GST Test

(TOS, VOS, POS, ITC)

Time Allowed – 1.5 Hour
Maximum Marks – 50

Q.1. Multiple Choice Questions –

(i) Ms. Anjali is engaged in supply of services. She is registered under GST and has opted 10
to pay tax under composition scheme for service provider under section 10 (2A) of the
CGST Act. The turnover for the quarter ending June was ` 12,00,000.
During July, she crossed the aggregate turnover of ` 50 lakh and opted out of
composition scheme. She also started trading of goods in July.
She supplied an order to Breathe Well LLP on ex-factory basis, the details of which are
as follows –
(a) Basic price of the product – ` 53,000
(b) Outward freight – ` 12,000
(c) Packing Charges – ` 5,000
(d) Discount given on receiving payment – ` 2,000 (not included in invoice)
For supplies, provided to Breathe Well LLP, she received half of the amount as advance
on 22nd July. The goods were dispatched from her factory on 25th July and delivered on
28th July. She raised the invoice on 30th July and the balance payment was also
received on the same date.
Ms. Anjali received 25 invoices from various suppliers involving GST of ` 1,50,000 for
the month of July. While filing GSTR-3B for the said month on 20th August, she found
that only 20 invoices involving GST of ` 1,00,000 were uploaded by the suppliers.
All the amounts given above are exclusive of taxes, wherever applicable. All the supply
referred above is intra-State unless specified otherwise. Conditions applicable for
availment of ITC are fulfilled subject to the information given above.
Based on the information provided above, choose the most appropriate answer for the
following questions i.1 to i.4 –
i.1 Compute the tax liability for the quarter ending June under CGST and SGST?
(a) ` 30,000 each
(b) ` 12,000 each
(c) ` 6,000 each
(d) ` 36,000 each

i.2 Compute the value of Supply made by Ms. Anjali to Breathe Wall LLP?
(a) ` 56,000
(b) ` 58,000
(c) ` 68,000
(d) ` 75,000

i.3 Determine the amount of ITC that can be claimed by Ms. Anjali for the month of July?
(a) ` 1,00,000
(b) ` 1,10,000
(c) ` 1,20,000
(d) ` 1,50,000

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i.4 Determine the time of supply made to Breathe Wall LLP?
(a) 22nd July
(b) 25th July
(c) 28th July
(d) 30th July

(ii) Big Bazaar has issued a voucher of ` 1,000 to a person on 15/08/2024. The voucher can
be used to purchase any item from the Big Bazaar store. The said voucher is redeemed
on 04/10/2024. Time of supply will be __________.
(a) 15/08/2024
(b) 15/09/2024
(c) 04/10/2024
(d) 04/11/2024

(iii) The time of supply in respect of interest received for delayed payment of consideration
shall be_________.
(a) date of issue of invoice.
(b) date immediately following the expiry of credit period.
(c) date of receipt.
(d) none of the above.

(iv) Credit on input services or capital goods held in stock can be availed in case of new
registration / voluntary registration.
(a) Yes
(b) No
(c) Yes on input services only
(d) Yes on capital goods only

(v) Financial institutions have an option of claiming

(a) eligible credit or 50% credit
(b) only 50% credit
(c) only eligible credit
(d) eligible credit and 50% credit

(vi) On making the payment, the ITC which was reversed earlier can be re-availed within
(a) 180 days
(b) 1 year
(c) 20th October of the next financial year or the date of filing annual return whichever
is earlier
(d) no time limit

(vii) Mr. Smarty (resident of Delhi) provides personal grooming services to employees of
Dull Ltd. registered under GST in Mumbai, Maharashtra. Expenses were borne by Dull
Ltd. The said services were provided by Mr. Smarty at his Centre of Excellence at Spiti
Valley, Himachal Pradesh. Determine the Place of Supply.
(a) Mumbai
(b) Delhi

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 (c) Spiti Valley
(d) None of the above

Q.2. (a) Ajay Pvt. Ltd. has provided the following particulars relating to goods sold by it to 5
Shah Pvt. Ltd.
Particulars `
List price of the goods (before considering taxes and discounts) 2,00,000
Tax levied by Municipal Authority on the sale of such goods 20,000
CGST and SGST chargeable on the goods 25,000
Designing charges (not included in price above) 40,000
Ajay Pvt. Ltd. received ` 15,000 as a subsidy from a Charitable Trust registered u/s
12AA of Income Tax Act, 1961 in respect of such goods. The list price of ` 2,00,000
does not include such subsidy. Ajay Pvt. Ltd. offers 5% discount on the list price of the
goods which is recorded in the invoice for the goods.
Determine the value of taxable supply made by Ajay Pvt. Ltd.
Solution:
Computation of value of taxable:
Particulars `
List price of the goods (exclusive of taxes and discounts) 2,00,000
Add: Tax levied by Municipal Authority on the sale of such goods [WN-1] 20,000
CGST and SGST chargeable on the goods [WN-1] –
Designing charges [WN-2] 40,000
Subsidy received from a Non-Government body [Since subsidy is received
from a Non-Government body the same is included in the value in terms of
section 15(2)(e)] 15,000
Total 2,75,000
Less: Discount @ 5% on ` 2,00,000 [WN-3] 10,000
Value of taxable supply 2,65,000
Working Notes:
(1) The value of supply shall include any taxes, duties, cess, fess and charged levied
under any law for the time being in force other than the CGST Act, the SGST Act,
the UTGST Act and the GST (Compensation to States) Act, if charged separately
by the supplier. [Section 15(2)(a) of CGST Act,2017]
(2) Any amount charged for anything done by the supplier in respect of the supply of
goods at the time of, or before delivery of goods shall be included in the value of
taxable supply. Hence, cost of designing shall form a part of the transaction value of
the supply. [Section 15(2)(c) of CGST Act, 2017]
(3) The value of supply shall not include any discount which is given before or at the
time of supply. [Section 15(3)(a) of CGST Act, 2017].

(b) Asha Enterprises supplier of sewing machines, is located in Kota (Rajasthan) and 5
registered for purpose of GST in the said State. It receives an order from Deep Traders,
located in Jalandhar (Punjab) and registered for purpose of GST in the said State. The
order is for the supply of 100 sewing machines, with an instruction to ship the sewing
machines to Jyoti Sons, located in Patiala (Punjab) and registered in the said State for
purpose of GST. Jyoti Sons is a customer of Deep Traders. Sewing machines are
shipped in a lorry by Asha Enterprises. Briefly explain the following:

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 (i) the place of supply under IGST Act, 2017;
(ii) the nature of supply - whether inter-state or intra-state and
(iii) whether CGST/SGST or IGST would be applicable in this case.
Solution:
Where three parties are involved i.e. to say a supplier, a buyer who is not the recipient of
goods (referred as third person) and the recipient who actually receives the goods on the
directions of the buyer, a fiction is introduced by Section 10(1)(b) of IGST Act, 2017,
whereby the third person on whose direction the goods are delivered will be considered
the recipient of the goods and the place of supply is deemed to be the principal place of
business of the said third person (being the first buyer).
There are two parts to this transaction:
(1) First part of the transaction between Asha Enterprises and Deep Traders:
Asha Enterprises is the supplier of sewing machine, and Deep Traders is the buyer.
Accordingly, Asha Enterprises bills the transaction to Deep Traders, and as per the
instruction, ships the goods to Jyoti Sons in Patiala (Punjab).
Over here, on the instruction from Deep Traders, Asha Enterprises ships the sewing
machine to Jyoti Sons located in Patiala (Punjab). Here, Deep Traders is deemed as
the third person. Therefore, the place of supply will be the principal place of
business of the third person, i.e., Jalandhar (Punjab). Since the location of supplier
is in Kota (Rajasthan) and Place of supply Jalandhar (Punjab), the supply is an
interstate supply. Accordingly, Asha Enterprises will charge IGST on billing to
Deep Traders.
(2) The second part of the transaction - between Deep Traders and Jyoti Sons:
Deep Traders is the supplier, and Jyoti Sons is the buyer. Deep Traders bills the
transaction to Jyoti Sons, and endorses the lorry receipt (goods shipped in a lorry by
Asha Enterprises) in favour of Jyoti Sons. This lorry receipt (LR) will enable Jyoti
Sons to take the delivery of the goods. The second part of the transaction between
Deep Traders Jalandhar (Punjab) and Jyoti Sons Patiala (Punjab) will be intra-state
supply, CGST and SGST will be charged.

Q.3. ( (a) Baapa Sitaram Ltd. is a company engaged in manufacturing of chemicals. It purchased 4
a new car (having seating capacity of 5 persons including driver) for use of its directors.
Discuss the availability of ITC with regards to –
(i) GST levied at the time of purchase of the car.
(ii) GST levied on Insurance Premium of the new car purchased and its servicing and
repair and maintenance.
(iii) Would your answer be different if Baapa Sitaram Ltd. were a motor driving training
school instead of a manufacturer of chemicals and the car was purchased for being
used for providing the said service?
Solution:
Sec. 17(5) provides that no ITC shall be allowed in case of purchase of motor vehicles
for transportation of persons with seating capacity ≤ 13 persons (including the driver).
Further no ITC shall be allowed on general insurance, servicing, repair and maintenance
relating to motor vehicles for transportation of persons with seating capacity ≤ 13
persons (including the driver).
Thus applying the above provisions, in the given question the company will not be able
to claim ITC with regards to GST levied at the time of purchase of the car as it is a
motor vehicles for transportation of persons with seating capacity ≤ 13 persons

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 (including the driver). Also no ITC shall be allowed shall be allowed with regards to
GST levied in Insurance Premium of the new car purchased and its servicing and repair
and maintenance as the same is also blocked by Sec. 17(5).
Further, in case the company was engaged in the business of motor driving training
school, then it would be eligible to claim ITC on the car purchased to be used for
providing motor driving training.

(b) Mr. Businessmen, a supplier of goods, pays GST under Regular scheme. Mr. 6
Businessmen is not eligible for any threshold exemption. He has made the following
outward taxable supplies in a tax period:
Particulars `
Intra- State supply of goods 10,00,000
Inter-State supply of goods 4,00,000
He has also furnished the following information in respect of purchases made by him in
that tax period:
Particulars `
Intra-State purchases of goods 2,00,000
Inter-State purchases of goods 1,50,000
Mr. Businessmen has following ITCs with him at the beginning of the tax period:
Particulars `
CGST 40,000
SGST 40,000
IGST 60,000
Note:
(i) Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively.
(ii) Both inward and outward supplies are exclusive of taxes, wherever applicable.
(iii) All the conditions necessary for availing the ITC have been fulfilled.
(iv) Assume that excess credit of IGST, if any, has to be utilised first to pay CGST and
further excess, if any, has to be utilised for SGST.
(v) Compute the net GST payable by Mr. Businessmen during the tax period.
Solution:
Computation of GST payable by Mr. Businessmen on outward supplies:
S. No. Particulars (`) GST (`)
(i) Intra-State supply of goods
CGST @ 9% on ` 10,00,000 90,000
SGST @ 9% on ` 10,00,000 90,000 1,80,000
(ii) Inter-State supply of goods
IGST @ 18% on ` 4,00,000 72,000
Total GST payable 2,52,000
Computation of total ITC
Particulars CGST @ 9% (`) SGST @ 9% (`) IGST @
18%(`)
Opening ITC 40,000 40,000 60,000
Add: ITC on Intra-State 18,000 18,000 Nil
purchases of goods valuing
` 2,00,000
Add: ITC on Inter-State Nil Nil 27,000

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 purchases of goods valuing
` 1,50,000
Total ITC 58,000 58,000 87,000
Computation of GST payable from cash ledger
Particulars CGST @ 9% SGST @ 9% IGST @ 18%
(`) (`) (`)
GST payable 90,000 90,000 72,000
Less: ITC (72,000)-IGST
(15,000)-IGST
(58,000)-CGST (58,000)-SGST

Net GST payable 17,000 32,000 Nil

Q.4. (a) Mr. Saxena is a retired judge and provides services of arbitral tribunal. He provided 4
services of arbitral tribunal to M/s. Falooda Enterprises, a business entity registered
under GST. Mr. Saxena issued invoice for the said service on 13/06/2024. M/s. Falooda
Enterprises made payment for the same on 05/09/2024. Determine the time of supply.
Solution:
The service provided by arbitral tribunal to a business entity is taxable under reverse
charge mechanism. Thus, in the given case, the service provided by Mr. Saxena to M/s.
Falooda Enterprises shall be taxable under RCM and the tax on the said services shall be
paid by M/s. Falooda Enterprises to the Government.
As per sec. 13(3), in case of supplies in respect of which tax is paid or liable to be paid
on reverse
charge basis, time of supply shall be earlier of the following dates –
(i) the date of payment as entered in the books of accounts of the recipient; or
(ii) the date of which payment is debited in his bank account; or
(iii) the 61st day from the date of issue of invoice.
In the given case, the date of payment is 05/09/2024 and 61st day from the date of
invoice is 13/08/2024. Thus, the time of supply shall be 13/08/2024 i.e. earlier of
05/09/2024 and 13/08/2024.

(b) Salasar Trading Mills Ltd. purchased a machine on 8th Oct, 2021 for ` 12,00,000 4
(excluding GST) paying GST @ 18% on the same. It availed the ITC of the GST paid
on the machine and started using it for manufacture of goods. The machine was sold on
22nd Feb., 2024 for ` 5,00,000 (excluding GST), as second hand machine. The GST rate
on supply of machine is 18%. State the action which Salasar Trading Mills Ltd. is
required to take, if any, in accordance with the statutory GST provisions on the sale of
the second-hand machine.
Solution:
Section 18(6) of the CGST Act, 2017 read with the CGST Rules, 2017 provides that if
capital goods or plant and machinery on which input tax credit has been taken are
supplied outward by the registered person, he must pay an amount that is the higher of
the following:
(a) Input tax credit taken on such goods reduced by 5% per quarter of a year or part
thereof from the date of issue of invoice for such goods (i.e., input tax credit
pertaining to remaining useful life of the capital goods), or

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 (b) Tax on transaction value.
Accordingly, the amount payable on supply of needle detecting machine shall be
computed as follows:
Particulars ` `
Input tax credit taken on the machine (` 12,00,000 × 18%) 2,16,000
Less: Input tax credit to be reversed @ 5% per quarter for
the period of use of machine
(i) For the year 2021-22 = (` 2,16,000 × 5%) × 2 quarters 21,600
(ii) For the year 2022-23 = (` 2,16,000 × 5%) × 4 quarters 43,200
(iii) For the year 2023-24 = (` 2,16,000 × 5%) × 4 quarters 43,200 1,08,000
Amount of ITC to be reversed (A) 1,08,000
Duty leviable on transaction value (` 5,00,000 × 18%) (B) 90,000
Amount payable towards disposal of machine is higher of 1,08,000
(A) and (B)

(c) Answer in the following situations whether ITC can be availed or not – 4
(i) Arihant Manufacturers Ltd. purchases a truck for delivering goods to its customers.
On purchase of truck, GST of ` 5,00,000 has been charged by the supplier in the tax
invoice.
(ii) Jenish Traders received works contract service for construction of a building which
will be used as their Head Office. The contractor charged GST of ` 1,00,000 in the
invoice.
(iii) Johnson, a non-resident taxable person, has purchased inputs from India on which
GST of ` 82,000 has been levied.
(iv) Keshav purchases goods on which GST of ` 25,000 has been levied. He later on
gives away these goods as gift to his relatives.
Solution:
(i) Yes, ITC can be availed. As per Sec. 17(5) of CGST Act, 2017, in case of purchase
of motor vehicles for transportation of persons with seating capacity ≤ 13 persons
credit is blocked. However there is no restriction in claiming ITC in case of any
other motor vehicle used for any purpose including transportation of goods. Thus,
Arihant Manufacturers Ltd. can avail GST of ` 5,00,000 levied at the time of
purchase of truck.
(ii) No, ITC cannot be availed. As per Sec. 17(5) of CGST Act, 2017, works contract
service when supplied for construction of an immovable property then ITC shall not
be available. Thus, Jenish Traders will not be able to avail ITC of ` 1,00,000 even
though the building will be used in the course or furtherance of business.
(iii) No, ITC cannot be availed. As per Sec. 17(5) of CGST Act, 2017, in case of goods
or services received by a non-resident taxable person, then no ITC shall be
available. A non- resident taxable person can avail ITC only on goods imported by
him. Thus, Johnson will not be able to avail ITC of ` 82,000 for inputs purchased
from India.
(iv) No, ITC cannot be availed. As per Sec. 17(5) of CGST Act, 2017, if the goods are
lost, stolen, destroyed, written off or disposed of by way of gift and free samples
then no ITC shall be availed. Thus, Keshav will not be able to avail ITC of `
25,000 since he has distributed them as gift to his relatives.

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Q.5. (a) Mr. Mahendra Goyal, an interior decorator provides professional services to Mr. Harish 5
Jain in relation to two of his immovable properties.
Determine the place of supply in the transaction below as per provisions of GST law in
the following independent cases.
Location of Mr. Location of Mr. Properties situated at
Case
Mahendra Goyal Harish Jain
(I) Delhi Mumbai New York (USA)
(II) Delhi New York Paris (France)
Explain the relevant provisions of law to support your conclusions.
Solution:
Case I: In a case where both the service provider and the service recipient are located in
India, the place of supply of services directly in relation to an immovable property is the
location of the immovable property. However, if the immovable property is located
outside India, the place of supply is the location of the recipient.
Since in the given case, both the service provider (Mr. Mahendra Goyal) and the service
recipient (Mr. Harish Jain) are located in India and the immovable property is located
outside India (New York), the place of supply will be the location of recipient
i.e., Mumbai.
Case II: In a case where either the service provider or the service recipient is located
outside India, the place of supply of services directly in relation to an immovable
property is the location of the immovable property.
Since in the given case, service recipient (Mr. Harish Jain) is located outside India (New
York), the place of supply will be the location of immovable property
i.e., Paris (France).

(b) From the following information determine the time of supply. 3

Jayesh Ltd. sold goods to Ramesh Ltd. which was removed for delivery on 15/08/2024.
The invoice for the said supply was issued on 17/08/2024. However, the payment for the
said supply was paid by Ramesh Ltd. on 10/08/2024 by direct credit (ECS) to our bank
account which we entered in our books on 11/08/2024.
Solution:
As per Sec. 12(2), the time of supply of goods shall be earlier of the following dates –
 The date of issue of invoice by the supplier;
 The last date by which the invoice should be issued u/s 31; or
 The date of payment.
However, as per notification 66/2017, in case of supply of goods by a tax payer paying
tax u/s 9, the time of supply shall be determined by ignoring the date of payment.
In the given case, the date of issue of invoice is 17/08/2024. However, the invoice
should have been issued by 15/08/2024 as per sec. 31 i.e. the date on which the goods
were removed for delivery. Hence the time of supply shall be earlier of 17/08/2024 and
15/08/2024. Hence the time of supply will be 15/08/2024.