The 'Nil-Rated Supply' under GST means: MCQ with Answer and Explanation

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The 'Nil-Rated Supply' under GST means:

A. Zero-rated supplies

B. Goods with 0% GST and no ITC on inputs (exempt)

C. Goods with 0% GST but ITC available

D. Non-taxable supplies

Answer: Option B

Solution (By JKSSB Mock Tests)

Nil-rated supplies are taxed at 0% but no input tax credit is available. Exempt supplies also fall here. Zero-rated (export) allows ITC.

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

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Question #1

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The 'Revenue from Contracts with Customers' (Ind AS 115) requires identification of performance obligations. A performance obligation is:

A. The contract as a whole

B. Only services

C. Only goods

D. Each promise to transfer a distinct good or service (or series)

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Correct Answer: Option D

Explanation:
Distinct goods/services are separate performance obligations.

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Question #2

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The 'Safe Harbour Rules' under transfer pricing provide:

A. No relief

B. Penalty provisions

C. Circumstances in which tax authorities accept transfer price declared by taxpayer

D. Criminal prosecution

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Correct Answer: Option C

Explanation:
Safe harbour rules reduce litigation by accepting declared margins in specified conditions.

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Question #3

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A company's profit after tax is ₹2,00,000. Preference dividend ₹20,000. Transfer to general reserve ₹30,000. Profit available for equity dividend is:

A. ₹1,80,000

B. ₹1,50,000

C. ₹2,00,000

D. ₹2,20,000

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Correct Answer: Option B

Explanation:
Profit after preference dividend and transfer to reserve = 2,00,000 - 20,000 - 30,000 = ₹1,50,000.

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