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

Agricultural products

Petroleum products

Exported machinery

Public services

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

The origin of the goods

The cost of production

The market value or selling price of the goods

The weight of the goods

3. 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

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

Legal services provided by a law firm

Government healthcare services

Agricultural production services

Public education services

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

It only applies to exports

It only applies to the import of goods

It only applies to goods

It applies to both goods and services

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

Only businesses importing goods need to register

Businesses must apply online through the FBR portal

No registration is required for businesses under a certain income level

Individuals need to register at their local bank

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

They are categorized as non-taxable

They are categorized as luxury items

They are categorized as exempt supplies

They are categorized as taxable supplies

8. 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 exempt certain goods from taxation

To promote industrial growth

To encourage foreign investment

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

Luxury cars

Rice

Sugar

Mobile phones

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

Corporate tax

Sales tax

Personal income tax

Excise duties on tobacco and alcohol

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

10%

Varies by product

15%

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

By conducting audits and inspections

By reducing taxes for businesses

By offering discounts to compliant taxpayers

By increasing the price of exempt goods

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

It is collected by provincial authorities

It applies to all goods and services

It is only applied to imported goods

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

14. 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 rate reduction for low-income businesses

A tax refund for taxpayers who make mistakes on their filings

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

Sales tax

Income tax

Corporate tax

Property tax

16. How does sales tax affect consumers?

It is only paid by businesses

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

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

Alcoholic beverages

Petroleum products

Tobacco products

Certain agricultural products

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

Goods sold with a discount

Services provided by government entities

Goods and services that are not subject to sales tax

Goods sold in bulk

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

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

Any individual can register online

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

To refund sales tax paid on exported goods

To return the entire sales tax paid to businesses

To refund taxes paid on exempt goods

To reduce the tax rate for individuals

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

National Identity Card

Birth certificate

Sales Tax Registration Certificate

Passport

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

No penalty

Imprisonment without a fine

A warning with no consequences

A fine equal to the tax amount evaded

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

Luxury goods

Exported goods

Goods sold within the country

Agricultural products

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

25%

10%

17%

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

Quarterly

Annually

Semi-annually

Monthly

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

To eliminate all taxes on goods

To decide which goods should be taxed

To collect sales tax and federal excise duty from taxpayers

To set tax rates only for importers

27. What is the purpose of federal excise duty?

To collect taxes from individuals’ income

To encourage exports

To increase government revenue from local businesses

To discourage the consumption of certain luxury goods

28. 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 granting tax amnesty programs for importers

By providing exemptions from tax for new businesses

By offering loans to businesses for tax payments

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

The filing of a tax return

The export of goods

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

The importation of goods

30. 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

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

The taxpayer is liable for penalties and interest charges

The taxpayer is eligible for a tax rebate

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

No consequences, only a warning

32. 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

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

Sales tax applies to agricultural products only

Sales tax applies to both goods and services in Pakistan

Sales tax is only applicable to exports

Sales tax only applies to goods imported from abroad

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

Alcohol

Petroleum

Tobacco

Medicines

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

Sales of property

Sales of medicines

Sales of alcoholic beverages

Sales of luxury goods

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

Federal Board of Revenue (FBR)

Ministry of Finance

Provincial Revenue Authorities

State Bank of Pakistan

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

Mobile phones

Wheat

Exported goods

Coal

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

Retail sale of goods

Import of goods

Export of services

Manufacturing of goods

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

Only exporters are eligible for tax credit

No credit is provided for services

Sales tax credit is only available for imports

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

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

Books

Wheat

Soft drinks

Livestock

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

Small retail businesses

Individuals filing income tax returns

Exporters of goods

Non-governmental organizations (NGOs)

42. 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

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 is a key feature of the Federal Excise Act, 2005?

It imposes duties on goods specified by the government

It regulates the foreign exchange market

It deals with the registration of businesses

It sets tax rates for all income earners

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

Corporate tax

Wealth tax

Sales tax

Income tax

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

The declaration of income by a taxpayer

The sale or transfer of goods or services

The transportation of goods

The import of goods from another country

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Mustansar KhanLast Updated: July 8, 2025

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