The 'Input Tax Credit' under GST is not available for: MCQ with Answer and Explanation

Question

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The 'Input Tax Credit' under GST is not available for:

A. Motor vehicles for transportation of goods

B. Inputs used for zero-rated supplies

C. Inputs used for taxable supplies

D. Works contract services for construction of immovable property

Answer: Option D

Solution (By JKSSB Mock Tests)

ITC on works contract for immovable property is blocked under Section 17(5) of CGST Act.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The 'Audit Programme' is:

A. The audit report

B. The final accounts

C. A list of audit procedures to be performed

D. The trial balance

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Correct Answer: Option C

Explanation:
Audit programme details the steps and procedures for conducting the audit.

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Question #2

Which of the following is an indirect tax?

A. Wealth Tax

B. Income Tax

C. Corporate Tax

D. Goods and Services Tax (GST)

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Correct Answer: Option D

Explanation:
GST is an indirect tax because the liability to pay is on the seller, but the burden is passed on to the consumer.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

In a merger, Company A (profit ₹10,00,000, 2,00,000 shares) acquires Company B (profit ₹5,00,000, 1,00,000 shares). A issues 1 share for every 2 shares of B. What is the post-merger EPS of Company A?

A. ₹7.00

B. ₹5.60

C. ₹6.00

D. ₹5.00

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Correct Answer: Option C

Explanation:
Total Post-merger Profit = 10,00,000 + 5,00,000 = ₹15,00,000. New shares issued by A = 1,00,000 / 2 = 50,000. Total shares of A = 2,00,000 + 50,000 = 2,50,000. Post-merger EPS = 15,00,000 / 2,50,000 = ₹6.00.

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