Home/FBR/Sales Tax and Federal Excise Duty Basic Concept Test Online

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 procedure for registering for sales tax in Pakistan?

Businesses must apply online through the FBR portal

Only businesses importing goods need to register

Individuals need to register at their local bank

No registration is required for businesses under a certain income level

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

25%

17%

10%

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

To administer sales tax on services at the provincial level

To handle the tax returns of large corporations

To collect all federal sales taxes

To set the sales tax rate for imported goods

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

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

The filing of a tax return

The importation of goods

The export of goods

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

To reduce the tax rate for individuals

To refund taxes paid on exempt goods

To refund sales tax paid on exported goods

To return the entire sales tax paid to businesses

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

To discourage the consumption of non-essential luxury goods

To promote industrial growth

To exempt certain goods from taxation

To encourage foreign investment

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

Excise duties on tobacco and alcohol

Corporate tax

Sales tax

Personal income tax

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

Value Added Tax (VAT)

Capital gains tax

Corporate tax

Property tax

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

By enforcing tax audits, processing returns, and ensuring compliance

By providing exemptions from tax for new businesses

By granting tax amnesty programs for importers

By offering loans to businesses for tax payments

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

It deals with the registration of businesses

It regulates the foreign exchange market

It sets tax rates for all income earners

It imposes duties on goods specified by the government

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

To reduce taxes for defaulters

To enforce penalties, audits, and investigations

To offer amnesty programs for evaders

To encourage tax avoidance strategies

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

It only applies to the import of goods

It only applies to exports

It applies to both goods and services

It only applies to goods

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

Agricultural production services

Legal services provided by a law firm

Government healthcare services

Public education services

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

15%

10%

Varies by product

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

By reducing taxes for businesses

By conducting audits and inspections

By offering discounts to compliant taxpayers

By increasing the price of exempt goods

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

Sales tax applies to both goods and services 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

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

Ministry of Finance

Provincial Revenue Authorities

State Bank of Pakistan

Federal Board of Revenue (FBR)

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

Mobile phones

Rice

Sugar

Luxury cars

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

The market value or selling price of the goods

The weight of the goods

The cost of production

The origin of the goods

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

The taxpayer is eligible for a tax rebate

No consequences, only a warning

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

The taxpayer is liable for penalties and interest charges

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

Agricultural products

Goods sold within the country

Exported goods

Luxury goods

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

Petroleum

Medicines

Tobacco

Alcohol

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

The transportation of goods

The import of goods from another country

The sale or transfer of goods or services

The declaration of income by a taxpayer

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

It applies to all goods and services

It is only applied to imported goods

It is collected by provincial authorities

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

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

A fine equal to the tax amount evaded

A warning with no consequences

Imprisonment without a fine

No penalty

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26. What is the purpose of federal excise duty?

To collect taxes from individuals’ income

To encourage exports

To discourage the consumption of certain luxury goods

To increase government revenue from local businesses

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

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

Only exporters are eligible for tax credit

No credit is provided for services

Sales tax credit is only available for imports

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

Sales tax

Property tax

Income tax

Corporate tax

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

Manufacturing of goods

Retail sale of goods

Import of goods

Export of services

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

Birth certificate

National Identity Card

Sales Tax Registration Certificate

Passport

31. How does sales tax affect consumers?

It is not applicable to consumers in Pakistan

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

It is only paid by businesses

It is paid directly by the consumer to the government

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

Wealth tax

Income tax

Sales tax

Corporate tax

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

To regulate income taxes

To regulate customs duties

To impose tax on profits

To define the scope and procedures for sales tax collection

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

Soft drinks

Wheat

Books

Livestock

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

To decide which goods should be taxed

To collect sales tax and federal excise duty from taxpayers

To set tax rates only for importers

To eliminate all taxes on goods

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

Tobacco products

Petroleum products

Alcoholic beverages

Certain agricultural products

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

Monthly

Quarterly

Annually

Semi-annually

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

Mobile phones

Exported goods

Wheat

Coal

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

Non-governmental organizations (NGOs)

Individuals filing income tax returns

Exporters of goods

Small retail businesses

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

No registration is required for excise duty

Businesses must apply for excise duty registration through the FBR

Any individual can register online

Only multinational companies are eligible for excise duty registration

41. 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 tax rate reduction for low-income businesses

A deduction available to businesses for tax paid on purchases

A special credit for foreign investors

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

Sales tax

Property tax

Federal excise duty

Corporate tax

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

Petroleum products

Exported machinery

Public services

Agricultural products

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

Sales of alcoholic beverages

Sales of property

Sales of luxury goods

Sales of medicines

45. 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 with a discount

Goods sold in bulk

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

They are categorized as exempt supplies

They are categorized as non-taxable

They are categorized as luxury items

They are categorized as taxable supplies

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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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