- C) Sale of petroleum and liquor
- D) Services provided by companies
Answer: C) Sale of petroleum and liquor
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Which of the following tax forms is required for stock transfers under the GST framework after the Taxation Laws (Amendment) Act, 2017?
- A) F Form
- B) C Form
- C) GSTR-1
- D) H Form
Answer: C) GSTR-1 (This form is now used to report outward supplies under GST)
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Which of the following provisions was removed from the CST Act after the introduction of GST?
- A) C Form for concessional tax rates
- B) Export tax refunds
- C) Interstate sales of declared goods
- D) Input tax credit on inter-state sales
Answer: A) C Form for concessional tax rates
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In the context of GST, what is the treatment of inter-state sales?
- A) Subject to Central Sales Tax
- B) Taxed under the Integrated Goods and Services Tax (IGST)
- C) Taxed as per VAT rates
- D) Taxed only if goods are exported
Answer: B) Taxed under the Integrated Goods and Services Tax (IGST)
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Which of the following transitional provisions are allowed under the Taxation Laws (Amendment) Act, 2017 for businesses transitioning to GST?
- A) Continuation of CST for certain goods like petroleum
- B) Complete elimination of VAT
- C) Automatic tax exemptions for exporters
- D) Phasing out of income tax
Answer: A) Continuation of CST for certain goods like petroleum
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What was the status of the CST rate after the introduction of GST?
- A) CST rates were reduced to 1%
- B) CST was abolished entirely
- C) CST continued to apply for inter-state sales with reduced rates
- D) CST continued for exports only
Answer: C) CST continued to apply for inter-state sales with reduced rates for certain goods under GST
General Understanding of Taxation Changes
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Which of the following taxes replaced CST for most inter-state sales after the introduction of GST?
- A) Integrated Goods and Services Tax (IGST)
- B) Central Excise Tax
- C) Sales Tax
- D) Service Tax
Answer: A) Integrated Goods and Services Tax (IGST)
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Which of the following is not a feature of the GST regime introduced by the Taxation Laws (Amendment) Act, 2017?
- A) The introduction of a single indirect tax
- B) The application of uniform tax rates across India
- C) The continuation of CST for intra-state sales
- D) The taxation of services under GST
Answer: C) The continuation of CST for intra-state sales (Intra-state sales are now taxed under GST)
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Which of the following taxes is not covered under GST after the Taxation Laws (Amendment) Act, 2017?
- A) Sales of goods
- B) Services provided within India
- C) Exports of goods
- D) Petroleum and liquor
Answer: D) Petroleum and liquor
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What is the correct treatment of CST after the implementation of GST for inter-state sales of goods involving petroleum?
- A) Subject to CST as per the CST Act
- B) Taxed under the GST system
- C) Subject to the Integrated GST (IGST)
- D) Not taxed at all
Answer: A) Subject to CST as per the CST Act
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