Top 111 Questions of GST

CA SURAJ SATIJA SS GURU CSCARTINDIA
TOP 111 QUESTIONS OF GST
Question1
List some of the benefits that GST may accrue to the economy.
Answer:
GST may accrue following benefits to the economy:
a) Creation of unified national market: GST aims to make India a common market with
common tax rates and procedures and remove the economic barriers, thereby paving the
way for an integrated economy at the national level.
b) Boost to ‘Make in India' initiative: GST may give a major boost to the ‘Make in India'
initiative of the Government of India by making goods and services produced in India
competitive in the national as well as international market. This would make India a
manufacturing hub.
c) Boost to investments, exports and employment: Under the GST regime, the principle of
exporting only the cost of goods or services and not taxes is being followed. This may boost
Indian exports thereby improving the balance of payments position. Exporters are being
facilitated by grant of provisional refund of 90% of their claims within 7 days of issue of
acknowledgement of their application, thereby resulting in the easing of position with
respect to cash flows.
Further, the subsuming of major Central and State taxes in GST, complete and comprehensive set-
off of input tax on goods and services and phasing out of Central Sales Tax (CST) may reduce the
cost of locally manufactured goods and services. Resultantly, the competitiveness of Indian goods
and services in the international market may increase to give boost to investments and Indian
exports.
With a boost in exports and manufacturing activity, more employment would be generated and
GDP would increase.
Question2.
Explain with the help of examples how a particular transaction of goods and services is taxed
simultaneously under Central GST (CGST) and State GST (SGST)?
Answer:
The Central GST and the State GST is levied simultaneously on every intra-State supply of goods or
services or both made by registered persons except the exempted goods and services as well as
goods and services which are outside the purview of GST. Further, both are levied on the same
price or transaction value. The same can be better understood with the help of following
examples:
Example I: Suppose that the rate of CGST is 10% and that of SGST is 10%. When a wholesale
dealer of steel in Uttar Pradesh supplies steel bars and rods to a construction company which is
also located within the same State for, say ` 100, the dealer would charge CGST of 10 and SGST of
10 in addition to the basic price of the goods. The CGST component will go into a Central
Government account while the SGST portion into the account of the concerned State Government
(viz. U.P.).
It is important to note that he might not actually pay 20 (10 + 10) in cash as he would be entitled
to set-off this liability against the CGST or SGST paid on his eligible purchases (inputs, input
services and capital goods) assuming that all his purchases are intra-State. However, for paying
CGST, he would be allowed to use only the credit of CGST paid on his purchases while for SGST he
can utilize the credit of SGST alone. CGST credit cannot be used for payment of SGST and vice
versa.
Example II: Suppose, again the rate of CGST is 10% and that of SGST is 10%. When an advertising
company located in Mumbai supplies advertising services to a company manufacturing soap also
located within the State of Maharashtra for, let us say 100, the ad company would charge CGST of
10 as well as SGST of 10 at the basic value of the service. The CGST component will go into a
Central Government account while the SGST portion into the account of the Maharashtra
Government.
He might not actually pay 20 (10+ 10) in cash as it would be entitled to set-off this liability against
the CGST or SGST paid on his eligible purchases (say, of inputs such as stationery, office
equipment, services of an artist etc.) assuming that all his purchases are intra-State. However, for
paying CGST, he would be allowed to use only the credit of CGST paid on its purchase while for
SGST, he can utilise the credit of SGST alone. CGST credit cannot be used for payment of SGST and
vice versa.
Question3
Why was the need to amend the Constitution of India before introducing the GST?
Answer:
Earlier, the fiscal powers between the Centre and the States were clearly demarcated in the
Constitution with almost no overlap between the respective domains. The Centre had the powers
to levy tax on the manufacture of goods (except alcoholic liquor for human consumption,© The
Institute of Chartered Accountants of India opium, narcotics etc.) while the States had the powers
to levy tax on the sale of goods. In the case of inter-State sales, the Centre had the power to levy
the Central Sales Tax but the tax was collected and retained entirely by the States. As for services,
it was the Centre alone that was empowered to levy service tax.
Introduction of the GST necessitated the amendments in the Constitution so as to simultaneously

empower the Centre and the States to levy and collect this tax. The Constitution of India was
amended by the Constitution (101 st Amendment) Act, 2016 for this purpose. Article 246A of the
Constitution introduced thereby empowered the Centre and the States to simultaneously levy and
collect the GST.
Question4
GST is a destination-based tax on consumption of goods or services or both. Discuss the validity of
the statement.
Answer:
The given statement is valid. GST is a destination-based tax on consumption of goods or services
or both. GST is known as destination- based tax since the tax would accrue to the taxing authority
which has jurisdiction over the place of consumption which is also termed as place of supply.
For example, if A in Delhi produces the goods and sells the goods to B in Haryana. In this case, the
tax would accrue to the State of Haryana and not to the State of Delhi. On the other hand, under
pre-GST regime, origin- based taxation was prevailing in such cases.
Under origin-based taxation, the tax used to accrue to the State from where the transaction
originated. In the given case, under origin-based taxation, the central sales tax would have been
levied by Centre and collected by the State of Delhi and not by the State of Haryana.
Question5
Discuss the leviability of GST or otherwise on the following:
(a) Alcoholic liquor for human consumption
(b) Petroleum crude, diesel, petrol, Aviation Turbine Fuel (ATF) and natural gas
(c) Tobacco
(d) Opium, Indian hemp and other narcotic drugs and narcotics
Answer:
a) Alcoholic liquor for human consumption: is outside the realm of GST. The
manufacture/production of alcoholic liquor continues to be subjected to State excise duty
and inter-State/intra-State sale of the same is subject to CST/VAT respectively.
b) Petroleum crude, diesel, petrol, ATF and natural gas: As regards petroleum crude,
diesel, petrol, ATF and natural gas are concerned, they are not presently leviable to GST.
GST will be levied on these products from a date to be notified on the recommendations of
the Till such date, central excise duty continues to be levied on manufacture/production of
petroleum crude, diesel, petrol, ATF and natural gas and inter-State/intra-State sale of the
same is subject to CST/ VAT respectively.
c) Tobacco: Tobacco is within the purview of GST, i.e. GST is leviable on tobacco. However,
Union Government has also retained the power to levy excise duties on tobacco and
tobacco products manufactured in India. Resultantly, tobacco is subject to GST as well as
central excise duty.
d) Opium, Indian hemp and other narcotic drugs and narcotics: Opium, Indian hemp and
other narcotic drugs and narcotics are within the purview of GST, i.e. GST is leviable on
them. However, State Governments have also retained the power to levy excise duties on
such products manufactured in India. Resultantly, Opium, Indian hemp and other narcotic
drugs and narcotics are subject to GST as well as State excise duties.
Question6
Under Goods and Services Tax (GST), only value addition is taxed and burden of tax is to be borne
by the final consumer. Examine the validity of the statement.
Answer:
The statement is correct. Goods and Services Tax is a destination-based tax on consumption of
goods and services. It is levied at all stages right from manufacture up to final consumption with
credit of taxes paid at previous stages available as setoff. Resultantly, only value addition is taxed
and burden of tax is to be borne by the final consumer.
Question7
Which are the commodities which have been kept outside the purview of GST? Examine the status
of taxation of such commodities after introduction of GST.
Answer:
Article 366(12A) of the Constitution as amended by 101 st Constitutional Amendment Act, 2016
defines the Goods and Services tax (GST) as a tax on supply of goods or services or both, except
supply of alcoholic liquor for human consumption. Therefore, alcohol for human consumption is
kept out of GST by way of definition of GST in the Constitution. Five petroleum products viz.
petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel
have temporarily been kept out of the purview of GST; GST Council shall decide the date from
which they shall be included in GST. The erstwhile taxation system (CST/VAT & central excise)
still continues in respect of the said commodities.
Question8
A dual GST has been implemented in India. Elaborate.
Answer:
A dual GST has been implemented in India with the Centre and States simultaneously levying it on
a common tax base. The GST levied by the Centre on intra-State supply of goods and / or services
is called the Central GST (CGST) and that levied by the States/ Union territory is called the State
GST (SGST)/ Union GST (UTGST). Similarly, Integrated GST (IGST) is levied and administered by
Centre on every inter-State supply of goods and/or services.
India is a federal country where both the Centre and the States have been assigned the powers to
levy and collect taxes through appropriate legislation. Both the levels of Government have distinct
responsibilities to perform according to the division of powers prescribed in the Constitution for
which they need to raise resources. A dual GST, therefore, keeps with the Constitutional
requirement of fiscal federalism.
Question9
Discuss Article 269A pertaining to levy and collection of GST on inter-State supply.
Answer:
Article 269A of the Constitution stipulates that Goods and Services Tax on supplies in the course of
inter-State trade or commerce shall be levied and collected by the Government of India and such
tax shall be apportioned between the Union and the States in the manner as may be provided by
Parliament by law on the recommendations of the Goods and Services Tax Council.
Here, supply of goods, or of services, or both in the course of import into the territory of India shall
be deemed to be supply of goods, or of services, or both in the course of inter-State trade or
commerce.
The amount so apportioned to a State shall not form part of the Consolidated Fund of India. Where
an amount collected as IGST has been used for payment of SGST or vice versa, such amount shall
not form part of the Consolidated Fund of India/State respectively. This is to facilitate transfer of
funds between the Centre and the States.
Parliament is empowered to formulate the principles for determining the place of supply, and
when a supply of goods, or of services, or both takes place in the course of inter-State trade or
commerce.
Question10
Discuss Article 246A which grants the power to make laws with respect to Goods and Services
Tax.
Answer:
Article 246A stipulates that Parliament, and, the Legislature of every State, have power to make
laws with respect to goods and services tax imposed by the Union or by such State.
Parliament has exclusive power to make laws with respect to goods and services tax where the
supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.
However, in respect to petroleum crude, high speed diesel, motor spirit (commonly known as
petrol), natural gas and aviation turbine fuel, the aforesaid provisions shall apply from the date to
be notified by the Government on the recommendations by the GST Council.
Question11
Meghraj & Co. wishes to commence the business of supplying ready-made garments within
Punjab and in the neighbouring States of Delhi and Haryana. Kindly state as to what is the taxable
event under GST and leviability of CGST, SGST/UTGST and IGST on the same?
Answer:-
Taxable event under GST is the supply of goods or services or both made for consideration
in the course or furtherance of business. CGST and SGST will be levied on intra-State supplies.
IGST will be levied on inter-State supplies.
Question12
Damodar Private Ltd., registered in Delhi, is planning to transfer some goods to its branch,
registered in West Bengal, without any consideration, so that the goods can be sold from the
branch. The company believes that the transaction that will be undertaken by it would not qualify
as supply as no consideration is involved. Ascertain whether the transfer of goods by Damodar
Private Ltd. to its branch office would qualify as supply.
Answer:-
As per Schedule I read with section 7(1)(c), supply of goods or services or both between
related persons or between distinct persons as specified in section 25, when made in the course or
furtherance of business, is deemed as supply even if made without consideration. In the given
case, since the Damodar Private Ltd. and its branch located in another State are distinct persons,
supply of goods between them would qualify as supply.
Question13
Prithvi Associates is engaged in supply of taxable goods. It enquires from its tax advisor as to
whether any activity can be treated as supply even if made without consideration in accordance
with the provisions of the GST law. You are required to enumerate such activities, if any.
Answer:-
Section 7(1)(a) stipulates that the supply should be for a consideration and should be in the
course or furtherance of business. However, section 7(1)(c) read with Schedule I enumerates the
cases where an activity is treated as supply, even if the same is without consideration. These
are as follows:
(i) Permanent transfer or disposal of business assets where input tax credit has
been availed on such assets.
(ii) Supply of goods or services or both between related persons or between distinct
persons as specified in section 25, when made in the course or furtherance of
business.
However, gifts not exceeding 50,000 in value in a financial year by an employer

to an employee shall not be treated as supply of goods or services or both.
(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.
(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.
Question 14
Composite supply is treated as supply of that particular goods or services which attracts the
highest rate of tax, for the purpose of considering tax liability. Examine the validity of the
statement.
Answer:-
The statement is not correct. For considering tax liability, composite supply is treated as
supply of the principal supply. It is the mixed supply that is treated as supply of that particular
goods or services which attracts the highest rate of tax.
Question 15
Transfer of title and/or possession is necessary for a transaction to constitute supply of goods.
Examine.
Answer:-
Title as well as possession both need to be transferred for a transaction to be considered as a

supply of goods. In case title is not transferred, the transaction would be treated as supply of
service in terms of Schedule II(1)(b).
In some cases, possession may be transferred immediately, but title may be transferred at a
future date like in case of sale on approval basis or hire purchase arrangement. Such
transactions will also be termed as supply of goods in terms of Schedule II.
Question 16
Examine whether the following activities would amount to supply under section 7 read with
Schedule I:
a) Sulekha Manufacturers have a factory in Delhi and a depot in Mumbai. Both these
establishments are registered in respective States. Finished goods are sent from factory in
Delhi to the Mumbai depot without consideration so that the same can be sold from the
depot.
b) Raman is an architect 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.
c) Would your answer be different if in the above case, Raman has taken advice in respect of
his business unit in Chennai?
Answer:-
a. Schedule I read with section 7(1)(c), inter alia, stipulates that supply of goods or services
or both between related persons or between distinct persons as specified in section 25, is
supply even without consideration provided it is made in the course or furtherance of
business. Further, a person who has obtained more than one registration, whether in one
State/Union territory or more than one State/Union territory shall, in respect of each such
registration, be treated as Udistinct personsU [Section 25(4)].
In view of the same, factory and depot of Sulekha Manufacturers are distinct persons.
Therefore, supply of goods from Delhi factory of Sulekha Manufacturers to Mumbai Depot
without consideration, but in course/furtherance of business, is supply under section 7
read with Schedule I.
b. Schedule I read with section 7(1)(c), inter alia, stipulates that import of services by a
taxable person from a related person located outside India, without consideration is
treated as supply if it is provided in the course or furtherance of business. Explanation to
section 15, inter alia, provides that persons shall be deemed to be “related persons” if
they are members of the same family. Further, as per section 2(49), family means, —
(i) the spouse and children of the person, and
(ii) the parents, grand-parents, brothers and sisters of the person if they are
wholly or mainly dependent on the said person.
In the given case, Raman has received free of cost legal services from his brother.
However, in view of section 2(49)(ii) above, Raman and his brother cannot be considered to be
related as Raman’s brother is a well- known lawyer and so, not wholly/mainly dependent on
Raman. Further, Raman has taken legal advice from him in personal matter and not in course or
furtherance of business. Consequently, services provided by Raman’s brother to him would not
be treated as supply under section 7 read with Schedule I.
c. In the above case, if Raman has taken advice with regard to his business unit, services
provided by Raman’s brother to him would still not be treated as supply under section 7
read with Schedule I as although the same are provided in course or furtherance of
business, but are provided without consideration and such services have not been
received from a related person.
Question 17
State whether the following supplies would be treated as supply of goods or supply of services as
per Schedule II:
a) Renting of immovable property.
b) Goods forming part of business assets are transferred or disposed of by/under

directions of person carrying on the business so as no longer to form part of those
assets.
c) Transfer of right in goods without the transfer of title in such goods.
d) Transfer of title in goods under an agreement which stipulates that property shall pass
at a future date upon payment of full consideration as agreed.
Answer:-
(a) Supply of services
(b) Supply of goods
(c) Supply of services
(d) Supply of goods

Question 18
Determine whether the following supplies would be treated as supply of goods or supply of
services as per Schedule II:
a) Temporary transfer or permitting use or enjoyment of any intellectual property right.
b) Any treatment or process which is applied to another person’s goods.
c) Transfer of title in goods.
Answer:-
(a) Supply of services
(b) Supply of services
(d) Supply of goods
Question 19
The goods supplied on hire purchase basis will be treated as supply of services. Examine the
validity of the statement.
Answer:-
The statement is not correct. Supply of goods on hire purchase shall be treated as supply of
goods as there is transfer of title, albeit at a future date.
Question 20
Examine whether the activity of import of service in the following independent cases would
amount to supply under section 7:
(i) Miss Shriniti Kaushik received interior decoration services for her residence located at
Bandra, Mumbai from Mr. Racheal of Sydney (Australia). The amount paid for the said
service is 5,000 Australian dollar.
(ii) Miss Shriniti Kaushik received interior decoration services for her residence located
at Bandra, Mumbai from her brother, Mr. Varun residing in Sydney (Australia)
[wholly dependent on Miss Shriniti]. Further, Miss Shriniti did not pay any
consideration for the said service.
(iii) Will your answer change if in the above case, if Miss Shriniti has taken interior
decoration services with regard to her business premises and not her residence?
Answer:-
(i) Supply, under section 7, inter alia,
 includes import of services for a consideration

 even if it is not in the course or furtherance of business.
Thus, although the import of service for consideration by Miss. Shriniti Kaushik is
not in course or furtherance of business [as the interior decoration services have been
availed in respect of residence], it would amount to supply.
(ii) Schedule I, inter alia, stipulates that import of services by a taxable person from a
related person located outside India, without consideration is treated as supply
only if it is provided in the course or furtherance of business. Explanation to section
15, inter alia, provides that persons shall be deemed to be “related persons” if they
are members of the same family. Further, as per section 2(49), family means, —
I. the spouse and children of the person, and
II. the parents, grand-parents, brothers and sisters of the person if they are wholly
or mainly dependent on the said person.
In the given case, Miss Shriniti Kaushik has received interior decoration services
from her brother. In view of section 2(49)(ii) above, Miss Shriniti and her
brother shall be considered to be related as Miss Shriniti’s brother is wholly
dependent on her.
However, Miss Shrinti has taken interior decoration services for her residence and
not in course or furtherance of business. Consequently, services provided by Miss
Shrinti’s brother to her would not be treated as supply under section 7 read with
Schedule I.
III. In the above case, if Miss Shriniti has taken interior decoration services with
regard to her business premises, services provided by Miss Shriniti’s brother
to her would be treated as supply under section 7 read with Schedule I, as the
same are provided in course or furtherance of business.
Question 21
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 rate applicable 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,
although Akbar Retail Store has paid a composite discounted price for these goods,
Dumdum Electronics has not charged a single price for the said supply. Therefore, said
supply is also not a mixed supply. Supply of these goods is, therefore, supply of individual
items which are taxable at the respective rates applicable to them.
Question 22
Manikaran, a registered supplier of Delhi, has supplied 20,000 packages at 30 each to

Mukhija Gift Shop in Punjab. Each package consists of 2 chocolates, 2 fruit juice bottles
and a packet of toy balloons. Determine the rate(s) of GST applicable in the given case assuming
the rates of GST to be as under:
Goods/services supplied GST rate
Chocolates 18%
Fruit juice bottles 12%
Toy balloons 5%
Answer:-
As per section 2(74), mixed supply means two or more individual supplies of goods or services, or
any combination thereof, made in conjunction with each other by a taxable person for a single
price where such supply does not constitute a composite supply.
Supply of a package containing chocolates, fruit juice bottles and a packet of toy balloons is a
mixed supply as each of these items can be supplied separately and is not dependent on any
other. 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 [since it attracts the highest rate of tax] and the rate of GST applicable
on the package of 6,00,000 (20,000 × 30) is 18%.
Question 23
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:-
As per section 25(4)35, a person who has obtained more than one registration, whether in one
State or Union territory or more than one State or Union territory shall, in respect of each such
registration, be treated as ‘distinct persons’.
Schedule I to the CGST Act specifies situations where activities are to be treated as supply even if
made without consideration. Supply of goods and/or services between ‘distinct persons’ as
specified in section 25, when made in the course or furtherance of business is one such activity
included in Schedule I under para 2.
However, as per CBIC circular, the inter-State movement of various modes of conveyance
including, inter alia, trucks, carrying goods or passengers or both 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. Applicable CGST/SGST/IGST, however, shall be leviable on repairs and
maintenance done for such conveyance [Circular No. 1/1/2017 IGST dated 07.07.2017].
Thus, 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’.
Question 24
Sarvanna & Sons wishes to start supplying alcoholic liquor for human consumption in the State of
Tamil Nadu. Therefore, it applies for license to the Tamil Nadu Government for selling liquor for
which the State Government has charged specified fee from it.
Examine whether the grant of alcoholic liquor license by the Tamil Nadu Government to Sarvanna
& Sons qualifies as supply.
Answer:-
Services by way of grant of alcoholic liquor license by the State Governments have been notified to
be treated neither as a supply of goods nor as a supply of service. Such licence is granted against
consideration in the form of licence fee or application fee or by whatever name it is called.
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.
Question25
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.
(c) Renting of immovable property service provided by the Central Government to a registered
business entity.
Answer:
(a) Since GST on services provided or agreed to be provided by an arbitral tribunal to any
business entity located in the taxable territory is payable under reverse charge, in the given
case, GST is payable by the recipient - business entity.
(b) GST on sponsorship services provided by any person to anybody corporate or partnership
firm located in the taxable territory is payable under reverse charge. Since in the given
case, services have been provided to an individual, reverse charge provisions will not be
attracted. GST is payable under forward charge by the supplier – company.
(c) GST on services supplied by Central Government, State Government, Union territory or
local authority by way of renting of immovable property to a person registered under CGST
Act, 2017 is payable under reverse charge. Therefore, in the given case, GST is payable
under reverse charge by the recipient – registered business entity.
Question26
Vivek Goyal, an independent director, appointed in accordance with the provisions of the
Companies Act, 2013, of A2Z Pvt. Ltd., has received sitting fee amounting to 1 lakh from A2Z Pvt.
Ltd for attending the Board meetings. Who is the person liable to pay tax in this case?
Answer:
GST on supply of services by director of a company to the said company located in the taxable
territory is payable on reverse charge basis.
Therefore, in the given case, person liable to pay GST is the recipient of services, i.e., A2Z Pvt. Ltd.
Question27
Raghu Associates provided sponsorship services to WE-WIN Cricket Academy LLP. Determine the
person liable to pay tax in this case.
Answer:
In case of services provided by any person by way of sponsorship to anybody corporate or

partnership firm, GST is liable to be paid under reverse charge by such body corporate or
partnership firm located in the taxable territory.
Further, for the reverse charge purposes, Limited Liability Partnership formed and registered
under the provisions of the Limited Liability Partnership Act, 2008 is also be considered as a
partnership firm.
Therefore, in the given case, WE-WIN Cricket Academy LLP is liable to pay GST under reverse
charge.
Question28
Legal Fees is received by Sushrut, an advocate, from M/s. Tatva Trading Company, engaged in
making taxable supplies and located in Maharashtra, having turnover of 50 lakh in preceding
financial year. Who is the person liable to pay tax in this case?
Answer:
GST on legal services supplied by an advocate [Mr. Sushrut] to any business entity [M/s. Tatva
Trading Company] located in the taxable territory is payable on reverse charge basis.
Therefore, in the given case, person liable to pay GST is the recipient of services, i.e., M/s. Tatva
Trading Company.
Question29
State the person liable to pay GST in the following independent cases provided recipient is located
in the taxable territory:
(a) Services supplied by an insurance agent to an insurance company.
(b) Services supplied by a recovery agent to a car dealer.
(c) Security services (services provided by way of supply of security personnel) provided by a
partnership firm to a registered person paying tax under regular scheme.
Answer:
(a) GST on services supplied by an insurance agent to any person carrying on insurance
business located in the taxable territory is payable under reverse charge. Therefore, in the
given case, GST is payable under reverse charge by the recipient – Insurance Company.
(b) GST on services supplied by a recovery agent to a banking company or a financial
institution or a non-banking financial company located in the taxable territory is payable
under reverse charge. However, since, in the given case, services are being supplied by a
recovery agent to a car dealer, GST is payable under forward charge by the service provider
- recovery agent.
(c) GST on security services (services provided by way of supply of security personnel)
provided by any person other than a body corporate to a registered person, located in the
taxable territory is payable under reverse charge. Therefore, in the given case, GST is
payable under reverse charge by the recipient – registered person receiving the services.
Question30
Sultan & Sons, a partnership firm, based in Nagpur, Maharashtra is a wholesaler of a taxable
product ‘P’ and product ‘Q’ exempt by way of a notification, only within the State of Maharashtra.
Its aggregate turnover in the preceding financial year is 130 lakh. The firm wishes to opt for
composition scheme under sub-sections (1) & (2) of section 10 in the current financial year.
However, its accountant is of the view that a person engaged in making supply of exempt goods is
not eligible for the said scheme. Discuss.
Note: Assume that Sultan & Sons is not engaged in manufacture of goods as notified under section
10(2)(e).
Answer:
The view taken by the accountant of Sultan & Sons is not valid in law. A registered person with an
aggregate turnover in a preceding financial year up to ` 1.5 crore is eligible for composition levy,
under section 10(1) & 10(2), in Delhi. Further, such person must not be engaged in making any
supply of goods or services which are not leviable to tax under this Act and must not be engaged in
making any inter-State outward supplies of goods or services, for being eligible to pay tax under
said scheme.
In the given case, the aggregate turnover of Sultan & Sons does not exceed 1.5 crore. Further, it is
engaged in making only intra-State supply of goods and Product P supplied by it is taxable and
Product Q supplied by it is leviable to tax, though exempted by way of notification. Therefore, it is
eligible for composition levy under section 10(1) & 10(2) in the current year.
Question31
A person availing composition scheme, under sub-sections (1) & (2) of section 10, in Haryana
during a financial year crosses the turnover of1.5 crore in the month of December. Will he be
allowed to pay tax under composition scheme for the remainder of the year, i.e. till 31st March?
Please advise.
Answer:
No. The option to pay tax under composition scheme lapses immediately from the day on which
the aggregate turnover of the person availing composition scheme for goods during the financial
year exceeds the specified limit (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.
Every person who has furnished such an intimation, may electronically furnish at the common
portal, a statement in prescribed form containing details of the 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, within a period of 30 days from the date from which the option is withdrawn.
Question32
Determine whether the suppliers in the following cases are eligible for composition levy, under
section 10(1) & 10(2), provided their turnover in preceding year does not exceed 1.5 crore:
(i) Mohan Enterprises is engaged only in trading of pan masala in Rajasthan and is
registered in the same State.
(ii) Sugam Manufacturers has registered offices in Punjab and Haryana and sells goods
manufactured by it in the neighbouring States.
Answer:
(i) A supplier engaged in the manufacture of goods as notified under section 10(2)(e),
during the preceding FY is not eligible for composition scheme under section 10(1) and
10(2). Ice cream and other edible ice, whether or not containing cocoa, Pan masala,
Tobacco and manufactured tobacco substitutes, aerated waters, fly ash bricks, fly ash
aggregate, fly ash blocks, bricks of fossil meals or similar siliceous earths, building
bricks, earthen or roofing tiles are notified under this category. However, in the given
case, since Mohan Enterprises is engaged in trading of pan masala and not manufacture
and his turnover does not exceed 1.5 crore, he is eligible for composition scheme
subject to fulfilment of specified conditions.
(ii) Since supplier of inter-State outward supplies of goods or services is not eligible for
composition levy, Sugam Manufacturers is not eligible for composition levy.
Question33
Subramanian Enterprises has two registered places of business in Delhi. Its aggregate turnover in
the preceding financial year for both the places of business is 120 lakh. It wishes to pay tax under
composition levy, under section 10(1) & 10(2), for one of the places of business for the current
financial while continuing paying under normal levy for other. You are required to advice
Subramanian Enterprises whether he can do so?
Answer:
A registered person with an aggregate turnover in a preceding financial year up to 1.5 crore is
eligible for composition levy, under section 10(1) & 10(2), in Delhi. Since the aggregate turnover
of Subramanian Enterprises does not exceed 1.5 crore, it is eligible for composition levy in the
current year.
However, all registered persons having the same Permanent Account Number (PAN) have to opt
for composition scheme. If one such registered person opts for normal scheme, others become
ineligible for composition scheme. Thus, Subramanian Enterprises either have to opt for
composition levy for both the places of business or under normal levy for both the places of
business.
Question34
Mr. Ajay has a repair centre, registered under GST, where electronic goods are repaired/serviced.
His repair centre is located in State of Rajasthan and he is not engaged in making any inter-State
supply of services. His aggregate turnover in the preceding financial year (FY) is 45 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) for 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 total tax payable by him in the
current F.Y. 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:
Section 10(1) provides that a registered person, whose aggregate turnover in the preceding
financial year did not exceed 1.5 crore (75 lakh in Special Category States except Assam, Himachal
Pradesh and Jammu and Kashmir), may opt to pay, in lieu of the tax payable by him, an amount
calculated at the specified rates. However, as per proviso to section 10(1), person who opts to pay
tax under composition scheme may supply services other than restaurant services, of value not
exceeding 10% of the turnover in a State or Union territory in the preceding financial year or 5
lakh, whichever is higher.
In the given case, since Mr. Ajay is an exclusive supplier of services other than restaurant services
[viz. repair services], he is not eligible for composition scheme under section 10(1) & 10(2).
However, section 10(2A) provides an option to a registered person (subject to certain conditions)
whose aggregate turnover in the preceding financial year is upto ` 50 lakh and who is not eligible
to pay tax under composition scheme under section 10(1) & 10(2), to pay tax @ 3% [Effective rate
6% (CGST+ SGST/UTGST)] of the turnover of supplies of goods and services in the State or Union
territory.
Thus, in view of the above-mentioned provisions, Mr. Ajay is eligible to avail the composition
scheme under section 10(2A) as his aggregate turnover in the preceding FY does not exceed 50
lakh and 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].
A registered person cannot opt for composition scheme under section 10(2A), if, inter alia, he is
engaged in making any inter-State outward supplies. However, there is no restriction on inter-
State procurement of goods. Hence, answer will remain the same even if Mr. Ajay procures few
items from neighboring State of Madhya Pradesh.
Question35
M/s United Electronics, a registered dealer, is supplying all types of electronic appliances in the
State of Karnataka. Its aggregate turnover in the preceding financial year by way of supply of
appliances is 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:
(i) The registered person, whose aggregate turnover in the preceding financial year does
not exceed 1.5 crore, may opt to pay tax under composition levy, under section 10(1)
and 10(2).
The scheme can be availed by an intra-State supplier of goods and supplier of
restaurant service.
However, the composition scheme permits supply of marginal services (other than
restaurant services) for a specified value along with the supply of goods and restaurant
service, as the case may be.
Thus, M/s United Electronics can opt for composition scheme for the current financial
year as its aggregate turnover is less than 1.5 crore in the preceding financial year and it
is not engaged in inter-State outward supplies.
(ii) The registered person opting for composition scheme, under section 10(1) and 10(2),
can also supply services (other than restaurant services) for a value up to 10% of the
turnover in the preceding year or 5 lakh, whichever is higher, in the current financial
year.
Thus, M/s United Electronics can supply repair and maintenance services up to a value
of 12 lakh [10% of 120 lakh or 5 lakh, whichever is higher] in the current financial year.
Question 36
In case of a domestic supply, what is the place of supply where goods are removed?
Answer:
As per section 10(1)(a), the place of supply of goods is the location of the goods at the time at
which the movement of goods terminates for delivery to the recipient.
Question 37
What will be the place of supply if the goods are delivered by the supplier to another person on the
direction of a third person?
Answer:
As per section 10(1)(b), it would be deemed that the third person has received the goods and the
place of supply of such goods will be the principal place of business of such person
Question 38
What is the place of supply where the goods or services are supplied on board a conveyance, such
as a vessel, an aircraft, a train or a motor vehicle?
Answer:
As per section 10(1)(e), in respect of goods, the place of supply is the location at which such goods
are taken on board.
However, in respect of services, the place of supply is the location of the first scheduled point of
departure of that conveyance for the journey in terms of sections 12(10).
Question 39
The place of supply in relation to immovable property (situated in India) is the location of
immovable property. Suppose a road is constructed from Delhi to Mumbai covering multiple
states.
What will be the place of supply of construction services?
Answer:
Where the immovable property is located in more than one State, the supply of service is treated
as made in each of the States in proportion to the value for services separately collected or
determined, in terms of the contract or agreement entered into in this regard or, in the absence of
such contract or agreement, on such other reasonable basis as may be prescribed in this behalf
[Explanation to section 12(3)].
In the absence of a contract or agreement between the supplier and recipient of services in this
regard, the proportionate value of services supplied in different States/Union territories (where
the immovable property is located) is computed on the basis of the area of the immovable
property lying in each State/ Union territories [Rule 4 of the IGST Rules]
Question 40
What would be the place of supply of services provided by an event management company for
organizing a sporting event for a Sports Federation which is held in multiple States?
Answer:
In case of an event, if the recipient of service is registered, the place of supply of services for
organizing the event is the location of such person. However, if the recipient is not registered, the
place of supply is the place where event is held.
Since the event is being held in multiple states and a consolidated amount is charged for such
services, the place of supply will be deemed to be in each State in proportion to the value for
services determined in terms of the contract or agreement entered into in this regard [Explanation
to section 12(7)].
In the absence of a contract or agreement between the supplier and recipient of services, the
proportionate value of services made in each State (where the event is held) will be computed in
accordance with rule 5 of the IGST Rules by the application of generally accepted accounting
principles.
Question 41
What is the place of supply of services by way of transportation of good s, including by mail or
courier when both the supplier and the recipient of the services are located in India?
Answer:
If the recipient is registered, the location of such person is the place of supply. However, if the
recipient is not registered, the place of supply is the place where the goods are handed over for
transportation. Further, if the goods are transported outside India, the destination of such goods is
the place of supply [Section 12(8)].
Question 42
What will be the place of supply of passenger transportation service, if a person travels from
Mumbai to Delhi and back to Mumbai?
Answer:
If the person is registered, the place of supply of passenger transportation service will be the
location of recipient. If the person is not registered, the place of supply for the forward journey
from Mumbai to Delhi will be Mumbai, the place where he embarks [Section 12(9)].
However, for the return journey, the place of supply will be Delhi as the return journey has to be
treated as separate journey [Explanation to section 12(9)].
Question 43
What is the place of supply for mobile connection? Can it be the location of supplier?
Answer:
The location of supplier of mobile services cannot be the place of supply as the mobile companies
are providing services in multiple states and many of these services are inter-state. The
consumption principle will be broken if the location of supplier is taken as place of supply and all
the revenue may go to a few states where the suppliers are located.
The place of supply for mobile connection would depend on whether the connection is on postpaid
or prepaid basis. In case of postpaid connections, the place of supply is the location of billing
address of the recipient of services on the record of supplier of services.
In case of pre-paid connections, if the service is supplied:-
(i) through a selling agent or a re-seller or a distributor of SIM card or re-charge voucher,
the place of supply is the place address of the selling agent or re-seller or distributor as
per the record of the supplier at the time of supply; or
(ii) by any person to the final subscriber, the place of supply is the location where such
prepayment is received or such vouchers are sold;
(iii) in other cases, the place of supply is the address of the recipient as per the records of
the supplier of services and where such address is not available, the place of supply
shall be location of the supplier of services.
However, if the recharge is done through internet/e-payment, the location of recipient of service
on record of the supplier will be taken as the place of supply [Section 12(11)].
Question 44
A person from Mumbai goes to Kullu-Manali and takes some services from ICICI Bank in Manali
Answer:
The place of supply in case of banking services to any person shall be the location of the recipient
of services on the records of the supplier of services.
However, if the location of recipient of services is not on the records of the supplier, the place of
supply shall be the location of the supplier of services i.e. Kullu-Manali, Himachal Pradesh [Section
12(12)].
Question 45
An unregistered person from Gurugram travels by Air India flight from Mumbai to Delhi and gets
his travel insurance done in Mumbai.
What is the place of supply of insurance services?
Answer:
When insurance service is provided to an unregistered person, the location of the recipient of
services on the records of the supplier of insurance services is the place of supply. So Gurugram is
the place of supply [Section 12(13)].
Question 46
Explain the significance of time of supply under GST law.
Answer:-
GST is payable on supply of goods or services. Time of supply indicates the point in time when the
liability to pay tax arises. However, it is important to note that though the liability to pay tax
arises at the time of supply, the same has to be paid to the Government by the due date prescribed
with reference to the said ‘time of supply’. The CGST Act provides separate provisions for time of
supply for goods and services vide sections 12 and 13.
Question 47
GST is payable on advance received for supply of goods and services taxable under forward
charge.
Answer:-
The statement is not correct. 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, the time of supply of services taxable under forward charge is –
 Date of issue of invoice or date of receipt of payment, whichever is earlier, if the

same is issued within 30 days from the date of supply of service;
OR
 Date of provision of service or date of receipt of payment, whichever is earlier, if the

invoice is not issued within 30 days from the date of supply of service.
Thus, in case of services, if the supplier receives any payment before the provision of service or
before the issuance of invoice for such service, the time of supply gets fixed at that point in time
and the liability to pay tax on such payment arises. However, the tax can be paid by the due
date prescribed with reference to such time of supply.
As regards time of supply of goods taxable under forward charge is concerned, Notification No.
66/2017 CT dated 15.11.2017 provides that a registered person (excluding composition supplier)
should pay GST on the outward supply of goods at the time of supply as specified in section
12(2)(a), i.e. date of issue of invoice or the last date on which invoice ought to have been
issued in terms of section 31. Therefore, in case of goods, tax is not payable on receipt of
advance payment.
Question 48
Determine the time of supply in the following cases assuming that GST is payable under
reverse charge:
Answer:-
S. No. Date of Date of payment Date of issue Date Time of
receipt of by the recipient of invoice by immediately supply of
goods of goods the supplier Following 30 goods [Earlier
of goods days from of (1),
the of (2) & (4)]

invoice
(1) (2) (3) (4) (5)
(i) July 1 August 10 June 29 July 30 July 1
(ii) July 1 June 25 June 29 July 30 June 25
(iii) July 1 Part payment June 29 July 30 June 30 for

made on June part payment
30 and balance made and
amount paid on July 1 for
July 20 balance
amount
(iv) July 5 Payment is June 1 July 2 June 28 (i.e.,

entered in the when
books of payment is
Account on June entered in the
28 and debited books of
in recipient’s account of the
bank account on recipient)
June 30
(v) July 1 Payment is June 29 July 30 June 26 (i.e.,

entered in the when
books of account payment is
on June 30 and debited in the
debited in recipient’s
recipient’s bank bank account)
account on June
26
(vi) August 1 August 10 June 29 July 30 July 30 (i.e.,

31st day from
issuance of
invoice)
Question 49
Determine the time of supply in the following cases assuming that GST is payable under
reverse charge:
Answer:-
S. No. Date of payment by Date of issue of Date immediately Time of supply of

the recipient for invoice by the following 60 days goods [Earlier
supply of services supplier of services from invoice of (1) & (3)]
(1) (2) (3)

(i) August 10 June 29 August 29 August 10
(ii) August 10 June 1 August 1 August 1
(iii) Part payment made June 29 August 29 June 30 for part
on June 30 and payment and
balance amount paid August 29 for
on September 1 balance amount
(iv) Payment is entered June 1 August 1 June 28 (i.e.
in the books of when payment is
account on June 28 entered in the
and debited in books of account
recipient’s bank of the
account on June 30 recipient)
(v) Payment is entered June 29 August 29 June 26 (i.e.
in the books of when payment
account on June 30 is debited in the
and debited in recipient’s bank
recipient’s bank account)
account on June 26
Question 50
Kabira Industries 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:-
Time of supply of service taxable under reverse charge is the earlier of the following two
dates in terms of section 13(3):
 Date of payment
 61st day from the date of issue of invoice

In this case, the date of payment precedes 61st day from the date of issue of invoice by the
supplier of service. Hence, the date of payment, i.e. 17th June, will be treated as the time of
supply of service [Section 13(3)(a)].
Question 51
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:-
Since the invoice has not been issued within the prescribed time period, time of supply of
service will be the earlier of the following two dates in terms of section 13(2)(b):
 Date of provision of service
 Date of receipt of payment
The payment was received on 5th January and the service was provided on 23rd April.
Therefore, the date of payment, i.e. 5th January is the time of supply of the service in this case.
Question 52
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:-
As per Notification No. 66/2017 CT dated 15.11.2017, a registered person (excluding composition
supplier) has to pay GST on the outward supply of goods at the time of supply as specified in
section 12(2)(a), i.e. date of issue of invoice or the last date on which invoice ought to have
been issued in terms of section 31.
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 supply of goods in the present case must be issued on or before the dispatch of
goods, i.e. on 2nd August. Therefore, the time of supply for the purpose of payment of tax for
the goods will be 2nd August, the date when the invoice should have been issued.
Question 53
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:-
In this case, the invoice is issued before the removal of the goods and is thus, within the
time limit prescribed under section 31(1). Therefore, the time of supply for the purpose of
payment of tax is the date of issue of invoice, which is 2nd December.
Question 54
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 of supply of the coupons?
Answer:-
As the coupons can be used for a variety of food items, which are taxed at different rates, the
supply cannot be identified at the time of purchase of the coupons. Therefore, the time of
supply of the coupons is the date of their redemption in terms of section 12(4).
Question 55
A firm of advocates issues invoice for services to ABC Ltd. on 17th Feb. The payment is contested by
ABC Ltd. on the ground that on account of negligence of the firm, the company’s case was
dismissed by the Court for non-appearance, which necessitated further appearance for which the
firm is billing the company. The dispute drags on and finally payment is made on 3rd November.
Identify the time of supply of the legal services.
Answer:-
Tax on services supply by a firm of advocates by way of legal services to any business entity is
payable under reverse charge by such firm of advocates. Time of supply of services that are
taxable under reverse charge is earliest of the following two dates in terms of section 13(3):
 Date of payment [3rd November]
 61st day from the date of issue of invoice [19th April]
The date of payment comes subsequent to the 61st day from the issue of invoice by the supplier of
service. Therefore, the 61st day from the date of supplier’s invoice has to be taken as the time of
supply. This fixes 19th April as the time of supply.
Question 56
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?
Answer:-
The time of supply of services, if the invoice is not issued in time, is the date of payment or the
date of provision of service, whichever is earlier [Section 13(2)(b)]. In this case, the service is
provided on 5th September but not invoiced within the prescribed time limit. Therefore, 5th
September, the date of provision of service, being earlier than the date of payment, will be
the time of supply.
Question 57
XYZ & Co., a firm of Chartered Accountants, issued invoice for services rendered to Mr. A on 7th
September. Determine the time of supply in the following independent cases:
1. The provision of service was completed on 1st August and payment was
received on 28th September.
2. The provision of service was completed on 14th August and payment was
received on 28th September.
3. Mr. A made the payment on 3rd August. However, provision of service

was remaining to be completed at that time.
4. Mr. A made the payment on 15th September. However, provision of

service was remaining to be completed at that time.
Answer:-
The time of supply of services is the date of issue of invoice if the same is issued within 30 days
from the date of supply of service OR the date of receipt of payment, whichever is earlier
[Section 13(2)(a)].
In case the invoice is not issued within 30 days from the date of supply of service, time of supply
is the date of provision of service OR the date of receipt of payment, whichever is earlier
[Section 13(2)(b)].
In accordance with the aforesaid provisions, the time of supply in the four independent cases will
be:
1. 1st August since the invoice is not issued within 30 days of supply of service.
2. 7th September since the invoice is issued within 30 days of supply of service and the
payment is received after the issuance of invoice.
3. 3rd August viz., earlier of date of issuance of invoice (7th September) or date of receipt
of payment (3rd August)
4. 7th September viz., earlier of date of issuance of invoice (7th September) or

date of receipt of payment (15th September)
Question 58
M/s Pranav Associates, a partnership firm, provided recovery agent services to Newtron Credits
Ltd., a non-banking financial company and a registered supplier, on 15th January. Invoice for the
same was issued on 7th February and the payment was made on 18th April by Newtron Credits Ltd.
Bank account of the company was debited on 20th April.
Determine the following:
Answer:-
I. Tax on services supplied by a recovery agent to, inter alia, a non- banking financial
company (NBFC) is payable under reverse charge by such non-banking financial
company.
Therefore, in the given case, person liable to pay GST is the NBFC - Newton
Credits Ltd.
II. As per section 13(3), the time of supply of service on which GST is payable under reverse
charge is earlier of the following:-
a. Date of payment as entered in the books of account of the recipient (18th April) or
the date on which the payment is debited in his bank account (20th April),
whichever is earlier;
b. Date immediately following 60 days since issue of invoice by the supplier, i.e. 9th
April.
Thus, time of supply of service is 9th April.
Question 59
Mr. X supplied goods for ` 50,000 to its customer Miss Diyana on 1st January on the condition
that payment for the same will be made within a week. However, Miss Diyana made payment for
the said goods on 2 nd 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:-
As per section 12(6), the time of supply with regard to an addition in value on account of
interest, late fee or penalty or delayed payment of consideration is the date on which the
supplier received such additional consideration.
Thus, time of supply in respect of interest would be the date on which the supplier has received
such additional consideration, i.e. 2 nd February.
Question 60
Mansh & Vansh Trading Company, a registered supplier, is liable to pay GST under forward charge.
It has furnished the following information:
1. Goods were supplied on 3rd October
2. Invoice was issued on 5th October
3. Payment received on 9th October
Determine the time of supply of goods for the purpose of payment of tax.
Answer:-
Further, a registered person is required to issue a tax invoice before or at the time of removal
of goods for supply to the recipient. Thus, in the given case, the invoice for supply of goods
should have been issued on or before the removal of goods i.e., on 3rd October.
However, since the invoice has not been issued within the prescribed time, 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 i.e., 3rd October.
Question61
Are post-supply discounts eligible for deduction from the value of supplies in all situations?
Explain.
Answer:
No, the post-supply discounts are not eligible for deduction from the value of supplies in all
situations. Such discounts are allowed as a deduction from the value of supply only in the
situations where the following two conditions are satisfied cumulatively:
(i) The discount is in terms of an agreement that existed at or before the time of supply and can be
worked out invoice-wise; and
(ii) Proportionate input tax credit (ITC) is reversed by the recipient – The buyer would have
availed ITC of GST payable on the gross value specified in the invoice. Thus, when a credit note is
issued to him by the supplier for the discount, the buyer will reverse the proportionate credit;
consequent to which, the supplier’s output tax liability will be reduced by the same amount.
If any of the above conditions are not satisfied, post-supply discount is not allowed as a deduction
from the value of supply and consequently, GST liability of the supplier does not get reduced.
Question62
‘Consideration under GST law includes both monetary and non-monetary considerations.’
Discuss the correctness or otherwise of the statement with reference to the definition of term
‘consideration’ provided under the CGST Act.
Answer:
The statement is correct. As per the definition of the term ‘consideration’ provided under the CGST
Act, consideration under the GST law includes both payment in money or otherwise made by the
recipient or any other person and also takes within its sweep the monetary value of any act or
forbearance, by the recipient or any other person for the supply. Further, it includes within its
ambit any deposit which is applied as a consideration for the supply but excludes the subsidies
provided by the State or Central Government.
The term ‘money’ has also been defined under the CGST Act and it 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 when used as a consideration to settle an obligation or exchange
with Indian legal tender of another denomination but shall not include any currency that is held
for its numismatic value. Non- monetary consideration essentially means consideration in kind
Question63
Sharp Minds Institute provides coaching for engineering entrance examinations. The monthly fee
charged by the Institute from a student is` 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 3,00,000 as coaching fees during a month. Nav Jeevan, an NGO working
in the area of education for underprivileged children, has given a subsidy of 10,000 (in lumpsum)
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:
As per section 15(2)(e), the value of a supply includes subsidies directly linked to the price,
excluding subsidies provided by the State Governments and the Central Government.
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 lumpsum 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
3,00,000.
Question64
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 showroom and the customer’s premises is
upto 20 kms. Where the distance is more than 20 kms, the showroom charges a concessional
freight of 10 for every additional km.
Ms. Leena Kapoor purchases a double bed, a dressing table and a centre table for 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 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 the showroom?
Answer:
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. Therefore, the same should not be added to the value.
Hence, the value of supply will be ` 2,00,000.
However, the answer will change in the second case when the showroom will charge ` 300 for
freight [(50km – 20 km) x `10] from Ms. Leena. In this case, the supply will be a composite supply
(principal supply being the supply of furniture) and value thereof will be ` 2,00,300.
Question65
AKJ Foods Pvt. Ltd. gets an order for supply of processed food from a customer. The customer
wants the consignment tested for gluten and specified chemical residues. AKJ Foods Pvt. Ltd. does
the testing before the supply and charges a testing fee for the same from the customer. AKJ Foods
Pvt. Ltd. argues that such testing fess should not form part of the consideration for the supply as it
is a separate activity.
Is the company’s argument correct in the light of section 15?
Answer:
Section 15(2) mandates addition of certain elements in the value of supply. Clause (c) of section
15(2) specifies that the amount charged for anything done by the supplier in respect of the supply
at the time of or before delivery of goods or supply of services shall be included in the value of
supply.
Since AKJ Foods Pvt. Ltd. does the testing before the delivery of goods, the charges therefor will be
included in the value of the supply. Therefore, AKJ Foods Pvt. Ltd.’s argument is not correct. The
testing fee should be included in the price to arrive at value of supply.
Question66
Mezda Banners, an advertising firm, gives its customers an interest-free credit period of 30 days
for payment. Its customer ABC paid for the supply 32 days after the supply of service. Mezda
Banners waived the interest payable for a delay of two days.
The Department wants to add interest for two days to the value of supply. Should notional interest
be included in the value?
Answer:
This is a supply that is valued as per transaction value under section 15(1) as price is the sole
consideration for the supply and the supply is made to unrelated person. The value of a supply
includes interest for delayed payment of any consideration for any supply. However, the time of
supply to the extent it relates to an addition in the value of supply by way of interest for delayed
payment of any consideration is the date on which the supplier receives such addition in value. In
the given case, the supplier has waived the interest for delayed payment. Consequently, the supplier has
not received the interest. Therefore, notional interest for 2 days shall not be included in the value of the
supply.
Question67
Crunch Bakery Products Ltd sells biscuits and cakes through its dealers, to whom it charges the
list price minus standard discount and pays GST accordingly. When goods remain unsold with the
dealers, it offered additional discounts on the stock as an incentive to push the sales, without any
prior agreement between them for offering such additional discount.
Can this additional discount be reduced from the price at which the goods were sold, and
concomitant tax adjustments made ?
Answer:
The discounts were not known or agreed for at the time of supply of goods to the dealers.
Therefore, in terms of section 15(3), such discounts cannot be reduced from the price on which tax
had been paid.
Question68
Red Pepper Ltd., Delhi, a registered supplier, manufactures taxable goods. It provides the
following details of taxable inter-State supply made by it during the month of March.
S. No. Particulars Amount

(i) List price of taxable goods supplied inter-State 15,00,000
(exclusive of taxes)
(ii) Price linked subsidy received from the Central 2,10,000
Government for supply of taxable goods to Government
School (exclusively related to supply of goods included
at S. No. 1)
(iii) Price linked subsidy received from an NGO for supply 50,000
of taxable goods to an old age home (exclusively
related to supply of goods included at S. No. 1)
(iv) Tax levied by Municipal Authority 20,000

(v) Packing charges 15,000
(vi) Late fee paid by the recipient of supply for delayed 6,000
payment of consideration (Recipient has agreed to pay
6,000 in lump sum and no additional amount is payable
by him over and above such amount)
The list price
of the goods is net of the two subsidies received. However, the other charges/taxes/fee are
charged to the customers over and above the list price.
Calculate the total value of taxable supplies made by Red Pepper Ltd. during the month of March.
Rate of IGST is 18%.
Answer:
Computation of total value of taxable supplies made by Red Pepper Ltd. during the month of
March
Particulars Amount
List price of the goods 15,00,000
Subsidy amounting to ` 2,10,000 received from the NIL
Central Government
[Since the subsidy is received from the Government,
the same is not includible in the value in terms of
section 15(2)(e)]
Subsidy received from NGO 50,000
[Since the subsidy is received from a non-Government
body and directly linked to the supply, the same is
includible in the value in terms of section 15(2)(e)]
Tax levied by the Municipal Authority 20,000
[Includible in the value as per section 15(2)(a)]
Packing charges [Being incidental expenses, the same 15,000
are includible in the value as per section 15(2)(c)]
Late fees paid by recipient of supply for delayed 5,085
Payment [Includible in the value as per section
15(2)(d) - As the amount of interest received is a lump

sum amount, the same has to be taken as inclusive of
GST] [` 6,000 x 100/118] rounded off
Total value of taxable supplies 15,90,085
Question69
M/s. Flow Pro, a registered supplier, sold a machine to BP Ltd. It provides the following
information in this regard: -

(i) Price of the machine [excluding taxes and other 25,000
charges mentioned at S. Nos. (ii) and (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 Flo Pro.]
(iii) Freight charges for delivery of the machine [M/s Flow 2,000
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. Flo Pro to BP Ltd.
Particulars Amount
Price of the machine 25,000
[Since the subsidy is received from the State
Government, the same is not includible in the value of
supply in terms of section 15(2)(e)]
Third party inspection charges 5,000
[Any amount that the supplier is liable to pay in
relation to the supply but has been incurred by the
recipient and not included in the price actually paid or
payable for the goods, is includible in the value of supply in
terms of section 15(2)(b)]
Freight charges for delivery of the machine 2,000
[Since arranging freight is the liability of supplier, it is a
case of composite supply and thus, freight charges are
added in the value of principal supply.]
Total 32,000
Less: Discount @ 2% on ` 25,000 being price charged to BP 500
Ltd.
[Discount given before or at the time of supply if duly
recorded in the invoice is deductible from the value of
supply in terms of section 15(3)(a)]
Value of taxable supply 31,500
Question70
Shri Krishna Pvt. Ltd., a registered supplier, furnishes the following information relating to goods
sold by it to Shri Balram Pvt. Ltd.-

(i) Price of the goods [excluding taxes and other charges 1,00,000
mentioned at S. Nos. (iii), (v) and (vi)]
(ii) Municipal tax 2,000
(iii) Inspection charges 15,000
(iv) Subsidy received from Shri Ram Trust 50,000
(v) Late fees for delayed payment inclusive of GST 1,000
[Shri Balram Pvt. Ltd. paid the late fees. However,
these charges were ultimately waived by Shri
Krishna Pvt. Ltd. and the amount was refunded to
Shri Balram Pvt. Ltd. during the same month]
(vi) Weighment charges 2,000
[Such charges were paid by Shri Balram Pvt. Ltd. to
Radhe Pvt. Ltd. on behalf of Shri Krishna Pvt. Ltd.]
Note: Price of the goods is net of the subsidy received.
Determine the value of taxable supply made by Shri Krishna Pvt. Ltd. to Shri Balram Pvt. Ltd.
Answer:
Computation of value of taxable supply made by Shri Krishna Pvt. Ltd. to Shri Balram Pvt.
Ltd.
Particulars Amount
Price of the goods 1,00,000

Municipal tax 2,000
[Includible in the value as per section 15(2)(a)]
Inspection charges 15,000
[Any amount charged for anything done by the supplier in
respect of the supply of goods at the time of/before
delivery of goods is includible in the value as per section
15(2)(c)]
Subsidy received from Shri Ram Trust 50,000
[Since the subsidy is received from a non-Government body
and directly linked to the supply, the same is includible in
the value in terms of section 15(2)(e)]
Late fees for delayed payment Nil
[Not includible since the same is waived off]
Weighment charges paid to Radhe Pvt. Ltd. on behalf of Shri 2,000
Krishna Pvt. Ltd.
[Any amount that the supplier is liable to pay in relation to
the supply but has been incurred by the recipient and not
included in the price actually paid or payable for the goods,
is includible in the value of supply in terms of section
15(2)(b)]
Value of taxable supply 1,69,000
Question71
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:

(i) Price of the goods [excluding taxes and other charges 1,00,000
mentioned at S. Nos. (iii), (v) and (vi)]
(ii) Municipal tax 2,000
(iii) Inspection charges 15,000
(iv) Subsidy received from Shri Ram Trust 50,000
(v) Late fees for delayed payment inclusive of GST 1,000
[Shri Balram Pvt. Ltd. paid the late fees. However,
these charges were ultimately waived by Shri
Krishna Pvt. Ltd. and the amount was refunded to
Shri Balram Pvt. Ltd. during the same month]
(vi) Weighment charges 2,000
[Such charges were paid by Shri Balram Pvt. Ltd. to
Radhe Pvt. Ltd. on behalf of Shri Krishna Pvt. Ltd.]
Question72
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:

(i) Price of machinery (exclusive of taxes and discounts) 5,50,000
(ii) Part fitted in the machinery at the premises of 20,000
Ghisa Ltd.
[Amount 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.]
(iii) Installation and testing charges for machinery, not 25,000

included in price
(iv) Discount @ 2% on price of the machinery mentioned at 50,000
S. No. (i) above (recorded in the invoice)
(v) Koli Ltd. provides additional discount @ 1% at year 1,000
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 value of taxable supply made by Koli Ltd. to Ghisa Ltd.
Particulars Amount
Price of machinery (exclusive of taxes and discounts) 5,50,000
Amount paid by Ghisa Ltd. directly to the supplier for the 20,000
part fitted in the machinery
[Any amount that the supplier is liable to pay in relation to
a 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 is includible in the value of supply in
terms of section 15(2)(b).]
Installation and testing charges 25,000
[Any amount charged for anything done by the supplier in
respect of the supply of goods at the time of/before
delivery of goods is includible in the value of supply in
terms of section 15(2)(c).]
Less: Discount @ 2% on the price of machinery 11,000
[` 5,50,000 x 2%]
[Since discount is given at the time of supply of machinery
and recorded in the invoice, the same is deductible from the

value of the supply in terms of section 15(3)(a).]
Less: Additional 1% discount at year end Nil
[Though the additional discount is established before/at
the time of supply, it is not deductible from the value of
supply in terms of section 15(3)(b) as the same is not
linked to any specific transaction and is adjusted by the
parties at the end of the financial year.]
Value of taxable supply 5,84,000
Question73
Mr. X, a registered taxpayer under regular scheme, did not make any taxablesupply during the
month of July
Is he required to file a GSTR-3B if he is monthly filer?
Answer:
A registered taxpayer is required to furnish a return u/s 39 for every month (every quarter in case
of quarterly filers) even if no supplies have been effected during such period. In other words, filing
of Nil GSTR-3B is also mandatory.
Therefore, being a monthly filer, Mr. X is required to file GSTR-3B even if he did not make any
taxable supply during the month of July.
Question74
If a return has been filed, how can it be revised if some changes are required to be made?
Answer:
In GST since the returns are built from details of individual transactions, there is no requirement
for having a revised return. Any need to revise a return may arise due to the need to change a set
of invoices or debit/ credit notes. Instead of revising the return already submitted, the system
allows amendment in the details of those individual details of those transactions (invoices or
debit/credit notes) that are required to be amended. They can be amended in any of the future
GSTR- 1 in the tables specifically provided for the purposes of amending previously declared
details.
As per section 39(9), omission or incorrect particulars discovered in the returns filed u/s 39 can
be rectified in the return to be filed for the month during which such omission or incorrect
particulars are noticed. Any tax payable as a result of such error or omission will be required to be
paid along with interest. The rectification of errors/omissions is carried out by entering
appropriate particulars in “Amendment Tables” contained in GSTR-1.
However, no such rectification of any omission or incorrect particulars is allowed after the due
date for furnishing 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 the actual date of
furnishing of relevant annual return, whichever is earlier.
Question75
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 said F.Y. during which he opted out of composition scheme?
Discuss.
Answer:
Where a taxpayer opts to withdraw from the composition scheme, he has to file GSTR-4 for the
period for which he has paid tax under the composition scheme. Such return is required to be
furnished till 30th day of April following the end of the financial year during which such
withdrawal falls. Therefore, in the given case, Mr. Kalpesh is liable to file GSTR-4 for the said F.Y.
during which he opted out of composition scheme by 30th April of next F.Y.
Question76
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
Answer:
As per section 39(10), 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.
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.
Question77
Mr. X, a registered taxpayer under regular scheme, did not make any taxable supply during the
month of July.
Is he required to file a GSTR-3B if he is monthly filer?
Answer:
A registered taxpayer is required to furnish a return u/s 39 for every month (every quarter in case
of quarterly filers) even if no supplies have been effected during such period. In other words, filing
of Nil GSTR-3B is also mandatory.
Therefore, being a monthly filer, Mr. X is required to file GSTR-3B even if he did not make any
taxable supply during the month of July.
Question78
If a return has been filed, how can it be revised if some changes are required to be made?
Answer:
In GST since the returns are built from details of individual transactions, there is no requirement
for having a revised return. Any need to revise a return may arise due to the need to change a set
of invoices or debit/ credit notes. Instead of revising the return already submitted, the system
allows amendment in the details of those individual details of those transactions (invoices or
debit/credit notes) that are required to be amended. They can be amended in any of the future
GSTR- 1 in the tables specifically provided for the purposes of amending previously declared
details.
As per section 39(9), omission or incorrect particulars discovered in the returns filed u/s 39 can
be rectified in the return to be filed for the month during which such omission or incorrect
particulars are noticed. Any tax payable as a result of such error or omission will be required to be
paid along with interest. The rectification of errors/omissions is carried out by entering
appropriate particulars in “Amendment Tables” contained in GSTR-1.
However, no such rectification of any omission or incorrect particulars is allowed after the due
date for furnishing 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 the actual date of
furnishing of relevant annual return, whichever is earlier.
Question78
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 said F.Y. during which he opted out of composition scheme?
Discuss.
Answer:
Where a taxpayer opts to withdraw from the composition scheme, he has to file GSTR-4 for the
period for which he has paid tax under the composition scheme. Such return is required to be
furnished till 30th day of April following the end of the financial year during which such
withdrawal falls. Therefore, in the given case, Mr. Kalpesh is liable to file GSTR-4 for the said F.Y.
during which he opted out of composition scheme by 30th April of next F.Y.
Question80
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.
Answer:
As per section 39(10), 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.
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.
Question81
Mr. A has deposited a sum of 30,000 under minor head of “Interest” column for the 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 consultant, 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:
Provisions of Section 49(10) of CGST Act, 2017 permit a registered person for transferring the
amount deposited under any of the minor head i.e. tax, interest, penalty, fees or others to any of
the heads under IGST/CGST/SGST/UTGS and make the payment of taxes there upon. Accordingly,
Mr. A need not deposit the tax amount under head “tax” and claim a refund for the remittance of
amount deposited under head ”interest”. Rather, using the Form GST PMT 09, such amount can be
transferred suo-moto on the common portal from “interest” to “tax” head and tax liability be paid
accrordingly.
Question82
M/s ABC & Co., have defaulted in filing the return under Section 39 of CGST Act, 2017 i.e. GSTR-3B
for the month of March within the specified due date. Reason for such delay is attributable to delay
in closure of books for March, which have been finalised during May. The GST Common portal
prompted for payment of late fees payable under Section 47 of CGST Act, 2017 for a sum of 2,000
under CGST and SGST each. Accountant, of M/s ABC & Co., sought your confirmation for payment
of such late fees through the balance available in Electronic Credit Ledger Give your guidance in
this regard
Answer:
Section 49(3) of the CGST Act, 2017 provides that the amount available in the electronic cash
ledger may be used for making any payment towards tax, interest, penalty, fees or any other
amount payable under the provisions of this Act or the rules made there under in prescribed
manner.
Further, section 49(4) provides that the amount available in the electronic credit ledger may be
used for making any payment towards output tax under this Act or under the Integrated Goods
and Services Tax Act in prescribed manner.
Accordingly, as per the combined reading of the above provisions, late fees shall be paid only
through electronic cash ledger and not possible through electronic credit ledger. Thus, contention
of the accountant of M/s ABC & Co., is not correct and the above amount shown on the common
portal has to be deposited in Electronic Cash Ledger under appropriate minor head, through any
of the specified modes.
Question83
Sahil is a supplier of taxable goods in Karnataka. He got registered under GST in the month of
September and wishes to pay his IGST liability for the month. Since he is 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:
Answer:
As per the provisions of CGST Act, 2017 read with relevant rules, the deposit in electronic cash
ledger can be made through any of the following modes, namely:-
(i) Internet Banking through authorised banks;
(ii) Unified Payment Interface (UPI) from any bank;
(iii) Immediate Payment Services (IMPS) from any bank;
(iv) Credit card or Debit card through the authorised bank;
(v) National Electronic Fund Transfer or Real Time Gross Settlement from any bank; or
(vi) Over the Counter payment through authorised banks for deposits up to ten thousand rupees
per challan per tax period, by cash, cheque or demand draft.
a) Manual or physical challans are not allowed under the GST regime. It is mandatory to
generate challans online on the GST Portal.
b) Challan is valid for a period of 15 days from the date of generation of challan.
c) 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,
2017 to the electronic cash ledger for integrated tax, central tax, State tax or Union
territory tax or cess.
Question84
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. The total input tax 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. Input tax
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 assuming provisions of rule 86B are not
applicable.
Answer:
The amount available in the electronic credit ledger, i.e. ITC may be used for making any payment
towards output tax. Output tax in relation to a taxable person, means the tax chargeable on taxable
supply of goods or services or both made by him or by his agent but excludes tax payable by him
on reverse charge basis.
Therefore, ITC 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 the GST of ` 2,700 on security service through electronic cash
ledger.
Question85
Mr. X, a registered person has caused movement of goods of consignment value exceeding 50,000
in relation to a supply and thus, generated e-way bill. However, after generation of e-way bill, he
found a mistake in the e-way bill and wants to edit it. You are required to advise Mr. X whether he
can do so with the help of relevant provisions?
Answer:
If there is a mistake, incorrect or wrong entry in the e-way bill, then it cannot be edited or
corrected. Only option is cancellation of e-way bill within 24 hours of generation and generate a
new one with correct details.
Thus, in view of the above-mentioned provisions, Mr. X cannot edit the e- way bill. However, he
can cancel the e-way bill within 24 hours of generation and generate a new one with correct
details.
Question86
Talli Lal, a registered person, has transported alcoholic liquor for human consumption of
consignment value of 1,50,000 from Delhi to Haryana. He has not generated e-way bill for the
same. You are required to examine the correctness of action taken by Talli Lal.
Answer:
E-way bill is not required to be generated where the goods being transported are alcoholic liquor
for human consumption.
Thus, the action of Talli Limited of not generating the e-way bill is correct in law.
Question87
Dhananjay Associates registered in Gujarat deals in industrial grade iron and steel products. The
proprietor of Dhananjay Associates sold TMT Iron bars (GST applicable @18%) to a retailer in
Maharashtra at a value of 40,000 (excluding GST). As per the agreement of sale, goods are to be
delivered at the premises of retailer. The transportation cost of 7,000 has been charged separately
to deliver the same to the retailer in Maharashtra. In the above scenario, determine whether an e-
way bill is required to be issued under GST?
Answer:
Consignment value of goods is the value determined in accordance with the provisions of section
15, and also includes the central tax, state or union territory tax, integrated tax and cess charged, if
any, in the document.
Further, since arranging freight is the liability of supplier, it is a case of composite supply and thus,
freight charges are to be added in the value of principal supply.
Accordingly, the value of supply as per section 15 in the given case would include the
transportation cost in the invoice value i.e. 47,000 (` 40,000 + 7,000).
Consignment value = 47,000 x 118% = 55,460.
Since the movement of goods is in relation to supply of goods and the consignment value exceeds `
50,000, e-way bill is mandatorily required to be issued under GST in the given case.
Question88
From the following information provided by M/s Sasta Bazaar. Determine the time of supply for
the purpose of payment of GST:
(i) It issued coupon on 20.06.2023, worth ` 2,000 redeemable against purchase of specific plastic
items. This coupon was redeemed on 31.07.2023.
(ii) It issued coupon on 01.08.2023 worth ` 3,000 which is redeemable against purchase of any
item. This coupon was redeemed on 18.08.2023.
(iii) It received interest of ` 10,000 for late payment from a customer on 11.11.2023 for supply of
goods which was originally made on 24.06.2023.
Answer:-
As per section 12(4) of the CGST Act, 2017, the time of supply of vouchers exchangeable for goods
is-
 Date of issue of the voucher, if the supply that it covers is identifiable at that point, or
 Date of redemption of the voucher in other cases.
(i) In the given case, supply can be identified at the time of purchase of the coupons. Therefore,
the time of supply of the coupons is the date of their issue i.e. 20.06.2023.
(ii) In the given case, supply cannot be identified at the time of purchase of the coupons. Therefore,
the time of supply of the coupons is the date of their redemption i.e. 18.08.2023.
(iii) Section 12(6) of the CGST Act, 2017 prescribes that time of supply in case of addition in value
on account of interest/ late fee/penalty for delayed payment of consideration for goods is the date
on which the supplier receives such addition in value. Therefore, time of supply in the given case is
11.11.2023.
Question89
With reference to GST law, Determine the place of supply with reasons in the following
independent circumstances:-
I. Miss Kanika of Kolkata (West Bengal) visited to Jodhpur Law University (Rajasthan) and
paid her college fees by purchasing a demand draft from a bank located in the University
campus. Miss Kanika did not have any account with the bank.
II. Mizu Machine Ltd., registered in the State of Andhra Pradesh, supplied a machinery to
Keyan Wind Farms Ltd., registered in the State of Karnataka. However, this machinery was
assembled and installed at the wind mill of Keyan Wind Farms Ltd., which was located in
the State of Tamilnadu.
Answer:-
I. Section 12(12) of the IGST Act, 2017 provides that the place of supply of banking and other
financial services, including stock broking services to any person is the location of the
recipient of services in the records of the supplier of services. However, if the location of
recipient of services is not available in the records of the supplier, the place of supply is the
location of the supplier of services. Therefore, since the location of recipient is not available
in the records of the supplier, the place of supply is the location of the supplier of services,
i.e. Rajasthan (or Jodhpur).
II. Section 10(1)(d) of the IGST Act, 2017 provides that if the supply involves goods which are
to be installed or assembled at site, the place of supply is the place of such installation or
assembly. Thus, the place of supply is the site of assembly of machine, i.e. Tamilnadu.
Question90
The aggregate turnover of M/s Mangal & Co., a registered person, for the financial year 2022-2023
was ` 8 Crores. It approaches you as GST Consultant for the issue of e-invoicing. Advice whether it
is mandatory to issue e-invoice?
Also list out the entities which are exempt from the mandatory requirement of e-invoicing.
Answer:-
E-invoicing has been made mandatory for all registered businesses (except specified class of
persons) with an aggregate turnover in any preceding financial year from 2017-18 onwards
greater than 5 crore in respect of B2B supplies (supply of goods or services or both to a registered
person) or for exports. Hence, it is mandatory for M/s Mangal & Co. to issue e-invoices.
Following entities are exempt from the mandatory requirement of e-invoicing:
 Special Economic Zone units

 Insurer or banking company or financial institution including NBFC
 GTA supplying services in relation to transportation of goods by road in a goods carriage
 Supplier of passenger transportation service
 Person supplying services by way of admission to exhibition of cinematograph films in
multiplex screens
 Government Department and a local authority
Further, the above taxpayers exempted from the mandatory requirement of e-invoicing are
required to provide a declaration on the tax invoice stating that though their aggregate turnover
exceeds the notified aggregate turnover for e-invoicing, they are not required to prepare an e-
invoice.
Thus, above mentioned entities are not required to issue einvoices even if their turnover exceeds `
5 crore in the preceding financial year from 2017-18 onwards but are required to provide a
declaration as discussed above.
Question91
Ramlala Enterprises, registered in Delhi, is engaged in supply of interior decoration services to

Andhra Bhawan located in Delhi. Service contract is entered into with the Government of Andhra
Pradesh (registered only in Andhra Pradesh). The total contract value inclusive of GST is Rs
15,50,000 and payment for the same is due in October, 2023.
You are required to determine amount of tax, if any, to be deducted in the above case assuming the
rate of CGST, SGST and IGST as 9%, 9% and 18% respectively.
Will your answer be different, if Ramlala Enterprises is registered under composition scheme?
Answer:-
As per section 51 of the CGST Act, 2017 read with section 20 of the IGST Act, 2017 and Notification
No. 50/2018 CT 13.09.2018, following persons are required to deduct CGST @ 1% [Effective tax 2%
(1% CGST + 1% SGST/UTGST)] or IGST @ 2% from the payment made/credited to the supplier
(deductee) of taxable goods or services or both, where the total value of such supply, under a contract,
exceeds ` 2,50,000:
(a) a department or establishment of the Central Government or State Government; or
(b) local authority; or
(c) Governmental agencies; or
(d) an authority or a board or any other body, -
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government, with 51% or more participation by way of equity or
control, to carry out any function; or
(e) Society established by the Central Government or the State Government or a Local Authority
under the Societies Registration Act, 1860, or
(f) Public sector undertakings.
Further, for the purpose of deduction of tax, the value of supply shall be taken as the amount
excluding CGST, SGST/UTGST, IGST and GST Compensation Cess indicated in the invoice. Proviso
to section 51(1) of the CGST Act, 2017 stipulates that no tax shall be deducted if the location of the
supplier and the place of supply is in a State or Union territory which is different from the State or
as the case may be, Union territory of registration of the recipient.
Section 12(3) of the IGST Act, 2017, inter alia, stipulates that the place of supply of services,
directly in relation to an immovable property, including services provided by interior decorators,
shall be the location at which the immovable property is located or intended to be located.
Accordingly, the place of supply of the interior decoration of Andhra Bhawan shall be Delhi.
Since the location of the supplier (Ramlala Enterprises) and the place of supply is Delhi and the
State of registration of the recipient i.e. Government of Andhra Pradesh is Andhra Pradesh, no tax
is liable to be deducted in the given case. The answer will remain unchanged even if Ramlala
Enterprises is registered under composition scheme.
Question92
Swastik Pvt. Ltd. is a manufacturer of taxable goods. It purchased a machinery for 8,00,000 on
which IGST of 14,400 is paid. The company has claimed depreciation under the Income-tax Act,
1961 on the full value of the machine, i.e. including the IGST component as also availed ITC of
14,400 paid by it as IGST.
Examine if the stand taken by the company is correct in law.
Answer:
As per section 16(3), if the person taking the ITC on capital goods and plant and machinery has
claimed depreciation on the tax component of the cost of the said items under the Income-tax Act
1961, the ITC on the said tax component shall not be allowed.
Since in the given case, Swastik Pvt. Ltd. has claimed depreciation on the tax component of the cost
of the machine, it cannot claim ITC of IGST of ` 14,400 paid by it on the machine. It can either claim
depreciation on the tax component or avail ITC of such tax but cannot avail both the benefits
simultaneously.
Question93
Harshgeet Pvt. Ltd., a registered supplier, is engaged in the manufacture of taxable goods. The
company provides the following information pertaining to purchases made/services availed by it
during the month of July:
S. No Particulars GST(₹)
(1) Raw material (to be received in the month of 2,50,000
September)
(2) Membership of a club availed for employees working in 1,45,000
the factory (not obligatory to be provided under any
law)
(3) Inputs to be received in 5 lots, out of which 3rd lot was 80,000
received during the month
(4) Trucks used for transport of raw material 40,000
(5) Capital goods (out of 3 items, invoice for 2 items is 1,50,000
missing and GST paid on those items is 80,000)
Determine the amount of ITC that can be availed by Harshgeet Pvt. Ltd. for the month of July by
giving the necessary explanation for treatment of various items. Subject to the information given
above, all the other conditions necessary for availing ITC have been fulfilled.
Answer:
Computation of ITC that can be availed by Harshgeet Pvt. Ltd. for the month of July:
Particulars ITC (₹)

Raw Material Nil
[ITC not available as raw material is not received in July]
Membership of a club availed for employees working in the Nil

factory (not obligatory to be provided under any law)
[Blocked credit in terms of section 17(5)]
Inputs to be received in 5 lots, out of which 3rd lot was Nil

receivedduring the month
[In case of goods received in lots, ITC can be taken only upon
receipt of the last lot]
Trucks used for transport of raw material 40,000

[ITC of GST paid on motor vehicles used for
transportation ofgoods is allowed unconditionally]
Capital goods 70,000
[ITC can be availed only on the basis of a valid document
(invoice). Thus, GST paid on items for which invoice is
missing, i.e. ` 80,000, is not available.]
Total ITC 1,10,000
Question94
Jamku Ltd., a registered person, is engaged in the business of spices. It provides following details
in relation to GST paid on inward supplies procured by it during the month of October.
(1) Raw spices purchase
- Raw spices sold to customers 50,000
- Raw spices used for personal use of directors 20,000
(2) Electric machinery purchased for being used in the 25,000
manufacturing process
(3) Motor vehicle used for transportation of the employee 55,000
(4) Payment made to contractor for construction of staff 1,25,000
quarter
Determine the amount of ITC that can be availed by Jamku Ltd. for the month of October by giving
the necessary explanation for treatment of various items.
Subject to the information given above, all the other conditions necessary for availing ITC have
been fulfilled.
Answer:
Computation of ITC that can be availed by Jamku Ltd. for the month of October
Purchase of raw spices which are sold to customers 50,000

[Every registered person is entitled to take credit of input
tax charged on any supply of goods to him which are used
or intended to be used in the course or furtherance of his
business.]
Purchase of raw spices for personal use of directors Nil
[ITC is not available on goods used for personal
consumption.]
Electric machinery purchased for being used in the 25,000
[Every registered person is entitled to take credit of input
business.]
Motor vehicle used for transportation of employee Nil
[ITC on motor vehicles for transportation of persons with
seating capacity ≤ 13 persons (including the driver) is
blocked except when the same are used for (i) making
further taxable supply of such motor vehicles (ii) making
taxable supply of transportation of passengers (iii) making
taxable supply of imparting training on driving such motor
vehicles.
In the given case, since the supplier is in the business of
spices, ITC on motor vehicle used for transportation of
the employeeis blocked credit. ]
Payment made to contractor for construction of staff Nil
quarter [ITC is not available for works contract services
when supplied for construction of an immovable property
(other than plantand machinery) except where it is an input
service for further supply of works contract service]
Total ITC 75,000
Question95
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:
(1) Purchase of iron which is used as a raw material [Goods 2,50,000
were received in two lots - first in March
and the second in April
(2) Purchase of accessories which were delivered directly to 90,000
the dealers of the company on the direction of Dina Ltd.
[Only invoice was received by Dina Ltd.
(3) Purchase of bus (seating capacity 15) for the 1,97,000
transportation of employees from their residence to
company and back
(4) General insurance taken on a car (seating capacity 5) 5,200
used by executives of the company for official purposes
You are required to determine the ITC that can be availed by 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.
Answer:
Computation of ITC that can be availed by Dina Ltd. for the month of March:

Purchase of iron used as a raw material Nil
[When inputs are received in lots, ITC can be availed
only on the receipt of last lot. Hence, since last lot is
received in April, ITC cannot be availed in March.]
Purchase of accessories delivered directly to the dealers of 90,000
the company
[Goods delivered to another person on the direction of the
registered person by way of transfer of documents of title or
otherwise, either before or during the movement, are
deemed to have been received by such registered person.
Thus, ITC is available to the registered person, on whose
order/direction the goods are delivered to a third person.]
Bus for the transportation of employees 1,97,000

seating capacity > 13 persons (including the driver) used
for any purpose is allowed.
General insurance taken on car (seating capacity 5) used by Nil
executives of the company for official purpose
blocked except when the same are used for (i) making
further taxable supply of such motor vehicles (ii) making
taxable supply of transportation of passengers (iii) making
taxable supply of imparting training on driving such motor
vehicles. Further, ITC is not allowed on services of general
insurance relating to such ineligible motor vehicles.
Since, the car is not used for any of the eligible purposes,
ITC thereon is blocked and thus, ITC on general insurance
taken on such car is also blocked.]
Total ITC 2,87,000
Question96
Determine the effective date of registration in following cases:
(a) The aggregate turnover of Dhampur Footwear Industries of Delhi has exceeded the applicable
threshold limit of 40 lakh on 1st September. It submits the application for registration on 20th
September. Registration certificate is granted to it on 25th September.
(b) Mehta Teleservices is an architect in Lucknow. Its aggregate turnover exceeds 20 lakh on 25th
October. It submits the application for registration on 27th November. Registration certificate is
granted to it on 5th December.
Answer:
(a) Every supplier becomes liable to registration if his turnover exceeds the applicable
threshold limit [` 40 lakh in this case] in a finacial year [Section 22 read with Notification
No. 10/2019 CT dated 07.03.2019]. Since in the given case, the turnover of Dhampur
Industries exceeded 40 lakh on 1st September, it becomes liable to registration on said
date.
Further, since the application for registration has been submitted within 30 days from such
date, the registration shall be effective from the date on which the person becomes liable to
registration [Section 25 read with rule 10]. Therefore, the effective date of registration is 1st
September.
(b) Since in the given case, the turnover of Mehta Teleservices exceeds the applicable threshold
limit [` 20 lakh] on 25th October, it becomes liable to registration on said date.
Further, since the application for registration has been submitted after 30 days from the
date such person becomes liable to registration, the registration shall be effective from the
date of grant of registration.
Therefore, the effective date of registration is 5th December.
Question97
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 Amount (₹)*

(i) Supply of machine oil in Delhi 15,00,000
(ii) Supply of high speed diesel in Delhi 10,00,000
(iii) Supply of machine oil made in Punjab by Pure Oils from 10,00,000
its branch located in Punjab
*excluding GST
Determine whether Pure Oils is liable for registration.
Answer:
As per section 22 read with Notification No. 10/2019 CT dated 07.03.2019, 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 taxable supplies of goods is as under:-
(a) 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland.
(b) 20 lakh for the States, namely, States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,
Telangana and Uttarakhand.
(c) 40 lakh for rest of India except persons engaged in making supplies of ice cream and other
edible ice, whether or not containing cocoa, pan masala and tobacco and manufactured
tobacco substitutes, fly ash bricks; fly ash aggregates; fly ash blocks, bricks of fossil
meals or similar siliceous earths, building bricks, earthen or roofing tiles.
The threshold limit for a person making exclusive taxable supply of services or supply of both
goods and services is as under:-
(b) 20 lakh for the rest of India.
As per section 2(6), aggregate turnover includes the aggregate value of:
(i) all taxable supplies,
(ii) all exempt supplies,
(iii) exports of goods and/or services and
(iv) all inter-State supplies of persons having the same PAN.
The above aggregate turnover is computed on all India basis. Further, the aggregate turnover
excludes central tax, State tax, Union territory tax, integrated tax and cess. Moreover, the value of
inward supplies on which tax is payable under reverse charge is not taken into account for
calculation of ‘aggregate turnover’.
Section 9(2) provides that CGST is not leviable on five petroleum products i.e. petroleum crude,
motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel. As per section 2(47),
exempt supply includes non- taxable supply. Thus, supply of high speed diesel in Delhi, being a
non- taxable supply, is an exempt supply and is, therefore, 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:
S. Particulars Amount (in ₹)

No.
(i) Supply of machine oils in Delhi 15,00,000
(ii) Add: Supply of high speed diesel in Delhi 10,00,000
(iii) Add: Supply of machine oil made by Pure 10,00,000
Oils from its 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 till April. However, if in remaining months of the financial year, its turnover exceeds
the said limit, then it would be liable to be registered.
Question98
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.
(iii) Harshit of Himachal Pradesh is exclusively engaged in intra-State supply of pan masala. His
Answer:
limit for a person making exclusive intra-State taxable supplies of goods is as under:-
(b) 20 lakh for the States, namely, States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,
Telangana and Uttarakhand.
(c) 40 lakh for rest of India except persons engaged in making supplies of ice cream and other
edible ice, whether or not containing cocoa, pan masala and tobacco and manufactured tobacco
substitutes, fly ash bricks; fly ash aggregates; fly ash blocks, bricks of fossil meals or similar
siliceous earths, building bricks, earthen or roofing tiles.
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 a 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 has exceeded limit of `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.
(iii) Harshit being exclusively engaged in supply of pan masala is not eligible for higher
threshold limit of `40 lakh. The applicable threshold limit for registration in this case is
`20 lakh. Thus, Harshit is liable to get registered under GST.
Question99
Examine whether the supplier is liable to get registered in the following independent cases:-
(i) Ankit of Assam is exclusively engaged in intra-State supply of taxable services. His aggregate
turnover in the current financial year is 25 lakh.
(ii) Sanchit of Assam is engaged in intra-State supply of both taxable goods and services. His
Answer:
limit for a person making exclusive taxable supply of services or supply of both goods and services
is as under:-
(b) 20 lakh for the rest of India.
(i) Though Ankit is dealing in Assam, he is not entitled for higher threshold limit for
registration as the same is applicable only in case of exclusively supply of goods and he is
exclusively engaged in providing services. Thus, the applicable threshold limit for
registration in this case is ` 20 lakh and hence, Ankit is liable to get registered under GST.
(ii) Since Sanchit is engaged in supply of both taxable goods and services, the applicable
threshold limit for registration in his case is 20 lakh. Thus, Sanchit is liable to get registered
under GST as his turnover is more than the threshold limit.
Question100
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 for supply to Prakash Entrepreneurs.
Determine the date by which tax invoice must be issued by Sultan Industries Ltd. under GST law
Answer:
As per the provisions of section 31, invoice shall be issued before or at the time of removal of
goods for supply to the recipient, where the supply involves movement of goods. Accordingly, in
the given case, the tax invoice must be issued on or before 29th September.
Question101
Royal Fashions, a registered supplier of designer outfits in Delhi, decides to exhibit its products in
a Fashion Show being organised at Hotel Park Royal, Delhi on 4th January. For the occasion, it gets
the service by way of makeover of its models from Aura Beauty Services Ltd., Ashok Vihar, on 4th
January, for which a consideration of 5,00,000 (excluding GST) has been charged. Aura
Beauty Services Ltd. issued a duly signed tax invoice on 10th February showing the lumpsum
amount of 5,90,000 inclusive of CGST and SGST @ 9% each for the services provided. Answer the
following questions:
(i) Examine whether the tax invoice has been issued within the time limit prescribed under
law.
(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 separately in the invoice. You are required to examine the
validity of the objection raised by tax consultant of Royal Fashions.
Answer:
(i) As per section 31 read with the CGST Rules, in case of taxable supply of services,
invoices should be issued before or after the provision of service, but within a period of
30 days [45 days in case of insurer/ banking company or financial institutions including
NBFCs] from the date of supply of service.
In view of said provisions, 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. upto3rd
February. However, the invoice has been issued on 10th February.
(ii) Section 31 read with the CGST Rules, inter alia, provides that tax invoice in addition to
other mandatory details shall also contain the amount of tax charged in respect of
taxable goods or services (central tax, State tax, integrated tax, Union territory tax or
cess). Further, where any supply is made for a consideration, every person who is liable
to pay tax for such supply shall prominently indicate in all documents relating to
assessment, tax invoice and other like documents, the amount of tax charged in respect
of taxable goods or services which shall form part of the price at which such supply is
made.
The objection raised by the tax consultant of Royal Fashions suggesting that the amount
of tax charged in respect of the taxable supply of makeover services should be shown
separately in the invoice raised by Aura Beauty Services Ltd., is valid in law.
Question102
Rana Sanga Ltd., a registered supplier, has made following taxable supplies to its customer Babur
in the quarter ending 30th June.
Date Bill No. Particulars Invoice value

(including
GST)[ ₹]
5th April 102 Notebooks [10 in 1,200

numbers]
10th May 197 Chart Paper [4 in 600
number]
20th May 230 Crayon colors [2 500

packets]
2nd June 254 Poster colors [5 900
packets]
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 against all the three
invoices?
Answer:
Where one or more tax invoices have been issued for supply of any goods and/or services and
(a) the taxable value/tax charged in that tax invoice is found to exceed the taxable value/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,
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.
Thus, one (consolidated) or more credit notes can be issued in respect of multiple invoices 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 a consolidated credit
note for the goods returned in respect of all the three invoices.
Question103
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 for supply to Suraj Enterprises. As per the agreement, the
goods were to be delivered on or before 31st October. Suraj Enterprises has received the goods on
14th October. Determine the time of issue of invoice as per the provisions of CGST Act.
Answer:
A registered person supplying taxable goods shall issue a tax invoice, before or at the time of
removal of goods for supply to the recipient, where the supply involves movement of goods.
Therefore, in the given case, invoice has to be issued on or before, 11th October (the time of
removal of goods).
Question104
Miss Nitya, proprietor of M/s. Honest Enterprise, a registered supplier of taxable goods and
services in the state of West Bengal, pays GST under regular scheme. It is not eligible for any
threshold exemption. It provided the following information for the month of December 2022:
S. Particulars Amount (Rs)

No.
OUTWARD SUPPLY: 7,00,000
i. Intra-state supply of goods to M/s. Natural & Sons
ii. Intra-state transfer of goods to its branch office in the 1,00,000
state of West Bengal. Both places are under the same
GSTIN.
iii. Provided inter-state supply of sponsorship services 80,000
to XYZ Ltd of Chennai
iv. Advance received for future supply of management 40,000
consultancy service to Mr. Sharad (Intra-state
supply)
INWARD SUPPLY: (Intra-state) 8,00,000
i. Purchase of taxable goods from registered suppliers.
ii. Availed Works Contract service for repair of office 30,000
building. Amount of repair was debited in the profit
& loss account.
iii. Availed legal service form an advocate to represent 50,000
the matter in the Court relating to collection of
disputed proceed from customers.
Notes:
(i) Rate of CGST, SGST and IGST on all supplies are as below:
Particulars CGST SGST IGST

Goods 2.5% 2.5% 5%
Supply of services 9% 9% 18%
(ii) Both inward and outward supplies given above are exclusive of taxes.
(iii) All the conditions necessary for availing the ITC have been fulfilled.
(iv) Working note should form part of the answer.
Compute the net minimum GST payable in cash by M/s. Honest Enterprise for the month of
December 2022.
Answer:-
Computation of minimum net GST payable in cash by M/s Honest Enterprise for the month
of December 2022
Particulars Value CGST SGST IGST

(Rs) (Rs) (Rs) (Rs)
GST payable under forward charge
Intra-State supply of goods to 7,00,000 17,500 17,500
M/s Natural & Sons [7,00,000 [7,00,000
× 2.5%] × 2.5%]
Intra-State branch transfer 1,00,000 -- --
[Such transfer is not a supply as

the branch has the same GSTIN
as that of the head office and
thus, is not a distinct person.]
Inter-State supply of 80,000 --
sponsorship service to XYZ Ltd.
of Chennai1
[Since sponsorship service is
provided to a body corporate,
tax on the same is payable by
recipient – XYZ Ltd. – under
reverse charge.]
Advance received for future 40,000 3,600 3,600

intra-State supply of [40,000× [40,000×
management consultancy 9%] 9%]
service
(In case of supply of service, tax

is payable at the time of receipt
of advance amount too)
Total output tax 21,100 21,100
Less: ITC utilized 27,200 27,200
Net GST payable [A] Nil Nil
The reversal provisions under rule 42 of the CGST Rules, 2017 have not been given effect to in the
above answer on account of specific exclusion of the same via Study guidelines applicable for
November, 2023 examination.
Legal services availed2 [B] 50,000 4,500 4,500

[50,000 × [50,000 ×
9%] 9%]
[Tax on legal services availed by a
business entity from an advocate
is payable under reverse charge.
Further, tax payable under reverse

charge cannot be set off against
ITC and thus, reverse charge has to
be paid in cash since the tax
payable under reverse charge is
not an output tax.]
Minimum net GST payable in cash 4,500 4,500

[A] + [B]
Working Note:
Computation of ITC available

Particulars Value CGST (Rs) SGST IGST(Rs)
(Rs) (Rs)
Intra-State purchase of taxable 8,00,000 20,000 20,000
goods [8,00,000 × [8,00,000
2.5%] × 2.5%]
[ITC of goods used in the course/
furtherance of business is
available.]
Works contract service for repair 30,000 2,700 2,700

of office [30,000 [30,000
× 9%] × 9%]
[ITC is available since the repair
amount is debited in the profit &
loss account and not capitalized
in the books of account.]
Legal services availed 50,000 4,500 4,500

[50,000 × [50,000 ×
[ITC of services used in the 9%] 9%]
course/
furtherance of business is
available
Total 27,200 27,200
Question105
Examine whether the following activities would be treated as supply under GST law?
(a) Mr. Sonu from Chandigarh purchased a water cooler from Malhotra Bros. of Hoshiarpur for
25,000 to donate it to a temple situated in Hoshiarpur. Mr. Sonu directed Malhotra Bros. to
engrave the words on the water cooler- "Donated by Mr. Sonu from Chandigarh" and
dispatch the ater cooler- "Donated by Mr. Sonu from Chandigarh" and dispatch the water
cooler directly to the temple.
(b) Wesco Ltd, a registered person in Ahmedabad (Gujarat) having head office located in
Singapore, received management consultancy services free of cost from its head office.
Answer:-
(a) Donations received by the charitable organisations are treated as consideration only if
there exists, quid pro quo, i.e., there is an obligation on part of recipient of the donation or
gift to do anything (supply a service).
Since the name of the donor, Mr. Sonu is displayed in temple as an expression of gratitude
and public recognition of his act of philanthropy and is not aimed at advertising or
promotion of his business, hence, donation of water cooler by Mr. Sonu to temple is without
quid pro quo and is, thus, not a supply under GST law.
However, supply of water cooler by Malhotra Bros. to Mr. Sonu is supply as it is made for
consideration in course or furtherance of business.
(b) As per schedule I, in case of import of services by a person from a related person or from
his establishments located outside India, without consideration, in the course or
furtherance of business shall be treated as “supply”.
Hence, services3 received by Wesco Ltd. qualify as supply even though such services have
been provided free of cost by the head office.
Question106
(a) Mr. Venaram proprietor of M/s. Lalit Kirana Stores is registered as a composition dealer in
the Jodhpur district of Rajasthan. He has not furnished the statement for payment of self-
assessment tax in the form GST CMP-08 for two consecutive quarters. He placed an order
for purchase of taxable goods worth ` 5,50,000 with M/s. Bob & Sons (a partnership firm), a
registered dealer in the Bikaner district of Rajasthan. M/s. Bob & Sons has been regularly
filing its GST returns. M/s. Bob & Sons wants to generate E-way bill with respect to intra-
state supply to be made to M/s. Lalit Kirana Stores. Whether M/s. Bob & Sons is allowed to
generate E-way bill as per the provisions of CGST Act, 2017? Answer with proper
reasoning.
(b) Dream World Pvt. Ltd is registered under GST in the State of Haryana. During the Financial
Year 2022-23, its annual aggregate turnover was 12 crore. In the month of April 2023, it
supplied goods worth 12 lakh to Nightmare Ltd (a registered taxable person).
(i) You are required to ascertain whether issue of e-invoice is mandatory in respect of this
transaction?
(ii) What would be your answer if Nightmare Ltd is a SEZ (Special Economic Zone) unit?
(c) Mr. Atul of Chennai is a registered dealer under GST. He has an opening balance of input tax
credit of 1,20,000 (IGST) lying in the electronic credit ledger relating to the month of
November,2022. During the month, a legal proceeding has been initiated under the GST law
which resulted in a tax liability of 80,000 (IGST, other than RCM liability). Mr. Atul agrees
with the tax liability and wants to use the balance lying in the electronic credit ledger
towards payment of same.
He seeks your opinion with regard to the provisions of GST laws as to whether he is
allowed to use the amount lying in the electronic credit ledger for making the payment of
tax liability, payable as a consequence of the proceeding?
Answer:-
(a) Where a person paying tax under composition scheme has not furnished the statement for
payment of self-assessed tax for 2 consecutive quarters, e-way bill shall not be allowed to
be generated in respect of any outward movement of goods by such person. However, this
restriction does not apply to generation of e-way bill in respect of inward movement of
goods by the defaulter. Hence, in the given case, M/s. Bob & Sons is allowed to generate e-
way bill with respect to supply to be made to M/s Lalit Kirana Stores since M/s. Bob & Sons,
who is making the outward movement of goods, is a regular return filer.
(b) (i) All registered businesses with an aggregate turnover (based on PAN) in any preceding
financial year from 2017-18 onwards greater than 10 crore are required to issue e-
invoices. Thus, issuance of e-invoice is mandatory in respect of the given transaction as the
aggregate turnover of Dream World Pvt. Ltd. in the preceding financial year exceeded 10
crore.
(ii) Issue of e-invoice is exempt in respect of supply BY the SEZ (Special Economic Zone)
unit. Here SEZ unit is receiver of supply. Thus, the issuance of e-invoice is mandatory in
respect of given transaction even in case where Nightmare Ltd. is a SEZ (Special Economic
Zone) unit.
(c) The amount available in the electronic credit ledger of IGST may be used for making any
payment towards tax under the CGST Act or the SGST Act or the IGST Act other than tax
payable under reverse charge. It is clarified that any payment towards output tax, payable
as a consequence of any proceeding instituted under the provisions of GST laws, can be
made by utilization of the amount available in the electronic credit ledger of a registered
person. Thus, Mr. Atul is allowed to use the credit of IGST in electronic credit ledger for
making payment of tax liability of 80,000, payable as a consequence of the legal proceeding.
Question107
MNO & Co, a Partnership firm, is engaged in the manufacturing of equipment in the State of
Gujarat. The firm became liable for registration under GST on 14th July, 2022. It applied for
registration on 14th August, 2022 and was granted registration certificate by department on 18th
August, 2022.
MNO & Co. supplied goods to Vikram Ltd. The terms of the contract stipulated that goods are
delivered to the factory of Vikram Ltd. Goods were removed from the factory of MNO & Co. on
November 9, 2022 and were delivered to the factory of Vikram Ltd. on November 15, 2022.
Invoice was issued on November 18, 2022 and payment was credited to MNO & Co’s account on
December 20, 2022. However, the entry was made in the books when the cheque was received,
that is on November 19, 2022.
MNO & Co, is dealing in taxable as well as exempted items. MNO & Co. has provided following
information of a consignment which is to be supplied:
S. No Particulars Amount (₹)
(i) Taxable value of supplies indicated on tax invoice 28,000
(ii) Value of exempted supplies shown separately in tax 13,00
invoice in S No. (i) above
(iii) Value of goods to be sent to job worker on delivery 16,000
challan
Note:- All amount above are excluding GST.
MNO & Co. has also exported some equipment by air. The FOB price of goods exported is US $
60000. The shipping bill was presented electronically on 17th October, 2022 and proper officer
passed order permitting clearance and loading of goods for export (Let Export Order) on 29th
November, 2022. The rate of exchange notified by Central Board of Indirect taxes and Customs
(CBIC) on 17th October, 2022 and 29th November, 2022 are 1 US $ = ₹ 78 and 1 US $ = ₹ 77
respectively. Other details are as follows:
Particulars Date Rate of Duty

Presentation of shipping bill Let 17th October, 2022 12%
Export Order 29th November, 2022 10%
Based on the facts of the case scenario given above, answer the following questions with reference
to GST law and Custom Law:
a) What will be effective date of registration and also is there any requirement to issue
revised invoices? Correct legal provision should form part of your answer.
b) With reference to transaction with Vikram Ltd., determine the Time of Supply for the
purpose of payment of Tax.
c) Decide whether in respect to goods supplied to Vikram Ltd. MNO & Co. needs to
mandatory generate e-way bill or not ? Assume this is the case of intra-state and rate of tax
on taxable goods to be CGST and SGST @ 9% each.
d) You are required to determine the export duty payable under Customs law in respect to
explored equipment
Answer (a)
Particulars
A supplier whose aggregate turnover in a financial year exceeds the threshold limit in
a State/Union Territory is liable to apply for registration within 30 days from the date
of becoming liable to registration (i.e., the date of crossing the threshold limit of Rs. 20
lakh/ 40 lakh) vide Section 22 of Central Goods & Services Tax Act, 2017.
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. [Rule 10(3) Central Goods and Services Tax Rules,
2017]
In view of the aforesaid provisions, effective date of registration will be 18th August,
2022, since company applied after 30 days of become eligible.
Every registered person who has been granted registration with effect from a date
earlier than the date of issuance of registration certificate to him, may issue revised
tax invoices in respect of taxable supplies effected during this period within 1 month
from the date of issuance of registration certificate. [Section 31(3)(a) Central Goods
and Services Tax Act, 2017]
Since effective date of registration is not retrospective date hence there is no need to
issue any revised invoice.
Answer (b)
Particulars
As per Section 12(1) of Central Goods and Services Tax Act, 2017, the time of supply of
goods shall be the earlier of the following dates, namely:—
(a) the date of issue of invoice by the supplier or the last date on which he is required
to issue invoice under section 31 of Central Goods and Services Tax Act, 2017;
or
(b) The date on which the supplier receives the payment with respect to the supply.
However, advance received in respect of supply of goods is not liable to be taxed at the
time of receipt vide Notification No. 66/2017 Central Tax dated 15.11.2017.
Therefore, the date of payment in respect of supply of goods shall not be relevant for
determining the time of supply.
Further, Section 31 of the Central Goods and Services Tax Act, 2017 provides that a
registered person supplying taxable goods shall issue a tax invoice, before or at the
time of, —
(a) removal of goods for supply to the recipient, where the supply involves
movement of goods;
or
(b) Delivery of goods or making available thereof to the recipient, in any other case.
As per the above scenario, various dates are as under:
Actual date of issue of invoice : November 18, 2022
Due date for issue of invoice : November 09, 2022
(as supply involves movement of goods)
Date of receipt of payment : November 19, 2022
(earlier of entry in books of accounts and credit made in the bank account)
Therefore, the time of supply would be the earliest of the above dates, that is,
November 09, 2022.
Answer (c)
Particulars
E-way bill mandatory needs to be generate whenever there is a movement of goods of
consignment value exceeding Rs. 50,000.
Consignment value of goods shall be the value includes value declared in an invoice, a
bill of supply or a delivery challan, as the case may be, issued in respect of the said
consignment and also includes the Central Tax, State or Union Territory Tax,
Integrated Tax and Cess charged, if any, in the document and shall exclude the value of
exempt supply of goods where the invoice is issued in respect of both exempt and
taxable supply of goods.
So as per above provision consignment value of the transaction effected through tax
invoice in the given case shall be: Rs.28,000 + Rs.5,040 (Tax i.e. 18% of Rs.28,000) +
16,000 = Rs. 49,040.
Since consignment value is not more that Rs. 50,000, E- way not mandatory required
to be generate
Answer (d)
Computation of Export Duty
Particulars
FOB price of goods (Note-1) US $ 60,000
Assessable Value (US$ 60,000 x Rs.78) (Note-2) Rs. 46,80,000

Export duty @ 10% (Note-3) Rs. 4,68,000
Notes: -
1) As per section 14(1) of the Customs Act, 1962, assessable value of the export goods is the
transaction value of such goods which is the price actually paid or payable for the goods
when sold for export from India for delivery at the time and place of exportation.
2) As per third proviso to section 14(1) of the Customs Act, 1962, assessable value has to be
calculated with reference to the rate of exchange notified by the CBIC on the date of
presentation of shipping bill of export.
3) As per section 16(1) (a) of the Customs Act, 1962, in case of goods entered for export, the
rate of duty prevalent on the date on which the proper officer makes an order permitting
clearance and loading of the goods for exportation, is considered.
4) Export Duty does not carry Social Welfare Surcharge (SWS).
Question108
(a) Rama Private Limited, Mumbai, a registered supplier, manufactures taxable goods. It
provides the following details of taxable inter-State supply made by it during the month of
March 2023:

(i) List price of taxable goods supplied inter-State (exclusive 20,00,000
of taxes)
(ii) Subsidy received from the Central Government for 3,50,000
supply of taxable goods to government School
{exclusively related to supply of goods included at S.No.
(i)}
(iii) Tax levied by Municipal Authority 20,000
(iv) Special packing at the request of customer to be charged 15,000
to the customer
(v) Late fee paid by the recipient of supply for delayed 7,080
payment of consideration (Recipient has agreed to pay ₹
6,000 (plus GST @ 18%) in Lump Sum and no additional
is payable by him over and above such amount)
The list price of the goods is net of the subsidies received. However, the other charges/ taxes/fee
are charged to the customers over and above the list price. Rama Private Limited offers 3%
discount on the list price of the goods which is separately shown in the invoice for the goods.
Calculate the total value of taxable supplies made by Rama Private Limited during the month of
March, 2023 and assume the rate of IGST is 18%
(b) Yash started the business of supplying shoes in the State of Karnataka from 1st April, 2022.
He makes only intra-State supplies. His turnover for April-June quarter was ₹20 lakh and
for July-September quarter was ₹ 110 lakh. Further, one-fourth of his total turnover in each
of the quarter was exempt from GST. Being eligible for composition scheme, Yash got
himself registered under the composition scheme with effect from 1st July, 2022.
You are required to compute the tax payable by Yash under composition scheme assuming
that he is a manufacturer.
Will your answer be different if Yash is a trader ? Give your answer supported with the
relevant provisions of the CGST Act, 2017.
(c) Shyam Ltd., a registered person, is engaged in the business of spices. It provides following
details in relation to GST paid on inward supplies procured by it during the month of
March, 2023:
1) Raw spices purchase 80,000

– Raw spices used for sale to customers 20,000
– Raw spices used for personal use of directors
2) Electric machinery purchased for being used in the 35,000

3) Motor vehicle used for transportation of the employee 55,000

(seating capacity 8 persons)
4) Payment made to contractor for construction of staff 2,00,000

quarter
Determine the amount of ITC that can be availed by Shyam Ltd. for the month of March, 2023 by
giving the necessary explanation for treatment of various items. Subject to the information given
above, all the other conditions necessary for availing ITC have been fulfilled.
(d) Calculate FOB Value, Cost of Insurance, Cost of Freight and Assessable Value under Custom
Law, where only the CIF value is given as US $ 8,000. Exchange rate notified by RBI and
CBIC are ₹ 78 and ₹ 79 respectively for one US $.
Answer (a)
Computation of total value of Taxable Supplies made by Rama Private Ltd. during the
month of March 2023
Particulars Amount (Rs.)

List Price of the Goods 20,00,000
Subsidy amounting to Rs.3,50,000 received from the Central NIL
Government
[Since the subsidy is received from the Government, the same is

not includible in the value in terms of Section 15(2)(e) of the
Central Goods and Services Tax Act, 2017]
Tax levied by the Municipal Authority 20,000
[Includible in the value as per Section 15(2)(a) of the Central

Goods and Services Tax Act, 2017].
Packing charges 15,000
[Being incidental expenses, the same are includible in the value

as per section 15(2)(c) of the Central Goods and Services Tax Act,
2017]
Late fees paid by recipient of supply for delayed payment 6,000
(Rs.7,080 x 100/118)
[Includible in the value as per Section 15(2)(d) of the Central

Goods and Services Tax Act, 2017]
Total 20,41,000
Less: Discount offered = 3% of List Price (Rs.20,00,000*3% ) (60,000)
Since discount is known at the time of supply, it is deductible

from the value in terms of Section 15(3)(a) of the Central Goods
and Services Tax Act, 2017.
Total Value of Taxable Supplies 19,81,000
Answer (b)
A registered person opting for Composition Levy for goods pays tax at the rates mentioned below
during the current financial year, in lieu of the tax payable by him under regular scheme:
Type of dealer Composition Tax Rate

Manufacturers, other 1% (0.5% CGST + 0.5% SGST/UTGST) of the turnover in the
than manufacturers of State/ Union territory.
notified goods
Trader 1% (0.5% CGST + 0.5% SGST/UTGST) of turnover of taxable
supplies of goods & services in the State / Union territory
Explanation 2 to section 10 Central Goods & Services Tax Act, 2017 provides that for
the purposes of determining the tax payable by a person under this section, the
expression “turnover in State or turnover in Union territory” shall not include the
value of following supplies, namely :-
(i) supplies from the first day of April of a financial year upto the date when such
person becomes liable for registration under this Act; and
(ii) 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
Tax payable by Yash under composition scheme is as follows:

(i) In case where Yash is a manufacturer: Tax payable by him under composition
scheme will be on aggregate turnover.
CGST = ₹ 110 lakh x 0.5% = ₹ 55,000
SGST = ₹ 110 lakh x 0.5% = ₹ 55,000
(ii) In case where Yash is a trader: The answer would be no different as the legal
position for manufacturers and traders is same for the purpose of composition
scheme under section 10 of the Central Goods and Services Tax Act, 2017.
Tax payable by him under composition scheme will be as follows only on taxable
turnover.
CGST = ₹110 lakh x 75% (as 25% of turnover is exempt) x 0.5% = 82.50 lakh x 0.5%
= ₹ 41,250
SGST = ₹110 lakh x 75% (as 25% of turnover is exempt) x 0.5% = 82.50 lakh x 0.5%
= ₹ 41,250
Answer (c)
Computation of ITC that can be availed by Shyam Ltd. for the month of March 2023
Purchase of Raw spices which are sold to customers. 80,000
(Every registered person is entitled to take credit of input

business.)
Purchase of Raw spices for personal use of directors. Nil
(ITC is not available on goods used for personal

consumption under Section 17(5) of the Central Goods and
Services Tax Act, 2017.)
Electric machinery purchased for being used in the 35,000

manufacturing process.
(Every registered person is entitled to take credit of input

or intended to be used in the course of furtherance of his
business.)
Motor vehicle used for transportation of employee. Nil
(ITC on motor vehicles for transportation of persons with

blocked under section 17(5) of the Central Goods and
Services Tax Act, 2017 except when the same are used for :
(i) making further taxable supply of such motor

vehicles
(ii) making taxable supply of transportation of
passengers
(iii) making taxable supply of imparting training on
driving such motor vehicles.
Payment made to contractor for construction of staff Nil

quarter.
[ITC is not available for works contract services when

supplied for construction of an immovable property (other
than plant and machinery) except where it is an input
service for further supply of works contract service. Section
17(5) of the Central Goods and Services Tax Act, 2017]
Total Input Tax Credit (ITC) Available 1,15,000
Answer (d)
Particular
As per Rule 10(2) proviso 3 of Customs Valuation (Determination of Value of
Imported Goods) Rule, 2007 where FOB value of goods, cost of insurance, and freight
are not ascertainable, then:
Freight has to be taken as 20% of FOB value; and
Insurance has to be taken @ 1.125% of FOB value; and
Rate notified by CBIC has to be taken (i.e. Rs.79 per USD)
Hence, FOB Value, cost of insurance and cost of freight and assessable value shall be
computed as follows:
Particulars Amount (Rs.
Assessable Value will be the CIF Value (US$ 8,000 x Rs.79) 6,32,000
Less: Cost of Insurance (Rs. 6,32,000/121.125 x 1.125) 5,870
(Roundoff)
Less: Cost of Freight (Rs. 6,32,000/121.125 x 20) (Roundoff) 1,04,355
FOB Value 5,21,775
Question109
Piyush is a supplier of taxable goods in Karnataka. He got registered under GST in the month of
April, 2023 and wishes to pay his IGST liability for the month. Since he is 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 advise him
with regard to following issues.
(i) Are manual challans allowed under GST?
(ii) What is the validity period of the payment challan?
(iii) Is cross utilization among Major and Minor heads of the electronic cash ledger permitted ?
Answer:
Sr. Particulars
No.
(i) Manual or physical challans are not allowed under the GST
regime. It is mandatory to generate challans online on the GST
Portal.
(ii) Payment Challan is valid for a period of 15 days from the date of
generation of challan.
(iii) 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 of the Central
Goods and Services Tax Act, 2017 to the electronic cash ledger
for integrated tax, central tax, State tax or Union territory tax or
cess.
Question110
What will be the late fee (CGST + SGST) for delay in filing of Annual Return under section 44 of the
CGST Act, 2017 for financial year 2022-23, if delay is for 47 days and turnover of the company was
₹ 5.20 crore during the relevant financial year.
Answer:
Particulars
As per amendment notification no. 07/2023 CT dated 31.03.2023, In

case of turnover is more than 5 Crore The late fee payable is the lower
of:
(i) Rs.100 per day [Central Goods and Services Tax (CGST) + State
Goods and Services Tax (SGST)]
or
(ii) 0.04 % of turnover [Central Goods and Services Tax (CGST)
+ State Goods and Services Tax (SGST)]
Hence in the given case Late Fees is given below:
(i) Rs.100 per day for 47 days = Rs. 4,700/-
or
(ii) 0.04% of Rs. 5.20 crores = Rs.
20,800/- Whichever is lower = Rs.
4,700/-
Hence the late fees will be Rs. 4,700.
Question111
GMEGA Events, an event management company registered under CGST Act, 2017 at Mumbai,
organizes a marriage function for Rakesh of Hubli (Karnataka). Determine the place of supply as
per IGST Act, 2017 in the following independent cases :
(i) If Rakesh is registered at Hubli (Karnataka) and function held at London.
(ii)If Rakesh is registered at Hubli (Karnataka) and function held at New Delhi.
(iii)If Rakesh is unregistered person and function held at New Delhi.
(iv)If Rakesh is unregistered person and function held at London.
Answer:
Sr. No. Place of Provisions

Supply
(i) Hubli For supplies related to organization of events
(Karnataka) or assigning sponsorship to such events, when
such service is provided to a registered person,
the place of supply is
location of recipient. Since recipient is
registered at Hubli, the place of supply shall be
Hubli (Karnataka).
(ii) Hubli If Recipient is registered, the place of supply is
(Karnataka) location of recipient. So the place of supply
shall be Hubli (Karnataka), here event is not
relevant.
(iii) New Delhi When it is provided to an unregistered person,
the place of supply is the location where the
event is actually held in India.
The recipient being an unregistered person, the
place of supply is the location where the event
is held i.e., New Delhi.
(iv) Hubli When it is provided to an unregistered person,
(Karnataka) and if the event is held outside India, the place
of supply is the location of recipient.
The recipient being an unregistered person and
the event held outside India, the place of supply
is the location of the recipient i.e., Hubli
(Karnataka) and not the location where the
event is held.

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CA SURAJ SATIJA SS GURU CSCARTINDIA

TOP 111 QUESTIONS OF GST

GST may accrue following benefits to the economy:

Introduction of the GST necessitated the amendments in the Constitution so as to simultaneously

Discuss the leviability of GST or otherwise on the following:

(a) Alcoholic liquor for human consumption

A dual GST has been implemented in India. Elaborate.

However, gifts not exceeding 50,000 in value in a financial year by an employer

(iii) Supply of goods —

Title as well as possession both need to be transferred for a transaction to be considered as a

b) Raman is an architect in Chennai. His brother who is settled in London is a well-

(i) the spouse and children of the person, and

a) Renting of immovable property.

b) Goods forming part of business assets are transferred or disposed of by/under

c) Transfer of right in goods without the transfer of title in such goods.

(a) Supply of services

(b) Supply of goods

(c) Supply of services

(d) Supply of goods

a) Temporary transfer or permitting use or enjoyment of any intellectual property right.

b) Any treatment or process which is applied to another person’s goods.

c) Transfer of title in goods.

(a) Supply of services

(b) Supply of services

(d) Supply of goods

(i) Supply, under section 7, inter alia,

 includes import of services for a consideration

I. the spouse and children of the person, and

(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%

Manikaran, a registered supplier of Delhi, has supplied 20,000 packages at 30 each to

Goods/services supplied GST rate

Fruit juice bottles 12%

(a) Services provided by an arbitral tribunal to any business entity.

(b) Sponsorship services provided by a company to an individual.

In case of services provided by any person by way of sponsorship to anybody corporate or

(a) Services supplied by an insurance agent to an insurance company.

(b) Services supplied by a recovery agent to a car dealer.

With reference to the provisions of the CGST Act, 2017, examine:

(ii) If yes, up to what amount, the services can be supplied?

What will be the place of supply of construction services?

In case of pre-paid connections, if the service is supplied:-

What is the place of supply of insurance services?

Explain the significance of time of supply under GST law.

 Date of issue of invoice or date of receipt of payment, whichever is earlier, if the

 Date of provision of service or date of receipt of payment, whichever is earlier, if the

date prescribed with reference to such time of supply.

S. No. Date of Date of payment Date of issue Date Time of

receipt of by the recipient of invoice by immediately supply of

goods of goods the supplier Following 30 goods [Earlier

of goods days from of (1),

the of (2) & (4)]

(1) (2) (3) (4) (5)

(i) July 1 August 10 June 29 July 30 July 1

(ii) July 1 June 25 June 29 July 30 June 25

(iii) July 1 Part payment June 29 July 30 June 30 for

(iv) July 5 Payment is June 1 July 2 June 28 (i.e.,