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CA CS PIYUSHA SARDA T.

Index
Sr.
Chapter’s Name Page No.
No.
1 Exemptions under GST 1.1 – 1.26
2 Input Tax Credit 2.1 – 2.30
3 Tax Invoice 3.1 – 3.23
4 E-Way Bill 4.1 – 4.7
5 Registration 5.1 – 5.26
6 Payment of Tax 6.1 – 6.12
7 Introduction to GST 7.1 – 7.11
8 What is Value of Supply? 8.1 – 8.16
9 Levy and Collection of GST 9.1 – 9.20
10 When to Pay GST? (Time of Supply) 10.1 – 10.17
11 Who shall Pay GST? (Reverse Charge and
11.1 – 11.12
Payment by ECO)
12 What Rate of GST is Applicable?
12.1 – 12.20
(Composition Scheme)
13 Returns under GST 13.1 – 13.15
14 Computation of GST 14.1 – 14.18

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CA CS PIYUSHA SARDA T.

My Dear Students,

"Future" always is an outcome of hard-work and smart-work done in present. Every step, even
a small one, taken today in quest of shaping future, ensures dawn of a successful era tomorrow.

We feel elated to present this guide "Indirect Taxes", which we firmly believe, would definitely
enable every student to understand the concepts and rationale behind taxation and consequently
aide in clearing your exams with flying colours.

This book would not have been a reality without unflinching support extended to me by my
beloved "FAMILY". My better-half CA. Bhavik Thakkar has indeed been a pillar of strength
and has stood by me in every part of this journey - pleasant as well as challenging. Lots and
lots of thanks to the apples of my eyes- my kids-Vraj and Stuti for unknowingly giving away
their "MUMMA Time" and picking up their share of contribution in making this book see light
of the day. My mother and father (Neela and Vijay) encouraged me and stood by me in every
decision I had to make for completing this enormous task of book writing. My parents (Saroj
and Pramod) will always be the reason of what I am today and aspire to be in future. Sayali
and Darshan also have contributed in their own way to this successful venture. Priyanka always
was and is there to give me strength and to keep me honest about my priorities.

Last but not the least I would like to profusely thank my team - Neha, Abhishek, Vyankatesh
and Aishwarya, who were with me day and night, bore my idiosyncrasies that very creative
person has and unassumingly aligned their own priorities with mine and made this book
happen.

My dear students, success very often is fickle in nature and will choose its own time to visit
you but your untiring and dedicated efforts should always be the best possible that you can put
in" TODAY AS WELL AS TOMORROW" and that one attribute alone will compel success
to embrace you.

We have tried our best to provide you with easy- breezy notes on tax to enhance your
understanding of the subject. This book coupled with Material provided by Institute and your
efforts, would definitely pave a way towards your success.

All the very best to you!!!

With love & regards
CA CS Piyusha Sarda T.

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01. Exemptions under GST

Q. 1 State the difference between
i) General & Special Exemption.
ii) Absolute & Conditional Exemption
Answer:
(i) Difference between General & Special Exemption:-
General Exemption Special Exemption
1 It is given by Government in public It is given by Government in public interest
interest by notification in official by special order.
gazette.
2 It is applicable to all members of a It is applicable in each case i.e. applicable
particular section. to that person to whom the order is given.
3 It is given in exceptional nature which is
It is given generally in public interest.
necessary in public interest.
4 It is covered u/s 11(1) of CGST Act, It is covered u/s 11(2) of CGST Act, 2017.
2017.
(ii) Difference between Absolute &
Absolute Exemption Conditional Exemption:
Registered person has to mandatorily avail Registered person has option to avail
exemption given without any conditions. exemption on fulfilment of certain
conditions.
Registered person supplying goods &/or Registered person supplying goods &/or
services which are exempted absolutely shall services which are exempted conditionally
not collect tax in excess of effective rate shall collect tax at effective rate, if any
condition is not fulfilled.

Q. 2 Ayushman Medical centre, a clinical establishment, offers the following services:-

S.No. Particular Rs. (Excluding GST)
i) Reiki healing treatment. Such therapy is not recognized
system of medicine as per section 2(h) of Clinical 10,00,000
Establishments Act, 2010
ii) Plastic Surgeries [One such surgery was conducted to
repair cleft lip of a new born baby, Consideration of 20,00,000
Rs.1,00,000 was charged for the same]
iii) Air ambulance services to transport critically ill
patients from distant location to Ayushman Medical 1,00,000
Centre
iv) Alternative medical treatments by way of Ayurveda.
Such therapy is a recognized system of medicine as per 2,50,000
section 2(h) of Clinical Establishment Act, 2010
v) Alternative medical treatments by way of yoga. 5,00,000

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vi) Rehabilitation professional therapy service to Mr.

Tushar who needed rehabilitation to learn how to walk 1,00,000
again after the car accident.
vii) Services provided by clinical establishments by way of
providing room having charges Rs.5500 per day 66000

Ayushman Medical Centre also operates a cord blood bank which provides services in
relation to preservation of stem cells. Ayushman Medical Centre is of the view that since
it is a clinical establishment, all the service provided by it as well as all the services
provided to it are exempt from payment of GST.
You are required examine the situation & also compute value of taxable supply and GST
liability [CGST & SGST or IGST] of Ayushman Medical Centre,if any, in the light of
relevant GST provisions.
Note: - All the services provided by Ayushman Medical Centre are intra-State supplies.
Assume the rates of CGST, SGST and IGST to be 9%, 4% and 18% respectively.
Answer:
 The contention of Ayushman Medical Centre that since it is a clinical establishment, all the
services provided to it are also exempt from GST is not correct in law.
 Exemption is available to health care services provided by a clinical establishment and not
to services provided to a clinical establishment. However, such services must be provided
in any recognized system of medicines in India.
Accordingly, Computation of Value of taxable supply and GST liability of Ayushman
Medical Centre:-
S. NO. Particulars RS Remarks
i) Reiki healing 10,00,000 Taxable as Reiki is not a recognized system
treatment of medicines.
ii) Plastic Surgeries 19,00,000 ‘Health care services' specifically excludes
(Rs.2000000 – cosmetic or plastic surgery except when
Rs.100000) undertaken to restore/ reconstruct anatomy/
functions of body affected due to congenital
defects, developmental abnormalities, injury
or trauma.
iii) Air ambulance Exempt as 'Health care services' specifically
services to transport includes transportation of patient to and from
critically ill patients Nil a clinical establishment.
from distant location
to Ayushman
Medical Centre
iv) Ayurveda medical Exempt as Ayurveda is a recognized system
treatments Nil of medicines.
v) Yoga medical Nil Exempt as Yoga is a recognized system of
treatments medicine.
vi) Therapy service by Nil Therapy provided by a rehabilitation
Rehabilitation professional recognised under Rehabilitation
professional to Mr. Council of India Act, 1992 at medical
Tushar to learn how establishments is exempt.
to walk again after
car accident.
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vii) Services provided by Taxable, Services provided by clinical

clinical establishment by way of providing room other
establishments by 66000 than ICU/CCU/ICCU/NICU having room
way of providing charges exceeding Rs.5000 per day
room
Value of Taxable 29,66,000
supply
CGST @9% 2,66,940
SGST @9% 2,66,940
Note:
 Services provided by cord blood banks by way of preservation of stem cells or any other
service in relation to such preservation are taxable from GST.
 Therefore, services provided in relation to preservation of stem cells by the cord blood bank
operated by Ayushman Medical Centre will be taxable from GST.

Q. 3 Services provided by an entity registered u/s 12AA or 12AB of the Income- tax Act,
1961 are exempt from GST, if such services are provided by way of charitable activities.
Elaborate the term 'charitable activities'.
Answer:-
The term 'Charitable activities' means activities relating to:-
(i) Public health by way of-
a) care or counselling of-
 terminally ill persons or persons with severe physical or mental disability,
 persons afflicted with HIV or AIDS,
 persons addicted to a dependence-forming substance such as narcotics drugs or
alcohol or
b) public awareness of preventive health, family planning or prevention of HIV infection,
(ii) Advancement of religion, spirituality or yoga,
(iii) Advancement of educational programmes/skill development relating to,-
a) Abandoned, orphaned or homeless children,
b) Physically or mentally abused and traumatized persons,
c) Prisoners or
d) Persons over the age of 65 years residing in a rural area,
(iv) Preservation of environment including watershed, forests & wildlife.

Q. 4 The Shirdi Sai Baba Trust is a religious trust, registered under section 10(23C)(v) of
the Income Tax Act 1961. The trust has a number of rooms, community halls and shops
which it gives out on rent.
Calculate the value of taxable service taking into consideration the relevant notification.
For the month of June 20XX, it furnishes the following details:-
S.No. Particulars RS
1 Renting of Rooms:
(i) 2 Rooms were rented for 900 each per day 1,800
(ii) 5 Rooms were rented for 1,100 each per day 5,500

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2 Renting of Community Halls:

(i) 3 Community Halls for performance of wedding ceremonies for 75,000
Rs.25,000 per day
(ii) 1 Community Hall for performance of various religious 8,000
ceremonies for Rs.8,000 per day
3 The trust has 5 shops located just across the temple which it has 75,000
rented to individuals for running their business. These are retails
mainly involved in selling goods required for performing various
religious ceremonies. Each has been rented for Rs.15,000 per month.
4 Meditation Hall provided on rent for Rs.100 per day 3,000

Answer-
Calculation of value of taxable service for the month of June 20XX:-
Sr. No. Particulars RS.
1 Renting of Rooms: (Note-1)
(i) 2 Rooms were rented for 900 each per day -
(ii) 5 Rooms were rented for 1,100 each per day 5,500
2 Renting of Community Halls: (Note-2)
(i) 3 Community Halls for performance of wedding ceremonies 75,000
for Rs.25,000 per day
(ii) Community Hall for performance of various religious
ceremonies for Rs.8,000 per day
3 Rented 5 retails shops of Trust across the temple mainly involved in 75,000
selling goods required for performing various religious ceremoniesfor
15,000 per month per shop (Note-3)
4 Meditation Hall provided on rent for Rs.100 per day (Note-4) -
Value of taxable service 1,55,500
Notes: - Exemption for Renting of precincts of a religious place meant for general public,
owned or managed by a charitable or religious trust registered u/s 10(23C) of Income-tax Act,
1961 is as under:
1) Renting of rooms where the rent charged is less than 1,000 per day is exempt.
2) Renting of community halls where the rent charged is less than 10,000 per day is exempt.
3) Renting of shops where the rent charged is less than Rs.10,000 per month is exempt.
4) Meditation Hall is in the precincts of religious place and renting charges are less than
Rs.10,000 per day. Hence, the exemption is available.

Q. 5 Anand Trust, Kolkata is registered under section 12AA of the Income Tax Act,
1961. It has provided following particulars relating to the activities carried out by it for
the month of March, 20XX:-
Particulars Amount (RS)
Donation received against display of name of a city-based school in
500000
annual religious book published by the Trust

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Receipts from sale of food in Anand food court, located in the Trust
200000
premises
Refundable deposit of Rs.2,00,000 and annual fees of Rs.1,00,000
300000
received from restaurants (located in West Bengal) using brand name
and logo of Anand Food Court
Donation received for Pooja organized in Trust premises on occasion 100000
of 'Shivratri
Receipts from Skill Development Program for Senior Citizens (aged 400000
more than 65 years) residing in Kolkata
Amount received for activities relating to preservation of Tigers in 300000
Sunderbans, West Bengal
Letting out of precincts of a religious place owned by Trust in Kolkata 200000
(Rent Rs.10,000 per day)
From given information, you are required to calculate the value of taxable supply.
Answer:-
Computation of value of taxable supply of Anand Trust for the month of March, 20XX:-
Particulars RS Reason
Donation received for publishing Taxable, as it is a non-charitable activity,
the name of a school in annual service provided by Trust is not eligible
500000
religious publication of Trust for exemption & also, publishing name of
school is giving publicity/advertisement to
it.
Receipts from sale of food in food Taxable, as it is a non-charitable activity,
200000
court in the premises of Trust service provided by Trust is not eligible
for exemption from GST.
Annual fees received from 100000 Taxable, as it is a non-charitable activity,
restaurants for use of brand name service provided by Trust is not eligible
and logo of food court for exemption. However, deposit being
refundable in nature cannot be
construed as consideration.
Note: It is assumed that refundable
deposit of Rs.2,00,000 has not affected, in
any manner, the consideration charged for
use of brand name and logo of the food
court.
Donation received for Pooja Nil Exempt because services of conduct of a
organized in Trust premises on religious ceremony are exempt from GST.
occasion of 'Shivratri .
Receipts from skill development 400000 Taxable, as Skill development program
program for senior citizens (aged conducted by Trust for persons over the
more than 65 years) residing in age of 65 years is not a charitable activity
Kolkata since such persons are not residing in
rural area, but in an urban area (Kolkata).
Thus, not eligible for exemption.
Preservation of Tigers in Nil Exempt, as it is a charitable activity of
Sundarbans, West Bengal preservation of wildlife, service provided
by Trust is eligible for exemption.
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Letting out of precincts of religious 200000 Taxable, as the rent is Rs.10,000 per day,
place owned by Trust in Kolkata is not eligible for exemption. Renting of
precincts of a religious place meant for
general public owned by a charitable trust
is exempt only when rent is less than
Rs.10,000 per day.
Total value of taxable supply 1400000

Q. 6 M/s Patil & Associates is a partnership firm engaged in providing services

pertaining to corporate affairs, legal consultancy & representational services. During the
financial year, it has provided the following services:-
(i) Represented a company appeal matter for M/s Shah & Shah Pvt. Ltd. which is an
unregistered person under GST as aggregate turnover in preceding financial year is
less than the threshold limit applicable for registration.
(ii) Assisted Advocate Dhiraj for a legal matter relating to a criminal case of his client.
(iii)Legal consultancy services for personal land related matter to its client, Mr. Balal
dev.
(iv)Provided legal advice to the State Government for an official matter.
Whether the above services are taxable or exempt? Also give reason for the same.
Answer:-
(i) Exemption:-
 Legal service provided by a partnership firm of advocates to a business entity with an
aggregate turnover up to such amount in preceding financial year as makes it eligible
for exemption from registration under CGST Act is exempted under GST.
 Legal services include representational services.
(ii) Exempt: - Legal service provided by a partnership firm of advocates to an advocate is
exempt.
(iii) Exempt: - Legal service provided by a partnership firm of advocates to a person other than
a business entity is exempt.
(iv) Exempt: - Legal service provided by a partnership firm of advocates to State Government
is exempt.

Relating to Agriculture:-
Q. 7 Green Agro Services, a registered person provides the following information
relating to its activities during the month of February, 20XX:-
Gross Receipts from Amount (RS)
Services relating to rearing of sheep’s 600000
Services by way of artificial insemination of horses 400000
Processing of sugarcane into jaggery 800000
Milling of paddy into rice 750000
Service of fumigation in a warehouse of agricultural produce 180000
All the above receipts are exclusive of GST. Compute the value of taxable supplies under
GST laws for the month of February, 20XX.
Answer:-

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Particulars RS. Reason

Services relating to rearingof Exempt since services relating to rearing of all
sheeps Nil life forms of animals, except horses, for food
etc. are exempt.
Services of artificial 400000 Not exempt, since artificial insemination of
insemination of horses livestock other than horses are exempt.
Processing of sugarcane into Not exempt, since processes which Iter
jaggery essential characteristics of agricultural produce
800000
are not exempt & processing of sugarcane into
jaggery changes essential characteristics of
sugarcane.
Milling of paddy into rice Not exempt, as this process, being carried out
after cultivation is over, is not an intermediate
750000 production process for cultivation of plants &
it also changes essential characteristics of
paddy.
Fumigation in a warehouseof Not exempt, Services by way of fumigation in
agricultural produce 180000 a warehouse of agricultural produce are
taxable.
Value of taxable supplies 2130000

Q. 8 Seed Farmers Association' is engaged in providing services relating to agriculture. It

furnishes the following details with respect to activities undertaken by them in month of
May, 20XX.
S.No. Particulars RS
1 Cultivation of ornamental flowers 42,000
2 Packing of tomato ketchup 54,000
3 Warehousing of potato chips and Biscuit 1,65,000
4 Sale of tea & rice on commission basis (tea 18000& rice 50000) 68,000
5 Packaging of pulses in retail packs 45,000
6 Training of farmers on use of scientific tools, Agro-machinery and 10,000
use of new pesticides and fertilizers developed through Scientific
research
7 Leasing of vacant land to a study farm (rearing of horses) 1,63,000
8 Grading of wheat according to its quality 42,000
9 Testing of samples from plants for pest detection 1,21,000
10 Rearing of silk worms 83,500
11 Supply of farm labour 58,000
12 Renting of Agro-machinery 5,00,000
13 Processing of Tomato ketchup and Potato Chips 3,00,000
14 Warehousing of minor forest produce 1,70,000
15 Warehousing of seasonal vegetables, fruits, cereals and pulses 50,000
Compute the value of taxable service of 'Seed Farmer Association' for the month of May,
20XX. Assume that the point of taxation in respect of all activities mentioned above falls
in the month of May, 20XX itself.

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Answer-
Computation of value of taxable service of 'Seed Farmer Association' for the month of May,
20XX:-
S.No. Particulars ₹ Remark
1 Cultivation of ornamental flowers It is exempt as Floriculture is
-
agricultural activity
2 Packing of tomato ketchup It is taxable as tomato ketchup is
54,000
not agricultural produce
3 Warehousing of potato chips It is taxable as potato chips &
&Biscuit 1,65,000 Biscuit are not agricultural
produce
4 Sale of tea & rice on commission Tea & Rice are not agricultural
basis 68,000 produce & thus, their sale on
(tea ₹18000 & rice ₹50000) commission basis is not exempted.
5 Packaging of pulses in retail packs This activity is taxable as it is not
45,000 necessary to make pulses
marketable in primary market.
6 Training of farmers on use of These are Agricultural extension
scientific tools, Agro- machinery services & are specifically
and use of new pesticides & - exempted.
fertilizers developed through
Scientific research
7 Leasing of vacant land to a stud Rearing of all life-forms of
1,63,000
farm (rearing of horses) animals except horses is exempt.
8 Grading of wheat according to its It does not alter essential
quality characteristics of Wheat but makes
-
it marketable for primary market
& thus, exempt.
9 Testing of samples from plants for Agricultural operations directly
pest detection related to production of any
-
agricultural produce including
testing is exempt.
10 Rearing of silk worms Rearing of all life-forms of
-
animals except horses is exempt.
11 Supply of farm labour - It is specifically exempted.
12 Renting of Agro-machinery - It is specifically exempted.
13 Processing of Tomato ketchup & Such processing alters essential
Potato Chips characteristics of tomato & Potato.
3,00,000
They are not agricultural produce
& thus, taxable
14 Warehousing of minor forest It is specifically exempted.
-
produce
15 Warehousing of seasonal It is specifically exempted.
-
vegetables, fruits, cereals & pulses
Value of Taxable Services 7,95,000

Q. 9 1) Mr. A boarded Rajdhani Express (fully AC train) from Kanpur on July 5, 20XXand
disembarked at New Delhi. He hired a car from a local cab operator for the whole
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day on a lump sum consideration and visited Delhi's historical monuments. In the
night, he took the Metro to International Airport and boarded a flight to Mumbai. At
Mumbai Airport, he booked a Radio taxi through Speed Cab Operator(ECO) for going
to his hotel. Mr. A returned to Kanpur from a different train, Pushpak Express' in
sleeper class. With reference to the Notification 12/2017, examine leviability of GST on
various modes of travel undertaken by Mr. A.
2) High Alps Cable Car Co. runs a cable car to transport pilgrim’s uphill to a mountain
top where a holy shrine is situated. Examine whether High Alps Cable Car Co. is
required to pay any GST.
Answer:
Legal provision:-
As per the exemption Notification, service of transportation of passengers, with or without
accompanied belongings, by the following modes of travel is exempted:-
a) Railways in a class other than -
i) First class; or
ii) An air-conditioned coach
b) Metro, monorail or tramway
c) Inland waterways
d) Public transport, other than predominantly for tourism purpose, in a vessel between places
located in India and
e) Metered cabs or Auto rickshaws (including e-rickshaws).
Discussion & Conclusion:-
In the given case, GST leviability on various passenger transportation services used by Mr. A
is as under:-
1 i) Rail travel in AC train:- It is covered under exception part of exemption & thus,
liable to GST.
ii) Travel in a car rented for Travel by only metered cabs is covered in exemption.
whole day for lump sum Thus, travel in a car rented for whole day for lump sum
consideration:- consideration is liable to GST.
iii) Metro travel:- It is covered in exemption and hence, not taxable.
iv) Air travel:- It is not covered under the exemption and thus, liable to
GST.
v) Radio taxi travel:- It is not covered under the exemption & thus, liable to
GST. As per section 9(5) of CGST Act, GST is to be
paid by the ECO in this case.
vi) Rail travel in sleeper It is covered in Exemption and hence, not liable to GST.
class:-
2 Use of capable car to transport passenger is not covered in the exemption & hence, it is
liable to GST.

Q. 10 M/s. R Ltd. is engaged is providing service of transportation of passengers,

furnished following information for the month of Oct, 20XX. Find the GST liability.
1) Service of transportation of passengers by National Waterways: ₹50 lakhs
2) Service of transportation of passengers by Stage carriage (non-air conditioned): ₹5
lakhs
3) Service of transportation of passengers by contract carriage for tourism: ₹120 lakhs

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4) Transportation of passenger from Mumbai to Chennai port in a vessel and such

servicein not for tourism purpose: ₹12 lakhs
5) Transportation of passenger from Bag Dogra to Manipur by Air in Business
class: ₹5lakhs
Note: R Ltd. is willing to avail exemption benefits, if any & Taxable supplies of Mr.
R inthe previous year were ₹22 lakhs. [GST Rate = 5%]
Answer:-
Computation of taxable value and GST liability of M/s. R Ltd.:-
Service supplied [Transportation of
₹in lakhs Remark
passengers]
By National Waterways - Exempted supply
By Stage Carriage (non-air conditioned) - Exempted supply
By contract carriage for tourism 120 Taxable supply
In a vessel from Mumbai to Chennai & not for Exempted supply
-
tourism
By Air in Business class from Bag Dogra to Taxable supply
5
Manipur
Taxable value of supply of services 125
GST liability @5% on ₹125 lakhs 6.25

Q. 11 Discuss whether GST is chargeable in respect of services provided by goods

transport agency in each of the following independent cases & also give necessary
explanation for the same:-
(i) Transportation of organic manures ₹50,000.
(ii) Transportation of goods by Goods transport Agency
(iii) Transportation of military equipment's ₹25,000
(iv) Transportation of polyester fiber ₹15,000
(v) Transportation of milk products ₹20,000
Answer:-
(i) Exempt: - As per the exemption notification, transportation of organic manure by
goodstransport agency is exempt & hence, the same is not liable to GST.
(ii) Taxable: - Service provided by GTA for Transportation of goods is taxable in full
(iii)Exempt: - Transportation of military equipment’s by goods transport agency is
specifically
exempted & hence, the same is not liable to GST.
(iv) Taxable: - Transportation of polyester fiber is not covered under the exemption &
hence,the same is liable to GST.
(v) Taxable: - Transportation of milk by goods transport agency is specifically
exempted butmilk products are taxable hence, the same is liable to GST.

Q. 12 Examine whether GST is payable in the given independent cases: -

(i) A State Transport Undertaking has hired motor vehicles meant to carry 8-10
passengers from Fast Cab Renting, a motor vehicle renting company. Give your
comments as to whether any GST is payable in this case.
(ii) ST Ltd. has given on hire 5 trucks to Titu Transporters of Delhi (a goods
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transport agency) for transporting goods in Central and West Delhi. The hiring
charges for thetrucks are ₹7,500 per truck per day.
Answer: -
(i) Legal Provision:-
 Services of giving on hire a motor vehicle meant to carry more than 12 passengers
to a State Transport Undertaking, is exempt from GST.
Discussion & Conclusion:-
 In given case, since motor vehicles given on hire by Fast Cab Renting to State
Transport Undertaking are meant to carry 8-10 passengers, it is not be eligible for
exemption & thus, is liable to GST.
(ii) Legal Provision:-
 Services of giving on hire a means of transportation of goods to a goods transport
agency are exempt from GST.
Discussion & Conclusion:-
 In the given case, hiring of trucks to Titu Transporters which is goods transport
agency is covered under the exemption irrespective of the hiring charges & thus,
GST is not payable.

Q. 13 Kesar Maharaj, a renowned classical dancer gave a classical dance

performance in an auditorium. The consideration charged for the said
performance is ₹98,500. Is Kesar Maharaj liable to pay GST on the consideration
received for the said performance,if such performance is not for promotion of any
product/services? If yes, determine his GST liability.
Will your answer be different if:-
(i) Consideration charged by Kesar Maharaj for the said performance is ₹1,60,000?
(ii) Kesar Maharaj is a brand ambassador of a food product and aforesaid
performanceis for the promotion of such food product?
(iii) Kesar Maharaj gives a contemporary Bollywood style dance performance in
TV Serial?
(iv) Kesar Maharaj gives Coaching in recreational activities relating to arts? Note:
- GSThas been charged separately, if any.
Answer:-
Legal Provision:-
a) Performance by an artist in folk or classical art forms of music, dance or theatre is
exemptfrom GST, if consideration charged for such performance is not more than
₹1,50,000. However, exemption will not apply to service provided by such artist as
brand ambassador.
b) Training or coaching service in recreational activities relating to arts or culture by an
Individual is exempt from GST.
Discussion & Conclusion:-
 In given case, classical dance performance by Kesar Maharaj is exempt from GST
as consideration is ₹98,500 which does not exceed ₹1,50,000 & also, he is not
promoting anything. Hence, he is not liable to pay GST.
 Yes, the answers in different scenarios shall be as under-
(i) If consideration charged by Kesar Maharaj is ₹1,60,000, he will be liable to pay
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GST as although the performance is in classical art form of dance, but the
consideration is more than 150000.
(ii) If Kesar Maharaj is performing as a brand ambassador of a food product to promote
the same, then he will be liable to pay GST as the exemption is not applicable to a
brand ambassador.
(iii) If Kesar Maharaj gives a contemporary Bollywood style dance performance in TV
Serials, then such performance will not be eligible for exemption because the
performance is not infolk or classical art forms of dance. Hence, GST would be
payable on the same.
(iv) If Kesar Maharaj, being an individual provides coaching in recreational activities
relating to arts, then he is not liable to pay GST as this service is specifically
exempted.
Q. 14 XYZ Pvt. Ltd. manufactures beauty soap with the brand name 'Forever
beauty'. XYZ Pvt. Ltd. has organized a concert to promote its brand. Ms. Mahima,
its brand ambassador, who is a leading film actress, has given a classical dance
performance in thesaid concert. The proceeds of the concert is ₹1,25,000.
(i) Explain with relevant provisions of GST, whether Ms. Mahima will be
required topay any GST.
(ii) What will be the answer if the proceeds of the concert is donated to a
charitableorganization?
Answer:-
(i) Legal Provision:-
 Services by an artist by performing folk or classical art forms of music, dance or
theatreare exempt from GST, if the consideration charged for such performance is
not more than
₹1,50,000.
 However, this exemption is not available to an artist performing as a brand
ambassador.
Discussion & Conclusion:-
 In the given case, Ms. Mahima is the brand ambassador of Forever Beauty' Soap
manufactured by XYZ Pvt. Ltd.
 Hence, services rendered by her by way of a classical dance performance in the
concert organized by XYZ Pvt. Ltd. to promote its brand will not be eligible for
exemption & thus, be liable to GST.
(ii) Even if the proceeds of concert is donated to a charitable organization, she will be
liable toGST as this fact will not have any bearing on eligibility or otherwise to above-
mentioned exemption.
Q. 15 M/s. Apna Bank Limited, a Scheduled Commercial Bank has furnished the
following details for the month of August, 20XX:- (Rs. in crores)

(Excluding GST)
Extended Housing Loan to its customers 100
Processing fees collected from its customers on sanction of loan 20
Commission collected from its customers on bank guarantee 30
Interest income on credit card issued by the bank 40
Interest received on housing loan extended by the bank 25
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Minimum balance charges collected from current account and

01
saving account holder
Compute the value of taxable supply. Give reasons with suitable
assumptions.Answer:
Computation of value of taxable supply of M/s. Apna Bank Limited for the month
ofAugust, 20XX:-
Particulars Rs in Crore Reason
Extended Housing Loan to its Exempt, since money does not
Nil
customers constitute goods or services, extending
housing loan is not a supply
Processing fees collected from its 20 Taxable, since interest does not
customers on sanction of loan include processing fee on sanction of
the loan.
Commission collected from its 30 Taxable, as any commission collected
customers on bank guarantee over & above interest on loan, advance
or deposit is not exempt.
Interest income on credit card Taxable, as interest income on
issued by the bank 40 extending loans is exempt but interest
income on credit card services is an
exception to this exemption.
Interest received on housing loan Exempt, as services of extending
extended by the bank Nil loans where consideration is
represented by way of interest are
exempt.
Minimum balance charges Taxable, as any charges collected
01
collected from current account & over & above interest on loan, advance
saving account holder or deposit is not exempt.
Value of Taxable Supply 91

Q. 16 AB Ltd., a registered company of Chennai, Tamil Nadu, provided

followingservices for month of Oct, 20XX:-
Particulars Amount (₹)
Services of transportation of students, faculty and staff from home to
college and back to Commerce College (a private college) providing 250000
degree courses in BBA, MBA, B.Com., M.Com
Online monthly magazine containing question bank and latest updates
in law to students of PQR Law College offering degree courses in LLB 100000
and LLM
Housekeeping services to T Coaching Institute 50000
Security services to N Higher Secondary School 325000
Services of providing breakfast, lunch and dinner to students of ABC
Medical College offering degree courses recognized by law in medical 580000
field
All the above amounts are exclusive of GST. Compute the taxable supplies of AB
C Ltd.for the month of October, 20XX with necessary explanations.
Answer:

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Computation of value of taxable supplies of AB Ltd. for the month of October, 20XX:-
Particulars ₹ Explanation
Services of transportation of 250000 Not exempt, as transportation services
students, faculty & staff to provided to an educational institution are
Commerce College exempt only if suck institution provides pre-
school education or education up to higher
secondary school or equivalent.
Online monthly magazine to Nil Exempt, since service of supply of online
students of PQR Law College education journals provided to an
educational institution providing
qualification recognized by law are exempt
from GST.
Housekeeping services to T 50000 Not exempt, since T Coaching Institute is
Coaching Institute not on educational institution.
Security services to N Higher Nil Exempt, since security services provided to
Secondary School an educational institution providing
education up to higher secondary school are
exempt. Note: It has been assumed that
security services are performed in N Higher
Secondary School.
Services of providing breakfast, 580000 Not exempt, since catering services
lunch & dinner to students of provided to an educational institution are
ABC Medical College exempt only if such institution provides pre-
school education or education up to higher
secondary school or equivalent.
Value of Taxable supplies 880000

Q. 17 Multi services Private Ltd., registered in Punjab, and is engaged in

supplying a variety of services. Its turnover was ₹35 lakh in the preceding financial
year. It providedfollowing information for April:-
Particulars Amount (₹)
Fee for the coaching provided to students for competitive exams.
The coaching centre is run by Multi services Private Ltd. in Punjab 624000
(Intra-State transaction)
Receipts for services provided in relation to conduct of examination
in Pureit University, Delhi (providing education recognized by Indian 19200
law), being an inter-State transaction
Amount received for transportation of students and faculty from their
residence to Lotus Public School - a higher secondary school -and 24000
back (Intra-State transaction)
Amount received for providing the security and housekeeping services
36000
in Dhaani Public School - a pre-school (Intra-State transaction)
Note: Rates of CGST, SGST & IGST are 9%, 9% and 18% respectively. All the
amountsgiven above are exclusive of taxes. Compute total GST liability of Multi
services Private Ltd. for the month of April.
Answer:-
Computation of net GST liability of Multi services Pvt. Ltd. for the month of April,
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20XX-
Particulars Value (₹) CGST @ SGST @ IGST @
9 %(₹) 9 %(₹) 8 %(₹)
Fee for coaching provided to students for 624000 56160 56160
-
competitive exams (Note-1)
Services towards conduct of examination
19200 - - -
in Pureit University, Delhi (Note-2)
Services of transportation of students &
24000
faculty from their residence to Lotus Public - - -
School & back (Note-3)
Security and housekeeping services in 36000
- - -
Dhaani Public School (Note-4)
Total GST Liability 56160 56160 -
Notes:-
1) Fee for coaching is taxable since Coaching centre run by Muti services Private Ltd.
is not an educational institution as it does not lead to grant of a qualification
recognized by law.
2) Since Pureit University provides qualification recognized by law in India, it is an
educational institution & services provided to an educational institution in relation
to conduct of examination by such institution are exempt from GST.
3) Since Lotus Public School provides education up to higher secondary school, it is an
educational institution & services of transportation of students, faculty and staff
provided to an educational institution are exempt.
4) Since Dhaani Public School provides pre-school education, it is an educational
institution.Security and housekeeping services provided within the premises of an
educational institution are exempt.

Q. 18 State whether the following services are exempt under GST or taxable? Also
determine the value of taxable services. Note that the amounts given below are
exclusiveof GST.
Sr.No. Particulars Amount (₹)
1. Services provided to a recognized sports body by an individual
as a player, referee, umpire, coach or team manager for
1240000
participation in a sporting event organized by a recognized
sports body
2. Service by a player to a franchisee which is not a recognized 680000
sports body
3. Services by a recognized sports body to another recognized 120000
sports body
4. Services by individuals such as selectors, commentators,
690000
curators, technical experts
5. Service by Team Manager for Indian Sports League (ISL), a
200000
recognised sports body, for a Tennis tournament organised by
Multi brand Retail Company

Answer-

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Legal Provision:-
Services provided to a recognised sports body are exempted, if they are provided by:-
a) An individual as a player, referee, umpire, coach or team manager for participation
in asporting event organized by a recognized sports body
b) Another recognised sports body
Discussion & Conclusion:-
Determination of value of taxable services:-
S.No. Particulars ₹ Remarks
1 Services provided to a recognized sports It is specifically exempted as
body by an individual as a player, discussed above.
referee, umpire, coach or team manager -
for participation in a sporting event
organized by a recognized sports body
2 Service by a player to a franchisee which It is taxable as the service by
is not a recognized sports body 680000 player to an un-recognized
sports body is not covered in
exemption.
3 Services by a recognized sports body to It is specifically exempted as
-
another recognized sports body discussed above.
4 Services by individuals such as selectors, It is taxable as exemption is
commentators, curators, technical given to player, referee,
experts umpire, and coach or team
690000
manager and not to selectors,
commentator’s curators or
technical experts.
5 Service by Team Manager for Indian It is taxable as the sporting
Sports League (ISL), a recognised sports 200000 event is not organised by a
body, for a Tennis tournament organised recognised sports body.
by Multi brand Retail Company
Value of Taxable Services 1570000

Q. 19 Department of Posts provided following services to general public during

themonth ended 30.09.20XX-
Services rendered ₹ in lakhs
Basic mail services like post card 100
Transfer of Money through money orders 500
Rural postal life insurance services 200
Distribution of mutual funds, bonds and pass port applications 500
Issuance of postal orders 300
Collection of telephone and electricity bills 100
Speed post services 500
Express parcel post services 200
Book post services 50
Ordinary post whose weight is less than 10 grams 100
Compute the value of taxable services of Department of Posts for the month
ended30.09.20XX.
Note:-
1. Time of Supply for all the aforesaid cases fall during the month ended 30.09.20XX.
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2. All the amounts stated above are exclusive of GST, wherever applicable.
Answer:
Computation of value of taxable services of department of post for the month
ended30.09.20XX:-
Particulars ₹ in lakhs
Basic mail services like post card -
Transfer of Money through money orders 500
Rural postal life insurance services 200
Distribution of mutual funds, bonds and pass port applications 500
Issuance of postal orders 300
Collection of telephone and electricity bills 100
Speed post services 500
Express parcel post services 200
Book post services -
Ordinary post whose weight is less than 10 grams -
Value of taxable services 2300
Notes:
All Services provided by Department of Posts are taxable under GST except Postal
services such as post card, inland letter, book post & ordinary post (envelopes weighing
less than 10 grams).

Q. 20 Income is received by Maharashtra Government from renting of immovable

property to Ganpati Morya Pvt. Ltd., registered in Maharashtra (Turnover of the
company was ₹18 lakh in the preceding financial year). Is GST payable in the
present case? If yes, who is liable to pay the same?
Answer: -
Legal Provision:-
 Services provided by State Government to a business entity with an aggregate turnover
uptosuch amount in preceding financial year as makes it eligible for exemption from
registrationunder CGST Act, 2017 are exempt.
 However, the same shall not apply to services by way of renting of immovable
property.
 If service of renting of immovable property is supplied by State Government to a
person registered under CGST Act, then recipient is liable to pay GST under reverse
charge u/s 9(3) of CGST Act.
Discussion & Conclusion:-
 In given case, Maharashtra Government rented immovable property to Ganpati
Morya Pvt.Ltd., registered in Maharashtra.
 The above exemption will not apply in this case even though the company is not
liable toregister under CGST Act & thus, GST is payable in present case.
 Ganpati Morya Pvt. Ltd., being a registered person, is liable to pay GST under
reversecharge.

Q. 21 Gita Services Limited, registered under GST, is engaged in providing

various services to Government. The company provides the following information

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in respect of services provided during the month of April:-

S.no. Description of Service Provided
(i) Supply of manpower for cleanliness of roads not involving any supply of goods.
(ii) Service provided by Fair Price Shops owned by Gita Services Limited by
way of sale of sugar under Public Distribution System against consideration in
the form of commission.
(ii) Service provided by fair price shops owned by Gita Services Limited by way of
sale of sugar under Public Distribution System against consideration in the
form of commission.
(iii) Service of maintenance of street lights in a Municipal area involving
replacement of defunct lights and other spares along with maintenance.
Generally, replacement of defunct lights and other spares constitutes 35% of
the supply of service.
(iv) Service of brochure distribution provided under a training programme for
which 70% of the total expenditure is borne by the Government.
(v) Services provided by Goods & service tax network to the Maharashtra
Government
Comment on the taxability or otherwise of the above transactions under GST law.
Alsostate the correct legal provisions for the same.
Answer:-
S.No. Particulars Taxability Reason
(i) Supply of manpower for Exempt Pure services provided to CG or
cleanliness of roads not involving SG or UT are exempt.
any supply of goods.
(ii) Service provided by Fair Price Exempt Service provided by Fair Price
Shops by way of sale of sugar Shops to Government by way of
under Public Distribution System sale of sugar under Public
Distribution System against
commission is exempt.
(iii) Service of maintenance of street Taxable Composite supply of goods &
lights in a Municipal area services to Government in which
involving replacement of defunct the value of supply of goods
lights and other spares constitutes not more than 25% of
constituting 35% of the supply of value of the said composite supply
service. is exempt. Since, in this case value
of supply of goods constitutes
35% of supply of composite
service, same is taxable.
(iv) Service of brochure distribution Taxable Services provided to Government
provided under a training under any training programme for
programme which 75% or more of total
expenditure is borne by
Government is exempt. Since in
given case, 70% of the total
expenditure is borne by
Government, it is taxable.

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(v) Services provided by GSTN tothe Taxable Services provided by Goods &
Maharashtra Government service tax network to the CG or
SG or UT for implementation of
GSTN are taxable

Q. 22 Mr. X, being a contractor, undertaken construction work of an individual

residential unit otherwise than as part of a residential complex. You are required
to answer: -
1. Whether Mr. X is liable to pay GST where he undertaken pure labour contract?
2. Whether Mr. X is liable to pay GST where he undertaken both labour and
materialcontract (GST Rate = 12%)?
3. Mr. X gives contract to a sub-contractor. Can sub-contractor also get
exemption if itis pure labour contract?
Answer:-
Legal Provision:-
 Services by way of pure labour contracts of construction, erection, commissioning,
or installation of original works pertaining to a single residential unit otherwise than
as a partof a residential complex are exempt from GST.
Discussion & Conclusion:-
1. Since, Mr. X has undertaken pure labour contracts of construction of single
residential unitotherwise than as part of a residential complex, it is exempt from
GST.
2. If Mr. X is providing service with both labour and material i.e. termed as works
contractunder GST, then exemption is not available & he will be charged 12%
GST.
3. Yes. Services provided by a sub-contractor to a contractor are also exempt as
he isproviding only labour for the construction of residential house.

Q. 23 Examine whether GST is payable in the following independent supply of

services:
(i) Indiana Engineering College, a recognised educational institution, has
conducted an entrance test examination for various courses run by it and
charged entrance fees from the applicants.
(ii) Ram, an agriculturist, has stored sugarcane in a warehouse. He has taken
fumigationservices in the said warehouse from Gupta Pest Control Co. for
which he paid the consideration of ₹6,000.
(iii) "Smart Kids" is a Play School located in Delhi. Smart Kids has outsourced the
catering services for supply of food and drink in the canteen of Play School to
BTV Caterers, Delhi for a consideration of ₹8,00,000 per annum
(iv) Wellness Hospital, a clinical establishment located in Tirupati, is specialised in
diabetic treatment. The hospital has its own canteen - Tasty Foods. The canteen
serves the food and drink to the in-patients as advised by the
doctors/nutritionists of the hospital. Apart from this, other patients (who are
not admitted) or attendants or visitors of the in-patients also take food and
drink from the canteen.
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Answer:-
(i) Legal Provision:-
 Services provided by an educational institution by way of conduct of entrance
examination against consideration in form of entrance fee are exempt from GST.
Discussion & Conclusion:-
 In the given case, Indiana Engineering College which is an educational institution
conducted entrance examination for which it charged entrance fee.
 This service is exempt from GST and thus, GST is not payable in this case.
(ii) Legal Provision:-
 Services by way of fumigation in a warehouse of agricultural produce are not
exempt from GST.
Discussion & Conclusion:-
 In the case, since Gupta Pest Control Co. provides services by way of fumigation
in the warehouse of sugarcane ['being an agricultural produce], said services are
taxable and GST is payable on the same.
(iii) Legal Provision:-
 Catering services provided to an educational institution which is providing
preschool education and education up to higher secondary school or equivalent
is exempt.
Discussion & Conclusion:-
 In the given case, services are provided by BTV Caterers to Smart Kids which
is providing preschool education & hence, the same are exempt from GST thus,
GST is not payable in this case.
iv) Legal Provision:-
 Health care services provided by a clinical establishment, an authorised medical
practitioner or para-medics are exempt from GST.
 As per CBIC clarification,
 Food supplied by hospital canteen to inpatients as advised by doctor/
nutritionists is a part of composite supply of healthcare services & is not
separately taxable. Thus, it is exempt.
 Food supplied by hospital to patients (not admitted) or their attendants or
visitors are taxable.
Discussion & Conclusion:-
 In view of the same, GST is exempt on the food supplied by Tasty Foods to the
inpatients as advised by doctors/nutritionists.
 However, supplies of food by it to patients (not admitted) or attendants/visitors of
the in-patients is taxable and GST is payable on the same.

Q. 24 Decide with reason whether the following independent services are exempt
underCGST Act, 20XX:-
(i) Gokul Residents' Welfare Association received ₹9,000 per month as
contribution from each member for sourcing of goods and services from third
persons for commonuse of its members. [GST Rate 18%] Will your answer
differ, if Gokul Residents' Welfare Association collects maintenance charges of
6,500 per month per member?
(ii) Holiday Guest House, situated at Shimla, provides boarding & lodging services
to tourists at economical cost. The charges of a single deluxe room per day are
999. Mr.X has booked one deluxe room for two days during Christmas holidays.
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You are required to determine whether GST is payable by Holiday Guest House
on the abovebooking.
Answer: -
(i) Legal Provision:-
 Supply of service by unincorporated body or a non-profit entity registered under any
law to its own members by way of reimbursement of charges or share of
contribution up to ₹7,500 per month per member for sourcing goods or services
from a third person for common use of its members in a housing society or
residential complex is exempt.
Discussion & Conclusion:-
a) In the first case, Rs. 9000 contribution per month per member received by Gokul
Residents' Welfare Association exceeds ₹7,500 & hence, exemption is not
available. Thus, GST @18% shall be payable on entire contribution of ₹9000/-
per month per member.
b) In second case, services provided by such association are exempt since
maintenance charges Rs. 6500 collected per month per member do not exceed
₹7500,
(ii) Legal Provision:-
 Services by a hotel, inn, guest house, club or campsite, by whatever name called,
for residential or lodging purposes, are taxable irrespective of the amount.
Discussion & Conclusion:-
 In given case, GST is payable by Holiday Guest House on the booking done by
Mr. X.

Q. 25 Examine whether GST is exempted on following independent supplies of

services:-
(i) Service provided by a private transport operator to Scholar Boys Higher
SecondarySchool in relation to transportation of students to and from the
school.
(ii) Services provided by way of vehicle parking to general public in a shopping mall.
(iii) Babloo Transporters, a Goods Transport Agency, transported relief
materialsmeant for victims of Kerala floods, a natural disaster, by road from
Delhi to Ernakulam, for a company.
(iv) Keyan Enterprises, an event organizer, provided services to Breathing Wall
Ltd. byway of organizing business exhibition in New Delhi as part of Make in
India initiative. Keyan Enterprises claims that it is not required to pay GST
as services provided by way of organizing business exhibition are exempt
from GST. Examinethe technical veracity of the claim of Keyan Enterprises,
in the given case.
(v) Clean and Green Pvt. Ltd. provided the bio-medical waste treatment facility
to veterinary clinic. Is it a taxable supply of service? If so, will GST be levied?
Answer:
(i) Yes. Services provided to an educational institution by way of transportation of
studentsare exempted from GST.
(ii) No. Services provided by way of vehicle parking to general public are not
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exempted
from GST. Therefore, GST is payable on the same.
(iii) Yes. Services provided by a goods transport agency by way of transport of relief
materialsmeant for victims of natural or manmade disasters in a goods carriage are
exempt from GST & thus, services provided by Babloo Transporters will be
exempt from GST.
(iv) No. The claim made by Keyan Enterprises that it is not required to pay GST is
not correct.
 Services provided by an organiser to any person in respect of a business
exhibition held outside India is exempt from GST.
 Since in given case, exhibition is organized in India, the services of organization
of event by Keyan Enterprises will not be exempt from GST.
(v) Yes, it is taxable supply of service because services provided by operators of
common Bio-medical Waste Treatment Facility to any establishments are
taxable.

Q. 26 Examine the following independent services provided in the month of

August,20XX and Compute total value of taxable services:-
Sr.No. Particulars Amount (₹)
1. Waxing of apples to provide it an artificial sheen for
100000
increasing its marketability
2. Admission to a Railway Museum 50000
3. Transportation of patients to ABC Nursing Home and Bheem 120000
Multispecialty Hospital, in an ambulance owned by XYZ Ltd.
4. Admission to a Telly Award Function [Value per ticket per 510000
person is ₹510]
5. Transportation of milk by a goods transport agency 150000
6. Services by way of artificial insemination of livestock 215000
(other than horses)
7. Services provided by clinical establishment to Neo natal
Intensive care (NICU) unit by way of providing room having 32500
charges 6500 per day
8. Services by way of slaughtering of Animals 20000
Note: - Wherever applicable, GST has been charged separately.
Answer: - Computation of Taxable Value of services
S.No. Particulars Rs Remarks
Waxing of apples to provide it an It is specifically exempted as it
1. artificial sheen for increasing its - does not alter essential
marketability characteristics of apples.
Admission to a Railway Museum It is specifically exempted &
2. -
hence, not liable to GST.

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3. Transportation of patients to ABC Ambulance services provided by

Nursing Home and Bheem an entity which is not a clinical
Multispecialty Hospital, in an establishment or an authorized
-
ambulance owned by XYZ Ltd. medical practitioner or
paramedics are also exempt from
GST.
Admission to a Telly Award 510000 It is taxable as consideration for
4. Function admission to an award function is
[Value per ticket per person is ₹510] more than ₹500.
Transportation of milk by a goods This is specifically exempted &
5. -
transport agency hence, not liable to GST.
Services by way of artificial This is specifically exempted &
6. insemination of livestock - hence, not liable to GST.
(Other than horses).
Services by way of artificial This is specifically exempted &
7. insemination of livestock - hence, not liable to GST.
(other than horses)
Services by way of providing room to Services provided by clinical
Neo natal intensive care unit establishment to providing room
8. - other than ICU/ CCU/
ICCU/NICU are taxable if room
charges exceeding ₹5000 per day
Services by way of slaughtering of 20000 It is taxable service & hence liable
9.
Animals to GST
Value of taxable services 530000

Q. 27 M/s P, a registered supplier of Rajasthan, has received the following amounts

inrespect of the activities undertaken by her during the month of April, 20XX:-
Sr.No. Particulars Amount (₹)
1. Amount received for warehousing of jaggery 50,000
2. Commission received as business facilitator for the services
provided to the urban branch of a nationalized bank with 20,000
respect to savings bank accounts
3. Amount received for services by way of labour contracts for
repairing a single residential unit otherwise than as a part 10,000
of residential complex
4. Amount received for acting as brand ambassador for
75,000
corporate client
5. Amount received for service provided to the Indian
80,000
Olympic Association as team manager of national team.
All the transactions stated above are Intra-State transactions and all amounts are
exclusive of GST. You are required to compute gross value of taxable supply on
which GST is to be paid by M/s P for the month of April, 20XX by giving necessary
explanationsfor treatment of various items.
Answer:-
Computation of value of taxable supply on which GST is to be paid by M/s P:-
S.No. Service provided ₹ Explanation

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1. Warehousing of jaggery 50,000 Services by way of storage or

warehousing of cereals, pulses, fruits &
vegetables are exempt, thus jaggery is
not comes under this category.
2. Commission received as Nil Services provided by a business
business facilitator facilitator to a banking company with
respect to accounts only in its rural area
branch are exempt. In this case, services
are provided to urban branch of bank &
thus, taxable. However, tax is to be paid
by recipient i.e. banking company,
under reverse charge. Hence, M/s Pwill
not be liable to pay GST on
commission received for said services.
3. Amount received for services 10000 Repairing of a residential unit is not
by way of labour contracts eligible for exemption since pure labour
contracts of construction, erection,
commissioning, or installation of original
works of single residential unit otherwise
than as a part of a residential complex are
exempt which do not cover repairing.
4. Acting as brand ambassador 75000 It is liable to tax as it is not specifically
for corporate client exempt.
5. Service provided to Indian Nil It is exempt, since services provided by
Olympic Associationas team a team manager to Indian Olympic
manager of national team. Association (ie., a recognized sports
body) are exempt.
Total value of taxable supply 135000

Q. 28 Determine taxable value of supply under GST law with respect to eachof
thefollowing independent services provided by the registered persons: -
Particulars Gross Amt.
Charged (₹)
Amount charged for loading, unloading, packing & warehousing of
25000
potato chips
Fees charged for yoga camp conducted by a charitable trust registered
50000
under section 12AA or 12AB of Income Tax Act, 1961
Amount charged by business correspondent for the services provided to
100000
the rural branch of a bank with respect to Savings Bank Accounts
Amount charged by cord blood bank for preservation of stem cells 500000
Amount charged for service provided by commentator to a recognized 600000
sports body
Amount charged for service provided by way of right to admission to
12000
circus where consideration for the same is Rs.750 per person.

Answer:-
Determination of taxable value of supply:-
Particulars ₹ Explanation

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Loading, unloading, packing & 25000 Taxable, potato chips is not an

warehousing of potato chips agricultural produce as it is
manufactured through processes
which alter its essential
characteristic & hence, notexempt.

Fees charged for yoga camp conducted by a - Exempt, services provided by an

charitable trust registered u/s 12AA or entity registered u/s 12AA or12AB
12AB of the Income Tax Act, 1961 of Income-tax Act, 1961 byway of
charitable activities which
includes advancement of yoga are
exempt from GST.
Services provided by business - Exempt, as it is specifically
correspondent to rural branch of a bank for exempted for accounts in rural
Savings Bank Accounts branch of bank.
Amount charged by cord blood bank for 5,00,000 Taxable, Services provided by
preservation of stem cells cord blood banks by way of
preservation of stem cells are
taxable
Amount charged for service provided by 600000 Taxable, as services provided to a
commentator to a recognized sports body recognized sports body only by an
individual as a player, referee,
umpire, coach or team manager for
participation in a sporting event
organized by a recognized sports
body are exempt from GST.
Amount charged right to admission to circus 12000 Taxable, the considerationcharged
where consideration is Rs.750 per person. is more than Rs.500 per person &
thus, the exemption is not
available.
Total Value of taxable Supply 1137000

Q. 29 Sun-grow Pvt. Ltd. (a registered person), having the gross receipt of Rs. 50
lakh in the previous financial year, provides the following information relating to
their servicesfor the month of July, 20XX:-
Sr.No. Particulars Amount (₹)
1. Running a boarding school 240000
2. Fees from prospective employer for campus interview 170000
3. Education services for obtaining qualification recognised by
310000
law of foreign country
4. Renting of furnished flats for temporary stay to different
120000
persons
5. Conducting Modular Employable Skill Course, approved by
140000
National Council of Vocational Training
6. Conducting private tuitions 300000
7. Running martial arts academy for young children 55000
8. Conducting career counselling session 165000
9. Renting of Flat for office use 100000
Compute the value of taxable supply and the amount of GST payable. The above
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receiptsare exclusive of GST amount. Rate of GST is 18%.

Answer:-
Computation of value of taxable supply and amount of GST payable for Sungrow
Pvt.Ltd. for July, 20XX:-
S.No. Particulars ₹ Reason
1. Running a boarding school Exempt, as any services provided by
Nil an educational institution to its
students, faculty & staff are exempt.
2. Fees from prospective employer Taxable, as it is not specifically
170000
for campus interview exempt.
3. Education services for obtaining Taxable, an institution providing
the qualification recognised by education services for obtaining
law of foreign country qualification recognized by a foreign
310000
country does not qualify as
educational institution. Thus, said
services are not exempt.
4. Renting of furnished Hats for Taxable, services by a hotel, inn,
temporary stay to different 120000 etc., for residential or lodging
persons purposes are taxable
5. Conducting Modular Exempt, as an institution providing
Employable Skill Course Modular Employable Skill Course
Nil
qualifies as educational institution &
thus, any service provided by it to its
students are exempt.
6. Conducting private tuitions Taxable, as it is not specifically
300000
exempt.
7. Running martial arts academy 55000 Taxable, as it is not specifically
for young children exempt.
8. Conducting career counselling 165000 Taxable, as it is not specifically
session exempt.
9. Renting of Flat for office use Taxable, services renting of
residential dwelling for residence is
100000 exempt, however renting of
residential dwelling for office use is
taxable
Value of taxable Supply 1220000
GST @18% 219600

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02. Input Tax Credit

Q. 30 Answer the following independent questions:-

(i) What is input tax & Input Tax Credit?

(ii) MN & Co, an unregistered supplier, wants to claim input tax credit and collect
tax.Can it do so?
Answer:

1  Input tax means central tax (CGST), state tax (SGST), integrated tax (IGST)or
Union territory tax (UTGST) charged on inward supply of goods or services
or both of registered person.
 It includes tax paid on reverse charge basis and IGST charges on import of
goods.
 It does not include tax paid under composition levy.
2  No, LMN & Co. cannot claim input tax credit and collect tax.
 Only a registered person can collect tax from his customers & also claiminput
tax credit u/s 16(1) of CGST Act, 2017.
 However, if LMN & Co. nevertheless wants to claim input tax credit andcollect
tax, it can apply for voluntary registration u/s 25(3) of CGST Act.

Q. 31 What are the conditions necessary for availing ITC?

Answer:- As per section 16(2) of CGST Act, 2017, all the following conditions are to
besatisfied by the registered taxable person for obtaining ITC:-
(a) He is possession of tax invoice or debit note or such other prescribed tax
payingdocuments.
(b) Supplier has furnished the details of invoice or debit not in his GST – 1
& alsocommunicated the same to the registered person in GSTR – 2B.
(c) He has received the goods or services or both,
(d) The details of ITC in respect of the said supply communicated to such
registeredperson under section 38 has not been restricted.
(e) subject to section 41, supplier has actually paid the tax charged on the
supply toGovernment and
(f) he has furnished the return under section 39.
Sec 16(2)(aa) read with Rule 36(4):- Supplier to furnish details of Invoice/Debit
Note &Communicate the same.
Q. 32 What is input tax? [FAQ 1]
Ans. Input tax means the central tax (CGST), State tax (SGST), integrated tax
(IGST) or Union territory tax (UTGST) charged on supply of goods or services or
both made to a registered person. It also includes taxpaid on reverse charge basis
and integrated tax charged on import of goods. It does not include tax paid under
composition levy.

Q. 33 What is Input Tax Credit? [FAQ 2]

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Ans. Input Tax Credit means the credit of input tax on the supplies of goods or services
or both received by aregistered person.

Q. 34 Laxmi Traders, a supplier of electric goods, is registered under GST in the

state of Karnataka. Laxmi Traders receives 200 invoices for inward supply of goods
and services, involving GST of 8,00,000, from various suppliers during the month
of November, 20XX.

Compute the input tax credit (ITC) that can be claimed by Laxmi Traders in his
GSTR-3B forthe month of November, 20XX to be filed by 20th December, 20XX
in the following independent situations assuming that GST of 8,00,000 is otherwise
eligible for input tax credit:-
Situation Ist: Out of 200 invoices, 160 invoices involving GST of 7,00,000 have been
uploaded by the suppliers in their respective GSTR-1 filed on the prescribed due
date thereof.
Situation 2nd: Out of 200 invoices, 140 invoices involving GST of 5,00,000 have been
uploaded by the suppliers in their respective GSTR-1 filed on the prescribed due date
thereof.
Answer:
Computation of ITC that can be claimed by Laxmi Traders in his GSTR-3B for the month
ofNovember, 20XX:
Situation 1:-
Invoices ITC as per Invoices (₹) ITC that can be availed (₹)
160 invoices uploaded in 700000 700000 [Note 1]
GSTR – 1
40 invoices not uploaded in 100000 Nil [Note 2]
GSTR – 1
Total ITC that can be 800000 700000
claimed

Situation 2:-
Invoices ITC as per Invoices (₹) ITC that can be availed (₹)
140 invoices uploaded in 500000 500000 [Note 1]
GSTR – 1
60 invoices not uploaded in 300000 Nil [Note2]
GSTR - 1
Total ITC that can be 800000 500000
claimed

Notes:-
1) Full ITC can be availed on the invoices uploaded by the suppliers in their GSTR-
Is u/s16(2)(aa) read with rule 36(4).
2) ITC on invoices which are not uploaded by the suppliers in their GSTR-Is is
restricted fully u/s 16(2)(aa) read with rule 36(4).

Q. 35 Sigma Consultants, an LLP of finance professionals, provides financial

consultancy services. It made an advance payment of 1,18,000 (inclusive of IGST

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@18%) in the month of October to Azuro Computer Services for developing a

software.The software would be used by the LLP to enhance the precision of the
financial advice given by it to various clients. The balance payment is to be made
after the successful testrun of the software in the month of December. Sigma
Consultants has availed ITC of IGST of 18,000 in the month of October. Do you
think Sigma Consultants can avail suchITC? Examine the scenario with reference
to the relevant legal provisions.
Answer:
Legal Provision:-

 As per section 16(2)(b) of CGST Act, tax paid on supply of goods and/or services
canbe availed as ITC only if such goods and/or services are received by the
registered person.

Discussion & Conclusion:-

 In the given case, Sigma Consultants has paid IGST of 18,000 in the month of
October, on advance for IT services intended to be used in the course or
furtherance of business.

 However, it cannot avail ITC of such tax in October as the services in relation to
which the advance payment has been made have not been received in that month.

Q. 36 One of the conditions to claim input tax credit is that the receiver must have
received the goods. Is there any provision for deemed receipt of goods in case of
transferof document of title before or during the movement of goods? would your
answer be different in case supply of services?
Answer:
a) As per Explanation to Section 16(2)(b) of CGST Act, goods or services are deemed
to bereceived by registered person under "Bill to Ship to" Model in following cases:-
1) Where goods are delivered by supplier to recipient or any other person on
direction ofsuch registered person, whether acting as an agent or otherwise, before
or during movement of goods, either by way of transfer of documents of title to
goods or otherwise.
ii) Where services are provided by supplier to any person on the direction of and
onaccount of such registered person.

b) No, answer will be the same as stated above, because section 16(2)(b) is applicable
in case of supply of services also.

Q. 37 M/s Diwan & Sons of New Delhi, has placed an order for 250 kg of plastic
granules @50 per kg (exclusive of GST) on M/s Karim & Bros. of Noida, U.P. M/s
Karim & Bros. has agreed to deliver the goods at the warehouse of M/s Diwan &
Sonsat New Delhi. While the order was getting packed at the factory of M/s Karim
& Bros., M/s Diwan & Sons got an order from Shubhkamna Sales of Hapur, U.P.
for 250 kg of plastic granules @ 760 per kg (exclusive of GST). In order to save on
transportation cost, M/s Diwan & Sons asks M/s Karim & Bros. to directly deliver

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the plastic granules to Shubhkamna Sales at its godown located in Hapur.

Accordingly, M/s Karim & Bros. has delivered the plastic granules at the godown
of Shubhkamna Sales at Hapur. Examine the availability of ITC with M/s Diwan
& Sons & M/s Karim & Bros.
Note:- All the parties are registered under GST and rate of GST is 18%.
Answer:
Legal Provision:-
 As per section 16(2)(b) of CGST Act, a registered person can avail ITC of tax
paid onsupply only when the goods &/or services are received by him.
 However, goods delivered to a third person on direction of registered person by
transfer of documents of title or otherwise, either before or during the movement,
are deemed to have been received by such registered person.
 So, ITC is available to the registered person, on whose order the goods are
delivered to a third person even though the registered person does not receive the
goods.

Discussion & Conclusion:-

 In given case, goods have been delivered by M/s Karim & Bros. (supplier) to
Shubhkamna Sales (third person) on the direction of M/s Diwan & Sons
(registered person).
 Therefore, ITC of 2,250 ( 50 x 250 x 18%) will be available to M/s Diwan &
Sons (registered person) on purchase of 250 kg of plastic granules @50 per kg.
 Further, there is another supply between Diwan & Sons (supplier) &
Shubhkamna Sales (recipient).
 Therefore, Shubhkamna Sales can avail ITC of 2,700 (60 x 250 x 18%) on
purchaseof 250 kg of plastic granules @60 per kg.

Q. 38 Answer the following questions:-

Can a person take ITC without payment of consideration for supply along with
tax? [ICAI Study Material]
If part payment of consideration is made by the recipient to the supplier, then
whether full amount of tax can be adjusted first? If no, then whether it has to be
calculated proportionately?
Answer:
 Yes, the recipient can take full ITC.
 However, proviso to section 16(2) states that recipient is required to pay the
consideration along with tax within 180 days from the date of issue of invoice.
This condition is not applicable where tax is payable on reverse charge basis.
 If recipient fails to do so, then corresponding credits availed by him will be added
to his output tax liability, with interest.
 If part payment is made against an invoice, then proportionate ITC is available
for the tax involved & thus, full amount of tax cannot be adjusted first against
the part payment made.

Q. 39 Whether the registered person can avail the benefits of input tax

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credit and depreciation on the tax component of capital goods and

plant and machinery simultaneously?
Answer:
 No, the benefits of input tax credit and depreciation on tax component of capital
goods and plant and machinery cannot be availed simultaneously.
 Section 16(3) of CGST Act states that input tax credit will not be allowed on tax
component of cost of capital goods and plant and machinery, if depreciation is
claimed on the same under Income Tax Act, 1961 by registered person.
 It means that either depreciation on tax component can be claimed under Income
TaxAct or ITC of such tax paid can be availed under GST laws.

Q. 40 What is the time limit for taking ITC and reasons therefor?Answer:
As per section 16(4) of CGST Act, time limit for availing ITC by registered person for
any invoice or debit note shall be earlier of following dates:-
 30th day of November following the end of financial year to which such
invoice ordebit note pertains or
 Furnishing of the relevant annual return.
However, there is no time limit for re-availing the credit that had been reversed earlier.
As per section 18(2), in special circumstances like new registration, voluntary
registration, etc., registered person can take ITC within 1 year from date of issue of tax
invoice by supplier.

Q.41 SRS Cars Pvt. Ltd., a car manufacturer, purchased a tempo Traveller
(Seating capacity of 15 persons) for the transport of its employees within the factory
premises. Can SRS Cars Pvt. Ltd. avail ITC on such purchase? Will your answer
differ, if seating capacity of tempo traveller is 10 persons?
Answer:
Legal Provision:-
As per section 17(5)(a) of CGST Act, ITC is not available on Motor vehicle for
transportationof persons having approved seating capacity of not more than 13 persons
(including driver), except when they are used for making following taxable supplies:-
a) Further supply of such motor vehicles or
b) Transportation of passengers or
c) Imparting training on driving such motor vehicles.
Discussion & Conclusion:-
 In first case, SRS Cars Pvt. Ltd. purchased a tempo Traveller with seating
capacity CH of 15 persons which is exceeding capacity of 13 persons & thus, it
will be able to avail ITC on the same.
 Yes, answer will differ in second case. If seating capacity of tempo traveller is
10 persons, then SRS Cars Pvt. Ltd. cannot avail ITC on the same as ITC is
blocked u/s 17(5)(a).

Q. 42 Answer the following questions:-

A) A flying school imports an aircraft for use in its training activity and takes ITC

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of IGST paid on import. Departmental audit raises an objection that aircrafts fall
within the definition of "conveyance" uls section 2(34) of CGST Act and that ITC
is not allowed on conveyances. Offer your comments.

B) Mr. A has two branches, one in Mumbai (MH) and another in Goa. Mr. A
purchaseda vessel for transportation of goods between two branches as a cheapest
source for transportation. Whether Mr. A is eligible for Input Tax Credit of tax
paid on such vessel?
Answer: Legal Provision:- As per section 17(5) (aa) of CGST Act, ITC is blocked
vessel & aircraft except when they are used:-
i) for making following taxable supplies:-
a) Further supply of such vessels or aircraft or
b) Transportation of passengers or
c) Imparting training on navigating such vessel or
d) Imparting training on flying such aircraft
ii) for transportation of Goods.

Discussion & Conclusion:-

A) In the given case, Aircraft is used for imparting training on flying such aircraft &
hence, ITC will be allowed on such aircraft. Therefore, the input tax credit i correctly
taken by flyingschool.
B) In the given case, Vessel is used for transportation of Goods by Mr. A & hence, he
is eligible for ITC of tax paid purchase of such vessel.

Q. 43 Mr. Veer paid tax on repairs, maintenance and insurance of Motor Vehicles
used for transportation of 6 employees for the purpose of business.Is this eligible
for ITC? What will be your answer, if Mr. Veer paid tax on repairs and
maintenance of tempos used to transport finished goods?
Answer: Legal Provision:-
As per section 17(5) (ab) of CGST Act, input tax credit is blocked on general insurance,
servicing, repair & maintenance of those motor vehicles on which input tax credit is
blocked u/s 17(5)(a).
Discussion & Conclusion for 1st Case:-
 In given case, motor vehicles are used for transportation of 6 employees i.e. the
seating capacity is not more than 13 persons & hence, ITC on such motor
vehicles is blocked u/s 17(5)(a).

 ITC on repairs, maintenance & insurance of these Motor Vehicles is also blocked
u/s 17(5) (ab).

(i) Nirmitee Pvt. Ltd. is engaged in supply of works contract services. It gives a part of
the construction work to a sub-contractor. The sub-contractor charges GST in his invoice
to Nirmitee Pvt. Ltd. Determine the eligibility of input tax credit available to Nirmitee
Pvt. Ltd.

Answer:
(i) Yes, Aspire Ltd. can avail ITC.

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Legal Provision:- As per section 17(5)(a) of CGST Act, ITC is blocked on Motor vehicle
for transportation of persons having approved seating capacity of not more than 13 persons
(including driver), except when they are used for Transportation of passengers.

Discussion & Conclusion:-

In given case, Aspire Ltd. is engaged in transportation of passengers & thus, it A will be
eligible to avail ITC of Rs 7,00,000 i.e. (Rs 25,00,000* 28%). (ii) Yes, Nirmitee Pvt.
Ltd. canavail ITC.

Legal Provision:-
As per section 17(5) (c) of CGST Act, ITC is blocked on works contract services
supplied forconstruction of an immovable property (other than plant and machinery)
except where it is aninput Service for further supply of works contract service.
Discussion & Conclusion:-
The given case falls under the exception criteria of section 17(5) (c) as the services are
supplied by a sub-contractor & hence, the company can avail ITC of GST charged by
the sub-contractor.

Q. 44 PQR Ltd, a registered supplier from Madhya Pradesh, is engaged in the

manufacturing of heavy machines. Company provides following details of
purchases made/services availed by it during month of Feb, 20XX:-

S. No. Particulars GST

1 Payment for fitness club membership availed by employee as one 25,000
of the terms of employment
2 Payment made to outdoor catering service to run a free canteen 55,000
in factory as it is required under the Factories Act, 1948
3 Payment made to travel agency for organizing a free vacation for 35,000
it's best performance awarded employees
4 Payment made for work contract service availed for the 1,05,000
construction of pipe line to be laid outside company's factory

You are required to determine the eligible ITC available to PQR Ltd. for the month
of February, 20XX by giving brief explanations for treatment of various items.
Assume all the conditions necessary for availing ITC have been fulfilled.
Answer:-Computation of eligible ITC available to PQR Ltd. for February, 20XX:-
S. No. Particulars GST Explanation
1 Payment for fitness club Nil ITC is blocked u/s 17(5) (b) of
membership of employee CGST Act as said service is not
provided by employer to
employee under any statutory
obligation.
2 Payment for outdoor catering 55,000 ITC is allowed u/s 17(5)(b) of
service for canteen under CGST Act as said service is
factories, Act provided by employer to
employee under a statutory
obligation

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3 Payment to travel agency for free Nil ITC is blocked u/s 17(5) (b) of
vacation of employees CGST Act as said service is not
provided by employer t employee
under any statutory
obligation.
4 Works contract services availed Nil ITC is blocked u/s 17(5) (c) of
for construction of pipeline laid CGST Act on works contract
outside company’s factory services for construction of
immovable property except plant
& machinery. Construction of
pipeline laid outside factory
premises is excluded from plant
& machinery.
Eligible ITC Available 55,000

Q. 45 A Ltd. Procured the following goods in the month of December, 20XX:-

S. No. Particulars GST
1 Goods used in constructing an additional floor of office building 18,450
2 Goods given as free sample to prospective customers 15,000
3 Trucks used to transport inputs in factory 11,000
4 Inputs used for transportation of inputs in the factory 9,850
5 Confectionery items for consumption of employees working in 3,250
the factory
6 Cement used for making foundation and structural support to 8,050
plant and machinery
Compute the amount of ITC available with a Ltd. For the month of December, 20XX by
giving necessary explanations. Assume that all the other conditions necessary for
availing ITC have been fulfilled.

Answer:- Computation of amount of ITC available with A Ltd. For the month
December, 20XX

S. Particulars GST(₹) Explanation

No.
1 Goods used in constructing an ITC is blocked u/s 17(5) of CGST
additional floor of office building Act on goods received by a taxable
person for construction of an
immovable property on his own
account even if it is used in the
course or furtherance of business
& it is assumed that cost of
construction of additional floor is
capitalized.
2 Goods given as free sample to ITC is blocked u/s 17(5) of CGST
prospective customers Act on goods disposed of by way
of free samples.
3 Trucks used to transport inputs in ITC is not blocked u/s 17(5) of
factory CGST Act on motor vehicles used
for transportation of goods & thus,
allowed unconditionally.

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4 Inputs used in trial runs Here, inputs are used in the course
or furtherance of business &
hence, ITC thereon is allowed.
5 Confectionery items for ITC on food or beverages is
consumption of employees working blocked u/s 17(5) of CGST Act
in the factory unless it is used in same line of
business or as an element of
taxable composite or mixed supply
or provided by an employer to its
employees under a statutory
obligation i.e. ITC is blocked when
the same consumed & not
supplied.
6 Cement used for making foundation TC is not blocked u/s 17(5) of
& structural support to plant & CGST Act on goods used for
machinery construction of plant and
machinery. Plant and machinery
Total Eligible ITC 28,900

Q. 46 Babla & Bros. is exclusively engaged in making exempt supply of goods &
is thus, not registered under GST. On 1st October, the exemption available on
its goodsget withdrawn. On that day, the turnover of Babla & Bros. was 50 lakhs.
Examine the eligibility of Babla & Bros. for availing ITC, if any.
Answer:-
Legal Provision:-
As per section 18(1)(a) of CGST Act, if a person applied for registration within 30 days
fromthe date on which he becomes liable to registration, then he shall be entitled to take
ITC of-
 Inputs held in stock,
 Inputs contained in semi-finished goods held in stock &
 Inputs contained in finished goods held in stock
on the day immediately preceding the date from which he becomes liable to pay
tax.

Discussion & Conclusion:-

 In given case, exemption available on goods being supplied by Babla & Bros.,
an unregistered person, is withdrawn & it becomes liable to registration as its
turnover has crossed threshold limit for registration on the day when the
exemption is withdrawn.
 Assuming that Babla & Bros. applies for registration within 30 days of 1st
October and it obtains such registration, it can take ITC of inputs held in stock
and inputs contained in semi-finished or finished goods held in stock on 30th
September.
 ITC on capital goods will not be available in this case.

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What is the ITC entitlement of a newly registered person?

Answer:

 As per section 18(1)(a) of CGST Act, if a person who is liable to take registration
has applied for registration within 30 days from the date on which he became liable
to registration, he can take
− ITC of inputs held in stock & inputs contained in semi-finished or in finished
goods held in stock on the day immediately preceding the date on which he
became liable to pay tax.
 As per section 18(1)(b) of CGST Act, a person applying for registration
voluntarily can take ITC of inputs held in stock and inputs contained in semi-
finished or in finished goods held in stock on the day immediately preceding the
date of grant of registration.

Q. 47 Mamta Sales trades in exempt goods and provides taxable services. It is

registered under GST. On 1st October, the exemption available on its goods gets
withdrawn. Analyze the scenario and determine the eligibility of Mamta Sales for
availing ITC, if any, on inputs and/or capital goods used in the supply of exempt
goods.

Answer:-
Legal Provision:-

 As per section 18(1) (d) of CGST Act, registered person whose exempt supply
becomestaxable supply can take ITC of:-
 Inputs held in stock, Inputs contained in semi-finished or in finished goods
held instock relatable to such exempt supply &
 on capital goods exclusively used for such exempt supply on the day
immediatelypreceding the date from which such supply becomes taxable.
 ITC on capital goods will be reduced by 5% per quarter or part thereof from the
date ofinvoice.
Discussion & Conclusion:-
 In given case, Mamta Sales is a registered person whose exempt supply is becoming
taxable supply.
 Thus, as per section 18(1) (d), it can take ITC of inputs held in stock and inputs
containedin semi-finished or finished goods held in stock relatable to such exempt
supply and on capital goods exclusively used for such exempt supply on 30th
September.

Q. 48 What is the tax implication of supply of capital goods by a registered person

whohad taken ITC on such capital goods?
Answer:-
 As per section 18(6) of CGST Act, if capital goods or plant & machinery on which
ITC b has been taken are supplied outward by registered person, then he must pay an
amount which is higher of:-

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 ITC taken on such goods reduced by 5% per quarter or part thereof from the date
of issue of invoice OR
 Tax on transaction value of such goods determined u/s 15.
 However, if refractory bricks, moulds & dies, jigs & fixtures are supplied as scrap,
person may pay tax on transaction value of such goods determined u/s 15.

Q. 49 Restrictions have been imposed on the use of amount available in electronic

credit ledger vide rule 86B of CGST Rules, 2017. Are there any exceptions to rule
86B? If yes, state the exceptions.
Answer:-
The registered person shall not use the amount available in electronic credit ledger to
discharge his liability towards output tax in excess of 99% of such tax liability, in cases
where the value of taxable supply other than exempt supply and zero-rated supply, in a
monthexceeds 50 lakhs
Yes, there are some exceptions to rule 86B that imposes restriction on use of amount Ho
available in electronic credit ledger which are as under:-
a) Payment of Income Tax more than 1 lakh:-
Rule 86B may not apply, if below persons have deposited more than 1 lakh as
income tax under Income-tax Act, 1961 in each of the last 2 financial years for which
time limit to file return of income u/s 139(1) of the said Act has expired:-

 The registered person or

 The Karta/ proprietor/ managing director of the registered person;
 Any of the two partners, whole-time directors, members of Managing
Committee ofAssociations or Board of Trustees of the registered person, as the
case may be.

b) Receipt of refund of input tax credit (ITC) of more than 1 lakh:-

Rule 86B may not apply, if registered person has received a refund of more than ` lakh
for unutilized ITC in preceding financial year due to:-
 zero-rated supplies made without payment of tax or
 Inverted duty structure.

c) Payment of total output tax liability through electronic cash ledger in excess of
1% of total output tax liability:-
 Rule 86B shall not apply, if registered person has paid more than 1% of total
outputtax liability using electronic cash ledger upto the said month in current
financial year.
 This condition is seen for C.F.Y., & hence, for April of any F.Y., the exception
willnot apply.
 GST liability paid under reverse charge should not be considered while
calculating thetotal output liability paid through electronic cash ledger.

d) Specified registered Person:-

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Rule 86B would not apply for following registered person:-

 Government Department or
 A public sector undertaking or
 A local authority or
 A statutory body.

However, Commissioner or an officer authorised by him in this behalf may remove the
said restriction after such verifications and such safeguards as he may deem fit.

Q. 50 Answer the following independent question:-

A technical testing agency tests and certifies each batch of machine tools before
dispatch by BMT Ltd. Some of these tools are dispatched to a unit in a SEZ without
payment of GST as these supplies are not taxable. The finance personnel of BMT
Ltd. want to know whether they need to carry out reversal of ITC on the testing
agency's services to the extent attributable to the SEZ supplies. Give your
comments. [ICAI Study Material]

(ii) A registered person transfers its business to another person. Is such registered
person allowed to transfer the unutilized ITC lying in its electronic credit ledger to
such transferred business? Discuss.
(iii) 'AB', a registered person, was paying tax under composition scheme up to 30th
July. However, w.e.f. 31st July, 'AB' becomes liable to pay tax under regular
scheme. Is 'AB' eligible for any ITC?
Answer:-
(i) ITC is disallowed only to the extent it pertains to supplies used for non- business
purposes or supplies other than taxable and zero-rated supplies.

 Supplies to SE2 units are zero rated supplies as per section 16(1) of IGST Act.

 In the given case, full ITC is allowed on inward supplies of BMT Ltd. used for
making supplies to unit in SEZ.
(ii)  As per section 18(3) of CGST Act, in case of sale, merger, demerger,
amalgamation, transfer or change in ownership of business etc., the ITC that
remains unutilized in electronic credit ledger of registered person can be
transferred to new entity, if there is a specific provision for transfer of liabilities
in such change of constitution.

 The registered person should furnish details of change in constitution on common

portal & submit a certificate from practicing Chartered Accountant/Cost
Accountant certifying that the change in constitution has been done with a
specific provision for transfer of liabilities.

 Upon Acceptance of details by transferee on common portal, the unutilized ITC

gets credited to his electronic credit ledger.

 Transferee should record the inputs and capital goods so transferred in his books
of account.

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(iii)  As per section 18(1) © of CGST Act, ‘AB’ is eligible for ITC on inputs held in
stock and inputs contained in Semi – finished or in finished goods held in stock
and capital goods as on 30th July.
 ITC on capital goods will be reduced by 5% per quarter or part thereof from the
date of invoice.

Q. 51 ABC co. Ltd. Registered under GST is engaged in the manufacture of heavy
machinery. It procured the following items during the month of July.
S. No. Items GST
1 Electrical transformers to be used in the manufacturing process 5,20,000
2 Trucks used for the transport of raw material 1,00,000
3 Raw material to be received in August 2,00,000
4 Confectionery items. These items were supplied free of cost to 25,000
the
customers in a customer meet organized by the company
5 Capital goods (Invoice missing for one out of 5 items & GST paid 5,00,000
on the same was ₹ 70,000)
6 GST paid on health insurance policies 80,000
Determine the amount of ITC available with ABC Co. Ltd., for the month of July
by giving necessary explanations for treatment of various items. Subject to the
information given above, assume that all the other conditions necessary for availing
ITC have been fulfilled.

Answer-
Legal Provision:-
As per section 18(1)(a) of CGST Act, if a person applied for registration within 30 days
from the date on which he becomes liable to registration, then he shall be entitled to take
ITC of:-

 Inputs held in stock,

 Inputs contained in semi-finished goods held in stock &
 Inputs contained in finished goods held in stock
on the day immediately preceding the date from which he becomes liable to pay tax.

Discussion & Conclusion:-

 In given case, exemption available on goods being supplied by Babla & Bros., an
unregistered person, is withdrawn & it becomes liable to registration as its turnover
has crossed threshold limit for registration on the day when the exemption is
withdrawn.
 Assuming that Babla & Bros. applies for registration within 30 days of 1st October
and it obtains such registration, it can take ITC of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock on 30th September.
 ITC on capital goods will not be available in this case.

Q. 52 What is the ITC entitlement of a newly registered person?

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Answer:
 As per section 18(1)(a) of CGST Act, if a person who is liable to take registration
has applied for registration within 30 days from the date on which he became liable
to registration, he can take
− ITC of inputs held in stock & inputs contained in semi-finished or in finished
goods held in stock on the day immediately preceding the date on which he
became liable to pay tax.

Answer:-

Computation of ITC available with ABC Co. Ltd. For the month of July:-
S. Particulars GST(₹) Explanation
No.
1 Electrical transformers to be used in 520000 ITC is available on goods used in
the manufacturing process the course or furtherance of
business u/s 16(1) of CGST ACT.
2 Trucks used to transport of raw 1,00,000 ITC is not blocked u/s 17(5) (a) of
material CGST Act on motor vehicles used
for transportation of goods.
3 Raw material - Since raw material is not received
in july, 20xx ITC for the same
cannot be availed in july, 20xx u/s
16 (2)
4 Confectionery items for - ITC is blocked u/s 17(5) (b) of
consumption of customers at CGST Act on food or beverages
customers meet unless the same is used for making
outward taxable supply of thesame
category or as an element of the
taxable composite or mixed supply
or provided by an employerto its
employees under a statutory
obligation.
5 Capital Goods 4,30,000 ITC can be availed only on basisof
a valid document u/s 16(2). Thus,
ITC for the item for which
invoice is missing cannot be
availed (i.e for Rs. 70000).
6 GST paid on health insurance - ITC is blocked u/s 17(5) of CGST
policies Act on health insurance taken for
employees except when there is a
statutory obligation on employer
to provide the same.
Total ITC Available 10,50,000

Q. 53 CANWIN Ltd., a registered supplier, is engaged in the manufacture of

Tanks. The company provides the following information pertaining to GST paid
on the purchases madelinput services availed by it during the month of January
20XX:

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S. No. Items GST paid

1 Purchase of Machinery where debit note is issued 1,15,000
2 Input purchased was directly delivered to Mr. Joe, a job worker 80,000
80,000 and a registered supplier
3 Computers purchased (Depreciation was claimed on the said 50,000
GST portion under the Income-Tax Act, 1961)
4 Works Contract services availed for construction of Staff 4,25,000
quarters within the company premises
Determine the amount of ITC available to M/s. CANWIN Ltd. for the month of January
20XX by giving brief explanations for treatment of various items. Subject to the
information given above, all the conditions necessary for availing the ITC have been
fulfilled. (ICAI Suggested Nov 18)

Answer: Computation of input tax credit (ITC) available with CANWIN Ltd. for the
month of January 20XX

S. No. Items (₹) Explanation

1 Purchase of Machinery where 1,15,000 As per sec 16(2)(a) of CGST
debit note is issued Act, ITC is allowed on goods
purchased on basis of debit
note which is a valid
document.
2 Input purchased was directly 80,000 As per explanation to
delivered to Mr. Joe, a job worker sec16(2)(b), goods delivered
& a registered supplier to a third person on direction of
registered person are deemed
to have been received by such
registered person. So, ITC is
available to registered person
even though he did not
receive the goods.
3 Computers purchased - As per sec 16 (3) of CGST Act,
(Depreciation is claimed on GST if depreciation has been
portion under Income-Tax Act, claimed on the tax component
1961) of cost of capital goods and
plant and machinery under
Income -tax Act, 1961, then
ITC is not allowed on the said
tax component.
4 Works Contract services availed - As per section 17(5) (c) of
for construction of Staff quarters CGST Act, ITC is blocked on
within the company premises works contract services
supplied for construction of an
immovable property except
where it is an input Servicefor
further supply of works
contract service.
Total ITC Available 1,95,000

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Q. 54 Dina Ltd., a registered supplier from Maharashtra, is engaged in the

manufacture of passenger autos. The company provides the following details of
purchases made/services availed by it during the month of March:
S. No. Particulars GST(₹)
1 Purchase of iron which is used as a raw material [Goods were 2,50,000
received in two instalments - first in March and the second in April]
2 Purchase of accessories which were delivered directly to the dealers 90,000
of the company on the direction of Dina Ltd. [Only invoice was
received by Dina Ltd.]
3 Purchase of bus (seating capacity IS) for the transportation of 1,97,000
employees from their residence to company and back
4 General insurance taken on a car used by executives of the company 5,200
for official purposes
5 Machinery purchased to be used in the manufacturing process of auto 3,00,000
parts
6 Inputs purchased, but stolen from the factory 1,40,000
7 Rent – a – cab facility availed for employees to fufil a staturtory 36,000
obligation
8 Outdoor catering services taken for a meeting organized in the 10,000
factory
9 Payment made for material and to contractor for construction of staff 1,25,000
quarter

You are required to determine the ITC available with Dina Ltd. for the month of
march, by giving brief explanations for treatment of various items. subject to the
information given above, all the other conditions necessary for availing ITC have
been fulfilled [ICAI Study Material with little additions] [Similar CA inter may 19
Exam]
Answer:- Computation of ITC available with Dina Ltd. for the month of march

S.No. Items (₹) Explanation

1 Purchase of iron which is used as a Nil 1st proviso to section 16(2) of
raw material CGST Act states that if goods
against an invoice are received in
instalments, ITC can be availed
only on the receipt of last
instalment. Since last instalment is
received in April, ITC cannot be
availed in March.
2 Purchase of accessories delivered 90,000 As per explanation to section 16(2)
directly to dealers of company (b), goods delivered to a third
person on direction of registered
person are deemed to have been
received by such registered person.
so, ITC is available to registered
person even though he did not
receive the goods.

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3 Bus for transportation of employees 1,97,000 ITC is not blocked u/s 17(5)(a) of
CGST Act on motor vehicles for
transportation of persons with
seating capacity more than 13
persons (including driver) used for
any purpose.
4 General insurance taken on car used Nil As per section 17(5) (ab) of CGST
by executives of company for Act, ITC is blocked on general
official purpose insurance of those motor vehicles
on which ITC is blocked u/s 17(5)
(a) as it’s seating capacity less than
13 & not used for purpose
mentioned in exceptions & thus.
ITC is blocked on general
insurance of car also.
5 Machinery purchased to be used in 3,00,000 ITC is available on goods used or
the manufacturing process of auto intended to be used in the course or
parts furtherance of business u/s 16(1) of
CGST Act.
6 Inputs purchased, but stolen from Nil ITC is blocked on goods stolen as
factory per 17(5) (h) of CGST Act.
7 Rent - a - cab facility availed for 36,000 ITC is not blocked u/s 17(5) (b) of
employees to fulfill a statutory CGST Act on rent - a cab services
obligation where the government notifies
services which are obligatory for
an employer to provide to its
employees.
7 Outdoor catering services taken for Nil ITC is blocked u/s 17(5)(b) of
a meeting organized in the factory CGST Act on catering services
except when such services are used
by a registered person for making
outward catering supply or as an
element of a taxable composite or
mixed supply or provided by an
employer to its employees under a
statutory obligation.
Payment made for material and to Nil ITC is blocked u/s 17(5)(d) of
contractor for construction of staff CGST Act on goods & or services
quarter received by a taxable person for
construction of an immovable
property on his own account
including when they are used in the
course or furtherance of business
Total ITC available 6,23,000

Q. 55 Shine Ltd., a registered manufacturer, is engaged in taxable supply of

goods. It procured the following goods during October, 20xx. Determine the
amount of input tax credit available by giving necessary explanation for treatment
of various supplies of goods.

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S. Description of Goods ITC (₹)

No.
1 Laptop purchased for factory unit 40,000
2 Goods used for purpose other than business 27,000
3 Capital goods used for making outward supplies to SE2 unit 52,000
4 Capital goods purchased from a composition dealer 25,000
5 Goods purchased from lata Ltd., the details of which are not 20,000
uploaded in GSTR - 1 by Lata Ltd. but tax is deposited to
Government within due data.
6 Battery purchased from Exide Ltd. for which invoice is issued in 54,000
Oct, 20xx but payment is made in Nov, 20xx
7 Goods purchased from Asha Ltd & payment is also made but tax 86,500
has not been deposited by Asha Ltd. to Government & also not
reported in GSTR - 1

Answer:-

Computation of Input Tax credit available to Shine Ltd. for October,

20XX:-
S. No Description of Goods ITC (₹) Explanation
1 Laptop purchased for factory 40,000 ITC can be availed u/s 16(1) of
unit CGST Act for goods (i.e.
laptop) used in the course of
furtherance of business.
2 Goods used for purpose otherthan Nil ITC is blocked u/s 17(5) (g) of
business CGST Act on goods used for
personal consumption (i.e. non
business use).
3 Capital goods used for making 52,000 ITC is allowed on capital goods
outward supplies to SE2 unit used for making taxable
including zero - rated supplies.
Supply to SE2 units are zero-
rated supplies u/s 16(1) of
IGST Act & hence, ITC is
available in this case.
4 Capital Goods purchased from a Nil ITC is blocked u/s 17(5)(g) of
composition dealer CGST Act on goods on which
tax is paid u/s 10.
5 Goods purchased from Lata Ltd. Nil As per sec 16(2) (aa) of CGST
Act, ITC is not available, if
supplier has not reported the
invoice in his GSTR - 1, even
though the tax is deposited to
Govt. within due date, since all
conditions are to be satisfied
u/s 16 (2) to avail ITC.

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6 Battery purchased from Exide 54,000 As per sec 16(2) (a) of CGST
Ltd. Act, a registered person can
avail ITC, if he is in possession
of a tax invoice which is a valid
document. However, payment
for value & tax has to be made
within 180 days of
invoice date as per proviso to
sec 16(2).
7 Goods purchased from Asha Ltd. - All conditions are to be
satisfied a/s 16 (2) to avail ITC.
So, ITC is not available in either
of the cases where supplier has
not reported invoice in GSTR -
1 or has not
paid tax to Govt.
Total ITC Available 1,46,000

Q. 56 Mr. Nimit, a supplier of goods, pays GST under regular scheme. He is not
eligible for any threshold exemption. He has made the following outward taxable
supplies in the month of August, 20XX:-
Particulars ₹
Intra state supplies of goods 6,00,000
Inter state supplies of goods 2,00,000

He has also furnished following information inrespect of purchases made by him

fromregistered dealers during August, 20XX :-

Particulars ₹
Intra stare purchase of goods 4,00,000
Inter stare purchase of goods 50,000
Balance of ITC available of the beginning of the August 20XX:-

Particulars ₹
CGST 15,000
SGST 35,000
IGST 20,000

Note:
(1) Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively, on both
inward andoutward supplies.
(ii) Both inward and outward supplies given above are exclusive of taxes,
whereverapplicable.

(iii) All the conditions necessary for availing the ITC have been fulfilled.
Compute the netGST payable by Mr. Nimit for the month of August, 20XX.

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Answer: Note 1 :-
Particulars IGST @ 18% CGST@9% SGST @ 9%
Opening ITC ₹20,000 ₹15,000 ₹35,000
Add: ITC on Intra - State purchases of ₹ 36,000 ₹ 36,000
goods valuing ₹ 4,00,000
Add: ITC on Inter - State purchases of ₹ 9,000
goods valuing ₹ 50,000
Total ITC ₹29,000 ₹51,000 ₹71,000
Computation of net GST payable by Mr. Nimit for the month of August, 20XX

S. No. Particulars Taxable IGST @ CGST @ SGST @ 9%

Value (₹) 18% (₹) 9% (₹) (₹)
1 Intra - State supply 6,00,000 54,000 54,000
of goods
2 Inter - State supply 2,00,000 36,000 - -
of goods
3 Total GST Payable 36,000 54,000 54,000
4 Less : ITC (Note) (29,000) - -
5 CGST - ₹51,000 - (51,000) x
6 SGST - ₹71,000 (7000) x (54,000)
Net GST payable Nil 3,000 Nil
ITC of SGST to be carry forward in next month ₹ 10,000
Note :- ITC of SGST has been used to pay SGST & IGST, in that order.

Q. 57 Satya Sai Residents Welfare Association, a registered person under GST

has 30 members each paying 8,000 as maintenance charges per month for sourcing
of goods and services from third persons for common use of its members.

The Association purchased a water pump for 59,000 (inclusive of GST of 9,000)
and availed input services for 23,600 (inclusive of GST of 3,600) for common use of
its members during February, 20XX.
Compute the total GST payable, if any, by Satya Sai Residents Welfare
Association, forFebruary, 20XX.
GST rate is 18%. All transactions are intra-State.

There is no opening ITC and all conditions for ITC are fulfilled.

Answer:-
Computation of total GST payable by Satya Sai Residents Welfare Association for
February,20XX:-

Particulars Value (₹) GST @ 18%

Maintenance charges received [ 8,000×30 members] [Refer 2,400 43,200
Note](It is logically presumed that maintenance
charges are exclusive of GST)
Total GST payable 43,200

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Less:- ITC of GST paid on water pump purchased (12,600)

(9,000) and input services availed (3,600)
Net GST payable 30,600

Note:-
Services by RWA to its members for sourcing of goods or services from a third person
for common use of its members in a housing society are exempt, if the share of
contribution permonth per member upto 7,500. Otherwise, entire amount is taxable.
Thus, maintenance charges are taxable in this case.

Q. 58 KNK Ltd., a registered supplier of Mumbai, is a manufacturer of heavy

machines. Its outward supplies (exclusive of GST) for the month of January, 20XX
are as follows:-
S. No. Particulars Amount (₹)
1 Inter – State 85,00,000
2 Intra – State 15,00,000

Applicable rate of CGST, SGST and IGST on outward supply are 9%, 9% & 18%
respectively. Details of GST paid on inward supplies during the month of January,
20XX are as follows:-
S. No. Particulars CGST(₹) SGST (₹)
1 Raw material A 60,000 40,000
(of which, 70% of inputs procured were used and
30% were in stock at the end of the January, 20XX)
2 Raw material B (of which, 90% material received in 50,000 50,000
factory and remaining material completely damaged
due to a road accident on the way to factory. There
was no negligence on the part of the KNK Ltd.)
3 Construction of pipelines laid outside the factory 30,000 30,000
premises
4 Insurance charges paid for trucks used for 55,000 55,000
transportation of goods

Q. 59 Additional Information:

(1) There is no opening balance of any input tax credit and all the conditions
necessary for availing the input tax credit (ITC) have been fulfilled. (ii) Details of
GST paid on inward supplies are available in GSTR-2A except for item (i) i.e. Raw
Material A, for which supplier has not filed its GSTR-1 for the month of January
20XX, hence corresponding input tax credit (ITC) is not reflecting in GSTR-2A of
KNK Ltd. In January, 20XX.
Compute the following:-

(1) Amount of eligible input tax credit (ITC) available for the month of
January,20XX.
(ii) Minimum net GST payable in cash, for the month of January, 20XX after
usingavailable input tax credit.

2.21
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CA CS PIYUSHA SARDA T.

Working notes should form part of your answer. [CA Inter Nov 20
Exam]Answer:-

(1) Computation of eligible ITC available for the month of January, 20XX:-
S. No. Particulars CGST (₹) SGST (₹)
1 Raw materials A [Note – 1] Nil Nil
2 Raw materials B (90% ) [Note – 2 ] 45,000 45,000
3 Construction of pipelines laid outside the factory Nil Nil
premises [Note – 3]
4 Insurance charges paid for trucks used for 55,000 55,000
transportation of goods [Note – 4 ]
Total eligible ITC 1,00,000 1,00,000

Notes:
1) ITC shall not be availed, if the invoice is not reported by supplier in his GSTR-1 &
also not reflected in GSTR-2B of recipient u/s 16(2)(aa) read with Rule 36(4).
2) ITC on goods destroyed (i.e. 10% of the goods) is blocked u/s 17(5)(h) of the CGST
Act, 2017.
3) As per section 17(5)(c), ITC on works contract services availed for construction of
plant and machinery is allowed but pipelines laid outside the factory premises are
excluded from the definition of plant and machinery and hence, ITC thereon is blocked.
4) ITC on motor vehicles used for transportation of goods is not blocked u/s 17(5) &
hence, ITC is also allowed on insurance services relating to such motor vehicles on
nwhich ITC is allowed.
ii) Computation of minimum net GST payable in cash for the month of January, 20XX

Particular Value (₹) IGST (₹) CGST (₹) SGST (₹)

Inter – State supply of goods 85,00,000 15,30,000 - -
Inter – State supply of goods 15,00,000 - 1,35,000 1,35,000
Total output tax payable 15,30,000 1,35,000 1,35,000
Less: Set off of CGST and SGST - (10,00,000) (1,00,000)
credit against CGST and SGST
liability respectively
Minimum net GST payable in 15,30,000 35,000 35,000
cash

Q. 60 M/s ABC & CO., a Chartered Accountancy Firm having office in

Bengaluru registered under GST in the state of Karnataka, submitted the
following information for the month of April 20XX:-

S. No. Services provided Amount excluding

GST (₹)
(1) Statutory audit services provided (intra – state supplies) 1,20,000
(2) ITR filing services provided within Karnataka 1,60,000

2.22
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CA CS PIYUSHA SARDA T.

(3) Internal Audit services provided to Mumbai client (inter – 1,80,000

state supplies)

ABC & Co. had incurred the following expenses in the month of April, 20XX
for thepurpose of providing the taxable services:-
S. No. Services provided
(1) Car purchased by firm for the use of senior 7,84,000 (CGST ₹ 42,000 &
partner of the firm for office use SGST ₹42,000)
(2) Office rent paid to landlord who is registered in 5,900 (CGST ₹ 450 & SGST
State of Karnataka ₹ 450)
(3) Professional fee paid to Mr. Rajesh, a practicing 2,36,000 (CGST ₹18,000 &
Chartered Accountant, for professional services SGST ₹ 18,000)
availed TDS deducted ₹ 20,000 u/s
194] of the Income Tax Act,
1961
(4) Computer purchased for office purpose 56,000 (CGST ₹ 3,000 &
SGST ₹ 3,000)
Out of the above 4 suppliers/service providers, landlord of office to whom rent was
paid has not uploaded his GSTR-1 within the specified time allowed under GST
resulting in GST amount not reflecting in GSTR-2A of ABC & Co.
Compute the net GST payable (CGST, SGST and IGST after adjustment of ITC)
by ABC & Co. for the month of April, 20XX. Rates of CGST, SGST and IGST are
9%, 9% and 18% respectively assuming that all the remaining conditions of
utilisation of ITC are fulfilled. [CA IPC Dec 21 Exam]
Answer:- Computation of net GST payable by ABC & Co. for the month of April, 20XX-

Particular Value (₹) IGST (₹) CGST (₹) SGST (₹)

Statutory audit services 1,20,000 - 10,800 10,800
ITR filing services 1,60,000 - 14,400 14,400
Internal audit services 1,80,000 32,400 - -
Total output tax liability 32,400 25,200 25,200
Less: ITC [Refer Working Note] - (21,000) (21,000)
CGST = ₹ 21000
SGST = ₹ 21000
[CGST credit is set off against CGST
liability & SGST credit is set off
against SGST liability since CGST
credit cannot be utilized towards
payment of SGST liability and vice
versa.
Net GST Payable 32,400 4200 4200

Working Note:- Computation of ITC that can be availed by ABC & Co. for the month
of April, 20XX:-

Particular Reason CGST (₹) SGST (₹)

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CA CS PIYUSHA SARDA T.

Car u/s 17(5) (a) of CGST Act, ITC on motor Nil Nil
purchased vehicles used for transportation of persons
for official with seating capacity upto 13 persons
used by (including driver) is blocked except when
senior used for making specified outward supplies.
partner
Office rent ITC is ineligible u/s 16(2)(aa) read with rule Nil Nil
paid to 36(4), since supplier has not uploaded details
landlord of this supply in his GSTR-1.
Professional ITC on services used in the course or 18000 18000
fee paid furtherance of the business is allowed.
Computer ITC on goods used in the course or 3000 3000
for office furtherance of the business is allowed.
purpose
ITC that can be availed 21,000 21,000

Q. 61 M/s. Grey, a registered taxable person under regular scheme provides

followinginformation in respect of supplies, during the month of April, 20XX :-
Particular Amount (₹)
Inter-state supply of goods 1,00,000
Intra-state supply of 500 packets of detergent @ 400 each along with a 2,00,000
plastic bucket worth 100 each with each packet, being a mixed supply.
(Rate of GST on detergent is 18% and on plastic bucket is 28%)
Supply of online educational journals to M/s. Pinnacle, a private 50,000
coaching centre providing tuitions to students of Class X-XII, being
intra-state supply
M/s. Grey has also received the following inward supplies:-
Inter-state supply of goods (out of which, invoice for goods worth 70,000
20,000 is missing and no other tax paying document is available)
Repairing of bus with seating capacity of 20 passengers used to 50,000
transport its employees from their residence, being intra-state supply

Details of opening balances of ITC as on 1 – 4 – 20xx are as follows:-

CGST ₹ 5000
SGST ₹ 5000
IGST ₹ 40,000
Following additional information is provided:-
(a) Rate of GST in respect of all inward and outward supplies except item (ii)
above is18% i.e. CGST and SGST @ 9% and IGST @ 18%.
(b) All figures mentioned above are exclusive of taxes.
(c) All the conditions for availing the ITC have been fulfilled except specificallygiven

and M/s. Grey is not eligible for any threshold exemption.

Compute the minimum net GST payable in cash by M/s. Grey for the month
April,20XX.
CA Inter MTP May 22 (Similar Question), RTP Nov 21 (Similar

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Question)]Answer:-
(A) Calculation of Total Tax Liability:-

Particular Value (₹) IGST (₹) CGST (₹) SGST (₹)

Inter-State supply of goods 100000 18000 - -
Intra-state supply of 500 200000 - 28000 28000
packets of detergent along with (500* 400) (200000* (200000
plastic basket (Note-1) 14%) 14%)
Supply of online educational 50,000 - 4500 4500
journal to private coaching centre (50000* 9%) (50000*
(Note-2) 9%)
Total Tax Liability (A) 18000 32,500 32,500

(B) Calculation of Total Input Tax Credit (ITC) :-

Particular Value (₹) IGST (₹) CGST (₹) SGST (₹)

Brought forward ITC (Given) 40,000 5000 5000
Inter – State purchase of goods 50,000 9000 4500 4500
(Note – 3) (50000*18%) (50000*9%) (50000*9%)
Repairing of bus with seating 50,000 4500 4500
capacity of 20 passengers (Note (50000* (50000* 9%)
– 4) 9%)
Total ITC (B) 49,000 9500 9500

(C) Computation of minimum net GST payable in cash by M/s. Grey for the month of
April, 20XX:-

Particular IGST (₹) CGST (₹) SGST (₹)

Total Tax Liability (A) above 18000 32,500 32,500
Less:- Set off of ITC
IGST = Rs. 49000 18000 32,500 32,500
CGST = Rs. 9500 32,500
SGST = Rs. 9500 32,500
Minimum net GST payable in cash (C) Nil Nil 15000

Notes:-
1. Supply of detergent and bucket together with a single price of 400 is a mixed supply
& it shall be treated as supply of that particular supply that attracts highest rate of tax
(28%).
2. Supply of online educational journal to an educational institution which provides a
qualification recognised by law in India is exempt. Since, private coaching centre does
not provide any recognised qualification, supply of online educational journals to the
same willbe taxable.
3. ITC can be taken only on basis of a valid tax paying document u/s 16(2)(a) of CGST
Act. Thus, ITC will not be available on goods of Rs. 20000 for which the invoice is
missing.

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4. ITC is not blocked u/s 17(5)(a) of CGST Act on motor vehicles for transportation of
persons with seating capacity more than 13 persons (including driver) & thus, ITC is not
blocked on its repair also u/s 17(S) (ab).

5. IGST credit shall be first used fully to pay IGST & then to pay CGST and SGST in
order and in any proportion. Thus, there cannot be one answer for minimum any net
CGST and SGST payable in cash.

Q. 62 M/s. Comfortable (P) Ltd. is registered under GST in Chennai, Tamil Nadu. It
isengaged in the manufacture of iron and steel products. It has carried out
following transactions in the financial year 20XX-XY:-
(a) Purchased 1,000 Metric Ton (MT) iron @1,000 per MT (excluding GST) from
M/s. Hard Ltd. of Chennai. M/s. Hard Ltd. has fulfilled the order as follows:-
Date Quarterly (MT) Taxable Value (Rs)
28 – Feb – 20XY 200 2,00,000
10 – Mar – 20XY 250 2,52,000
25 – Mar – 20XY 250 2,50,000
28 – Mar -20XY 200 2,00,000

Balance order requirement has been fulfilled by Hard Ltd. on 5 -Apr-20XY. However,
Hard Ltd. has raised the invoice for full order at the time of dispatch of first lot, i.e. on
28-Feb- 20XY. M/s. Comfortable (P) Ltd. has made the full payment on 28-Feb-20XY
for the order.
(a) Company has received IT engineering service from M/s. Dynamic Infotech

(P) Ltd. of Chennai for Rs. 11,00,000/- (excluding GST) on 28-Oct-20XX. Invoice for
service rendered was issued on 5-Nov- 20XX. M/s Comfortable (P) Ltd. made part-
payment of Rs. 4,13,000/- on 31-Dec-20XX. Being
unhappy with service provided by M/s Dynamic Infotech (P) Ltd., it did not make the
balancepayment. Deficiency in service rendered was made good by M/s Dynamic
Infotech (P) Ltd.by 15-Feb-20XY. M/s. Comfortable (P)

Ltd. made payment of Rs. 2,95,000/- on 15-Feb-20XY towards full & final N settlement
of the dues and did not pay the balance amount. [ICAI Study Material covers (b)]
(b) Company has made following intra State supplies (excluding GST) for the financial
year 20XX-XY:-

S. No. Particulars Amount (₹)

(1) Value of intra-State supplies made to registered persons 10,00,000
(2) Value of intra-State supplies made to unregistered persons 2,00,000
(1) Compute the GST liability (CGST, SGST or IGST, as the case may be) of M/s.
Comfortable (P) Ltd. for the financial year 20XX-XX:-
(ii) Compute amount of ITC to be reversed in FY 20XX-XY and/or in the next FY
20XY-Y2,if any.

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CA CS PIYUSHA SARDA T.

Assume the rate of GST as under:- CGST @9%, SGST @9%, & IGST @18%

Note:-
(i) All the conditions necessary for availing input tax credit have been fulfilled.

(ii) Ignore interest, if any [CA Inter MTP Mar 19]

Answer:- (1) Computation of net GST payable for the financial year 20XX-XY:-

Particular Value (₹) CGST (₹) SGST (₹)

Tax liability
Intra – State supplies made to registered 10,00,000 90,000 90,000
persons
Intra – State supplies made to 2,00,000 18,000 18,000
unregistered persons
Total (A) 10,8000 10,8000
Input Tax Credit
Supply of iron in lots by M/s. Hard 10,00,000 - -
limited [Note – 1 ]
Supply of IT engineering service [Note 11,00,000 99,000 99,000
– 2]
Total (B) 99,000 99,000
Net GST payable (A) – (B) 9,000 9,000

Notes:-
1) Ist proviso to section 16(2) of CGST Act states that if goods against an invoice are
received in lots or instalments, the registered person is entitled to take credit upon receipt
of last lot or instalment. Although 900 MT of iron are received in financial year 20XX-
XY, last lot is received after FY 20XX-XY only, i.e. on 5 April, 20XY & thus ITC is
not available in FY 20XX-XY.

2) As per section 16 of CGST Act, registered person can take credit of input tax charged
on his inward supplies which are used in the course of business on receipt of said
services. Thus,full ITC Rs. 1,98,000 (i.e. Rs 99000 CGST + Rs 99000 SGST) can be
claimed in financial year 20XX-XY.

(ii) Input tax credit to be reversed in Financial Year 20XY-Y2:-

Particulars Amount (₹)
Total Value of procurement of IT engineering service 11,00,000
Add: Total GST on the above value @ 18% [CGST + SGST] 1,98,000
Value including GST 12,98,000
Amount paid for the said service including GST [RS. 4,13,000 + Rs. 7,08,000
2,95,000]
Amount [value along with tax payable thereon] not paid for the said 5,90,000
service
ITC to be reversed [Rs. 5,90,000 x 18/118] 90,000

Explanation:-

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CA CS PIYUSHA SARDA T.

 Proviso to section 16 (2) of CGST Act states that recipient is required to pay the
consideration along with tax within 180 days from the date of issue of invoice.
This condition is not applicable where tax is payable on reverse charge basis. If
recipient fails to do so, then corresponding credits availed by him will be added
to his output tax liability, with interest.
 If part payment is made against an invoice, proportionate ITC is available for the
tax involved.
 In given case, proportionate ITC availed needs to be reversed on the value along
with
tax payable thereon which has not been paid by M/s Comfortable (P) Ltd.
to M/sDynamic Infotech (P) Ltd. within 180 days from invoice date.
 This reversal will be done in financial year 20XY-Y2 when 180 days from
invoicedate expires.
 There is no time limit to re-avail the credit when the payment is made later on.

Q. 63 Zeon Ltd., a GST registered supplier located in Ranchi, Jharkhand, is

engagedin the manufacturing of washing machines & mixer grinders. It provides
you the detailsof various activities undertaken during the month of September,
20XX as follows

S. No. Particulars Amount (₹)

(1) Outward supplies made during the month
A Within Jharkhand 24,00,000
B Outside Jharkhand 5,00,000 29,00,000
(2) Purchase of raw materials from registered dealers within 7,00,000
Jharkhand which includes materials worth ₹ 2,00,000
purchased from Mr. Krishna, a registered person who is
paying tax under composition scheme
(3) Bus purchased from a registered dealer in Tatanagar, 12,00,000
Jharkhand. Bus used to ferry its 25 workers to and from
factory.

Assume the Rates of GST applicable on various supplies as follows:

Nature of supply CGST SGST IGST
Composition supplies 0.5% 0.5% -
Bus 14% 14% 28%
Raw materials 6% 6% 12%
Washing machines & mixer grinders 9% 9% 18%
Assume the rates of GST applicable on various supplies as follows:

CGST 20,000
SGST 5,000
IGST 95,000
Note:
(i) All the figures mentioned above are exclusive of taxes.
(ii) Both inward & outward supplies within the State of Jharkhand are to be considered

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intra-State supplies and outside the State of Jharkhand are inter-State supplies.

(iii) Subject to information given above, all the other conditions necessary for
availing ITChave been fulfilled.
Calculate the amount of net minimum GST payable in cash by Zeon Ltd. for the
month ofSep, 20XX
Brief and suitable notes should form part of your answer.

Answer:

(A) Calculation of Total Tax Liability:-

Particulars Value (₹) IGST @ 18% CGST @ 9% SGST @ 9%

(₹) (₹) (₹)
Intra – State 24,00,000 - 2,16,000 2,16,000
supply of goods
Inter – State 5,00,000 90,000 - -
supply of goods
Total Tax - 90,000 2,16,000 2,16,000
Liability (A)

(B) Calculation of Total Input Tax Credit (ITC):-

Particulars Value (₹) IGST @ 18% CGST @ 9% SGST @ 9%

(₹) (₹) (₹)
Opening Balance 95,000 20,000 5,000
(Given)
Purchase of raw 5,00,000 - 30,000 30,000
materials from (7,00,000 (5,00,000* 6%) (5,00,000*
registered dealers -2,00,000) 6%
within Jharkhand (Note
-1)
Bus purchased from 12,00,000 - 1,68,000 1,68,000
dealer in Jharkhand (12,00,000* (12,00,000*
used to ferry 25 14%) 14%
workers to and from
factory (Note – 2)
Total Tax Liability - 95,000 2,18,000 2,03,000
(A)

C) Computation of Minimum net GST payable in cash by Zeon Ltd. For the
month ofSep, 20XX:-
Particulars IGST (₹) CGST (₹) SGST (₹)
Total Tax Liability (A) above 90,000 2,16,000 2,16,000
Less:- Set off of ITC (Note – 3)
IGST = Rs. 95,000 (90,000) - (5,000)
CGST = Rs. 2,18,000 - (2,16,000) -
SGST = Rs. 2,03,000 - - (2,03,000)
Minimum net GST payable in cash (C) Nil Nil 8,000

2.29
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ITC to be carried forward next month - 2,000 -

Notes:
1) ITC is blocked u/s 17(5)(g) of CGST Act on goods on which tax is paid under
compositionscheme (Sec 10)
2) As per section 17(5)(a) of CGST Act, ITC on motor vehicles for transportation of
persons with seating capacity > 13 persons (including the driver) used for any purpose
is allowed
IGST credit be first utilized for payment of IGST liability, After exhausting IGST credit,
CGST and SGST credit to be utilized, & ITC of CGST cannot be utilized for payment of
SGST and vice versa.

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03. TAX INVOICE

Q. 64 Mention the time period within which tax invoice shall be issued in the following
cases:-

(i) Supply of Goods

(ii) Supply of Services between other than distinct persons
(iii) Continuous supply of Goods
(iv) Continuous supply of Services
(v) Supply of service ceases before its completion
(vi) Goods being sent or taken on approval for sale
Answer:
1  As per section 31(1) of CGST Act, 2017, a registered person supplying
taxable goods shall issue invoice as follows:-
(a) Where supply involves movement of goods:
- It shall be issued before or at the time of removal of goods for supply
to the recipient.
(b) In any other case (no movement of goods involved):-
- It shall be issued before or at the time of delivery of goods or making
goods available to the recipient.
 As per proviso to Section 31(1), Government may notify goods! supplies on
recommendations of council, for which the tax invoice shall be issued in
prescribed time and manner.

2 As per section 31(2) of CGST Act, 2017, a registered person supplying taxable services
shall issue a tax invoice before or after the provision of service, but within a
prescribed period as following:-
 For an insurer/ banking company/ financial institution, including an NBFC:-
- within 45 days from the date of supply of service.
 For registered person other than those covered in point I above:-
- within 30 days from the date of supply of service.

3 As per section 31(4) of the CGST Act, 2017, in case of continuous supply of goods
involving periodic statement of accounts or payments under a contract, the invoice
shall be issued before or at the time of:-
 Issue of the statements of account or
 receipt of payments.

4 As per section 31(5) of CGST Act, 2017, the time period within which tax invoice
shall be issued in case of continuous supply of services is as below: -
(a) If due date of payment is ascertainable from the contract: -
- Invoice shall be issued on or before due date of payment.
(b) If due date of payment is not ascertainable from the contract:
- Invoice shall be issued before or at the time of receipt of payment by
supplier of services.
(c) If payment is linked to the completion of an event:-

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- Invoice shall be issued on or before the date of completion of that event.

5 As per section 31(6) of the CGST Act, 2017, where a supply of service ceases under
a contract before its completion, the invoice shall be issued at the time the supply
ceases & such invoice shall be issued to the extent of supply made before such
cessation.

6 As per section 31(7) of CGST Act, 2017, where the goods being sent or taken on
approval for sale or return are removed before the supply takes place, the time period
within which tax invoice shall be issued is earlier of:-
- time of supply or
- 6 months from the date of removal

Q. 65 Examine the following independent cases of supply of goods and determine the
time of issue of invoice under each of the cases as per the provisions of CGST Act, 2017:-
(1) Sakthi Enterprises, Kolkata entered into a contract with Suraj Enterprises, Surat
for supply of goods and the delivery shall be made on or before 31st October. The
goods were removed from the factory at Kolkata on 11th October. As per the
agreement, the goods were to be delivered on or before 31st October. Suraj
Enterprises has received the goods on 14th October. [ICA! Study Material]
(2) Sultan Industries Ltd., Delhi, entered into a contract with Prakash Entrepreneurs,
Delhi, for supply of spare parts of a machine on 7th September. The spare parts
were to be delivered on 30th September. Sultan Industries Ltd. removed the
finished spare parts from its factory on 29th September. Determine the date by
which invoice must be issued by Sulton Industries Ltd. under GST law.
Answer: Legal Provision: -
 As per section 31(1) of CGST Act 2017 a registered person supplying taxable goods
shall issue invoice before or at the time of removal of goods for supply to the recipient
if supply involves movement of goods.

Discussion & Conclusion: -

(i) In the first case, invoice has to be issued on or before lith October, 20XX which is the
time of removal of goods for supply to recipient.
(ii) In the second case, last date to issue invoice is the date of removal of goods as supply
involves movement & thus, the invoice must be issued on or before 29th September.

Q. 66 What is a Bill of Supply? [FAQ 52]

Ans. A bill of supply is document which is issued in lieu of a tax invoices. In cases where
it is not mandatory forthe supplier to issue an invoice, a bill of supply can be issued.
Q. 67 Who are the persons required to issue a Bill of Supply under GST? [FAQ 53]
Ans. A registered person supplying exempted goods or services or both or paying tax under
the provisions of
section 10 (i.e. a composition taxable person) shall issue, instead of a tax invoice, a bill of
supply.
Q. 68 Can an unregistered person collect GST? [FAQ 65]

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Ans. No. A person who is not a registered person shall not collect any amount by way of
tax under this Act in
respect of any supply of goods or services or both.
Q. 69 I am supplying A4-sized bundles of paper to an Advocate's Office. I submit the
account of total supplies made during the 2-month period on the 25th of alternate month.
Do I have to issue an invoice each time I dispatch the bundles?
Answer: Legal Provision:-
As per section 31(4) of the CGST Act, 2017, in case of continuous supply of goods involving
periodic statement of accounts or payments under a contract, the invoice shall be issued before
or at the time of:-
 issue of the statements of account or
 receipt of payments

Discussion & Conclusion: -

1. No, invoice is not required to be issued each time the bundle is dispatched.
2. Since, the given instance is a case of continuous supply of goods, tax invoice has to be
issued latest by the time of submitting the statement every time (ie. 25th of Alternate
Month).

Q. 70 (a) M/s Indian Oil Corporation entered into a contract with Mr. B for supply of
oil throughout the year. M/s Indian Oil Corporation issues monthly statement for the oil
supplied to Mr. B. Determine the time of supply of goods in following independent cases:
(i) Mr. B mode payment for the month of July on 31st July, 20XX and M/s Indian Oil
Corporation issued statement for the month of July on 8th August, 20XX.
(ii) M/s Indian Oil Corporation issued statement for the month of August on 5th
September, 20XX, the payment of which not received till 30th September, 20XX.
(b) State the time of supply for goods sent for approval.

Answer:

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a) Legal Provision: -
As per section 12 (2) of the CGST Act, 2017 read with notification 66/2017 the time
of supply of goods shall be earlier of the following dates: -
(a) Date of issue of invoice or
(b) last date to issue the invoice u/s 31.
As per section 31(4) of the CGST Act, 2017, the last date to issue invoice in case of
continuous supply of goods which involves successive statement of accounts or
successive payments is: -
 Date of issue of each such statement of accounts or
 Date of receipt of such successive payment, as the case may be.

Discussion & Conclusion: -

(i) In the given case, date of issue of statement is 8th August, 20XX whereas the
last date to issue invoice is 31st July, 20XX which is earlier of date of
payment (31.07.20XX) or date of statement (08.08.20XX). Therefore, 31st
July, 20XX will be the time of supply in this case.
(ii) ii) in the given case, date of issue of statement is 5th September, 20XX which
itself is the last date to issue invoice as the payment date is not known.
Therefore, 5th September, 20XX will be the time of supply in this case.

b) As per section 12(2) read with section 31(7) of CGST Act, 2017, the time of supply
for goods sent for approval shall be earlier of:-
(a) Date of issue of invoice or
(b) Time when it becomes known that supply has taken place or
(c) Expiry of Six months from the date of removal.

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Q. 71 M/s. Xing Trans of Kolkata is engaged in the trading of transmitters. On

20/05/20XX, M/s. Xing Trans has sent 500 units of transmitters for exhibition at
Chennaion sale or return basis. Out of the said 500 units, 300 units have been sold
on 28/07/20XXat the exhibition. Out of remaining 200 units, 150 units have
been brought back toKolkata on 25/1/20XX and balance 50 units have neither
been sold nor brought back. Explain the provisions under GST law relating to
issue of invoices with exact dates onwhich tax invoices need to be issued by M/s.
Xing Trans. (

Answer:
Legal Provision: -
As per Sec 31(7), Where the goods being sent for sale or return are removed before the
supplytakes place, the tax invoice shall be issued
 before or at the time of supply or
 6 months from the date of removal, whichever is earlier

Discussion & Conclusion:

 In the given case, 500 units of transmitters have been sent for exhibition on
sale orreturn basis out of which 300 units are sold before 6 months from the date
of removal
 Thus, tax invoice for 300 units needs to be issued before or at the time of supply
of suchgoods, i.e., up to 28/07/20XX.
 Remaining 200 (150+ 50) units have neither been sold nor brought back till the
expiryof 6 months from the date of removal goods, i.e. 20/11/20XX.
 Thus, tax invoice for 200 units needs to be issued up to 20/11/20XX.

Q. 72 Examine the following independent cases of supply of services and determine

thetime of issue of invoice under each of the cases as per the provisions of CGST Act,
2017:-

(1) Trust and Fun Ltd., an event management company, has provided its
services foran event at Kapoor Film Agencies, Mumbai on Sth June, 20XX.
Payment for the event was made on 19th June, 20XX. [CA Inter May 19
Exam] [ICAI Material]
(2) Katyani Security Services Ltd. provides security services to Royal Jewellers
for their Jewellery Exhibition to be organized on 5th October. [
Answer: Legal Provision:-
 As per section 31(2) of CGST Act, 2017, a registered person [other than an
insurer/ banking company! financial institution, including an NBFC] supplying
taxable servicesshall issue a tax invoice before or after the provision of service,
but within a period of30 days from the date of supply of service.

Discussion & Conclusion: -

(i) In the first case, invoice has to be issued within 30 days from 5th June, 20XX
(date of supply of service), i.e. on or before, 5th July, 20XX.

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(ii) In the second case, Katyani Security Services Ltd. needs to issue a tax invoice
within30 days of supply of security services, i.e. , on or before 4th November.

Q. 73 Mr. Lakhan provides Continuous Supply of Services (CSS) to M/s. TNB

Limited.He furnishes the following further information:-

(a) Date of commencement of providing CSS-01-10-20XX

(b) Date of completion of providing CSS-31-01-20XY
(c) Date of receipt of payment by Mr. Lakhan-30-03-20XY.
Determine the time of issue of invoice as per provisions of CGST Act, 2017 in the
followingcircumstances: -
(i) If no due date for payment is agreed upon by both under the contract of CSS.
(ii) If payment is linked to the completion of service.
(iii) If M/s. TNB Limited has to make payment on 25-03-20XY as per the
contractbetween them.
Answer:
Legal Provision: -
As per section 31(5) of CGST Act, 2017, the time period within which tax invoice shall
beissued in case of continuous supply of services is as below:-
(a) If due date of payment is ascertainable from the contract: -
 Invoice shall be issued on or before due date of payment.
(b) If due date of payment is not ascertainable from the contract: -
 Invoice shall be issued before or at the time of receipt of payment by
supplierof services.
(c) If payment is linked to the completion of an event: -
 Invoice shall be issued on or before the date of completion of that event.

Discussion & Conclusion: -

In view of the aforesaid provisions, time of issue of invoice will be as follows in the
givendifferent circumstances:-

(i) In the given case, the invoice should be issued on or before 30.03.20XY which
is thedate of receipt of payment by Mr. Lakhan.
(ii) In the given case. Since payment is linked to the completion of service, the
invoiceshould be issued on or before 31.01.20XY which is the date of completion
of service.
(iii) If M/s. TNB Limited has to make payment on 25.03.20XY as per the contract
betweenthem, the invoice should be issued on or before 25.03.20XY.

Q. 74 MBM Caretakers, a registered person, provides the services of repair and

maintenance of electrical appliances. On April 1, it has entered into an annual
maintenance contract with P for its Air Conditioner and Washing Machine. As per
the terms of contract, maintenance services will be provided on the first day of each
quarter of the relevant financial year and payment for the same will also be due on

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the date on which service is rendered. During the year, it provided the services on
April 1, July 1, October 1, and January I in accordance with the terms of contract.
When should MBM Caretakers issue the invoice for the services rendered?
Answer: Legal Provision:-
 As per the definition of Continuous supply of service, it means supply of
service which is provided, or agreed to be provided continuously or on recurrent
basis, under a contract, for a period exceeding 3 months with the periodic
payment obligations.
 As per section 31(S) of CGST Act, 2017, If due date of payment is
ascertainable from the contract of continuous supply of services, invoice shall
be issued on or beforesuch due date of payment.

Discussion & Conclusion:-

 The given situation is a case of continuous supply of service as repair and
maintenanceservices have been provided by MBM Caretakers on a quarterly
basis, under a contract,for a period of one year with the obligation for quarterly
payment.
 Since in the given case, due date of payment is ascertainable from the contract,
invoiceshall be issued on or before the due date of payment
 Therefore, MBM Caretakers should issue quarterly invoices on or before
April 1, July 1, October 1, and January 1.
Q. 75 Shreya Ltd. had undertaken a contract for supplying manpower for 28 days
for
$28,000/-. However, after 10 days, the service has stopped. Should Shreya Ltd
raise aninvoice?
Answer:
 Yes.
 As per section 31(6) of the CGST Act, 2017, where a supply of service ceases
under acontract before its completion, the invoice shall be issued at the time the
supply ceases,i.e., on the 10th day.
 The invoice shall be issued to the extent of the service provided before its cessation
 Value of such invoice shall be determined in proportionate to supply made in 10
days i.e. 10,000.

Q. 76 Briefly discuss the following with reference to GST law:-

(i) Revised Tax Invoice
(ii) Bill of Supply OR (Under what circumstances, a registered person is
required toissue a "Bill of Supply"? [
(iii) Receipt Voucher
(iv) Payment Voucher
(v) Refund Voucher.
Answer:

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1 As per section 31(3)(a) of CGST Act, 2017 read with rule 53 of CGST Rules 2017, if
a registered person is granted registration with effect from a date earlier than the date
of issuance of registration certificate, then
 he may issue revised tax invoices for taxable supplies effected
 between effective date of registration & date of issue of registration
certificate.
 within 1 month from the date of issue of registration certificate.

2 As per section 31(3)(c) of CGST Act, 2017, a registered person is required to issue a
"bill of supply" instead of a tax invoice in prescribed manner containing prescribed
particulars in the following two circumstances:-
(a) In case of supplying exempted goods and/or services or
(b) In case of payment of tax under composition levy.

3 As per section 31(3)(d) of CGST Act, 2017, on receipt of advance payment for any
supply of goods and/or services, a registered person shall issue a receipt voucher or
any other document evidencing receipt of such payment & containing prescribed
particulars.

4 As per section 31(3)(g) of CGST Act, 2017, a registered person who is liable to pay
tax under section 9(3)/9(4) of CGST Act shall issue a payment voucher at the time of
making payment to the supplier.

5 As per section 31(3)(e) of CGST Act, 2017, if a registered person issues a Receipt
Voucher for advance payment received for supply of goods &/or services, but
subsequently: -
 No supply is made &
 No tax invoice is issued for the same,
then he may issue a Refund Voucher against such advance payment to the person
who had made the payment.

Q. 77 Luv & Kush Pvt. Ltd. of Srinagar, Jammu & Kashmir, engaged in the
supply ofgifts items provides you the following details: -
Sl. No Particulars Relevant dates
1 Commencement of the business of supplying goods 01.08.20XX
2 Turnover exceeds ₹10,00,000 on 15.08.20XX
3 Turnover exceeds ₹ 20,00,000 on 05.09.20XX
4 Application for registration made on 28.09.20XX
5 Registration certificate granted on 06.10.20XX
The company seeks your advice as to how it should raise revised tax invoices for
suppliesmade. Is there any specific provision for issuance of revised tax invoices to
unregistered customers? Explain.
(Assumption: Supplier is not exclusively engaged in supply of goods).

Answer: Legal Provision: -

 As per section 22(1) of CGST Act, 2017, a supplier is liable to register under GST
Act,if his aggregate turnover in a financial year for other than special category
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states of Manipur, Mizoram, Tripura & Nagaland exceeds 20 lakhs

 Where the application is submitted within 30 days from the date of becoming
liable toregistration, the effective date of registration is the date on which the
person becomes liable to registration, otherwise it is the date of grant of
registration.
 As per section 31(3)(a) of CGST Act, 2017 of CGST Rules, 2017, if a registered
personis granted registration with effect from a date earlier than the date of
issuance of registration certificate, then
- he may issue revised tax invoices for taxable supplies effected
- during the period between effective date of registration and date of issue of
registration certificate.
- within 1 month from the date of issue of registration certificate.

Discussion & Conclusion:-

 In the given case, the threshold limit applicable for registration is Rs. 20 Lakhs.
 Since Luv & Kush Pvt. Ltd. has made the application for registration within 30
daysof becoming liable for registration, the effective date of registration is the
date when itbecomes liable to registration i.e. 05.09.20XX.
 Only a registered person can collect tax & hence till the time of granting of
registration,no tax invoice could be issued to collect tax.
 It may issue revised tax invoices against the invoices already issued to collect
tax for supplies made between effective date of registration (05.09.20XX) & the
date of issuance of registration certificate (06.10.20XX), within 1 month from
06.10.20XX (i.e.on or before 06.11.20XX).
 It may issue a consolidated revised tax invoice for all taxable supplies made to
a unregistered recipient during such period.
 But, if the value of a supply does not exceed Rs. 250000 for inter-state supplies,
a consolidated revised tax invoice may be issued separately for all the
unregistered recipients located a state.

Q. 78 Jain & Sons is a trader dealing in stationery items. It is registered under

GST andhas undertaken following sales during the day:

Sr. Recipient of supply Amount (₹)

No.
1 Raghav Traders - a registered retail dealer 190
2 Dhruv Enterprises - an unregistered trader 358
3 Gaurav-a Painter [unregistered] 500
4 Oberoi Orphanage- an unregistered entity 188
5 Aaradhya - a Student [unregistered] 158
None of the recipients require a tax invoice [Raghav Traders being a composition
dealer].
Determine in respect of which of the above supplies, Jain & Sons may issue a
ConsolidatedTax Invoice instead of Tax Invoice at the end of the day?
Answer: Legal Provision:-

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 As per section 31(3)(b) of CGST Act, 2017 read with proviso to rule 45 of
CGSTRules, 2017, a registered person is not required to issue a tax invoice, if
- the value of supply of good &/or services is less than Rs. 200,
- the recipient is unregistered person &
- the recipient does not require tax invoice.
 Such person shall issue a consolidated tax invoice at the close of each day
for allsuch supplies.
Discussion: -
 In the given case, Jain & Sons can issue a Consolidated Tax Invoice only with
respectto supplies made to Oberoi Orphanage [worth 188] and Aaradhya
[worth 158] as:-
- the value of goods supplied to these recipients is less than 200,
- these recipients are unregistered persons and
- do not require a tax invoice.
 In case of Raghav Traders, although the value of goods supplied to it is less than
200, Raghav Traders is registered under GST & so, Consolidated Tax Invoice
cannot be issued.
 Consolidated Tax Invoice cannot be issued for supply of goods to Dhruv
Enterprises and Gaurav although both of them are unregistered because value of
goods supplied isnot less than ₹200.

Conclusion: -
Therefore, Jain & Sons may issue one Consolidated Tax Invoice instead of Tax Invoice
at theend of the day only in respect of supply of goods made to Oberoi Orphanage [worth
188] and Aaradhya [worth 158] together.
Q. 79 ABC Cinemas, a registered person engaged in making supply of services by
would of admission to exhibition of cinematograph films in multiplex screens was
issuing consolidated tax invoice for supplies at the close of each day in terms of
section 31(3)(b) of CGST Act, 2017 read with fourth proviso to rule 46 of CGST
Rules, 2017. During the month of October, 20XX, the Department raised objection
for this practice and asked toissue separate tax invoices for each ticket. Advise ABC
Cinemas for the procedure to be followed in the light of recent notification.
Answer:
The procedure to be followed by ABC Cinemas, a registered person engaged in making
supplyof services by way of admission to exhibition of cinematograph films in multiplex
screens, is as under:-
 The option to issue consolidated tax invoice is not available to a supplier engaged
in making supply of services by way of admission to exhibition of cinematograph
films inmultiplex screens.
 Thus, ABC Cinemas cannot issue consolidated tax invoice for supplies made
by it atthe close of each day.
 ABC Cinemas is required to issue an electronic ticket.
 The said electronic ticket shall be deemed to be a tax invoice, even if such ticket
doesnot contain the details of the recipient of service but contains the other
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information as prescribed to be mentioned.

Q. 80 How many copies of invoice are required:-

(i) In case of supply of Goods?
(ii) In case of supply of
Services?Answer:

1  In case of supply of goods, the invoice shall be prepared in triplicate.

 The original copy is for the recipient, the duplicate for the transporter and the
triplicate for the supplier.
 The copies should be marked as 'ORIGINAL FOR RECIPIENT,
DUPLICATE FOR TRANSPORTER' and 'TRIPLICATE FOR SUPPLIER',
as the case may duplicate.

2  In case of supply of services, the invoice shall be prepared in duplicate

 The original copy is for the recipient & the duplicate is for the supplier.
 The copies should be marked as 'ORIGINAL FOR RECIPIENT' &
'DUPLICATE FOR SUPPLIER', as the case may be.

Q. 81 Answer the following questions:-

(i) What is 'e-invoicing'?
(ii) What is the threshold limit for mandatory issuance of E-invoice for all registered
businesses? [CA Inter Dec 21 Exam]
(iii) To whom mandatory E-invoicing is applicable? & state the entities are exempt
from mandatory requirement of E-invoicing
(iv) Bali Limited, a registered taxpayer, provides security services to registered
persons from Mumbai office and Delhi office. The aggregate turnover of
Mumbai office and Delhi office in the preceding financial year is 30 crore and
25 crore respectively. For the month of November in the current financial year,
Bali Limited prepares duplicate invoices and does not issue e-invoice as it is of
the view that it's aggregate turnover does not cross the threshold limit to make it
liable for issuing e- invoices.
(a) Briefly explain whether the view taken by Bali Limited is correct in law?
(b) Also explain the advantages of e-invoicing, if any. [CA Inter RTP May 21]
(v) Speedy transport is a goods transport agency providing a service of goods
transport byair, having aggregate turnover calculated on all India basis of 700 Cr
in previous year 20XX-XY. It provides the GTA service to other registered GTA
only for fast delivery of their courier and does not provide any services to
unregistered person. The accountant of GTA agency is of view that there is no
need to prepare e-invoices as it falls under exception. You as a chartered
accountant are required to advice GTA regarding whether Speedy transport is
required to prepare E-invoice or not?

Answer:

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1 E-invoicing is reporting of business to business (B2B) invoices to GST system for

certain notified category of taxpayers

2 The threshold limit for mandatory issuance of e-invoice for all registered businessesis
₹10 Crores.

3 Mandatory e-invoicing is applicable to all notified registered businesses (except

specified class of persons) with an aggregate turnover exceeds 10 crore (based on PAN)
in any preceding financial year! from 2017-18 onwards.
The following entities are exempt from mandatory requirement of e-invoicing-
(a) A Government Department
(b) A Local Authority
(c) Special Economic Zone units
(d) Insurer or banking company or financial institution including NBFC
(e) GTAsupplying services in relation to transportation of goods by road in a goods
carriage
(f) Supplier of passenger transportation service
(g) Person supplying services by way of admission to exhibition of cinematograph
films in multiplex screens
Note: A taxpayer whose aggregate turnover in any preceding financial year from 2017-
18 onwards exceeds 10 Crore but is exempted from invoicing shall give a declaration
in the tox invoice that
- invoice is not required to be issued in the manner specified under rule 48(4),

4 The view taken by Bali Limited is not correct in law.

 All notified registered businesses (except specified class of persons) with an
aggregate turnover (based on PAN) in the preceding financial year greater than
₹10 crores, are required to issue e-invoices.
 Thus, the aggregate total turnover of Bali Limited is more than 7 10 crores
(considering both the GSTINs) and is required to issue e-invoices.
 Further, if e-invoicing is applicable, there is no need of issuing invoice copies
in triplicate/ duplicate
E-invoice has many advantages for businesses, which have been given as under: -
1. Auto-reporting of invoices into GST return & auto-generation of e-waybill
(wherever required)
Once B2B invoice data is reported in e-invoice form, the same is reported in
multiple forms(GSTR-1, e-way bill etc.)
2. Substantial reduction in transcription errors & Reconciliation:-

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This is because same data will get reported to tax department & to buyer to
prepare his inward supplies register. Buyer can reconcile with his Purchase
Order
3. Matching of ITC & output tax by Dept.:-
A complete trail of B2B invoices is available with Department which enables
the system-level matching of ITC & output tax thereby reducing the tax
evasion.
4. Eliminates fake invoices: -
Claiming fictitious ITC by raising fake invoices is one of the biggest challenges
currently faced by tax-authorities. The e-invoice system will help to curb the
actions of unscrupulous taxpayers & reduce the number of fraud cases as the
tax authorities will have access to data in real-time.
5. Other Advantages:-
- Facilitate standardisation & inter-operability,
- Reduction of disputes among transacting parties,
- Better relationship,
- Improve payment cycles,
- Eco-friendly as it eliminates paper,
- Internal controls,
- Reduction of processing costs &
- Improving overall business efficiency greatly
- Eco-friendly as it eliminates paper

5 Legal Provision:-
 As per Rule 48(4) of CGST Rules, 2017, E-Invoice is required to be prepared
by a registered person having aggregate turnover in any preceding financial
year from 2017-18 on words exceeding ₹10 Crore.
 Exception to generating E-Invoice:-
However, Goods Transport Agency (GTA) supplying services of transportation
of goods by road in a goods carriage is exempted from the requirement of
preparing E-Invoice.
Discussion & Conclusion:-
 In the present case, GTA is providing services by air.
 But the exemption from preparing E-Invoice is given to GTA only if it provides
goods transportation services by road and not by air.
 Since the aggregate turnover of GTA also exceeds ₹10 Crore in previous year
20XX-XY and it makes supplies to registered person only, the GTA is required
to prepare E-invoice.
Therefore, the view taken by accountant is not correct.

Q. 82 (a) Fashion Queen Ltd., registered under GST and dealing in baby products
has an aggregate turnover of 40 crore in the preceding financial year. The tax
consultant of Fashion Queen Ltd. advised it to issue e-invoices mandatorily.
However, Fashion Queen Ltd. is of the view that since its aggregate turnover is less
than the threshold limit applicable for e-invoicing, it is not required to issue e-
invoices. You are required to comment upon the validity of the advice given by tax
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consultant.
(b) Ministry of Communications and Information Technology, a Government
Department registered under GST has an aggregate turnover of 52 crore in the
preceding financial year. You are required to comment whether Ministry of
Communications and Information Technology is required to issue e- invoices in the
current financial year?

Answer: Legal Provision:

All registered businesses with an aggregate turnover (based on PAN) in any preceding
financialyear from 2017-18 onwards greater than 10 crore are required to issue e-
invoices in respect ofB2B supplies (supply of goods and/or services to a registered
person).
Further, following entities are exempt from the mandatory requirement of e- invoicing
i.e. notrequired to issue e-invoices even if their turnover exceeds 10 crore in the
preceding financial year from 2017-18 onwards:-
a) A Government Department

b) A Local Authority
c) Special Economic Zone units
d) Insurer or banking company or financial institution including NBFC

e) GTA supplying services in relation to transportation of goods by road in a goods carriage

f) Supplier of passenger transportation service

g) Person supplying services by way of admission to exhibition of cinematograph

films inmultiplex screens
Discussion & conclusion:
In view of the above mentioned provisions, the answer to the independent cases are as
under:-

(a)  The advice given by tax consultant of Fashion Queen Ltd. for issuance of e-
invoices mandatorily in the current financial year is valid in law

 The aggregate turnover of Fashion Queen Ltd. exceeds the threshold limit of
aggregate turnover applicable for e-invoicing & thus, it is mandatorily

required to issue e-invoices in respect of supplies made to registered persons.

(b) Department is specifically exempt from mandatory requirement of e-invoicing even if
the turnover exceeds 10 crore in the preceding financial year & thus, e- invoicing is
not applicable to Ministry of communication & Information technology

Note to point (b):

Government Department shall give a declaration in the tax invoice that Invoice is not
requiredto be issued in the manner specified under Rule 48(4) as it is exempted from E-

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invoicing

Q. 83 Briefly explain the requirement of Dynamic Quick Response (QR) code and list
out the non-applicability of requirement of Dynamic QR Code. or
Is Dynamic Quick Response (QR) Code applicable to suppliers who issue invoice
to unregistered persons? If no, list the suppliers to whom Dynamic QR Code is not
applicable.
Answer: Legal Provision:-
 All invoices issued to an unregistered person (B2C invoice) by a registered
person whose aggregate turnover in any preceding financial year from 2017-18
onwards exceeds 500 crores are required to have a Dynamic QR code.
 However, Dynamic QR code is not applicable to an invoice issued to an
unregistered person by following suppliers:-
(i) Insurer or banking company or financial institution including NBFC
(ii) GTA supplying services in relation to transportation of goods by road goods carriage
(iii) Supplier of passenger transportation service to exhibition of
(iv) Person supplying services by way of admission cinematograph films in multiplex
screens
(v) Supplier of online information and database access or retrieval (OIDAR) services
(vi) Registered person whose aggregate turnover in all the preceding financial years
from2017-18 onwards does not exceed 500 crores..

Q. 84 Chidanand Products Pvt. Ltd. is a registered supplier who has opted for
composition levy in the current financial year. He wishes to know whether the issue
of a bill of supply can be dispensed with under any circumstances. You are required
to advisehim. or
Can a consolidated bill of supply be issued on a periodic

basis?Answer:-
Yes. Chidanand Products Pvt. Ltd. (supplier) may not issue a bill of supply if the value
of thegoods or services or both supplied is less than 200 subject to the condition that:
(a) the recipient is not a registered person; and

(b) the recipient does not require such bill of supply,

and he shall issue a consolidated bill of supply for such supplies at the close of each
day inrespect of all such supplies.

Q. 85 Udai Singh, a registered supplier, has received advance payment with

respect to services to be supplied to Sujamal. His accountant asked him to issue the
receipt voucher with respect to such services to be supplied. However, he is
apprehensive as to what wouldhappen in case a receipt voucher is issued, but
subsequently no services are supplied. You are required to advise Udai Singh
regarding the same.

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Answer: Legal Provision:-

As per section 31(3)(d) of CGST Act, 2017, on receipt of advance payment for any
supply of goods and/or services, a registered person shall issue a receipt voucher or any
other documentevidencing receipt of such payment & containing prescribed particulars.
As per section 31(3)(e) of CGST Act, 2017, if a registered person issues a Receipt
Voucher for advance payment received for supply of goods &/or services, but
subsequently:-

- No supply is made &

- No tax invoice is issued for the same,
then he may issue a Refund Voucher against such advance payment to the person who
had made the payment.

Discussion & Conclusion:-

 Udai Singh is required to issue a receipt voucher at the time of receipt of advance
payment with respect to services to be supplied to Sujamal.
 In the given case, subsequently no services are supplied by Udai Singh, and no
tax invoice is issued in pursuance thereof, Udai Singh may issue a refund
voucher againstsuch payment to Sujamal.

Q. 86 ABC Ltd., is a contractor executing works contract service, situated in Tamil

Nadu.It entered into an agreement with XYZ Ltd. (another registered person in
Tamil Nadu) to provide works contract services in various States in South India.
The precise location details were to be shared later. In this regard, ABC Ltd.
received an advance of 1 Crore (including GST). You are to advise ABC Ltd.
whether:
(A) ABC Ltd. is liable to pay GST on such advance amount.

(B) Whether the tax liability is to be paid as CGST + SGST or IGST

(C) What would be the tax rate at which such tax liability is to be
paid?
Answer:-
(a) Supply includes inter alia all forms of supply made or agreed to be made. Thus,
advance payment for a supply agreed to be made is liable to tax. In case of services, the
time of supplyis issue of invoice or receipt of payment, whichever is earlier. Therefore,
in the given case, ABC Ltd. will be required to pay tax on advance of I crore at the time
of receipt of advance.
(b) Where at the time of receipt of advance, nature of supply is not determinable, the
same is treated as inter-State supply and thus, IGST is charged thereon.
(c) Where at the time of receipt of advance, rate of tax is not determinable, tax is paid at
the rate of 18%.

Q. 87 Bhoj Raj, a registered person, has availed GTA services on which he is

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liable to pay tax under reverse charge. He wishes to know whether he is required
to issue an invoice. Please advise him discussing the relevant provisions under
CGST Act and rules thereunder.

Answer:
Legal Provision:-

 The Recipient is liable to pay tax on reverse charge basis if he receives supply of
suchgoods &/or services which are notified under section 9(3) & 9(4) of CGST
Act, 2017.
 As per section 31(3)(f), when a registered person receives supply of goods &/or
services which are liable to tax on reverse charge basis from an unregistered
person, then Invoiceis to be issued by recipient on the date of receipt of goods
&/or services.
 Thus, a recipient who is liable to pay tax as per section 9(3) has to issue invoice
only when supplies have been received from an unregistered supplier.
 As per section 31(3)(g), a registered person who is liable to pay tax under section
9(3)/9(4) of CGST Act shall issue a payment voucher at the time of making
payment tothe supplier.
Clarification:-
Bhoj Raj (a registered person) has availed services of GTA (unregistered person) on
which heis liable to pay tax under reverse charge u/s 9(3). He is required to issue an
invoice for GTA services availed by him & issue a payment voucher at time of making
payment to GTA.

Q. 88 Are there any relaxations available for Banking Companies or Financial

Institutions including NBFC & an Insurer?
Answer:
Yes. The following are the relaxations available for Banking Companies or Financial
Institutions including NBFC & an Insurer:-

As per section 31 of CGST Act, 2017 read with rule 54 of CGST Rules, 2017, In case of
supplymade by these persons, the tax invoice shall include any document in lieu thereof.

Such document shall be treated as complete if it contains other information as per Rule
46 ofCGST Rules, even in the following cases:-
The invoice is not serially numbered;

The invoice does not contain the address of the recipient of taxable
service. Such document may be issued /made available physically or
electronically.

Supplier may issue a consolidated tax invoice or any other document in lieu thereof for
supplyof services made during a month at the month end.

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Also, they may issue an invoice within 45 days from the date of supply of service (as
against30 days in any other case as per section 31(2)).

Q. 89 Should suppliers of Passenger Transportation Service issue an invoice inadditionto

issue of tickets?
Answer:
As per Rule 54 of CGST Rules, 2017, in case of suppliers of Passenger Transportation
Service,a tax invoice will include a 'ticket' in any form and name.
The invoice would be treated as complete if it contains other information as per Rule 46
of theCGST Rules except the following:-

 Serial number
 Address of the recipient of taxable service
However, the signature or digital signature of the supplier or his authorised representative
shallnot be required in the case of issuance of ticket as per Information technology act,
2000

Thus, suppliers of Passenger Transportation Service shall not issue an invoice in

addition toissue of tickets.

Q. 90 Answer the following questions:-

i) What are the tax implications on issue of a Credit Note?
ii) Mention the requirements for claiming a reduction in output tax liability by
issuingCredit Note.
Answer:
(1) As per section 34 of CGST Act, 2017, on issue of a Credit Note under GST, there is
a reduction in output tax liability (subject to doctrine of unjust enrichment).

(ii) The below requirements must be met for claiming a reduction in output tax liability
by issuing Credit Note under section 34 of CGST Act, 2017:-

a) It can be proven that the incidence of tax and interest have not been passed on to
any person.
b) The details of the credit note are declared within the prescribed timelines.

C) The recipient of the supply should accept credit note in his return of inward supply
and reduce his claim of input tax credit to the extent of reduction in tax liability.

Q. 91 Kidzee Toys Ltd., a wholesaler of toys registered in Chandigarh, is

renowned in the local market for the variety of toys and their reasonable prices.
Kidzee Toys Ltd. makes supply of 100 pieces of baby's learning laptops and chat
learning phones to NancyGeneral Store on 25th September by issuing a tax invoice
amounting to 1,00,000. However, the said toys were returned by Nancy General
Store on 30th September. Discusswhich document Kidzee Toys Ltd. is required to
issue in such a case?

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Answer:
 Kidzee Ltd. is required to issue a credit note in given case.
 As per section 34(1) of CGST Act, 2017, where one or more tax invoices have
been issued for supply of any goods &/or services & the goods supplied are
returned by therecipient, then the registered person who supplied such goods or
services or both, mayissue to the recipient one or more credit notes for supplies
made in a financial year containing prescribed particulars.
 Therefore, Kidzee Ltd. is required to issue a credit note to Nancy General Store
for thegoods returned.

Q. 92 Rana Sanga Ltd., a registered supplier has made following taxable suppliesto
its customer Babur in the quarter ending 30th June:-

Date Bill No. Particulars Invoice value

(Including GST
(Rs.)
5th April 102 Notebooks [10 in numbers] 1,200
10th May 197 Chart Paper [4 in number] 600
20th May 230 Crayon colours [2 packets] 500
2nd June 254 Poster colours [5 packets] 900
22nd June 304 Pencil box [4 sets] 700

Goods in respect of bill no. 102, 230 and 254 have been returned by Babur. You are
required to advise Rana Sanga Ltd. whether it can issue a consolidated credit note
againstall the three invoices?
Answer: Legal Provision:-
As per section 34(1) of CGST Act, 2017, where one or more tax invoices have been
issued forsupply of any goods and/or services and
a) the taxable value or tax charged in that tax invoice is found to exceed the taxable
value or tax payable in respect of such supply, or
b) where the goods supplied are returned by the recipient, or
c) where goods and/or services supplied are found to be deficient, then the registered
person, who has supplied such goods and/or services, may issue to the recipient one or
more credit notes for supplies made in a financial year containing prescribed particulars.

Discussion & Conclusion:-

 Thus, one (consolidated) or more credit notes can be issued in respect of
multipleinvoices issued in a financial year without linking the same to individual
invoices.
 Hence, in view of the above-mentioned provisions, Rana Sanga Ltd. can
issue aconsolidated credit note for the goods returned in respect of all the three
invoices.

Q. 93 Answer the following questions:-

1) What are the circumstances under which "Debit Notes" needs to be issued by a

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taxableperson?
ii) Is it correct to state that, Debit Note can be issued only for increasing tax liability
by the supplier?
Answer:

(i) As per section 34 of CGST Act, 2017, the circumstances under which debit
note needs to be issued by a taxable person are:-
a) The taxable value declared in the invoice is less than the actual value of
the supply;
b) The tax charged in the invoice is less than the actual tax payable in respect
of the supply;
c) The quantity received by the recipient is more than what has been declared
in the tax invoice and the customer choses to retain the same.

(ii) Yes, Debit Note can be issued only for increasing tax liability by the supplier.
 Debit note' are akin to 'supplementary invoice'.
 They are issued by the supplier for recording increase in taxable
value or tax charged in the supply under section 34 of CGST Act,
2017.

Q. 94 Kartik & Co., a registered supplier under GST, provides the following
informationregarding various tax invoices issued by it during the month of March:-

(i) Value of supply charged in invoice no. I was 2,50,000 against the actual taxable
valueof 2,30,000.
(ii) Tax charged in invoice no. 4 was 32,000 against the actual tax liability of * 68,000
dueto wrong HSN code being chosen while issuing invoice.

(iii) Value charged in invoice no. 8 was * 3,20,000 as against the actual value of
4,20,000 due to wrong quantity considered while billing.
Kartik & Co. asks you to answer the following:-
1) Who shall issue a debit/credit note under CGST Act?
2) Whether debit note or credit note has to be issued in each of the above
circumstances?
3) What is the maximum time-limit available for declaring the credit note in the
GST Return?
Answer:
1) The debit/credit note shall be issued by the registered person who has supplied the
goods and/or services, i.e. Kartik & Co.
2) Yes, debit/credit note need to be issued in each of the circumstances as under:-

i) A credit note is required to be issued as the taxable value in invoice no. I exceeds
theactual taxable value.

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ii) A debit note is required to be issued as the tax charged in the invoice no. 4 is less
than theactual tax payable.

iii) A debit note is required to be issued as the value of supply charged in the invoice
no. 8is less than the actual value.
3) The details of the credit note cannot be declared later than:- 30th November following
the end of the financial year in which such supply was made or the date of furnishing of
the relevantannual return, whichever is earlier.

Q. 95 Explain the provisions relating to the transactions where tax invoice is not
requiredto be issued under the CGST Act, 2017.
Answer:
As per section 31(3)(b) of CGST Act, 2017 read with proviso to Rule 46 of CGST Rules,
2017,the tax invoice is not required to be issued under the CGST Act, 2017 in the case
of supply ofgoods and/or services of:-

 value less than 200

 to an unregistered recipient
 who does not require such invoice.
Further, as per Rule SS of CGST Rules, 2017, the tax invoice is also not require to be
issued under the CGST Act, 2017 in the case of:-
a) supply of liquid gas where the quantity at the time of removal from the place of
business ofthe supplier is not known,
b) transportation of goods for job work,
c) transportation of goods for reasons other than by way of supply, or

d) such other supplies as may be notified by the Board.

Q. 96 Determine with reason whether the following statements are true or false:-

(1) A registered person shall issue separate invoices for taxable and exempted goods
whensupplying both taxable as well as exempted goods to an unregistered person.
(ii) A Non-banking financial company can issue a consolidated tax invoice at the
end of every month for the supply made during that month.
Answer:
(i) The given statement is false.
- Where a registered person is supplying taxable as well as exempted goods or
services or both to an unregistered person, a single "invoice-cum-bill of supply"
may be issuedfor all such supplies.

(ii) The said statement is true.

- A non-banking financial company is allowed to issue a consolidated tax invoice
or anyother document in lieu thereof for the supply of services made during a
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month at the end of the month.

Q. 97 Royal Fashions, a registered supplier of designer outfits in Delhi, decides to

exhibitits products in a Fashion Show being organised at Hotel Park Royal, Delhi
on 4th January, 20XX. For the occasion, it gets the makeover of its models done by
Aura BeautyServices Ltd., Ashok Vihar, for which a consideration is ₹ 5,00,000
(excluding GST) has been charged. Aura Beauty Services Ltd. issued a duly signed
tax invoice on 10th February, 20XX showing the lumpsum amount of * 5,90,000
inclusive ofCGST and SGST @ 9% each. Royal Fashions made the payment the
very next day. Answer the following questions:-
(i) Examine whether the tax invoice has been issued within the time limit prescribed
underlaw? Also, what would be time of supply under this case as per sec 13?
(ii) Tax consultant of Royal Fashions objected to the invoice raised suggesting that
the amount of tax charged in respect of the taxable supply should be shown
separately in the invoice raised by Aura Beauty Services Ltd. However, Aura
Beauty Services Ltd. contended that there is no mandatory requirement of showing
tax component separatelyin the invoice. You are required to examine the validity
of the objection raised by tax consultant of Royal Fashions?
OR
Since some customers may not bear the taxes if shown separately, can a single
consolidated price inclusive of all taxes be shown along with such a declaration?
Answer:

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(i) Legal Provision:-

As per section 31(2) of CGST Act, 2017, a registered person [other than an insurer/
banking company/ financial institution, including an NBFC] supplying taxable
services shall issue a tax invoice before or after the provision of service, but within a
period of 30 days from the date of supply of service.
As per section 13(2)(b) of CGST Act, 2017, if invoice is not issued within the time
prescribed u/s 31 for supply of services, then the time of supply of such services shall
be earlier of:-
 the date of provision of service or
 the date of receipt of payment.

Discussion & Conclusion:-

 In the present case, the tax invoice should have been issued in the prescribed
time limit of 30 days from the date of supply of service i.e. upto 03.02.20XX.

 However, the invoice has been issued beyond the time limit for it's issue on
10.02.20XX.

 In such a case, the time of supply as per section 13 of the CGST Act, 2017
would be 04.01.20XX i.e. earlier of the following:-

a) Date of provision of service (04.01.20XX) or

b) Date of receipt of payment (11.02.20XX)

(ii) Legal Provision:-

 As per section 33 of CGST Act, 2017, every person who is liable to pay tax for
supply which is made for a consideration shall prominently indicate
the tax amount which shall form part of price for such supply.

 Further, the invoice rules i.e. Rule 46 of CGST Rules, 2017 also have a separate
mandatorily field for the amount of tax and the rate of tax applicable for the
supply.

 for each of the Central Tax, State Tax, Integrated Tax, Union Territory Tax or Cess.

 Therefore, mentioning a consolidated amount without showing the tax

separately will not be valid.

Discussion & Conclusion:-

 In the present case, the tax amount has not been shown separately in the
invoice.

 Therefore, the objection raised by the tax consultant of Royal Fashions

suggesting that the amount of tax charged in respect of the taxable supply
should be shown separately in the invoice raised by Aura Beauty Services Ltd.
is valid in law.

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04. E-Way Bill

Q. 98 Explain the purpose of E-way bill in GST?
Answer: -
E-way bill is an electronic mechanism to ensure the following: -
a) There is hassle free movement of goods throughout the country
b) To act as an effective tool to track movement of goods.
c) To check tax evasion in the Country.
d) Physical interface to pave way for digital interface resulting in elimination of state
boundary check-posts.
Q. 99 When & who is required to generate an e-way bill?
Answer: -
1) Consignment value exceeding Rs 50000: - As per Rule 138(1), Every registered person who
causes movement of goods of consignment value exceeding Rs 50000
-in relation to a supply or
-For reasons other than supply or
-due to inward supply from an unregistered person shall furnish the information relating to thesaid
goods in Part A of Farm GST
EWB-01 before commencement of such movement
11) ECO or Courier agency: - A registered person liable to generate e-way bill can authorize
the transporter, ECO or courier agency to furnish details in Port A of e- way bill (Form
GSTEWB-01)
111) Voluntary generation of e-way bill: - A registered person or the transporter may
voluntarily generate an e-way bill even if consignment value is <= Rs. 50,000.

Q. 100 How to compute consignment value for the purpose of generation of e-way bill?
Answer: As per explanation to rule 138(1) of CGST Rules, the consignment value of goods
shall be: -
 the value as per section IS as declared in an invoice or a bill of supply or a delivery
challan which issued in respect of the said consignment.
 It also includes the central tax, State or Union territory tax, integrated tax and cess
charged, if any, in the document &
 It shall exclude the value of exempt supply of goods where the invoice is issued inrespect
of both exempt and taxable supply of goods.
Yash & Co., a manufacturer and supplier of plastic goods, is registered under GST in the state
of Maharashtra. Yash & Co. sold plastic goods to a retail seller in Punjab, at a value of 43,000
(excluding GST leviable @ 18%). Now, it wants to send the consignment of such plastic goods
to the retail seller in Punjab.
You are required to examine and advise Yash & Co., whether e-way bill is mandatorily required
to be generated in respect of such movement of goods under GST laws?
1) Mr. X, a registered dealer under GST, wants to transfer certain stock of goods from his
factory located in Kolkata (MH) to the location of buyer Mr. S at Nagpur (MH). For this, he
has raised an invoice as under-
S. No. Item Value GST Rate GST Amount Total
1 A 40,000 12% 4,800 44,800
2 B 25,000 Nil (Exempt) - 25,000

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69,000

Q. 101 Determine Whether E-way bill is required to be issued as per Rule 138 of CGST
Rules?
Answer: -
Legal Provision-
 As per Rule 138(1) of CGST Rules, a registered person is mandatorily required to
generate e-way bill if he causes movement of goods of consignment value exceeding
Rs 50000 in relation to a supply.
 The consignment value shall be the value as per section 15 as declared in an invoice
including CGST, SGST, UTGST, IGST and cess charged, if any, in the document but
it excludes the value of exempt supply of goods where the invoice is issued in respect
of both exempt and taxable supply of goods.
Discussion & Conclusion: -
1)  In given case, the consignment value of goods will be ₹50,740 [i.e., 43,000+
(43,000 ×18%)].
 Since the movement of goods is in relation to supply of goods and the
consignment value exceeds 50,000, the e-way bill is mandatorily required to be
generated for movement of goods from Maharashtra to Punjab.
2)  In the given case, the consignment value is Rs 44800 (i.e., Rs 40,000+ Rs 4800).
 Here, Rs 25,000 will not be included as it is an exempt supply
 Thus, E-way bill is not required to be issued as the consignment value is not
exceeding Rs 50000.

Q. 102 "It is mandatory to furnish the details of conveyance in Part-B of E-way Bill."
Comment on the validity of the above statement with reference to provisions of E-Way
Bill under CGST Rules, 2017.
Answer: -
 The given statement is partially valid.
 Generally, e-way bill is valid for movement of goods by road only when the information
is furnished in Port-B of the same which includes details of Conveyance.
 However, the details of conveyance may not be furnished in Part-B of e-way bill, if the
goods are transported for a distance up to 50 km within the State or Union territory: -
a) from the place of business of the consignor to the place of business of transporter for
further transportation or
b) from the place of the transporter finally to the place of business of the consignee

Q. 103 Explain the provisions relating to generation of E-way bill in case of

Transshipment.
Answer: -
 Goods may be transferred from original conveyance to another due to unforeseen
exigencies like break down of vehicle or sometimes consignments are transported by
transporter through transshipment using multiple vehicles.
 Before such transfer & further movement of goods, details of conveyance in Port-B
of E-way Bill shall be updated by the consignor or recipient who provided information
in Part A, or transporter.
 User can update Part-B (Vehicle details) any number of times to move goods to
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destination within validity period of E-way Bill.

 If one e-way bill goes through multiple modes of transportation before reaching
destination, the EWB can be updated with new mode of transportation by using option
of 'Update Vehicle Number.

Q. 104 Mr. Shah, a consignor, is required to move goods from Ahmedabad (Gujarat) to
Nadiad (Gujarat). He appoints Mehta Transporter for movement of goods. Mehta
Transporter moves the goods from Ahmedabad (Gujarat) to Kheda (Gujarat). For
completing the movement of goods from Kheda (Gujarat) to Nadiad (Gujarat), Mehta
Transporter now hands over the goods to Parikh Transporter. Explain the procedure
regarding e-way bill to be followed by consignor and transporter as per provisions of GST
law and rules made thereunder.
Answer: -
Legal Provision: -
 Before such transfer and further movement of goods, the following persons shall
update the details of conveyance in Port-B of E-way Bill:-
-the consigner or the recipient, who has provided information in Part A, or
-the transporter.
 Further, the consignor or the recipient, who has furnished the information in Port A, or
the transporter, may assign the e-way bill number to another registered or enrolled
transporter for updating the information in Part B for further movement of the
consignment.
 But, Once the transporter updates details of conveyance in Part B, then
consignor/recipient shall not be allowed to assign the e way bill number to another
transporter.
Discussion & Conclusion: -
 In given case, only one e-way bill is required to be issued.
 Part A of e-way bill can be filled by either Mr. Shah or recipient of goods or Mehta
Transporter on the appropriate authorization.
 Thus, on reaching Kheda, Mr. Shah or the recipient of the goods who has filled Part A
of e-way bill, or Mehta Transporter con, before the transfer and further movement of
goods, update the details of conveyance in Part B of e-way bill.
 Further, on reaching Kheda, Mr. Shah or recipient of goods, or Mehta Transporter can
assign the said e-way bill to Parikh Transporter who will thereafter update details of
conveyance in Part B.
 Once the details of conveyance are updated by Parikh transporter in Part B, Mr. Shah
or recipient shall not be allowed to assign e-way bill number to another transporter.

Q. 105 Answer the following questions -

1) Examine the correctness of statements:
a) Once generated, on e-way bill cannot be cancelled.
b) E-way bill generated in one State is valid in another State.
2) "One consolidated e-way bill can be generated for multiple invoices". Comment on the
validity of the above statement with reference to GST law.
3) What do you mean by Acceptance/rejection of e-way bill.
Answer: -

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1) a) The said statement is partially correct.

 As per Rule 138(9) of CGST Rules, e-way bill may be cancelled electronically
on common portal within 24 hrs. of its generation, if after generation of e-way
bill,
- Goods are not transported at all or
- Goods are not transported as per the details furnished in E-way bill
 However, E-way bill cannot be cancelled, if it has been verified in transit as
per Rule 138 B.
b) The said statement is correct.
 E-way bill generated under goods and services Tax Rules of anu state or Union
territory shall be valid in every state and Union territory.

2)  The said statement is invalid

 Multiple invoices cannot be clubbed to generate one e-way bill
 If multiple invoices are issued by the supplier to recipient, for movement of
such goods, multiple e-way bills have to be generated.
 Thus, for each invoice, one e-way bill has to be generated, irrespective if the
fact whether same or different consignors or consignee are involved.
 However, after generating all these e-way bills one consolidated e-way bill can
prepared for transportation purpose, if goods are going in one vehicle.

3) Acceptance/ rejection of e-way bill: -

 As per Rule 138(11) of CGST Rules, the details of e-way bill generated shall
be made available on common portal to: -
- Supplier (if registered)- if information in Part A is furnished by
recipient/transporter or \
- Recipient (if registered) - if information in part A is furnished by supplier/
transporter
 Supplier/recipient shall communicate his acceptance or rejection of
consignment covered by e-way bill.
 As per Rule 138 (12) of CGST Rules, information in part A shall be deemed to
be accepted, if such supplier/ recipient does not
- 72 hours of details being made available to him on common portal or
- Time of delivery of goods.

Q. 106 1) Explain the validity of E-way bill in brief.

2) Agni Ltd., a registered supplier, whishes to transport cargo by road between
two cities situated at a distance of 368 kilometres. Calculate the validity period of
e-way bill under rule 138(10) pf CGST Rules, 2017 for transport of the said cargo,
if it is over dimensional cargo or otherwise. (CA Inter Jan 21 Exam)
3) A consignor hands over his goods for transportation on Friday to the
transporter. However, assigned transporter starts the movement of goods from
consignor’s warehouse to its depot located at distance of 600 km. on Monday.
When will the e-way bill be generated and for how many days it will be valid?
Answer: -

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 As per rule 138(10) of CGST Rules, e-way bill shall be valid for a period as given
below from the relevant date, in accordance with the distance covered: -
Type of Cargo Distance Validity
Cargo other than Over Up to 200 Km 1 day
Dimensional Cargo or Multimodal For every 200 Km 1 day
shipment in which at least one leg or part thereof Additional
involves transport by ship thereafter
Over Dimensional Cargo or Up to 20 km 1 day
multimodal shipment in which at For every 20 km 1 day
least one leg involves transport by or part thereof Additional
ship thereafter
 Relevant Date: - It is the date on which e-way bill has been generated.
 Validity period: - The period of validity shall be counted from the time at which
the e-way bill has been generated and each day shall be counted as the period
expiring at midnight of the day immediately following the date of generation of e-
way bill
 Extension of validity of E-way bill: - Once the validity of E-way bill expires, the
goods are not supposed to be moved. Generally, the validity of e-way bill cannot
be extended.
Exception: -
- Commissioner may extend validity for goods notified on
recommendations of Council.
- Transporter mayextend validity within 8 hours form the time of its expiry
in exceptional circumstances, if consignment is not reached to the
destination, after updating the details in Part B (if required)
2) Legal Provision: -
& As per rule 138 (10) of CGST Rules, 2017, the validity period of e-way bill is as under:
3) (a) If it is over dimensional cargo: -
The validity period of e-way bill is 1 day from relevant date up to 20 km and I
additional day for every 20 km or part thereof thereafter.
(b) If it is a cargo other than over dimensional cargo: -]
The validity period of e-way bill is 1 day from relevant date up to 200 km and I
additional day for every 200 km or part thereof thereafter.

Discussion & conclusion: -

2) In given case, the validity period of e-way bill for transport of cargo by road between
two cities situated at a distance of 368 kilometres is as under: -
(a) If it is over dimensional cargo: -
Validity period = 1 day + 18 days i.e., 19 days

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(b) If it is a cargo other than over dimensional cargo: -

Validity period = 1day + 1 day i.e., 2 days

3)  E-way bill will be generated before commencement of movement of goods by

transporter on Monday
 Thus, the validity period in the given case, in 3 days
 It is assumed that goods transported are not ever dimensional cargo.

Q.107 Mention any eight cases where e-way bill is not required to be
generated?Answer: - As per Rule 138(14) of CGST Rules, e-way bill is not
required to be generated, if:-
1) Goods are being transported by a non-motorised conveyance.
2) Goods (other than de-ailed cake] transported are exempt from tax.
3) Goods transported are alcoholic liquer for human consumption, petroleum crude,
highspeed diesel, motor spirit (petrol), natural gas or aviation turbine fuel.
4) Supply of goods transported is not treated as supply under Schedule III of CGST
Act.
5) Goods transported are transit cargo from or to Nepal or Bhutan.
6) Any movement of goods caused by defence formation under Ministry of defence
as aconsignor or consignee.
7) Central Government, any State Government or Local Authority is the consignor
ofgoods for transport of goods by rail.
8) Transportation is of empty cargo containers.

Q. 108 What are the documents required to be carried by a person-in-charge of

conveyance? OR
What are the other document needs to be provided to the transporter in addition to
E-Way Bill for movement of goods?
Answer:
 As per rule 138A of CGST Rules, the documents required to be carried by a
person- in-charge of a conveyance are as under: -
(a) Invoice or bill of supply or delivery challan, as the case may be, &
(b) a copy of the e-way bill in physical
form or e-way bill number in
electronic form or
e-way bill number mapped to Radio Frequency Identification Device (RFID)
embedded on to the conveyance.
 Clause b) is not applicable in case of movement of goods by rail or by air or by
vessel.
 For imported goods, the person in charge of conveyance shall also carry a copy
of bill of entry filed by importer & shall indicate the number and date of the bill
of entry in Part A of E-way bill.
Q. 109 Mr. Shambhu, a trader registered under GST in Delhi, is engaged in
wholesale business of toys for kids. Mr. Nandi registered under GST in Patiala, a

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regular return filer supplies toys in bulk to Mr. Shambhu for selling to end
consumers. Mr. Shambhu paying taxin regularscheme in Delhi, has not filed GSTR-
3B for last 2 months. Mr. Nandiwants to generate e-way bill for toys amounting to
5,00,000 to be supplied to Mr. Shambhu. Also, Mr. Narayan from Jammu
approached Mr. Shambhu for purchasing

toys amounting to 75,000 for the purpose of return gift on his son's first birthday
party. Shambhu wants to generate an e-way bill in respect of an outward supply of
goods to Mr.Narayan. Examine with reference to the provisions under GST law,
whether Mr. Nandi and Mr. Shambhu can generate e-way bill?
Answer
Legal Provision: -
 As per Rule 138E of CGST Rules, 2017, a taxpayer (consignor or consignee)
shall be disabled from generating the e-way bill, if the GSTIN is not eligible for
e-way bill generation.
 Under this rule, GSTIN is blocked only for the defaulting supplier for e-way bill
generation and not for the defaulting Recipient or Transporter.
 A person paying tax under regular scheme who has not furnished the returns for
a consecutive period of two tax periods is considered as a defaulting person.
 The suspended GSTIN cannot generate e-way bill as a supplier. However, it can
get e-way bill generated as recipient or as transporter.
 In other words, e-way bill generation facility is blocked only for any outward
movementof goods of registered person & not for his inward supplies.
Discussion & Conclusion: -
 In the given case, there will be no restriction in generating e-way bill by Mr.
Nandi as Mr. Nandi who is making outward movement of goods is a regular
return filer.
 But, E-way bill generation is blocked for movement of goods by Mr. Shambhu
to Mr. Narayan as it is an outward movement of goods of Mr. Shambhu who has
not filed GSTR-3B for past 2 months.

Q. 110 Write a short note on Invoice Reference Number (IRN) in lieu of tax
invoice.Answer: -
 The e-invoice issued under rule 48(4) of CGST Rules have an embedded Invoice
Reference Number (IRN) in the Quick Reference (QR) code.
 It can be produced electronically for verification by proper officer in lieu of
physical copy of such tax invoice.
 The registered person will not have to upload information in Part A of e-way bill
to generate it as the same shall be auto-populated by common portal based on
informationfurnished.
IRN eases the process of documentation to a great level and reduces the burden.

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05. Registration
Q. 111 What is the advantage of taking registration in GST?

Answer:
Registration under Goods and Service Tax (GST) regime will confer following advantages tothe
business :-
 The person is legally recognized as supplier of goods or services.
 There is proper accounting of taxes paid on the input goods or services which con be
utilized for payment of GST due on supply of goods or services or both by the business.
 Person is legally authorized to collect tax from his purchasers and pass on the credit of
the taxes paid on the goods or services supplied to purchasers or recipients.
 The person becomes eligible to avail various other benefits & privileges under the GSTlows.

Q. 112 What is "Aggregate Turnover" under the GST Law?

Answer:
As per section 2(6) of CGST Act, 2017, "Aggregate Turnover" :-
Includes Excludes
Value of all outward supplies of goods &/or services in following CGST/ SGST/
4 categories:- UTGST/IGST/
- Taxable supplies Compensation Cess
- Exempt supplies (wholly exempt, nil rated & Non-
taxable)
- Exports
- Inter-State supplies
For persons having same PAN, aggregate turnover is to be Value of inward
computed on all India basis. supplies on which tax is
payable by a person
under reverse charge.

Q. 113 Happy Trader, a sole proprietorship firm, started a business of dealing in supply
of both exempted as well as taxable goods in Assam. Happy Trader has furnished the
following details relating to the sales made for the month of April, 20XX. All amounts are
exclusive of GST.
Sr. No. Particulars RS
1 Intra-State sale of goods chargeable with GST@ 12% 15,00,000
2 Intra-State sale of non-taxable goods 5,00,000
3 Intra-State sale of alcoholic liquor for human consumption 2,00,000
Intra-State sale of Tobacco 3,00,000
With reference to the above and provisions of CGST Act, 2017,
(i) Compute the aggregate turnover.
(ii) Examine whether Happy Trader is liable to be registered under the Act, with reasons
for the same.
(iii) What is the threshold limit for taking registration in this case?
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Answer:- Legal Provision:-

 As per section 2(6) of CGST Act, 2017, "aggregate turnover"
means the aggregate value of all:-
 taxable supplies,
 exempt supplies (wholly exempt, nil rated & Non-taxable)
 exports &
 inter-State supplies of persons having the same Permanent Account Number, to be
computed on all India basis
but excludes:-
 central tax, State tax, Union territory tax, integrated tax and cess &
 the value of inward supplies on which tax is payable by a person on reverse charge basis
 As per section 22(1) read with proviso to section 22(1) of the CGST Act, 2017, Every person
engaged in making a taxable supply is required to obtain registration if hisaggregate
turnover exceeds the threshold limit in a financial year.
 The threshold limit for a person making exclusive intra-state supplies of goods is as under-
 ₹ 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland
 ₹ 20 lakh for the States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,
Telangana and Uttarakhand.
 ₹ 40 lakh for rest of India.
 However, the higher threshold limit of 40 lakh is not available to persons engaged in
making supplies of Tobacco and manufactured tobacco substitutes & other notified goods.
Discussion & Conclusion :-
Particulars Amount in RS
Intra-State sale of goods chargeable with GS GST @ 12% [Aggregate 15,00,000
turnover includes value of all outward taxable supplies.]
Intra-State sale of non-taxable goods [Non-taxable supply, being an 5,00,000
exempt supply is included in aggregate turnover ]
Intra-State sale of alcoholic liquor for human consumption [Sale of 2,00,000
alcoholic liquor for human consumption, being a non- taxable supply, is
an exempt supply and is therefore, included in aggregate turnover.]
Intra-State sale of tobacco 3,00,000
[Aggregate turnover includes value of all outward taxable supplies.]
Aggregate turnover 25,00,000
(ii) & (iii)
 In view of the same, the applicable threshold limit of registration for Happy Traders is ₹
20 lakh the person is supplying tobacco and thus, is ineligible for higher threshold.
 Thus, it is liable to be registered under the CGST Act as its aggregate turnover exceeds
the said threshold limit.
Q. 237 If a person is operating in different states, with the same PAN number, whether he
can operate witha single Registration? [FAQ 9]
Ans. No. Every person who is liable to take a Registration will have to get registered
separately for each of the States where he has a business operation and is liable to pay GST
in terms of Section 22(1) of the CGST/SGSTAct.
Q. 114 Can a person obtain multiple registrations in a State? [FAQ 10]
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Ans. Yes. In terms of the proviso to Sub-Section (2) of Section 25, a person having multiple
place of businessesin a State or UT may obtain a separate registration for each such place of
business, subject to such conditions asprescribed in the registration rules.
As per the CGST(Amendment) Act, 2018, the reference to requirement of separate business
vertical for separateregistration is not there now. The definition of “business vertical” has
been omitted. However, the notification tobring the Act into effect is yet to be issued.

Q. 115 Explain the registration requirements under GST law in the following case:- Mr.
Lepcha of Mizoram is engaged in the supply of papers with an aggregate turnover of 13
lacs. Will your answer be different if Mr. Lepcha is located in Meghalaya?
Answer: Legal Provision:-
 The higher threshold limit of 40 lakh as applicable to a person engaged exclusively in
intra-State supply of goods is not applicable to Mizoram [a specified Special Category
State).
 Instead, a lower threshold limit of 10 lakh for registration is applicable for Mizoram.
Discussion & Conclusion :-
(i) In the given case, Mr. Lepcha of Mizoram, is liable to register since his aggregate
turnover (13 lakh) exceeds the applicable threshold limit for registration of 10
lakh.
(ii)  The enhanced threshold limit of 40 lakh is also specifically not applicable in
the State of Meghalaya.
 Instead, the normal threshold limit of 20 lakh for registration is applicable to
it.
 Therefore, if Mr. Lepcha is located in Meghalaya, he is not liable to register
since his aggregate turnover ( 13 lakh) does not exceed the applicable
threshold limit for registration of 20 lakh.

Q. 116 Examine whether the supplier of goods is liable to get registered in the following
independent cases:
(i) Raghav of Assam is exclusively engaged in intra-State taxable supply of readymade
garments. His turnover in the current financial year (FY) from Assam showroom is
33 lakh. He has another showroom in Tripura with a turnover of 11 lakh in the
current FY.
(ii) Pulkit of Panjim, Goa is exclusively engaged in intra-State taxable supply of shoes.
His aggregate turnover in the current financial year is 22 lakh.
Answer: Legal Provision:-
 As per section 22(1) read with proviso to section 22(1) of the CGST Act, 2017, a supplier
is liable to be registered in the State/Union territory from where he makes a taxable supply
of goods and/or services, if his aggregate turnover in a financial year exceeds the threshold
limit.
 The threshold limit for a person making exclusive intro-state supplies of goods is as
under-
 ₹ 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland.
 ₹ 20 lakh for the States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,

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Telangana and Uttarakhand.

 ₹ 40 lakh for rest of India.
Discussion & Conclusion:- In the light of the afore-mentioned provisions, the answer to the
independent cases is as under:-
(i)  Raghav is eligible for higher threshold limit of turnover for registration, i.e.₹ 40
lakh as he is exclusively engaged in intra-State supply of goods.
 However, since Raghav is engaged in supplying readymade garments from •
Special Category State i.e. Tripura, the threshold limit gets reduced to ₹ 10 lakh.
 Thus, Raghav is liable to get registered under GST as his turnover exceeds ₹ 10
lakh
 Further, he is required to obtain registration in both Assam and Tripura as he is
making taxable supplies from both the States.
(ii)  The applicable threshold limit for registration for Pulkit in the given case is ? 40
lakh as he is exclusively engaged in intra-State taxable supply of goods in Goa.
 Thus, he is not liable to get registered under GST as his turnover is less than the
threshold limit.

Q. 117 Ltd. is engaged exclusively in supply of taxable goods from the following states."
The particulars of intra-state supplies for the month of May 20XX are as follows:
State Turnover
Madhya Pradesh 5,00,000
Gujarat 14,00,000
Tripura 12,00,000
(i) Q Ltd. seeks to know whether it is liable for registration under GST. Give your
explanation.
(ii) Will your answer be different if Q Ltd. supplies only petrol & diesel from Tripura
instead of any other taxable goods?
Answer:
Legal Provision:-
 As per section 22(1) read with proviso to section 22(1) of the CGST Act, 2017, a supplier
is liable to be registered in the State/Union territory from where he makes a taxable supply
of goods and/or services, if his aggregate turnover in a financial year exceeds the threshold
limit.
 The threshold limit for a person making exclusive intra-state supplies of goods is as
under:-
- ₹ 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland.
- ₹ 20 lakh for the States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,
Telangana and Uttarakhand.
- ₹ 40 lakh for rest of India.
Discussion & Conclusion:-

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(i)  Since Q Ltd. is making supply of taxable goods from Tripura, a specified Special
Category State, the applicable threshold limit will get reduced to 10 lakh.
 Thus, it is liable to be registered under GST as its aggregate turnover RR 31
lakh] exceeds the said threshold limit.
Assumption:-
It has been assumed that Q Ltd. is not engaged in making supplies of notified goods
that makes it ineligible for threshold of Rs. 40 Lakhs.
(ii)  In case Q Ltd. is making supply of non-taxable goods [petrol and diesel] from
Tripura, the applicable threshold limit will not be reduced to 10 lakh.
 The enhanced threshold limit o f ne40 lakh will be applicable.
 Thus, it is not liable to be registered under GST as its aggregate turnover 31
lakh] does not exceed the said threshold limit.

Q. 118 Examine whether the supplier of goods is liable to get registered in the following
independent cases.
(i) Rudra Builders of Rohini, Delhi is exclusively engaged in intra-State taxable
supply of building bricks. It's aggregate turnover in the current financial year
is ₹ 23 lakh. (CA Inter RTP may 22, Similar Ques CA Inter July 21 Exam)
(ii) Heera of Himachal Pradesh is exclusively engaged in intra-State taxable supply
of footwear. His turnover in the current financial year (FY) from Himachal
Pradesh showroom is ₹ 32 lakh. He has another showroom in Nagaland with a
turnover of 11 lakh in the current FY. (CA Inter RTP Nov 22) (Similar Ques
CA Inter July 21 Exam]
(iii) Ankit of Telangana is exclusively engaged in intra-State taxable supply of
footwears. His aggregate turnover in the current financial year is ₹ 25 lakh [CA
Inter July 21 Exam] [CA Inter RTP- Nov 21]
(iv) Akki Ltd. of Assam is exclusively engaged in intra-State supply of taxable
services, It's aggregate turnover in the current financial year is ₹ 25 lakh
(v) Aaru Ltd. of Assam is engaged in intra-State supply of both taxable goods and
services. It's aggregate turnover in the current financial year is ₹ 30 lakh [CA
Inter MTP Oct 2020] [ICAI Study Material]
Answer:
Legal Provision:-
 As per section 22(1) read with proviso to section 22(1) of the CGST Act, 2017, a
supplier is liable to be registered in the State/Union territory from where he makes a
taxable supply of goods and/or services, if his aggregate turnover in a financial year
exceeds the threshold limit.
 The threshold limit for a person making exclusive intra-state supplies of goods is as
under:-
- ₹ 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland.
- ₹ 20 lakh for the States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,
Telangana and Uttarakhand.
- ₹ 40 lakh for rest of India.
 However, the higher threshold limit of 40 lakh is not available to persons engaged in
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making supplies of notified goods, one of which is Building bricks.

 The threshold limit for a person making exclusive supply of services or supply of both
goods and services is as under:-
- ₹ 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland.
- ₹ 20 lakh for the rest of India
Discussion & Conclusion:-
(i) Ø Though the enhanced threshold limit for registration of ₹ 40 lakh is available to
Delhi, the same will not be applicable if the person is engaged in supply of notified
goods, one of which is Building Bricks.
Ø In view of the same, the applicable threshold limit for Rudra builders is ₹ 20 lakh.
Ø Thus, it is liable to be registered under GST as its aggregate turnover exceeds the
said threshold limit.
(ii) Ø Since Heera is making taxable supply from Nagaland a Special Category State, the
applicable threshold limit will get reduced to 10 lakh.
Ø Thus, it is liable to be registered under GST as its aggregate turnover exceeds the
said threshold limit
Ø Further, he is required to obtain registration in both Himachal Pradesh and
Nagaland as he is making taxable supplies from both the States
(iii)  Since Ankit is exclusively engaged in intra-State supply of goods in Telangana,
which is not a specified State for enhanced threshold limit, the applicable
threshold limit for registration is 20 lakh.
 Thus, Ankit is liable to be registered under GST as its aggregate turnover exceeds
the said threshold limit.
(iv)  Akki Ltd. is not entitled for higher threshold limit for registration as the same
is applicable only in case of exclusive supply of goods and not services.
 Thus, applicable threshold limit for registration for making supply in Assam is 20
lakh.
 Hence, Akki Ltd. is liable to get registered under GST as it's turnover is more
than the threshold limit.
(v)  Aaru Ltd.is not entitled for higher threshold limit for registration as the same is
applicable only in case of exclusive supply of goods and here, there is supply of
both goods as well as services.
 Since Aaru Ltd, is engaged in supply of both taxable goods and services, the
applicable threshold limit for registration in this case is ₹ 20 lakh.
 Thus, Aaru Ltd. is liable to get registered under GST as it's turnover is more than
the threshold limit.

Q. 119 Rishabh Enterprises- a sole proprietorship firm- started an air-conditioned

restaurant in Virar, Maharashtra in the month of February wherein the customers are
served cooked food as well as cold drinks/non-alcoholic beverages. In March, the firm
opened a liquor shop in Raipur, Uttarakhand for trading in alcoholic liquor for human
consumption.
Determine whether Rishabh Enterprises is liable to be registered under GST law with the
help of the following information:

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Particulars February (₹)* March (₹)*

Serving of cooked food and cold drinks/non- 5,50,000 6,50,000
alcoholic beverages in restaurant in Maharashtra
Sale of alcoholic liquor for human consumption - 5,00,000
in Uttarakhand
Interest received from banks on the fixed deposits 1,00,000 1,00,000
Export of packed food items from restaurant in 1,50,000 2,00,000
Maharashtra
*excluding GST, You are required to provide reasons for treatment of various items given
above.
Answer:
Legal provision:-
 As per section 22(1) of CGST Act, a supplier is liable to register under GST Act in the State
or Union territory from where he makes a taxable supply of goods &/or services, if his
aggregate turnover in a financial year exceeds:-
 ₹ 20 lakhs where person makes taxable supply from other than special category states
of Manipur, Mizoram, Tripura & Nagaland.
 ₹ 10 lakhs where person makes taxable supply from Manipur, Mizoram, Tripura &
Nagaland.
 As per proviso to section 22(1) of CGST Act, 2017, any person, who is engaged in
exclusive intra-state supply of goods and whose aggregate turnover in the financial year
does not exceed 40 lakh rupees are exempt from registration, subject to some conditions
to be fulfilled.
 As per section 2(6) of CGST Act, 2017, "aggregate turnover" means the aggregate valueof
all:-
 taxable supplies,
 exempt supplies (wholly exempt, nil rated & Non-taxable)
 exports &
 inter-State supplies of persons having the same Permanent Account Number, to be
computed on all India basis
but excludes:-
 central tax, State tax, Union territory tax, integrated tax and cess &
 the value of inward supplies on which tax is payable by a person on reverse charge
basis.
Explanation:-
 In the given case, since Rishabh Enterprises is engaged in making taxable supplies of goods
and services from Maharashtra which is not a specified Special Category State, the
threshold limit applicable for obtaining registration is 20 lakh.
 Supply of alcoholic liquor are non-taxable supplies in terms of section 9(1) of - CGST
Act, 2017.
 Computation of aggregate turnover of Rishabh Enterprises:-

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Particulars Refer Turnover of Cumulative

February (₹) Turnover of
February &
March (₹)
Serving of cooked food and 5,50,000 12,00,000
cold drinks/non-alcoholic [₹ 5,S0,000+ ₹
Cumulative Turnover of 6,50,000]
beverages in restaurant in
Maharashtra
Add: Sale of alcoholic liquor exempt supply - 5,00,000
for human consumption in includes non-
Uttarakhand taxable supply u/s
2(47)
Add: Interest received from It is exempt 1,00,000 2,00,000
banks on the Fixed Deposits supply & thus, [₹ 1,00,000 + [₹
included 1,00,000]
Add: Export of packed food 1,50,000 3,50,000
[₹ 1,50,000 + [₹
Maharashtra 2,00,000]
Aggregate Turnover 8,00,000 22,50,000
Conclusion:-
 In the given case, Rishabh Enterprises was not liable to be registered in the month of
February since its aggregate turnover did not exceed 20 lakh in that month.
 However, since its aggregate turnover exceeds 20 lakh in the month of March, it should
apply for registration within 30 days from the date on which it becomes liable to
registration.
 Further as per section 23, he is not liable to be registered in Uttarakhand since he is not
making any taxable supply from Uttarakhand.

Author Note:- Above answer is given as per ICAI material, but according to author, Rishabh
Enterprises has made export supply in the month of Feb (Inter-state Supply). So, as per sec
24, registration is required within 30 days of such supply.

Q. 120 An agriculturist who is only engaged in supply of produce out of cultivation of

land.
Answer:
Legal provision:-
 As per section 23(1) of CGST Act, 2017, following are not liable to obtain registration:-
 A person exclusively making exempt supply or
 an agriculturist, to the extent of supply of produce out of cultivation of land, is not
liable to obtain registration under GST.
Discussion & Conclusion:-
 In the given case, as the agriculturist is exclusively engaged in making exempt supply of
produce out of cultivation of land.
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 Thus, he is not required to obtain registration under GST.

Q. 121 SP Ltd. of Bangalore, Karnataka has effected intra state supplies of taxable goods
(other than handicraft goods) amounting 14,00,000 till 31.10.20XX. On 01.11.20XX, it has
effected inter-state supply of taxable goods amounting to * 2,50,000. SP Itd. is of the
opinion that it is not required to get registered under GST law since its aggregate
turnover is not likely to exceed 20 lakhs during the financial year 20XX-YY. As a
consultant of the company, it requires advice relating to registration requirement.
Answer:
 As per section 24 of CGST Act, 2017, person making interstate taxable supply of goods
(other than taxable supply of handicraft goods) are compulsorily required to obtain
registration irrespective of quantum of aggregate turnover.
 Section 24 is an overriding section that makes it mandatory to obtain registration by
certain prescribed persons even though the conditions prescribed under section 22 are
not met.
 As per section 25 of CGST Act, 2017, A Person who is liable to be registered under section
22 or section 24 needs to obtained registration within 30 days from the date on which he
becomes liable to registration in every state or union territory from where he makes taxable
supply.
 Thus, SP Itd. is mandatorily required to obtain registration upto 01.12.20XX.

Q. 122 State with brief reason, whether following suppliers of taxable goods are required
to register under the GST Law:-
(i) Mr. Raghav is engaged in wholesale cum retail trading of medicines in the State of
Assam. His aggregate turnover during the financial year is ₹ 9,00,000 which consists
of ₹ 8,00,000 as Intra-State supply and ₹ 1,00,000 as Inter- State supply.
(ii) Mr. S.N Gupta of Rajasthan is engaged in trading of taxable goods on his own account
and also acting as an agent of Mr. Rishi of Delhi. His turnover in the financialyear
20XX-XY is of ₹ 12 lakhs on his own account and ₹ 9 lakhs on behalf of principal.Both
turnovers are Intra-State supply.
Answer:
(i) Legal Provision:-
 As per section 24 of CGST Act, 2017, person making interstate taxable supply
of goods (other than taxable supply of handicraft goods) are compulsorily
required to obtain registration irrespective of the quantum of aggregate turnover.
Discussion & Conclusion:-
 Here, Raghav is making inter-state taxable supply of goods.
 Thus, he is required to obtain registration compulsorily under GST laws even
though his aggregate turnover does not exceed the threshold limit applicable u/s
22.

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(ii) Legal Provision:-

 As per section 24 of CGST Act, 2017, Persons making taxable supply of goods
on behalf of other taxable persons whether as an agent or otherwise are
required to obtain registration compulsorily under GST laws irrespective of
the quantum of aggregate turnover.
 As per Explanation to section 22 of CGST Act, 2017, aggregate turnover
includes all supplies made by the taxable person,
- whether on his own account or
- made on behalf of all his principals.
 If agent issues invoice in his own name, then section 24 gets attracted, otherwise
he is liable to register u/s 22 if his aggregate turnover crosses the threshold limit
for registration.
Discussion & Conclusion:-
 In the given case, since Mr. S.N Gupta is also acting as an agent of Mr. Rishi of
Delhi, he is required to obtain registration compulsorily under GST laws
irrespective of the quantum of aggregate turnover.
Assumption:- it is assumed that agent is issuing invoice for further supply in his
own name.

Q. 123 Mr. Q, a casual taxable person of Gujarat state is a trader of taxable notified
handicraft goods. It makes supplies to the states of Maharashtra, Rajasthan and Andhra
Pradesh. Turnover for October, 20XX is 18 Lakh.
(i) Explain the provisions of registration for casual taxable person under GST. Examine
whether Mr. Q is liable for registration or not?
(ii) What will be the answer if Mr. Q makes trading in taxable notified products instead
of taxable notified handicraft goods which involves 75% making on machine and
25% by hand?
Answer:
(i) Legal Provision:-
 As per section 24 of CGST Act, 2017, a casual taxable person is required to
obtain compulsory registration under GST irrespective of the quantum of its
aggregate turnover.
 However, a threshold limit of 20 lakh (10 lakh in case of specified Special
Category States of Manipur, Mizoram, Tripura & Nagaland) is available for
registration to a casual taxable person who :-
(i) is making inter-State taxable supplies of notified handicraft goods & notified
hand-made goods,
(ii) is availing the benefit of exemption from registration available to inter-State
supply of above-mentioned goods upto the aggregate turnover of 20 lakh (₹ 10
lakh in case of specified Special Category States), and

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(iii) has obtained a PAN and

(iv) has generated an e-way bill.
Discussion & Conclusion:-
In the given case, since Mr. Q is engaged in supplying notified handicraft goods and
its aggregate turnover does not exceed 20 lakh, he will not be liable to registration
provided he fulfils other conditions specified herein.
Assumption:-
It has been assumed that Mr. Q has started supply of goods in October 20XX itself.
(ii) In case Mr. Q is engaged in trading of notified products which are predominantly
made by machine, he will not be eligible for the exemption from registration
under aforesaid provisions and needs to. take compulsory (mandatory)
registration.

Q. 124 State the persons who are not liable for registration as per provisions of Section
23 & 24 of Central Goods and Service Tax Act, 2017.

Answer:
As per Section 23 & 24 of CGST Act, 2017, the persons who are not liable for registration are
as under:-
(a) Person engaged exclusively in supplying good &/or services that are wholly exempt
from tax.
(b) Person engaged exclusively in supplying good &/or services that are not liable to tax.
(c) Agriculturist to the extent of supply of produce out of cultivation of land.
(d) Persons only engaged in making supplies of taxable goods &/or services that are liable
to tax under reverse charge.
(e) Persons making inter-State supplies of taxable services up to an aggregate turnover of
20 lakh (10 lakh in case of special category States of Manipur, Mizoram, Tripura &
Nagaland).
(f) Casual Taxable Persons making taxable supplies of specified handicraft goods up to
an aggregate turnover of 220 lakh (* 10 lakh in case of special category States of
Manipur, Mizoram, Tripura & Nagaland), subject to specified conditions.
(g) Persons making inter-State taxable supplies of specified handicraft goods up to an
aggregate turnover of 20 lakh ( 10 lakh in case of special category States of Manipur,
Mizorom, Tripura & Nagaland), subject to specified conditions.
(h) Job workers making inter-State supply of services to a registered person up to an
aggregate turnover of 20 lakh ( 10 lakh in case of special category States of Manipur,
Mizoram, Tripura & Nagaland), subject to specified conditions.
(i) Persons making supplies of services through an electronic commerce operator
(other than supplies specified under section 9(5) of the CGST Act) up to an aggregate
turnover of 20 lakh ( 10 lakh in case of special category States of Manipur, Mizoram,
Tripura & Nagaland).

Q. 125 Mr. Ashwin (from Maharashtra) is a farmer with an annual turnover in relation
to agriculture of *15,50,000. Since, it is agricultural income, it is exempt from GST
However, Mr. Ashwin also supplies plastic bags worth of 5,50,000 being a taxable supply
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along with his crop and charges separately for this. Is Mr. Ashwin required to register
under GST? Advise.
Answer:
Legal Provision:-
 As per proviso to section 22 (1) of CGST Act, 2017, any person, who is engaged in
exclusive intra-state supply of goods and whose aggregate turnover in the financial year
does not exceed 40 lakh rupees are exempt from registration subject to some conditions
to be fulfilled.
Advise:-
 In the given case, Mr. Ashwin is exclusively engaged in supply of goods & thus, his
threshold limit will be 40 Lakhs.
 Aggregate Turnover (inclusive of exempt supply) of Ashwin is 221 Lakhs.
 Since, it is below the threshold limit applicable, he is not liable to register under
GST.
 Section 23 will not be applicable here, as Mr. Ashwin is not exclusively engaged in
exempt supplies, but also engaged in taxable supplies & therefore, no exemption from
registration is available for Mr. Ashwin.

Q. 126 BBD Pvt. Ltd. of Gujarat exclusively manufactures and sells product '2' which is
exempt from GST vide notifications issued under relevant GST legislations. The company
sells '2' only within Gujarat and is not registered under GST laws. The turnover of the
company in the previous year 20XX-YY was 50 lakh. The company expects the sales to
grow by 10% in the current year 20YY-22.
However, effective 01.01.2022, exemption available on '2' was withdrawn by the Central
Government and GST@ 5% was imposed thereon. The turnover of the company for the
nine months ended on 31.12.20YY was 42 lakh. BBD Pvt. Ltd. is of the opinion that it is
not required to get registered under GST for current financial year 20YY-ZZ.
Examine the above scenario and advise BBD Pvt. Ltd. whether it needs to get registered
under GST or not.
Answer: Legal Provision:-
 As per section 22(1) of CGST Act, 2017 read with proviso thereto, for a supplier
exclusively engaged in intra-State supply of goods, the threshold limit of turnover to
obtain registration in the State of Gujarat is 40 lakh.
 However, as per section 23, a person exclusively engaged in the business of supplying
goods and/or services that are not liable to tax or are wholly exempt from tax is not
liable to registration.
 As per section 2(6), aggregate turnover includes exempt supply also along with taxable
supply
Discussion & Conclusion:-
 In the given case, since BBD Pvt. Ltd. was engaged exclusively in supplying exempted
goods till 31.12.20YY, it was not required to be registered till that day, though
voluntary registration was allowed.
 This position will change from 01.01.2022 as the supply of goods become taxable from
that day and the turnover of BBD Pvt. Ltd. is more than ₹40 lakh.
 Since the aggregate turnover limit of 40 lakh includes exempt turnover also, turnover
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of '2' till 31.12.2019 will be considered for determining the threshold limit even though
the same was exempt from GST.
 Therefore, BBD Pvt. Ltd. needs to register within 30 days from 01.01.2022.

Q. 127 Pure Oils, Delhi has supplied machine oil and high-speed diesel in the month of
April as per the details given in table below. Pure Oils is not yet registered.
Sl. No. Particulars Rs. *
i Supply of machine oils in Delhi 15,00,000
ii Supply of high diesel in Delhi 10,00,000
iii Supply of machine oil made in Panjab by pure oils from its branch 10,00,000
located in Panjab
*excluding GST
1) Determine whether Pure Oils is liable for registration.
2) What will be your answer if Pure Oils supplies the high speed diesel in Delhi in the
capacity of an agent of Mixed Oils Ltd.?
Answer:- Legal Provision:-
 As per section 22(1) read with proviso to section 22(1) of the CGST Act, 2017, a
supplier is liable to be registered in the State/Union territory from where he makes a
taxable supply of goods and/or services, if his aggregate turnover in a financial year
exceeds the threshold limit.
 The threshold limit for a person making exclusive intra-state supplies of goods is as
under:-
- 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and
Nagaland
- 20 lakh for the States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,
Telangana and Uttarakhand.
- 40 lakh for rest of India.

 As per section 2(6) of CGST Act, 2017, aggregate turnover means the aggregate value
of all taxable supplies as well as exempt supplies
- excluding central tax, State tax, Union territory tax, integrated tax and cess &
- it shall be computed for persons having same Permanent Account Number on
all India basis.
 As per section 2(47), exempt supply includes non-taxable supply.
Discussion & Conclusion :-
1  In the given case, supply of high speed diesel in Delhi, being a non- taxable
supply, is an exempt supply and Machine oil is taxable supply

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 Therefore, both are includible while computing the aggregate turnover.

 In the backdrop of the above-mentioned discussion, the aggregate turnover of
Pure Oils for the month of April is computed as under:-
Sl. No. Particulars Rs. *
1 Supply of machine oils in Delhi 15,00,000
2 Add: Supply of high speed diesel in Delhi 10,00,000
3 Add: Supply of machine oil made by Pure Oils from its 10,00,000
branch located in Punjab
Aggregate Turnover 35,00,000
 Pure Oils is making exclusive supply of goods and hence, the threshold limit
for registration would be 40,00,000. Since the aggregate turnover does not
exceed 40,00,000, Pure Oils is not liable to be registered.

2 (2) In case Pure Oils makes the supply in capacity of an agent of Mixed Oils Ltd.:
 As per section 24 of CGST Act, 2017, Persons making taxable supply of
goods on behalf of other taxoble persons whether as an agent or otherwise are
required to obtain registration compulsorily under GST laws irrespective of
the quantum of aggregate turnover.
 However, in the present case, if Pure Oils supply high speed diesel on behalf
of Mixed Oil Ltd. in Delhi as its agent, it shall still not be liable to obtain
registration in Delhi since section 24 comes into play only when agent is
making taxoble supply of goods on behalf of principal whereas in the given
case, Pure Oils is supplying non-taxable goods on behalf of Mixed Oils Ltd.

Q. 128 Examine the liability of compulsory registration under section 24 of the CGST
Act, 2017, in each independent cases mentioned below:
(1) Meenu, a supplier in Maharashtra, is engaged in supply of potatoes within
Maharashtra and also outside Maharashtra, whose turnover exceeds threshold
limit under GST Law. [CA Inter RTP- Nov 21] [CA Inter Exam May 19 Old]
(2) Govardhan is an agriculturist engaged in supply of produce out of cultivation of
land. He utilizes services of Manu who is a commission agent as per the
Agricultural Produce Marketing Committee Act. Turnover of Manu is above the
threshold limit prescribed. Manu wants to know whether he is liable to get
registered under GST Act or not.
(3) Anubhav is dealing in supply of taxable goods and services in the state of Gujarat.
His turnover from intra-State supply of taxable goods is 16 lakh and inter-state
supply of taxable services is 22 lakh. He is of the opinion that his aggregate
turnover is within the limit so he is not required to get registered. Advise him. [
Answer:-
i (1) Legal Provision:-

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 As per section 24 of CGST Act, 2017, Persons making interstate taxable

supply of goods (other than taxable supply of handicraft goods) are
compulsorily required to obtain registration irrespective of quantum of
aggregate turnover.
 However, as per section 23 of the said act states that an agriculturist, to the
extent of supply of produce out of cultivation of land, is not liable to
registration.
 Section 23 will prevail over section 24.
Discussion & Conclusion:-
 Assuming that Meenu is engaged in cultivation and supply of potatoes, she is
not liable to registration irrespective of the fact that she is engaged in making
interstate supply and her turnover exceeds the threshold limit.
Note:-
 Any person engaged exclusively in the business of supplying exempted goods
is not liable to registration.
 Since potatoes exempted goods, Meenu is not liable to obtain registration are
irrespective of the fact that she is engaged in making interstate supply and her
turnover exceeds the threshold limit.
ii  As per section 24 of CGST Act, 2017, a commission agent under APMC Act
is not liable to be compulsorily registered since it provides exempt services
of sale/purchase of agricultural produce on behalf of an agriculturist being
a non-taxable person as he supplies produce out of cultivation of land.
 Moreover, such commission agents are otherwise also exempt from
registration since any person engaged exclusively in the business of
supplying exempt services is not liable to registration as per section 23.
 Therefore, Manu is not liable to get registered under GST law.
iii  As per section 22 of CGST Act, 2017, A supplier who is supplying both goods
and services is required to obtain registration in the State from where he is
making taxable supply if his aggregate turnover exceeds the threshold limit in
a financial year as under
- ₹10 lakh for the Special Category States of Mizoram, Tripura, Manipur
and Nagaland.
- ₹20 lakh for the rest of India.
 As per section 24 of the said act, threshold limit of Rs. 20/10 Lakhs is allowed
to a person making inter-state supply of taxable services.
 In the given case, the aggregate turnover of goods and services supplied by
Anubhav (38 lakh) exceeds the threshold limit and thus, he is required to
obtain registration.

Q. 129 State the time period within which registration needs to be obtained in each ofthe
following independent cases:-
(a) Person liable to register u/s 22 or 24 of CGST Act
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(b) Casual Taxable Person (CTP) or Non-Resident Taxable Person

(NRTP).Answer:-
As per section 25(1) of the CGST Act, 2017, the time-period within which registration
needsto be obtained under GST in various cases are as follows:-
(a) A Person who is liable to be registered under section 22 or section 24 needs to
obtainedregistration within 30 days from the date on which he becomes liable to
registration inevery state or union territory from where he makes taxable supply.
(b) A CTP or NRTP must obtain registration at least 5 days prior to the
commencement of its business.

Q. 130 Can a person get himself voluntarily registered though he may not be liable to
payGST?
Answer:-
 Yes, a person may get himself registered voluntarily though he is not liable to be
registered under sections 22 or 24 of CGST Act, 2017.
 Once a person obtains voluntary registration, he has to pay tax even though his
aggregate turnover does not exceed the applicable threshold limit in a financial
year &has to comply with all the provisions of the GST Act.

Q. 131 In order to be eligible for grant of registration, a person must have a

Permanent Account Number issued under the Income-tax Act, 1961. State
exceptions to it. [ICAI Study Material]
Answer:-
 A Permanent Account Number (PAN) is mandatory to be eligible for grant of
registration.
 One exception to this is a non-resident taxable person (NRTP):-
- A NRTP may be granted registration on the basis of other prescribed
documentsinstead of PAN.
- He has to submit a self-attested copy of his valid passport along with the
application signed by his authorized signatory who is an Indian Resident
having valid PAN and application will be submitted in a different
prescribed form [Section 25(6) & (7)].
 Another exception is as follows:-
- A person who is required to deduct tax u/s 51 of CGST Act, 2017 may
be granted registration based on a Tax deduction & collection Account
Number (TAN) issued under the said act instead of PAN.

Q. 132 Answer the following:-

(a) Is it necessary for the UN bodies to get registration under GST?
(b) What is the responsibility of the taxable person making supplies to UN bodies?
Answer:-

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(a)  As per section 25(9) of the CGST Act, 2017, all notified UN bodies,
Consulate or Embassy of foreign countries and any other class of persons so
notified would be required to obtain a Unique Identification Number (UIN)
from the GST portal.
 The structure of the said ID would be uniform across the States in conformity
with GSTIN structure and the same will be common for the Centre and the
States.
 This UIN will be needed for claiming refund of taxes paid on notified supplies
of goods and/or services received by them, and for any other purpose as may
be notified.
(b) The taxable supplier making supplies to UN bodies is expected to mention the UIN
on the invoices and treat such supplies as supplies to another registered person (B2B).

Q. 133 What will be the effective date of registration under

GST?Answer:-
Where an applicant submits application Effective date:-
for registration-
Within 30 days from date he becomes liable the date on which he becomes liable for
for registration- registration.

After 30 days from date he becomes liable The date of grant of registration
the date of grant of registration.

Voluntary registration (being within The date of order of registration

threshold limit)-

Q. 134 Determine the effective date of registration in the following instances:-

(i) The aggregate turnover of Madhu Ltd., engaged in taxable supply of
services in the state of Punjab, exceeded? 20 lakh on 25th August, 20XX. It
applies for registration on 19th September, 20XX and is granted
registration certificate on 29th September, 20XX. [CA IPC Nov 20 Exam-
similar question] [ICAI Material]
(ii) What will be your answer, if in the above scenario, Madhu Ltd. submits the
application for registration on 27th September, 20XX and is granted
registrationon 5th October, 20XX?
Answer:- Legal Provision:-
 A supplier, whose aggregate turnover in a financial year exceeds ? 20 lakh in a
State other than Manipur, Mizoram, Nagaland, Tripura, is liable to apply for
registration within 30 days from the date of becoming liable to registration
u/s 22 read with section 25 of CGST Act.
 Where the application is submitted within the said period, the effective date of
registration is the date on which the person becomes liable to registration
- otherwise it is the date of grant of registration.

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Discussion & Conclusion:-

In the given case, the applicable turnover limit for registration will be 20 lakh as Punjab
is nota Special Category State.
(i) Since Madhu Ltd. applied for registration within 30 days of becoming liable to
registration, the effective date of registration is 25th August, 20XX.
(ii) In this case, since Madhu Ltd. applies for registration after the expiry of 30 days
fromthe date of becoming liable to registration, the effective date of registration
is 5th October, 20XX.

Q. 135 M/s Siya Ram is a trader of decorative items in Hauz Khas, Delhi. His
aggregateturnover exceeded 20 lakh in the month of October, 20XX. He applied for
registration onGST portal, but missed to submit the details of his bank account.
His tax consultant advised him that prior submission of bank details is mandatory
to obtain registration. Examine whether the advice of Mr. Siya Ram's tax
consultant is correct.
Answer:-
 No, the advice of Mr. Siyo Ram's consultant that prior submission of bank details
is mandatory to obtain registration is no more valid in law.
 A new rule 10A has been inserted in the CGST Rules, 2017 to allow the
registered person to furnish details of bank account which is in name of the
registered person& obtained on Permanent Account Number (PAN) of the
registered person, or anyother information, as may be required on the common
portal in order to comply with any other provision, soon after obtaining
certificate of registration and a GSTIN.
 But the information shall be furnished not later than 45 days from earlier of:-
- the date of grant of registration certificate or
- the date on which the return required under section 39 is due to be furnished.
 In case of a proprietorship concern, the PAN of the proprietor shall also be
linkedwith his Aadhaar number.

Q. 136 "Aadhaar authentication is not required for persons who are already
registered under GST." Examine and discuss the correctness of the statement. You
are required toelaborate the relevant legal provisions.
Answer:-
 The given statement is incorrect.
 Aadhaar authentication has been made mandatory for the new registrants as well
as forthe existing registrants.
 For existing registrants, section 25(6A) of the CGST Act, 2017 stipulates that
every registered person shall undergo authentication, or furnish proof of
possession ofAadhaar number, in the prescribed form, manner and time.
 New rule 10B of the CGST Rules, 2017 prescribes the manner in which aadhaar
authentication needs to be done by a registered person.
 A registered person, who has been issued a certificate of registration under GST,

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shallundergo authentication of the Aadhaar number of:-

Entity Person need to undergo AA

Proprietorship Firm. Proprietor

Partnership Firm Partner
Hindu undivided family Karta
A Company Managing director or any whole-time
director
An AOP or BOI or a Society or Any of the Members of the Managing
Committee
Trust Trustee in the Board of Trustees &
Authorised signatory
in order to be eligible for the following purposes:
 for filing of application for revocation of cancellation of registration
 for filing of refund application.
 for refund of the IGST paid on goods exported out of India.

 First proviso to section 25(6A) provides that If an Aadhaar number is not assigned
to an existing registered person, such person shall be offered alternate and viable
means of identification in the prescribed manner under Rule 10B
 If Aadhaar number has not been assigned to the person required to undergo
authentication of the Aadhaar number, such person shall furnish the following
identification documents, namely: -
(a) his/ her Aadhaar Enrolment ID slip and
(b) (i) Bank passbook with photograph or
(ii) Voter identity card issued by the Election Commission of India or
(iii) Passport or
(iv) Driving license issued by the Licensing Authority
 However, once Aadhaar number is allotted to such person, he shall undergo the
authentication of Aadhaar number within a period of 30 days of the allotment of
the Aadhaar number.
Note: The above rule 10B shall not be applicable to persons notified under section
25(6D) of the CGST Act 2017, i.e., to persons exempt from aadhaar authentication.

Q. 137 Explain the concept of Deemed registration under

GST?Answer:-
 Registration under GST is not tax specific.
 This means that there is single registration for all the taxes i.e. CGST,
SGST/UTGST, IGST and Compensation Cess.
 Grant of registration/UIN under any SGST Act/ UTGST Act is deemed to be
registration/UIN granted under CGST Act provided application for registration
has notbeen rejected under CGST Act.
 Further, rejection of application for registration/UIN under SGST Act/UTGST

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Act is deemed to be rejection of application for registration under CGST Act.

Q. 138 Answer the following questions with respect to casual taxable person under
theCGST Act, 2017-
(i) Who is a casual taxable person?
(ii) Can a casual taxable person opt for the composition scheme?
(iii) When is the casual taxable person liable to get registered?
(iv) What is the validity period of the registration certificate issued to a casual
taxableperson?
(V) Can the validity of registration certificate issued to a casual taxable person
beextended? If yes, what will be the period of extension?
Answer: -
i) As per section 2(20) of CGST Act, 2017, Casual taxable person means a person-
 who occasionally undertakes transactions involving supply of goods and/or
services
 in the course or furtherance of business,
 whether as principal, agent or in any other capacity,
 in a State/UT where he has no fixed place of business.

ii) No, as per section 10(2) and 10(2A) of CGST Act, 2017, a casual taxable person
cannot opt for the composition scheme.

iii)  As per section 24 of CGST Act, 2017, a casual taxable person (CTP) is liable
to obtain registration compulsorily under GST low.
 CTP has to apply for registration at least 5 days prior to commencement of
business as per section 25(1) read with proviso thereto.
 However, if CTP is making taxable supplies of specified handicraft goods,
then it is eligible for the threshold limit applicable as per section 22.
iv) As per section 27(1) of CGST Act read with proviso thereto Registration Certificate
granted to a casual taxable person will be valid for earlier of-
 period specified in the application for registration or
 period of 90 days from the effective date of registration.
However, at the request of the said taxable person, the proper officer may extend the
validity by a further period not exceeding 90 days.
v) Yes, the validity of registration certificate issued to a casual taxable person can be
extended.
 It can be extended by a further period not exceeding 90 days by making
application before the end of period of validity of registration granted to him.

Q. 139 Mr. X of Mumbai often participates in the jewellery exhibition at Trade

Fair in Delhi, which is organised every year in the month of February. Mr. X
applied for registration in January. The proper officer demanded an advance

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deposit of tax in an amount equivalent to the estimated tax liability of Mr. X. You
are required to examine whether any advance tax is to be paid by Mr. X at the time
of obtaining registration?
Answer:-
 Yes, advance tax is to be paid by Mr. X at the time of obtaining registration.
 Mr. X occasionally undertakes supply of goods in the course or furtherance of
business ina State where he has no fixed place of business.
 Thus, he qualifies as casual taxable person as per section 2(20) of CGST Act, 2017.
 As per section 27(2) read with proviso thereto, at the time of submission of
applicationfor registration, a casual taxable person shall make an advance deposit
of tax for net estimated tax liability for the period for which registration is sought.
 On the contrary, normal taxable person does not have to make any advance deposit
of taxto obtain registration.

Q. 140 Mr. Allan, a non-resident person, wishes to provide taxable supply of goods.
He has no fixed place of business or residence in India. He seeks your advise on the
followingaspects, relating to CGST Act, 2017:-
(i) When shall he apply for registration?
(ii) Is PAN mandatory for his registration?
(iii) What is the period of validity of Registration Certificate (RC) granted to him?
(ICAIMaterial)
(iv) Will he be able to extend the validity of his registration? If yes, what will be the
periodof extension?
Answer:- As per section 27 of CGST Act, 2017,
(i) Mr. Allan, being a non-resident taxable person, should apply for registration at least
5 days prior to the commencement of business irrespective of the threshold limit.
(ii) No, PAN is not mandatory for his registration.
 He has to submit a self-attested copy of his valid passport along with the
application signed by his authorized signatory who is an Indian Resident having
valid PAN.
 However, in case of a business entity incorporated or established outside India,
the application for registration shall be submitted along with its tax identification
number or unique number on the basis of which the entity is Identified by the
Government of that country or its PAN, if available.
(iii)  As per section 27(1) of CGST Act read with proviso thereto, Registration
Certificate granted to Mr. Allan will be valid for earlier of:-
- period specified in the application for registration or
- period of 90 days from the effective date of registration.
 However, at the request of the said taxable person, the proper officer may extend
the validity by a further period not exceeding 90 days.

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(iv) Yes, Mr. Allan can get the validity of his registration extended.
 Registration can be extended further by a period not exceeding 90 days by
making application before the end of period of validity of registration granted to
him.

Q. 141 Answer the following questions:-

(a) Whether the cancellation of registration certificate is permissible? If so, discuss
the circumstances where registration is liable to be cancelled by proper officer
otherwisethan on his own motion also
(b) What happens when the registration is obtained by means of wilful
misstatement, fraud or suppression of facts?
Answer:-
(a) Yes.
 Any Registration granted under CGST Act may be cancelled by the Proper Officer
in circumstances mentioned in Section 29 of the CGST Act.
 As per section 29(1) of the CGST Act, 2017, the following are the circumstances
where proper officer may cancel the registration either:-
- on his own motion or
- on an application filed by the registered person or
- on an application filed by his legal heirs, in case of death of such person
(a) the business has been discontinued, transferred fully for any reason including
death of the proprietor, amalgamated with other legal entity, demerged or
otherwise disposed of.
(b) there is any change in the constitution of the business. (c) the taxable person is no
longer liable to be registered under section 22 or section 24 or intend to opt out of
the registration voluntarily made under section 25(3).
 The proper officer shall not cancel the registration without giving the person an
opportunity of being heard.
(b) In such cases, the registration may be cancelled from such date including any
retrospective date by the proper officer as per Section 29(2) of CGST Act, 2017.
Explain the circumstances under which proper officer can cancel the registration on
hisown of a registered person under CGST Act, 2017.
O
R
Explain the statutory provisions for cancellation or suspension of registration
under section 29(2) of the CGST Act, 2017.
OR
State any five circumstances under which the proper officer can cancel the
registration on his own under the CGST Act, 2017.
Answer :-
 As per section 29(2) of CGST Act, 2017 read with rule 21 of CGST Rules, 2017,
the circumstances under which proper officer can cancel registration on his own

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of a registered person under the CGST Act, 2017 are as under:-

(i) A registered person has contravened any of the following provisions of the
GST law:-
a) he does not conduct any business from the declared place of business.
b) he issues invoice/bill without supply of goods or services or both in
violation ofthe provisions of GST law.
c) he violates the provisions of anti-profiteering.
d) he violates the provisions relating to furnishing of bank details.
e) He avails input tax credit in violation of the provisions of section 16 of
CGST Act or the rules made thereunder.
f) furnishes the details of outward supplies in FORM GSTR-1 under section
37 forone or more tax periods which is in excess of the outward supplies
declared byhim in his valid return under section 39 for the said tax
periods.
g) violates the provision of rule 86B.
h) he has not furnished returns for a continuous period of 6 months under
normal scheme
i) he has not furnished returns for a continuous period of 2 tax periods under
QRMP scheme
(ii) A person paying tax under composition levy has not furnished returns
for 3consecutive tax periods.
(iii) A registered person paying tax under regular scheme has not furnished
returns forcontinuous period of 6 months.
(iv) Voluntarily registered person has not commenced the business within 6
months
from the date of registration.
(v) Registration was obtained by means of fraud, wilful misstatement or
suppressionof facts.
 Proper officer shall not cancel the registration without giving the person
an
opportunity of being heard.
 During pendency of the proceedings relating to cancellation of registration, the
properofficer may suspend the registration for prescribed period and in prescribed
manner.

Q. 142 Does cancellation of registration impose any tax obligations on the person
whose registration is so cancelled? Discuss.
Answer:- Yes, as per section 29(S) of the CGST Act, 2017, every registered person
whose registration is cancelled shall pay by debiting the electronic cash ledger or
electronic credit ledger, an amount calculated in manner which is higher of:-
 of input tax in respect of:-
- inputs held in stock and
- inputs contained in semi-finished or finished goods held in stock or

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- capital goods or plant and machinery

on the day immediately preceding the date of such cancellation or
 output tax payable on such goods.

Q. 143 Under the provision of section 29(1) of CGST Act, 2017 read with rule 21A
of CGST Rules, 2017 related to suspension of registration if the registered person
has applied for cancellation of registration, what is the period and manner of
suspension of registration?
Answer:-
 As per section 29(1) of CGST Act, 2017 read with rule 21A of CGST Rules, 2017,
if a registered person has applied for cancellation of registration & the completion
of proceedings for cancellation of registration is pending, then the registration shall
be deemed to be suspended from LATER of:
(a) the date of submission of the application or
(b) the date from which the cancellation is sought,
 Such person shall not make any taxable supply during the period of suspension and
shall
not be required to furnish any return.
 The expression "shall not make any taxable supply" mean that the registered person
shallnot issue a tax invoice and, accordingly, not charge tax on supplies made by
him during the suspension period.

Q. 144 M/s. S Corporation has made default in furnishing returns. It has not filed
returnsfrom the month of June 20XX. The proper officer cancelled its registration
with effect from 1st January 20XY by an order dated 1st January 20XY. It applied
for revocation of cancellation of registration and the order for revocation of
cancellation of registration was passed on 1st March 20XY. What are the
provisions regarding filing returns beforemaking such an application of revocation
of cancellation of registration for the given case?
Answer:- Legal Provision:-
 As per section 30 of CGST Act, 2017 read with Rule 23 of CGST Rules, 2017,
where the registration is cancelled suo-motu by the appropriate officer, the
registrant seeking revocation of the order, has to apply for the revocation of
cancellation within 30 days from the date of service of the order of cancellation of
registration.
 Further, he has to furnish all the returns due till the date of such cancellation
before theapplication for revocation can be filed.
 Further, he should also pay any amount due as tax along with any amount payable
towardsinterest, penalty, and late fee in respect of the said returns.
Discussion & Conclusion:-
 Thus, in the given case, before making an application for revocation of
cancellation of registration, M/s S. Corporation should file all returns due for the
period from June, 20XX till 1st January, 20XY.
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Q. 145 Mr. X of Haryana intends to start business of supply of building material

tovarious construction sites in Haryana. He has taken voluntary registration under
GST in the month of April. However, he has not commenced the business till
December due tolack of working capital. The proper officer suo-motu cancelled the
registration of Mr. X. You are required to examine whether the action taken by
proper officer is valid in law? Mr. X has applied for revocation of cancellation of
registration after 40 days from thedate of service of the order of cancellation of
registration. Department contends thatapplication for revocation of cancellation of
registration can only be made within 30 daysfrom the date of service of the order
of cancellation of registration. However, Mr. Xcontends that the period of
submission of application may be extended on sufficientgrounds shown. You are
required to comment upon the validity of contentions raised byDepartment and Mr.
X.
Answer:- Legal Provision:-
As per section 29 of CGST Act, 2017, if any person who has taken voluntary registration
u/s 25(3) has not commenced business within 6 months from the date of registration,
then the proper officer may cancel the registration of such person from such date,
including any retrospective date, as he may deem fit.
Discussion & Conclusion:-
 In view of the above-mentioned provisions, suo-motu cancellation of registration
of Mr.X by proper officer is valid in law
- since Mr. X, a voluntarily registered person, has not commenced his business
within 6 months from the date of registration.
 In this case, such registered person may (subject to the provision of Rule 10B)
apply forrevocation of the cancellation to such proper officer within 30 days from
the date of service of the order of cancellation of registration.
 On sufficient cause being shown and for reasons to be recorded in writing, the said
periodof 30 days may be extended
- for a period not exceeding 30 days by Additional/Joint Commissioner &
- by further period not exceeding 30 days by Commissioner.
 Thus, the contention of Department is not valid in law as extension can be sought
in the prescribed time limit for revocation of cancellation of registration.
 The contention raised by Mr. X is valid in law as extension in time limit is allowed
on sufficient cause being shown and for reasons to be recorded in writing.

Q. 146 A Answer the following questions:-

(i) Can the Department, through the proper officer, suo-motu proceed to
register aperson under GST?
(ii) What could be the liabilities (in so far as registration is concerned) on transfer
of abusiness?
Answer:-
(i) Yes. As per section 25(8) of CGST Act, 2017, where a person who is liable to be
registered under GST law fails to obtain registration, the proper officer may,
withoutprejudice to any action which may be taken under CGST Act, or under any
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other law forthe time being in force, proceed to register such person in the manner
as is prescribed in the CGST Rules.
(ii) As per section 22(3) of CGST Act, 2017, the transferee or the successor shall be
liableto be registered with effect from such transfer or succession and he will
have to obtain a fresh registration with effect from the date of such transfer or
succession.

Q. 147 Answer the following independent questions:-

(a) If a person is operating in different states with the same PAN number, can he
operatewith a single Registration? OR Is there an option to take centralized
registration forservices under GST Law?
(b) Whether the registration granted to any person is permanent?
(c) Whether the registered taxable person is required to display his certificate of
registration?
(d) Can a person having multiple places of business in a State obtain separate
registrations for each place of business?
(e) At the time of registration, will the assessee have to declare all his places of
business?
Answer:
(a) No. As per section 25 of CGST Act, 2017, A person will have to get registered
separatelyin each of the State from where he makes taxable supply, if he is liable
for registration asper section 22 or 24.
(b) Yes. The registration once granted to any person is permanent except for non-
resident taxable person and casual taxable person unless the same is surrendered,
cancelled or suspended.
(c) Yes.
 Every registered person shall display his registration certificate in o prominent
location at his principal place of business and at every additional place or places of
business.
 Further, he has to display his GSTIN on the name board exhibited at the entry of
his principal place of business and at every additional place or places of business.
(d) Yes. As per proviso to section 25(2) of CGST Act, a person having multiple places
of business in a State may obtain a separate registration for each place of business,
subjectto such conditions as may be prescribed.
(e) Yes.
 The principal place of business and place of business have been separately defined
under section 2(89) & 2(85) of the CGST Act respectively.
 The taxpayer will have to declare the principal place of business as well as the
details ofadditional places of business in the registration form.

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06. PAYMENT OF TAX

Q. 148 What are the payments to be made in GST regime?
Answer:
Under GST regime, following payments are to be made:-
 In case of Intra-state supply- CGST & SGST/UTGST are to be paid to Central
Government and State Government/ Union Territory Account respectively.
 In case of Inter-state supply, IGST is to be paid to Central Government Account.
 In addition to these above taxes, Cess, TDS, TCS, Interest, penalty, fees and otheradditional
payments are to made, whenever applicable.

Q. 149 What are the main features of GST payment process?

Answer:
The main features of GST payment process are as follows:-
a) Electronically generated challan from GSTN common portal in all modes of payment and
no use of manually prepared challan;
b) Facilitation for the tax payer by providing hassle free, anytime, anywhere mode of payment
of tax;
c) Convenience of making payment online;
d) Real time data for tax collection in electronic format;
e) Faster remittance of tax revenue to the Government Account;
f) Paperless transactions;
g) Speedy Accounting and reporting;
h) Electronic reconciliation of all receipts;
i) Simplified procedure for banks;
j) Warehousing of Digital Challan.

Q. 150 List out the benefits of the new payment system of GST taxpayer and the GST
Department.
Answer:
Benefits of the payment system of GST available to the taxpayer and the GST
Department:
Benefits to Taxpayer:
 No more queues and waiting for making payments as payments can be made online 24 X
7.
 Electronically generated challan from GSTN common portal in all modes of payment and
no use of manually prepared challan. Paperless transactions.
 Instant online receipts for payments made online.
 Tax consultants can make payments on behalf of the clients.
 Single challan form to be created online, replacing the three or four copy Challan.
 Greater transparency.
 Online payments made after 8 pm will be credited to the taxpayer's account on the same
day.
Benefits to the GST Department:
 Revenue will come more rapidly into the Government Treasury.
 Logical tax collection data in electronic format.

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 Speedy accounting and reporting.

 Electronic reconciliation of all receipts.
 Warehousing of digital challan.
Q. 151 What type of outward supply details are to be filed in the return? [FAQ 3]
Ans. A normal registered taxpayer has to file the outward supply details in GSTR-1 in relation
to various types of supplies made in a month, namely outward supplies to registered persons,
outward supplies to unregistered persons (consumers), details of Credit/Debit Notes, zero
rated, exempted and non-GST supplies, exports, and advances received in relation to future
supply.
Q. 152 Is the scanned copy of invoices to be uploaded along with GSTR-1? [FAQ 5]
Ans. No scanned copy of invoices is to be uploaded. Only certain prescribed fields of information
from invoices
need to be uploaded.
Q. 153 Whether all invoices have to be uploaded in the returns? [FAQ 6]
Ans. No. It depends on whether the invoice is B2B or B2C plus whether Intra-state or Inter-state
supplies.
For B2B supplies, all invoices, whether Intra-state or Inter- state supplies, will have to be
uploaded. Why So? Because ITC will be taken by the recipients.
In B2C supplies, uploading in general may not be required as the buyer will not be taking
ITC. However still inorder to implement the destination based principle, invoices of value
more than Rs.2.5 lacs in inter-state B2C supplies will have to be uploaded. For inter-state
invoices below Rs. 2.5 lacs and all intra-state invoices, state wise summary will be sufficient.

Q. 154 What are the differences between electronic cash ledger and electronic credit
ledger?
Answer:
The differences between electronic cash ledger and electronic credit ledger are as
follows:-
S.No. Electronic Cash Ledger Electronic Credit Ledger
1 Can be used for payment of tax, interest, fee, Can be used only for payment of
penalty, and other amounts. output tax i.e. IGST/ CGST/ SGST/
UTGST.
2 Credit to the ledger will be through payment Credit to the ledger will be through
vide Challans. input tax credit claimed
3 Refund for excess balance can be applied Refund for excess balance may be
generally. refunded only in case of zero rated
supply or inverted tax structure.
4 Refund is allowed in all cases i.e. no Refund is available only in 2 cases:
restrictions on refund. 1. Zero Rated Supply
2. Inverted Tax Structure

Q. 155 What is the procedure for payment of tax for a casual taxable person or non-resident
taxable person who is required to pay tax in advance for obtaining registration?
Answer:
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 As the casual taxable person or non-resident taxable person are required to pay tax in
advance for obtaining registration, they do not have GSTIN because GSTIN is allowed
only when a person is registered.
 Therefore, a casual taxable person or non-resident taxable person are provided with a
temporary identification number using which the person can deposit estimated tax
liability,

Q. 156 What are the possible debits' and credits' to electronic cash ledger?
Answer: The differences are as follows:-
S.No. Debit Credit
1 Discharge of any liability of tax, interest, Deposit made through challan
penalty, late fee, etc. towards tax, interest, penalty, latefee,
etc.
2 Claim for refund of any amount Claim for TDS Deducted
3 - Claim for TCS Collected
4 - Reversal of amount debited earlier
on account of final rejection of
refund to the extent of rejection.

Q.157 Sahil is a supplier of taxable goods in Karnataka. He got registered under GST in
the month of September, 20XX and wishes to pay his IGST liability for the month. Since
he's making the GST payment for the first time, he is of the view that he needs to
mandatorily have the online banking facility to make payment of GST; offline payment
is not permitted under GST. You are required to apprise Sahil regarding the various
modes of deposit in the electronic cash ledger. Further, advise him with regard to
following issues:-
(a) Are manual challans allowed under GST?
(b) What is the validity period of the challan?
(c) is cross utilization among Major and Minor heads of the electronic cash ledger
permitted?
Answer:
 As per Section 49(1) of CGST Act, 2017, the deposit in electronic cash ledger can be
made through any of the following modes, namely:-
(i) Internet Banking through authorised banks;
a) Unified Payment Interface (UPI) from any bank;
b) Immediate Payment Services (IMPS) from any bank;
(ii) Credit card or Debit card through the authorised bank;
(iii) National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) or
Immediate Payment Service (IMPS) from any bank; or
(iv) Over the Counter payment through authorised banks for deposits up to Rs.10,000/- per
challan per tax period, by cash, cheque or demand draft.
 Thus, offline mode is also permitted under GST subject to specified conditions.
a Manual or physical Challans are not allowed under the GST regime & it is mandatory
to generate Challans online on the GST Portal.
b E-challan is valid for a period of 15 days.

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c  Amount entered under any Minor head (Tax, Interest, Penalty, etc.) and Major Head
(CGST, IGST, SGST/UTGST) of the Electronic Cash Ledger can be utilized only for
that liability.
 Cross-utilization among Major and Minor heads is not possible.
But as per Section 49(10) of CGST Act, 2017, a registered person may,on the common
portal, transfer any amount of tax, interest, penalty, fee or any other amount available
in the electronic cash ledger under the CGST Act to the electronic cash ledger for
Integrated tax, Central tax, State tax or Union territory tax or cess in FORM GST PMT-
09, if declaration is given.

Q. 158 Answer the following Questions:

(a) Can one use electronic credit ledger for payment of interest, penalty, and payment
under reverse charge?
(b) Suhasini is a registered software consultant. On account of her ill health, she could
not provide any services during the month of October. However, she had to incur all
the expenses relating to her office. She paid ₹75,000 to various vendors. Total GST
involved on the goods and services procured by her is ₹13,500. Out of the total bills
paid by her, one bill for ₹15,000 relates to security services availed for security of her
office, tax on which is payable under reverse charge. GST involved in such bill is
₹2,700.
Suhasini is of the opinion that for the month of October, no GST is payable from
electronic cash ledger as she has sufficient balance of ITC for payment of GST under
reverse charge on security services. Do you think Suhasini is right? Explain with
reasons.
Answer: Legal Provision:-
 As per section 49(4) of the CGST Act, 2017, the amount available in the electronic credit
ledger may be used for making any payment towards 'output tax’.
 As per section 2(82) of the CGST Act, 2017, output tax is the tax chargeable on taxable
supply of goods and/or services made by a taxable person or by his agent but
-excludes tax payable by him on reverse charge basis.
Discussion and conclusion:-
(a)  Therefore, input tax credit balance available in electronic credit ledger cannot be
used for payment of interest, penalty, and also for payment of tax under reverse
charge.
 The same is always required to be paid through electronic cash ledger and not
electronic credit ledger.
(b)  In the given case, input tax credit cannot be used to pay the tax liability under
reverse charge.
 The same is always required to be paid through electronic cash ledger and not
electronic credit ledger.
 Thus, Suhasini is wrong and she will need to pay GST of ₹2,700 on security service
through electronic cash ledger.

Q. 159 Examine the authority vested under CGST Act, 2017 for preventing a registered
person from utilising the input tax credit availed in a fraudulent manner?
Answer:
 Every registered person shall avail the Input Tax Credit (ITC) through a return filed under
Section 39 of CGST Act, 2017.
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 Input Tax credit availed shall be credited to electronic credit ledger under section 41 of the
CGST Act, 2017 on a provisional basis.
 As per Rule 86A of CGST Rules, 2017, in case the Commissioner or an officer authorised
by him in this behalf, not below the rank of an Assistant Commissioner, has reasons to
believe that ITC available in the electronic credit ledger has been
 fraudulently availed or
 is ineligible,
then for reasons to be recorded in writing, he may prohibit use of ITC:-

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 for discharge of any liability under section 49 or

 for claim of any refund of any unutilised amount.
 Also, as per Rule 86B, if the value of taxable supply other than exempt supply and
zero- rated supply in a month exceeds Rs.50 Lakhs, then the registered person shall
not use the amount available in electronic credit ledger to discharge his liability
towards output tax inexcess of 99% of such tax liability.
 However, there are certain exception to this rule.

Q. 160 Answer the following:-

(i) Explain the manner of utilization of input tax credit?
(ii) Can IGSTICGST/SGST/UTGST credit be utilized for payment of outward
Compensation Cess?
(iii) Should the payment be made only from the account of the taxable
person?Answer:
1 As per section 49(5), 49A, 49B of CGST Act read with rule 88A of CGST Rules,
2017, the manner of utilization of input tax credit under GST is as follows:-
 Credit of: -
 IGST shall be used for paying IGST first & then CGST or SGST/UTGST in any
order and in any proportion.
 CGST shall be used for paying CGST first & then to pay IGST
 SGST/UTGST shall be used for paying SGST/UTGST first & then to pay IGST
 However, IGST credit is to be fully utilized first as above & then the CGST/
SGST/ UTGST credit can be utilized & SGST/UTGST can be used to pay IGST
only after CGST balance is not available to pay IGST
2 No. Input tax credit of IGST/CGST/SGST/UTGST cannot be utilised for payment of
outward compensation cess.
3 No. There is no such restriction.
 the taxable person himself or any other person can make payment on behalf of
the taxable person by using the GSTIN of that taxable person.

Q. 161 What are the E-ledgers? State the entries to be debited to electronic liability
register under the CGST Act, 2017 and the CGST Rules, 2017.
Answer:
 Electronic Ledgers or E-Ledgers (i.e., Electronic Cash Ledger and Electronic Credit
Ledger) are statements of cash and input tax credit in respect of each registered
taxpayer.
 In addition, each taxpayer shall also have an electronic tax liability register.
 The entries to be debited to electronic liability register under the CGST Act, 2017
and theCGST Rules, 2017 are as follows:-
(i) all amounts payable towards tax, interest, late fee and any other amount as per
returnfiled;
(ii) all amounts payable towards tax, interest, penalty and any other amount
determined inany proceeding by an Assessing authority or as ascertained by the
taxable person;
(iii) the amount of tax and interest payable due to mismatch;
(iv) any amount of interest that may accrue from time to time.

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Q. 162 Mr. Ram Narayan, a registered supplier under GST, wants to first
discharge his self-assessed tax liability for the current period before settling the
dues for the previous tax period. Examine briefly whether he can do so?
Or
Explain the order of discharge of tax and other dues as per the section 49(8) of the
CGSTAct, 2017.
Answer:
Legal Provision:-
 As per section 49(8) of CGST Act, 2017, Every taxable person shall discharge his tax
andother dues under GST law in following order, namely:-
a) self-assessed tax, and other dues related to returns of previous tax periods.
b) self-assessed tax, and other dues related to the return of the current tax period.
c) any other amount payable under GST law including the demand as per 73 or
section74.
 The liability if any, arising out of demand notice and adjudication proceedings comes
last.
 This sequence has to be mandatorily followed.
Conclusion:-
Thus, in the given case, Mr. Ram Narayan cannot discharge his self-assessed tax
liabilityfor the current period before settling the dues for the previous tax period.

Q. 163 PQR Ltd. has the following tax liabilities under the provisions of Act:-
Sr. No. Particulars Amounts
1 Tax liability of CGST, SGST/UTGST, IGST for supplies made 1,00,000
during August, 20XX
2 Interest & Penalty on delayed payment and filing of returns 20,000
belonging to August, 20XX
3 Tax liability of CGST, SGST/UTGST, IGST for supplies made 1,20,000
during September, 20XX
4 Interest & Penalty on delayed payment and filing of returns 20,000
belonging to September, 20XX
5 Demand raised as per section 73 or section 74 under CGST Act, 8,00,000
2017 belonging to July, 20XX
6 Demand raised as per the old provisions of Indirect Taxes 1,00,000
PQR Ltd. has ₹5,00,000 in Electronic Cash Ledger.Suggest PQR Ltd. in discharging
the tax liability.
Answer:- Legal Provision:-As per section 49(8) of CGST Act, 2017, Every taxable
personshall discharge his tax and other dues under GST law in following order, namely:
a) self-assessed tax, and other dues related to returns of previous tax periods.
b) self-assessed tax, and other dues related to the return of the current tax period.
c) any other amount payable under GST law including the demand as per 73 or section
74. PQR Ltd can use the balance in Electronic cash ledger in the following
manner todischarge tax liability:-
Particulars Amount ₹
Balance available in Electronic cash ledger 5,00,000

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Less: -
Tax liability of CGST, SGST/UTGST, IGST for supplies made during August, 1,00,000
20XX
Interest & Penalty on delayed payment and filing of returns belonging to 20,000
August, 20XX
Tax liability of CGST, SGST/UTGST, IGST for supplies made during 1,20,000
September, 20XX
Interest & Penalty on delayed payment and filing of returns belonging to 20,000
September, 20XX
Demand raised as per section 73 or section 74 under CGST Act, 2017 2,40,000
(Note 1)
Balance in electronic cash ledger Nil
Notes:-
1. The balance amount of ₹5,60,000 (₹8,00,000-₹2,40,000) towards demand raised
under section 73 or section 74 under CGST Act, 2017 to be discharged before
discharging liability of demand raised under old provisions of Indirect Taxes.

Q. 164 Are principles of unjust enrichment applicable for payment made under
GST?
Answer: Yes.
 As per Section 49(9) of the CGST Act, 2017, every person who has paid the tax on
goodsor services or both under CGST Act shall be deemed to have passed on the
full incidenceof such tax to the recipient of such goods or services or both unless the
contrary is provedby him.
Author's Note (not part of ans.):-
 The principle of unjust enrichment means that no one should be unjustly enriched at the
expense of another.
 It also means that no person should take advantage of the position of another person
which causes some loss to one party and gain to another party.

Q. 165 Mr. A has deposited a sum of ₹30,000 under minor head of "Interest"
column forthe major head "IGST". At the time of filing GSTR-3B for a particular
tax period, he noticed that there is no sufficient amount under the minor head 'Tax'
towards payment of ₹30,000. When approached with the Jurisdictional Tax officer,
Mr. A was guided to deposit the tax amount under proper head of account and
claim a refund for the remittance of amount deposited under head "interest".
Examine the relevant provisions
of CGST Act, 2017 towards payment of tax and compliance with the law.
Answer: Legal provision:-
 As per Section 49(10) of CGST Act, 2017, a registered person can transfer the
amount deposited under any of the minor head i.e. tax, interest, penalty, fees or others
to any of theheads under IGST/ CGST/ SGST/ UTGST and make the payment of
taxes there upon.
Discussion and Conclusion:-
 Accordingly, Mr. A need not deposit the tax amount under head" tax" and claim a

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refundfor the remittance of amount deposited under head "interest.

 Rather, using the Form GST PMT 09, such amount can be transferred suo-moto
on thecommon portal from "interest" to "tax" head and tax liability be paid.

Q. 166 What are the provisions in relation to interest under GST? If there is default
in payment of tax and filing of returns, interest is payable on gross tax payable or
net tax payable?
Answer:
 As per section 50 of CGST Act, 2017, Interest is payable on delayed payment of tax
at therate 18% from the day succeeding the due date of payment till the date of
payment.
 As per proviso to section 50, the interest is payable on net tax payable when the
return isnot furnished within due date and also payment is not made within due date,
 Such interest is payable on that portion of tax which is paid by debiting the electronic
cashledger.
 Therefore, Interest is payable on net tax payable, if there is default in payment of
tax andfiling of returns.

Q. 167 ABC Ltd., have filed their GSTR3B for the month of July, 2021 within
the duedate prescribed under Section 39 i.e. 20.08.2021. Post filing of the return,
the registeredperson has noticed during September 2021 that tax dues for the month
of July, 2021 havebeen short paid for ₹40,000. ABC Ltd., has paid the above
shortfall of ₹40,000, through GSTR3B of September 2021, filed on 20.10.2021
[payment through Cash ledger-₹30,000and Credit ledger ₹10,000]. Examine the
Interest payable under the CGST Act, 2017. What would be your answer if,
GSTR3B for the month of July 2021 has been filedbelatedly on 20.10.2021 and
the self-assessed tax of ₹40,000/- has been paid on 20.10.2021[payment through
electronic cash ledger - ₹30,000 and electronic credit ledger ₹10,000]
Notes:
 There exists adequate balance in Electronic Cash & Credit ledger as on
31.07.2021for the above short fall
 No other supply has been made nor tax payable for the month of July, 2021 other
than
₹40,000/-missed out to be paid on forward charge basis
 Ignore the effect of leap year, if applicable in this case.
Answer: Interest is payable under Section 50 of the CGST Act, 2017 in case of delayed
payment of tax @ 18% per annum from the date following the due date of payment to the
actualdate of payment of tax.
As per proviso to sub-section (1) of Section 50, interest is payable on the net tax liability
paidin cash, only if the return to be filed for a tax period under Section 39, has been filed
after thedue date to furnish such return.
In the above scenario, ABC Ltd., has defaulted in making the payment for ₹40,000 on
self- assessment basis in the return for the month of July, 2021.
Accordingly, interest is payable on the gross liability and proviso of sub-section 50(1)
shall notbe applicable.

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Thus, the amount of interest payable by ABC Ltd., is as under: -

Period of delay = 21st August, 2021 to 20th October, 2021 = 61
daysHence, amount of interest ₹40,000 x 18% x 61/365=₹1,203
Alternatively, if ABC Ltd., have filed the return for the month of July, 2021 on
20.10.2021, beyond the stipulated due date of 20.08.2021 and if the self-assessed tax for
July, 2021 has been paid on 20.10.2021, Interest under proviso to Section 50(1) shall be
payable on the tax paid through Electronic Cash Ledger only.
Hence Interest is payable from 21st August 2021 till 20th October 2021 =
61 daysAmount of Interest = 30,000 x 18% x 61/365=₹902

Q. 168 MNI Ltd. provides following details for the month of March 20XX:
(1) While filling GST return of March 20XX on 20-04-20XX (within the prescribed
due date), they came to know that one bill of January 20XX consisting tax
amount of
₹50,000 was not considered while filling return for the month of January 20XX
(Return was filed on 20-02-20XX, within the prescribed due date).
(2) MNI Ltd. has paid the above shortfall of ₹50,000 of January 20XX, through
GSTR- 3B for the month of March 20XX (payment through cash ledger was
₹30,000 and payment through credit ledger was ₹20,000).
(3) MNI Ltd. got a notice regarding interest payment u/s 50 of the CGST Act, 2017.
MNILtd. assumed that they paid self-assessed tax and both returns were also
filed timely so they were not liable for payment of interest.
They seek your opinion regarding whether,
(i) They are liable to pay interest u/s 50 of the CGST Act.
(ii) If they had filed return of January 20XX on 20-04-20XX (Self assessed tax also
paid on 20-04-20XX of ₹50,000 (payment through cash ledger was ₹30,000 and
payment through credit ledger was ₹20,000), then also they are liable to pay interest
u/s 50 of the CGST Act.
Answer:
Legal provision:-
 As per section 50 of the CGST Act, 2017, Interest is payable on delayed payment of
tax atthe rate 18% from the day succeeding the due date of payment till the date of
payment.
 Further, the interest on tax payable in respect of supplies made during a tax period c
and declared in the return for the said period furnished after the due date is o payable
on the net tax liability paid through electronic cash ledger.
Discussion and conclusion:-
i.  In the given case, MNI Ltd. has defaulted in making the payment of ₹50,000 in the
return of January 20XX.
 Therefore, it will be liable to pay interest @ 18% p.a. from 21.02.20XX till the
date of payment.
 Further, since the return for the month of January, 20XX has been filed on the due
date, MNI Ltd. will be liable to pay interest on the gross tax liability i.e., ₹50,000
and not on net tax liability paid in cash.

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ii. If MNI Ltd. had filed the return for the month of January, 20XX on 20.04.20XX, i.e.
after the prescribed due date and the tax of ₹50,000 is also paid on 20.04.20XX,
interest will be payable on net tax liability paid through electronic cash ledger i.e.,
₹30,000.

Q. 169 Mr. A file the return has the month of April, May, June, July. He has
furnished the following details refereeing the details. Determine the date from when
such interest isapplicable.
Month Opening balance Eligible ITC Output Due date of Filing
in electronic ITC (B) wrongly liability the return
credit ledger [A] availed (C) (E)
April - 7,00,000 50,000 7,00,000 20 May XX
May 50,000 5,00,000 - 5,00,000 20 June XX
June 50,000 3,00,000 - 3,30,000 18 July XX
July 20,000 6,00,000 - 6,20,000 25 Aug XX
Answer: - As per sec 50 (3) of CGST Act Read with rule 88B, Where the input tax
credit hasbeen wrongly availed and utilised, the registered person shall pay interest on
such input tax credit wrongly availed and utilised, at such rate not exceeding 24%.
For period starting from the date of utilisation of such wrongly availed input tax
credittill the date of reversal of such credit or payment of tax in respect of such amount
Month Opening Eligible ITC Total Output Closing Amount
balance in ITC (B) wrongly ITC liability balance on which
electronic availed (D)= (E) in E- Interest is
credit (C) (A+B+C) credit applicable
ledger [A] ledger(F)
=
(D-E)
April - 7,00,000 50,000 7,50,000 7,00,000 50,000 -
May 50,000 5,00,000 - 5,50,000 5,00,000 50,000 -
June 50,000 3,00,000 - 3,50,000 3,30,000 20,000 30,000
July 20,000 6,00,000 - 6,20,000 6,20,000 - 20,000
April & May: - ITC of ₹50000/- was wrongly availed but the same was not utilised, so
interestis not applicable.
June: - Wrongly availed ITC of ₹50000/- is carried forward to the current month as it
has notbeen utilised, however ₹30000/- is utilised out of ₹50000 when we had shortage
of eligible ITC(₹30000/-) to adjust against the output liability of ₹330000/-, interest
shall be applicable on
₹30000/- as the same is utilised in the current month.
July: - Out of ₹50000/-, ₹30000/- was already utilised and the balance of ₹20000/- was
carriedforward to the current month. Since eligible ITC (₹600000/-) is lesser than the
output liabilityof ₹620000/- and the remaining wrongly availed ITC of ₹20000 is
utilised, therefore interest shall be applicable for ₹20000/-

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The date from when such interest is applicable as explained below:

Due Date Filing Date Date of Utilisation
20/05/2022 20/05/2022 -
20/06/2022 20/06/2022 -
20/07/2022 18/07/2022 18/07/2022
20/08/2022 25/08/2022 20/08/2022

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CA CS PIYUSHA SARDA T.

07. Introduction to GST

Q170. Write a short note on various Lists provided under Seventh Schedule to the
Constitution of India.
Answer: Seventh Schedule to Article 246 of the Constitution contains three lists which enumerate
the matters under which the Union & the State Governments have the authority to make laws as
follows:-
List-I (UNION LIST):- It contains the matters in respect of which the Parliament
(Central Government) has the exclusive right to make laws.
List-II (STATE LIST):- It contains the matters in respect of which the State
Government has the exclusive right to make laws.
List-III (CON- It contains the matters in respect of which both the Central &
CURRENT LIST):- State Governments have power to make laws.

Q172. Differentiate between Direct and Indirect taxes. What are the GST rates in India
prescribed for various goods?
Hint: The following are CGST rates, hence, overall rate of GST will be double of same.
(CGST + Equal levy of SGST/UGST, as the case may be.) 0.125%, 1.5%, 2.5%, 6%, 9%, 14%.
Particulars Direct Taxes Incidence of tax
Levied on It is levied on income earned by It is levied on product or
activities conducted. services
Incidence of tax It is borne directly by person payingtaxIt is shifted to other person as
to Government. the person paying tax to
Government collects the
same
from ultimate consumer.
Nature It is progressive in nature i.e. highrate It is regressive in nature as all
of taxes for people with higher ability to the consumers equally bear
pay. the burden, irrespective of
their
ability to pay.
When it is paid? It is paid after the income reaches in It is paid before goods/services
the hands of tax payer. reaches the tax payer.

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Collection Tax collection is difficult and it is on Tax collection is relatively

yearly basis. easier and collected at the time
of sale purchase of goods or
rendering of services.
Examples E.g. Income tax, wealth tax, etc. Eg. Custom Duty, GST,
Excise Duty, Service tax,
Sales tax,
etc.
Q173. Which goods are kept out of levy of GST permanently? What are the GST rates in
India prescribed for various services?
Hint: Alcoholic Liquor for human consumption. Broadly, four rates of CGST have been notified for
services viz. 2.5%, 6%. 9%and 14%. (Equivalent rate of SGST/UGST will also be levied.)

Q174. Discuss the deficiencies in the existing indirect taxes which led to the need for
ushering into GST regime.
Answer: Deficiencies in the erstwhile indirect tax regime:-
Feature Explanation
1 Double taxation Earlier some items were treated both as goods & Services
that led to double taxation.
2 No set-off CENVAT & State level VAT were value added taxes but
cross credit i.e. set-off of those was not possible as
CENVAT was central levy & the other one was a State levy.
3 Cascading of taxes CENVAT did not include value addition chain in
distributive trade after the stage of production & in state
level VAT also, CENVAT load on goods was not removed
leading to cascading of taxes.
4 Several taxes not For a single transaction, multiple taxes in multiple forms
subsumed in VAT were required to be paid like Luxury Tax, Entertainment
Tax, etc. which were not subsumed in VAT.
5 Non-integration of VAT on goods was not integrated with service tax at the
VAT & Service Tax state level. So, the cascading effect of service tax was not
removed.
6 Cascading nature of CST was non-vatable (i.e. no credit was allowed) and an
CST origin-based tax which had cascading effect.
7 High Compliance Cost Large number of taxes created high compliance cost for the
taxpayers in form of more returns, payments, etc.

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CA CS PIYUSHA SARDA T.

Q175. Explain the concept & principles of GST?

Answer: The Concept & Principles of GST are as under:-
1 Value Added Tax GST is a Broad-based value added tax levied on value added
to goods &/or services at each stage of supply chain.
2 Destination based GST is the revenue of that state which has jurisdiction over
tax on consumption the place of consumption of goods &/or services which is
consumption also termed as place of supply.
3 Tax on business GST is a tax on the consumption of products/services from
activity business sources, and not on personal/ hobby activities.
4 Continuous Chain It is available from producer's/service provider's point up to
of tax Credits the retailer's/ consumer's level thus taxing only the value
added at each stage of supply chain.
5 Burden borne by Only the final consumer bears the GST charged by the last
final consumer supplier in supply chain as at all the previous stages- set off
benefits are available to the suppliers.
6 No cascading of As GST is charged only on value added at each stage, there
taxes is no cascading of taxes in this system & it avoids double
taxation.

Q176. GST is a simplified tax structure. Justify the statement.

Answer: GST is a simplified tax structure because of following reasons:-
i) Multiple taxes are reduced under GST & this lead to simplification & uniformity in
tax structure making it simpler.
ii) Uniformity in laws, procedures and tax rates across the country makes doing business
easier.
iii) Common system of classification of goods and services across the country ensures
certainty in tax administration across India.
iv) GST avoids cascading effect of taxes completely.

Q177. Discuss how GST resolved the double taxation dichotomy under previous indirect
taxlaws OR
Explain how GST is a cure for ills of existing indirect tax regime.

Answer:

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CA CS PIYUSHA SARDA T.

 Input Tax Credit (ITC):- ITC of CGST/SGST/ UTGST/IGST is available throughout

thesupply chain thus, taxing only the value added.
 A comprehensive tax structure:- GST covers both goods and services which solved
many issues.
 GST removed the cascading effect of CENVAT, service tax & VAT as it is
simultaneously introduced at both Centre and State levels.
 Now, Set off is available at all level i.e. to manufacturer, retailer, service provider.
 One Single tax:- Under GST regime, major indirect taxes have been subsumed in the
ambit of GST reducing the multiplicity of taxes. The erstwhile concepts of
manufacture/ sale of goods or rendering of services are no longer applicable since, GST
is levied on "Supply of Goods and/or services".

Q178. List the advantages that GST accrues to the trade and industry.
Answer: GST accrues following advantages to the trade and industry:-
i) Benefits to industry:-
 Several Central & State taxes are subsumed in GST giving relief to trade and
agriculture industry.
 Under GST, wide and comprehensive set-off is available of input tax credit.
 This resulted in widening of tax base and better tax compliance that lead to lowering
of tax burden on an average dealer in trade and industry.
ii) Mitigation of ill effects of cascading:-
 Under GST, most of the Central & State taxes are subsumed into a single tax and
set-off of prior-stage taxes are also allowed for the transactions across the entire
value chain.
 This helps in mitigating the ill effects of cascading, improving competitiveness and
improving liquidity of the businesses.
iii) Benefits to small traders and entrepreneurs:-
 GST increased the threshold for GST registration for small businesses & also
providedthem the benefit of composition scheme.
 Further, single registration is needed in one State. It has created a seamless national
market across the country giving an opportunity to small enterprises to expand
their national footprint with minimal investment.

Q179. Mention the various components under GST & also discuss them in brief.
Answer:

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CA CS PIYUSHA SARDA T.

CGST:-  It stands for Central Goods & Service tax which is levied & collected
by Central government on intra-state supply of goods &/or services.
 It is governed by Central Goods & Services Tax Act, 2017.
SGST:-  It stands for State Goods & Service tax which is levied & collected by
respective State Government on intra-state supply of goods &/or
services.
 It is governed by State Goods & Services Tax Act, 2017.
UTGST:-  It stands for Union Territories Goods & Service tax which is levied &
collected by Central government on intra-state supply of goods &/or
services.
 It is governed by Union Territory Goods & Services Tax Act, 2017.
IGST:-  It stands for Integrated Goods & Service tax which is levied & collected
by only Central government on inter-state supply of goods &/or
services.
 The tax so collected is then apportioned between Central Government
& respective State Government where goods are consumed.
 It is governed by GST (Compensation to states) Cess Act, 2017.
GST  It is a compensation to States for loss of revenue on account of
Compensation introduction of GST & is provided by Parliament, by law, on
Cess:- recommendation of GST Council for 5 years.
 It is levied by Central government on notified goods only-on intra/inter
state supply.
 It is governed by GST (Compensation to states) Cess Act, 2017.

Q 180. What is Goods and Services Tax (GST)?

Answer : It is a destination based tax on consumption of goods and services. It is proposed
to be levied at all
stages right from manufacture up to final consumption with credit of taxes paid at previous
stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is
to be borne by the final consumer.

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CA CS PIYUSHA SARDA T.

Q 181. What exactly is the concept of destination based tax on consumption?

Answer : The tax would accrue to the taxing authority which has jurisdiction over the
place of consumptionwhich is also termed as place of supply.
Q 182. Which of the existing taxes are proposed to be
subsumed under GST?Answer : The GST would replace the
following taxes:
i. taxes currently levied and collected by the Centre:
a. Central Excise duty
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special Importance)
d. Additional Duties of Excise (Textiles and Textile Products)
e. Additional Duties of Customs (commonly known as CVD)
f. Special Additional Duty of Customs (SAD)
g. Service Tax
h. Central Surcharges and Cesses so far as they relate to supply of goods and services
ii. State taxes that would be subsumed under the GST are:
a. State VAT
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax (all forms)
e. Entertainment and Amusement Tax (except when levied by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State Surcharges and Cesses so far as they relate to supply of goods and services
The GST Council shall make recommendations to the Union and States on the taxes,
cesses and surchargeslevied by the Centre, the States and the local bodies which may
be subsumed in the GST.
Q 183 Elaborate the principles that were borne in mind while subsuming various
central,State and local levies, under GST.
Answer:
The various central, state & local taxes or levies were examined to identify their
possibility ofbeing subsumed under GST keeping the following principles in mind:-
i) They should be primarily in the nature of indirect taxes, either on the supply of
goods or on the supply of services.

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CA CS PIYUSHA SARDA T.

ii) They should be part of transaction chain which commences with import/
manufacture/ production of goods or provision of services at one end & the
consumption of goods & services at the other.
iii) Subsuming of taxes should result in free flow of tax credit in intra & inter- State
levels. Taxes, levies & fees that are not specifically related to supply of goods &
services should not be subsumed under GST.
iv) Revenue fairness for both the Union and the States individually would need to be
attempted.

List the Central and State levies which have been subsumed in GST in India.
Answer:
Central levies subsumed State levies subsumed
Central Excise Duty & Additional Duties
Service Tax Entertainment Tax (except those levied by
local bodies)
Excise Duty levied under Medicinal & Toilet Taxes on lottery, betting & gambling
Preparation Act
ACD (Additional custom duty) Entry Tax (All forms) & Purchase Tax
Luxury Tax
Central Sales Tax Taxes on advertisements
Central Surcharges & Cesses related to State surcharges & Cesses related to supply
supply of goods & services of goods & services

Q 184 What are the taxes that will continue

postGST? Answer: The taxes that will
continue
after GST are:-
a. Basic Customs Duty
b. Export Duty
c. Stamp Duties & Property Tax
d. Electricity Duties
e. Entertainment tax levied by local bodies
f. Excise duty/ VAT/CST on Alcohol for human consumption & Petroleum products.

Q 185. Which are the commodities kept outside the purview of GST? OR Supply
of all goods and/or services is taxable under GST. Discuss the validity of the
statement.
Answer: The statement is invalid due to the following reasons:-
 Supplies of all goods &/or services are taxable under GST
 except alcoholic liquor for human consumption.
 Supply of following would be taxable with effect from the date notified by
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CA CS PIYUSHA SARDA T.

Government on recommendations of the GST Council:-

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CA CS PIYUSHA SARDA T.

 petroleum crude, high speed diesel,

 motor spirit (petrol),
 natural gas &
 aviation turbine fuel.

Q 186. Briefly explain the leviability of GST or otherwise on petroleum crude, diesel,
petrol,Aviation Turbine Fuel (ATF) and natural gas.
Answer:
 At present, Petroleum crude, diesel, petrol, ATF and natural gas are not leviable to
GST.
 GST will be levied on these products from a date to be notified on the
recommendationsof the GST Council.
 But, there is a levy of:-
 Central excise duty on manufacture/production of petroleum crude, diesel,
petrol,ATF and natural gas &
 CST/VAT on inter-State/intra-State sale of the same respectively.

Q 187. ITC Itd. is a company manufacturing Cigarette and supplies it to the

distributor Mr. 2 for 2, 00,000 on which it charged excise as well as GST. Mr. 2
further supplied it tothe retailer Mr. R for 2, 20,000 charging GST. Explain whether
treatment of taxes by ITCLtd. & distributor Mr. 2 is correct or not. OR
Discuss the leviability of GST or otherwise on tobacco.
Answer:
 Tobacco is subject to GST as well as central excise duty as it is within the purview of
GST
i.e. GST is leviable on its' supply & Union Government has also retained the power
to levyexcise duties on tobacco and tobacco products manufactured in India.
 Therefore, treatment by ITC Ltd. on supply of the tobacco & tobacco products after
manufacturing it is correct. Recipient of supply (ie. Mr. 2) can take ITC only of
GST.
 In case of further supply by Mr. 2 to retailer Mr. R, supply would be subject to GST
only& not central excise because there is no manufacture therefore, treatment by
Mr. 2 is alsocorrect.

Q 188. Explain the concept of 'Dual GST' OR Discuss the dual GST model as
introduced in India.
Answer: India a Dual GST model in view of the federal structure of the country where
GST isimposed concurrently by the Centre & States, i.e. they both simultaneously tax
goods & services as under:-
 Centre has power to levy IGST on inter-state supplies of goods &/or services.
 Central & States/UTs with state legislature simultaneously have power to levy
CGST & SGST on Intra State supplies of goods &/or services.
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CA CS PIYUSHA SARDA T.

 UTS without legislature have power to levy UTGST on Intra state supplies of
goods &/or services.
GST extends to whole of India including the State of Jammu & Kashmir.

Q 189. Write a short note on Goods and Services Tax (GST) Council.
Answer:
 Article 279A of the Constitution empowers the President to constitute a joint forum
of theCentre and States called GST Council.
 Constitution of Council:-
 The Union Finance Minister is the Chairman of this Council,
 Ministers in charge of Finance/ Taxation or any other Minister nominated by
each ofthe States & UTs with Legislatures are members of council.
 The Union Minister of State in charge of Revenue or Finance is also a
member ofcouncil.
 Function of Council :- To make recommendations to the Union and the States on
important issues like tax rates, exemptions, threshold limits, dispute resolution, etc.
The GST Council has decided the threshold exemption, composition threshold, GST
rates, GSTlegislations including rules and notifications.

Q 190. List the special category States as prescribed in Article 279A of the
Constitution ofIndia?
Answer: There are II Special Category States for which special provisions are made
under GST, namely, States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur,
Meghalaya,Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh & Uttarakhand.

Q 191. What is
GSTN?
Answer:
 GSTN stands for Goods and Services Tax Network (GSTN).
 It is a Special Purpose Vehicle that provide a shared IT infrastructure and services to
Central and State Governments, tax payers and other stakeholders for
implementation of GST.
 It is a non-Government, private limited company formed u/s 8 of the Companies Act,
2013(not for profit companies).

Q 192. Discuss the functions of Common GST portal/GSTN? [ICAI Study Material]
Answer: Common GST portal is a robust settlement mechanism amongst the States &
the Centre as GST is a destination-based tax. It is a clearing house & it verifies the claims
and inform the respective Governments to transfer the funds.

Thus, Common GST Electronic Portal - www.gst.gov.in - is a website managed by

Goods & Services Network (GSTN). It establishes a uniform interface for tax payer and
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CA CS PIYUSHA SARDA T.

a common andshared IT infrastructure between the Centre and States.

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CA CS PIYUSHA SARDA T.

The functions of Common GST portal/ GSTN include:-

 Facilitating registration
 Forwarding the returns to Central & State authorities
 Computation & settlement of IGST
 Matching of tax payment details with banking network
 Providing various MIS reports to the Central & the State Governments based on
thetaxpayer return information
 Providing analysis of taxpayers' profile
 Running the matching engine for matching, reversal & reclaim of input tax credit
 For furnishing E-Way Bill
 For generation of E-Invoice

Q 193.Bring out the salient features of cross utilization of Input Tax Credit (ITC)
underGST law?
Answer: Input Tax Credit (ITC) of IGST, CGST and SGST/UTGST is available
throughoutthe supply chain but,
1. First use IGST credit to pay IGST.
 remaining amount can be used to pay CGST & SGST/UTGST in any order and
in anyproportion.
2. Entire ITC of IGST is to be fully utilised first before the ITC of CGST or
SGST/UTGSTcan be utilized.
3. CGST Credit shall first be utilized for payment of CGST. Remaining amount
will beutilized for payment of IGST.
4. SGST /UTGST credit shall first be utilized for payment of SGST/UTGST.
 Remaining amount will be utilized for payment of IGST, that too only when
credit ofCGST is not available for payment of IGST.
5. CGST credit shall not be utilised to pay SGST/ UTGST.
6. SGST/ UTGST credit shall not be utilised to pay CGST.

Q 194.Mr. Ajay, a registered supplier of goods, pays GST under regular scheme
andprovides the following information for the month of August 20XX:
Particulars ₹
Inter-State taxable supply of goods 10,00,000
Inter-State taxable supply of goods 2,00,000
Intra-State purchase of taxable goods 5,00,000

He the following Input tax credit at the beginning of August 20XX:

Nature ITC Amount in ₹
CGST 20,000
SGST 30,000
IGST 25,000

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CA CS PIYUSHA SARDA T.

Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively. Both Inward
and outward supplies are exclusive of taxes wherever applicable. All the conditions
necessaryfor availing the ITC have been fulfilled. Compute the net GST payable
by Mr. Ajay for the month of August 20XX.
Answer: Note :- Computation of total ITC
Particulars IGST@ 18% CGST@9% SGST@9%
Opening ITC 25,000 20,000 30,000
Add: ITC on Intra-State purchases of - 45,000 45,000
taxable goods valuing 5,00,000
Total ITC 25,000 65,000 75,000

Computation of Net GST payable by Mr. Ajay for the month of August, 20XX
S. Particulars Taxable IGST@1 CGST@ SGST@
No. Value ₹ 8% 9% 9%
1 Intra-State taxable supply of goods 2,00,000 - 18,000 18,000
2 Intra-State taxable supply of goods 10,00,000 1,80,000 - -
Total GST Payable 1,80,000 18,000 18,000
3 Less : ITC (Note I) (25,000) - -
IGST – 25,000
4 CGST – 65,000 (47,000) (18,000) x
5 SGST – 75,000 (57,000) x (18,000)
Net GST payable 51,000 Nil Nil
Note :-
1. IGST credit is used to pay IGST 1st, once IGST credit is fully utilised then
CGST/SGSTcredits are used first to pay tax under same head & balance credit is
used to pay IGST.
2. Also, SGST credit can be utilised to pay IGST only when credit of CGST is not
availableto pay IGST.

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08. VALUE OF SUPPLY

Q. 195 Can any addition be made to the contracted price when Transaction Value'
isacceptable?
Answer: Yes, As per section 15(2) of CGST Act, 2017, the following inclusions shall be made
to the transaction value determined as per section 15(1):-
a) any taxes, duties, cesses, fees and charges levied under any law other than the GST law, if
charged separately by the supplier.
b) any amount that the supplier is liable to pay in relation to such supply but which Ce has
been incurred by the recipient & also not included in the price actually paid or Dis payable
for the goods &/or services.
c) incidental expenses, including commission and packing, charged by the supplier to the
recipient, and any amount charged for anything done by the supplier in respect of the supply
until delivery of goods or supply of services.
d) interest or late fee or penalty for delayed payment of any consideration for any supply &
e) subsidies directly linked to the price excluding subsidies provided by the Central
Government & State Government.

Q. 196 Determine whether the following taxes and their value shall be included in the
value of supply as per section 15 of CGST Act for levy of GST:-
i. Mr. R recovers rent for premises of 15,000 and a house tax of 1000 per month.
ii. Contract price of supply of goods is Rs.14,000 inclusive of GST is 18%.
iii. An Indian company is required to pay 1,00,000 to a German company for technical
knowhow. It deduced 10,000 as income tax at source and paid Rs.90,000 to the
German company.
Answer:
Legal Provision:- As per section 15(2)(a) of CGST Act, 2017, the value of supply shall
include any taxes, duties, cesses, fees and charges levied under any law other than the GST
law (i.e. other than CGST, SGST, UTGST, IGST & GST Compensation Cess), if charged
separately by the supplier.
Discussion & Conclusion: - Thus, the treatment and valuation in various cases asked shall be
as under: -
i) The Value of supply shall be Rs.16000 which is including the house tax (i.e. Rent
15,000+ House tax Rs.1000).
ii) Contract Value is 14,000 including GST @18%. GST charged shall be worked out
as per Rule 35 of CGST Rules i.e. Rs.14,000 * 18/118=Rs.2136. Thus, the value of
supply for GST will be Rs.11864.
iii The value of taxable supplies on which the Indian company will pay GST under
) reverse charge shall be Rs.100000 which is including TDS under income tax act.

Q. 197 What is time of supply?

Ans. The time of supply fixes the point when the liability to charge GST arises. It also indicates
when a supply is deemed to have been made. The CGST/SGST Act provides separate time of
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supply for goods and services.

Q. 198 When does the liability to pay GST arise in respect of supply of goods?
Ans. Section 12 of the CGST/SGST Act provides for time of supply of goods. The time of supply
of goods shall
be the earlier of the following namely,
a. the date of issue of invoice by the supplier or the last date on which he is required u/s 31, to issue
the invoice
with respect to the supply; or
b. the date on which the supplier receives the payment with respect to the supply.
However, vide Notification No. 66/2017-Central Tax dated 15.11.2017, liability to pay tax at
the time of receipt of advance has been relaxed in case of goods.
Q. 199 XYZ Ltd. sells plant & machinery installed at its factory on 'as is whereas basis at
Rs.2,00,000. In order to remove machinery from the factory, the buyer incurs dismantling
charges of 3000, which are paid to third party. Determine the value of supply as per n the
GST Act.
Answer:
Legal Provision:-
As per section 15(2)(b) of CGST Act, 2017, the value of supply shall include any amount thatthe
supplier is liable to pay in relation to such supply but
- which has been incurred by the recipient of the supply and
- not included in the price actually paid or payable for the goods & or services.
Discussion & Conclusion:-
 In given case, XYZ Ltd. sells the plant & machinery on 'as is whereas basis where the
dismantling charges are directly incurred by buyer without the supplier having any
liability of the same.
 Thus, dismantling charges shall not be included in transaction value Rs.2,00,000 of XYZ
Ltd.
 Thus, the value of supply shall be Rs.200000 in this case & the dismantling
chargesRs.3,000 shall be separately treated in the invoice of third party and not in the
invoice of supplier.
Q. 200 AKJ Foods Pvt. Ltd. gets an order for supply of processed food from a customer.
The customer wants the consignment tested for gluten or specified chemical residues.
AKJ Foods Pvt. Ltd. does the testing and charges a testing fee for the some from the
customer. AKJ Foods Pvt Ltd. argues that such testing fees should not form part of the
consideration for the sale as it is a separate activity. Is the argument correct in light of
section I5?
Answer: - No. The argument of AKJ Foods Pvt. Ltd. is not correct.
Legal Provision:-
 Section 15(2)(c) of CGST Act, specifies that amount charged for anything done by supplier
in respect of supply at the time of or before delivery of goods or supply of services shall be
included in value of supply.
Discussion & Conclusion-
 In the given case, Since AKJ Foods Pvt. Ltd. does the testing on customer's request before
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the delivery of goods, the charges therefore will be included in the value of the
consignment.
 The testing fee should be added to the price to arrive at value of the consignment.

Q. 201 Furniture Wala is a chain of retail showrooms selling both modern and classic
furniture. In order to build strong customer association, the showroom provides free
delivery of the furniture at the premises of the customers if the distance between the

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showroom and the customer's premises is up to 20kms. Where the distance is more than
20kms, the showroom charges a concessional freight of Rs.10 for every additional km.
Ms. Leena Kapoor purchases a double bed, a dressing table and a centre table for
Rs.2,00,000 from Furniture Wala. Ms. Leena gets free delivery of the furniture as her
residence is located at a distance of 18 km from the showroom. The showroom incurs an
expenditure of Rs.1000 for delivering the furniture at Ms. Leena's residence. Determine
the value of taxable supply made by Furniture Wala.
Will your answer change if residence of Ms. Leena is 50 km away from showroom?
Answer:
Legal Provision:-
As per section 15(2)(c) of the CGST Act, the value of supply includes:
 Incidental expenses, including commission and packing, charged by supplier to recipient
&
 any amount charged for anything done by the supplier in respect of the supply until delivery
of goods or supply of services.
Discussion & Conclusion:-
 In the given case, the showroom is not charging any amount towards freight from Ms.
Leena but incurring the same out of its own pocket.
 Thus, the same shall not be added to value & the value of supply will be 2,00,000 in this
case.
 However, the answer will change in the second case when the showroom will charge
Rs.300 for freight [(50km-20 km) x Rs.10] from Ms. Leena.
 In this second case, the supply will be a composite supply where the principal supply
being the supply of furniture and value thereof will be Rs.2,00,300.

Q.202 Mezda Banners, on advertising firm, gives an interest-free credit period of 30 days
for payment by the customer. Its customer ABC paid for the supply 32 days after the
supply of service. Mezda Banners waived the interest payable for delay of two days. The
Department wants to add interest for two days as per contract. Should notional interest
be added to the taxable value?
Answer:
The Contention of Department to add notional interest is not valid in the eyes of law.
Legal Provision:-
 As per section 15(1) of CGST Act, 2017, value of supply is the transaction value (i.e. price
actually paid or payable) where price is sole consideration for supply & supply is made to
unrelated person.
 As per section 15(2)(d) of CGST Act, 2017, the value of supply shall include Interest or
late fee or penalty for delayed payment of any consideration for supply.
 Such interest is added to transaction value on receipt basis & not on notional basis.
Discussion & Conclusion:-
 In given case, Mezda Banners waived the interest payable for delay of two days & thus, it
did not actually receive that notional interest.
 Once waived, the interest is not payable and is therefore, not to be added to the value.

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Q. 203 M/s. Chand is a manufacturer of Paper products having factory at Kolkata,

Maharashtra, M/s. Kela and M/s. Bela of Mumbai, Maharashtra are appointed as agents
to sell the products on behalf of M/s. Chand with the conditions that both of them
guarantee the realization of payment from buyers. Both M/s. Kela and M/s. Bela provide
short-term borrowing facilities to buyers for timely payment of dues against supplies
made to them and for this they charge interest from the ultimate buyer. While M/s. Kela
raises invoices in the name of M/s. Chand and M/s. Bela raises invoices in its own name.
In light of provisions contained in Para 3 of Schedule I of CGST Act, kindly explain
treatment of interest charged by M/s. Kela and M/s. Bela in abovementioned cases.
Answer:-
 M/s. Kela and M/s. Bela are del credere agents (DCA) of M/s. Chand as they guarantee
payment to supplier.
 A DCA falls under the ambit of 'agent' under Para 3 of Schedule I of the CGST Act,
2017, if the invoice for supply of goods is issued by the DCA in its own name.
 However, if the invoice for supply of goods is issued by the supplier to the customer, either
himself or through DCA, the DCA is not an 'agent' in terms of Para 3 of Schedule 1.
 Thus, M/s. Bela is an agent of M/s. Chand in terms of Para 3 of Schedule I, M/s. Kela is
not.
 Where the DCA is not an agent under Para 3 of Schedule l:-
- the temporary short-term loan being provided by DCA to the buyer is a supply of
service by the DCA to the recipient on principal-to-principal basis and is an
independent supply.
- Said supply is specifically exempt from tax.
- Thus, interest charged by M/s. Kela is an independent supply and is exempt from tax.
 Where the DCA is an agent under Para 3 of Schedule 1:-
- the temporary short-term credit being provided by DCA to the buyer no longer
retains character of an independent supply and is subsumed in the of the goods by
the DCA to recipient.
- Interest charged for such credit is also included in value of supply of goods by DCA
to recipient.
- Thus, interest charged by M/s. Bela will be included the value of goods supplied by
it.

Q. 204 A philanthropic association makes a substantial donation each year to a reputed

private management institution to subsidize the education of low income group students
who have gained admission there. The fee for these individuals is reduced thereby, coming
to Rs.3 lakh e year compared to Rs.5 lakh a year for other students. What would be the
taxable value of the service of coaching and instruction provided by the institution?
Answer:
Legal Provision:-
 As per section 15(2)(e) of CGST Act, 2017, the value of supply shall include Subsidies
directly linked to the price excluding subsidies provided by the Central Government &
State Government.
Discussion & Conclusion-
 In this case, the subsidy is not given by Government but by a philanthropic association to
subsidize the education & is directly linked to the fee charged.
 Thus subsidy is to be added back to the price to arrive at the taxable value, i.e. Rs.5 lakh
in a year.
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Q.205 Sharp Minds Institute provides coaching for engineering entrance examinations.
Monthly Fee charged by the Institute from a student is Rs.10,000. The Institute is known
for its commitment to provide education to underprivileged children. It trains 10 students
every year for entrance examinations free of cost. The Institute has received Rs.3,00,000
as coaching fees during a month. Nav Jeevan, an NGO working in the area of education
for underprivileged children, has given subsidy of Rs.10,000 (in lump sum) during the
month to the institute as it is serving the cause of underprivileged children.
Determine the value of supply of education services made by Sharp Minds Institute
during the month.
Answer:
Legal Provision:-
 As per section 15(2)(e) of CGST Act. 2017, the value of a supply includes subsidies
directly linked to the price, excluding subsidies provided by the State Governments and the
Central Government.
Discussion & Conclusion:-
 In the given case, though the subsidy is given by a non-Government body, the same is not
includible in the value as it is given in lump sum and not directly linked to the price of
the supply being valued.
 Therefore, the value of supply made by Sharp Minds during the month is Rs.3,00,000.

Q. 206 Whether discounts given to a customer be allowed as a deduction from transaction

value?
Answer: Yes, As per section 15(3) of CGST Act, 2017, the following two types of discount
would be excluded from the transaction value:-
i) Discount given before or at the time of Supply:-
It is allowed as a deduction if such discount has been duly recorded in the invoice
issued in respect of such supply.
ii) Discount given after effecting Supply/Post-Supply Discount:-
It is allowed as a deduction if:-
 such discount is given as per agreement entered into at or before the time of
such supply,
 it is specifically linked to relevant invoices &
 the recipient of supply reverses the Input tax credit which is attributable to
such discount on the basis of document issued by the supplier.

Q. 207 Crunch Bakery Products Ltd. sells biscuits and cakes through its dealers, to whom
it charges the list price minus standard discount and pays GST C accordingly. When
goods remain unsold with the dealers, it offers additional discounts on the stock as an
incentive to push the sales. Can this additional discount be reduced from the price at
which the goods were sold and concomitant tax adjustments made?
Answer:
Legal Provision:- As per section 15(3) of CGST Act, 2017, the discount given after effecting
Supply shall be deducted from transaction value if:-
 such discount is given as per agreement entered into at or before the time of such
supply,
 it is specifically linked to relevant invoices &
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 the recipient of supply reverses the Input tax credit on such discount on the basis o f
document issued by the supplier
Discussion & Conclusion:-
 In the given case, Crunch bakery products Ltd. has given additional discount after
supply of goods which was not agreed at the time of supply.
 Therefore, such discounts cannot be reduced from the price on which tax had been paid.

Q. 208 When will the recipient and supplier be treated as related person?
Answer: As per explanation to section 15 of CGST Act, 2017, persons shall be deemed to
be "related persons" if:-
(i) Such persons are officers or directors of one another's businesses
(ii) Such persons are legally recognised partners in business
(iii) Such persons are employer and employee
(iv) Any person directly or indirectly owns, controls or holds twenty-five percent or more of
the outstanding voting stock or shares of both of them
(v) One of them directly or indirectly controls the other
(vi) Both of them are directly or indirectly controlled by a third person
(vii) Together they directly or indirectly control a third person or
(viii) They are members of the same family.
(ix) They are associated in the business of one another where one is the sole agent/sole
distributor/ sole concessionaire of the other.
Q. 209 Determine the value of taxable supply from the following information inaccordance
with the provisions of section 15 of the CGST Act 2017:-
Particulars Amount in RS
Contract Value of goods inclusive of GST @ 12% 9,50,000
The above value of goods includes the following charges:-
- Packing & Handling charges 15,000
- Assembling & Pattern making charges 22,000

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- Testing charges 11,000

Transport charges paid by recipient on behalf of supplier has 7,500
not been included in the contract value
Answer: Computation of Value of Taxable supply:-
Particulars RS. Remark
Total Contract price of 9,50,000 It is inclusive of GST, Packing & Handling
goods charges, Assembling & Pattern making charges
& Testing charges as given in Question.
Less: - GST @ 12% (1,01,786) It is not includible in value u/s 15(2)(a) of
[Rs.9,50,000 *12/112] CGST Act, 2017.
Add:- Transport 7,500 Supplier's liability being incurred by recipient
charges and not included in price, is includible in value
u/s 15(2)(b) of CGST Act, 2017.
Value of taxable Supply 8,55,714 Refer Note below
Notes:-
 As per section 15(2)(c) of the CGST Act, value of supply shall include
- incidental expenses, including commission and packing, charged by supplier to
recipient &
- any amount charged for anything done by the supplier in respect of the supply until
delivery of goods or supply of services.
 Hence, Packing & Handling charges, Assembling & Pattern making charges & Testing
charges are not deducted from total contract price as they already included in value.

Q.210 Samriddhi Advertisers conceptualized and designed the advertising campaign for
o new product launched by New Moon Pvt. Ltd. for a consideration of Rs.5,00,000.
Samriddhi Advertisers owed Rs.20,000 to one of its vendors in relation to the advertising
service provided by it to New Moon Pvt. Ltd. Such liability of Samriddhi Advertisers was
discharged by New Moon Pvt. Ltd. New Moon Pvt. Ltd. delayed the payment of
consideration and thus, paid Rs.15,000 as interest. Determine the value of taxable supply
made by Samriddhi Advertisers[Applicable Rate=18%].
Answers:-
Determination of the value of taxable supply made by Samriddhi Advertisers:-
Particulars Amount in RS
Advertising service charges 5,00,000
Payment made by New Moon Pvt. Ltd. to vendor of Samriddhi 20,000
Advertisers [Note 1]
Interest for delay in payment of consideration[Rs.15,000x 12,712
100/118][Round off] [Note 2]
Value of taxable supply 5,32,712
Notes:-
1. Supplier's liability being incurred by recipient & also not included in price charged is
includible in value as per section 15(2)(b) of CGST Act, 2017.
2. The interest for delay in payment of consideration will be includible in the value of
supply as per section 15(2)(d) of CGST Act but, the time of supply of the same will be
the date when such interest amount is actually received as per section 13(6).
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- Such interest received shall be inclusive of GST and the value shall be computed by
backward calculation ie. [Int/(100+tax)*100].
Alternative Ans. by ICAI:-
 It is also possible to assume interest to be exclusive of GST & so, value of supply will be
Rs.5,35,000.
 if in any Question, interest on delay in payment of consideration is there but tax rate is
not given, then take assumption that interest & other amounts in Question are exclusive
of GST.

Q. 211 M/s. Flow Pro, a registered supplier, sold a machine to BP Ltd. It provides the
following information in this regard:-
Sr. No. Particulars Amount in RS
(i) Price of the machine [excluding taxes and other charges 25,000
mentioned at S. Nos. (ii) & (iii)]
(ii) Third party inspection charges 5,000
[Such charges were payable by M/s Flow Pro but the same
have been directly paid by BP Ltd. to the inspection agency.
These charges were not recorded in the invoice issued by
M/s Flow Pro]
(iii) Freight charges for delivery of the machine 2,000
[M/s Flow Pro has agreed to deliver the goods at BP Ltd.'s
premises]
(iv) Subsidy received from the State Government on sale of 5,000
machine under Skill Development Programme
[Subsidy is directly linked to the price]
(v) Discount of 2% is offered to BP Ltd, on the price mentioned
at S. No. (i) above and recorded in the invoice
Note: Price of the machine is net of the subsidy received.
Determine the value of taxable supply made by M/s Flow Pro to BP Ltd.
Answer: Computation of value of taxable supply made by M/s. Flow Pro to BP Ltd.
Particulars Amount (Rs.) Remark
Price of the machine 25,000 Since subsidy is received from State
Government, the same is not includible in
the value of supply as per section 15(2)(e)
of CGST Act
Third party inspection 5,000 Amount that supplier is liable to pay for
charges supply but is incurred by recipient & not
included in the price for the goods, is
includible in value of supply as per section
15(2)(b) of CGST Act
Freight charges for 2,000 Since arranging freight is the liability of
delivery of the machine supplier, it is a case of composite supply
and thus, freight charges are added in the

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value of principal supply as per section

15(2)(c) of CGST Act
Total 32,000
Less: Discount @ 2% on 500 Discount given before or at the time of
Rs.25,000 being price supply if duly recorded in invoice is
charged to BP Ltd. deductible from the value of supply as per
section 15(3)(a) of CGST Act
Value of taxable supply 31,500

Q. 212 Following are the particulars, relating to one of the machine sold by SQM Ltd. to
ACD Ltd. in the month of February 20XX at list price of Rs.9,50,000 (exclusive of taxes
and discount). Further, following additional amounts have been charged from ACD Ltd:-
Sr. No. Particulars Amount in RS
(i) Municipal taxes chargeable on the machine 45,000
(ii) Outward freight charges (Contract was to deliver machine 65,000
at ACD Ltd.'s factory i.e. F.O.R. contract)
Additional information:-
(i) SQM Ltd. normally gives an interest-free credit period of 30 days for payment, after
that it charges interest @ 1% p.m. or part thereof on list price. ACD Ltd. paid for
the supply after 45 days, but SQM Ltd. waived the interest payable.
(ii) SQM Ltd. received Rs.50,000 as subsidy, from one non-government organization
(NGO) on sale of such machine. This subsidy was not linked to the price of machine
and also not considered in list price of Rs.9,50,000.
(iii) ACD Ltd. deducted discount of Rs.15,000 at the time of final payment, which was
not as per agreement.
(iv) SQM Ltd. collected Rs.9,500 as TCS (tax collected at source) under the provisions
of the Income Tax Act, 1961.
Compute the value of taxable supply as per the provision of GST laws, considering that
the price is the sole consideration for the supply and both parties are unrelated to each
other.
Note: - Correct legal provision should form part of your answer.
Answer:-
Computation of value of taxable supply:-
Sr. No. Particulars Amount (Rs.)
List price (exclusive of taxes and discount) 9,50,000
(i) Municipal taxes [Note-1] 45,000
(ii) Outward freight charges [Note-2] 65,000
Value of taxable supply 10,60,000
Notes:-
1. As per section 15(2)(a) of CGST Act, Tax other than GST are includible in the value,
if charged separately,
2. Since contract is to deliver machine at buyer's factory, it is a composite supply wherein
the freight charges will be added to the value of principal supply of K machine & it is
includible as per section 15(2)(c).
3. As per section 15(2)(d), Value of supply includes interest charged for delayed
payment. However, since the interest on delayed payment has been waived off, A the
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same has not been added to the value.

4. As per section 15(2)(e), Subsidy directly linked to the price provided by non-
Government bodies is includible in value. Since subsidy received from NGO is not
directly linked to the price of the machine, the same has not been added to the value.
5. Since the discount was not known or agreed to at the time of supply of goods to the
buyers, such discount cannot be reduced from the price, as per section15 (3).
6. TCS is not includible in the value of supply as it is an interim levy not having the
character of tax.
Q. 213 Shri Krishna Pvt. Ltd., a registered dealer, furnishes the following information
relating to goods sold by it to Shri Balram Pvt. Ltd. in the course of Intra State:-
Sr. No. Particulars Amount in RS
(i) Price of the goods 1,00,000
(ii) Municipal Tax 2,000
(iii) Inspection charges 15,000
(iv) Subsidies received from Shri Ram Trust 50,000
(As the products is going to be used by blind association)
(v) Late fees for delayed payment (Though, Shri Balram 1,000
Pvt. Ltd. made late payment but these charges are
waived by Shri Krishna Pvt. Ltd.)
(vi) Shri Balram Pvt. Ltd. paid weightment charges to Radhe 2,000
Pvt. Ltd. (on behalf of Shri Krishna Pvt. Ltd.)
According to GST Law, determine the value of taxable supply made by Shri f Krishna
Pvt. Ltd. Items given in Point (ii) to (vi) are not considered while arriving at the price of
the goods given in point no. (1).
Answer: -
Computation of value of taxable supply made by Shri Krishna Pvt. Ltd. to Shri Balram
Pvt. Ltd.:-
Particulars Amount (Rs.) Remark
Price of the goods 1,00,000
Municipal Tax 2,000 Taxes other than those levied under GST
law are Includible in value as per section
15(2)(a) of CGST Act, 2017
Inspection charges 15,000 Being incidental expenses, the same are
includible in the value as per section 15(2)(c)
of the CGST Act, 2017
Subsidy received from 50,000 Since subsidy is received from a non-
Shri Ram Trust Government body, and subsidy is directly
linked to price the same is includible in the
value as per section 15(2)(e) of the CGST
Act, 2017
Late fees for delayed Nil Not includible u/s 15(2)(d) of CGST Act,
payment 2017 since it is waived off

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Weighment charges paidto 2,000 Liability of the supplier being discharged by

Radhe Pvt. Ltd. by Shri the recipient & not included in price, is
Balram Pvt. Ltd. on behalf includible in the value as per section
of Shri Krishna Pvt. Ltd. 15(2)(b) of the CGST Act
Value of taxable supply 1,69,000

Q. 214 Koli Ltd., a registered supplier, has supplied machinery to Ghisa Ltd. (a supplier
registered in the same State). It provides following particulars regarding the same-
Particulars Amount in RS
Price of Machinery (exclusive of taxes and discounts) 5,50,000
Part fitted in the machinery at the premises of Ghisa Ltd. [Amount 20,000
has been paid by Ghisa Ltd, directly to the supplier. However, it was
Koli Ltd.'s liability to pay the said amount. The said amount has not
been recorded in the invoice issued by Koli Ltd.]
Installation and testing charges for machinery, not included in price 25,000
Discount 2% on price of machinery mentioned at S. No. (i) above
(recorded in invoice)
Koli Ltd. provides additional discount @ 1% at year end, based on
additional purchase of other machinery for which adjustment is made
at the end of the financial year without any change in individual
transactions.
Determine the value of taxable supply made by Koli Ltd. to Ghisa Ltd.
Answer:-
Computation of taxable value of supply of machinery by Koli Ltd.:-
Particulars Amount (RS.) Remark
Price of machinery (exclusive of 5,50,000
taxes & discounts)
Add: Amount paid by Ghisa 20,000 As per section 15(2)(b) of CGST Act,
Ltd. directly to the supplier for a it shall be added in value as it is
part fitted in the machinery supplier's liability being incurred by
recipient and not included in price also.
Add: Installation and testing 25,000 As per section 15(2)(c) of CGST Act,
charges any amount charged for anything done
by supplier for supply of goods at the
time of, or before delivery of goods
shall be included in value.
Less: Discount 2% on (11,000) As per section 15(3)(a) of CGST Act,
machinery price [Rs.5,50,000 x since discount is given before or at the
2%] time of supply of machinery &
recorded in invoice, this discount shall
be deducted from value.
Less: Additional 1% discount at Nil As per section 15(3)(b) of CGST Act,
year end though the additional discount is
established before or at the time of
supply, it is not deductible from value

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as the same is not linked to any specific

transaction & is adjusted by parties at
end of the financial year
Value of taxable supply 5,84,000

Q. 215 Namo Shankar Ltd., a registered supplier in Mumbai (Maharashtra), has supplied
goods to Narad Traders and Nandi Motors Ltd, located in Ahmedabad (Gujarat) and
Kolkata (Maharashtra) respectively. Namo Shankar Ltd. has furnished the following
detailsfor the current month:-
Sr. Particulars Narad Traders (RS.) Nandi Motors Ltd.
No. (RS.)
(i) Price of the goods (excluding 10,000 30,000
GST)
(ii) Packing charges 500
(iii) Commission 500
(iv) Weighment charges 2,000
(v) Discount for prompt payment 1,000
(recorded in the invoice)
Items given in points (ii) to (v) have not been considered while arriving at price of the
goods given in point (1) above.
Compute the GST liability [CGST & SGST or IGST, as the case may be] of Namo
Shankar Ltd. for the given month. Assume the rates of taxes to be as under:-
Particulars Rate of tax
Central tax (CGST) 9%
State Tax (SGST) 9%
Integrated tax (IGST) 18%
Make suitable assumptions, wherever necessary.
Note: The supply made to Narad Traders is an inter-State supply.
Answer:-
Computation of GST liability:-
Sr. No. Particulars Narad Traders Nandi Motors
(RS) Ltd. (RS )
(i) Price of goods 10,000 30,000
(ii) Add: Packing charges (Note-1) 500
(iii) Add: Commission (Note-1) 500
(iv) Add: Weighment charges (Note-1) 2,000
(v) Less: Discount for prompt payment (1,000)
(Note-2)
Value of taxable supply 11,000 31,000
IGST payable @ 18% (Note-3) 1,980
CGST payable @ 9% (Note-4) 2,790
SGST payable @ 9% (Note-4) 2,790
Notes:-
1. As per section 15(2) (C) of CGST Act, 2017, Incidental expenses, including
commission and packing, charged by supplier to recipient of supply until the time of

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delivery of goods is includible in value of supply. Weighment charges are alsoincidental

expenses, hence includible in value of supply.
2. Since discount is known at the time of supply, it is deductible from the value as per
section 15(3) of the CGST Act, 2017.
3. Since supply made to Narad Traders is an inter-State supply, IGST is payable in terms
of section 5 of the IGST Act, 2017.
4. Since supply made to Nandi Motors Ltd. Is an intra-state supply, CGST & SGST is
payable on the same as per section 9 of CGST/SGST Act.

Q. 216 Kamal Book Depot, a wholesaler of stationery items, registered in Mumbai, has
received order for supply of stationery items worth Rs.2,00,000/- on 12th November, 20XX
from another local registered dealer, Mr. Mehta, Mumbai. Kamal Book Depot charged
the following additional expenses from Mr. Mehta:-
Sr. No. Particulars Amount in RS
(i) Packing charges 5,000
(ii) Freight & Cartage 2,000
(iii) Transit Insurance 1,500
(iv) Extra designing charges 6,000
(v) Taxes by Municipal Authority 500
The goods were delivered to Mr. Mehta on 14th November, 20XX. Since Mr. Mehta was
satisfied with the quality of the goods, he made the payment of goods the same day and
simultaneously placed another order on Kamal Book Depot of stationery items
amounting to Rs.10,00,000 to be delivered in the month of December, 20XX**. On receipt
of second order, Kamal Book Depot allowed a discount of Rs.20,000 on the first order
placed by Mr. Mehta.
Compute the GST liability of Kamal Book Depot for the month of November, 20XX
assuming the rates of GST on the goods supplied as CGST 9% & SGST 9% would your
answer be different if expenses (i) to (v) given in above table are already included in the
price of Rs.2,00,000?
Note: - (i) All the amounts given above are exclusive of GST.
(ii) Kamal Book Depot and Mr. Mehta are not related persons and price is the sole
consideration of the supply.
**Payment and invoice for the second order will also be made in the month of December,
20XX only.
Answer: -
i) Computation of value of taxable supply & GST liability of Kamal Book Depot for
November, 20XX
Particular Amount (RS) Refer Note
Price of the goods 2,00,000 [Note 1]
Add:-
i. Packing Charges 5,000 [Note 2]
ii. Freight & Cartage 2,000 [Note 2]
iii. Transit Insurance 1,500 [Note 2]
iv. Extra Designing charges 6,000 [Note 2]
v. Taxes by Municipal Authority 500 [Note 3]
Value of taxable supply 2,15,000 [Note 4]

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CGST @ 9% 19,350
SGST @ 9% 19,350
Total GST Liability 38,700
Notes:-
1. As per section 15(1) of CGST Act, 2017, value of a supply of Transaction value (i.e.
price actually paid or payable) where price is sole consideration for supply & supply is
made to unrelated person.
2. As per section 15(2) (c) of the CGST Act,
 The value of supply includes:-
 Incidental expenses, including commission and packing, charged by supplier
to recipient &
 Any amount charged for anything done by the supplier in respect of the supply
until delivery of goods or supply of services.
 Thus, Packing Charges, Freight & Cartage, Transit Insurance & Extra designing
charges are includible in value.
 The given supply is a composite supply where the principal supply is supply of
goods (stationery items) & the above services are incidental. Thus entire composite
supply is treated as a supply of goods only & charged to tax according u/s 8(a) of
CGST Act.
3. As per section 15(2) (a) of CGST Act, Taxes other than those levied under GST law
are includible in value.
4. As per section 15(3) of CGST Act, discount given after effecting supply / post-
supply discount will be allowed as a deduction from value if:-
 Such discount is given as per agreement entered into at or before the time of such
supply,
 It is specifically linked to relevant invoices &
 The recipient of supply reverse the input tax credit which is attributable to such
discount on the basis of document issued by the supplier.
In given case, discount of Rs.20,000 is a post-supply discount as goods are already
delivered by Kamal Book Depot. It will not be allowed as a deduction from value
since the discount policy was not known on or before the time of such supply although
the discount can be specifically linked to relevant invoice (invoice pertaining to
stationery items supplied to Mr. Mehta in November, 20XX).
ii) In case, the expenses (i) to (v) given in above table are already included in price of
Rs.2,00,000:-
 Since, these expenses are includible in value of supply as per the reasons
mentioned in explanatory notes above, no further addition will be required.
 Resultantly, the value of taxable supply will be Rs.2,00,000 and CGST and
SGST will be Rs.18,000 respectively.
Q. 217 XYZ Pvt. Ltd. provided the following particulars relating to goods sold by it to
ABC Pvt. Ltd.:
Particulars Amount (RS)
List price of the goods (exclusive of taxes and discount) 50,000
Tax levied by the Municipal Authority on the sale of such goods 6,000
Packing charges (not included in the list price above) 2,500

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Subsidy received from a NGO, directly linked to price (included in the 3,000
list price above)
Paid to one of the vendors by ABC Pvt.in relation to the service] 2,000
provided by the vendor to XYZ Pvt. Ltd. (not included in the list price
above)
XYZ Pvt. Ltd. offers 2% turnover discount on the list price after reviewing the
performance of ABC Pvt. Ltd. The discount was not known at the time of supply.
ABC Pvt. Ltd. delayed the payment and paid Rs.5,000 (including GST of 18%) as
interest to XYZ Pvt. Ltd.
Determine the value of taxable supply made by XYZ Pvt. Ltd. under GST
law.
Answer: Computation of value of taxable supply made by XYZ Pvt. Ltd:
Particulars Amount (RS) Remark
List price of the goods 50,000
(exclusive of taxes and
discount)
Tax levied by Municipal 6,000 As per section 15(2)(a) of CGST Act, Tax
Authority on the sale of such other than GST are includible in value, if
goods charged separately.
Packing charges 2,500 As per section 15(2)(c) of the CGST Act,
the value of supply shall include incidental
expenses, including commission and
packing charges, charged by supplier to
recipient
Subsidy received from NGO - As per section 15(2)(e) of the CGST Act,
subsidy is received from a non-Govt. body
and directly linked to the price, the same is
includible in the value of supply
Payment made by ABC Pvt. 2,000 As per section 15(2)(b) of the CGST Act,
Ltd. in relation to service Amount that supplier is liable to pay, but
provided by vendor to XYZ incurred by the recipient, is includible in
Pvt Ltd the value of supply
Turnover discount - As per section 15(3), Since discount is not
known at the time of supply, it is not
deductible from the value of supply
Interest for delayed payment 4237 (5000 As per section 15(2)(d) of CGST Act, the
(rounded off) *100/118) value of supply shall include Interest or late
fee or penalty for delayed payment of any
consideration for supply.
Value of taxable supply 64,737

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09. Levy and collection of GST

Q 218. Define the following terms as per GST Acts:- i) Goods ii) Services:
i) Goods:- As per section 2(52) of CGST Act, 2017, "Goods"
- means every kind of movable property
- other than money and securities but
- includes actionable claim, growing crops, grass and things attached to or
forming part of the land which are agreed to be severed before supply or under
a contract of supply.
ii) Services:- As per section 2(102) of CGST Act, 2017, "Services"
- means anything
- other than goods, money and securities but
- includes activities relating to:-
 the use of money or
 its conversion by cash or by any other mode, from one form, currency or
denomination, to another form, currency or denomination for which a
separate consideration is charged.
Explanation:-"services" includes facilitating or arranging transactions in securities.

Q 219. Define Taxable territory & Non-taxable Territory?

Answer: i) As per Section 2(109), "Taxable territory" means the territory to which the
provisions of the GST Act apply (ie. whole of territory of India).
ii) As per Section 2(79), "Non-taxable territory" means the territory which is outside the
taxable territory.
Author's Comment (just for reference & not part of ans):-
Sec 2(56):- India a) Territory of India as referred to in article I of Constitution (The
means territory of the Union of India viz., state and the union territories).
b) Its Territorial Water, seabed and sub-soil underlying such waters,
continental shelf, exclusive economic zone or any other maritime
zone as defined in the Territorial Waters, Continental Shelf,
Exclusive Economic Zone and Other Maritime Zones Act, 1976.
c) The air space above its territory and territorial waters.
Note:- INM = 1.85 KM, territorial waters = upto 12NM from baseline,
Contiguous zone = upto 24NM & EEZ = 200NM

Q 220. Explain the meaning of the term "recipient of supply of goods and/or services" under
the CGST Act, 2017.
Answer:
 As per section 2(93) of CGST Act, "Recipient" of supply of goods &/or services means:-
(a) where a consideration is payable for supply of goods &/or services,
- the person who is liable to pay that consideration,
(b) where no consideration is payable for the supply of goods,
- the person to whom the goods are delivered or made available, or
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- to whom possession or use of the goods is given or made available, and

(c) where no consideration is payable for the supply of a service,
- the person to whom the service is rendered, and
 any reference to a person to whom a supply is made shall be construed as a reference to
the recipient of the supply and
 shall include an agent acting as such on behalf of the recipient in relation to the goods or
services or both supplied.

Q 221. What is the taxable event under GST? [FAQ 2]

Ans. Taxable event under GST is supply of goods or services or both. CGST and SGST/ UTGST
will be levied
on intra-State supplies. IGST will be levied on inter-State supplies.
Q 222. Whether supplies made without consideration will also come within the purview of
supply underGST? [FAQ 3]
Ans. Yes, but only those activities which are specified in Schedule I to the CGST Act / SGST
Act. The said provision has been adopted in IGST Act as well as in UTGST Act also. In cases
where the inputs/ capital goodssent for job work are not returned with in the specified time
limit, the supplies made by the principal to job worker will also be deemed to be a supply.

Q223. Explain the term "Deemed Distinct Person" & answer the following questions
accordingly:-
(a) Smart Pvt. Ltd. have a registered head office located in Bangalore (Karnataka).
However, the registered branch of Smart Pvt. Ltd. is located in state of Gujarat. Will
they fall under the ambit of deemed distinct person under the GST Act?
(b) Shreya Ltd. is having a registered establishment in Goa. It has another establishment
in Chandigarh. Will they be treated as establishments of distinct persons under the
GST Act?
Answer:-
Legal Provision:-
 As per section 25(4) of CGST Act, If more than one registration is obtained or is required
to be obtained by a person in one or more State or Union territory, then for eachof such
registration, he shall be treated as distinct persons.
 As per section 25(5) of CGST Act, If registration is obtained or is required to be obtained
by a person for one establishment in a State or Union territory & has an establishment
in another State or Union territory, then such establishments shall be treated as
establishments of distinct persons.
Discussion & Conclusion:-
a) In the given case, Smart Pvt. Ltd. is separately registered in State of Karnataka & Gujarat
for its head office & branch respectively & thus, its' head office & branch shall be treated
as distinct persons.
b) In the given case, Shreya Ltd. have a registered establishment in Goa & have another
establishment in Chandigarh. Thus, both the establishments shall be treated as
establishments of distinct persons.
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Q224. Define 'intra-state supply' & 'inter-state supply' under GST law. Is it correct to say
that inter-state supply attracts both CGST & SGST?
Answer:
 If the location of supplier and the place of supply are in the same State/ Union territory, it
shall be treated as an 'Intra State supply.
 If the location of supplier and the place of supply are in:-
- two different States or
- two different Union territories or
- a State & a Union Territory
it shall be treated as an 'Inter State supply.
Import or export of goods &/or services are also treated as interstate supply.
 No, it is not correct to say that inter-state supply attracts both CGST & SGST as inter-state
supply attracts IGST. However, IGST is the sum total of CGST & SGST/UTGST.

Q 225.India wines has registered place of business in Kolkata, it is engaged in sale of

wine &beer from its outlet to various dealers across Kolkata. Whether GST is applicable
on such supply?
Answer: As per section 9(1) of CGST Act, Supply of alcoholic liquor for human consumption
is not leviable to GST, Thus, in this case, no GST shall be charged on value of such supply.

Q 226. When does a particular activity attract GST? Explain the scope.
Answer:
 As per section 9 of CGST Act, GST is leviable on supply of goods &/or services.
 As per section 7(1) of CGST act, supply includes:-
(a) All forms of supply of goods &/or services such as sale, transfer, barter,exchange,
licence, rental, lease, or disposal made or agreed to be mode for a
consideration by a person in the course or furtherance of business.
(aa) The activities/ transactions by a person other than an individual to its members or
constituents or vice-versa for cash, deferred payment or other valuable
consideration & as per Explanation to this section such person and its members
shall be deemed to be two separate persons & supply between them deemed to
take place from one person to another.
(b) Import of services for a consideration whether or not in course or furtherance of
business &
(c) The activities specified in Schedule 1, made or agreed to be made without a
consideration.

 Thus, if any transaction falls under the scope of sec 7(1) as above, it shall attract GST
except for the following activities which shall be treated neither as a supply of goods nor
supply of services given u/s 7(2):-
(a) Activities specified in Schedule III &
(b) Activities or transactions undertaken by Central Government, a State Government or
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any local authority in which they are engaged as public authorities which are
notified by Government on recommendations of Council as follows:-
1) Any activity in relation to a function entrusted to a Panchayat under article 2436
or to a Municipality under article 243W of Constitution.
2) Granting of alcoholic liquor licence, against consideration by the State
Government in which they are engaged as public authorities.

Q 227. “Exchange is a form of supply of goods or services or both, made or agreed to be

made for a consideration by a person in the course or furtherance of business". Explain
it with help of example.
Answer:
 When two persons mutually transfer the ownership of one thing for the ownership of
another, neither thing nor both things being money only, the transaction is called an
exchange.
 Exchange offers on products like televisions, mobile phones, refrigerators, etc. are
leviable to GST.
 Example:- Mr. X is a dealer of new cars. He sells new cars for ₹ 8,25,000 & agrees to
reduce ₹ 1,25,000 on surrendering of old car. Mr. Y who intends to buy new car worth ₹
8,25,000 agreed to exchange his old car with new car. Under GST law, it will be treated as
Mr. Y has made supply of old car to dealer Mr. X and Mr. X has made supply of new car
to Mr. Y. If Mr. Y is registered person, he will be liable to pay GST on ₹ 1,25,000.
Whereas, Mr. X will be liable to pay GST on ₹ 8,25,000 irrespective of fact that whether
Mr. Y is a registered person or not.

Q 228. Mention the necessary elements that shall constitute supply under CGST Act?
Answer: For any activity to qualify as a 'supply, the following elements are required to be
satisfied:-
i) The involves supply of goods &/or services.
ii) The supply is for a consideration except for activities covered under Schedule I.
iii) The supply is made in the course or furtherance of business.
iv) The supply is made in the taxable territory.

Q 229. 'Consideration under GST law includes both monetary and non-monetary
considerations."
Discuss the correctness or otherwise of the statement with reference to the definition ofterm
'consideration' provided under the CGST Act.
Answer:
 The statement is correct.
 As per the definition of 'consideration' provided under the CGST Act, "Consideration" in
relation to supply of goods &/or services includes:-
a) Any payment in money or otherwise, in respect of, in response to, or for the inducement
of, the supply of goods &/or services.
b) The monetary value of any act or forbearance, in respect of, in response to, or for the
inducement of, the supply of goods or services or both,
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 It excludes:-
a) Any subsidy given by the Central Government or a State Government.
b) Deposit given for the supply shall not be considered as payment made unless the
supplier applies it as consideration for the said supply.
 The consideration can be provided by the recipient or by any other person
 The term money under GST law not only includes cash (Indian as well as foreign currency)
but also cheque, promissory note, bill of exchange, letter of credit, draft, pay order,
traveler's cheque, money order, postal/electronic remittance or any such similar instrument
recognized by RBI.
 Non-monetary consideration essentially means consideration in kind.
Q 230. Determine whether there is consideration in following cases & also state whether
GST is chargeable:-
i) Reliance J10 offers free mobile handset on payment of security deposit worth
₹1500/- which is fully refundable.
ii) Isha, a customer purchases a gold necklace weighing 275 gms from PN Gadgil
Jewel showroom. In exchange, she sells her old gold articles weighing 200 gms &
pays differential amount in cash.
iii) RC cricket association Chennai, gifts a motor bike to Rahul as inducement to join
their cricket club.
iv) XYZ Itd. is manufacturing fertilizers used for agriculture purpose. State govt. has
given 30% subsidy on sale of such fertilizer.
v) ABC and Co., a trading concern, has supplied the product X to Mr. Y at subsidized
rate of 30,000 (Open market value of such goods is 45,000). The supplier of ABC
and Co. has given the subsidy to it to compensate for the price difference.
Answer:
i) No, as security deposit given in this case is not applied by the supplier towards the
mobile handset provided by it. Hence, GST will not be charged as there is no
supply in absence of consideration.
ii) In this case, there are two supplies as follows:-
a) Sale of gold necklace by Jeweller to the customer-
 It falls under the ambit of 'supply' as the sale of Jewellery by the Jeweller
is in the course of his business.
 Consideration paid by customer is partly in kind for 200 gms & partly in
money for 75 gms.
 GST shall be charged on value determined as per open market value for
275 gms of gold necklace.
b) Sale of old gold articles by customer to Jeweller
It is out of the purview of 'supply' as the sale by customer is not in the course
of business. Hence, GST will not be charged.
iii) Yes, as supply of motor bike is in response to an offer to join (i.e. inducement
to join) the cricket club & thus, GST shall be charged.

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iv) No, Section 2(31) of CGST Act clearly states that "consideration" excludes the
value of subsidy given by State Government. Thus, in the given case, GST will
be charged on value excluding subsidy.
v) Yes, Section 2(31) of CGST Act clearly states that "consideration" excludes the
value of subsidy given by Central Government or State Government. But, in given
case, subsidy is given by the supplier and not by Government. Hence, subsidy is
treated as consideration & GST will be charged on value including such
subsidy.

Q 231. The temple of ancestral deity of Mr. Aman Goel and his family is located at Beri,
Haryana. The temple is run by a charitable organisation registered under section 12AA of
the Income Tax Act, 1961. The family has got unshakeable faith in their ancestral deity.Mr.
Aman is a big entrepreneur having flourishing business of tiles in Gurugram. Upon the birth
of their first child, he donated 10 lakh to the said temple for construction of a sitting hall in
the temple. On the main door of the sitting hall, a name plate was placed stating "Donated
by Mr. Aman Goel upon birth of his first child".
You are required to examine the leviability of GST on the donation received from Mr.
Aman Goel?
Answer:-
Legal Provision:-
 As per CBIC clarification, if a name plate or similar acknowledgement is placed in the
premises of religious institution displaying donor's name just as an expression of
gratitude and public recognition of donor's act of philanthropy, then there is no supply
of service for a consideration (in the form of donation) & there is no GST liability on such
consideration.
 But the condition is that the displaying of name is not aimed at giving publicity to the donor
to advertise or promote his business.
 Here, Recipient of donation/ gift has no obligation (quid pro quo) to do anything i.e. supply
a service.
Discussion & Conclusion :- In the given case,
 The payment made to a charitable organization has the character of gift or donation.
 As there is no reference or mention of any business activity of the donor so as to advertise
it, the purpose is also philanthropic (i.e., it leads to no commercial gain) & thus, not
leviable to GST.

Q 232. Glory Ltd. is engaged in manufacturing and selling of cosmetic products. Seva
Trust, a charitable organisation, approached Glory Ltd. to provide financial assistance
for its charitable activities. Glory Ltd. donated a sum of 2 lakh to Seva Trust with a
condition that Seva Trust will place a hoarding at the entrance of the trust premises
displaying picture of products sold by Glory Ltd. Examine whether this activity would
amount to "supply" under GST law?
Answer:-
Legal Provision:-
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 An activity qualifies as supply under GST only if it is for a consideration and is in

course/furtherance of business.
 Donations received by the charitable organizations are treated as consideration only when
there's an obligation on part of the recipient of the donation to do anything.
Discussion & Conclusion:-
 Since in the given case, the display of products sold by the donor - Glory Ltd. - in charitable
organization's premises aims at advertising/promotion of its business, it is supply for
consideration in course/furtherance of business and thus, qualifies as supply under GST
law.

Q 233. A Resident Welfare Association provides the service of depositing the electricity
bills of the residents in lieu of some nominal charges. Whether this activity is treated as
supplyunder the GST Act?
Answer:-
Legal Provision:-
 As per section 2(17) of CGST Act, 2017, Business includes provision of service club or
association or society to its members for a subscription or any other consideration.
 As per Section 7(1)(aa) of the said act, supply includes activity/ transaction supplied by a
person other than an individual for its members for consideration. Explanation to this
section states that such person and its members are deemed to be two separate persons &
supply between them deemed to take place from one person to another.
Discussion & Conclusion:-
 In this case, Resident Welfare Association is a person other than an individual and it is
providing service to its members by way of depositing the electricity bills of the residents
in lieu of some nominal charges.
 Hence, this transaction is treated as supply u/s 7(1)(aa).
Q 234. Whether any activity can be treated as supply even if made without consideration
in accordance with the provisions of GST? You are required to enumerate such
activities,if any.
Answer:- Section 7(1)(a) of CGST Act stipulates that the supply of goods &/or services should
be for a consideration and should be in the course or furtherance of business. But, Section
7(1)(c) states the Activities to be treated as supply even if made without consideration which
are given under Schedule I as follows:-
Para Activity/ Transaction
i) Permanent transfer or disposal of business assets where input tax credit has been
availed on such assets.
ii) Supply of goods &/or services between:-
- related persons or
- distinct persons as specified in section 25, when
made in the course or furtherance of business.
However, gifts not exceeding Rs. 50000 in value in a financial year by an
employer to an employee shall not be treated as supply of goods &/or services

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iii) Supply of goods:-

a) by a principal to his agent where the agent undertakes to supply such goods on
behalf of the principal or
b) by an agent to his principal where the agent undertakes to receive such goods
on behalf of the principal
However, this para 3 is applicable only when agent issues invoice to customer in
his own name.
iv) Import of services by a person:-
 from a related person or
 from any of his other establishments outside India,in
the course or furtherance of business.

Q 235. Whether the following transactions are treated as supply?

(a) A retailer of clothes gives clothes from his business stock (on which ITC is taken) to
his friend free of cost permanently.
(b) A dealer of air conditioners (on which ITC is not taken) permanently transfers an air
conditioner from his stock in trade, for personal use at his residence.
Answer:- Legal Provision:-
 As per Section 7(1)(c) read with para I of schedule I of CGST Act, permanent transfer
or disposal of business assets where ITC has been availed on such assets shall be treated
as supply under GST even when there is no consideration is involved.
 So, if no ITC is availed on such business asset, then it will not be treated as supply under
this para.
Discussion and Conclusion:-
(a) Business assets also includes stock in trade. Hence, in this case, permanent transfer of
business stock free of cost shall be treated as supply under para I of schedule I as the retailer
claimed input tax credit on his purchase of that business stock.
(b) The transaction will not constitute a supply even though there is permanent transfer of
stock in trade (business asset) as in this case, no input tax credit is taken on such stock in
trade.

Q 236. Sahab Sales, an air-conditioner dealer in Janakpuri, Delhi, needs 4 air

conditioners for his newly constructed house in Safdarjung Enclave. Therefore, he
transfers 4 air- conditioners [on which ITC has already been availed by it] from its stock,
for the said purpose. Examine whether the said activity amounts to supply uls 7 of the
CGST Act, 2017. Further, a Janakpuri resident, Aakash, approached Sahab Sales. He
sold an air conditioner to Sahab Sales for 5,000. Aakash had bought the said air
conditioner six months before, for his residence. Does sale of the air conditioner by
Aakash to Sahab Sales amount to supply u/s 7 of the CGST Act, 2017?
Answer:-
Legal Provision:-
 Section 7(1)(a) of CGST Act states that the supply of goods and/or services should be fora
consideration and should be in the course or furtherance of business.
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 As per Section 7(1)(c) sread with Para I of Schedule I of CGST Act, 2017, Permanent
transfer or disposal of business assets where input tax credit has been availed on such
assets be treated as supply even when it is made consideration.
Discussion & Conclusion:-
 In the given case, permanent transfer of air conditioners by Sahab Sales from its stock
for personal use at its residence would amount to supply even though it is made without
consideration as per para I discussed above.
 But, sale of air conditioner by Aakash to Sahab Sales will not qualify as supply under
section 7. Although it is made for a consideration, but it is not in the course or
furtherance of business.
Q 237. Raghubir transfers 1000 shirts from his factory located in Lucknow to his retall
showroom in Delhi so that the same can be sold from there. The factory and retail
showroom of Raghubir Fabrics are registered in the States where they are located.
Although no consideration is charged, supply of goods from factory to retail showroom
constitutes supply. Justify.
Answer:-
Legal provision:-
 As per section 7(1)(c) read with para 2 of schedule I of CGST Act, 2017, Supply of goods
&/or services between distinct person u/s 25 in the course or furtherance of business shall
be treated as supply even when it is made without consideration is required to be obtained
by a person in one or more State, then for each of such registration, he shall be treated as
distinct persons.
Discussion & Conclusion:-
 In given case, factory & retail showroom of Raghubir Fabrics are registered in the States
where they are located. So, both are treated as establishments of distinct person u/s 25(4).
 Although, no consideration is charged, supply of goods from factory to retail showroom
constitutes supply as per para 2 of schedule I stated above as it is in course or
furtherance of business.

Q 238. On occasion of Diwali, Daksh gold pvt. ltd. distributes gift hamper to its employee
worth 3,00,000. Does it qualify as supply? Would your answer be different, if gifts of 42,000
have been given to an employee?
Answer:-
Legal Provision:-
 As per section 7(1)(c) read with Para 2 of Schedule I of CGST Act, 2017, Supply of goods
&/or services between related persons is treated as supply even if it is without
consideration.
 Proviso to para 2 of schedule I states that if gifts given by employer to an employee are
not exceeding 50,000 in value in a financial year, then it shall not be treated as supply of
goods &/or services.
 As per explanation to section 15, employer and employee are deemed to be related persons.

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Discussion & Conclusion:-

1) Diwali gift to employee worth ₹ 3,00,000 will qualify as supply and such supply would
be leviable to GST as the employer & employee are related and value of gift exceeds Rs
50000 in a financial year.
2) If gift of ₹ 42,000 is given instead of 3,00,000, the same will not qualify as supply. This
is because, the value of gift is not exceeding ₹ 50,000 in a financial year.

Q 239. Gagan Engineering Pvt. Ltd., registered in Haryana, is engaged in providing

maintenance and repair services for heavy steel machinery. For carrying out the repair
work, Gagan Engineering Pvt. Ltd. sends its container trucks equipped with items like
repair equipments, consumables, tools, parts etc. from Haryana workshop to its own
repairing centres (registered under GST law) located in other States across India where
the clients' machinery are being brought and are being repaired.
Discuss the leviability of GST on the inter-State movement of trucks from the workshop
of Gagan Engineering Pvt. Ltd. in Haryana to its own repairing centres located in other
States across India.
Answer:
Legal Provision:-
is required to be obtained by a person in one or more State, then for each of such
registration, he shall be treated as distinct persons.
 Section 7(1)(c) read with Para 2 of schedule I of CGST Act, 2017 states that of goods
and/or services between 'distinct persons' as specified in section 25, when made in the
course or furtherance of business shall be treated as supply even if made without
consideration.
 As per CBIC circular,
- The inter-State movement of various modes of conveyance including trucks, carrying
goods &/or passengers or for repairs and maintenance, between 'distinct persons' as
specified in section 25(4), not involving further supply of such conveyance, may be treated
'neither as a supply of goods nor supply of service' and therefore, will not be leviable
to IGST.
- But, the applicable CGST/SGST/IGST shall be leviable on repairs & maintenance done
for such conveyance.
Discussion & conclusion:-
 In the given case, inter-State movement of trucks from the workshop of Gagan Engineering
Pvt. Ltd. located in Haryana to its repair centres located in other States is 'neither a supply
of goods nor supply of service'.

Q 240. Mr. Veer is a supplier of goods located in Mumbai has appointed Mr. Rudra to
procure goods based on a specification given by him. As the same kind of goods are not
available in the area of Mr. Veer, Mr. Rudra buys the specified goods on his behalf from
M/s XYZ Ltd. For this activity, invoice is issued in the name of principal.
i) Whether it is to be treated as a supply under GST?
ii) Would your answer differ if invoice is issued in name of an agent Mr. Rudra?

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Answer:-
Legal Provision:-
 Section 7(1)(c) read with Para 3 of Schedule I of CGST Act, 2017 states that supply of
goods by an agent to his principal where the agent undertakes to receive such goods on
behalf of the principal, shall be treated as supply even if made without consideration.
 As per CBIC clarification, if invoice for further supply is being issued by agent in his own
name, then this activity is treated as supply under para 3 Schedule 1, otherwise not.
Discussion:-
 In the given case, Mr. Rudra (Agent) is appointed just to procure the goods on behalf of
Mr. Veer (Principal) and he is issuing invoice also in name of Mr. Veer (Principal).
 He has not involved himself in the supply or receipt of goods in any way.
 Hence, Mr. Rudra is not an agent of Mr. Veer for the purpose of para 3 of schedule
Conclusion:-
i) No, it is not to be treated as a supply as per para 3 of Schedule 1. This is because Mr.
Rudra (Agent) is issuing invoice in name of the Mr. Veer (Principal).
ii) Yes, if invoice is in the name Mr. Rudra (Agent), then this transaction will be treated as
supply as per para 3 of Schedule 1.

Q. 241 M/s M Ltd. being a garment manufacturer, appoints Mr. Ram as an agent, who
stores garments manufactured by M Ltd. and sends to dealers whenever M Ltd. asks Mr.
Ram to do so. Mr. Ram issues his own Is it a Justify.
Answer:-
Legal Provision:-
 Section 7(1)(c) read with Para 3 of Schedule I of CGST Act, 2017 states that supply of
goods by a principal to his agent where the agent undertakes to supply such goods on behalf
of the principal shall be treated as supply even if made without consideration.
 As per CBIC clarification, if invoice for further supply is being issued by agent in his own
name, then this activity would be treated as supply under para 3 Schedule 1, otherwisenot.
Discussion & Conclusion:-
 Yes, Transfer of garments from M Ltd. to Mr. Ram is taxable supply under GST & GST
will be levied.
 This is because, Mr. Ram (Agent) is issuing invoice in his own name for further supply of
goods on behalf of M/s M ltd.
 Thus, this transaction is getting covered under para 3 of schedule I as discussed above.

Q. 242 With reference to provisions of the CGST Act, 2017, discuss in brief, when e
"Importation of services" is to be considered as supply and when it is not to be considered
as supply. [CA Inter Nov 20 Exams] OR Discuss the taxability of import of services under
GST.
Answer:-
 As per section 7(1)(b) of CGST Act, 2017, Importation of services for a consideration
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whether or not in the course or furtherance of business is to be considered as supply.

 Thus, if services are imported for a consideration, then they are taxable in both situations
i.e. when importation is in the course or furtherance of business & even when it is not.
 Para 4 of Schedule I of CGST Act states that Importation of services by a person without
consideration is deemed as supply provided the following two conditions are satisfied:-
(a) Such import is from related person or from his establishments located outside India &
(b) Such import is in the course or furtherance of business.
 In case any or both of the above two conditions is/are not satisfied, the import of services
without consideration shall not be deemed as supply.

Q. 243 Mrs. Pragati received legal advice for her personal problems & paid 1,000 pound as
legal fees to Miss Unnati of U.K. (London).
Explain whether the above activity of import of service would amount to supply uls 7 of
the CGST Act, 2017?
If in above case, both of them are real sisters & no consideration is paid then will it change
your answer?
Further in the above case, if both of them are real sisters & Mrs. Pragati receives legal
advice for her business & she doesn't pay any consideration then what will be your
answer?
[Note:- It has been most logically assumed that miss Unnati is wholly/mainly dependant
on Miss Pragati]
Answer:-
Legal Provision:-
 As per section 7(1)(b) of CGST Act, Supply includes import of services for a consideration
whether or not it is in the course or furtherance of business.
 Further, as per para 4 of schedule I of CGST Act, import of services by a person from a
related person located outside India, without consideration is treated as supply if it is
provided in course or furtherance of business.
Discussion & Conclusion:-
1) In the first case, Mrs. Pragati imported service for personal purpose for a consideration
& thus, it would amount to supply uls 7(1)(b) even though it is not in course or
furtherance of business.
2) In second case, import of service without consideration by Mrs. Pragati from her real
sister - Miss Unnati [real sister being member of the same family & wholly/mainly
dependent is a related person] will not be treated as supply as it is not in course or
furtherance of business.
3) In the third case, import of service without consideration by Mrs. Pragati from her sister -
Miss Unnati (related person) will be treated as supply if she receives legal advice for her
business, i.e. in course or furtherance of business.

Q.28 Examine whether the following activities would amount to supply

under section 7of the CGST Act:-

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(a) Damodar Charitable Trust, a trust, who gets the eye treatment of needy people done
free of cost, donates clothes and toys to children living in slum area.
(b) i) Raman is an Electronic Commerce Operator in Chennai. His brother who is settled
in London is a well-known lawyer. Raman has taken legal advice from him free of
cost with regard to his family dispute.
ii) Would your answer be different in the above case, if Raman has taken advice in
respect of his business unit in Chennai?
Answer:-
(a) Section 7(1)(a) of the CGST Act, states that supply
- must be made for a consideration except the activities specified in Schedule I
and

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- must be in the course or furtherance of business.

In the given case, since, both these elements are missing, donation of clothes and
toys to children living in slum area would not amount to supply u/s 7 of CGST Act.
(b) i) legal provision:-
 with Section 7(1)(c) read Para 4 of Schedule I of CGST Act, states that if
services are imported by a person from a related person located outside India
without consideration & that too in the course or furtherance of business, then
it is treated as supply.
 Explanation to section 15 states that members of the same family are
deemed to be "related persons".
 Further, as per section 2(49), brother is treated member of same family only
when he is wholly or mainly dependent on the said person.
Discussion & Conclusion:-
 In the given case, Raman has received free of cost legal services from his brother
who is a well-known lawyer settled in London and is not wholly/mainly
dependent on Raman.
 So, as per section 2(49) & Explanation to section IS above, Raman & his brother
are not related as they are not treated as family.
 Further, Raman has taken legal advice from him in personal matter & not in
course or furtherance of business.
 Thus, the services provided by Raman's brother to him would not be treated as
supply u/s 7 of the CGST Act read with para 4 of Schedule 1.
ii) No, if Raman has taken advice for his business unit, services provided by
Raman's brother to him would still not be treated as supply. This is because,
though services are provided in course or furtherance of business but it is not
received from related person as discussed in answer i).

Q. 244 Enumerate the activities or transactions which shall be treated neither as

a supply of goods nor a supply of services. or List down the activities/transactions
specified under schedule III of the GST Act as non-supplies or 'Negative List'.
Answer-
 As per section 7(2)(a) of CGST Act, 2017, activities or transactions specified in
ScheduleIII shall be treated neither as a supply of goods nor a supply of services.
 Activities/transactions specified under schedule III of GST Act as non-supplies!
"NegativeList" are as follows:
Para Activities or transactions which shall be treated neither as a supply of goods nor
No. a supply of services:-
1. Services by an employee to the employer in the course of or in relation to his
employment.
2. Services by any court or Tribunal established under any law for the time being in
force.

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3. (a) Functions performed by the Members of Parliament, Members of State

Legislature, Members of Panchayats, Members of Municipalities and Members
of other local authorities.
(b) Duties performed by any person who holds any post in pursuance of the
provisions of the Constitution in that capacity.
(c) Duties performed by any person as a Chairperson or a Member or a Director in
a body established by the Central Government or a State Government or local
authority and who is not deemed as an employee before the commencement of
this clause.
4. Services of funeral, burial, crematorium or mortuary including transportation of the
deceased.
5. Sale of land and, subject to paragraph 5(b) of II, sale of building.
6. Actionable claims, other than lottery, betting and gambling.

Q. 245 Determine whether following activities fall under the purview of

supplyas persection 7 of CGST Act, 2017:-
i) Mr. Raj hires an ambulance for transport facility of a deceased person to
performingfuneral rituals.
ii) Mr. S enters into an agreement for sale of land to Mr. R for a consideration.
iii) M/s ABC developers sold fully furnished building to Mr. Sagar for a
valuableconsideration.
Answer:
i) As per section 7(2) read with para 4 Schedule III of CGST Act, Services of
funeral including transportation of the deceased shall be treated neither as a supply
of goods nor asupply of services. Thus, there is no levy of GST on such activity as
it is out of scope of supply.
ii) As per section 7(2) read with para 5 Schedule III of CGST Act, Sale of land shall be
treatedneither as a supply of goods nor a supply of services. Thus, there is no levy
of GST on such activity as it is out of scope of supply.
iii) As per section 7(2) read with para 5 Schedule III of CGST Act, subject to
paragraph 5(b) of Schedule II, Sale of building shall be treated neither as a supply
of goods nor a supply of services.
Paragraph 5(b) of Schedule II states that where the entire consideration has been
received after issuance of completion certificate or after its first occupation,
whichever isearlier, then it is not a supply at all.
Thus, there shall be no levy of GST on such activity as it is out of scope of supply.

Q. 246 Sarvanna & Sons wishes to start supplying alcoholic liquor in the State of
TamilNadu. Therefore, it applies for licence to the Tamil Nadu Government for
selling liquor
for which the State Government has charged specified fee from it. Examine
whether thegrant of alcoholic liquor licence by the Tamil Nadu Government to
Sarvanna & Sons qualifies as supply.
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Answer:
 Services of granting of alcoholic liquor license by the State Governments have
been notified u/s 7(2)(b) of CGST Act which shall be neither treated as a supply of
goods nor as a supply of service.
 This licence is granted against consideration i.e. licence fee or application fee or or
any other fee.
 This special benefit is given only for granting of licence to sell liquor as notified
above and not for any other licences or privileges i.e. other licences or privileges
given by government are treated as supply & liable to GST.
 Thus, in the given case, the grant of alcoholic liquor license by the Tamil Nadu
Government to Sarvanna & Sons is neither a supply of goods nor a supply of
service.

Q. 247 Is it required to distinguish whether a particular supply involves supply

ofgoods orservices or both?
Answer:
Yes, it is required to distinguish whether a particular supply involves supply of
goods orservices or both due to following reasons:-
i) Time of supply:- Section 12 & 13 of CGST Act, 2017 provides different provision
to determine time of supply of goods & services respectively. Therefore, distinction
of supplybetween goods, services or both is required.
ii) Place of supply:- Similarly Section 10, 11, 12 & 13 of IGST Act, 2017 provides
differentprovision to determine place of supply for supply of goods & services.
Therefore, distinction of supply between goods, services or both is required.
iii) Rate of Supply:- Rate of supply for goods or services or both is different.
Therefore, for determination of rate of supply, distinction of supply between goods,
services or both is required.

Q. 248 Transfer of title and/or possession is necessary for a transaction to constitute

supplyof goods. Examine.
Answer:-
 Section 7(1)(a) of CGST Act, 2017 states that supply include sale, transfer, barter,
exchange, lease, license, rental or disposal for a consideration in the course or
furtheranceof business.
 Once, a transaction is treated as supply, it is classified of goods or services uls 7(IA)
readwith schedule II.
 As per Para I of schedule II, activities are classified as follows:-
a) If both title and possession are transferred in a transaction, it shall be treated as
supplyof goods.
b) If title is not transferred but possession is given in a transaction, it shall be
treated as supply of service.
c) If possession is transferred immediately but title is transferred at a future date in

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a transaction like sale on approval basis or hire purchase arrangement, it shall be

treatedas supply of goods.
 Thus, transfer in title irrespective of the transfer of possession is necessary to
constitute supply of goods.

Q. 249 State whether the following supplies would be treated as supply of goods or
supplyof services as per Schedule II of CGST Act:-
(i) Works contract services
(ii) Temporary transfer of permitting use or enjoyment of any intellectual property
right
(iii) Sale of personal car to dealer.
Answer:
(i) Supply of services
(ii) Supply of services
(iii) It is not a supply as it is not made by the individual in the course or furtherance of
business.

Q. 250 State whether the following supplies would be treated as supply of goods or
supplyof services as per Schedule II of the CGST Act:-
(a) Renting of immovable property.
(b) Goods forming part of business assets are transferred or disposed of
bylunderdirections of person carrying on the business.
(c) Transfer of right in goods without transfer of title in goods.
(d) Transfer of title in goods under an agreement which stipulates that property
shallpass at a future date.
(e) Any treatment or process which is applied to another person's goods.
(f) Transfer of title in goods.
Answer:-
(a) Supply of Services (b) Supply of Goods
(c) Supply of Services (d) Supply of Goods
(e) Supply of Services (f) Supply of Goods

Q. 251 M/s. ABC Ltd. provides the following information relating to information
technology software. Compute the value of taxable supply of service and GST
liability (Rate of CGST 9% and SGST 9%).
1. Development and Design of information technology software: 15 lakhs;
2. Sale of pre-packaged software, which is put on media: * 52 lakhs.
Answer:-
(1) It will be treated as supply & as per para 5(d) of schedule II of CGST Act, it
will beclassified as supply of service.
Particulars ₹ in lakhs
Value of Taxable supply of service 15
CGST @ 9% of Rs. 15 Lakhs 1.35
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SGST @ 9% of Rs. 15 Lakhs 1.35

(2) It will be treated as supply & as per para 5(d) of schedule II of CGST Act, it
will beclassified as supply of goods
Value of Taxable supply of goods 52
CGST @ 9% of Rs. 52 Lakhs 4.68
SGST @ 9% of Rs. 52 Lakhs 4.68

Q. 252 State Government has exclusive power to notify a transaction to be supply

ofgoodsor services." Discuss the correctness of the statement.
Answer:-
 The said statement is not correct.
 State Government can notify a transaction to be supply of goods or services but only
onthe recommendations of the GST Council.
 Further, Central Government or State Government, both on the recommendations
of theGST Council, can notify an activity to be:-
- supply of goods and not supply of services or
- supply of services and not supply of goods or
- neither a supply of goods nor a supply of services.

Q. 253 Determine whether the following supplies amount to composite supplies:-

(a) A hotel provides 4 days-3 nights package wherein the facility of breakfast and
dinneris provided along with the room accommodation.
(b) A toothpaste company has offered the scheme of free Soap along with the
toothpaste.
Answer
Legal Provision:-
As per section 2(30) of CGST Act, "Composite supply"-
 Consists of two or more taxable supplies of goods &/or services,
 Such supplies are naturally bundled,
 Such supplies are supplied in conjunction with each other,
 They are supplied in the ordinary course of business &
 Have one supply as principal supply.
Discussion & Conclusion :- In view of the same,
(a) Since, supply of breakfast and dinner with the accommodation in the hotel are
naturallybundled, said supplies qualify as 'composite supply.
(b) Since, supply of soap along with the toothpaste are not naturally bundled, said
supplies
do not qualify as 'composite supply.

Q. 254 Manikaran, a registered supplier of Delhi, has supplied 20,000 packages at

?30 eachto Mukhija Gift Shop in Punjab. Each package consists of 2 chocolates, 2

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fruit juice bottles and a packet of toy balloons. Determine the rate(s) of GST
applicable in the givencase assuming the rates of GST to be as under-
Goods/services supplied GST Rate
Chocolates 18%
Chocolates 12%
Toy balloons 5%

Answer:-
Legal Provision:- As per section 2(74) of CGST Act, "Mixed supply"-
 Consist of two or more individual supplies of goods &/or services,
 They can be supplied independently, still supplied together by the taxable person,
 Supplied for a single price &
 Is not naturally bundled i.e. it is not a composite supply.
Discussion & Conclusion:-
 Supply of a package containing chocolates, fruit juice bottles and a packet of toy
balloonsis a mixed supply as each of these items can be supplied separately and is
not dependent on any other (i.e. not naturally bundled) & also a single price is
charged for the package..
 Further, as per section 8(b), the mixed supply is treated as a supply of that particular
supply
which attracts the highest rate of tax.
 Thus, in the given case, supply of packages is treated as supply of chocolates as it
attractsthe highest rate of tax & the rate of GST applicable on the package of
*6,00,000 (20,000 x 30) is 18%.

Q. 255 Dumdum Electronics has sold the following electronic items to Akbar Retail
Store.
(i) Refrigerator (500 litres) taxable @ 18%
(ii) Stabilizer for refrigerator taxable @ 12%
(iii) LED television (42 inches) taxable @ 12%
(iv) Split air conditioner (2 Tons) taxable @ 28%
(v) Stabilizer for air conditioner taxable @12%
Dumdum Electronics has issued a single invoice, indicating price of each of the
above items separately in the same. Akbar Retail Store has given a single cheque
of 1,00,000/- for all the items as a composite discounted price. State the type of
supply and the tax rateapplicable in this case.
Answer:-
 In the given case, the items supplied by Dumdum Electronics are not naturally
bundled in the ordinary course of business. Therefore, such supply is not a
composite supply.
 Further, Akbar Retail Store has paid a composite discounted price for these goods
but Dumdum Electronics has not charged a single price for the said supply.
Therefore, saidsupply is also not a mixed supply.
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 Thus, there is supply of individual items which are taxable at the respective rates
applicable to them.

Q. 256 Explain the composite supply & mixed supply. If a trader launches a
package salesfor marriage containing double bed, refrigerator, washing machine,
wooden wardrobe at a single rate. He is issuing invoice showing value of each
good: separately. Whether this is case of mixed supply or composite supply.
Explain.

Answer:
Legal Provision:-
 As per section 2(30) of CGST Act, "Composite supply".
 Consists of two or more taxable supplies of goods &/or services,
 Such supplies are naturally bundled,
 Such supplies are supplied in conjunction with each other,
 They are supplied in the ordinary course of business &
 Have one supply as principal supply.
 As per section 2(74) of CGST Act, "Mixed supply"-
 Consist of two or more individual supplies of goods &/or services,
 They can be supplied independently, still supplied together by the taxable person,
 Supplied for a single price &
 Is not naturally bundled i.e. it is not a composite supply.
Discussion & Conclusion:-
 Items such as double bed, refrigerator, washing machine & wooden wardrobe m
notnaturally bundled &
 The invoice for the supply shows separate values for each item i.e., the package
is notsupplied for a single price.
 Thus, supply of such items as a package will neither constitute a composite supply
nora mixed supply.
 Thus, the various items of the package will be treated as being supplied individually.

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10. Time of Supply

Q. 257 Explain the significance of time of supply under GST law. Answer:-
 GST is leviable on supply of goods &/or services.
 Time of supply indicates the point in time when the liability to pay tax arises:
 Though, the liability to pay the tax arises at the time of supply, the payment of the same
can be paid to Government by the due date prescribed with reference to the said 'time of
supply.
 There are separate provisions for time of supply for goods and services under section 12
and 13 of the CGST Act respectively.

Q. 258 The time of liability to pay GST is independent of the time of supply of goods!
services. Discuss the correctness of the statement?
Answer:
 The said statement is not correct.
 Liability to pay GST arises at the time of supply of goods as explained in Section 12
and at the time of supply of services as explained in Section 13 of CGST Act.
 The time of supply is generally the earliest of one of the three events, namely receiving
payment, issuance of invoice or completion of supply.
 Different situations are envisaged and different tax points have been explained in the
aforesaid sections.

Q. 259 What will be the time of supply of goods, generally?

Answer:
 As per section 12 (2) of the CGST Act, 2017 read with notification 66/2017, the time of
supply of goods shall be earlier of the following dates:-
a) Date of issue of invoice or
b) last date to issue the invoice u/s 31. (i.e., Date of removal or Date of delivery or Date
of making goods available).
 As per notification 66/2017, the time of supply of goods is not on advanced received &
this is applicable to all registered persons except composition supplier.

Q. 260 An order is placed on Ram & Co. on 18th August for supply of a consignment of
customized shoes. Ram & Co. gets the consignment ready and informs the customer and
issues the invoice on 2nd December. The customer collects the consignment from the
premises of Ram & Co. on 7th December and electronically transfers the payment on the
same date, which is entered in the accounts on the next day, 8th December.
What is the time of supply of the shoes for the purpose of payment of tax?
Answer: Legal Provision:-
 As per section 12 (2) of the CGST Act, 2017 read with notification 66/2017, the time of
supply of goods shall be earlier of the following dates:-
c) Date of issue of invoice or
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d) last date to issue the invoice u/s 31.

 As per N/N 66/2017, the time of supply of goods is not on advanced received & this is
applicable to all registered persons except composition supplier.
 Further, u/s 31(1), supply involves movement of goods, a registered person required toissue
a tax invoice before or at the time of removal of goods for supply to the recipient. Is
Discussion & Conclusion:-
 In this case, invoice is issued before the removal of the goods (i.e., collection of goods by
customer) & is thus, within the time limit prescribed u/s 31(1).
 Therefore, the time of supply for payment of tax is date of issue of invoice, which is 2nd
December.

Q. 261 Investigation shows that 150 cartons of ceramic capacitors were dispatched on 2nd
August but no invoice was raised and the transaction (dispatch of cartons) were not
entered in the accounts. There was no evidence of receipt of payment. What is the time of
supply of 150 cartons for the purpose of payment of tax?
Answer:- Legal Provision:-
 As per section 12 (2) of the CGST Act, 2017 read with notification 66/2017, the time of
supply of goods shall be earlier of the following dates:-
e) Date of issue of invoice or
f) last date to issue the invoice u/s 31.
Discussion & Conclusion:-
 In this case, since the invoice has not been issued, the time of supply for the purpose of
payment of tax will be the last date on which the invoice is required to be issued.
 The invoice for of goods must be issued on or before dispatch of goods, i.e. on 2nd August.
 Therefore, the time of supply of goods will be 2nd August.

Q. 262 Determine the time of supply of goods in the following independent cases assuming
that GST is payable under reverse charge:-

Sr. Date of receipt of Date of payment by recipient of Date of issue of invoice

No. goods goods by supplier of goods
1 July 1 August 10 June 29
2 July 1 June 25 June 29

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3 July 1 Part payment made on June 30 June 29

& balance amount paid on July
20
4 July 5 Payment entered in recipient’s June 1
books of account on June 28 &
debited in recipient’s bank
account on June 30
5 July 1 Payment entered in recipient’s June 29
books of account on June 30 &
debited in recipient’s bank
account on June 26
6 August 1 August 10 June 29

Answer:-
Legal Provision:-
As per section 12(3) of CGST Act, 2017, if supply of goods is taxable under reverse charge,
then the time of supply of goods shall be the earliest of the following dates:-
a) Date of receipt of goods or
b) Date of payment which shall be earlier of following:-
 date entered in the books of account of the recipient or
 date on which the payment is debited in his bank account.
c) Date immediately following 30 days from date of issue of invoice by the supplier.
(Here, date of invoice is relevant only for calculating thirty days from that date.)
Determination of time of supply of goods under reverse charge:-
Date of issue of Time of Supply
Date of Date of payment 31st day
Sr. invoice by of Goods u/s
receipt of by recipient of from date
No. supplier of 12(3) [Earlier of
goods goods of Invoice
goods (1), (2) & (3)]
(1) (2) (3)
1 July 1 August 10 June 29 July 30 July 1
2 July 1 June 25 June 29 July 30 June 25
3 July 1 Part payment June 29 July 30 June 30 for part
made on June 30 payment & July 1
& balance amount for balance
paid on Jul 20 amount
4 July 5 Payment entered June 1 July 2 June 28
in recipient’s
books of account
on June 28 &
debited in his
bank account on
June 30

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5 July 1 Payment entered June 29 July 30 June 26

in recipient’s
books of account
on June 30 &
debited in his
bank account on
June 26
6 August 1 August 10 June 29 July 30 July 30

Q. 263 (i) Determine the time of supply from the given information
May 4 Supplier invoices goods taxable on reverse charge basis to Bridge & Co.
May 12 Bridge & Co receives the goods
May 30 Bridge & Co makes the payment
(ii) What would be your answer in case, the goods are received on June 12.
Answer:
Legal Provision:-
As per section 12 (3) of CGST Act, 2017, if supply of goods is taxable under reverse
charge, then the time of supply of goods shall be the earliest of the following dates:-
a) Date of receipt of goods or
b) Date of payment which shall be earlier of following:-
 date entered in the books of account of the recipient or
 date on which the payment is debited in his bank account.
c) Date immediately following 30 days from date of issue of invoice by the supplier.
(Here, date of invoice is relevant only for calculating thirty days from that date.)
Discussion & Conclusion:-
1) In 1st case, May 12 will be the time of supply of goods taxable under reverse charge
being earlier of:-
- Date of receipt of goods i.e. May 12 or
- Date of payment made i.e. May 30 or
- June 4 being 31st day from date of invoice which is May 4.
2) In 2nd case, May 30 will be the time of supply being the earliest of dates as per section
12(3).

Q. 264 How to ascertain the time of supply of services under forward charge & what will
be the date of receipt of payment for the purpose of the same?
Answer :- As per section 13(2) of CGST Act, 2017, the time of supply of services shall be
as follows:-
Cases Time of Supply
a) If the invoice is issued within the period Time of supply shall be earlier of:-
prescribed u/s 31:-  the date of issue of invoice by the
supplier or

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 the date of receipt of Payment.

b) If the invoice is not issued within the Time of supply shall be earlier of:-
period prescribed u/s 31:-  the date of provision of service or
 the date of receipt of payment.
c) In case, where the provisions of clause The time of supply shall be :-
(a) or (b) do not apply  the date on which the recipient shows
the receipt of services in his books of
account.

 As per explanation to section 13(2) of CGST Act, the date of receipt of payment shall be
earlier of:-
 the date on which the payment is entered in the books of account of the supplier or
 the date on which the payment is credited to his bank account.
 As per section 31(2) of CGST Act, normally, a registered person supplying taxable services
shall issue a tax invoice within 30 days from the date of supply of service & in case of
banking & Fl, it should be within 45 days.

Q. 265 Determine the time of supply of services and the corresponding due date of e-
payment of GST in each of following independent cases for person not paying tax under
QRMP Scheme:-
Sr. Date of Date of
Date on which payment is received
No. completion Invoice
1 10.04.20XX 05.05.20XX 20.05.20XX
2 10.04.20XX 05.05.20XX 25.04.20XX
3 10.04.20XX 05.05.20XX 25.04.20XX (Part) and 20.05.20XX (remaining)
4 10.04.20XX 05.05.20XX 06.04.20XX (Part) and 09.04.20XX (remaining)
5 10.04.20XX 16.05.20XX 05.04.20XX (Part) and 14.05.20XX (remaining)

Answer: Legal Provision:-

 As per section 13(2) of CGST Act, 2017, the time of supply of services shall be as
follows:-
Cases Time of Supply
a) If the invoice is issued within the period Time of supply shall be earlier of:-
prescribed u/s 31:-  the date of issue of invoice by the
supplier or
 the date of receipt of Payment.
b) If the invoice is not issued within the Time of supply shall be earlier of:-
period prescribed u/s 31:-  the date of provision of service or
 the date of receipt of payment.

 As per section 31(2), generally, the tax invoice shall be issued within 30 days of supply o f
service & in case of banking & FI, it should be within 45 days.

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Determination of the time of supply of services and the corresponding due date of e-
payment of GST:-
last Date of Due date of
Date of Date of
Sr. issue Date of Time of monthly
Completion receipt of
No. Invoice u/s Invoice Supply GST
of service payment
31 Payment
1 10.04.20XX 10.05.20XX 05.05.20XX 20.05.20XX
2 10.04.20XX 10.05.20XX 05.05.20XX 25.04.20XX
3 10.04.20XX 10.05.20XX 05.05.20XX 25.04.20XX 25.04.20XX 20.05.20XX
(Part) & (Part) & (Part) &
20.05.20XX 05.05.20XX 20.06.20XX
(remaining) (remaining) (remaining)
4 10.04.20XX 10.05.20XX 05.05.20XX 06.04.20XX 06.04.20XX 20.05.20XX
(Part) & (Part) & (For part &
09.04.20XX 09.04.20XX remaining
(remaining) (remaining) both)
5 10.04.20XX 10.05.20XX 16.05.20XX 05.04.20XX 05.04.20XX 20.05.20XX
(Part) & (Part) & (For part &
14.05.20XX 10.04.20XX remaining
(remaining) (remaining) both)

Q. 266 Mr. XYZ & Co., a firm of Chartered Accountants, issued invoice for services
rendered to Mr. A on 7th September, 20XX. Determine the time of supply in the e following
independent cases:-
1. The provision of service was completed on 1st August, 20XX and payment was
received on 28th September, 20XX.
2. The provision of service was completed on 14th August, 20XX and payment was
received on 28th September, 20XX.
3. Mr. A made the payment on 3rd August, 20XX where provision of service was
remaining to be completed at that time.
4. Mr. A made the payment on 15th September, 20XX where provision of service was
remaining to be completed at that time.
Answer:
Legal Provision:-
 As per section 13(2) of CGST Act, 2017, the time of supply of services shall be as
follows:-
Cases Time of Supply
a) If the invoice is issued within the period Time of supply shall be earlier of:-
prescribed u/s 31:-  the date of issue of invoice by the
supplier or
 the date of receipt of Payment.

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b) If the invoice is not issued within the Time of supply shall be earlier of:-
period prescribed u/s 31:-  the date of provision of service or
 the date of receipt of payment.

 As per section 31(2), generally, the tax invoice shall be issued within 30 days of supply of
service & in case of banking & FI, it should be within 45 days.
Discussion & Conclusion :- In accordance with aforesaid provisions, time of supply is:-
1) 01.08.20XX since invoice is not issued within 30 days of supply of service i.e. till
31.08.20XX.
2) 07.09.20XX since the invoice is issued within 30 days of supply of service i.e. till
13.09.20XX and the payment is received after the issuance of invoice.
3) 03.08.20XX which is earlier of date of issuance of invoice (07.09.20XX) or date of receipt
of payment (03.08.20XX).
4) 07.09.20XX which is earlier of issuance of invoice (07.09.20XX) or date of receipt of
payment (15.09.20XX).

Q. 267 Raju Pvt Ltd. receives the order and advance payment on 5th January for carrying
out an architectural design job. It delivers the designs on 23rd April. By oversight, no
invoice is issued at that time, and it is issued much later, after the expiry of prescribed
period for issue of invoice. When is the time of supply of service?
Answer:
Legal Provision:-
 As per section 13(2)(b) of CGST Act, 2017, if invoice is not issued within the time
prescribed u/s 31 for supply of services, then the time of supply of such services shall be
earlier of:-
 the date of provision of service or
 the date of receipt of payment.
 As per section 31(2), generally, the tax invoice shall be issued within 30 days of supply of
service & in case of banking & Fl, it should be within 45 days.
Discussion & Conclusion:-
 In the given case, the advance payment was received on 5th January and the service was
provided on 23rd April.
 However, no invoice was issued even after the expiry of prescribed period for issue of
invoice.
 Therefore, the time of supply of service is 5th January which is the date of receipt of
payment.

Q. 268 Modern Security Co. provides service of testing of electronic devices. In one case,
it tested a batch of devices on 4th and 5th September but could not raise invoice till 19th
November because of some dispute about the condition of the devices on return. The
payment was made in December. What is the method to fix the time of supply of the
service?

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Answer:
Legal Provision:-
 As per section 13(2)(b) of CGST Act, 2017, if invoice is not issued within the time
prescribed u/s 31 for supply of services, then the time of supply of such services shall be
earlier of:-
 the date of provision of service or
 the date of receipt of payment.
 As per section 31(2), generally, the tax invoice shall be issued within 30 days of supply of
service & in case of banking & Fl, it should be within 45 days.
Discussion & Conclusion:-
 In this case, the service is provided on 5th September but the invoice is not issued within
the prescribed time limit of 30 days of supply of service.
 Therefore, 5th September will be the time of supply which is the date of provision of
service, being earlier than the date of payment.

Q. 269 Determine the time of supply from the following particulars:

6th May Booking of convention hall, sum agreed *15000, advance of ₹ 3000
received
th
15 September Function held in convention hall
th
27 October Invoice issued for 15000, indicating balance of 12000 payable
rd
3 November Balance payment of ₹ 12000 received
Answer: Legal Provision:-
 As per section 13(2)(b) of CGST Act, 2017, if invoice is not issued within the time
prescribed u/s 31 for supply of services, then the time of supply of such services shall be
earlier of:-
 the date of provision of service or
 the date of receipt of payment.
As per section 31(2), generally, the tax invoice shall be issued within 30 days of supply of
service & in case of banking & Fl, it should be within 45 days.
Discussion & Conclusion:-
 In given case, invoice is not issued within the prescribed time limit of 30 days of supply
of services
 Therefore, as per section 13(2)(b), the time of supply of service is:-
 6th May for advance received ₹ 3,000 because this date of advance payment of ₹
3000 is earlier than the date of provision of service i.e. 15th September.
 15th September for the balance ₹ 12,000 because this date of provision of service is
earlier than the date of payment of balance amount i.e. 3rd November.

Q. 270 Investigation shows that ABC & Co. carried out service of cleaning and repairs of
tanks in an apartment complex, for which the Apartment Owners' Association showed a
payment in cash on 4th April to them against work of this description. The dates of the
work are not clear from the records of ABC & Co. ABC & Co have not issued invoice or
entered the payment in their books of account.

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Answer:
Legal Provision -
 As per section 13(2)(c) of CGST Act, 2017 if time of supply of service cannot be
determined u/s 13(2)(a) & 13(2)(b), then the time of supply shall be:-
 date on which the recipient shows the receipt of services in his books of account.
Discussion & Conclusion:-
 In the given case, time of supply cannot be determined as per section 13(2)(a)/(b) as
neither the invoice has been issued nor the date of provision of service is available & the
date of receipt of payment in the books of the supplier is also not available.
 Now, the time of supply as per section 13(2)(c) shall be the date on which the recipient of
service shows receipt of the service in his books of account.
 Thus, the time of supply will be 4th April which is the date on which the Apartment
Owners' Association records the receipt of service in its books of account

Q. 271 Mr. X took telecommunication service from BSNL. For the month of January,
20XX, the bill amount was ₹ 5,000. He made a payment of ₹ 5,500 with an instruction to
adjust the excess payment against next month's bill, and hence the same was adjusted by
BSNL in case of his next month bill payable on 05/03/20XX (invoice issued on same date).
Determine the time of supply with regard to such excess payment in light of the GST law.
What would be your answer, if Mr. X make payment of ₹ 6,500?
Answer:- Legal Provision:-
 As per proviso to section 13(2) of CGST Act, if supplier of taxable services receives upto
Rs 1000/- in excess of the amount indicated in the tax invoice, then the supplier has the
option to take the date of issue of invoice for such excess amount as the time of supply for
such excess.
Discussion & Conclusion:-
(i) If Mr. X makes the payment of ₹ 5,500:-
 In the given case, excess amount paid is ₹ 500 (which is not exceeding ₹ 1000) as the
January, 20XX bill was for ₹ 5000 & payment made ₹ 500.
 Therefore, time of supply of such excess amount is 05/03/20XX i.e. date of invoice
for such excess as per proviso to section 13(2).
(ii) If Mr. X makes the payment of ₹ 6,500:-
 Here, the excess payment is 1500 which exceeds Rs. 1000.
 In such case, above proviso is not applicable.
 Therefore, as per section 13(2), the time of supply shall be the date of receipt of such
excess advance amount.

Q. 272 Determine the time of supply in the following cases assuming that GST is payable
under reverse charge:-
Sr. Date of payment by recipient for supply of Date of issue of invoice by
No. services supplier of services
(1) (2)

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(i) August 10 June 29

(ii) August 10 June 1
(iii) Part payment made on June 30 and balance amount June 29
paid on September 1
(iv) Payment is entered in the books of account on June June 1
28 and debited in recipient's bank account on June 30
(v) Payment is entered in the books of account on June June 29
30 and debited in recipient's bank account on June 26

Answer: Legal Provision:- As per section 13 (3) of CGST Act, 2017, if supply of services is
taxable under reverse charge, then the time of supply of services shall be the earliest of the
following dates:-
a) Date of payment which shall be earlier of following:-
 date entered in the books of account of the recipient or
 date on which the payment is debited in recipient's bank account.
b) Date immediately following 60 days from date of issue of invoice by the supplier.
(Here, date of invoice is relevant only for calculating sixty days from that date.)
Determination of the time of supply of services taxable under reverse charge :-
Date of issue
Sr. Date of payment by of invoice by 61st day from date Time of Supply of
No. recipient of services supplier of of Invoice Services u/s 13(3)
service
i (1) (2) [Earlier of (1) & (2)]
ii August 10 June 29 August 29 August 10
iii August 10 June 1 August 1 August 1
iv Part payment made June 29 August 29 June 30 for Part
on June 30 & balance payment and August
amount paid on 29 for balance amount
September 1
v Payment is entered in June 1 August 1 June 28
the recipient's books
of account on June 28
& debited in
recipient's bank
account on June 30
vi Payment is entered in June 29 August 29 June 26
the recipient's books

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of account on June 30
& debited in
recipient's bank
account on June 26

Q. 273 Kabira Ltd engaged the services of a transporter for road transport of a
consignment on 17th June and made advance payment for the transport on the same date,
i.e., 17th June. However, the consignment could not be sent immediately on account of a
strike in the factory, and instead was sent on 20th July. Invoice was received from the
transporter on 22nd July.
What is the time of supply of the transporter's service?
Answer: Legal Provision:-
 As per section 9(3) of CGST Act, if services are provided by Goods Transport Agency
(GTA) for transportation of goods by road to any Body Corporate (which includes
company) established by or under any law, then GST is payable on reverse charge basis
by such Body Corporate.
 As per section 13(3) of CGST Act, 2017, the time of supply of service taxable under reverse
charge is earlier of the following:-
g) Date of payment made by the recipient.
h) Date immediately following 60 days from date of issue of invoice by the supplier.
(Here, date of invoice is relevant only for calculating sixty days from that date)
Discussion & Conclusion:-
 In the given case, the date of payment (i.e. 17th June) precedes 61st day (i.e. 21st September)
from the date of issue of invoice by the supplier of service.
 Hence, the time of supply of service as per section 13(3) shall be 17th June which is the
date of payment in this case.
Assumption:- It is assumed that GTA has not paid GST @12% i.e. GST is payable @ 5%.

Q. 274 Know & Grow Publishers, a registered dealer in India, paid an advance of* 50,000
to Mr. Ganatra, an author, for the copyright covered under Section 13(1)(a) of the
Copyright Act, 1957, of his original literary work on 5-9-20XX. It made the balance
payment of 1,50,000 on 12-12-20XX. You are required to determine the time of supply, if
Mr. Ganatra raised the invoice on :
(i) 6-10-20XX, or
(ii) 17-12-20XX.
Answer:-
Legal Provision:-
 As per section 9(3) of CGST Act, 2017, if services are supplied by an author by way of
transfer or permitting the use or enjoyment of a copyright covered uls 13(1)(a) ofCopyright
Act, 1957 relating to original literary works to a publisher, then GST is payable under
reverse charge by publisher.

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 As per section 13(3) of CGST Act, 2017, the time of supply of service taxable under
reverse charge is earlier of the following:-
a) Date of payment made by the recipient.
b) Date immediately following 60 days from date of issue of invoice by the supplier.
Discussion & Conclusion:-
In given case, GST is payable by publisher Know & Grow Publishers (i.e. the recipient) under
reverse charge as per section 9(3) & thus, the time of supply shall be determined as per
section 13(3).
(i) If the invoice is issued on 06.10.20XX, time of supply is as under:-
 05.09.20XX is the time of supply for payment of Rs. 50000 as this is earlier than the
61st day (i.e., 06.12.20XX) from date of issue of invoice.
 06.12.20XX is the time of supply for payment of Rs. 150000 as this is earlier than the
date of payment 12-12-20XX.
(ii) If the invoice is issued on 17.12.20XX, time of supply is as under:-
 05.09.20XX is the time of supply for payment of Rs. 50000 as this is earlier than the
61st day (i.e., 16.02.20XX) from date of issue of invoice.
 12.12.20XX is the time of supply for payment of Rs. 150000 as this is earlier the 61st
day (i.e. 16.02.20XX) from date of issue of invoice.
Assumption:- It is assumed that Author has not taken responsibility to pay tax under Forward
Charge by filing declaration to commissioner.

Q. 275 A Ltd., registered under GST, is engaged in job work of engineering goods as well
as supplying of engineering goods. A Ltd. provides following details regarding orders
received for Job work and supply of goods:-
A. Job work of engineering goods:-
Date of confirmation of order 01.03.20XX
Date of receipt of advance of 1,50,000 03.03.20XX
Date of completion of job work 06.03.20XX
Date of issue of invoice for total amount 11.03.20XX
Date of receipt of balance payment of 1,00,000 16.03.20XX
B. Supply of engineering goods:-
Date of confirmation of order 08.01.20XX
Date of receipt of advance of 1,50,000 12.01.20XX
Date of removal of goods 17.01.20XX
Date of issue of invoice for total amount 22.01.20XX
Date of receipt of balance payment of 1,00,000 01.02.20XX
You are required to examine and determine the time and value of supply under forward
charge w.r.t. job work and supply of goods under the provisions of CGST Act, 2017.
Answer:
a) Time and value of supply in case of job work:-
 Job work is treated as supply of services.

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 As per section 13(2)(a) of CGST Act, 2017, if invoice is issued within the time
prescribed u/s 31 (i.e., within 30 days) for supply of services, then the time of supply
of such services shall be earlier of:-
a) the date of issue of invoice by the supplier or
b) the date of receipt of payment
(to the extent the invoice/payment covers the supply of services).
 Thus, the time of supply for advance of 1,50,000 received for the supply of job work
services is 03.03.20XX and for balance payment of ₹ 1,00,000 is 11.03.20XX.
 Value of supply is ₹ 2,50,000.
b) Time and value of supply in case of supply of goods:-
 As per section 12(2) of CGST Act, 2017 read with notification 66/2017, the time of
supply of goods taxable under forward charge shall be earlier of the following dates:-
a) Date of issue of invoice or
b) last date to issue the invoice u/s 31 (ie. before or at the time of removal of goods
for supply to the recipient, where supply involves movement of goods).
 Thus, the time of supply for advance of 1,50,000 as well as for balance payment of
1,00,000 is 17.01.20XX which is the date of removal of goods.
 Value of supply is ₹2,50,000.
Q. 276 (i) An order is placed to T & Co., Sholapur on 18th August, 20XX for supply of
fabrics to make garments. Company delivered the fabrics on 4th September, 20XX and
after completion of the order issued the invoice on 15th September,20XX. The payment
against the same was received on 30th September, 20XX.Determine the time of supply for
the purpose of payment under CGST Act, 2017 with your explanations.
(ii) HM Industries Ltd. engaged the services of a transporter for road transport of
a consignment on 20th May, 20XX. However, the consignment could not besent
immediately on account of a strike in the factory, and instead was sent on20th
July, 20XX. Invoice was received from the transporter on 20th June, 20XX and
payment was made on 25th August, 20XX. What is the time of supply of the
transporter's service?
Answer:
(i) Legal Provision:-
 As per section 12 (2) of CGST Act, 2017 read with notification 66/2017, the
time of supply of goods shall be earlier of the following dates:-
a) Date of issue of invoice or
b) last date to issue the invoice u/s 31.
(As per notification 66/2017, the time of supply of goods is not on advanced
received).
 As per section 31(1), the registered person is required to issue invoice before or
at the time of delivery of goods or making goods available to the recipient.
Discussion & Conclusion:-

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 In given case, last date to issue invoice is the date of delivery of fabrics i.e. 4th
September, 20XX which precedes the date of invoice i.e. 15th September,
 Thus, the time of supply is 4th September, 20XX.
(ii) Alternative 1:- Assuming that services of transportation of goods by road have been
provided by a GTA which has not paid GST @ 12%; i.e. GST is payable @ 5%.
Legal Provision:-
 As section 9(3) of CGST Act, 2017, if service of transportation of goods by road
is provided by GTA to a body corporate (which includes company), then GST is
payable under reverse charge by body corporate.
 As per section 13(3) of CGST Act, 2017, the time of supply of service taxable
under reverse charge is earlier of the following:-
a) Date of payment made by the recipient.
b) Date immediately following 60 days from date of issue of invoice by the
supplier.
Discussion & Conclusion:-
 Thus, in the given case, time of supply is earlier of:-
 25th August, 20XX i.e. the date of payment or 20th August, 20XX (61st day from
 20th June which is the date of invoice)
 Therefore, the time of supply is 20th August, 20XX.
Alternative 2: Assuming that services of transportation of goods by road have been
provided by a GTA which has paid GST @ 12%. Thus, GST is payable under forward
charge.
Legal Provision:-
 As per section 9(3) of CGST Act, 2017, if GTA pays GST @ 12%, then RCM is
not applicable, then GTA is liable forward charge to pay tax.
 As per section 13(2)(a) of CGST Act, 2017, if invoice is issued within the time
prescribed u/s 31 (i.e., within 30 days) for supply of services, then the time of
supply of such services shall be earlier of:
a) the date of issue of invoice by the supplier or
b) the date of receipt of payment.
Discussion & Conclusion:-
 In the given case, the date of invoice is 20th June, 20XX which is before provision
of services and the date of receipt of payment is 25th August, 20XX.
 Therefore, the time of supply is 20th June, 20XX.

Q. 277 GST is payable on advance received for supply of goods and services taxable under
forward charge.
Do you agree with the statement? Support your answer with legal provisions.
Answer:
 The statement is not correct.

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 While GST is payable on advance received for supply of services taxable under forward
charge, the same is not payable in case of advance received for supply of goods taxable
under forward charge.
 As per section 13(2) of CGST Act, 2017, the time of supply of services under forward
charge is:-
Cases Time of Supply
a If the invoice is issued within the period Time of supply shall be earlier of:-
prescribed u/s 31:  the date of issue of invoice by the
supplier or
 the date of receipt of Payment.
b If the invoice is not issued within the Time of supply shall be earlier of:-
period prescribed u/s 31-  the date of provision of service or
 the date of receipt of payment.

 Thus, if supplier of services receives any payment before the provision of service or before
the issue of invoice for the same, time of supply gets fixed at that point in time & liability
to pay tax arises on such payment which can be paid by the due date prescribed with
reference to such time of supply.
 As per section 12 (2) of CGST Act, 2017 read with notification 66/2017, the time of
supply of goods taxable under forward charge shall be earlier of following dates:-
i) Date of issue of invoice or
j) last date to issue the invoice u/s 31.
 Therefore, in case of goods, tax is not payable on receipt of advance payment.

Q.278 Meal coupons are sold to a company on 9th August for being distributed
to the employees of the said company. The coupons are valid for six months and can
be used against purchase of food items. The employees use them in various stores for
purchases of various edible items on different dates throughout the six months. What
is the date ofsupply of the coupons?
Answer: Legal Provision:-
As per section 12 (4) of CGST Act, 2017, time of supply of vouchers issued supplier of goods
shall be:- by
a) the date of issue of voucher, if the supply is identifiable at that point; or
b) the date of redemption of voucher, in all other cases.
Discussion & Conclusion:-
 In the given case, supply is not identifiable at the time of issue of coupon.
 This is because coupons can be used for a variety of food items, which are taxed at different
rates & thus, supply cannot be identified at the time of purchase of the coupons.
 Therefore, the time of supply of coupons shall be date of redemption of coupons by
employees.

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Q. 279 From the following information, determine the time of supply of services where
supply is by issue of voucher valid for one year and are issued after supply of first service:-
Date of First Service: 01.01.20XX
Date of Issue of Voucher: 01.01.20XX
Date of Redemption of Voucher: 31.8.20XX
Last date for acceptance of voucher: 31.12.20XX
Answer: Legal Provision:-
As per section 13(4) of CGST Act, 2017, time of supply of vouchers issued by supplier of
services shall be:-
a) the date of issue of voucher, if the supply is identifiable at that point; or
b) the date of redemption of voucher, in all other cases.
Discussion & Conclusion:-
 In the given case, voucher is issued after supply of first service & therefore, it is assumed
that supply is identifiable at that point.
 Thus, as the supply is identifiable at the time of issue of voucher, the time of supply is the
date of issue of voucher i.e. 01.01.20XX.

Q. 280 An income-tax and money laundering case against Mr. XYZ, working in a
multinational company, reveals a large volume of undisclosed assets, which he claims as
service income. On this basis, the GST authorities investigates the GST liability. Dates of
provision of service, whether in the first half or the second half of the financial year being
scrutinised by income-tax authorities, are not known. Mr. XYZ voluntarily pays GST
during the investigation. What is the time of supply of the services?
Answer:
Legal Provision:-
 As per section 13 (5) of CGST Act, 2017, where it is not possible to determine the timeof
supply under section 13(2), 13(3) and 13(4), then-
c) In a case where a periodical return has to be filed:- Time of supply shall be the date
on which such return is to be filed (i.e. Due date for filing of periodical return) or
d) In any other case:- The time of supply shall be the date on which the tax is paid.
Discussion & Conclusion:-
 In the given case, it is not possible to determine the time of supply using:- - date of invoice,
- date of provision of service,
- date of receipt of payment &
- date of receipt of services in the books of account of the recipient.
 On the other hand, Mr. XYZ, being an employee in a multi-national company, is not a
registered person and hence, the periodical return is also not to be filed.
 Therefore, the date of payment of GST by Mr. XYZ will be the time of supply u/s 13(5).

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Q. 281 Mr. X supplied goods for 50,000 to its customer Miss Diyana on 1st January
on thecondition that payment for the same will be made within a week. However,
Miss Diyana made payment for the said goods on 2nd February and thus, paid
interest amounting to 2,000. What is the time of supply with regard to addition in
the value by way of interest in lieu of delayed payment of consideration?
Answer:
Legal Provision:-
 As per section 12(6) of CGST Act, 2017, the time of supply for the addition in value
of supply by way of interest, late fee or penalty for delayed payment of any
consideration shall be the date of receipt of such addition in value by supplier.
Discussion & Conclusion:-
 Thus, in the given case, the time of supply of interest would be the date on which
the supplier has received such additional consideration, i.e. 2nd February.

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11. Reverse Charge and Payment by ECO

Q. 282 What does reverse charge mean & Who is responsible to pay taxes under the
GSTLaw?
Answer:
Meaning of reverse charge:-
As per section 2(98) of CGST Act, 2017, "Reverse charge" means the recipient of supply o f
goods &/or services is liable to pay GST instead of supplier u/s 9(3) or 9(4) of CGST Act.
The person responsible to pay taxes under the GST Law:-
Generally, the supplier of Goods &/or Services is liable to pay taxes under the GST Law.
However, the following are certain exceptions:-
(a) Reverse Charge:-
Under reverse charge mechanism, the recipient is liable to pay GST in the following
cases:
 Supply of goods &/or services notified by the Government on the recommendations
of the GST Council u/s 9(3) of CGST Act
 Supply of specified categories of goods &/or services by an unregistered supplier to
specified class of registered persons, as notified by the Government on
recommendation of GST Council u/s 9(4) of CGST.

Q. 283 MEPL Classes had appointed a senior advocate Ms. Pooja forrepresentation of
company's legal matter at Delhi. Determine who is liable to pay the GST? Would your
answer differ if MEPL Classes appoints local advocate Mr. Sagarwho further appoints
Ms. Pooja for representation?
Answer:
Legal Provision:-
 As per section 9(3) of CGST Act, 2017, if legal services are provided by an individual
advocate including a senior advocate to any business entity located in the taxable
territory, then the GST is payable on reverse charge basis by recipient.
 Legal services include representation made on legal matters.
Discussion & Conclusion:-
i) In the given case, Pooja is a senior advocate providing representational service to o
business entity i.e., MEPL Classes, Kolkata. Therefore, MEPL Classes is be liable to pay
GST under reverse charge for services provided by Ms. Pooja.
ii) No because the liability to pay GST will be on MEPL Classes only eventhough Ms. Pooja
is appointed through another local advocate Mr. Sagar.

Q. 284 "Under the GST law, taxes on taxable services supplied by the Central
Government or the State Government to a business entity in India are payable by
recipient of services".
State the exceptions of the above statement.

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Answer:-
As per section 9(3) of CGST Act, Services supplied by the Central Government or State
Government to a business entity in India are payable by the Recipient of services except:
1) Services of renting of immovable property provided to an unregistered business entity.
2) Services in relation to an aircraft or a vessel, inside or outside the precincts of a port or
an airport.
3) Services of transport of goods or passengers.

Q. 285 Arpan Singhania is a director in Narayan Limited. The company paid him the
sitting fee amounting to 25,000, for the month of January. Further, salary was paid to
Arpan Singhania amounting to 1.5 lakh for the month of January on which TDS was also
deducted as per applicable provisions under Income-taxlaw.
Tapasya & Associates, in which Arpan Singhania is a partner, supplied certain
professional services to Narayan Limited in the month of January for an amount of 2
lakh.
Discuss the person liable to pay tax in each of the supplies involved in the given case.
Answer:-
Legal Provision:- As per reverse charge notification, if services are supplied by director of a
company to the said company located in the taxable territory, then GST
is payable on reverse charge basis by recipient.
Discussion & Conclusion:-
i) Sitting Fee paid to director:-
 Here, Narayan Limited (i.e. Company) paid sitting fee 25,000 to its director- Arpan
Singhania.
 Thus, Narayan Limited is liable to pay GST under reverse charge

ii) Salary paid to director:-

 As per CBIC circular, if director's remuneration is declared as Salaries in books of
company & subjected to TDS u/s 192 of Income-tax Act, then that is not taxable under
GST because it is the consideration for services by an employee to employer in the
course of or in relation to his employment as per Para I of Schedule III.
 Therefore, the salary received by Arpan Singhania of 1.5 lakh is not liable to GST.
iii) Services provided by Tapasya & Associates:-
 In this case, the fact that Arpan Singhania is a partner in Tapasya & Associates and also
a director in Narayan Limited does not have any impact on the taxability of
professional services supplied by Tapasya & Associates to Narayan Limited.
 Therefore, Tapasya & Associates (i.e. the supplier) is liable to pay GST on such
services under forward charge.

Q. 286 Yes Bank, located in Nagpur, appointed Mr. Mahesh as a recovery agent for
collecting outstanding balance amount of loan from one of its customer. Mr. Mahesh
provided this service to Yes Bank for which it charged a fee. Determine the tax

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implications as per CGST Act.

Answer-
 As per section 9(3) of CGST Act, if services are supplied by a recovery agent to a
banking company, then GST is payable on reverse charge basis by recipient.
 In the given case, Yes Bank shall be liable to pay GST under reverse charge for services
provided by Mr. Mahesh as a recovery agent.

Q. 287 Mr. Vicky Frankyn, an unregistered famous author, received 3 crore of

consideration from Shiv Bhawan Publications (SBP) located in Indore for supply of
services by way of temporary transfer of a copyright covered under section 13(1)(a) of the
Copyright Act, 1957 relating to original literary works of his new book. He finished his
work & made available the book to the publisher, but has yet not raised the invoice. Mr.
Vicky Frankyn is of the view that SBP is liable to pay tax under reverse charge on services
provided by him. SBP does not concur with his view and is not ready to deposit the tax
under any circumstances. Examine whether the view of Mr. Vicky Frankyn is correct.
Further, if the view of Mr. Vicky Frankyn is correct, what is the recourse available with
Mr. Vicky Frankyn to comply with the requirements of GST law as SBP has completely
refused to deposit the tax.

Answer :- Yes, the view of Mr. Vicky Frankyn is correct.

Legal Provision:-
As per section 9(3) of CGST Act, if services are supplied by an author by way of transfer or
permitting the use or enjoyment of a copyright covered under section 13(1)(a) of the
Copyright Act, 1957 relating to original literary works to a publisher located in the taxable
territory, then GST is payable on reverse charge basis by recipient.
Discussion & Conclusion:-
 In the given case, Mr. Vicky temporarily transferred copyright relating to original literary
works of his new book to the publisher - SBP.
 Therefore, the publisher - SBP is liable to pay tax under reverse charge.
 However, since SBP has completely refused to deposit the tax on the given transaction,
Mr. Vicky Frankyn has an option to pay tax under forward charge provided he fulfils
the following conditions:-
(i) He has taken registration under the GST law.
(ii) He has filed a declaration, in the prescribed form,
 that he exercises the option to pay tax on the said service under forward charge and,
 to comply with all the provisions of GST law as they apply to a person liable for
paying the tax for supply of any goods &/or services &
 that he shall not withdraw the said option within a period of 1 year from the date of
exercising such option.
(iii) He makes a declaration on the invoice issued by him in prescribed form to the publisher.

Q. 288 Mr. Vishal wants a loan of 10,00,000. For this, he has taken the service of an
individual, Mr. Rudra, who is a Direct Selling agent of HDFC bank. Bank pay the
commission to Mr. Rudra @2% of loan granted to Mr. Vishal for giving a customer to
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the bank. Who is liable to pay GST in this case? Also calculate the amount of GST
payable, if GST rate is 18%.
Answer-
Legal Provision:-
As per section 9(3) of CGST Act, if services are provided by an individual Direct Selling
Agent (DSA) other than body corporate, partnership or limited liability partnership firm to
 any banking company or
 non-banking financial company,
located in a taxable territory, then the GST is payable on reverse charge basis by recipient.
Discussion & Conclusion:-
 In the given case, Mr. Rudra is an individual who is providing services of direct selling
agent to a banking company i.e. HDFC Bank.
 Therefore, the HDFC bank (i.e. the recipient) is liable to pay GST under reverse charge.
 Calculation of GST payable:-
Particulars Amount in ₹
Loan Amount 10,00,000
Commission paid by bank to Rudra (Rs. 10,00,000 2%) 20,000
GST Payable @18% (Rs. 20,000 18%) 3,600

Q. 289 The Professionals Security-Kolkata is a firm of security agency providing of supply

ofsecurity personnel to following categories of persons:-
(i) XY2 Pvt. Ltd. (a company registered under CGST Act, 2017), valuing 10 lakhs.
(ii) Sindh Co-operative Credit Society, Mumbai, which is unregistered under CGST Act,
2017,8 lakhs.
(iii) Mr. Altaf, from Gujarat (registered under section 10 of CGST Act, 2017), value of 2
lakhs.
(iv) Service provided to Star Industries Ltd., USA, value being7 lakhs.
Determine the taxable value as well as the tax liability of The Professionals Security
Kolkata, assuming CGST @ 9%, SGST @ 9% and IGST @ 18%.
Answer: Determination of taxable value of the Professionals Security-Kolkata-
Sr. Taxable Taxable Refer
Recipient of service
No. under value in ₹ note
i. XYZ Pvt. Ltd. (Registered person) Reverse - 1
Charge
ii. Sindh Co-operative Credit Society, (Un- Forward 8 lakhs 1
registered person) Charge
iii. Mr. Altaf, Gujarat Forward 2 Lakhs 2
(Registered u/s 10 of CGST Act) Charge
iv. Star Industries Ltd., USA Forward 7 Lakhs 4
Charge
Total taxable value 17 lakhs
Notes:-
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1. As per section 9(3) of CGST Act, 2017, if security services (services provided by way of
supply of security personnel) are provided by any person other than a body corporate
to a registered person located in the taxable territory, then GST is payable on reverse
charge basis by recipient.
2. The following are the exceptions to the service covered under reverse charge in note
I above:-

 a registered person paying tax under section 10 of the said Act i.e, composition scheme.
3. RCM will apply only if service provided to registered person located in taxable territory.
As Star Industries is located in USA which falls outside the taxable territory, The
Professionals Security- Kolkata will be liable to pay tax under forward charge.
Determination of Tax liability of The Professionals Security - Kolkata is as follows:-
Sr. Particulars ₹ in IGST CGST SGST
No Lakhs @ 18% @ 9% @ 9%
1 Intra State Supply 8 - 72,000 72,000
2 Intra State Supply 2 36,000 - -
3 Export 7 - - -
Total Tax Liability 36,000 72,000 72,000

Note :- If supplier satisfies the conditions, then it can avail benefit of zero-rated supply for
export to Star Industries Ltd. USA & no GST would be payable.

Q. 290 State, with reason, the person liable to pay GST in each of following independent
cases:-
Assume recipient is located in taxable territory.
(i) Rental income received by Tamil Nadu State Government from renting an
immovable property to Mannappa Pvt. Ltd. (Turnover of the company was 22 lakhs
in the preceding F. Y) [ICAI Study Material- but with Central Govt. instead of State
Govt.]
(ii) Legal Fees received by Mr. Sushrut, a senior advocate, from M/s. Tatva Trading
Company having turnover of 50 lakhs in preceding financial year.
Answer:

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i. Legal Provision:-
As per section 9(3) of CGST Act, if service of renting of immovable property is
provided by the Central Government, State Government, Union Territory, or local
authority to any registered person located in the taxable territory, then GST is
payable under reverse charge by recipient.
Discussion & Conclusion:-
 In the given case, Mannappa Pvt. Ltd. is registered under GST as the turnover
of the company was 22 lakhs in the preceding financial year which is exceeding
threshold limit for registration u/s 22 of CGST Act.
 So, here, the State Government of Tamil Nadu provided service of renting of
immovable property to a registered person located in taxable territory.
Therefore, Manaappa Pvt. Ltd. is liable to pay GST under reverse charge.
ii. Legal Provision:-
As per section 9(3) of CGST Act, if legal services are supplied by a senior advocate
to any business entity located in the taxable territory, then GST is payable on reverse
charge basis by recipient.
Discussion & Conclusion:-
 In the given case, Mr. Sushrut is a senior advocate & he is supplying legal
services to M/s. Tatva Trading Company i.e. a business entity.
 Thus, M/s. Tatva Trading Company is liable to pay GST under reverse charge.

Q. 291 State the person liable to pay GST in the following independent cases provided
recipient is located in the taxable territory:-
(a) Services supplied by a recovery agent to a car dealer.
(b) Security services (services provided by way of supply of security personnel) provided
to a registered person.
Answer:-
(a) Legal Provision:- As per section 9(3) of CGST Act, if services are supplied by a
recovery agent to a banking company or a financial institution or a non- banking
financial company (NBFC) located in the taxable territory, then GST is payable on
reverse charge basis by recipient.
Discussion & Conclusion:-
 In the given case, services are being supplied by a recovery agent to a car dealer&
not to a banking company or financial institution or NBFC.
 Thus, service provider i.e. the recovery agent is liable to pay GST under
forward charge.

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(b) Legal Provision:-

As per section 9(3) of CGST Act, if security services (services provided by way of
supply of security personnel) are provided by any person other than a body
corporate to a registered person located in the taxable territory, then GST is
payable on reverse charge basis by recipient.
Discussion & Conclusion:-
 Therefore, in the given case, registered person receiving the services is liable to
pay GST under reverse charge.

Q. 292 In the following independent cases, decide, who is liable to pay GST, if any. You
may assume that recipient is located in the taxable territory. Ignore the aggregate
turnover and exemption available.
(i) 'Veer Transport', a registered Goods Transport Agency (GTA) paying IGST @ 12%,
transported goods by road of Dilip & Company, a sole proprietary firm (other than
specified person) which is not registered under GST or any other Law.
(ii) Mr. Kamal Jain, an unregistered famous author, received 20 lakh of consideration
from PQR Publications Ltd. for supply of services by way of temporary transfer of a
copyright covered under section 13(1)(a) of the Copyright Act, 1957 relating to
original literary works of his new book.
Answer:-
i. Legal Provision:- As per section 9(3) of CGST Act, in case of a GTA service,
 where GST is payable @ 5% without ITC and recipient is one of the specified
recipients, tax is payable under reverse charge by the recipient of service &
 where GST is payable @ 12% with ITC, tax is payable under forward charge by
the supplier of service.
Discussion & Conclusion:-
 In the given case, GTA is paying IGST @12%.
 Also, the recipient of service is other than specified recipient, i.e. unregistered
sole proprietorship firm.
 Therefore, GST is payable by "Veer Transport", a registered GTA under forward
charge.
Note:- GTA service is exempt from GST in this question as recipient is other than
specified recipient, i.e., unregistered sole proprietorship firm. But, this exemption is
ignored as the question specifically requires the students to ignore the exemptions
available, if any.

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ii. Legal Provision:-

 As per section 9(3) of CGST Act, if services are supplied by an author by way
of transfer of a copyright covered under section 13(1)(a) of the Copyright Act,
1957 relating to original literary works to a publisher located in the taxable
territory, then GST is payable on reverse charge basis by recipient.
 The Author can pay tax under forward charge if the author is a registered person.
Discussion & Conclusion:-
 In the given case, the author is an unregistered person.
 So, the option of paying tax under forward charge is not available to him.
 Therefore, PQR Publications Ltd. (i.e. the recipient) is liable to pay GST under
reverse charge.

Q. 293 State the person liable to pay GST in the following independent cases provided
recipient is located in the taxable territory:-
(a) Services provided by an arbitral tribunal to any business entity.
(b) Sponsorship services provided by a company to an individual.
Answer:-
a. Legal Provision:- As per section 9(3) of CGST Act, if services are provided or
agreed to be provided by an arbitral tribunal to any business entity located in the
taxable territory, then GST is payable under reverse charge by recipient.
Discussion & Conclusion :- Therefore, in the given case, the business entity is
liable to pay GST under reverse charge.
b. Legal Provision:- As per section 9(3) of CGST Act, if sponsorship services are
provided by any person to any body corporate or partnership firm located in the
taxable territory, then GST is payable under reverse charge by recipient.
Discussion & Conclusion:-
 In the given case, sponsorship services have been provided to an individual.
 Thus, the reverse charge provisions will not be attracted here.
 So, company i.e. the supplier is liable to pay GST under forward charge.

Q. 294 From the following information, determine the person liable to pay GST given that
both Supplier and Recipient are located in India:-
1 Mr. Atul is an agent of Life Insurance Co. The insurance company pays commission
(excluding tax) 6 Lakh to him. Mr. Atul claims that no GST is leviable on services
provided by him as his value of taxable service does not exceed 20 lakhs.

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2 XYZ Ltd. availed services of Vimal Goods transport agency for transportation of
goods by road from factory located in New Delhi to its Jaipur depot and paid freight
of 1,00,000.
3 Ranka Jewellers Ltd. paid 50 lakhs for sponsorship of Miss India beauty pageant.
4 Legal services provided by VHB & Co., a partnership firm of Advocates, New Delhi
to Tata Motors Ltd, Mumbai for 70,00,000.
5 Infrastructural support services provided by Government to a business entity for 14
Lakh
6 Renting of immovable property services provided by Government to unregistered
business entity for Rs. 18 Lakhs.
Answer:
1 Legal Provision:- As per section 9(3) of CGST Act, if services are supplied by an
insurance agent to any person carrying on insurance business located in the
taxable territory, then GST is payable on reverse charge basis by recipient.
Discussion & Conclusion:-
 In the given case, Mr. Atul's claim that his turnover does not exceeds Rs. 20
Lakhs has no relevance here, because under reverse charge threshold limit of
registration is not available & there is compulsory registration required u/s 24 of
CGST Act.
 Therefore, Life Insurance Company is liable to pay GST under reverse charge
2 Legal Provision:-
As per section 9(3) of CGST Act, in case of a GTA service,
 where GST is payable @ 5% without ITC and recipient is one of the specified
recipients, tax is payable under reverse charge by the recipient of service &
 where GST is payable @ 12% with ITC, tax is payable under forward charge by
the supplier of service.
Discussion & Conclusion:-
 In the given case, it is assumed that GTA is paying GST @5%.
 Also, the XYZ Ltd. who is the recipient of service is a specified recipient, i.e., a
body corporate established by or under any law liable to pay freight.
 Therefore, XYZ Ltd. is liable to pay GST under reverse charge.
3 Legal Provision:- As per section 9(3) of CGST Act, if sponsorship services are
provided by any person to any body corporate or partnership firm in taxable
territory, then GST is payable on reverse charge basis by recipient.
Discussion & Conclusion:-
 In the given case, sponsorship services are provided to Ranka Jewellers Ltd. i.e. a
body corporate.
 Therefore, Ranka Jewellers Ltd. is liable to pay GST under reverse charge.

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4 Legal Provision:- As per section 9(3) of CGST Act, if legal services are provided
by a firm of advocates to any business entity located in the taxable territory, then
the GST is payable on reverse charge basis by recipient.
Discussion & Conclusion:-

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 In the given case, VHB & Co. is a partnership firm of advocates & provides
legal service to a business entity - Tata Motors Ltd.
 Therefore, Tata Motors Ltd. is liable to pay GST under reverse charge.
5 Legal Provision:- As per section 9(3) of CGST Act, if any service, other than those
covered under exception, are provided by the Government to business entity
located in a taxable territory, then GST is payable under reverse charge by recipient.
Discussion & Conclusion:-
 In given case, the government provides the Infra structural support services to
business entity.
 The Infra structural support services are not covered under exceptions toservices
under reverse charge.
 Therefore, the business entity is liable to pay GST under reverse charge.
6 Legal Provision:-
 As per section 9(3) of CGST Act, if service of renting of immovable property is
provided by Central Government or State Government or Union Territory or local
authority to any registered person located in the taxable territory, then GST is
payable under reverse charge by recipient.
 If recipient is unregistered, then the supplier of service will pay under forward
charge.
Discussion & Conclusion:-
 In this case, this service is provided by the government to an unregistered
business entity.
 Thus, the supplier i.e. the Government is liable to pay GST under forward charge.

Q. 295 Does the tax liability u/s 9(5) comes within the scope of reverse charge? Can any
person other than the supplier or recipient be liable to pay tax under GST?
Answer:-
 No, this is because:-
 The definition of reverse charge given in section 2(98) of CGST Act refers only to
section 9(3) and 9(4) of the said act.
 It has no reference to section 9(5).
 Tax payment by ecommerce operator in case of specified services under section 9(5)
would not be a case of reverse charge as the ecommerce operator facilitates the supply
through the digital network and collects payment from recipient and passes it on to
supplier.
 Yes, E-Commerce Operator is not a supplier / recipient but he is liable to pay tax u/s 9(5)
for the supply of notified categories of services.

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Q. 296 Mr. Ram has 4 Hats & 2 shops in Kolkata. He has given all flats & Shops
on rent asfollows:-
(a) Flat I is given on rent to Mr. B (Salaried person) for his residence purpose
(b) Flat 2 is given on rent to XYZ Ltd. (reg. in GST) company is using as guest
house forresidence purpose
(c) Flat 3 is given on rent to Mr. C a CA (unregistered person), who is using it for
officialpurpose
(d) 2 commercial shops are given on rent to partnership firm for running
Garmentsbusiness.
Determine tax payable in each case.

Answer-
Legal Provision:- As per Sec 9(3), services supplied by way of renting of residential
dwellingby any person to a registered then under reverse charge registered person is
liable to pay tax. Also as per exemption N/N 12/2017, services by way of renting of
residential except wherethe residential dwelling is rented to a register person is exempt
from tax,

Discussion:-
a) Renting of Flat 1 to Mr. B, a salaried un-registered person is exempt from
payment ofGST.
b) Renting of flat -2 to XYZ Ltd. a registered person for use of guesthouse is liable to
GST under reverse charge & XYZ Ltd. is liable to pay tax.
c) Exemption is available only if Hat is given on rent only for residence purpose. In
given case, even though Mr. C is un-registered person but he is using flat for official
purpose hence renting service is taxable under forward charge & Mr. Ram is liable
to pay tax.
d) Exemption is not available to renting of commercial place & also in this case there
is no provision of reverse charge. Hence Mr. Ram is liable to pay tax on renting of 2
commercialshops under forward charge.

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12. COMPOSITION SCHEME

Q. 297 What is composition levy as per section 10 of CGST Act? Also state the threshold
limit for opting to pay tax under this scheme.
Answer:
Eligibility of scheme:-
 The composition levy is an alternative method of levy of tax designed for small taxpayers.
 The option to pay tax under this scheme is available u/s 10(1)/ 10(2A) of CGST Act to a
registered person whose aggregate turnover in preceding financial year was not
exceeding:-
a) Under section 10(1) of CGST Act:-
 Rs. 1.5 Cr in other than special category states but including Assam, Himachal
Pradesh and Jammu & Kashmir &
 Rs. 75 lakhs in special category states except Assam, Himachal Pradesh & Jammu
& Kashmir.
b) Under section 10(2A) of CGST Act:-
 Rs. 50 lakhs for person who are ineligible to opt u/s 10(1).
 The benefit of composition scheme can be availed up to the turnover of 1.5 Cr/375 /*50
lakh as the case may be in the current financial year.
Objective :- To bring simplicity & reduce compliance cost for the small taxpayers Optional
Scheme :- This scheme is optional and the eligible person opting this scheme canpay tax at
a prescribed percentage of his turnover every quarter, instead of paying tax atnormal rate.

Q. 298 What are the tax rates to a registered person u/s 10(1) & 10(2A) composition
scheme?
Answer: The registered persons who are eligible for composition scheme under section 10(1)
& Section 10(2A) read with Rule 7 of CGST Act shall pay tax at the rates specified in below
table:-
SGST/ Total
Sr. Category of registered CGST
UTGST Tax Tax as a %
No. persons Rate
Rate Rate
U/s 10(1) of CGST Act, 2017-
1. Manufacturers, other than The turnover in the
manufacturers of notified goods State/Union territory
0.5% 0.5% 1%
(ice cream, pan masala tobacco
etc.)
2. Suppliers making supplies The turnover in the
2.5% 2.5% 5%
referred to in clause (b) of State/Union territory

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paragraph 6 of Schedule II
[referred to as "Restaurant
service"]
3. Other supplier eligible for The turnover oftaxable
composition levy u/s 10 (i.e. supplies of goods &
0.5% 0.5% 1%
traders not being manufacturers) services in the
State/ Union territory
U/s 10(2A) of CGST Act, 2017:-
4. Registered person eligible to opt The turnover in the
for composition levy for 3% 3% 6% State/Union territory
services u/s 10(2A)

Q. 299 How to compute 'Aggregate Turnover' to determine eligibility for composition

scheme?
Answer: As per section 2(6) read with explanation I to section 10 of CGST Act, Aggregate
Turnover for the purpose of composition scheme shall:-
Include:-
 Value of all outward supplies of goods &/or services in following 4 categories:-
- Taxable supplies
- Exempt supplies (wholly exempt, nil rated & Non-taxable)
- Exports
- Inter-State supplies
(For persons having same PAN, aggregate turnover is to be computed on all India basis.)
 Value of supplies made by registered person from 1st April of a Financial Year upto the
date when he becomes liable for registration under GST Acts.
Exclude:-
 CGST/SGST/ UTGST/IGST/ Cess
 Value of inward supplies on which tax is payable by a person under reverse charge.
 Value of exempt supply of services of extending deposits, loans or advances where the
consideration is by way of interest or discount.
This definition includes non-taxable supply, inter-state outward supply & export supply,
but if such supplies are made in current financial year then, this levy shall be
withdrawn immediately though Aggregate turnover is below the threshold limit for this
scheme.

Q. 300 Zen Pvt. Ltd. is a dealer in goods having registered office at Noida, Uttar
Pradesh and shops are located at Noida, Uttar Pradesh and Chennai, Tamil Nadu.
Details of various supplies both inward & outward undertaken by them during June
20XX quarterare given in the table below:-
All the values given in the table are inclusive of GST (CGST/SGST/UTGSTAGST),
wherever applicable. Applicable IGST Rate is 5% and CGST & SGST @ 2.5% each, on
inward & RCM supplies as well.

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S.
Particulars Amounts (₹)
No.
i. Export of goods to China from Noida 20,00,000
ii. Goods supplied to SEZ located at Delhi from Noida 15,00,000
iii. Supply of goods directly to customer from location of job 2,00,000
worker at Lucknow (U.P.) after completion of job work. (Intra
state)
iv. Sales from Chennai Shop (Inter State) 11,00,000
v. Local sales at Noida (Intra State) 25,00,000
vi. Services of transport availed from M/s. ABC Transport (Inter 3,00,000
State)
vii. Commission paid to Mr. Nagar, Sales Executive which is not 50,000
part of the terms of employment. (Intra State)
Calculate the aggregate turnover of Zen Pvt. Ltd. for June 20XX quarter. Brief and
suitable notes should form part of your answer. [CA IPC July 21 Exam]
Answer:-
Computation of aggregate turnover of Zen Pvt. Ltd.:-
Amount (₹)
Sr.
Particular [excluding Reason / Assumptions
No.
GST]
I Export of goods to China 20,00,000 Includible in the aggregate turnover & It
from Noida is assumed that exports are made
without payment of tax.
ii Goods supplied to SE2 15,00,000 Includible in the aggregate turnover & it
located at Delhi from is assumed that supply of goods to SE2
Noida are made without payment of tax
iii Supply of goods directly to 1,90,476 (₹ Includible in the aggregate turnover of
customer from location of 2,00,000 × Zen Pvt. Ltd & IGST be excluded from
job worker 100/105) same
iv Sales from Chennai Shop 10,47,619 Includible in the aggregate turnover.
(Inter State) [₹11,00,000 Further, IGST be excluded from the
same
× 100/105]
v Local sales at Noida (Intra 23,80,952 Includible in the aggregate turnover &
State) [₹25,00,000 CGST and SGST be excluded from the
same
× 100/105]

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vi Services of transport Nil Inward supplies are not included in

availed aggregate turnover
vii Commission paid to Sales Nil Inward supplies are not included in
Executive aggregate turnover
Total aggregate turnover 71,19,047

Q. 301 Mr. Zafar of Assam, provides the following information for the preceding
financial year 20XX-YY. You are required to find out the aggregate turnover for the
purpose of eligibility of composition levy scheme and determine whether he is eligible
for composition levy scheme or not for the F.Y. 20YY-22.
Particular Amount (₹)
Value of taxable outward supplies (include 10 lakh of inter-state 50.00
transactions)
Value of exempt supplies (include 30 lakh received as interest on 70.00
loans & advances)
Value of inward on which he is liable to pay tax under reverse charge 5.00
Value of exports 5.00
All the amounts are exclusive of GST.

Answer:
Legal Provision:-
 As per section 10(1) of CGST Act, a registered person can opt to pay tax under composition
scheme, if aggregate turnover in preceding financial year was not exceeding Rs. 1.5
Crore other than special category states but including Assam, HimachalPradesh & Jammu
& Kashmir.
 As per section 10(2)(c), he should not be engaged in making outward inter-state supply in
current financial year
 As per section 2(6) read with explanation I to section 10 of CGST Act, Aggregate Turnover
means aggregate value of all Taxable supplies, Exempt supplies (wholly exempt, nil rated
& Non-taxable), Exports, Inter-State supplies of persons having same PAN, to be
computed on all India basis but It excludes:-
 CGST/ SGST/ UTGST/IGST/ Cess &
 Value of inward supplies on which tax is payable by a person under reverse charge.
 Value of exempt supply of services provided by way of extending deposits, loans or
advances in so far as the consideration is represented by way of interest or discount.
Discussion Conclusion:-
 Computation of aggregate turnover of Mr. Zafar for F.Y. 20XX-YY for eligibility of
composition levy:

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Particular Amount (₹)

Value of taxable outward supplies 50
Value of exempt supplies 40
Value of inward on which he is liable to pay tax under reverse charge Nil
Value of exports 5
Aggregate turnover for determining eligibility for composition 95
scheme
 In the given case, the aggregate turnover of Mr. Zafar is Rs. 95 lakhs in preceding financial
year 20XX-YY which is not exceeding Rs. 1.5 Crore.
 Therefore, Mr. Zafar is eligible to opt for composition scheme u/s 10(1) financial year
20YY-2022 assuming that he is not engaged in making any inter State outward supply of
goods or services in financial year 20YY-2022.
Note (just for understanding & not part of the ans):- Condition of section 10(2) are not
applicable for Previous year, it is applicable only in the current year to check whether
person is eligible for composition scheme or not.

Q. 302 M/s United Electronics, a registered dealer, is supplying all types of electronic
appliances in the State of Karnataka. Their aggregate turnover in the preceding financial
year by way of supply of appliances was 120 lakh. The firm also expects to provide repair
and maintenance service of such appliances from the current financial year.
With reference to the provisions of the CGST Act, 2017, examine:
i) Whether the firm can opt for the composition scheme, under section 10(1) and 10(2),
for the current financial year, as the turnover may include supply of both goods and
services?
ii) If yes, up to what amount, the services can be supplied?
Answer:-
Legal Provision:-
 As per section 10(1) of CGST Act, a registered person can opt to pay tax under composition
scheme, if aggregate turnover in preceding financial year was not exceeding Rs. 1.5
Crore in other than special category states but including Assam, Himachal Pradesh &
Jammu & Kashmir.
 This scheme can be availed by a supplier making intrastate supply of goods and restaurant
service.
 As per Second proviso to section 10(1) of CGST Act, A person who opts to pay tax uls
10(1) may supply services (other than those referred to in clause (b) of paragraph 6 of
Schedule II i.e. Restaurant service) in current financial year, of value not exceeding the
higher of:-
 10% of turnover in a State or UT in the preceding financial year or
 ₹ 5 Lakhs.
Discussion & Conclusion:-

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i) In the given case, M/s United Electronics can opt for composition scheme u/s
10(1) & 10(2) for the current financial year as its aggregate turnover is Rs. 120 lakhs
which is not exceeding Rs. 1.5 crore in the preceding financial year and it is not
engaged in inter-Stateoutward supplies.
ii) M/s United Electronics can supply repair and maintenance services up to a value of
Rs. 12lakhs [i.e. 10% of 120 lakh or 5 lakh, whichever is higher] in the current
financial year.

Q. 303 M/s XYZ Pvt. Ltd., a manufacturer, having the only registered place of
business inthe state of Maharashtra. Determine the eligibility to opt for composition
scheme and alsocompute tax liability of M/s XYZ Pvt. Ltd. on the basis of following
information assumingthat total of service provided by the company in Preceding
Financial Year (PFY) is withinthe allowed limit of section 10(1) except interest and
restaurant service:-
Sr. PFY 20XX-YY 1st Qtr. 20YY-22
Particulars
No. (₹ in lakhs) (₹ in lakhs)
1 Value of taxable supply of goods 90 20
2 Value of exempt supply of goods 20 5
3 Value of taxable supply of service 5 1
4 Value of exempt supply of Service 3 0.5
5 Value of restaurant & catering services 15 1.5
6 Interest on loan/advances /deposits 4 1.2
st
Calculate GST payable under composition scheme for 1 quarter of Current
Financial Year (CFY) 20YY-22.
Answer:-
Legal Provision:-
 As per section 2(6) of CGST Act, Aggregate Turnover means aggregate value of all
Taxable supplies, Exempt supplies (wholly exempt, nil rated & Non-taxable),
Exports, Inter-State supplies of persons having same PAN, to be computed on all
India basis butIt excludes:-
 CGST/SGST/ UTGST/IGST/ Cess &
 Value of inward supplies on which tax is payable by a person under reverse
charge.
 As per Second proviso to section 10(1), A person who opts to pay tax u/s 10(1) may
supply services (other than Restaurant service) in current financial year, of value
not exceeding the higher of:
 10% of turnover in a State or UT in the preceding financial year or
 Rs. 5 Lakhs.
 The value of exempt services of extending deposits, loans or advances where the
consideration is interest or discount shall not be taken into account to determine:-
 aggregate turnover,
 value of turnover in a State or Union territory for calculating marginal service
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allowed,& tax payable under composition scheme.

Calculations:-
a) Calculation of aggregate turnover of PFY 20XX-YY under composition
scheme M/sXYZ Pvt. Ltd:-
Particulars ₹ in lakhs
Value of taxable supply of goods 90.00
Value of exempt supply of goods 20.00
Value of taxable supply of service 5.00
Value of exempt supply of Service 3.00
Value of restaurant & catering services 15.00
Aggregate Turnover 133.00

As aggregate turnover of PFY does not exceed 1.SCr in Maharashtra, M/s XYZ Pvt Ltd.
iseligible for composition levy.
b) Calculation of value of supply of service to be allowed in CFY:-
 Company have registered place of business in Maharashtra only. Thus,
aggregate turnover = turnover in state.
 Value of supply of service allowed is 13.3 lakhs (i.e., 10% of 133 lakhs or ₹ 5
lakhs, whichever is higher).
 Actual supply of service in CFY [i.e., taxable supply + exempt supply] other
than restaurant services is ₹ 1.5 lakhs (i.e., Rs. 1 lakhs + Rs. 0.5 lakhs), which
is within limit allowed.
c) Calculation of GST Payable on supply of goods and services except
restaurantservice:-
S. No. Particulars Amount on ₹
1 Value of taxable supply of goods 20,00,000
2 Value of exempt supply of goods 5,00,000
3 Value of taxable supply of service 1,00,000
4 Value of exempt supply of service 50,000
Turnover in State 26,50,000
CGST @ 0.5% 13,250
SGST @ 0.5% 13,250
Total 26,76,500

d) Calculation of GST Payable on restaurant service:-

Particulars Amount on ₹
Value of supply 1,50,000
CGST @ 2.5% 3,750
SGST @ 2.5% 3,750
Total 1,57,500

Note :- Manufacturer shall pay composition tax @ 1% (i.e., CGST & SGST @0.5%
each) of turnover in state which also includes nil rate & wholly exempt supply whereas
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tax rate is 2.5%each CGST & SGST for restaurant & catering service.

Q. 304 Enumerate the persons who are not eligible to opt for Composition Scheme
undersection 10(2) of the CGST Act, 2017.
Answer:-
A registered person shall not be eligible to opt for composition scheme u/s 10(2) of
CGSTAct, if:-
a) He is engaged in supply of services (other than those referred to in clause (b) of
paragraph 6 of Schedule 11), exceeding the higher of:-
 10% of turnover in state or Union territory in preceding financial year or
 Rs. 5 lakhs.
b) He is engaged in supply of goods or services not leviable to tax under GST law.
c) He is engaged in inter-State outward supplies of goods or services.
d) He is engaged in supply of goods or services through an electronic commerce
operator, who is required to collect tax at source u/s 52.
e) He is a manufacturer of notified goods, i.e.,
Ice cream and other edible ice, whether Fly ash bricks; Fly ash aggregates; Fly
or not containing cocoa ash blocks
Pan Masala Bricks of fossil meals or similar
siliceous earths
Aerated Water Building bricks
Tobacco and Manufactured tobacco Earthen or roofing tiles
substitutes
f) He is a casual taxable person or a non-resident taxable person.

Q. 305 What are the goods notified by Government on the recommendation of the
councilwhose manufacturer in ineligible to opt for composition scheme u/s 10(2)(e)
of CGST Act,2017?
Are all these goods notified u/s 10(2A) also? If no, then mention goods notified u/s
10(2A).Answer:-
 The following are the goods notified by Government on the recommendation of the
council whose manufacturer is ineligible to opt for composition scheme u/s
10(2)(e) :-
Ice creamand other edible ice, whether or not Fly ash bricks; Fly ash aggregates; Fly ash
containing cocoa blocks
Pan Masala Bricks of fossil meals or similar siliceous
earths
Aerated Water Building bricks
Tobacco and Manufactured tobacco Earthen or roofing tiles
substitutes

 No, only few goods are notified u/s 10(2A) of CGST Act, 2017 which are:-
 Ice cream and other edible ice, whether or not containing cocoa, Pan Masala,
AeratedWater & Tobacco and Manufactured tobacco substitutes.
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Q. 306 Sultan & Sons, a partnership firm, in Nagpur, Maharashtra is a

wholesaler of a taxable product ^ prime p ^ prime and product 'Q' exempt by
way of a notification, in the State of Maharashtra. Its aggregate turnover in the
preceding financial year is 130 lakh. The firm wishes to opt for composition
scheme under sections 10(1) & 10(2) However, its accountant is of the view that a
person engaged in making supply of exemptgoods is not eligible for the said
scheme. Discuss.
Note :- Assume that Sultan & Sons is not engaged in manufacture of goods as
notifiedunder section 10(2)(e).
Answer:
In the given case, the view taken by the accountant of Sultan & Sons is not valid
in law.Legal Provision:-
 As per section 10(1) of CGST Act, a registered person can opt to pay tax under
composition scheme, if aggregate turnover in preceding financial year was not
exceeding Rs. 1.5 Crore other than special category states but including Assam,
HimachalPradesh & Jammu & Kashmir.
 As per section 10(2)(b) & 10(2)(c) of CGST Act, such person must not be engaged
in making any supply of goods which are not leviable to tax under this Act and must
not be engaged in making any inter-State outward supplies of goods respectively,
for being eligible to pay tax under said scheme.
Discussion & Conclusion:-
 In the given case, the aggregate turnover of Sultan & Sons in the preceding financial
yearis Rs. 130 lakhs which is not exceeding 150 lakhs (i.e., Rs. 1.5 Crore) in
Maharashtra.
 It is engaged in making only intra-State outward supply of goods. Product P supplied
by itis taxable and Product Q supplied by it is leviable to tax but for the time being is
exemptedby way of notification.
 Therefore, it is eligible for composition levy under section 10(1) & 10(2) in the
currentfinancial year.

Q. 307 Subramanian Enterprises has two registered places of business in Delhi.

Its aggregate turnover for the preceding year for both the places of business was?
120 lakh.It wishes to pay tax under composition levy section 10(1) & 10(2) for one
of the places ofbusiness in the current year while under normal levy for the other
unit.You are requiredto advice Subramanian Enterprises whether it can do so?
Answer:-
Legal Provision:-
 As per section 10(1) of CGST Act, a registered person can opt to pay tax under
composition scheme, if aggregate turnover in preceding financial year was not
exceeding:-
- Rs. 1.5 Crore in other than special category states but including Assam Himachal

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Pradesh & Jammu & Kashmir.

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 As per proviso to section 10(2), all registered persons having the same Permanent
Account Number (PAN) have to opt for composition scheme u/s 10(1). If any of them
optsfor normal scheme, then all such other persons also become ineligible for
composition scheme.
Discussion & Conclusion:-
 In the given case, the aggregate turnover of Subramanian Enterprises for both the
places of business in Delhi is Rs. 120 Lakhs which is not exceeding Rs. 1.5 Cr in
the preceding financial year.
 Thus, it is eligible for composition levy in the current financial year u/s 10(1) & 10(2).
 Further, Subramanian Enterprises can go for any one of the following two options:-
 either opt for composition levy for both the places of business or
 opt for normal levy for both the places of business.

Q. 308 Mr. X is running a consulting firm and also a readymade garment

showroom in Kolkata registered under same PAN. Turnover of the showroom is
70 lakh andreceipt ofconsultancy firm is ₹ 15 lakh in the preceding financial year.
You are required to answer the following:-
1. Is Mr. X eligible for composition scheme?
2. Is it possible for Mr. X to opt for composition scheme only for showroom?
Answer-
Legal Provision:-
 As per section 10(1) of CGST Act, a registered person can opt to pay tax under
composition scheme, if aggregate turnover in preceding financial year was not
exceeding Rs. 1.5 Crore other than special category states but including Assam,
HimachalPradesh & Jammu & Kashmir
 As per Second proviso to section 10(1), A person who opts to pay tax u/s 10(1) may
supply services (other than Restaurant service), of value not exceeding the higher
of:-
 10% of turnover in a State or Union territory in the preceding financial year or
 Rs. 5 Lakhs.
Discussion & Conclusion for (1):-
 In given case, as Mr. X is engaged in supply of consultancy service along with sale
of goods with the Aggregate turnover of preceding financial year is Rs. 85 lakhs
which doesnot exceed Rs. 1.5 Crore.
 Thus, Mr. X is eligible to opt for composition scheme u/s 10(1), if value of supply of
service to be provided in current financial year does not exceeds marginal limit
allowed ofRs. 8.5 lakhs [i.e. higher of 10% (70 lakhs +15 lakhs) or *5 lakhs].

Discussion & Conclusion for (2):-

No, it is not possible for Mr. X to opt for composition scheme only for showroom as all
the registrations under the same PAN have to opt for composition scheme & here, the
person is ineligible to opt for composition levy as discussed above.

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Q. 309 Explain in brief the conditions to be fulfilled by a registered person under

GST lawfor availing the option to pay concessional tax @ 3% (effective rate 6%)
GST as per theprovisions of Sec 10(2A).
Answer: The registered person desirous of availing the option to pay concessional
tax @3% (effective rate 6%) u/s 10(2A) of CGST Act, 2017 shall:-
1) not be eligible for composition scheme u/s 10(1) & (2).
2) not have the aggregate turnover in the preceding financial year exceeding Rs. 50
lakhs.
3) not be engaged in making any supply of goods or services which are not leviable to
tax.
4) not be engaged in making any inter-State outward supply of goods or services.
5) not be engaged in making any supply of goods or services through an electronic
commerce operator who is required to collect tax at source u/s 52.
6) not be engaged in manufacturing of goods (i.e., Ice cream, pan masala, Aerated
Water & tobacco & Manufactured tobacco substitutes or supplying of such services
as may be notified by Government on recommendation of Council.)
7) neither be a casual taxable person nor a non-resident taxable person.
8) neither collect any tax from the recipient nor be entitled to any input tax credit.
9) issue a bill of supply instead of tax invoice. Note:- Any 5 conditions may be
mentioned out of the above mentioned conditions for 5 marks.

Q. 310 Vansh Traders, a registered supplier, is providing restaurant services in

Manipur. It has turnover of 55 lakh in the preceding financial year 20XX-YY. It
has started providing intra- State event management services in the current
financial year 20YY-22and discontinued rendering restaurant services.
(i) With reference to the provisions of the CGST Act, 2017, examine whether
Vansh Traders can opt for the composition scheme under section 10 of the
CGST Act, 2017in the current financial year?
(ii) Is Vansh Traders eligible to avail benefit of concessional payment of tax under
Sec 10(2A)?
Answer:
Legal Provision:-
 A registered person who is exclusively engaged in providing services other than
restaurant services is not eligible for the composition scheme u/s 10(1) & 10(2)
of the CGST Act, 2017.
 Such person is eligible for composition scheme u/s 10(2A) of the CGST Act, 2017,
provided his aggregate turnover in the preceding financial year does not exceed 50
lakh.
Discussion & Conclusion:-
 In the given case, Since Vansh Traders is engaged exclusively in supply of services
otherthan restaurant services (viz. event management services) in the current
financial year20YY-22, it is not eligible for composition scheme u/s 10(1) & 10(2)
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in said FY.
 Further, since its aggregate turnover in the preceding financial year 20XX-YY
exceeds 50lakh, it cannot opt for the composition scheme u/s 10(2A) also in the
current financial year 20YY-22.

Q. 311 Mr. Ajay has a registered repair centre where electronic goods are
repaired/serviced. His repair centre is located in State of Rajasthan and he is not
engagedin making any inter-State supply of services. His aggregate turnover in the
preceding financial year (FY) is 245 lakh.
With reference to the provisions of the CGST Act, 2017, examine whether Mr. Ajay
can opt for the composition scheme under section 10(1) &10(2) in the current
financial year?Or whether he is eligible to avail benefit of composition scheme
under section 10(2A)?
Considering the option of payment of tax available to Mr. Ajay, compute the
amount of tax payable by him assuming that his aggregate turnover in the current
financial year is
* 35 lakh.
Will your answer be different if Mr. Ajay procures few items required for
providing repair services from neighbouring State of Madhya Pradesh?
Answer:-
Legal Provision:-
 A registered person who is exclusively engaged in providing services other than
restaurant services is not eligible for the composition scheme u/s 10(1) & 10(2)
of the CGST Act, 2017.
 As per section 10(2A) of CGST Act, if a registered person is not eligible to opt to
pay taxu/s 10(1) & (2) & has aggregate turnover in preceding financial year not
exceeding 50 Lakhs, then such person can opt to pay tax under composition scheme
under section 10(2A).
 Then, supplies are liable to GST @6% (i.e. CGST @3% & SGST @3%) of the
turnoverin state till the aggregate turnover reaches Rs. 50 lakhs.
 As per the conditions given u/s 10(2A), he should not be engaged in outward inter-
state supply of goods or services.
Discussion & Conclusion:-
 In the given case, since Mr. Ajay is an exclusive supplier of services (i.e. repair
services)other than restaurant services, he is not eligible for composition scheme
under section 10(1) & 10(2).
 However, Mr. Ajay is eligible to avail the composition scheme under section
10(2A) as his aggregate turnover in the preceding FY was ₹ 45 lakhs which does
not exceed 50 lakhand he is not eligible to opt for the composition scheme under
section 10(1) & 10(2).
 Thus, the amount of tax payable by him as per the composition scheme under section
10(2A) is ₹ 2,10,000 [6% of * 35 lakh].
 There is restriction on making inter-state outward supply and not on inter-State
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procurement of goods. Hence, answer will remain the same even if Mr. Ajay
procures few items from neighbouring State of Madhya Pradesh.

Q. 312 (a) Chanchal started providing beauty and grooming services and
inaugurated "Care & Care Beauty Centre" in Janak Puri, Delhi on Olst April,
20XX. She opted to pay tax under sec 10(2A) scheme. The aggregate turnover of
Care & Care Beauty Centre for the quarter ending 30th June, 20XX was 20 lakh.
Further, for the half year ending 30th September, 20XX, the turnover reached50
lakh. Care & Care Beauty Centre recorded a rapid growth and the turnover
reached 70 lakh by the end of October, 20XX. Determine the total tax liability of
Care & Care Beauty Centre by the end of October, 20XX.
(b) Care & Care Beauty Centre wishes to opt for composition scheme from the
nextfinancial year. You are required to advise it whether it can do so?
Note:- Rate of GST applicable on such services is 18%.

Answer:-
(a) Legal Provision:-
 A registered person who is exclusively engaged in providing services other than
restaurant services is not eligible for the composition scheme u/s 10(1) & 10(2)
of the CGST Act, 2017.
 As per section 10(2A) of CGST Act, if a registered person is not eligible to opt to
pay taxu/s 10(1) & (2) & has aggregate turnover in preceding financial year not
exceeding Rs. 50Lakhs, then such person can opt to pay tax under composition
scheme under section 10(2A).
 Such supplies will be liable to GST @6% (i.e. CGST @3% & SGST @3%) of the
turnover in state from 1st April in current financial year upto the time when the
aggregateturnover of current financial year reaches Rs. 50 Lakhs & thereafter
at normal tax rates.
 As per explanation 2 to Sec 10, to determine tax payable u/s 10, "turnover in State
or Union territory" shall not include supplies from 1st April of a financial year upto
the datewhen such person becomes liable for registration under GST Act.
Calculation:-
Computation of the total tax liability of Care & Care Beauty Centre by the end
ofOctober, 20XX:-
Period Tax Rate Turnover(₹) Tax Liability (₹)
Quarter I Since, aggregate turnover did not 20 Lakhs Nil
exceed ₹ 20 lakh, it was not required
to obtain registration u/s 22 of CGST
Act. Hence, no tax was required to be
paid.
Quarter II Effective rate is 6% (CGST @3% + 30 Lakhs 180000
SGST/ UTGST @3%] [50L -20L]

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October 20XX Normal rate of GST of 18% is to be 20 Lakhs 360000

applied [70L – 50L]
Total Tax Payable 5,40,000
(b) No, Care & Care Beauty Centre cannot opt for composition scheme u/s 10(2A) from
the next financial year as the aggregate turnover in the current financial year is exceeding
Rs. 50 lakhs.

Q. 313 Hyundai Service Centre, registered under GST in the state of Maharashtra,
provides car servicing to various customers at intra-state level. The turnover of
precedingfinancial year (PFY) was 45 lakhs and turnover of 1 st quarter of current
financial year (CFY) was 48 lakhs which includes 30 lakhs from provision of service
and 18 lakhs fromsale of goods (spare parts).
(i) State whether Hyundai Service Centre can opt for composition scheme in CFY.
(ii) Determine the tax liability under Section 10(2A). (Normal tax rates for goods -
12%,for services - 18%, & tax rate under composition scheme -6%).
Answer:
Legal Provision:-
 As per section 10(1) of CGST Act, if a registered person is solely/dominantly
engaged inproviding services other than restaurant services, such person is not
eligible for composition levy u/s 10(1).
 As per section 10(2A) of CGST Act, if a registered person is not eligible to opt to
pay taxu/s 10(1) & (2) & has aggregate turnover in preceding financial year not
exceeding Rs. 50Lakhs, then such person can opt to pay tax under composition
scheme under section 10(2A).
 U/s 10(2A) scheme, supplies will be liable to GST @6% (ie. CGST @3% & SGST
@3%)of the turnover in state from 1st April in current financial year upto the time
when the aggregate turnover of current financial year reaches Rs. 50 Lakhs &
thereafter at normal tax rates.
Discussion & Conclusion (i):-
 In the given case, Hyundai Service Centre is not eligible to opt for composition
scheme
u/s 10(1) as it is predominantly supplying car servicing along with goods.
 The aggregate turnover is Rs. 45 lakhs in preceding financial year which does not 50
lakhs& thus, it is eligible to opt for composition scheme in current financial year
u/s 10(2A).
Discussion & Answer for (ii):-
 As the aggregate turnover of Hyundai Service Centre in 1st quarter of current
financial year was 48 lakhs, it is eligible for levying GST @6% on entire turnover
of 48 lakhs as there is no restriction on supply of goods as per section 10(2A) along
with supply ofservices.
 The Tax Liability of Hyundai Service Centre for the 1st quarter of CFY is as follows:-
Particulars Turnover of goods (Rs.) Turnover of Service (Rs.)
Value of Supply 18,00,000 30,00,000
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CGST @3% 54,000 90,000

SGST@3% 54,000 90,000
Total GST Payable 1,08,000 1,80,000

Q. 314 Determine whether the supplier in the following cases are eligible for
composition levy 10(1) / 10 * (2A) provided their turnover in preceding financial
exceed 1.5 Crore:- year does not exceed ₹ 1.5 Crore:-
(i) Sugam Manufacturers has registered offices in Punjab and Haryana and
supplies goods in neighbouring States.
(ii) Can a person paying tax under composition scheme make supplies of goods to
SE2?
(iii) Ketu is a manufacturer of Building Bricks in State of Maharashtra. His
turnover forthe year does not exceed 1.5 Crore. He wants to register for
composition scheme u/s 10(1). Is he eligible?
Answer:-
i) Legal Provision:-
 As per sections 10(2)(c) & 10(2A) of CGST Act, Supplier who is engaged in
making any inter-State outward supplies of goods or services is not eligible
to opt for composition scheme u/s 10(1)\& 10(2A) respectively.
Discussion & Conclusion:-
 In the given case, Sugam Manufacturers supplies goods in neighbouring States.
 Thus, It is not eligible for composition levy u/s 10 as it is making outward inter-
state supply.
ii) Legal Provision:-
 As per sections 10(2)(c) & 10(2A) of CGST Act, Supplier who is engaged in
making any inter-State outward supplies of goods or services is not eligible to
opt for composition scheme u/s 10(1) & 10(2A) respectively.
Discussion & Conclusion:-
 In the given case, supply of goods to SEZ from domestic tariff area will be
treated as inter-State supply as per section 7 of IGST Act.
 Thus, person making such supplies is not eligible to opt for composition levy
u/s 10.
 Further, for making supplies goods to an SE2 unit, a person needs to take
registration as a regular taxpayer
iii) Legal Provision:-
 As per section 10(2)(e) of CGST Act, a registered person manufacturing notified
goods, one of which is Building Bricks, is not eligible to opt for composition
scheme u/s 10(1).
Discussion & Conclusion:-
 In given case, Ketu is a manufacturer of Building Bricks which is a notified
good u/s 10(2)(e).
 Therefore, he is not eligible to opt for composition levy scheme u/s 10, even if
his aggregate turnover does not exceed 1.5 crore.
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Q. 315 Mr. Amar is running a consultancy firm and also a readymade garment
showroomwhich are registered under same PAN. Turnover of the showroom is ₹
35 lakhs and of the consultancy firm is 15 Lakhs in the current financial year.
(a) Whether Mr. Amar is eligible for Composition Scheme u/s 10 of CGST Act b
(Assumeturnover in state of preceding financial year is 10 Lakhs)?
(b) If instead of consulting agency, Mr. Amar is running a Restaurant, whether
he iseligible for composition?
(c) If the turnover of Garment showroom is 1.5 Cr in the preceding financial year
andthere is no consultancy firm, whether he is eligible for Composition?
Answer:-
Legal Provision:-
 As per section 10(1) read with second proviso thereto,
 a person providing Restaurant service can opt for composition scheme without
anylimit for supplying such service &
 person who opts to pay tax u/s 10(1) may supply services (other than
Restaurantservice) in current financial year, of value not exceeding higher of:-
 10% of turnover in a State or UT in the preceding financial year or
 Rs. 5 Lakhs.
 As per section 10(2)(a) of CGST Act, if any person is engaged in supply of services
exceptas allowed above, then such person is ineligible for composition levy uls
10(1).
 As per section 10(2A) of CGST Act, if a registered person is not eligible to opt to
pay taxu/s 10(1) * 8(2) & has aggregate turnover in preceding financial year not
exceeding Rs. 50Lakhs, then such person can opt to pay tax under composition
scheme under section 10(2A).
Discussion & Conclusion:-
a) No, Mr. Amar is not eligible for composition scheme u/s 10(1) because:-
 he is supplying consultancy service of Rs IS lakhs in current financial year
 which is more than the limit allowed Rs. 5 Lakhs (i.e., 10% of Rs. 10 lakhs or
Rs. 5 lakhs, whichever is higher)
But, Mr. Amar can opt for composition scheme u/s 10(2A) as his aggregate
turnoverin preceding financial year Rs. 10 Lakhs which is not exceeding Rs. 50
Lakhs.
b) Yes, as Mr. Amar is providing Restaurant services which are eligible for
composition scheme u/s 10(1) read with second proviso to section 10(1) without
any limit for providing such service and hence, not becoming ineligible u/s 10(2)(o)
also.

c) Yes, Mr. Amar, being a trader, is eligible for composition scheme u/s 10(1)
and hisaggregate turnover also is not exceeding 1.5 Crore in the preceding financial
year.

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Q. 316 Mr. Zaid, registered in Himachal Pradesh, is engaged in making inter-

State outwardsupplies of apparels. The aggregate turnover of Mr. Zaid in the
financial year 20XX-YYis 70 lakh. He opted for composition levy in the year
20YY-22 and paid tax for the quarterending June, 20YY under composition levy.
The proper officer has levied penalty on Mr.Zaid in addition to the tax payable
by him. You are required to examine the validity of the action taken by proper
officer.
Answer:-
The action taken by proper officer is valid
in law.Legal Provision:-
 As per section 10(1) of CGST Act, a registered person can opt to pay tax under
composition scheme, if aggregate turnover in preceding financial year was not
exceeding Rs. 1.5 Crore in other than special category states but including Assam,
Himachal Pradesh & Jammu & Kashmir.
 Further, as per section 10(2)(c), a registered person is eligible to opt for composition
levyif he is not engaged in making any inter-state outward supplies of goods or
services.
 As per Section 10(S), if a taxable person has paid tax under the composition. scheme
though he was not eligible for the scheme, then the person would be liable to penalty
in addition to tax payable by him to be determined as per section 73 or 74 of CGST
Act.
Discussion:-
 In the given case, Mr. Zaid is engaged in making inter-State outward supplies of
goods.
 So, he is not eligible to opt for composition levy u/s 10(2)(c) irrespective of aggregate
turnover in the preceding financial year. Still, he paid tax for quarter ending June,
20YY under composition levy.
Conclusion:-
 So, the action taken by proper officer to levy penalty u/s 10(S) on Mr. Zaid in addition
totax payable by him is valid in law.
Author's Note (not part of ans):- in Question, the words "is engaged in making inter-State
outward supplies" can be interpreted as the person is engaged in interstate outward supply in
current financial year also.

Q. 317 The due date for payment of tax by a person paying tax under section 10
of the CGST Act, 2017, i.e., a composition supplier is aligned with the due date of
return to be filed by the said person. Discuss the correctness or otherwise of the
statement.
Answer:-
 The statement is not correct.
 Every registered person who is paying tax u/s 10 of CGST Act (i.e., a composition
supplier) is required to file a return in Form GSTR-4 annually by 30th April of
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the succeeding financial year.

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 However, a composition supplier is required to pay tax on a quarterly basis.

 A quarterly statement for payment of self-assessed tax in GST CMP-08 is required
to befurnished by 18th day of the month succeeding such quarter.
 Therefore, though the return is to be furnished annually, payment of tax needs to
be made on a quarterly basis, by a composition supplier.

Q. 318 A person availing composition scheme, under sub-sections (1) & (2) of
section 10, in Haryana during a financial year crosses the turnover of Rs. 1.5 Crore
in the month ofDecember. Will he be allowed to pay tax under composition scheme
for the remainder ofthe year, i.e. till 31st March?
Answer:-
 No, As per section 10(3) of CGST Act, the option availed of by a registered person
u/s 10(1) lapses with effect from the day on which his aggregate turnover during
a financialyear exceeds the threshold limit as specified u/s 10(1) of Rs. 1.5 Crore.
 Once he crosses the threshold, he is required to file an intimation for withdrawal
from the scheme in prescribed form within 7 days of the occurrence of such event.
 After filing such intimation, he may furnish a statement in prescribed form within a
periodof 30 days from the date from which the option is withdrawn containing
details of-
 stock of inputs and
 inputs contained in semi-finished or finished goods held in stock by him on the
date on which the option is withdrawn.

Q. 319 Explain the following in accordance with provisions of GST Act

pertaining tocomposition scheme u/s 10:-
i) Whether the composition scheme u/s 10 is optional or compulsory?
ii) Can composition tax be collected from customers?
iii) Can a registered person, who purchases goods &/or services from a taxable
person paying tax under composition scheme, avail credit of tax paid on
purchases made from such person?
iv) Can a person who has opted to pay tax under the composition scheme avail
Input Tax Credit on his inward supplies?
v) Can a person paying tax under the composition scheme issue a tax invoice
under GST?

Answer:
1) Composition scheme u/s 10 is optional provided the eligibility criterion & all
conditions to opt the scheme are satisfied.
2) No, as per section 10(4) of CGST Act, a person paying tax under composition scheme
shall not collect any tax from the recipient on supplies made by him as he cannot
issue tax invoice.

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3) No, this is because:-

 As per section 10(4) of CGST Act, the composition dealer cannot collect tax from
recipient on supplies made by him as he cannot issue tax invoice.
 Thus, the registered person making purchases from a composition supplier cannot
avail credit of tax paid as no tax is charged to him by the said person.
 As per section 17(5) also, the input tax credit is blocked for inward supply from
the person paying tax under composition scheme u/s 10.
4) No, as per section 10(4) of CGST Act, any taxable person opting to pay tax under
the composition scheme u/s cannot avail any input tax credit on his inward supplies.
5) No, the person paying tax under composition scheme of GST shall issue bill of supply
instead of tax invoice.

Q. 320 In accordance with the provisions of GST Act, Give answers to the following
questions pertaining to composition scheme:-
i) Can a person making application for fresh registration under GST opt for
composition levy at the time of making application for registration?
ii) Can the option to pay tax under composition levy be exercised at any time of the
yearby a registered person?
iii) Can a person having branches registered under same PAN opt to pay tax under
composition scheme for any one of its branches while paying tax for others at
normalrates? Or
Will a taxable person be eligible to opt for composition scheme only for I out
of 3 business verticals? Or of tax under
Can a person having registration in multiple states opt for payment
composition levyonly in one state and not in other state?

Answer:-
1)  Yes, a Person can avail the option to pay tax under the composition scheme at
the time of making application for registration.
 For this, the details are to be filed in Part B of FORM GST REG-01.
 This form will be considered as intimation to pay tax under the composition
scheme u/s 10 of CGST Act.
2)  No, the person who is already registered under GST Act can opt to pay tax under
composition scheme u/s 10 prior to the commencement of the relevant
financial year for which said option is to be exercised.
 For this, an intimation is to be filed in Form GST CMP-02 on the GST Common
Portal electronically.
 However, the composition scheme shall be availed from beginning of the financial
year only for which the intimation is given.
 But, if a person applied for registration in between the year, then he can opt
for composition by filling the details in Part B of FORM GST REG-01.

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3)  No, a registered person shall not be eligible to opt for the composition scheme u/s
10 unless all such registered persons (ie., branches having separate registration
under a single PAN) opt to pay tax under composition scheme.
 This scheme would be applicable to all registrations separately held by person
with same PAN

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13. RETURN
Q. 321 What are the key features of return under GST mechanism?
Answer:
The key features of return GST mechanism are as under: -
 Electronic filing of returns.
 Uploading of invoice level information and auto-population of information relating to
ITC from returns of supplier to that of recipient
 Invoice-level information matching and auto-reversal of ITC in case of mismatch.

Q. 322 M/s Cavenon Enterprises, a registered supplier of designer wedding dresses under
regular scheme, has aggregate annual turnover of 30 lakh in the preceding financial year.
It is of the view that in the current financial year, it is permitted to file its monthly
statement of outward supplies GSTR-1 on a quarterly basis while its accountant advises
it to file the same on a monthly basis. You are required to advise M/s Cavenon Enterprises
on the same.
Answer:
Legal Provision: -
 As per section 37 of CGST Act, GSTR-1 for a particular month is filed on or before the
10th day (now extended to 11th day) of immediately succeeding month i.e. on monthly
basis.
 However, to ease the compliance requirement, GSTR-I is can be filed quarterly by small
taxpayers with aggregate annual turnover upto Rs 5 crore in preceding financial year
under QRMP Scheme.
 Under QRMP Scheme, for the first and second months of a quarter, the details of
outward supplies can be furnished up to a cumulative value of Rs 50 Lakhs in each of
the months using invoice furnishing facility (IFF) electronically on common portal from
the 1st day of the month succeeding such month till the 13th day of the said month.
Discussion & Conclusion: -
 In view of the same, M/s Covenon Enterprises can file its GSTR-1 on quarterly basis if
it has opted to furnish the outward supply related details on quarterly basis and filing
IFF on monthly basis as its aggregate turnover does not exceed S crore in the preceding
financial year.

Q. 323 "All taxpayers are required to file GSTR-1 only after the end of the current tax
period." Comment on the validity of the above statement with reference to GST law. or
Whether a tax payer can file GSTR-1 before the end of the current tax period?
Answer: -
 The statement is partially valid.
 A taxpayer cannot file Form GSTR-1 before the end of the current tax period.
 However, following are the exceptions to this rule:
- Casual taxpayers, after the closure of their business
- Cancellation of GSTIN of a normal taxpayer.
 A taxpayer who has applied for cancellation of registration will be allowed to file Form
GSTR-1 after confirming receipt of the application.

Q. 324 Quicktax, a GST return filing service provider, has asked its clients to provide the
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scanned copies of the tax invoices issued to B2B customers for uploading on the GST
portal and filing the return. State whether the process followed by Quicktax is correct or
not?
Answer-
 No, the process followed by Quicktax is not correct.
 The registered persons supplying goods or services to B2B customers are required to
upload the invoice wise details of supplies made during the tax period
 There is no requirement to upload scanned copies of invoices on GST portalwhile filing
returns.
 Only information required as per GST returns is to be captured in the return filing utility
and the same is to be uploaded on the GST portal and not the scanned copies of the
actual invoices.

Q. 325 1) What kind of invoice details of outward supplies are required to be furnished
in GSTR-1 for outward supplies?
2) "In Form GSTR-1, submission of invoice-wise details of outward supplies is
mandatory for all kind of invoices issued during the tax period." Comment on the
validity of the above statement with reference to GST laws.
Answer:
 Some of the details of invoice for outward supplies required to be furnished in
GSTR-1 are:- Name, address & GSTIN of recipient, invoice number, date, total
value, taxable value, rate of tax, amount of tax, HSN code, etc.
 As per Rule 59 of CGST Rules, 2017, GSTR-I shall include following:-
(a) Invoice-wise details of all: -
(i) inter-State and intra-State supplies made to registered persons and
(ii) Inter-State supplies made to unregistered persons with invoice value
more than Rs 2,50,000
(b) Consolidated details of all:-
(i) Intra-State supplies made to unregistered persons for each rate of tax
and
(ii) Inter-State supplies made to unregistered person with invoice value up
to Rs 2,50,000 for each rate of tax separately for each state
(c) Debit & credit notes, if any, issued during the month for invoices issued
previously.
 The said statement is not valid.
 For the following Outward supplies, consolidated details are required to be
uploaded in GSTR-1 and not invoice- wise details: -
(a) Intra-state supplies made to unregistered persons for each rate of tax.
(b) Inter-State supplies made to unregistered persons with invoice value upto
₹ 2,50,000 for each rate of tax separately for each state.

Q. 326 Mr. Gauri shiva, a registered person in Punjab, supplies goods taxable @ 12%
[CGST @ 6% SGST @ 6% & IGST @12%] in the states of Punjab and Haryana. He has
furnished the following details in relation to independent supplies made by him in the
quarter ending June, 20xx: -
Supply Recipient Nature of Value (₹)
Supply

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1 Mr. A, a registered person Inter- State 2,20,000

2 Mr. B, a registered person Inter- State 2,55,000
3 Mr. C, an unregistered person Intra-State 1,80,000
4 Mr. D, an unregistered person Intra-State 2,60,000
5 Mr. M, an unregistered person Inter- State 3,00,000
6 Mr. N, an unregistered person Inter- State 50,000
7 Mr. O, an unregistered person Inter- State 2,50,000
8 Mr. P, an unregistered person Inter- State 2,80,000
9 Mr. Q, a registered person Intra-State 1,50,000
10 Mr. R, a registered person Intra-State 4,10,000
The aggregate annual turnover of Mr. Gauri Shiva in the preceding financial year was
1.20 crore. With reference to rule 59 of the CGST Rules, 2017, discuss the manner in
which the details of above supplies are required to be furnished in GSTR-1.
Answer: -
Legal Provision: -
 As per Rule 59 of CGST Rules, 2017, GSTR-I shall include following: -
(a) Invoice-wise details of all: -
(i) Inter-State and intra-State supplies made to registered persons and
(ii) Inter-State supplies made to unregistered persons with invoice value more than
Rs 2,50,000
(b) Consolidated details of all: -
(i) Intra-State supplies made to unregistered persons for each rate of tax and
(ii) Inter-State supplies made to unregistered persons with invoice value upto
Rs 2,50,000 for each rate of tax separately for each State
(c) Debit & credit notes, if any, issued during the month for invoices issued previously.
Discussion & Conclusion: -
As per above provisions, Mr. Gauri Shiva shall furnish details of outward supplies of goods
during quarter ending June, 20XX as follows: -
Supply Recipient Nature of Value (₹) Manner of
supply furnishing
details
1 Mr. A, a registered person Inter-State 2,20,000 Invoice-wise
details
2 Mr. B, a registered person Inter-State 2,55,000 Invoice-wise
details
3 Mr. C, an unregistered person Intra-State 1,80,000 Consolidated
4 Mr. D, an unregistered person Intra-State 2,60,000 details of 3&4
5 Mr. M, an unregistered person Inter-State 3,00,000 Invoice-wise
details
6 Mr. N, an unregistered person Inter-State 50,000 Consolidated
7 Mr. O, an unregistered person Inter-State 2,50,000 details of
supplies 6 and 7
8 Mr. P, an unregistered person Inter-State 2,80,000 Invoice-wise
details
9 Mr. Q, a registered person Intra-State 1,50,000 `Invoice-wise
Details
10 Mr. R, a registered person Intra-State 4,10,000 Invoice- wise
details

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Q. 327 Please answer the following independent cases with reference to section 37 of the
CGST Act, 2017 and rule 59 of CGST Rules, 2017:-
Mr. Kohli is registered supplier in the State of Gujarat. He is filing GSTR I everymonth.
During the month of February, he was out of India and so did not do any transaction
during the month. He believes that as there is no transaction there is no need to file GSTR-
1 for the month of February. Is he correct?
(i) Mr. Kaji is a registered dealer in Kerala. He was registered as a normal tax payer
for FY 20XX-XY. But on 15-01-20XY, he converted from normal tax payer to
composition tax payer. Is he liable to file GSTR-1 for the month of February, 20XY
(ii) Mrs. Zeel, a registered dealer in Rajasthan, did not file GSTR 1 for the month of
June, 20XY but she wants to file GSTRI for the month of July, 20XY. Is it possible?
Answer:
i No, Mr. Kohli is not correct.
Legal Provision: -
 Nil GSTR-1 needs to be filed, even if there is no business activity in the tax
period.
 Further, a NIL GSTR-1 can be filed by a registered person through an SMS using
the registered mobile number of the taxpayer & is verified by registered mobile
number-based OTP facility
Discussion & Conclusion: -
 In given case, even though Mr. Kohli was out of India and thus had not done any
transaction during February, he is still required to file GSTR-1 for the that month.

ii Legal Provision: -
 А person paying tax under composition scheme is not liable to furnish the details
of outward supplies in GSTR-1.
 If a taxpayer has been converted from a normal taxpayer to composition
taxpayer, GSTR-1 is to be filed only for the period during which taxpayer was
registered as normal taxpayer.
Discussion & Conclusion: -
 Therefore, in given case, Mr. Kaji is not liable to file GSTR-1 for February,
20XY, since he had already shifted to composition scheme on 15.01.20XY.

iii Legal Provision: -

A registered person shall not be allowed to furnish the details of outward supplies of
goods or services or both u/s 37 in FORM GSTR-1, if he has not furnished the return in
FORM GSTR-3B for preceding One months.
Discussion & Conclusion: -
Therefore, in the given case, Mrs. Zeel cannot file GSTR-1 for July, 20XY as she has
not filed GSTR-1 for the preceding month, i.e., June,20XY.

Q. 328 What are the cases where a registered person is debarred from furnishing details
of outward supplies in GSTR-INFF?
Answer: The following are the cases where a registered person is debarred from furnishing
details of outward supplies in GSTR-INFF:-

1) Registered Person He shall not be allowed to furnish the details of outward supplies
(other than QRMP in Form GSTR-1, if he has not furnished the return in Form
Scheme): - GSTR-3B for preceding one month
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2) Registered person He shall not be allowed to furnish the details of outward supplies
(option for QRMP in Form GSTR-1 or using IFF, if he has not furnished the return
scheme) in Form GSTR-3B for preceding tax period.

Q. 329 Ms. Prisha, a registered taxpayer, has discovered some omissions her GSTR I of
the period of January, 2022. She wants to rectify the same. what date she can rectify the
omission, taking different dates answer the question.
1. 29th March, 2022
2. 18th October, 2022
3. 14th December, 2022
Answer: As per the sec37 of cgst act
A registered person who is furnishing details under section 37(1) if discovers any error or
omission shall rectify the same by paying interest and tax, if any, by 30th November of the year
succeeding the year related to which the rectification is concerned.
Sr. No. Date of Rectification Remark
1 29th March, 2022 Yes
th
2 18 , March,2022 Yes
th
3 14 , March, 2022 No

Q. 330 Mr. Avinash Kumar Is a registered person from Jharkhand. He took various
inward supplies from different suppliers which are as follow;
S. No. Name of supplier ITC (Rs.) Remark
1 PQR Ltd. 18000 Goods Purchased (ITC available)
2 ABC Ltd. 22000 A registered person who has taken
registration just 1 month before.
(Suppose term prescribed in the rule is
1 month)
3 DEF & Co. 2000 Person making default in payment of
taxes
4 XYZ Pvt Ltd. 6500 Having difference in payment of out
put tax more than the prescribed limit.
5 Bluffer Traders 10000 Availed the ITC more than the amount
of ITC which can be availed
6 Scammer Pvt Ltd. 2500 Person defaulted in discharging tax
liability in accordance with Section
49(2)
Answer: -
 ITC not available under section 38 as per GSTR – 2B if the supplier
- Is having new registration ( upto the prescribed time period)
- Has defaulted in tax payment and defaulted has continued for the prescribed time
period
- Has taxa paid in GSTR-3B lower than output tax shown in GSTR-1 by the
prescribed limit.
- Has taken more ITC in GSTR-2B than in GSTR-2B than in GSTR-3B by the
prescribed limit
- Has paid higher proportion of taxes from his credit than what is allowed as per law.
- Other notified persons.
ITC available to Mr. Avinash Kumar is;

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S. No. Name of supplier ITC (Rs.) Available Available Non-Available

Yes/No Amount amount
1 PQR Ltd. 18000 Yes 18000 -
2 New Mart Pvt Ltd. 22000 No - 22000
3 Defaulter & Co. 2000 No - 2000
4 Failure Pvt Ltd. 6500 No - 6500
5 Cheater Traders 10000 No - 10000
6 Scammer Pvt Ltd. 2500 No - 2500
Total 18000 43000

Q. 331 Answer the following questions independently: -

(a) Explain the Consequence if the taxable person under GST law files the GST return
under section 39(1) of the CGST Act, 2017, but does not make payment of self-
assessment tax.
(b) Mrs. Zarina a registered dealer in Rajasthan, did not file GSTR-3B for the month
of June but she wants to file GSTR-3B for the month of July. Is it possible? Answer
with reference to section 39 of the CGST ACT.
Answer: -
a)  If taxable person under GST law files the GST return u/s 39 (1) of CGST ACT,
2017, but does not pay the self-assessment tax, the return is not considered as a
valid return.
 Such person will not be able to claim any input tax credit (ITC), since ITC can be
availed only on the basis of a valid return.
 He shall pay interest, penalty, fees or any other amount payable under the CGST
ACT for filing return without payment of tax.
b) Legal Provision: -
 As per section 39(10) of CGST Act, a registered person is not allowed to furnish
a return for a tax period if the return for any of the previous tax periods has not
been furnished by him.
Discussion & conclusion: -
 Therefore, in the given case, Mrs. Zarina cannot file |GSTR-3B for July if she has
not filed GSTR-3B for the preceding month, i.e., June.

Q. 332 a)Miss kashi is a registered intra-state supplier of goods In Haryana. During the
months of August and September, she was out of station on a religious pilgrimage with
her family for 55 days. Thus, no business transaction was made during August. Miss
Kashi is of the opinion that as there is no transaction, there is no need to file monthly
return [GSTR-3B] for the month of August. However, her tax consultant has advised her
to file nil GSTR-3B. Whether the advice given by tax consultant is correct? Explain.
(b) Will your answer in (a) change, if Miss Kashi has placed an order for some
purchases during August over her mobile phone, which has been received in her premises
and she intends to take input tax credit on the same?
(c) Assuming in (a) above, Miss Kashi does not have internet facility in her mobile
and there is no facilitation centre notified by the Commissioner, whether no return is
required to be filed in the absence of means to file return? Explain.
(d) If Miss Kashi is a registered taxpayer under composition scheme & did not
make any taxable supply during the quarter ending Sept, 20XX. Is she required to file
FORM GST CMP-08 for such tax period?
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Answer: -
(a) Yes, the advice given by tax consultant is correct.
Legal Provision: -
 Under GST law, filing of GSTR-3B is mandatory for all normal and casual
taxpayers, even if there is no business activity in any particular tax period.
 For such tax period(s), a Nil GSTR-3B is required to be filed.
Discussion & Conclusion: -
In the given case, even though Miss Kashi was out of station on a religious C
pilgrimage with her family for SS days and thus, could not do any business transaction
during the month of August, she is still required to file Nil GSTR- 3B for that month.

(b) Yes, answer will change.

Legal Provision: -
Nil GSTR-3B means a return that has nil or no entry in all its Tables.
Discussion & Conclusion: -
 In the present case, Miss Kashi has received purchases, she cannot file nil
GSTR-3B, as the purchases will need to be disclosed in the 'Table for eligible
ITC' in GSTR-3B.
 Thus, Miss Kashi is required to file monthly return, GSTR-3B for the month of
August.

(C) Legal Provision: -

 GSTR-3B can be submitted electronically on the common portal, either directly
or through a Facilitation Centre notified by the Commissioner.
 Further, a Nil GSTR-3B can be filed through an SMS using the registered
mobile number of the taxpayer& is verified by the registered mobile number-
based OTP facility.
Discussion & Conclusion: -
 Miss Kashi is required to file Nil GSTR-3B for the month of August through
an SMS using her registered mobile number even though there is no internet
facility in her mobile and no Facilitation Centre notified by the Commissioner.

(d) Legal Provision: -

 Filing of GST CMP-08 is mandatory for composition supplier, even if there is
no business activity in any particular tax period.
Discussion & Conclusion: -
 In this case, Miss Kashi is required to file CMP-08, even if she did not render
any taxable supply during the quarter ending Sept, 20XX.

Q. 333 Explain the following questions on the basis of QRMP scheme:

1) Benefits of QRMP Scheme.
2) Eligibility for QRMP scheme under GST?
3) Manner of exercising option of QRMP scheme.
Answer: -

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1.  The QRMP Scheme is best suitable for both the Small Tax Payers as well as
the Big Tax Payers who are losing a lot of credits due to non- reflection of
invoice entries.
 This is because many suppliers are filling GSTR-1 quarterly which eventually
saves both time & money.
 Also, as per the Government Perspective, this scheme is expected to reconnect
the revenue leakages and frauds as it would be surely decreasing the fake
invoicing and fake input tax credit.
 Hence, it can be said that after the successful implementation of this scheme, it
would be a win-win situation for all.

2.  Registered persons (other than online information & database access or

retrieval (OIDAR) service supplier located in non-taxable territory and
providing such services to a non-taxable online recipient), whose aggregate
turnover is up to 5 crore in the preceding financial year, and who have opted to
furnish quarterly return under QRMP scheme are eligible for QRMP scheme as
the class of persons who shall furnish a return for every quarter from January,
2021 onwards, and pay the tax due every month.
 Thus, the taxpayers whose aggregate turnover is up to 5crore in the preceding
financial year are eligible for QRMP scheme.
 For computing aggregate turnover, details furnished in returns for tax periods
in the preceding financial year shall be taken into account.
 A registered person intending to opt for QRMP scheme for any quarter shall
indicate his preference for furnishing of return on a quarterly basis from 1st day
of the 2nd month of the preceding quarter till the last day of the 1st month of
the quarter for which the option is being exercised.
 Example: - A registered person intending to opt for QRMP scheme for the
quarter July to September can exercise his option from 1st May to 31st July
 However, where such option has been exercised once, the said registered
person shall continue to furnish the return on a quarterly basis for future tax
periods, unless he-
(a) becomes ineligible for this scheme as per the conditions & restrictions
notified in this regard or
(b) opts for furnishing of return on a monthly basis, electronically, on the
common portal.

Q. 334 Answer the following questions:

(1) What is the Due date for filing return & due dates of payment in case of a taxpayer
opting for QRMP scheme?
(2) Sangam Ltd., obtains registration for paying taxes under section 9 of CGST Act.
He asked his tax manager to pay taxes on quarterly basis. However, Sangam Ltd.'s
tax manager advised the Company to pay taxes on monthly basis. You are required
to examine the validity of the advice given by tax manager?
Answer:

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1) Due date of Filing return: -

Under QRMP scheme, a registered person is required to furnish GSTR-3B on quarterly
basis on or before 22nd or 24th (depending upon the principal place of business of such
registered person) of the month
succeeding the quarter for which return is furnished.
Due dates of Payment: - Every registered person opting for QRMP Scheme
shall pay the tax due-
(i) for each of the first 2 months of the quarter: by 25th day of the month
succeeding such month in Form GST PMT-06 &
(ii) for 3rd month of quarter: - on or before the due date of return in GSTR-3B i.e.
before 22nd or 24th of succeeding month, as the case may be, in Form GST
PMT-06.
2) Legal Provision: -

 If Registered person is not availing QRMP Scheme, then tax is payable on

monthly basis within 20th of subsequent month.
 If Registered person is opting for QRMP Scheme, then tax is payable on
monthly basis but Return is to be filed on Quarterly basis (payment to be made
by 25th of next month for 1st 2 month and within due date of Return for 3rd
month).
 In case of composition scheme, the tax is payable on quarterly basis by 18th of
next month and Return is to be filed on yearly basis.
Discussion & Conclusion: -
 So, in given case, the advice given by manager is correct & valid.
 If Mr. Sangam is not opting for Composition Scheme, then the tax is payable
on monthly basis.

Q. 335 When does the option of QRMP scheme lapses?

Answer: -
1) If the aggregate turnover crosses ₹ 5crore during a quarter in a financial year,then the
registered person shall not be eligible to furnish return on quarterly basis
 from the first month of the succeeding quarter.
2) He shall opt for furnishing of return on a monthly basis from the 1st month of the
quarter, succeeding the quarter during which his aggregate turnover exceeds 5crore.
3) The facility for opting out of the scheme for a quarter will be available
 from 1st day of 2nd month of preceding quarter
 to the last day of the 1st month of the quarter

Q. 336 Explain the different payment methods under the QRMP Scheme?
Answer: -
The different payment methods under the QRMP Scheme are as under: -
1. Fixed Sum Method (FSM): -
Sr. No. Type of Taxpayer Tax to be paid in each of 1st 2months
1 Who furnished GSTR-3B 35% of tax paid in cash in the preceding quarter.
quarterly for the last quarter

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2 Who furnished GSTR-3B 100% of tax paid in cash in the last month of the
monthly during the last immediately preceding quarter.
quarter
The balancing amount of tax as per return is to be paid in the 3rd month.
There are certain situations where no such tax needs to be deposited: -
 1st Month of Quarter: The tax liability is Nil. OR The balance in the electronic cash
ledger is adequate for the tax liability for the same month.
 2nd Month of Quarter: The tax liability is Nil or the balance in the electronic cash
ledger/ electronic credit ledger is adequate for the cumulative tax liability for the first
two months of the quarter.
2. Self - Assessment Method (SAM): -
Under this method, taxpayer can pay the tax by considering the tax liabilities on inward &
outward supplies as per the ITC available for which GSTR-2B can be used for each month.

Q. 337 Mr. Kalpesh is a registered dealer in Kerala paying tax under composition levy
from 1st April. However, he opts to pay tax under regular scheme from 1st December. Is
he liable to file GSTR-4 for the month of November? Discuss.
Answer:
Legal Provision: -
Where a taxpayer opts to withdraw from the composition scheme, he has to file GSTR-4 forthe
period prior to his opting for payment of tax under regular scheme.
Discussion & Conclusion: -
Therefore, in the given case, Mr. Kalpesh is liable to file GSTR-4 for the month of November
since he was paying tax under composition scheme during the month of November.

Q. 338 Ms. Pragya, a taxpayer registered under regular scheme (Section 9), files GSTR-
3B for the month of October on 20th November. After filing the return, she discovers that
the value of a taxable supply has been under-reported therein. Ms. Pragya now wants to
file a revised GSTR-3B. Examine the scenario and give your comments.
Answer: -
Legal Provision: -
 As per section 39(9) of CGST Act, Under GST law, a return once filed cannot be
revised but the details of those transactions that are required to be amended can be
changed in any of the future GSTR- Is in tables specifically provided for the same.
Discussion & Conclusion: -
 In given case, Ms. Pragya cannot revise GSTR-3B filed by her for the month of
October.
 But she can amend the details of taxable supply that was underreported in GSTR-1 for
November.
 The tax payable due to such error will be paid along with interest in GSTR-3B for
November.
Q. 339 Discuss the provisions of Section 39(9) of the CGST Act, 2017, relating to
rectification of errors/omissions in GST returns already filed and also state its exceptions.
State the time limit for making such rectification.
If a return has been filed, how can it be revised if some changes are required to be made?
OR
Explain the provisions of section 39(9) of the CGST Act, 2017 with reference to
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rectification of returns.
Answer-
Rectifications of Errors/Omissions: -
 In GST, since the returns are built from details of individual transactions, there is no
requirement for having a revised return.
 As per section 39(9) of CGST Act, Under GST law, a return once filed cannot be revised
but the details of those transactions that are required to be amended can be changed in
any of the future GSTR- Is in amendment tables specifically provided for the same.
 Omission or incorrect particulars discovered in the returns filed u/s 39 can be rectified
in the return to be filed for the tax period during which such omission or incorrect
particulars are noticed.
 Any tax payable as a result of such error or omission will be paid along with interest.
Exception: -
 Error/omission discovered on account of scrutiny, audit, inspection, or enforcement
activities by tax authorities cannot be rectified u/s 39(9) of CGST Act.
Time limit for making rectification: - It is Earlier of following dates: -
 Due date of filing of return for the month of September or second quarter (in case of
quarterly filers) following the end of the financial year to which such details pertain or
 Actual date of filing of relevant annual return.

Q. 340 X Ltd. is winding up its business in Rajasthan. The Tax Consultant of X Ltd. has
suggested that X Ltd. will have to file either the annual return or the final return at the
time of voluntary cancellation of registration in the state of Rajasthan. Do you agree with
the stand taken by Tax Consultant of X Ltd.? Offer your comments.
Answer: -
No, the stand taken by Tax Consultant of X Ltd. is not correct.
Legal Provision: -
 Annual return is required to be filed by every registered person paying tax as a normal
taxpayer.
 Final return is filed by the registered persons who have applied for cancellation of
registration, within three months of the date of cancellation or the date of cancellation
order, whichever is later.
Discussion & Conclusion: -
 In the given case, X Ltd., a registered person, is winding up its business and is thus,
applying for cancellation of registration.
 Therefore, it is required to file both annual return and final return.

Q. 341 1) Briefly discuss GSTR-5 return

2) Mention persons who are not required to file annual return under GST. OR
3) Briefly discuss Final Return under GST. Answer: -
1)  Aregistered non-resident taxable person (NRTP) is required to file a simplified
monthly tax return in Form GSTR-5 for every calendar month or part thereof
incorporating the details of its outward supplies and inward supplies.
 GSTR-S should be furnished within 30 days after the end of the calendar month
or within 7 days after the last day of validity period of the registration,
whichever is earlier
 It is to be noted that a NRTP is not required to file an annual return.
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2) Following persons are not required to file the annual return:

a) Casual taxable persons.
b) Non-resident taxable person
c) Input service distributors
d) Persons authorized to deduct/collect tax at source under section S1/S2 of the CGST
Act and
e) Person supplying OIDAR services from outside India to unregistered persons in
India

3)  Every registered person who is required to furnish return u/s 39(1) and whose
registration has been surrendered or cancelled
 The Final return has to be filed within 3 months of:
> Date of cancellation or
> Date of order of cancellation, whichever is later

Q. 342 Miss Vaishno, a registered tax payer paying tax under regular scheme failed to file
the return for the month of January, 20XX. Explain the legal recourse available to the tax
officer, if any.
Answer: -
 As per Sec 46 of CGST Act 2017, The proper officer has to first issue a notice to the
Miss Vaishno requiring him to furnish the return within a period of 15 days.
 If Miss Vaishno fails to file return within the given time, the proper officer shall proceed
to assess the tax liability along with applicable interest and penalty payable by the
defaulter to the best of his judgement taking into account all the relevant material
available with him.

Q. 343 Explain who is required to furnish final return, time limit for filing of final return
and late fee for delay in filing final return.
Answer: -
 Every registered person who is required to furnish a return and whose registration has been
surrendered or cancelled is required to file a final return.
 The final return has to be filed within 3 months of the:
 date of cancellation or
 date of order of cancellation, whichever is later.
 Quantum of late fee for not filing the final return is lower of the following: -
 ₹100 for every day during which such failure continues or
 ₹5,000.
 An equal amount of late fee is payable under the respective SGST/UTGST Act as well.

Q. 344 Answer the following questions:

(a) Mr. Ayushman, a registered person having intra-State aggregate turnover of ₹1.2
crores in the preceding financial year did not file GSTR-3B for the month September,
20XX by 10th November, 20XX. The amount of tax payable for the month September,
20XX is 8 lakh. All his supplies are intra-State supplies. Is there any late fee payable for
the same? If yes, what is the amount of late fee payable?

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(b) Will your answer be different in (a), if Mr. Ayushman has intra-State aggregate
turnover of 5 crores in the preceding financial year?
(c) Will your answer be different in (a), if total amount of tax payable in the GSTR-3B for
the month of September is Nil?
(d) What would be your answer in (a), if Mr. Ayushman has intra State aggregate turnover
is above 5 crores in the preceding financial year?
(e) Discuss the penal provisions, if any, for not filing the annual return before the due
date.
Answer:
a) Legal Provision: -
As per section 47 of CGST Act read with relevant notification, the registered persons
whose aggregate turnover is ≤ 1.5 crores in the preceding FY, and who fails to furnish
the returns required u/s 39 by the due date shall pay a late fee of 2,000 (1,000 each
under CGST & SGST).
Discussion & Conclusion: -
Thus, late fee is payable in the given case and the amount of late fee payable is 2,000
(1,000 each under CGST & SGST).

b) Legal Provision: -
Ü As per section 47 of CGST Act read with relevant notification, the registered persons
whose aggregate turnover is more than 1.5 crores but less than equal to 5 crores in the
preceding FY, and who fails to furnish the returns required u/s 39 by the due date shall
pay a late fee of 5,000 (2,500 each under CGST & SGST).
Discussion & Conclusion: -
Thus, late fee is payable in the given case and the amount of late fee payable is 5,000
(2,500 each under CGST & SGST).

c) Legal Provision: -
 As per section 47 of CGST Act read with relevant notification, any registered
person whose total amount of tax payable in the GSTR-3B is Nil and who fails
to furnish the returns required u/s 39 by the due date shall pay a late fee of 500
(250 each under CGST & SGST).
Discussion & Conclusion: -
 Thus, late fee is leviable even if total amount of tax payable in the GSTR- 3B
for the month of September is Nil.
 The amount of late fee would be 500 (250 each under CGST & SGST).

d) Legal Provision: -
As per section 47 of CGST Act read with relevant notification, the registered persons
whose aggregate turnover is more than 5 crores in the preceding FY, and who fails to
furnish the returns required u/s 39 by the due date shall pay a late fee of 10,000 (5,000
each under CGST & SGST).
Discussion & Conclusion: -
Thus, late fee is payable in the given case and the amount of late fee payable is 10,000
(5,000 each under CGST & SGST).

e) The penal provisions for not filing the annual return (GSTR-9) under section 44(1) of
the CGST Act, 2017 before the due date are lower of the

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following: -
 ₹100 for every day during which such failure continues, or
 0.25% of the turnover of the registered person in the State/Union Territory

Q. 345 Who can be registered as Goods and Service Tax Practitioners under Section 48
of the CGST Act?
Answer: Following persons can be registered as Goods and Service Tax Practitioners: -
1) Any person who,
(i) is a citizen of India
(ii) is a person of sound mind
(iii) is not adjudicated as insolvent
(iv) has not been convicted by a competent court

2) In addition to above, the person has to satisfy any of the following conditions: -
(i) He is a Retired officer of Commercial Tax Department of any State Govt./CBIC who,
during service under Government had worked in a post not lower than the rank of a
Group-B gazetted officer for a period not less than 2 years.
(ii) He is enrolled as a Sales Tax Practitioner or Tax Return Preparer under the earlier
indirect tax laws for a period of not less than 5 years.
(iii) He Has acquired any of the prescribed qualifications
- has passed Graduate/postgraduate degree or its equivalent examination having a degree
in specified disciplines, from any Indian University or
- a degree examination of any Foreign University recognized by any Indian University
as equivalent to degree examination
- has passed any other notified examination
- has passed final examination of ICAI ICSI/ Institute of Cost Accountants of India
Note: Any 3 points may be mentioned.

Q. 346 A is a chartered accountant in practice and is registered under GST. On a query

regarding return filing process by a potential client, A has represented him as a GST
practitioner. A is of the view that since he is a qualified chartered accountant with a GST
registration in the name of his proprietorship firm, he also qualifies as GST practitioner.
Is the understanding of A correct? Discuss.
Answer:
 No, the understanding of A is not correct
 A chartered accountant can become a GST practitioner (GSTP). However, holding a
certificate of practice as a chartered accountant and having GST registration does not
imply that such chartered accountant is a GST practitioner as well.
 For becoming a GSTP, even a chartered accountant in practice has to follow the
enrolment process of GSTP as provided under the GST law and only upon approval of
such enrolment, a chartered accountant can represent himself as a GSTP.

Q. 347 Ms Neha, a registered taxable person from Delhi, has purchased goods from Mr.
Umesh (a registered person from Mumbai). Mr. Umesh has not paid the amount of GST

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to the government. Neha took the ITC while filing the return is Neha required to
reversethe ITC. Mr. Umesh paid the GST amount to the government after 3yrs.
Can now Ms. Neha take the ITC.
Answer: As per Sec41 of CGST Act Where a registered person has claimed the ITC of
the inward supply for which the supplier of the same has not paid the taxes, the amount
of ITC claimed is required to be reversed along with interest by the registered person.
Provided that the ITC can be re-claimed when the said supplier makes the payment of
taxes to the government.
Therefore the amount of ITC claimed by Ms. Neha is required to be reversed along with
interest. However, when Mr. Umesh makes the pa government, Ms. Neha will be
allowed to re-claim the same amount in her GSTR 3B. In case, where Mr. Umesh pays
the amount of GSTafter 3 years. Ms. Neha would be eligible to re-claim it .AS , there is
no any time limit to re- claim the ITC.

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CA CS PIYUSHA SARDA T.

14. COMPUTATION OF GST

Q. 348 Star Ltd., a registered supplier in Karnataka has provided the following
detailsfor supply of one machine: -
Sl. No. Particulars Amount in ₹
1 List price of machine supplied [exclusive of items 80,000
given below from (2) to (4)]
2 Tax levied by Local Authority on sale of such 6,000
machine
3 Discount of 2% on the list price of machine was
provided (recorded in the invoice of machine)

4 Packing expenses for safe transportation charged 4,000

separately in the invoice
Star Ltd. received 5,000 as subsidy from a NGO on sale of each such machine.The
Price of 80,000 of the machine is after considering such subsidy.
During the month of February, 20XX, Star Ltd. supplied three machines to Intra-
Statecustomers and one machine to Inter-State customer.
Star Ltd. purchased Inputs (intra-State) for 1,20,000 exclusive of GST for
supplyingthe above four machines during the month.
The Balance of ITC at the beginning of February, 20XX was: -
CGST SGST IGST

18,000 4000 26,000

Note: -
(i) Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively for
bothinward and outward supplies.
(ii) All the amounts given above are exclusive of GST.
(iii) All the conditions necessary for availing the ITC have been fulfilled.
Compute the minimum net GST payable in cash by Star Ltd. for the month of
February, 20XX.
Answer: -
Particulars Amount In₹ Remark
List price of machine 80,000 Given
Add: -
Tax levied by local authority 6,000 Tax other than GST if charged separating
on the sale of machine are includible in the value as per section
15(2)(a) of the CGST Act, 2017.
Packing expenses for safe 4000 Includible in value as per sec 15 (2) (c) of
transportation the CGST Act,2017.

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CA CS PIYUSHA SARDA T.

Subsidy received from a 5,000 Subsidy received from a non-Government

NGO on sale of each body and which is directly linked to the price
machine is included in value as per sec 15(2)(e)
of the CGST Act,2017.
Total 95,000
Less: Discount @ (1,600) Since discount in known form at the time of
2% on ₹80,000 supply & recorded in invoice, it is deductible
from the value as per sec 15(3)
of the CGST Act, 2017.
Value of taxable supply 93,400
Computation of minimum net GST payable in cash by Star Ltd. for the
month ofFebruary,20XX: -
Particulars IGST ₹ CGST ₹ SGST ₹
Sale of machine
Intra-State sales = ₹93,400 x 3 - 25,218 25,218
machine = ₹ 2,80,000 [₹2,80,200 x 9%] [₹2,80,200 x
9%]
Inter-State sales= ₹ 93,400 x 1 16,812
machine = ₹ 93,400 [₹93,400x8%]
Total output tax payable 16,812 25,218 25,218

Less: - Set off

Input tax credit available for:
IGST= Rs. 26000(Note1) (16,812) (9,188)
CGST = Rs.28800(Note 2&3) - (25,218) -
SGST= Rs. 14800 (Note 2) - - (14,800)
Minimum net GST payable in cash Nil Nil 1,230

Notes: -
1. IGST credit is first utilized towards payment of IGST, remaining amount
can be utilized towards CGST and SGST in any order and in any
proportion.
2. CGST credit cannot be utilized towards payment of SGST and vice versa.
Therefore,CGST credit is used against CGST payable and SGST credit is used
against SGST payable.
3. Only ITC of CGST Rs. 3582 is carried forward to next month.
Working note: -
Computation of total ITC available: -
Particulars IGST ₹ CGST ₹ SGST ₹
Opening balance of ITC 26,000 18,000 4,000
Add: - Inputs purchased during the month - 10,800 10,800
[₹ 1,20,000 x [₹1,20,000 x
9%] 9%]
Total ITC Available 26,000 28,800 14,800

Q. 349 ABC Ltd., a registered supplier in Surat, Gujrat has calculated output net
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CA CS PIYUSHA SARDA T.

GSTliability after adjusting ITC in the books for the month of February, 20xx : -
CGST:
₹3,00,000
SGST:
₹2,50,000
IGST:
₹3,00,000
During the above month, the following additional information is provided by ABC
Ltd.:
Sl. No. Particulars Amount
[excluding GST]
1 The company had given on hire 5 trucks to one of the 3,75,000
transporters of Vadodara (o goods transport agency) for
transporting goods for 10 days. The hiring charges for the
trucks were 7,500 per truck per day.
2 The company sold goods to X & Co. of Delhi on 6th January, 5,00,000
20XX with a condition that interest @ 2% per month will be
charged on invoice value if X & Co. failed to make payment
within 30 days of the delivery of the goods. Goods were
delivered and also the invoice was issued on 6th January,
20XX. X & Co. paid the consideration for the goods on 20th
February along with applicable interest.
3 The company sought legal consultancy services for it's 1,50,000
business from A & Advocates, a partnership firm of advocates
situated at Bhuj, Gujarat.
4 The company ordered 3,000 packets of tools which are to be 5,00,000
delivered by the supplier of Delhi via 3 lots of 1,000 packets
monthly. The supplier raised the invoice for full quantity in
February, 20XX and the last lot would be delivered in April,
20XX.
5 The company supplied 10,000 packets of tools to one of it's
customer at 10/- per packet in Gujarat in January, 20XX.
Afterwards, the company re-values it at 9 per packet in
February, 20XX and the company issued credit note to the
customer for 1 per packet.

The rate of GST is 9% CGST, 9% SGST and 18% IGST.

You are required to compute the actual net liability of GST to be paid in cash along
withworking notes for the month of February, 20XX.
Answer: -
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CA CS PIYUSHA SARDA T.

Computation of net GST liability of ABC Ltd. to be paid in cash for February, 20xx: -
Particulars Value (₹) IGST (₹) CGST (₹) SGST (₹)
Net output GST liability as 3,00,000 3,00,000 2,50,000
given
Add: Trucks given on hire to 3,75,000 - - -
goods transport agency (GTA)
[Note 1]
Add: Interest on delayed 5,900 900 - -
payment of 15 days (6th [5,90,000 x
February, 20xx to 20th February 2% x 15/30]
,20xx) [Note 2]
Total output tax liability 3,00,900 3,00,000 2,50,000
Less: ITC in respect of legal 1,50,000 (13,500) (13,500)
services paid as reserve charge [1,50,000 x9%] [1,50,000
is available x 9%]
Net output tax liability (A) 3,00,900 2,86,500 2,36,500
Legal consultancy services 1,50,000 (13,500) (13,500)
received (B) [Note 3] [1,50,000x9%] [1,50,000
x9%]
Total GST Payable in cash 3,00,900 3,00,000 2,50,000
[(A)+ (B)]

Notes: -
1. Services of giving a means of transportation of goods on hire to a GTA are exempt
2. Interest on delayed payment collected is assumed to be inclusive of GST.
 Further, the invoice value has been taken as inclusive of GST for computing
saidpenal interest.
 It is includible in value as per section 15(2)(d) of the CGST Act, 2017.
3. Tax is payable under reverse charge on legal services received by a business entity
from apartnership firm of advocates. Further, tax payable under reverse charge, being
not an outputtax, cannot be set off against ITC and thus, will have to be paid in cash.
4. ITC on goods received in lots is available on receipt of last lot. Hence, ITC on
toolsreceived will not be available in February, 20XX.
5. Since discount given by ABC Ltd, on the pockets of tools was not known at the
time ofsupply, it shall not be excluded from its value of supply.
Assumption:
It is assumed that the aggregate turnover of ABC Ltd. in the preceding FY was above the
threshold limit for registration under GST low.
Alternative as per ICAI: -
It is also possible to assume the interest on delayed payment to be exclusive of GST and to
compute the same by taking the values as exclusive of GST (i.e. * 5,00,000).

Q. 350 Kaira Air Ltd. located in Anand, Gujarat is engaged in manufacturing of Air
Coolers and Air Purifiers. They supply goods all over India and their aggregate
turnover during F.Y. 20XX-YY was 125 lakh. The details of various activities
undertaken during the month of September, 20YY are as follows: -
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Sl. No. Particulars Amount

1 Outward supplies made during the month: - 14,00,000
(a) Within Gujrat 11,00,000
(b) Outside Gujrat 3,00,000
2 On 5th September, 20YY, the company had
issued 10 exchange vouchers @ 1,000 each of
which can be exchanged/redeemed against
purchase of Air cooler worth 10,000 each at any
of the company's outlets in the State of Gujarat.
Out of the above, 7 vouchers were encoshed
during the month of September, 20YY & rest 3
were encashed during the month of October,
20YY
3 Purchase of material within Gujarat which 8,00,000
includes 8,00,000 material worth 13,00,000
purchased from M/s. Kalpana Industries
registered as a composition dealer
4 In respect of few invoices worth 1,00,000 raised
during the month of June, 20YY, the stipulated
condition was to pay the dues within 1 month
from the date of raising of invoices, otherwise
interest @ 24% was payable on supplies made
against such invoices. The buyers failed to pay
the dues within the stipulated time and made the
payment together with interest of t 11,200 during
the month of September, 20YY.
5 Bought air tickets from Ahmedabad to Guwahati
Airport, Assam for its marketing executives. The
total fare of the tickets was 60,000 out of which
SS,000 is the basic fare. Applicable GST rate is
5% on basic fare for air tickets.
6 Send 10 managers for 15 days training course 50,000
organized by IIM Ahmedabad, Gujarat on 5th
September, 20YY.
The IIM provides Participation Certificates at the
end of the course.
The Rates of GST applicable on various supplies are as follows: -
Nature of Supply CGST SGST IGST
Goods 6% 6% 12%
Services other than 9% 9% 18%
item of s. No. (v)
Composition 2.5% 2.5% -
supplies
Opening balances of input tax credit as on 1st September, 20YY were as follows: -
CGST SGST IGST

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4,000 10,000 5,000

All the figures mentioned above other than S. No. (iv) are exclusive of taxes. Both
Inward& Outward supplies within the State of Gujarat are Intra State supplies
and outside Gujarat supplies are Inter State Supplies.
Calculate the amount of tax payable in cash by kaira Air Ltd. for the month of
September,20YY. Brief and suitable notes form part of your answer.
Answer: -
Computation of tax payable in cash by kaira Air Ltd. for September, 20YY: -
Particular Amount (₹) IGST (₹) CGST (₹) SGST (₹)
Output tax liability
Outward supplies within Gujrat 11,00,000 - 66,000 66,000
@6%
Outward supplies outside Gujrat 3,00,000 36,000
@12%
Supply of 10 exchange vouchers 10,000 @ 600 600
(Note 1) 6%
Interest for delayed payment 10,000 1,200 - -
(Note 2) [11,200 x
100/112]
Total output tax liability (A) 37,200 66,600 66,600
Less: - Input tax credit (ITC)
Opening balance 5,000 4,000 10,000
Purchase of material within Gujrat 5,00,000 - 30,000 30,000
(Note 3) [₹ 8,00,000
-₹3,00,000]
@ 6%
All tickets from Ahmedabad to 55,000 - - -
Guwahati (Note 4)
Training course organized by IIM, 50,000 @ - 4,500 4,500
Gujrat (Note 5) 9%
Total ITC (B) 5,000 38,500 44,500
Net GST Payable in cash = (a)-(b) 32,200 28,100 22,100
Notes: -
1. As per section 12 (4) of CGST Act, 2017, Since supply is identifiable at the time
of issue of the 10 vouchers, the time of supply is the date of their issue and are
thus the same are taxable in September itself irrespective of the time of their
redemption.
2. Interest on delayed payment of consideration is Includible in value and taxable
when the same is received, i.e. in September.
 It has been assumed that interest for delayed payment has been collected
in respect of inter-State sale & also assumed that it is inclusive of GST.
3. No credit on material purchased from composition dealer as he cannot collect
any tax from the recipient on supplies made by him.
4. Transportation of passengers by Air in Economy class embarking from or
terminating in an airport located in Assam are exempt, here we are assuming that
passengers are travelling in Economy class.
5. Training course organized by IIM, Gujarat is not exempt. These are short

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duration programs offered by IIMs for which participation certificate is awarded

are not 'qualification recognized by law'.
Alternative as per ICAI:-
Interest on delayed payment can also be assumed in respect of intra-State sale & ans will
change to this effect.

Q. 351 The following are details of purchases and sales etc. effected by Smart Pvt.
Ltd. aregistered manufacturer under CGST Act, 2017:
1) Purchased fabric material from local dealer 47,040 (including GST @ 12%)
2) Purchased textile material from local dealer 94,500 (including GST@ 5%)
3) Purchased machinery for manufacture of taxable goods 3,18,600 (including
GST@ 18%), Depreciation @ 15% is charged.
4) Other direct and indirect expenses ₹44,570.
5) Profit margin on total cost @ 10%
6) For the month November, 20xx only 80% production is sold within the state
andapplicable GST rate being 18%
Calculate the amount of CGST and SGST payable after utilizing input tax credit
for themonth of November 20xx and not opening balance of input tax credit is
available.
Answer: - 1. Computation of sales Value: -
Particulars Amount
Purchased fabric material from local dealer (₹ 47040*100/112) [WN] 42,000
Purchased textile material from local dealer (₹ 94500* 100/105) 90,000
(WN)
Depreciation expense [(3,18,600-3,18,600 * 18/118) * 15%] 40,500
Other direct & indirect expense 44,570
Total cost of goods manufactured 2,17,070
Cost of goods sold (80 % of goods produced were sold) 1,73,656
Add: profit margin @ 10% 17,366
Total Sales Value 1,91,022
Working Note: -
Credit will be available for CGST and SGST charged by local suppliers. Hence the same
is notto be included in the cost.
2. Computation of CGST and SGST payable for the month of November, 20xx
afterutilizing the available input tax credit: -
Particulars CGST SGST
(A) output tax liability for the month of 17,192 17,192
November,20XX @ 18% (Being CGST 9% and
SGST 9%) [i.e.1,91,022* 18%]
Eligible input tax credit in respect of purchases of -
Fabric material (42,000 * 12%) 2520 2520
Textile material (90,000 * 5%) 2250 2250
Capital Goods (2,70,000 * 18%) 24,300 24,300

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[B] Total input tax Credit 29,070 29,070

CGST/ SGST credit to be carried forward [B-A] 11,878 11,878

Q.352 Mr. Himanshu, a registered supplier of chemicals, pays GST under regular
scheme.He is not eligible for any threshold exemption
1. He has made the following outward taxable supplies for the month of
September20XX:
Intra-State supply of goods
₹25,00,000Inter-State supply of
goods ₹5,00,000
2. He has also made the following inward supply:
Intra-State purchase of goods from registered dealer ₹14,00,000
Intra-State purchase of goods from unregistered dealer
₹2,00,000 Inter-State purchase of goods from registered
dealer ₹4,00,000
3. Balance of ITC at the beginning of September
20XX:CGST =₹ 95,000
SGST=
₹60,000
IGST
=₹50,000
4. Additional Information:
 He purchased a car (Intra-State supply) used for business purpose at
a price of ₹6,72,000/- (including CGST of ₹36,000 & SGST of
₹36,000) on September 15, 20XX. He capitalized the full value
including GST in the books on the same date to claim depreciation.
 Out of Inter-State purchase from registered dealer, goods
worth₹1,00,000 were received on October 3, 20XX due to road traffic
jams
Note:
(i) Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively.
(ii) Both inward and outward supplies given above are exclusive of taxes,
whereverapplicable.
(iii) All the conditions necessary for availing the ITC have been fulfilled
exceptmentioned above
Compute the net CGST, SGST and IGST payable in cash by Mr. Himanshu for the
monthof September, 20XX.
Answer: -
1. Computation of net GST payable in cash of Mr. Himanshu for the month of
September,20XX
Particulars Value (₹) IGST (₹) CGST (₹) SGST (₹)
Total output tax liability

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Intra State outward supplies of goods 25,00,000 - 2,25,000 2,25,000

Inter State outward supplies of goods 5,00,000 90,000 - -
Total output tax liability (A) 90,000 2,25,000 2,25,000
Input tax liability
Brought forward ITC (Given) 50,000 95,000 60,000
Intra State purchase of goods from 14,00,000 - 1,26,000 1,26,000
registered dealer [Note-1]
Inter State purchase of goods from 3,00,000 54,000 - -
registered dealer [Note -1 & Note 4]
Intra state purchase of goods from 2,00,000 - - -
unregistered dealer [Note-2]
Purchase of car used for business - - -
purpose [Note – 3]
Total ITC (B) 1.04,000 2,21,000 1,86,000
2. Computation of Net GST Liability: -
Particulars IGST (₹) CGST (₹) SGST (₹)
Total output tax liability 90,000 2,25,000 2,25,000
Less: Input tax credit
IGST: ₹1,04,000 [Note-5] (90,000) (4,000) (10,000)
CGST: ₹ 221000 - (2,21,000) -
SGST: ₹ 186000 - - (1,86,000)
Net GST Payable in cash Nil Nil 29,000
Notes: -
(1) Every registered person is entitled to take credit of input tax charged on any
inward supply of goods used/intended to be used in the course/furtherance of his
business
(2) Intra-state supplies received by a registered person from any unregistered
supplier in this case, are not falling under the supplies notified u/s 9(4) and thus
no tax is requiredto be paid in RCM by recipient.
Since no tox has been paid, no credit is available,
(3) As per sec 16(3), Input tax paid on capital goods cannot be availed as ITC if
depreciation has been claimed on such tax component.
Moreover, ITC on motor vehicle (car) is blocked under section 17(5) of
CGSTAct, 2017.
(4) As per Sec 16(2)(b), A registered person is entitled to avail input tax in respect
of any supply of goods to him only if he has actually received the said goods.
Since goods worth 1,00,000 have not been received by Mr. Himanshu in
the month of September 20XX, credit in respect of some cannot be
claimed in the said month.
Note: It will be claimed in October 20XX when goods will be received.
(5) IGST credit is first utilized towards payment of IGST, remaining amount can be
utilizedtowards CGST and SGST in any order and in any proportion.

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Q. 353 Mr. Thiraj, a registered supplier of service in Bangalore (Karnataka

State) hasprovided the following information for the month of February 20XX:
Sr. No. Particulars Amount (₹)
(i) Intra-State taxable supply of service 5,20,000
(ii) Legal fee paid to a lawyer located within the state 20,000
(iii) Rent paid to the State Govt. for his office building 30,000
(iv) Received for services towards conduct of exams in love all 16,000
University, Kolkata (recognized by law) being an inter-
State
transaction
A compute the net GST liability (CGST, SGST or IGST) of Mr. Thiraj for the month
ofFebruary, 20XX.
Rate of CGST, SGST and IGST are 9%,9% and 18% respectively
All the amounts given above are exclusive of taxes.
Answer: -
Computation of net GST liability for the month of Feb 20XX: -
Particulars Value of IGST@ CGST @9% SGST
Supply 18% (₹) @9%
(₹) (₹) (₹)
Output Supply
Intra-State taxable supply of 5,20,000 - 46,800 46,800
services
Intra-State taxable supply of 16,000 - - -
services Loveall University,
Kolkata
[Note-1)
Inward Supply
Legal fee paid to lawyer located 20,000 - 1,800 1,800
within State [Note 2]
Rent paid to State Government for 30,000 - 2,700 2,700
office building[Note 3]
Total tax liability - 51,300 51,300
Less: cash paid towards tax - 4,500 4,500
payable under reverse charge
[Note 4] [1800+2700] [A]
Output tax payable against which - 46,800 46,800
ITC can be set off
Less: ITC of tax paid on legal fees - (4,500) (4,500)
and rent
Output tax payable after set off - 42,300 42,300
ITC [B]
Total tax liability [A]+[B] - 46,800 46,800

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Notes:
1. Since Loveall University provides education recognized by law it is an
educational institution and services provided to an educational institution, by way of
conduct ofexamination by such institution are exempt from GST
2. In case of legal services provided by an advocate to any business entity GST is
payableunder reverse charge by the recipient of service
3. In case of services supplied by State Government by way of renting of
immovable property to a registered person, GST is payable under reverse
ncharge by the recipientof service
4. The amount available in the electronic credit ledger may be used for making
payment towards output tax.
 However, tax payable under reverse charge is not an output tax.
 Therefore, tax payable under reverse charge cannot be set off against the
inputtax credit and
 Thus, will have to be paid in cash.

Q. 354 Mr. Uttam Kumar a registered supplier of service in Kolkata, has

providedfollowing information for the month of October, 20XX
Sr. No. Particulars Amount
(₹)
(i) Intra-State taxable supply of service 6,40,000

(ii) Amount received from Kupola Pit Ltd., far service provided 5,00,000
to company. (He is a director in Kapalo P. Ltd.), being Intra-
State transaction
(iii) Paid legal fee to senior advocate for one legal matter within 50,000
State, being Intra-State transaction
(iv) Amount received for service provided by him as a 1,20,000
commentator a local recognized sports body, being Intra-
State transaction
(v) Amount received for acting as a coach in recreational 30,000
activities relating to sports, from one local chantable entity
registered under section 12AA of the Income Tax Act, 1961,
being Intra-State transaction
Compute the net GST liability (CGST, SGST or IGST) of Mr. Uttam Kumar for
the month of October, 20XX.
Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively. All the amounts
givenare exclusive of CGST, SGST and IGST, wherever applicable.
Answer-
Computation of net GST liability of Mr. Uttom Kumar for the month of October,20XX.
Particulars Refer Amount (₹) CGST @ SGST
Note 9% @9%
(₹) (₹)
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Intra-State taxable supply of 6,40,000 57,600 57,600

services
Add: Amount received from 1 5,00,000 - -
Kapola Pvt. Ltd, for service
provided to company, being intra
State transaction

Add: Legal fee paid to senior 2 50,000 4,500 4,500

advocate for one legal matter
within the State, being intra
State transaction

3 1,20,000 10,800 10,800

Add: Amount received for
services provided as a
commentator to a local
5recognized sports body, being
intra- State transaction

4 30,000 - -
Add: Amount received for acting
as a coach in recreational
activities relating to sports from
one local charitable entity
registered under section 12AA or
12AB of the Income Tax Act,
1961, being intro- State
transaction

Total Tax Payable 72,900 72,900

Less: Cash paid towards tax 4,500 4,500

payable under reverse charge [A]

Output tax payable against which 68,400 68,400

ITC can be set off

4,500 4,500
Less: ITC of tax paid on legal
fees paid to senior advocate

Output tax payable after set off of 63,900 63,900

ITC [B]
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Net GST Liability [A]+[B] 68,400 68,400

Notes: -
1. Services supplied by a director of a company to the said company are taxable
under reverse charge.
Thus, the tax leviable thereon will be paid by the company.
2. Services provided by a senior advocate by way of legal services are taxable under
reverse charge.
Thus, the tax leviable thereon will be paid by Mr. Uttam Kumar.
3. Services provided to a recognized sports body by an individual as a player,
referee, umpire, coach or team manager for participation in a sporting event
organized by a recognized sports body is exempt from GST.
However, services provided as a commentator to a local recognized sports body
is taxable.
4. Services by way of coaching in recreational activities relating to sports by
charitable entities registered under section 12AA or 12AB of the Income-tax Act
are exempt fromGST.
5. The amount available in the electronic credit ledger may be used for making
paymenttowards output tax.
 However, tax payable under reverse charge is not an output tax.
 Therefore, tax payable under reverse charge cannot be set off against the
inputtax credit and
 Thus, will have to be paid in cash.
Assumptions as per ICAI-
It has been assumed that services provided to Kopola Pvt Ltd by Mr.Uttam Kumar are in the
capacity of being a director in the company
It has been assumed that the turnover of Mr. Uttam Kumar in the previous year 20XX-YY
exceeded 20,00,000
It has been assumed that the matter for which the legal fees is paid to the senior advocate is
in the course or furtherance of business

Q. 355 M/s J & Co. Chartered Accountants, a partnership firm, having it's head
office inMumbai and registered under the GST Act in the State of Maharashtra
only. It does not have any branches in other State. The gross receipts of the firm in
the Financial Year 20XX-YY was 60 lakh. Firm has submitted following
information for the month of August, 20YY:
Particulars Amount
(Excluding GST)

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Professional services provided and bills raised during the month for 1,00,000
providing services of ITR filing and income tax consultancy

Internal Audit of X Pvt. Ltd at their office in Mumbai (registered in the 50,000
State of Maharashtra)

Statutory audit services provided to M/s Tirupati Trading Pvt. Ltd. et 70,000
Ahmedabad (registered in the State of Gujarat)

Firm has also furnished following information in respect of input services availed from
registered dealers for providing output services during the month August, 20XX:
Particulars Amount CGST (₹) SGST (₹) IGST (₹)
excluding GST
Services availed from courier 5,000 450 450 Nil
agency
Mumbai to Ahmedabad and 12,000 Nil Nil 600
Return Ticket for conducting of
audit of M/s Tirupati Trading
Pvt. Ltd. for 3 Tier AC
Service availed from another 20,000 1800 1800 Nil
professional firm at Mumbai
amount is paid without TDS u/s
194J of Income Tax Act
Notes:
(1) Rate of CGST, SGST and IGST to be 9%, 9% & 18% respectively, on
outwardsupplies.
(i) All the conditions necessary for availing the ITC have been fulfilled.
(ii) Opening balance of available input tax credit is Nil for CGST, SGST
andIGST.
Compute the net GST payable by M/s 3 & Co. for the month August, 20YY after
adjustingthe GST credit. Brief reasoning should form part of your Answer.
Answer: -
Computation of net GST payable by7 M/s. J & Co for the month of August,20YY
Sr. Particulars IGST @18% CGST @ SGST@ 9%
No. (₹) 9% (₹)
(₹)
1 Professional services provided and - 9,000 9,000
services of ITR and income tax
consultancy (₹100000)
2 Internal Audit Services (₹50000) - 4,500 4,500
3 Statutory Audit services (₹70000) 12,600 - -

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Total GST 12,600 13,500 13,500

Less: ITC (Refer working note) 4,200 2,250 2,250
Net GST Payable 8,400 11,250 11,250
Working Note: Computation of ITC available for set off:
Sr. Particulars IGST (₹) CGST (₹) SGST (₹)
No.
1 ITC on Courier Services [₹ 5,000] - 450 450
2 ITC on railway travelling expenses 600 - -
for conducting of audit of M/s
Tirupati trading Pvt. Ltd. [12,000]
3 ITC on Services availed from - 18,00 18,00
another professional firm at Mumbai
[₹ 20,000]
Total ITC 4,200 2,250 2,250

Q. 356 Neelkanth Pvt. Ltd., a registered supplier of goods and services at Kolkata
hasfurnished the following information for the month of February:
Sr. No Particulars Amount (₹)
1 (Intra-State supply of taxable goods including 4,00,000
100,000 received at advance in January, the
invoice for the entire sale value is issued on15th
February
2 Purchase of goods from a composition dealer, 5,50,000
registered in Kolkata
3 Services provided by way of labour contracts for 1,00,000
repairing a single residential unit otherwise than as
a part of residential complex (it is an intra-State
transaction)
4 Membership of a club availed for employees 1,75,000
working in the factory (It is an intra-State
transaction)

5 Goods transport services received from a GTA 2,00,000

GST is payable @ 12% 9( it is an inter-State
transaction)
6 Inter-State services provided by way of training in 10,000
recreational activities relating to sports
7 Inter-State security services provided to ABC 15,000
higher secondary school for their annual day
function organized in Fintex Auditorium outside
the School campus

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8 inputs to be received in 4 lots, out of which 2nd let 40,000

was received during the month
The company has following ITCs with it at the beginning of the tax period
Particulars Amount (₹)
CGST 57,000
SGST Nil
IGST 50,000
Note:
(i) Rates of CGST, SGST and IGST are 9%, 9% and 12% respectively.
(ii) Both Inword and outward supplies are exclusive of taxes, wherever applicable.
(iii) All the conditions necessary for availing the ITC have been fulfilled.
(iv) The turnover of Neelkanth Pvt. Ltd. was 2.5 crore in the previous financial
year. Compute the minimum GST, payable in cash, by Neelkanth Pvt. Ltd. for
the month ofFebruary. Make suitable assumptions as required.
Answer-
1) Computation of GST Payable on outward supplies:
Particulars Value IGST @ CGST @ SGST @
18% 9% 9%
Intra-State supply of goods (Note-1) 4,00,000 - 36,000 36,000
Services rendered by way of labour 18,000 - 9,000 9,000
contracts for repairing a single
residential unit otherwise than as a part
of residential complex (Note-2)
Services provided by way of training 10,000 1,800 - -
in recreational activities relating to
sports (Note-3)
Inter-State security services provided 15,000 2,700 - -
to ABC higher secondary school for
their annual day function held in
Fintex Auditorium (Note-4)

Total GST payable 4,500 45,000 45,000

2) Computation of Total ITC

Particulars IGST ₹ 18% CGST ₹ 9% SGST ₹ 9%
Opening ITC (Given) 57,000 57,000 -
Add: Purchase of goods from a - - -
composition dealer (Note-5)
Add: Membership of a club (Note-6) - - -
Add: Goods transport services received 24,000 - -
form GTA (Note 7)

14.16
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Add: inputs to be received in 4 lots, out - - -

of which 2nd lot was received during the
month (Note 8)
Total ITC 74,000 57,000 -

3) Computation of minimum GST Payable:

Particulars IGST ₹ 18% CGST ₹ SGST ₹ 9%
9%
Total Output tax liability 4,500 45,000 45,000
Less: Input tax Credit - - -
IGST: 74,000 [Note-9] (4,500) (24,500) (45,000)
CGST: 57,000 - (20,500) -
SGST: Nil - - -
Minimum GST payable in cash Nil Nil Nil
Notes:
(1) As per Sec 12(2), read with notification 66/2017, the time of supply of goods
shall beearlier of the following dates-
 Date of issue of invoice or
 last date to issue the invoice u/s 31.
Further, As per notification 66/2017, the time of supply of goods is not on advance received
&this is applicable to all registered persons except composition supplier. Thus, liability
to pay tax on the advance received in January will also arise in the month of February,
when the invoice for the supply is issued
(2) Services by way of pure labour contracts of construction, erection, commissioning,
or installation of original works pertaining to a single residential unit otherwise
than as a part of a residential complex are exempt but Labour contracts for
repairing are thus, taxable.
(3) Services by way of training or coaching in recreational activities relating to sports
is exempt under only if provided by charitable entities registered under section
12AAof theIncome-tax Act. Thus, in the given case, said service is taxable
(4) Security services provided to ABC higher secondary School for Annual Day
function organized outside the school campus will be taxable as only the security
services performed within the premises of the higher secondary school are exempt
(5) ITC is blocked u/s 17(5)(g) of CGST Act on goods on which tax is paid u/s 10.
(6) ITC is blocked u/s 17(5)(b) of CGST Act as said service is not provided by
employer toemployee under any statutory obligation
(7) GST is payable by the recipient on reverse charge basis on the receipt of services
of transportation of goods by road from a goods transport agency (GTA), provided
GST is not payable @ 12%. Since in the given case, services have been received
from a GTA where GST is payable @ 12% and recipient is one of the specified
recipients, reverse charge provisions will not be applicable. In this case, input tax
credit is available for theservices received from GTA]

14.17
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CA CS PIYUSHA SARDA T.

(8) As per 1st proviso to section 16(2) of CGST Act, in case of goods received in lots
ITC can be taken only upon receipt of the last lot
IGST is first utilized towards payment of IGST, remaining amount can be utilized towards
CGST and SGST in any order and in any proportion.

14.18
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