I'm writing a book report and I'm mot sure which tense should I use to describe the story in it. The story in the book is set in the past time. So I wonder whether I might use the simple past tense or just the simple present tense?
This is a long-standing case were the present historic is often used. It is though also a case were the past historic has long use.
You may freely use either. The same incidentally applies to descriptions of the writer's approach and technique, etc. (Slightly more controversially; a recent increase in use of the present historical for non-fictional elements has brought a backlash from some, though they'd mostly say it was a valid choice they disliked rather than wrong).
Some use the past historic generally, but highlight some parts by switching to present historic. Done well this can be very effective, but that gets into stuff probably more on-topic on the writers' site than here.
The present tense is usually better.
English has two so-called narrative tenses. The past tense:
The man bit the dog. Then he ran away.
and the present tense:
The man bites the dog. Then he runs away.
I'm vastly oversimplifying matters here but, when you want to give the impression that something really happened you use the past tense. If you don't want to give that impression (e.g. in a joke) you use the present tense.
Novelists want their stories to be believable, so they usually use the past tense.
But when you're writing a book report, you acknowledge that the book is a work of fiction, so the present tense is more appropriate.