Composition Levy Multiple Choice Questions
1. What is the threshold limit of turnover in the preceding financial year for opting to pay tax undercomposition scheme for States other than special category States?
A. 20 lac
B. 10 lacs
C. 50 lacs
D. 1.5 crore
Answer: D. 1.5 crore
2. Which of the following persons can opt for composition scheme?
A. Person making any supply of goods which are not leviable to tax under this Act
B. Person making any inter-State outward supplies of goods and services (except restaurant services)
C. Person effecting supply of goods through an e-commerce operator liable to collect tax at source
D. Person providing restaurant services
Answer: D. Person providing restaurant services
3. What is the threshold limit of turnover in the preceding financial year for opting to pay tax undercomposition scheme for special category states?
A. 25 lac
B. 50 lacs
C. 75 lacs
D. 1 crore
Answer: C. 75 lacs
4. What is the rate applicable under CGST to a registered person being a manufacturer opting topay taxes under composition scheme?
A. 2.5%
B. 1%
C. 0.5%
D. No composition for manufacturer
Answer: C. 0.5%
5. What is the rate applicable under CGST to a registered person being a hotelier (providingrestaurant and accommodation services) opting to pay taxes under composition scheme?
A. 1%
B. 0.5%
C. 2.5%
D. Not eligible for composition scheme thus liable to pay normal tax
Answer: D. Not eligible for composition scheme thus liable to pay normal tax
6. Mr. Richard, a trader in Delhi has opted for composition scheme of taxation under GST. Determinethe rate of total GST payable by him under composition scheme:
A. 0.5% CGST & 0.5% SGST
B. 2.5% CGST & 2.5% UTGST
C. 5% IGST
D. 5% UTGST
Answer: A. 0.5% CGST & 0.5% SGST
7. Can a registered person opt for composition scheme only for one out of his 3 business placeshaving same Permanent Account Number?
A. Yes
B. No
C. Yes, subject to prior approval of the Central Government
D. Yes, subject to prior approval of the concerned State Government
Answer: B. No
8. Can composition scheme be availed if the registered person effects inter-State supplies?
A. Yes
B. No
C. Yes, subject to prior approval of the Central Government
D. Yes, subject to prior approval of the concerned State Government
Answer: B. No
9. Can a registered person under composition scheme claim input tax credit?
A. Yes
B. No
C. Input tax credit on inward supply of goods only can be claimed
D. Input tax credit on inward supply of services only can be claimed
Answer: B. No
10. Can a registered person opting for composition scheme collect tax on his outward supplies?
A. Yes
B. No
C. Yes, if the amount of tax is prominently indicated in the invoice issued by him
D. Yes, only on such goods as may be notified by the Central Government Manan Prakashan 15
Answer: B. No
11. Which of the following will be excluded from the computation of ‘aggregate turnover’?
A. Value of taxable supplies
B. Value of exempt Supplies
C. Non-taxable supplies
D. Value of inward supplies on which tax is paid on reverse charge basis
Answer: D. Value of inward supplies on which tax is paid on reverse charge basis
12. What will happen if the turnover of a registered person opting to pay taxes under compositionscheme during the year 2019-20 crosses threshold limit?
A. He can continue under composition scheme till the end of the financial year
B. He will be liable to pay tax at normal rates of GST on the entire turnover for the financial year 2019-20
C. He will cease to remain under the composition scheme with immediate effect
D. He will cease to remain under the composition scheme from the quarter following the quarter in which the aggregate turnover exceeds threshold limit
Answer: C. He will cease to remain under the composition scheme with immediate effect
13. What is the threshold limit of turnover in the preceding financial year for opting to pay tax undercomposition scheme for a trader in Mumbai?
A. 30 lac
B. 10 lacs
C. 150 lacs
D. 75 lacs
Answer: C. 150 lacs
14. For certain Special category States, the reduced limit of ` 75 lakhs for opting composition schemeis available. The reduced limit of ` 75 Lakhs is not available for?
A. Manipur
B. Meghalaya
C. Himachal Pradesh
D. Jammu & Kashmir
Answer: D. Jammu & Kashmir
15. ABC Ltd is manufacturer of goods opting for Composition Scheme has effected turnover of ` 60 Lakhs during the financial year 2019-20. The CGST portion for composition tax payable by ABC Ltd is
A. 30,000
B. 60,000
C. 30,000
D. 1,50,000
Answer: A. 30,000
16. GST Ltd. has business places at Lucknow, UP and Kanpur, UP having the same PAN; and Aggregate Turnover in the financial year not exceeding ` 75 lakhs. Can it opt composition levy for Lucknow and normal levy at Kanpur?
A. No
B. Yes
C. Up-to an Aggregate Turnover of ` 75 lakhs at Lucknow only
D. Subject to the approval of GST Council
Answer: A. No.
Composition Levy