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Service Tax Planning and Optimization

Description: Service Tax Planning and Optimization Quiz
Number of Questions: 14
Created by:
Tags: service tax tax planning tax optimization indian law
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Which of the following services is exempt from service tax?

  1. Legal services

  2. Accounting services

  3. Management consulting services

  4. Advertising services

Show answer
Correct Option: A
Explanation:

Legal services are exempt from service tax under the Service Tax Act, 1994.

What is the rate of service tax on taxable services?

  1. 6%

  2. 12%

  3. 18%

  4. 24%

Show answer
Correct Option: A
Explanation:

The rate of service tax on taxable services is 6%.

Which of the following is a method of service tax planning?

  1. Choosing the right service tax category

  2. Availing input tax credit

  3. Filing service tax returns on time

  4. All of the above

Show answer
Correct Option: D
Explanation:

All of the above are methods of service tax planning.

What is the due date for filing service tax returns?

  1. 15th of the month following the end of the quarter

  2. 30th of the month following the end of the quarter

  3. 15th of the month following the end of the year

  4. 30th of the month following the end of the year

Show answer
Correct Option: A
Explanation:

The due date for filing service tax returns is 15th of the month following the end of the quarter.

What is the penalty for late filing of service tax returns?

  1. 1% of the tax due for each day of delay

  2. 2% of the tax due for each day of delay

  3. 5% of the tax due for each day of delay

  4. 10% of the tax due for each day of delay

Show answer
Correct Option: A
Explanation:

The penalty for late filing of service tax returns is 1% of the tax due for each day of delay.

Which of the following is a benefit of service tax optimization?

  1. Reduced tax liability

  2. Improved cash flow

  3. Increased profitability

  4. All of the above

Show answer
Correct Option: D
Explanation:

All of the above are benefits of service tax optimization.

What is the difference between service tax and value added tax (VAT)?

  1. Service tax is a tax on services, while VAT is a tax on goods and services.

  2. Service tax is a central tax, while VAT is a state tax.

  3. Service tax is levied on the gross value of the service, while VAT is levied on the net value of the goods or services.

  4. All of the above

Show answer
Correct Option: D
Explanation:

All of the above are differences between service tax and value added tax (VAT).

Which of the following services is taxable under the reverse charge mechanism?

  1. Management consulting services

  2. Information technology services

  3. Legal services

  4. Accounting services

Show answer
Correct Option: A
Explanation:

Management consulting services are taxable under the reverse charge mechanism.

What is the rate of service tax on services provided by a foreign service provider?

  1. 6%

  2. 12%

  3. 18%

  4. 24%

Show answer
Correct Option: C
Explanation:

The rate of service tax on services provided by a foreign service provider is 18%.

Which of the following is a method of avoiding service tax?

  1. Providing services that are exempt from service tax

  2. Availing input tax credit

  3. Filing service tax returns on time

  4. None of the above

Show answer
Correct Option: D
Explanation:

There is no method of avoiding service tax.

What is the penalty for non-payment of service tax?

  1. 1% of the tax due for each day of delay

  2. 2% of the tax due for each day of delay

  3. 5% of the tax due for each day of delay

  4. 10% of the tax due for each day of delay

Show answer
Correct Option: D
Explanation:

The penalty for non-payment of service tax is 10% of the tax due for each day of delay.

Which of the following is a benefit of service tax planning?

  1. Reduced tax liability

  2. Improved cash flow

  3. Increased profitability

  4. All of the above

Show answer
Correct Option: D
Explanation:

All of the above are benefits of service tax planning.

What is the due date for filing service tax returns for a quarterly taxpayer?

  1. 15th of the month following the end of the quarter

  2. 30th of the month following the end of the quarter

  3. 15th of the month following the end of the year

  4. 30th of the month following the end of the year

Show answer
Correct Option: A
Explanation:

The due date for filing service tax returns for a quarterly taxpayer is 15th of the month following the end of the quarter.

Which of the following is a method of service tax optimization?

  1. Choosing the right service tax category

  2. Availing input tax credit

  3. Filing service tax returns on time

  4. All of the above

Show answer
Correct Option: D
Explanation:

All of the above are methods of service tax optimization.

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