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Sales Tax and Federal Excise Duty Basic Concept Test Online

Mustansar KhanLast Updated: July 8, 2025

Sales Tax and Federal Excise Duty Basic Concept Test Online

Sales Tax and Federal Excise Duty Basic Concept Test

Total Questions:	46
Time Allowed:	20 Minutes
Total Marks:	46
How to Attempt Test:	Please choose the right Option in MCQ-type question.
Test Helpful For:	FBR Sub Inspector Test Customs Inspector Test FBR Interviews FBR Sepoy Test Preparation for Customs and Tax Related Questions

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1. What is the rate of excise duty on petroleum products in Pakistan?

10%

15%

Varies by product

2. Which of the following is NOT considered taxable under the Sales Tax Act, 1990 in Pakistan?

Retail sale of goods

Manufacturing of goods

Import of goods

Export of services

3. How does Pakistan's Sales Tax Act define the term 'supply'?

The sale or transfer of goods or services

The transportation of goods

The import of goods from another country

The declaration of income by a taxpayer

4. Which of the following taxes is designed to discourage the consumption of harmful goods like tobacco and alcohol?

Sales tax

Corporate tax

Federal excise duty

Property tax

5. Which of the following is an example of a taxable service under Pakistan's sales tax law?

Government healthcare services

Agricultural production services

Legal services provided by a law firm

Public education services

6. What is the process for registering for federal excise duty in Pakistan?

Any individual can register online

Only multinational companies are eligible for excise duty registration

No registration is required for excise duty

Businesses must apply for excise duty registration through the FBR

7. What is the purpose of federal excise duty?

To collect taxes from individuals’ income

To discourage the consumption of certain luxury goods

To encourage exports

To increase government revenue from local businesses

8. What happens when a taxpayer fails to submit their sales tax returns on time in Pakistan?

No consequences, only a warning

The taxpayer is allowed to submit the return after a grace period

The taxpayer is eligible for a tax rebate

The taxpayer is liable for penalties and interest charges

9. What is the procedure for registering for sales tax in Pakistan?

Individuals need to register at their local bank

No registration is required for businesses under a certain income level

Businesses must apply online through the FBR portal

Only businesses importing goods need to register

10. Which of the following entities is eligible for sales tax refund in Pakistan?

Non-governmental organizations (NGOs)

Exporters of goods

Small retail businesses

Individuals filing income tax returns

11. Which of the following taxes is typically exempt from federal excise duty in Pakistan?

Tobacco

Medicines

Alcohol

Petroleum

12. Which of the following is an example of a luxury item subject to excise duty in Pakistan?

Mobile phones

Sugar

Luxury cars

Rice

13. Which of the following entities is responsible for the administration of sales tax and federal excise duty in Pakistan?

Federal Board of Revenue (FBR)

Provincial Revenue Authorities

State Bank of Pakistan

Ministry of Finance

14. Which of the following best describes the application of sales tax in Pakistan?

Sales tax applies to agricultural products only

Sales tax only applies to goods imported from abroad

Sales tax is only applicable to exports

Sales tax applies to both goods and services in Pakistan

15. How does sales tax affect consumers?

It is paid directly by the consumer to the government

It is only paid by businesses

It is included in the price of goods and services purchased by the consumer

It is not applicable to consumers in Pakistan

16. What is the scope of the Sales Tax Act, 1990 in Pakistan?

It applies to both goods and services

It only applies to the import of goods

It only applies to exports

It only applies to goods

17. What is the role of the provincial tax authorities in relation to sales tax in Pakistan?

To set the sales tax rate for imported goods

To collect all federal sales taxes

To administer sales tax on services at the provincial level

To handle the tax returns of large corporations

18. Which of the following is an essential document for sales tax registration in Pakistan?

Sales Tax Registration Certificate

Birth certificate

National Identity Card

Passport

19. What does the term "input tax credit" mean in the context of sales tax?

A tax refund for taxpayers who make mistakes on their filings

A special credit for foreign investors

A tax rate reduction for low-income businesses

A deduction available to businesses for tax paid on purchases

20. What is the main function of the Sales Tax Act, 1990?

To regulate customs duties

To define the scope and procedures for sales tax collection

To impose tax on profits

To regulate income taxes

21. Which of the following taxes is imposed on the sale of goods and services in Pakistan?

Sales tax

Wealth tax

Income tax

Corporate tax

22. What does the term 'taxable event' refer to in the context of sales tax in Pakistan?

The filing of a tax return

The importation of goods

The sale or transfer of goods or services that are subject to tax

The export of goods

23. How does the FBR ensure compliance with federal excise duty payments?

By offering discounts to compliant taxpayers

By increasing the price of exempt goods

By reducing taxes for businesses

By conducting audits and inspections

24. Which of the following is a key feature of the Federal Excise Act, 2005?

It deals with the registration of businesses

It imposes duties on goods specified by the government

It regulates the foreign exchange market

It sets tax rates for all income earners

25. How does the Federal Board of Revenue (FBR) assist in the implementation of sales tax in Pakistan?

By providing exemptions from tax for new businesses

By offering loans to businesses for tax payments

By granting tax amnesty programs for importers

By enforcing tax audits, processing returns, and ensuring compliance

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26. Which of the following is a key feature of the sales tax credit mechanism in Pakistan?

Only exporters are eligible for tax credit

Sales tax credits can be used to offset the tax payable on sales

Sales tax credit is only available for imports

No credit is provided for services

27. What is the standard rate of sales tax in Pakistan?

10%

17%

25%

28. What is the term used for the tax paid on the production, sale, or consumption of goods in Pakistan?

Income tax

Corporate tax

Sales tax

Property tax

29. What is the penalty for tax evasion related to sales tax in Pakistan?

Imprisonment without a fine

A warning with no consequences

A fine equal to the tax amount evaded

No penalty

30. Which of the following goods is typically exempt from federal excise duty in Pakistan?

Certain agricultural products

Tobacco products

Petroleum products

Alcoholic beverages

31. Which of the following is a primary objective of the federal excise duty in Pakistan?

To promote industrial growth

To encourage foreign investment

To exempt certain goods from taxation

To discourage the consumption of non-essential luxury goods

32. Which of the following goods is typically subject to federal excise duty in Pakistan?

Mobile phones

Exported goods

Wheat

Coal

33. Which of the following is NOT subject to sales tax in Pakistan?

Exported goods

Agricultural products

Goods sold within the country

Luxury goods

34. What is the primary basis for determining the value of goods subject to sales tax in Pakistan?

The origin of the goods

The market value or selling price of the goods

The cost of production

The weight of the goods

35. Which of the following is a feature of federal excise duty in Pakistan?

It applies to all goods and services

It is collected by provincial authorities

It is applied to goods specified by the government, like tobacco

It is only applied to imported goods

36. Which of the following types of sales is exempt from sales tax in Pakistan?

Sales of alcoholic beverages

Sales of luxury goods

Sales of medicines

Sales of property

37. Which of the following is an example of goods subject to federal excise duty?

Public services

Agricultural products

Exported machinery

Petroleum products

38. How often must registered businesses submit their sales tax returns in Pakistan?

Monthly

Semi-annually

Annually

Quarterly

39. How are goods that are not subject to sales tax categorized in Pakistan?

They are categorized as non-taxable

They are categorized as exempt supplies

They are categorized as taxable supplies

They are categorized as luxury items

40. Which of the following taxes are collected under the Federal Excise Act?

Personal income tax

Corporate tax

Excise duties on tobacco and alcohol

Sales tax

41. What is the role of the FBR in implementing sales tax and federal excise duty?

To set tax rates only for importers

To eliminate all taxes on goods

To collect sales tax and federal excise duty from taxpayers

To decide which goods should be taxed

42. What is the purpose of the Sales Tax Refund System in Pakistan?

To refund sales tax paid on exported goods

To refund taxes paid on exempt goods

To reduce the tax rate for individuals

To return the entire sales tax paid to businesses

43. Which of the following taxes is included in the sales tax collection system in Pakistan?

Property tax

Capital gains tax

Corporate tax

Value Added Tax (VAT)

44. Which of the following goods is subject to excise duty in Pakistan?

Livestock

Soft drinks

Wheat

Books

45. What is the FBR’s role in controlling tax evasion in the context of sales tax?

To enforce penalties, audits, and investigations

To encourage tax avoidance strategies

To offer amnesty programs for evaders

To reduce taxes for defaulters

46. What does the term "exempt supplies" mean in the context of sales tax?

Services provided by government entities

Goods and services that are not subject to sales tax

Goods sold in bulk

Goods sold with a discount

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Mustansar KhanLast Updated: July 8, 2025

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Sales Tax and Federal Excise Duty Basic Concept Test Online

Sales Tax and Federal Excise Duty Basic Concept Test Online

Sales Tax and Federal Excise Duty Basic Concept Test

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Sales Tax and Federal Excise Duty Basic Concept Test Online

Sales Tax and Federal Excise Duty Basic Concept Test

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