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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 role of the provincial tax authorities in relation to sales tax in Pakistan?

To handle the tax returns of large corporations

To administer sales tax on services at the provincial level

To collect all federal sales taxes

To set the sales tax rate for imported goods

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

Capital gains tax

Corporate tax

Value Added Tax (VAT)

Property tax

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

Goods and services that are not subject to sales tax

Services provided by government entities

Goods sold in bulk

Goods sold with a discount

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

To define the scope and procedures for sales tax collection

To regulate customs duties

To impose tax on profits

To regulate income taxes

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

No registration is required for businesses under a certain income level

Only businesses importing goods need to register

Individuals need to register at their local bank

Businesses must apply online through the FBR portal

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

It sets tax rates for all income earners

It imposes duties on goods specified by the government

It deals with the registration of businesses

It regulates the foreign exchange market

7. 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

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

Mobile phones

Luxury cars

Sugar

Rice

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

Exported goods

Mobile phones

Wheat

Coal

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

15%

Varies by product

10%

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

Corporate tax

Sales tax

Income tax

Wealth tax

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

A deduction available to businesses for tax paid on purchases

A special credit for foreign investors

A tax refund for taxpayers who make mistakes on their filings

A tax rate reduction for low-income businesses

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

Corporate tax

Income tax

Property tax

Sales tax

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

It is collected by provincial authorities

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

It applies to all goods and services

It is only applied to imported goods

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

10%

17%

25%

16. How does sales tax affect consumers?

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

It is paid directly by the consumer to the government

It is not applicable to consumers in Pakistan

It is only paid by businesses

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

Businesses must apply for excise duty registration through the FBR

Only multinational companies are eligible for excise duty registration

No registration is required for excise duty

Any individual can register online

18. 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

19. What is the purpose of federal excise duty?

To collect taxes from individuals’ income

To discourage the consumption of certain luxury goods

To increase government revenue from local businesses

To encourage exports

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

Luxury goods

Exported goods

Goods sold within the country

Agricultural products

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

Government healthcare services

Legal services provided by a law firm

Public education services

Agricultural production services

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

Import of goods

Export of services

Retail sale of goods

Manufacturing of goods

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

Sales of luxury goods

Sales of medicines

Sales of property

Sales of alcoholic beverages

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

Agricultural products

Public services

Exported machinery

Petroleum products

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

To enforce penalties, audits, and investigations

To reduce taxes for defaulters

To offer amnesty programs for evaders

To encourage tax avoidance strategies

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

Sales tax

Excise duties on tobacco and alcohol

Corporate tax

Personal income tax

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

Medicines

Alcohol

Petroleum

Tobacco

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

No credit is provided for services

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

Only exporters are eligible for tax credit

Sales tax credit is only available for imports

29. 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 return the entire sales tax paid to businesses

To reduce the tax rate for individuals

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

Wheat

Livestock

Books

Soft drinks

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

The sale or transfer of goods or services

The declaration of income by a taxpayer

The transportation of goods

The import of goods from another country

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

To encourage foreign investment

To discourage the consumption of non-essential luxury goods

To exempt certain goods from taxation

To promote industrial growth

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

It applies to both goods and services

It only applies to exports

It only applies to the import of goods

It only applies to goods

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

Sales Tax Registration Certificate

Birth certificate

National Identity Card

Passport

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

Annually

Quarterly

Monthly

Semi-annually

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

By increasing the price of exempt goods

By offering discounts to compliant taxpayers

By conducting audits and inspections

By reducing taxes for businesses

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

Ministry of Finance

State Bank of Pakistan

Federal Board of Revenue (FBR)

Provincial Revenue Authorities

38. 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 export of goods

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

39. 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

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

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

Sales tax applies to agricultural products only

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

The weight of the goods

The market value or selling price of the goods

The cost of production

The origin of the goods

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

Federal excise duty

Property tax

Sales tax

Corporate tax

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

Tobacco products

Petroleum products

Alcoholic beverages

Certain agricultural products

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

To set tax rates only for importers

To collect sales tax and federal excise duty from taxpayers

To decide which goods should be taxed

To eliminate all taxes on goods

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

They are categorized as exempt supplies

They are categorized as luxury items

They are categorized as taxable supplies

They are categorized as non-taxable

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

A warning with no consequences

A fine equal to the tax amount evaded

Imprisonment without a fine

No penalty

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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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