Tag: tax

Questions Related to tax

Which one of the following sources of Central revenue belongs to the category of Indirect taxes?

meaning and importance of taxes government and taxes tax civics economics

  1. Corporation tax

  2. Customs

  3. Wealth tax

  4. Interest Receipts

Show answer
Correct Option: B
Explanation:

Custom Duty is a indirect tax for goods when import or export. The tax is collected by Central Board of Indirect Taxes and Customs.

If final goods attracts an excise duty of Rs. 8000 and Rs. 1050 has already been paid on inputs then the firm will pay the 7000 towards excise duty. It is paying tax according to

meaning and importance of taxes government and taxes tax civics economics

  1. VAT

  2. CENVAT

  3. MODVAT

  4. None of the above

Show answer
Correct Option: C
Explanation:

The firm pays tax according to the MODVAT system. MODVAT means Modified Value added tax.This was an excise duty scheme introduced in 1986 for allowing relief to final manufacturers on the excise duty borne by their suppliers of raw material. This scheme has now been replaced by the CENVAT Scheme.

VAT was introduced in india in which year ?

meaning and importance of taxes government and taxes tax civics economics

  1. 2005

  2. 2000

  3. 2001

  4. 2002

Show answer
Correct Option: A
Explanation:

VAT was introduced in India in the year 2005 which was valid from 1st april 2005.


From the following information calculate interest coverage ratio: Profit after Tax Rs. 2,70,000; Tax Rs. 30,000; Interest on long term funds Rs.50,000

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  1. 5 times

  2. 8 times

  3. 7 times

  4. 5.5 times

Show answer
Correct Option: C
Explanation:

Interest coverage ratio is given by =EBIT/Interest Expense

Therefore in this case EBIT= 270000+30000+50000=350000
Interest expenses= 50000
Interest coverage ratio will be 7 times

$NDP _{MP}$ - Indirect Taxes+ Subsides =

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  1. $NNP _{MP}$

  2. $NDP _{FC}$

  3. $NNP _{FC}$

  4. None of the above

Show answer
Correct Option: B
Explanation:

NDPMP is defined as the market value of final goods and services produced in the domestic territory of a country by its residents and non residents in an accounting year less depreciation. NDPMP= GDPMP-Depreciation

NNPFC= NDPMP-Indirect taxes+Subsidies
NNPFC is defined by total factor incomes earned by the factors of production.

MODVAT is:

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  1. Modern Value Added Tax

  2. Modified Value Added Tax

  3. Monopoly Value Added Tax

  4. Method of Deduction of VAT

Show answer
Correct Option: B
Explanation:

MODVAT (modified value added tax) was introduced in India in 1986. MODVAT was re-named as CENVAT. The system was termed as MODVAT, as it was restricted upto manufacturing stage and credit of only excise duty paid on manufacturing products (and corresponding CVD paid on imported goods) was available.

The following section/s of the Indian Income Tax govern the receipt of income by way of dividend by companies

meaning and importance of taxes government and taxes tax civics economics

  1. SEc 80k

  2. Sec. 80M

  3. Sec. 80N

  4. All of the above

Show answer
Correct Option: D

If final good attracts an excise duty of Rs. 8000 and Rs. 1000 has already been paid on inputs then the firm will pay the Rs. 7,000 towards excise duty. It is paying tax according to________.

meaning and importance of taxes government and taxes tax civics economics

  1. VAT

  2. CENVAT

  3. MODVAT

  4. None of the above

Show answer
Correct Option: B
Explanation:

Under CENVAT scheme the credit of the excise duty/additional duty of customs paid on inputs and capital goods and service tax paid on input services allowed to be utilized for the payment of the excise duty on the final products or service tax on output services in order to avoid cascading effect of the duty/tax. 

Which of the following was the first country to implement GST to reduce tax-evasion?

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  1. France

  2. Canada

  3. Germany

  4. Switzerland

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Correct Option: A

What are different types of supplies covered under the scope of Supply under CGST Act 2017?

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  1. Supplies made with consideration

  2. Supplies made without consideration

  3. Both of the above

  4. None of the above

Show answer
Correct Option: C