CAF-2 · Chapter 17 · Question 4 of 15
Which of the following manufacturing concerns meets the criteria to be classified as a "cottage industry" and thus have its local supplies exempt from sales tax?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) D) A manufacturer in a residential area without industrial gas/electricity, with 9 workers, and an annual turnover of Rs. 7.5 million.
Explanation
A "cottage industry" must fulfill all of the following conditions: (a) does not have an industrial gas or electricity connection; (b) is located in a residential area; (c) does not have a labour force of more than 10 workers; and (d) annual turnover does not exceed Rs. 8 million.
More Scope of Sales Tax Law and Rules for Registration and Deregistration MCQs
- Q6Under the provisions of the Sales Tax Act, 1990, which of the following persons is NOT mandatorily required to be registered for sales tax?
- Q7Where a person files an application for sales tax registration as a manufacturer but has not yet installed machinery, he may be granted…
- Q8Under the rules for suspension and blacklisting of registration, the Commissioner can suspend a registered person's sales tax registration…
- Q9Emerald Traders (ET) purchased taxable goods from Sapphire Electronics (SE), another registered person, and paid the invoice value…
- Q10What is the primary difference between a "zero-rated supply" and an "exempt supply" under the Sales Tax Act, 1990?