CA Final Indirect Tax MCQs

GST, Customs and FTP MCQs for Paper 5, each test marked with the law it follows.

5 full-length tests. Each has 23 questions for 30 marks in 30 minutes. MCQ 1 is free.

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Try 3 questions from MCQ 1

They follow the law as at 30.04.2025. Work each one out, then open the answer to see why every option is right or wrong.

Deccan Imports

Deccan Imports imported a consignment of industrial components into India by sea.

The free on board value of the consignment was US$ 40,000. The rate of exchange notified by the Central Board of Indirect Taxes and Customs for the date of presentation of the bill of entry was Rs. 86 to the US dollar.

Neither the cost of transport of the goods to the place of importation nor the cost of insurance is ascertainable from the documents.

No commission, brokerage, royalty or licence fee is payable, and the buyer and the seller are not related.

Question 1, 2 marks

What is the assessable value of the consignment imported by sea?

  1. Rs. 34,40,000, being the free on board value converted at the notified rate, the cost of transport and insurance not being ascertainable and so not capable of being added.

    Wrong. Where the actual cost is not ascertainable the rules supply a deemed figure.

  2. Rs. 41,66,700, being the free on board value increased by transport at 20% and insurance at 1.125% of that value, converted at the notified rate of exchange.

    Correct answer

    Correct - Rs. 41,66,700.

  3. Rs. 41,28,000, being the free on board value increased by transport at 20% of that value and converted at the notified rate, no addition being made for insurance.

    Wrong. Insurance is added at 1.125% where it is not ascertainable.

  4. Rs. 42,08,367, being the free on board value increased by transport, insurance and a further one per cent towards landing charges, converted at the notified rate.

    Wrong. There is no addition for landing charges.

Show answer
Why

Where the cost of transport is not ascertainable it is taken at 20% of the free on board value, and where the cost of insurance is not ascertainable it is taken at 1.125% of that value. Transport is therefore US$ 8,000 and insurance US$ 450, giving a cost, insurance and freight value of US$ 48,450. Converted at the notified rate of Rs. 86 that is Rs. 41,66,700. No further loading is made: the one per cent addition towards landing charges that older computations carried no longer forms part of the valuation.

Reference: Section 14 of the Customs Act, 1962 read with rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007; Study Material Module 4, Chapter 4.

Trilok Mart Pvt Ltd

Trilok Mart Pvt Ltd holds GST registration in Bengaluru, Karnataka. It owns and operates a digital platform on which independent suppliers sell goods and provide services to customers.

Individual drivers, none of them registered under GST, provide passenger transportation by motor cab to customers who book through the platform. Passenger transportation supplied through an electronic commerce operator is a service notified under section 9(5).

Separately, registered sellers supply goods through the platform. For the month of October 2025 the net value of taxable supplies made through the platform by those sellers, the consideration for which Trilok Mart collects, was Rs. 95,00,000.

Trilok Mart charges each seller a commission for the use of the platform.

Question 2, 1 mark

A person supplies services, not being services notified under section 9(5), through Trilok Mart. His aggregate turnover on an all-India basis is Rs. 14 lakhs. Must he register?

  1. Yes. Any person who supplies through an electronic commerce operator required to collect tax at source must register, whatever his aggregate turnover may be.

    Wrong. The exemption for small suppliers of services through an operator exists precisely to avoid this.

  2. Yes, but only in the State in which the electronic commerce operator is itself registered, the operator's registration governing the supplies routed through it.

    Wrong. Registration is not taken in the operator's State on that footing.

  3. No. Suppliers of services other than those specified under section 9(5), routed through such an operator, are exempt where turnover is within Rs. 20 lakhs.

    Correct answer

    Correct - exempted up to Rs. 20 lakhs on an all-India basis.

  4. No, provided the operator undertakes in writing to discharge the tax on those supplies on his behalf and reflects them in its own return for the month.

    Wrong. No such private undertaking can displace a registration requirement.

Show answer
Why

Persons making supplies of services, other than supplies specified under section 9(5), through an electronic commerce operator who is required to collect tax at source under section 52, and having an aggregate turnover computed on an all-India basis not exceeding Rs. 20 lakhs, or Rs. 10 lakhs in the case of the special category States of Mizoram, Tripura, Manipur and Nagaland, have been exempted from obtaining registration. At Rs. 14 lakhs this supplier is within the exemption. The position differs for a person supplying goods through such an operator, and for the services that section 9(5) itself covers.

Reference: Section 24 read with the notification exempting such suppliers; Study Material Module 2, Chapter 8.

Question 3, 1 mark

For how long is an Advance Authorisation valid for import, and may that period be extended?

  1. Six months from the date of issue, with no provision for revalidation, a fresh authorisation having to be applied for if the imports are not completed in time.

    Wrong period, and revalidation is available.

  2. Twenty-four months from the date of issue, which may be revalidated for a further twenty-four months on as many occasions as the Regional Authority allows.

    Wrong period, and revalidation is allowed once only.

  3. Until the export obligation attaching to it has been discharged in full, no separate period being prescribed for making the imports under the authorisation.

    Wrong. The import validity period is prescribed separately from the export obligation.

  4. Twelve months from the date of issue, and revalidation for a further period of twelve months may be allowed once only, on an application made online.

    Correct answer

    Correct - twelve months, revalidated once for twelve months.

Show answer
Why

The validity period of an Advance Authorisation is twelve months from the date of issue, which means that imports under the authorisation must be made within that period. Revalidation for another period of twelve months may be allowed once only, and the application for revalidation is made online. The validity period for import is a distinct matter from the period within which the export obligation has to be discharged, and the two should not be run together.

Reference: Foreign Trade Policy, Advance Authorisation; Study Material Module 4, Chapter 8 Unit 2.

That is the review you get on every question after a full test, with your marks broken down by topic, weakest first, so you know what to revise next.

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What the IDT tests cover

Indirect tax questions turn on precise conditions: the date by which credit must be taken, what enters the value of a supply, whether a supplier on a platform has to register. These tests are built on those conditions, and each one is marked with the date its law is taken as at, so you know which amendments it reflects.

About four fifths of each test is GST: value of supply, input tax credit and blocked credits, registration, e-commerce operators, time and place of supply, returns, refunds and job work. The rest is customs valuation and duty computation and the Foreign Trade Policy schemes.

Distractors are the rules students mix up: the time limit for one scheme placed on another, a deemed addition that no longer applies, a threshold that belongs to a different kind of supply.

The questions are new, written from the Acts, the Standards and the study material, and are not reprints of ICAI papers.

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