LEVEL-2

1. Input tax Credit is available on all supplies which are used or intended to be used in the course or furtherance
of business. Input tax credit will be available under which of the following situations?
a) GST paid on motor car used in the course and furtherance of business.
b) GST paid on club membership fees.
c) GST paid on goods or services or both used for personal consumption.
d) IGST @18% paid on inputs purchased from a vendor in Bangalore where the supplier is registered in
Rajasthan.
2. Table 6 in GSTR-1 captures information related to:
(i) Exports out of India
(ii) Supplies to SEZ unit/ and SEZ developer
(iii) Deemed Exports
a) (i) and (ii)
b) (ii) and (iii)
c) (i)
d) (i), (ii) and (iii)
3. Which of the following is FALSE w.r.t HSN disclosure in GSTR 1?
a) Disclosure is not required for taxpayers having annual turnover upto Rs. 1.5 Crore
b) It will be mandatory to report HSN code at 2 digit level for taxpayer having annual turnover in the preceding
year above Rs. 1.50 Crore but upto 5.00 Crore
c) Taxpayers having turnover above Rs. 5 Crore have to mandatorily report 8 digit level HSN code.
d) Taxpayers having turnover above Rs. 5 Crore have to mandatorily report 4 digit level HSN code.
4. Which of the statement is FALSE with regard to filing of GST return of Mr. Anup, a proprietor registered under
GST (under regular scheme) who is filing quarterly return as his annual turnover is less than Rs. 1.5 crore?
a) Mr. Anup has to file GSTR-1 quarterly
b) Mr. Anup has to pay tax quarterly.
c) Mr. Anup has to settle his tax liabilities before filing of return.
d) Mr. Anup has to pay tax monthly.
5. Mr. Alok had to transport his personal goods from Mumbai to Goa. He contacts Sigma Travel Services (STS).
STS is a Goods Transport Agency. Mr. Alok hands over the goods to STS and STS issues consignment note
for his goods. Alok is an unregistered person. What will be GST scenario in this case?
a) Goods transport agency service rendered to un-registered person is exempt from tax
b) Unregistered person is required to pay GST on said activity under reverse charge.
c) Unregistered person is required to pay GST to Goods transport agency which in turn will be deposited by
Goods transport agency to Government.
d) Goods Transport Agency is required to pay tax under forward charge.

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6. Which of the following statements are true w.r.t. accounts and records?
1) All accounts and records are to be retained for 6 years.
2) Stock record is to be maintained by all registered dealers except the dealers registered under composition
scheme.
3) Stock record is to be maintained by all registered dealers including composition dealers.
4) Account, containing the details of tax payable (including tax payable under reverse charge), tax collected and
paid are not required to be maintained by the composition dealer.
5) Account, containing the details of tax payable (including tax payable under reverse charge), tax collected and
paid are mandatorily required to be maintained by the composition dealer.
Which of the above are correct?
a) 1,2,4
b) 1,2,5
c) 3,5
d) 2,4
7. A special audit under GST is conducted by :
a) The CGST Officials
b) The SGST Officials
c) Chartered Accountant or Cost Accountant
d) Any of the above
8. Suppose, One Business Group has 35 businesses within a State and wishes to take separate GST
registrations under the same PAN. How many online registration applications with scanned documents have
to be filed by that Business Group?
a) 35 separate applications in GST REG-01
b) Only one registration application incorporating all the businesses in one go.
c) Either of the above at the option of the Business Group
d) Either of the above at the discretion of the Proper Officer
9. GSTN stands for Goods and Service Tax Network. Which of the following is not the role of GSTN in GST
regime?
a) Facilitating registration, forwarding return to Central and State authorities.
b) Maintenance of interfaces between the Common GST Portal and tax administration systems
c) Providing platform for litigation
d) Providing various MIS reports to Central and State Governments.
10. Mr. A purchases redeemable vouchers worth Rs. 8000/- on 1st January. The vouchers are redeemable
against purchase of any goods. The vouchers are valid till 30th June. What will be the time of supply in case
of such vouchers?
a) 1st January
b) 30th June

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c) The date of redemption of vouchers
d) Any date before 30th June
11. Mr. A, registered under regular scheme of payment of GST, had annual turnover of Rs. 3 crores last year.
He is required to file GSTR-1 on a monthly basis. While filing the GSTR-1 for July month, he found that he
has received advances worth INR 2,00,000/- for which goods have not been supplied till month end. The
goods will be supplied in coming months. What would be his reporting for the above transaction in GSTR-1?
a) Mr. A is not required to pay GST on receipt of advance payments.
b) He needs to report the details of advances received in Table 11A rate wise in the tax period and tax to be
paid thereon along with respective point of sale.
c) He needs to report the details of advances received in Table 8 rate wise in the tax period and tax to be paid
thereon along with respective point of sale.
d) Mr. A has to pay tax on advances and adjust the same on issue of invoice. Recipient will only be able to take
input tax credit only in the month of issue of Invoice.
12. Mr. R, a resident of Delhi, holds an account in ICICI Bank in Delhi. Hometown of Mr. R is, however, Lucknow.
Mr. R goes to Jaipur for work. During his visit to Jaipur he takes certain services relating to his account from
ICICI bank in Jaipur in relation to some transaction to be carried out at Mumbai. What will be place of supply
in this case?
a) Delhi
b) Jaipur
c) Mumbai
d) Lucknow
13. Mr. A has a head office in Mumbai and branches in various States. The head office and all the branches are
various registered under GST. Various input services are used by branches, payment for which is done by
head office. In this case, the input tax credit on input services used by more than one branch is:
a) Distributed pro rata among the branches who use such input service on the basis of turnover in a State of
such branch to the aggregate of turnover of all branches which use such input service
b) Distributed equally among all the branches
c) Distributed only to one branch which has the highest turnover
d) Cannot be distributed
14. Mr. Z, a registered dealer in Rajasthan, has supplied goods to Mr. A in Rajasthan. Due to some configuration
mistake in the software, on Tax invoice Mr. Z has wrongly charged IGST instead of CGST and SGST. What
is the available remedy to him to correct this mistake?
a) Pay CGST and SGST and claim IGST refund.
b) Take help of GST helpdesk to pass adjustment entry so that it is corrected in Electronic ledger
c) IGST wrongly paid can be used in subsequent month tax payment, no procedure for refund. CGST and
SGST liability to be paid now.
d) Pay CGST and SGST now. IGST paid can neither be adjusted in subsequent months nor be refunded.
15. Mr. X becomes liable to pay tax on 1st April and has obtained registration on 15th April. Such person is eligible
for input tax credit on inputs held in stock as on:

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 a) 1st April
b) 31st March
c) 15th April
d) He cannot take credit for the past period
16. PQR is dealing in supply of services through XYZ, an e-commerce operator and the same is notified under
section 9(5) of the CGST Act. As per section 9(5) of CGST Act, in case of the notified services supplied
through an e-commerce operator, all the provisions shall apply to e-commerce operator as if he is liable to
pay tax in relation to the supply of such services. Here are some scenarios.
I. XYZ (E-commerce operator) has their office in India so they are liable to pay tax as if they are the supplier of
such service
II. XYZ (E-commerce operator) is not in taxable territory but they have a person representing him in taxable
territory who shall be liable to pay tax
III. Neither E-commerce operator nor any person representing him is in taxable territory. So PQR is responsible
to pay tax on behalf of XYZ.
IV. Neither E-commerce operator nor any person representing him is in taxable territory. So XYZ (E-commerce
operator) shall appoint a person in the taxable territory for the purpose of paying tax.
Which of the above is not correct w.r.t tax liability of XYZ (e-commerce operator)?
a) I
b) II
c) III
d) IV
17. Mr. A, registered taxable person, pays Rs. 23,600/- for purchase of capital goods worth Rs. 20,000 with GST
(18%) of Rs. 3600/-. These capital goods are eligible for input tax credit. Mr. A is a proprietor in the trading
firm and is entitled to claim depreciation on the above capital goods. His accountant thinks of the following
entries.
i. He capitalizes the goods at Rs. 20,000 and claims depreciation on the same. For GST amount, he claims
input tax credit of Rs. 3600
ii. He capitalizes the goods at Rs. 20,000 and claims depreciation on the same. For GST amount, he does not
claim input tax credit.
iii. He capitalizes the goods at Rs. 23,600 and claims depreciation on the same. For GST amount he claims
input tax credit of Rs. 1800 (50% since he is claiming depreciation).
iv. He capitalizes the goods at Rs. 23,600 and claims depreciation on the same. For GST amount he does not
claim input tax credit.
Which of the two accounting treatments from the above are correct?
a) i, iv
b) ii, iii
c) iii, iv
d) i, iii
18. Mr. A is providing payroll services to Mr. B without consideration.

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1) Scenario 1: They are related persons and supply is made for furtherance of business
2) Scenario 2: They are not related persons and supply is made for furtherance of business
3) Scenario 3: They are related persons and supply is not made for furtherance of business
4) Scenario 4: They are not related persons and supply is not made for furtherance of business
Which from the above scenarios will be considered as supply?
a) Scenario 1
b) Scenario 1 and Scenario 3
c) Scenario 2
d) Scenario 2 and Scenario 4
19. Indigo Airlines sells various products like watches, artificial jewellery, packaged foods etc. to its passengers
on board during the flight. The Head Office of Indigo Airlines is In Delhi. In a flight originating from Jaipur,
halting at Mumbai and finally landing in Chennai, such products were boarded in Jaipur and sold to the
passengers on board during this flight. What would be the place of supply of such products?
a) Jaipur
b) Chennai
c) Mumbai
d) Delhi
20. M/s V Ltd., Ahmedabad is an importer of electronic components from China. The goods are imported at
Nhava Sheva port, Maharashtra and transferred to Ahmedabad after custom clearance. Also, he exports
certain finished consumer durables to Jakarta, Indonesia from Ahmedabad, but the final port of export is
Nhava Sheva, Maharashtra. What would be the place of supply in case of import and export?
a) Import – Nhava Sheva, Maharashtra, Export – Nhava Sheva
b) Import – Ahmedabad, Gujarat, Export – Jakarta
c) Import – Ahmedabad, Gujarat, Export – Ahmedabad
d) Import – Nhava Sheva, Export – Ahmedabad
21. In which of the following cases, a tax invoice under GST is not required to be issued by a registered person,
provided the recipient does not require such invoice?
(a) Value of the goods/services/both supplied is less than Rs.200 and recipient is unregistered.
(b) Value of the goods/services/both supplied is less than Rs.200 and recipient is registered.
(c) Value of the goods/services/both supplied is more than Rs.200 and recipient is unregistered.
(d) Value of the goods/services/both supplied is equal to Rs.200 and recipient is unregistered.
22. What is the maximum time limit for passing the demand order in case of short payment of tax for reasons
other than fraud, or wilful misstatement or suppression?
(a) 3 years from the due date of filing of Annual Return for the Financial Year to which the demand pertains.
(b) 2 years and 9 months from the due date of filing of Annual Return for the Financial Year to which the
demand pertains.
(c) 5 years from the due date of filing of Annual Return for the Financial Year to which the demand pertains.

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 (d) 4 years and 9 months from the due date of filing of Annual Return for the Financial Year to which the
demand pertains.
23. What is the maximum time limit for issuance of show cause notice in case of short payment of tax on account
of fraud?
(a) 3 years from the due date of filing of Annual Return for the Financial Year to which the demand pertains.
(b) 2 years and 9 months from the due date of filing of Annual Return for the Financial Year to which the
demand pertains.
(c) 5 years from the due date of filing of Annual Return for the Financial Year to which the demand pertains.
(d) 4 years and 6 months from the due date of filing of Annual Return for the Financial Year to which the
demand pertains.
24. Which of the following statements is not correct with respect to input tax credit?
(a) Input tax credit is allowed on inward supplies charged to tax under composition levy.
(b) Input tax credit is allowed on capital goods
(c) Input tax credit is not allowed on goods/services for personal use.
(d) No input tax credit shall be allowed after GST return has been filed for September following the end of
the financial year to which such invoice pertains or filing of relevant annual return, whichever is earlier.
25. 'Zero rated supply' shall not include the following:
(a) Export of goods or services under bond or LUT.
(b) Export of goods or services on payment of IGST.
(c) Supplies by SEZ unit or SEZ developer.
(d) Supplies to SEZ unit or SEZ developer
26. Mr. Z has an agency of wholesale trading of a particular brand in Gas Stoves for Rajasthan and Gujarat and
has separate proprietorship firms in each of the two States. In Gujarat, Mr. Z additionally trades in shoes
under the same firm from a different Store.
In the context of the above information, which of the following statement is correct?
a) Mr. Z can operate with single registration for Gas Stoves business for Rajasthan and Gujarat. For Shoes
business, he has to compulsorily take separate registration since it is different business segment.
b) Mr. Z will have to mandatorily get separate registrations for each of the States i.e., Rajasthan and Gujarat.
In Gujarat, he has an option to obtain either separate registration for Gas stove Business and Shoes business
or one registration for Gas stove Business and Shoes business.
c) Mr. Z will have to compulsorily take 3 registrations two for Gujarat (Gas Stoves and Shoes separately) and
one for Rajasthan business (Gas stoves).
d) Mr. Z can operate with single registration for Gas Stoves business for Rajasthan and Gujarat and Shoes
business for Gujarat.
27. A new client Mr. Z has recently obtained GST registration and keeps manual accounts. He has got his GSTIN
printed on top of every page of new booklet printed for Tax Invoice. Apart from his principal place of business,
he owns 2 godowns where he keeps stock of his goods and does some wholesale trading. He asks you
whether he needs to display the GSTIN registration and GSTIN at any other places?

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a) Mr. Z is required to display his certificate of registration in a prominent location at his principal place of
business only. Name board at entry shall display GSTIN at his principal place of business only.
b) Mr. Z has to display his certificate of registration in a prominent location at his place of business and at every
additional place or places of business. Also, he should display GSTIN in the name board exhibited at the
entry of his principal place of business and at every additional place or places of business.
c) The certificate of registration is not required to be displayed. Only name board at entry of principal and
additional places of business shall display GSTIN.
d) The certificate of registration in a prominent location is required to be displayed only at principal place of
business. Name board at entry of principal and additional places of business shall display GSTIN
28. Mr. X is a trader and has opted for composition scheme. He wants to withdraw from composition levy
retrospectively during the year. Can he do so? Does it make any difference to date of withdrawal, if the reason
for withdrawal is voluntary?
a) During the year withdrawal from composition levy is not allowed. It can be done from next financial year
onwards.
b) Yes, withdrawal can be done any time during the year. No, it does not make any difference to the date of
withdrawal, if the reason for withdrawal is voluntary.
c) Yes, withdrawal can be done any time during the year. If the reason for withdrawal is voluntary, then the
date from which withdrawal is sought cannot be a previous date. It can be current or a future date.
d) Yes, withdrawal can be done any time during the year. If the reason for withdrawal is voluntary, then the
date from which withdrawal is sought cannot be a future date. It shall be a date between the date of
registration and the present date.
29. Mr. Z, a job worker of cotton bedsheets, approaches you to know whether he is required to be compulsorily
registered under GST. His job-work is the last stage of work for the product to be a finished product. Can
he dispatch goods from his place directly to the customer on direction of his principal? What would be your
advice from the following options:
a) Mr. Z is supplier of services and is required to obtain compulsory registration under GST. He can supply
goods from his place directly to customer since he is registered.
b) Mr. Z is a supplier of services and is liable to take registration only when his turnover crosses the prescribed
threshold limit of INR 10/20 lakh as applicable. He can supply the goods to customer directly only if he is
registered under GST.
c) Mr. Z is a supplier of services and is liable to take registration only when his turnover crosses the prescribed
threshold limit of INR 10/20 lakh as applicable. He can supply the goods to customer directly if he is registered
under GST or if the principal declares Mr. Z’s place as his additional place of business.
d) Mr. Z is not required to obtain registration under GST. He cannot supply goods from his place directly to
customer since he is not registered.
30. Which of the following is a correct method of serving notice?
(i) By giving it to any adult member of the family residing with the taxable person
(ii) By making it available on the common portal
(iii) By sending a courier to a person regularly employed by him in connection with the business
(iv) By registered post with acknowledgement due to his authorised representative
(v) Affixing a copy on the notice board of the office of the concerned officer who issued such notice

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 (a) (ii), (iv)
(b) (i), (iii), (v)
(c) (i), (ii), (iii), (iv)
(d) (i), (ii), (iii), (iv) and (v)

Level 2 answers

Question No. Correct option

1 (d)

2 (d)

3 (c)

4 (b)

5 (a)

6 (a)

7 (c)

8 (a)

9 (c)

10 (c)

11 (a)

12 (a)

13 (a)

14 (a)

15 (b)

16 (c)

17 (a)

18 (a)

19 (a)

20 (b)

21 (a)

22 (b)

23 (d)

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 24 (a)

25 (c)

26 (b)

27 (b)

28 (c)

29 (c)

30 (d)

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