GST: ISD, Composition Scheme, TDS and TCS
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Kit Library / Commerce / Taxation
⚡ Topic Learning KitGST Unit 3.3
English 15 leveled MCQs Free
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All 15 questions, laddered from warm-up to topper-level, each with its answer and the reasoning behind it.
Warm-up · 12 questions
Q1. Under GST, an Input Service Distributor (ISD) is defined under which section of the CGST Act, 2017?
Beginner
A
Section 51
B
Section 10
C
Section 2(61)
D
Section 20
Show the answer
C · Section 2(61)
Section 2(61) of the CGST Act, 2017 defines Input Service Distributor.
Q2. An ISD must file a return in which form?
Beginner
A
FORM GSTR-8
B
FORM GSTR-6
C
FORM GSTR-9
D
FORM GSTR-7
Show the answer
B · FORM GSTR-6
Every ISD must file a return in FORM GSTR-6 containing details of invoices and distribution of ITC.
Q3. What is the aggregate annual turnover limit for opting composition scheme under section 10(1) for general category states?
Beginner
A
Rs. 50 lakh
B
Rs. 75 lakh
C
Rs. 2 crore
D
Rs. 1.5 crore
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D · Rs. 1.5 crore
Under section 10(1), the turnover limit is Rs. 1.5 crore (Rs. 75 lakh for special category states).
Q4. Under the composition scheme, a manufacturer of goods pays tax at which rate?
Beginner
A
1% (0.5% CGST + 0.5% SGST)
B
6% (3% CGST + 3% SGST)
C
12% (6% CGST + 6% SGST)
D
5% (2.5% CGST + 2.5% SGST)
Show the answer
A · 1% (0.5% CGST + 0.5% SGST)
Eligible manufacturers and traders pay 1% (0.5% CGST + 0.5% SGST/UTGST) of turnover.
Q5. A composition taxpayer must issue which document instead of a tax invoice?
Beginner
A
Bill of supply
B
Tax invoice
C
Credit note
D
Debit note
Show the answer
A · Bill of supply
Composition taxpayers are not eligible to issue taxable invoices; they must issue a bill of supply.
Q6. Under GST, TDS is deducted at the rate of:
Beginner
A
5% (2.5% CGST + 2.5% SGST)
B
2% (1% CGST + 1% SGST or 2% IGST)
C
1% (0.5% CGST + 0.5% SGST)
D
6% (3% CGST + 3% SGST)
Show the answer
B · 2% (1% CGST + 1% SGST or 2% IGST)
TDS is deducted at 2% (1% CGST + 1% SGST or 2% IGST) on payments exceeding Rs. 2,50,000 under a contract.
Q7. Which form is used as a TDS certificate under GST?
Beginner
A
FORM GSTR-8
B
FORM GSTR-7A
C
FORM GSTR-9
D
FORM GSTR-6
Show the answer
B · FORM GSTR-7A
The TDS certificate is issued in Form GSTR-7A by the deductor to the deductee.
Q8. TCS under GST is collected by:
Beginner
A
Supplier of goods
B
Recipient of goods
C
Electronic Commerce Operator
D
Government department
Show the answer
C · Electronic Commerce Operator
TCS is collected by the Electronic Commerce Operator when a supplier supplies taxable goods or services through its portal.
Q9. The rate of TCS under GST is:
Beginner
A
1% (0.5% CGST + 0.5% SGST or 1% IGST)
B
2% (1% CGST + 1% SGST)
C
5% (2.5% CGST + 2.5% SGST)
D
6% (3% CGST + 3% SGST)
Show the answer
A · 1% (0.5% CGST + 0.5% SGST or 1% IGST)
TCS is collected at 1% (0.5% CGST + 0.5% SGST for intra-state, or 1% IGST for inter-state).
Q10. An E-Commerce Operator must furnish a monthly statement in which form?
Beginner
A
FORM GSTR-8
B
FORM GSTR-7
C
FORM GSTR-9
D
FORM GSTR-6
Show the answer
A · FORM GSTR-8
An E-Commerce Operator is required to furnish a monthly statement in Form GSTR-8 by the 10th of the following month.
Q11. An ISD can distribute input tax credit on capital goods.
Beginner
A
True
B
False
Show the answer
B · False
ISD is only for distribution of ITC on input services, not on goods, inputs or capital goods.
Q12. A composition taxpayer can claim input tax credit on purchases.
Beginner
A
True
B
False
Show the answer
B · False
A composition taxpayer cannot claim input tax credit of purchases.
Building up · 3 questions
Q13. Which of the following is NOT a feature of ISD?
Intermediate
A
Can distribute ITC on capital goods
B
Must be a separately registered entity under GST
C
Distribution of ITC on input services only
D
Fosters smooth credit flow across units
Show the answer
A · Can distribute ITC on capital goods
ISD is only for distribution of ITC on input services, not on goods, inputs or capital goods.
Q14. When ISD and recipient are in different states, IGST credit is distributed as:
Intermediate
A
IGST only
B
CGST and SGST
C
CGST only
D
SGST only
Show the answer
A · IGST only
As per Rule 39, when ISD and recipient are in different states, IGST is distributed as IGST.
Q15. Which of the following persons is NOT eligible for the composition scheme?
Intermediate
A
A manufacturer with turnover up to Rs. 1.5 crore
B
A restaurant service provider not serving alcohol
C
A person engaged in inter-state outward supply of goods
D
A trader with turnover up to Rs. 1.5 crore
Show the answer
C · A person engaged in inter-state outward supply of goods
A person engaged in inter-state outward supply of goods and services is not eligible for composition scheme.
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