Answes: C 1& 2: I, S: Hapter Ntroduction Upply

ANSWES: CHAPTER 1& 2: INTRODUCTION, SUPPLY
1. The said statement is not correct. State Government can notify a transaction
to be supply of goods or services but only on the recommendations of the GST
Council. Further, Central Government or State Government, both on the
recommendations of the GST Council, can notify an activity to be the supply
of goods and not supply of services or supply of services and not supply of
goods or neither a supply of goods nor a supply of services.
2. Yes. It qualifies as a supply.

Sec 7(1)(c) read with Schedule 1 of CGST Act, 2017 says that supply of goods
or services between related persons is treated as supply even if it is without
consideration.
As per explanation to Sec 15 of CGST Act, 2017, person shall be deemed to be
related person if one of them directly or indirectly controls the other. Since Sun
Ltd. has controlling rights of Moon Ltd. it means it directly controls Moon Ltd.
They will be treated as a related persons and the said transaction will qualify
as supply.
3. Section 7(1)(a) of the CGST Act, 2017 stipulates that in order to qualify as
supply:
(a) Supply should be of goods and/or services.
(b) Supply should be made for a consideration.
(c) Supply should be made in the course or furtherance of business.
Further, Schedule I read with S.7(1)(c) of the CGST Act, 2017 illustrates the
activities to be treated as supply even if made without consideration. Para 1
of schedule I says permanent transfer or disposal of business assets where input
tax credit has been availed on such assets, i.e. said activity is to be treated as
supply even if made without consideration. In view of said provisions,
permanent transfer of air conditioners by Sahab Sales from its stock for
personal use at its residence, though without consideration, would amount to
supply.
However, sale of air-conditioner by Aakash to Sahab Sales will not qualify as
supply under section 7 of the CGST Act, 2017 as although it is made for a
consideration, but its not in the course or furtherance of business.
CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 1

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4. (a) Section 7 of the CGST Act, inter alia, provides that supply must be made
for a consideration except the activities specified in Schedule I and in course
or furtherance of business. Since, both these elements missing, donation of
clothes and toys to children living in slum area would not amount to supply
under section 7 of the CGST Act.
(b) Schedule I of CGST Act, 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, where a person who has obtained
or is required to obtain registration in a State in respect of an establishment,
has an establishment in another State, then such establishments shall be
treated as establishments of distinct persons [Section 25 of the CGST Act]. In
view of the same, factory and depot of Sulekha Manufacturers are
establishments of two 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 of the CGST Act.
(c) Schedule I of CGST Act, 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. In the given case, Raman has received legal services from his
brother free of cost in a personal matter and not in course or furtherance of
business. Hence, services provided by Raman’s brother to him would not be
treated as supply under section 7 of the CGST Act.
(d) In the above case, if Raman has taken advice with regard to his business
unit, services provided by Raman’s brother to him would not be treated as
supply under section 7 of the CGST Act as the same are provided in course or
furtherance of business since it is not received from a related person. Brother
can be a related person only if he is wholly or mainly dependent.
5. Under composite supply, two or more taxable supplies of goods or services or

both, or any combination thereof, are naturally bundled and supplied in
conjunction with each other, in the ordinary course of business, one of which
is a principal supply [Section 2(30) of the CGST Act]. In view of the same,
(a) since, supply of breakfast and dinner with the accommodation in the hotel
are naturally bundled, said supplies qualify as ‘composite supply’.

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(b) since supply of toothbrush along-with the toothpaste are not naturally
bundled, said supplies do not qualify as ‘composite supply’.
6. No it does not qualify as supply

As per sec 2(52), goods mean every kind of movable property other than
money and securities but includes actionable claims, growing crops, grass and
thing attached to or forming part of the land which are agreed to be severed
before supply or under a contract of supply
Hence, actionable claims are covered in definition of goods. However
schedule III specifically excludes actionable claims other than lottery,
gambling and betting from the scope of supply. There for transfer of unsecured
loans would not amount to supply.
7. The following elements are required to be satisfied for a supply to be

chargeable to GST, i.e.-
a) the activity involves supply of goods or services or both;
b) the supply is for a consideration unless otherwise specifically provided
for;
c) the supply is made in the course or furtherance of business;
d) the supply is a taxable supply; and
e) t h e supply is made by a taxable person.
8. Yes, transfer of stock made by Modest Ltd. are taxable under GST. The
definition of supply given under section 7 of CGST Act, 2017 is an inclusive one.
It does not specify that supply is to be made by one person to the another. So,
self-supplies are to be treated as supply in terms of section 7 of CGST Act.
Further, section 25(5) provides that where a person who has obtained or is
required to obtain registration in a State or Union territory in respect of an
establishment, has an establishment in another State or Union territory, then
such establishments shall be treated as establishments of distinct persons.
Clause (2) of Schedule I of CGST Act, 2017 inter alia provides that supply of
goods between distinct persons as specified in section 25 made in the course
or furtherance of business is to treated as supply even if made without
consideration.
Inter-state self-supplies such as stock transfers, branch transfers or consignment
sales shall be taxable under IGST even though such transactions may not
involve payment of consideration. Every supplier is liable to register under the
GST law in the State or Union territory from where he makes a taxable supply
of goods or services or both in terms of Section 22 of the CGST Act. However,

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intra-state self- supplies are not taxable subject to not opting for registration as
business vertical.
9. Printing of books, pamphlets, brochures, annual reports, and the like, where
only content is supplied by the publisher or the person who owns the usage
rights to the intangible inputs while the physical inputs including paper used for
printing belong to the printer, supply of printing [of the content supplied by the
recipient of supply] is the principal supply and therefore such supplies would
constitute supply of service falling under heading 9989 of the scheme of
classification of services.
While, supply of printed envelopes, letter cards, printed boxes, tissues, napkins,
wall paper etc. falling under Chapter 48 or 49, printed with design, logo etc.
supplied by the recipient of goods but made using physical inputs including
paper belonging to the printer, predominant supply is that of goods and the
supply of printing of the content [supplied by the recipient of supply] is ancillary
to the principal supply of goods and therefore such supplies would constitute
supply of goods falling under respective headings of Chapter 48 or 49 of the
Customs Tariff.
10. The view taken by ABC Consultancy is not valid in law. The scope of supply is
defined by section 7(1) of CGST Act, 2017. It includes deemed supply given
under Schedule II. The paragraph 5(e) of Schedule II provides that agreeing to
the obligation to refrain from an act, or to tolerate an act or a situation, or to
do an act is treated as supply of service.
Thus, any consideration received for agreeing to the obligation to refrain from
an act, is subject to GST. Consideration received for non-compete agreement
is deemed as consideration for supply of services Consideration of ₹ 45 lakh
received on the promise of ABC consultancy of not providing similar services
to any other person, is consideration for supply which is chargeable to GST.
11. Supply, under section 7 of the CGST Act, 2017, inter alia,
• includes import of services for a consideration
• even if it is not in the course or furtherance of business.
In the given case pragati received services from Unnati for consideration and
activity of import of service would amount to supply u/s 7 of the CGST Act,
2017 even if for personal purpose.
Even if the they are sisters if there is no consideration and it is not in the course
or furtherance of supply it will not be treated as supply under section 7 of CGST
act 2017.

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But if they are wholly or mainly dependent as sisters and consideration is not
there and importation of service is in the course or furtherance of business in
India it will be treated as supply under para 4 schedule I of Section 7.
12. (i) Supply, under section 7 of the CGST Act, 2017, 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 vaastu consultancy service has
been availed in respect of residence, it would amount to supply.
(ii) Section 7 of the CGST Act, 2017 read with Schedule I provides 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. In the given case, import of service without
consideration by Miss Shriniti from her son – Mr. Varun [son, being member of
the same family, is a related person] will not be treated as supply as it is not in
course or furtherance of business.
(iii) Section 7 of the CGST Act, 2017 read with Schedule I provides that import
of services by a taxable person from a related person located outside India,
without
CHAPTER 2 : CHARGE
13. The advice given by M/s X & Sons is not valid in law. The reverse charge
mechanism applies to supplies of both goods and services, as notified by the
Government on the recommendations of the GST Council vide section
9(3)/5(3) of CGST/IGST Act, 2017. Notification No. 4/2017-Central Tax (Rate)
and 13/2017- Central Tax (Rate) both dated 28/06/2017 have been issued.
Similar notifications have been issued under IGST Act also. Reverse charge also
applies to supplies received by a registered person from unregistered persons
under section 9(4)/5(4) of CGST/IGST Act, 2017. However, the provision of
reverse charge liability on supplies received from unregistered persons, as
provided in sections 9(4) and 5(4) of the CGST Act and the IGST Act
respectively, have been kept in abeyance till 31.03.2018.
14. Pepper & Salt Ltd. can avail the benefit of the composition scheme in the year
2019-20 as the threshold for composition scheme is 1.50 Crore of aggregate
turnover in the preceding financial year* under section 10(1) of CGST Act,
2017. The benefit of composition scheme can be availed up to the turnover of

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1.50 Crore in current financial year*. However, it has to be ensured that Pepper
& Salt Ltd. fulfills the following conditions as given under section 10(2) of CGST
Act, 2017:-
(i) Pepper & Salt Ltd. is not engaged in the supply of services other than
supplies of food articles (restaurant service).
(ii) It is not engaged in making any supply of goods which are not taxable
under the CGST Act/SGST Act/ UTGST Act.
(iii) Pepper & Salt Ltd. do not make any inter-State outward supplies of
goods.
(iv) It does not supply goods through an electronic commerce operator.
(v) It does not manufacture ice cream, pan masala and tobacco etc.
*- ₹ 75 lakhs for 8 special category states viz 1. Arunachal Pradesh, 2.
Uttarakhand, 3. Manipur, 4. Meghalaya, 5. Mizoram, 6. Nagaland, 7. Sikkim,
8. Tripura
If Pepper & Salt Ltd. is registered in Arunachal Pradesh, it can not avail the
benefit of composition in the year 2019-20 as its turnover in the preceding
financial year (80 lakhs) exceeds the threshold limit (75 lakhs).
15. No. The option availed shall lapse from the day on which his aggregate
turnover during the financial year exceeds 1.50 Crore vide section 10(3) of
CGST Act, 2017.
He is required to file an intimation for withdrawal from the scheme in prescribed
form within 7 days from the day on which the threshold limit has been crossed.
16. (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 any body 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) renting of immovable property service by Govt or Local Authority to a
Registered person is under RCM. Therefore, in the given case, reverse charge
provisions will be attracted.
d) renting of immovable property service by Govt or Local Authority to a

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provisions will be attracted. Mannappa Pvt limited is liable to pay GST under
RCM.
e) Since GST on Legal services provided or agreed to be provided by an
Advocate 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.M/s. Tatva Trading Company is liable to pay GST.
17. a) Renting of immovable property service by Govt or Local Authority to a

provisions will be attracted. Ganpati Morya Pvt. Ltd is liable to pay GST under
RCM.
b) A director of a company providing service to a body corporate being a

company is under RCM. A2Z Pvt. Ltd. Company is liable to pay GST to Govt.
18. (i) A supplier of services engaged in the supplies other than the supplies
referred to in clause (b) of paragraph 6 of Schedule II of CGST Act i.e.
supply by way of or as part of any service or in any other manner
whatsoever, of goods, being food or any other article for human
consumption or any drink, is not eligible for composition levy. Since Mohan
provides legal services, he is not eligible for composition scheme.
(ii) Since supplier of inter-State outward supplies of goods is not eligible for
composition levy, Sugam Manufacturers is not eligible for composition levy.
19. A registered person with an aggregate turnover in a preceding financial
year up to 150 lakh is eligible for composition levy in Delhi. Since the
aggregate turnover of Mohan Enterprises does not exceed 150 lakh, 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,
Mohan Enterprises either have to opt for composition levy for both the verticals
or under normal levy for both the verticals.
20. The composite tax liability of True limited shall be as under:
(1)Computation of aggregate turnover and composite tax
Particulars Rupees
1.Supplies made under forward charge 60,00,000
2. supplies made which are chargeable to GST at NIL rate 18,00,000
3. supplies which are wholly exempt U/s 11 of CGST act 2017 12,00,000
4.Value of inward supplies on which tax payable under RCM(GST NIL
rate 12%)

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5.intra state supplies of goods Y chargeable at 18% GST 9,00,000
Aggregate Turnover 99,00,000
Rate of composite tax 1%
Total composite tax 99,000
(2) Tax payable under reverse charge basis:
Particulars Rs.
Value of inward supplies on which tax payable under RCM 25,00,000
Rate of GST 12%
Tax payable under RCM 3,00,000
Total tax payable= Rs. 99,000 + Rs. 3,00,000 = Rs. 399,000
If they are trading concern GST is payable on taxable turnover in a state that
is 69 Lakhs*1% = 69,000.
Exempted Supply includes supply for which tax is exempted by exemption
notification u/s 11 of CGST Act 2017 or S.6 of IGST Act 2017, Nil rated supply
and non taxable supply.
21. As per Sec 10 (2) of CGST Act 2017, a manufacturer cannot opt for
composition scheme if he is engaged in making any interstate outward
supply of goods. In this case, PQR Ltd. has effected inter state taxable
supply of goods worth Rs. 5,00,000. Hence it cannot opt for composition
scheme.
22. According to Sec 10 (2), of CGST Act 2017, all registered persons having
same PAN have to opt for composition scheme. If one opts for regular levy
for one registered place, others become ineligible for composition levy.
Thus, Class Ltd. cannot opt for composition scheme in Goa. and pay
normal tax in Kerala.
23. As per section 10(1) of the CGST Act, 2017, a registered person, whose
aggregate turnover in the preceding financial year did not exceed ₹ 1.50
crore, may opt to pay, in lieu of the tax payable by him, an amount
calculated at such rate as may be prescribed, but not exceeding,–– (a)
0.50% of the turnover in State/ Union territory in case of a manufacturer,
(b) 2.5% of the turnover in State/ Union territory in case of persons engaged in
making supplies referred to in clause (b) of paragraph 6 of Schedule II
(restaurant services), and
(c) 0.5% of the taxable turnover in State/ Union territory in case of other
suppliers.
Further, sub-section (2) of section 10 lays down that the registered person
shall be eligible to opt for composition levy if:—
(a) he is not engaged in the supply of services other than restaurant services;

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(b) he is not engaged in making any supply of goods which are not leviable
to tax under CGST Act; 2017
(c) he is not engaged in making any inter-State outward supplies of goods;
(d) he is not engaged in making any supply of goods through an electronic
commerce operator who is required to collect tax at source under section
52; and
(e) he is not a manufacturer of such goods as may be notified by the
Government on the recommendations of the Council.
Basis above provisions, a firm of Chartered Accountants, being a supplier of
professional services (other than restaurant services) is not eligible to apply for
composition scheme. Therefore, it has to discharge its tax liability under
regular provisions at the applicable rates.
(a) The answer will not change even if the turnover of the firm had been ₹ 90
lakh since the ineligibility of the firm to opt for composition scheme is not
linked with the turnover of the firm, but with the nature of the services
supplied by the firm.
(b) The answer will not change even if the firm is providing support service to
restaurants. They can opt for Composition levy scheme only if they are
restaurants.
24. The action taken by proper officer is valid in law. Section 10(1) of CGST
Act, 2017 inter alia provides that the benefit of composition levy can be
availed by a registered person if the aggregate turnover in the preceding
financial year does not exceed ₹ 1.5 crore. However, the said threshold is
reduced to ₹ 75 lakh in case of special category states. Further, section
10(2) inter alia specifies that registered person is eligible to opt for
composition levy if he is not engaged in making any inter-state outward
supplies of goods.
In the present case, Mr. Zaid is engaged in making inter-State outward
supplies of goods. So, he is not eligible to opt for composition levy
irrespective of aggregate turnover in the preceding financial year.
Moreover, section 10(5) provides that if a person who has paid under
composition levy is found as not being eligible for compounding then
such person shall be liable to penalty to an amount equivalent to the tax
payable by him under the provisions of the Act i.e., as a normal taxable
person and that this penalty shall be in addition to the tax payable by
him. Thus, levy of penalty on Mr. Zaid is valid in law in terms of section
10(5).
25. Section 10 of the CGST Act, 2017 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, if, inter alia, such registered person is engaged in the supply of
services other than restaurant services, he shall not be eligible to opt for

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composition levy. In the given case, since Mr. Ajay is a supplier of repair
services, he is not eligible for composition scheme even though his
aggregate turnover in the preceding FY does not exceed ₹ 1.5 crore.
Therefore, he has to discharge his tax liability under regular provisions at
the applicable rates.
However, with effect from 01.04.2019, Notification No. 2/2019 CT (R)
dated 07.03.2019 has provided an option to a registered person whose
aggregate turnover in the preceding financial year is upto ₹ 50 lakh and
who is not eligible to pay tax under composition scheme, to pay tax @ 3%
[Effective rate 6% (CGST+ SGST/UTGST)] on first supplies of goods and/or
services upto an aggregate turnover of ₹ 50 lakh made on/after 1st April
in any FY, subject to specified conditions. Thus, in view of the above-
mentioned provisions, Mr. Ajay is eligible to avail the benefit of
concessional payment of tax under Notification No. 2/2019 CT (R) dated
07.03.2019 as his aggregate turnover in the preceding FY does not
exceed ₹ 50 lakh and he is not eligible to opt for the composition
scheme. Thus, the amount of tax payable by him under Notification No.
2/2019 CT (R) dated 07.03.2019 is ₹ 2,10,000 [6% of ₹ 35 lakh]. A registered
person cannot opt for Notification No. 2/2019 CT (R) dated 07.03.2019, 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 neighbouring State of Madhya Pradesh.
26. As per section 10 of the CGST Act, 2017, the following registered persons,
whose aggregate turnover in the preceding financial year did not
exceed ₹ 1.5 crore, may opt to pay tax under composition levy.
(a) Manufacturer,
(b) Persons engaged in making supplies referred to in clause (b) of
paragraph 6 of Schedule II (restaurant services), and
(c) Any other supplier eligible for composition levy.
Thus, essentially, the composition scheme can be availed in respect of
goods and only one service namely, restaurant service. However, the
scheme permits supply of other marginal services for a specified value
along with the supply of goods and restaurant service, as the case may
be. Such marginal services can be supplied for a value up to 10% of the
turnover in the preceding year or ₹ 5 lakh, whichever is higher. Further, the
registered person should not be engaged in making any inter-State
outward supplies of goods.
Furthermore, an option of availing benefit of concessional payment of tax
has been provided to a registered person whose aggregate turnover in
the preceding financial year is upto ₹ 50 lakh and who is not eligible to
pay tax under composition scheme. Said person can pay tax @ 3%
[Effective rate 6% (CGST+ SGST/UTGST)] on first supplies of goods and/or
services up to an aggregate turnover of ₹ 50 lakh made on/after 1st

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April in any financial year (FY), subject to specified conditions vide
Notification No. 2/2019 CT (R) dated 07.03.2019 as amended. One of such
condition is that the registered person should not be engaged in making
any inter-state outward taxable supplies. In view of the above-mentioned
provisions, the answer to the given independent cases is as under:
(a) The turnover limit for composition scheme in case of Jaipur
(Rajasthan) is ₹1.5 crore. Thus, M/s Devlok can opt for composition
scheme as its aggregate turnover is less than ₹1.5 crore. Further, since the
registered person opting for composition scheme 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, M/s Devlok can supply repair services up to a value of ₹13 lakh [10%
of ₹130 lakh or ₹5 lakh, whichever is higher] in the current financial year.
(b)In the given case:
(i) the turnover in the preceding year is less than the eligible turnover limit,
i.e. ₹ 1.5 crore.
(ii) the supplier is engaged in providing restaurant service which is an
eligible supply under composition scheme.
(iii) the supplier wants to engage in trading of goods which is also an
eligible supply under composition scheme.
Thus, M/s Narayan & Sons is eligible for composition scheme.
(c) The turnover limit for composition scheme in case of Uttarakhand is ₹
75 lakh. Further, a registered person who is exclusively engaged in
supplying services other than restaurant services are not eligible for
composition scheme. Thus, M/s Indra & bro cannot opt for composition
scheme. Further, the benefit of concessional tax payment under
Notification No. 2/2019 CT (R) dated 07.03.2019 is available in case of a
registered person whose aggregate turnover in the preceding financial
year does not exceed ₹ 50 lakh. Thus, in view of the above- mentioned
provisions, M/s Indra & bro cannot avail the benefit of concessional tax
payment as its aggregate turnover in the preceding financial year is more
than ₹ 50 lakh.
(d) An exclusive service provider can opt for the composition scheme
only if he is engaged in supply of restaurant services. The composition
scheme permits supply of marginal services for a specified value, but only
when the same are supplied along with goods and/or restaurant service.
Since M/s Him Naresh is exclusively engaged in supply of services other
than restaurant services, it is not eligible for composition scheme even
though its turnover in the preceding year is less than ₹ 75 lakh, the eligible
turnover limit for Uttarakhand.
However, since M/s Him Naresh is not eligible to opt for composition
scheme, its aggregate turnover in the preceding financial year does not
exceed ₹ 50 lakh and it is exclusively engaged in supply of services other
than restaurant services, M/s Him Naresh is entitled to avail benefit of

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concessional payment of tax under Notification No. 2/2019 CT (R) dated
07.03.2019.
27. Computation of GST Liability of Pradyumn Corporation for the month of
October 20XX
Particulars Value CGST SGST IGST

A. Computation of Tax payable on
Outward Supply
(i) Intra State Sale(WN1) 200,000 18,000 18,000 -
(ii) Labour Contract for 50,000 4,500 4,500 -
repair of single residential
unit(WN2)
Total 22500 22500 -
B. ITC Eligible
(i) Goods purchased from 50,000 - - -
unregistered Dealer(WN3)
(ii) Professional Fee paid to 50,000 - - 9000
Udadi(WN4)
Total - - 9000
Computation of Net GST Payable
Tax Payable on Outward Supply 22500 22500 -
(-)ITC - IGST (4500) (4500)
Net GST Liability 18000 18000
+Tax Payable under RCM - - 9000
Total GST to be paid in Cash 18000 18000 9000
Working Notes:
1. Time of supply for goods is date of invoice or due date of invoice u/s 31
which ever is earlier under section 12 even if payment is received in
advance as per notification 66/2017
2. Labour contract of construction of single residential house otherthan
part of residential complex is exempted by notification 12/2017. Repair
is not exempted.
3. As per 9(4), only notified categories of supply of goods or service by an
unregistered person to notified categories of registered recipient is
subject to GST under RCM.
4. Tax is payable under RCM if supplier located in non taxable territory
and recipient is located in taxable territory as per Section5(3) of IGST
act 2017. Tax under RCM needs to be paid in cash and once paid can
be availed as ITC.
28. Computation of GST liability of M/s. Shri Durga Corporation Pvt. Ltd. for
the month of February, 20XX

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Notes: 1. Section 12 of CGST Act, 2017 read with Notification No. 66/2017
CT dated 15.11.2017 provides that the time of supply for all suppliers of
goods (excluding composition suppliers) is the time of issue of invoice,
without any turnover limit. Thus, liability to pay tax on the advance
received in January, 20XX will also arise in the month of February, when
the invoice for the supply is issued.
2. All intra-State and inter-State procurements made by a registered
person from unregistered person have been exempted from reverse
charge liability, without any upper limit for daily procurements upto
30.06.2018*1. [Notification No. 8/2017 CT (R) dated 28.06.2017 as
amended and Notification No. 32/2017 IT(R) dated 13.10.2017 as
amended]
3. Services by way of pure labour contracts of construction, erection,
commissioning, or installation of original works pertaining to a single
residential unit otherwise than as a part of a residential complex are
exempt vide Notification No. 12/2017 CT(R) dated 28.06.2017. Labour
contracts for repairing are thus, taxable.
4. As per Notification No. 13/2017 CT(R) dated 28.06.2017, GST is payable
by the recipient on reverse charge basis on the receipt of services of
transportation of goods by road from a goods transport agency (GTA)
provided such GTA has not paid GST @ 12%. Since in the given case,
services have been received from a GTA who has paid GST @ 12%,
reverse charge provisions will not be applicable.
5. Input tax credit is available for the services received from GTA. The
input tax credit of IGST can be used against IGST, CGST and SGST in the
respective order vide section 49(5) of CGST Act, 2017.

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CHAPTER 4: EXEMPTION
29. Computation of value of taxable supply
Particulars (Rs.)
Fees charged for yoga camp conducted by a charitable trust

Nil
[Note-1]
Amount charged by business correspondent for the services

provided to the rural branch of a bank with respect to Savings Nil
Bank Accounts [Note-2]
Amount charged by cord blood bank for preservation of stem

Nil
cells [Note-3]
Service provided by commentator to a recognized sports body

5,20,000
[Note-4]
Notes:
1. Services by an entity registered under section 12AA of the Income-tax Act, 1961
by way of charitable activities are exempt from GST. The activities relating to
advancement of yoga are included in the definition of charitable activities. So,
such activities are exempt from GST.
2. Services by business facilitator or a business correspondent to a banking

company with respect to accounts in its rural area branch have been exempted
from GST.
3. Services provided by cord blood banks by way of preservation of stem cells or

any other service in relation to such preservation are exempt from GST.
4. Services provided to a recognized sports body only by an individual as a player,

referee, umpire, coach or team manager for participation in a sporting event
organized by a recognized sports body are exempt from GST. Thus, services
provided by commentators are liable to GST.
30. (i) Yes. Services provided TO an educational institution by way of

transportation of students are exempted from GST.

14
(ii) No. Services provided by way of vehicle parking to general public are not
exempted from GST. Therefore, GST is payable on the same.
31. Services provided by educational institution being preschool till higher
secondary to students, staffs, faculties is exempted from GST
32.
a. Services by way to catering by a 3rd party to preschool till higher
secondary is exempted from GST.
b. Hospital serving food to in- patients as directed by doctors are considered
as health care and is exempted from GST. But hospital canteen serving food
to bystanders and other persons are taxable.
33.
a. Renting of community hall by a religious trust where the daily rent is less
than 10,000 is exempted from GST.
b. Speed post services to anybody other than GOVT is taxable. Since it is
provided to union territory GOVT, it is exempted from GST.
c. Providing on hire a goods transportation vehicle to GTA is exempted from
GST.
34. A. Services by way of conduct of entrance examination by education

institution is exempted from GST.
b. Fumigation in warehouse of agriculture produce is exempted from GST.
35.
Nature of services Amount

Customer Taxability
provided charged
Exempt. Transportation of
Transportation of
A 20,000 milk by goods transport
milk
agency is exempt.
GST is payable.
Exemption is available for
transportation of goods
Transportation of
only where the
books on a
consideration for
consignment
B 3,000 transportation of goods
transported in a
on a consignment
single goods
transported in a single
carriage
goods carriage does not
exceed Rs. 1,500.

15
Exempt. Transportation of
goods where
Transportation of
consideration for
chairs for a single
C 600 transportation of all
consignee in the
goods for a single
goods carriage
consignee does not
exceed Rs. 750 is exempt.
CHAPTER 5 : TIME OF SUPPLY

36.
Date of Date Time of

Date of payment by issue of immediately supply of
S. No. recipient for supply of invoice by following 60 goods
services supplier of days from [Earlier of (1)
services invoice & (3)]
(1) (2) (3)
(1) August 10 June 29 August 29 August 10
(2) August 10 June 1 August 1 August 1
June 30 for
Part payment made on part
June 30 and balance payment and
(3) June 29 August 29
amount paid on August 29 for
September 1 balance
amount
June 28 (i.e.
Payment is entered in the when
books of account on June payment is
(4) 28 and debited in June 1 August 1 entered in
recipient’s bank account the books of
on June 30 account of
the recipient)

16
June 26 (i.e.
when
Payment is entered in the
payment is
books of account on June
debited in
(5) 30 and debited in June 29 August 29
the
recipient’s bank account
recipient’s
on June 26
bank
account)
37.
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, that is 17th June,
will be treated as the time of supply of service [Section 13(3)(a)].
38. 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.
39. Time of supply of goods is the earlier of the following two dates in terms of
section 12(2):
• Date of issue of invoice/last date on which the invoice is required to be issued
• Date of receipt of payment (Omitted by Notification 66/2017)
In this case since the invoice has not been issued, the time of supply will be the
last date on which the invoice is required to be issued.

17
The invoice for supply of goods must be issued on or before the despatch of
goods i.e., on 2nd August. Since there is no evidence of receipt of payment, time
of supply of the goods will be 2nd August, the date when the invoice should have
been issued.
40. Time of supply of goods is the earlier of the following two dates in terms of
section 12(2):
• Date of issue of invoice/last date on which the invoice is required to be issued
• Date of receipt of payment (Omitted by Notification 66/2017)
In this case,
Date of invoice: 2nd December
Due date of Invoice : 7th December (Being date of delivery of goods)
Hence, the time of supply will be 2nd December.
41. 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).
42. 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 supplier’s invoice has to be
taken as the time of supply. This fixes 19th April as the time of supply.
43. 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, the date of provision of
service, i.e., 5th September, will be the time of supply.

18
44. Where it is not possible to determine the time of supply in terms of date of
invoice or date of provision of service or date of receipt of payment or
date of receipt of services in the books of account of the recipient, and
where periodical return is not to be filed (Mr. XYZ, being an employee in a
multi-national company, is not a registered person), the date of payment
of tax is taken as the time of supply [Section 13(5)(b)].
Therefore, the date when Mr. XYZ pays the GST will be the time of supply.
45. In case of supply of vouchers by a supplier, the time of supply shall be the
date of issue of voucher, if the supply is identifiable at that point. In this
case the supply of goods i.e. cell phone is identifiable with the voucher,
hence time of supply shall be the date of issue of such vouchers by PQR
Ltd. i.e.25/02/2018.
46. In case of supply of vouchers by a supplier, the time of supply shall be the
date of redemption of voucher, if the supply is not identifiable at the time
of issue of voucher. In this case, since the supply is not identified at the time
of issue of voucher. The holder of voucher can purchase anything from
Flipkart. Hence, time of supply is date of redemption of voucher i.e, the
date of purchase of goods by the holder of voucher i.e, 06/06/2019.
47. Kanu&Kanu of India and Prince Ltd. of US are “associated enterprises” as

per Section 92A of Income Tax Act, 1961. Since, Indian Company holds 69%
shareholding of Hungarian based company, Section 13(3) of the CGST Act,
2017 gets attracted. As per Section 13(3) of CGST Act,2017, in case of
supply by associated enterprises, where the supplier of service is located
outside India, the time of supply shall be the earlier of-
(a) The date of entry in the books of account of the recipient of supply; or
(b) The date of payment,
Therefore, the time of supply shall be 29-12-2018
48. As per section 12(6) of CGST Act, 2017, the time of supply with regard to an
addition in value on account of interest, late fee or penalty or delayed
payment of consideration shall be 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. 02.02.2018. Further,
Mr. P is required to make payment on or before 20th of March, 2018.

19
49. i) As per section 31 of the CGST Act, 2017 read with the CGST Rules, 2017,
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. upto 03.02.20XX. However, the invoice has been issued on
10.02.20XX.
In such a case, the time of supply as per section 13 of the CGST Act, 2017
would be 04.01.20XX i.e. earliest of the following:
. (a) Date of provision of service (04.01.20XX)
. (b) Date of receipt of payment (11.02.20XX)
ii) Section 31 of the CGST Act, 2017 read with the CGST Rules, 2017, inter alia,
provides that tax invoice shall contain the following particulars-
. (a) Total value of supply of goods or services or both;
. (b) Rate of tax (central tax, State tax, integrated tax, Union territory tax or
cess);
. (c) Amount of tax charged in respect of taxable goods or services

(central tax, State tax, integrated tax, Union territory tax or cess);
The objection raised by the tax consultant of Royal Fashions suggesting that
the amount of tax charged in respect of the taxable supply should be shown
separately in the invoice raised by Aura Beauty Services Ltd., is valid in law. In
the present case, the tax amount has not been shown separately in the
invoice.
50. As per S. 13(3) Time of supply for recipient of service under RCM is earlier
of following dates
- Date of payment or
- 61st Day from Date of Invoice
In the given Question

20
Date of payment is 4th September 2018.
61st Day from Date of Invoice is 23rd September 2018.
Hence time of supply will be 4th September 2018.
VALUE OF SUPPLY
51. Section 15(2) mandates the addition of certain elements to transaction
value to arrive at taxable value. Clause (c) of section 15(2) specifies that
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 taxable value.
Since AKJ Foods Pvt. Ltd. does the testing before the delivery of goods, the
charges therefore will be included in the taxable value. Therefore, AKJ Foods
Pvt. Ltd.’s argument is not correct. The testing fee should be added to the price
to arrive at taxable value of the consignment.
52. As per section 15(2)(e), the value of a supply includes subsidies directly
linked to the price, excluding State Government and Central Government
subsidies. In this case, the subsidy is not from the Government but is from a
philanthropic association. Therefore, the subsidy is to be added back to
the price to arrive at the taxable value, which comes to ₹ 5 lakh a year.
53. This is a supply that is valued as per transaction value under section 15(1)
as the price is the sole consideration for the supply and the supply is made
to unrelated person. The concept of transaction value has been
expanded to include certain elements like interest which are actually
payable. Once waived, the interest is not payable and is therefore, not to
be added to transaction value.
54. The discounts were not known or agreed at the time of supply of goods to
the dealers. Therefore, such discounts cannot be reduced from the price
on which tax had been paid in terms of section 15(3).
55. Computation of value of taxable supply
Particulars Rs.
List price of the goods (exclusive of taxes and discounts) 5,00,000
Tax levied by Municipal Authority on the sale of such goods
[Includible in the value as per section 15(2)(a)] 50,000
CGST and SGST chargeable on the goods [Not includible in the
value as per section 15(2)(c)]
10,000

21
Packing charges [Includible in the value as per section
15(2)(c)]
Subsidy received from a non-Government body [Since subsidy 20,000
is received from a non-Government body, the same is
included in the value in the value in terms of section 15(2)(e)]
Total 5,80,000
Less: Discount @ 20% on Rs.5,00,000 [Since discount is known at
the time of supply, it is deductible from the value in terms of
section 15(3)(a)] 1,00,000
Value of taxable supply 4,80,000
56. No, the said statement is not correct. Section 15 of CGST Act determines
the value of supply of goods or services or both. Further, section 15 is
applicable for determining value of taxable supply under IGST as well vide
section 20 of IGST Act. Section 20 of IGST Act inter alia provides that the
provisions of CGST Act relating to time and value of supply shall mutatis
mutandis apply in relation to integrated tax as they apply in relation to
central tax. Thus, section 15 is common for all three taxes and also common
for goods and services.
57. Yes, post-supply discounts or incentives are allowed as admissible

deduction under section 15 of the CGST Act. Where the post-supply
discount is established as per the agreement which is known at or before
the time of supply and where such discount specifically linked to the
relevant invoice and the recipient has reversed input tax credit
attributable to such discount, the discount is allowed as admissible
deduction under Section 15(3)(b) of the CGST Act.
58. Computation of GST Liability
Particulars Sahil Traders Jaggi Motors

Ltd.
Price of the goods (excluding GST) 20000 15000
Add: Packing charges (Note a) 600
Add :Commission (note a) 400

22
Add: Weighment charges (Note a) 1000
Less: Discount for prompt payment 500

(recorded in the invoice) – Note b
Value of taxable supply 21000 15500
IGST payable @ 18% (Note-c) 3780

1395
CGST payable @ 9% (Note-d)
SGST payable @ 9% (Note-d) 1395
Note :
a. Incidental expenses, including commission and packing, charged by

supplier to recipient of supply is includible in the value of supply.
Weighment charges are also incidental expenses, hence includible in the
value of supply [Section 15 of the CGST Act, 2017].
b. Since discount is known at the time of supply, it is deductible from the
value in terms of section 15 of the CGST Act, 2017.
c. Since supply made to Sahil Traders is an inter-State supply, IGST is payable
in terms of section 5 of the IGST Act, 2017.
d. Since supply made to Jaggi Motors Ltd. is an intra-State supply, CGST &
SGST is payable on the same.
59. Computation of Net GST Payable by Kamal Book Depot for the month of
November 2019
Particulars W.N Amount
List Price 1 2,00,000
Packing Charges 2 5,000
Freight & Cartage 3 2,000
Transit Insurance 3 1,500
Extra Designing Charges 2 6,000

23
Taxes by Muncipal Authorities 4 500
Total Value of Supply 2,15,000
CGST @9% 19350
SGST @9% 19350
If the amounts were already included in transaction value then the value
becomes 2,00,000 and CGST will be 18000 and SGST will be 18000.
Working notes
1. List price is transaction value u/s 15(1).
2. As per S. 15(2)(c) Incidental expenses incurred by supplier in relation to
supply till goods are ready for delivery charged to the recipient needs
to be added to value.
3. Supply of goods with transit insurance and freight are composite supply
of goods and service. It will taxed in the rate of principal supply as per
S.8 of CGST Act 2017.
4. Taxes otherthan GST charged separately needs to be added to value
u/s 15(2)(a)
5. Discount given after the supply cannot be reduced from value if it was
existed at the time of supply as per agreement u/s 15(3)(b).
60. Computation of net GST payable
Particulars CGST SGST
GST payable on intra-State supply of goods 1,080 1,080
[Being an intra-State supply, CGST and (12,000 × 9%) (12,000 × 9%)

SGST is payable on the same]
Less: Input tax credit (ITC) on intra-State 900 900

purchase of goods
(10,000 × 9%) (10,000 × 9%)
[CGST and SGST paid on the intra-State
purchases of goods]
Net GST payable 180 180

24
61. Computation of net GST payable by Govind
Particulars Amount
IGST @ 18% payable on inter-State supply of services 32,400
[Being an inter-State supply, IGST is payable on the same [1,80,000 × 18%]

in terms of section 5 of the IGST Act, 2017]
Less: ITC of CGST @ 9% paid on intra-State receipt of 9000

goods and services [1,00,000 × 9%]
[Cross utilisation of CGST towards IGST]
Less: ITC of SGST @ 9% paid on intra-State receipt of 9000

goods and services [1,00,000 × 9%]
[Cross utilisation of SGST towards IGST]
Net GST payable in cash 14400
Note :
1. CGST shall first be utilised towards payment of CGST and the amount
remaining, if any, be utilised towards the payment of IGST [Section 49 of
the CGST Act, 2017].
2. SGST shall first be utilised towards payment of SGST and the amount
remaining, if any, may be utilised towards the payment of IGST [Section 49
of the CGST Act, 2017].
62.
Computation of Net GST payable by Mr. Nimit
C. Computation of Tax payable on
Outward Supply
(iii) Intra State 600,000 54000 54000 -
(iv) Inter state 2,00,000 - - 36000
Total 54000 54000 36000
D. ITC Eligible
Opening Credit 15000 35000 20,000
(iii) Intra state 4,00,000 36000 36000 -
(iv) Inter State 50,000 - - 9000

25
Total 51000 61000 29000
Computation of Net GST Payable
Tax Payable on Outward Supply 54000 54000 36000
(-)ITC - IGST - - (29000)
(-) ITC - CGST (51000) - -
(-) ITC SGST - (54000) (7000)
Total GST to be paid in Cash 3000 0 0
63. Computation of GST liability of Singhal Brothers

Particulars Amount
Price of chemicals (₹ 50,000 x 30 tons) [Note-1] 15,00,000
Freight [Note-2] 1,80,000
Packing charges [Note-3] 1,10,000
Weighing charges [Note-3] 20,000
Cost of special instrument [Note-4] 3,10,000
Inspection charges [Note-5] 12,000
Government subsidy [Note-6] -
Interest for late payment [Note 7] (₹15,000 x 100/118) 12,712
Tax liability for the month of September 20XX
Value of taxable supply (₹ 21,44,712- ₹ 12,712) [Note- 21,32,000

8]
CGST @ 9% 1,91,880
SGST @ 9% 1,91,880
Tax liability for the month of November 20XX
Interest for late consideration [Note-9] 12,712
CGST payable @ 9% 1,144

26
SGST payable @ 9% 1,144
Due date of deposit of GST

Particulars Time of Supply Due date of deposit
[Note-11]
GST liability of ₹ September 8, 20XX October 20, 20XX

3,83,760 for the
taxable supply made
by Singhal Brothers
[Note-10]
Interest amounting to November, 20XX December 20, 20XX
₹ 2,288 [Note-9]
Notes: (1) As per section 15(1) of the CGST Act, 2017, the value of a supply
is the transaction value i.e., the price actually paid or payable for the said
supply when the supplier and the recipient of the supply are not related
and the price is the sole consideration for the supply.
(2) The given supply is a composite supply involving supply of goods
(chemical) and services (freight) where the principal supply is the supply of
goods. As per section 8(a) of the CGST Act, 2017, a composite supply is
treated as a supply of the principal supply involved therein and charged
to tax accordingly. Thus, tax rate applicable to the goods (chemical) has
been considered.
(3) All incidental expenses including packing charged by the supplier to
the recipient of a supply are includible in the value of supply in terms of
section 15(2)(c) of CGST Act, 2017.
(4) Any amount charged for anything done by the supplier in respect of
the supply of goods at the time of, or before delivery of goods is includible
in the value of supply in terms of section 15(2)(c) of CGST Act, 2017.
(5) Any amount that the supplier is liable to pay in relation to supply but
incurred by the recipient of supply and not included in the price actually
paid for the goods is includible in the value of supply in terms of section
15(2)(b) of CGST Act, 2017.
(6) Subsidies not directly linked to the price and provided by the Central
Government and State Governments are not includible in the value of
supply in terms of section 15(2)(e) of the CGST Act, 2017.
(7) Interest for the delayed payment of any consideration for any supply is
includible in the value of supply in terms of section 15(2)(d) of the CGST

27
Act, 2017. The interest has to be considered as cum tax value and tax
payable thereon has to be computed by making back calculations in
terms of rule 35 of CGST Rules, 2017.
(8) The tax liability for the month of September, 20XX will not include the tax
payable on the amount of interest as the tax liability for the delayed
payment of interest arises on the date of receipt of interest in terms of
section 12(6) of CGST Act, 2017.
(9) As per section 12(6) of the CGST Act, 2017, the time of supply in case of
addition in value by way of interest for delayed payment of consideration
for goods is the date on which the supplier receives such addition in value.
Thus, the time of supply of interest received on account of delayed
payment of consideration is the date of receipt of interest.
(10) the time of supply would be the date of issue of invoice i.e. September
8, 20XX in terms of section 12(2) of CGST Act, 2017
(11) As per section 39(1) of CGST Act, 2017 every person registered under
regular scheme of payment of tax has to furnish the prescribed return on or
before 20th of the succeeding month. Further, section 39(7) provides that
every regular registered person is liable to pay tax due to the Government
by the last date on which he is required to furnish such return. Thus, GST is
liable to be paid on or before 20th of the succeeding month.
64. Computation of value of special machine

Particulars Amount
Price of machinery 6,00,000
Add: Transit insurance [Note 1] 11,000
Packing charges [Note 2] 9,000
Extra design charges [Note 3] 20,000
Freight [Note 1] 12,000
Total 6,52,000
Less: 2% cash discount on price of machinery [₹ 12,000

6,00,000 x 2%] [Note 4]

28
Notes:
(1) The given supply is a composite supply involving supply of goods
(special machine) and services (transit insurance and freight) where the
principal supply is the supply of goods. As per section 8(a) of the CGST
Act, 2017, a composite supply is treated as a supply of the principal supply
involved therein and charged to tax accordingly. Thus, tax rate
applicable to the goods (special machine) has been considered
(2) All incidental expenses including packing charged by the supplier to
the recipient of a supply are includible in the value of supply in terms of
section 15(2)(c) of CGST Act, 2017.
(3) Any amount charged for anything done by the supplier in respect of
the supply of goods at the time of, or before delivery of goods is includible
in the value of supply in terms of section 15(2)(c) of CGST Act, 2017. Thus,
extra designing charges are to be included in the value of supply.
(4) Cash discount was given at the time of supply and also recorded in
invoice, so the same is not to be included while computing value of supply
in terms of section 15(3)(a) of CGST Act, 2017.
65. Computation of Value of Taxable supply by Shri KrishnaPvt Limited.

Particulars Amount
Price of Goods 100,000
Muncipal Taxes 2,000
Inspection Charges 15,000
Subsidy from Ram Trust -
Late fee -
Weighment charges 2,000
66. Computation of value of taxable supply by red pepper Ltd for March
20XX
Particulars Amount

29
Price of Goods 15,00,000
Subsidy from Govt -
Subsidy from NGO 50,000
Taxes by municipal Authorities 20,000
Packing Charges 15,000
Late fee(6000*100/118) 5085
CHAPTER 6 : INPUT TAX CREDIT
67. (i) Section 17(5) of the CGST Act, 2017, inter alia, blocks input tax credit in
respect of motor vehicles for transportation of persons having approved
seating capacity of not more than 13 persons (including the driver), except
when they are used for certain specified purposes. Since in the given case,
the mini bus has a seating capacity of 16 persons, the ITC thereon will not
be blocked.
(ii) Section 17(5) of the CGST Act, 2017, inter alia, blocks input tax credit in
respect of motor vehicles for transportation of persons with certain
exceptions. Thus, ITC on motor vehicles for transportation of goods is
allowed unconditionally. Therefore, ITC on trucks purchased by Bangur
Ceramics Ltd for transportation of its finished goods from the factory to
dealers located in various locations within the country is allowed.
(iii) Section 17(5) of the CGST Act, 2017, inter alia, blocks input tax credit in
respect of motor vehicles for transportation of persons having approved
seating capacity of not more than 13 persons (including the driver), except
when they are used for making further supply of such motor vehicles. Being
a dealer of cars, “Hans Premium” has purchased the cars for further supply.
Therefore, ITC on such cars is allowed even though seating capacity is less
than 13.
(iv) Section 17(5) of the CGST Act, 2017 inter alia, blocks input tax credit in
respect of outdoor catering services. However, ITC is available on such

30
services, when the same are provided by an employer to its employees
under a statutory obligation.
Thus, in view of the above- mentioned provisions, Sun & Moon packers Pvt.
Ltd. can avail ITC in respect of outdoor catering services availed by it as
the same is being provided under a statutory obligation.
68. In case of supply of capital goods or plant and machinery on which ITC
has been taken, the registered person shall pay an amount equal to the
ITC taken on the said capital goods or plant and machinery reduced by
5% per quarter or part thereof from the date of invoice or the tax on the
transaction value of such capital goods, whichever is higher.
However, in case of refractory bricks, moulds and dies, jigs and fixtures
when these are supplied as scrap, the person can pay tax on the
transaction value.
69. Under section 17(5)(a)CGST Act, ITC is allowed on aircraft if they are used
to make the taxable supply of imparting training on flying an aircraft.
Therefore, the credit is correctly taken.
70. No. As per section 17(5)(a), ITC on motor vehicles can be availed only if
the taxable person is in the business of transport of passengers or is
providing the services of imparting training on driving/flying/navigating
motor vehicles or is in the business of supply of motor vehicles.
71. Under section 16(2) of the IGST Act, credit of input tax is allowed to be
taken for inward supplies used to make zero rated supplies. Under section
17 of the CGST Act also, ITC is disallowed only to the extent it pertains to
supplies used for non-business purposes or supplies other than taxable and
zero-rated supplies. Supplies to SEZ units are zero rated supplies in terms of
section 16(1) of IGST Act. Thus, full ITC is allowed on inward supplies of BMT
Ltd. used for effecting supplies to the unit in the SEZ.
72. Thread and lining material are inputs which are used for making taxable as
well as exempt supplies. Therefore, credit on such items will be apportioned
and credit attributable to exempt supplies will be added to the output tax
liability in terms of rule 42 of the CGST Rules, 2017.
Credit attributable to exempt supplies = Common credit x (Exempt
turnover/ Total turnover)
Common credit = ₹ 15,000 + ₹ 5,000 = ₹ 20,000
Exempt turnover = ₹ 1 crore
Total turnover = ₹ 5 crore [₹ 1 crore + ₹ 4 crore]

31
Credit attributable to exempt supplies = (₹ 1 crore /₹ 5 crore) x ₹ 20,000 =
₹ 4,000.
Ineligible credit of ₹ 4,000 will be added to the output tax liability for the
month of July. Credit of ₹ 16,000 will be eligible credit for the month of July.
73. Mr. A is eligible for ITC on inputs held in stock and inputs contained in semi-
finished or finished goods held in stock and capital goods as on 30th July.
ITC on capital goods will be reduced by 5% per quarter or part thereof
from the date of invoice [Section 18(1)(c)].
74. Computation of net GST payable by Shipra Traders
Particulars CGST SGST
GST payable on intra-State supply of goods 855 855
[Being an intra-State supply, CGST and [9,500 × 9%] [9,500 × 9%]

CGST is payable on the same]
Less: ITC on intra-State purchase of goods 900 900
[ITC of CGST and SGST paid on intra-State (10,000 × 9%) (10,000 × 9%)
purchase is available in full, even if some
inputs are lying in stock]
Net GST payable Nil Nil
Input tax credit carried forward in 45 45

Electronic Credit Ledger
75. Section 18 of the CGST Act, 2017 read with the CGST Rules, 2017 provides
that if capital goods or plant and machinery on which input tax credit
has been taken are supplied outward by the registered person, he must
pay an amount that is the higher of the following:
(a) input tax credit taken on such goods reduced by 5% per quarter of a
year or part thereof from the date of issue of invoice for such goods (i.e.,
input tax credit pertaining to remaining useful life of the capital goods), or

32
(b) tax on transaction value.
Accordingly, the amount payable on supply of needle detecting

machine shall be computed as follows:
Particulars Amount Amount
Input tax credit taken on the machine 1,80,000

( 10,00,000 × 18%)
Less: Input tax credit to be reversed @ 5% per quarter

for the period of use of machine
(i) For the year 2017-18 =

(₹ 1,80,000 × 5%) × 3 quarters 27000
(ii) (For the year 2018-19 =
27000 54000
(₹ 1,80,000 × 5%) × 3 quarters
Amount required to be paid (A) 1,26,000
Duty leviable on transaction value (₹ 7,50,000 × 18%) 1,35,000

(B)
Amount payable towards disposal of machine is 1,35,000

higher of (A) and (B)
76.
Particulars Amount Amount
Input tax credit taken on the machine 1,62,000

( 9,00,000 × 18%)
Less: Input tax credit to be reversed @ 5% per quarter

for the period of use of machine
(i) For the year 2017-18 =

(₹ 1,62,000 × 5%) × 3 quarters 24300
(ii) (For the year 2018-19 =
32400 56700
(₹ 1,80,000 × 5%) × 4 quarters

33
Amount required to be paid (A) 1,05,300
Duty leviable on transaction value (₹ 7,00,000 × 18%) 1,26,000

(B)
Amount payable towards disposal of machine is 1,26,000

higher of (A) and (B)
77. Computation of admissible ITS to RD Ltd. For the month of September 2017
Purchases CGST &

SGST (In
Rs)
1. Goods procured but without invoice(WN#1)
2. Goods procured from Jkl Ltd(WN#2)
3. Purchase of goods not to be used for business purposes (Wn#3)
4. Purchase of goods from CC ltd. ( invoice of Cc Ltd, is received in
month of September 2017 but goods were received in month of
January 2018) (Wn#4) 1,36,000
5.Goods purchased against valid invoice fron DD Ltd. But tax been
deposited by DD Ltd. Rd ltd. has made payment to DD Ltd for such
purchases in the month of 2018(Wn#5)
Total admissible ITS to RD Ltd. For the month of September 2017 136000
Working Notes
1. As per Sec 16(2)(a), no ITC will be available since RD Ltd. Is not in possession of
valid tax paying document.
2. As per Sec 16(2)(c) no registered person shall be entered into the credit of any
input tax credit in respect of any supply of goods unless the credit charged in
respect of such supply has been actually paid to the Govt. Since JKL Ltd. has not
deposited the tax to the credit of Govt. , no ITC can be claimed by RD Ltd.
3.A registered person shall be entitled to take ITC on goods which are used or
intended to be used in the course of furtherance of business. Since RD Ltd. has

34
purchased the goods for non business purpose , hence no credit will be admissible
on such purchases.
4.As per Sec 16(2)(b) ITC is admissible only when registered person has received
such goods. Since the goods are received in the month of Jan 2018, ITC cannot
be taken in the month of Sept 2017.
5. Input tax credit shall be admissible in the month of Sept 2017, even if payment
is made by RD Ltd. in month Jan 2018.
78. As per sec 16(4) a registered person shall not be entitled to take ITC in
respect of any invoice or debit note for supply of goods or services or both
after-
(a) the due date of furnishing of the return under sec 39 for the month of
September following the end of FY to which such invoice pertains, or
(b) furnishing of the relevant annual return,
Whichever is earlier .
In this case the inputs were purchased by invoice dated 22/11/2017, hence ITC in
respect of such inputs can be taken on earlier of following dates-
1. 20/10/2018 being due date of furnishing return of month of September 2018,

or
2. 15/09/2018 being the date of furnishing of annual return
Applying the above provisions , ABC ltd can avail credit of Input Tax paid on inputs
till 15/09/2018. Therefore it can avail credit of CGST Rs 13,500 and SGST of 13,500
on 06/06/2018
79. Computation of ITC
Items Input tax

(Rs)
Machinery used in the factory (WN-1) 1,05,000
Moulds and dies used in the factory(WN-1) 23,000
Pollution control equipment used in the factory (WN-1) 21,000
Capital goods purchased on which depreciation has been Nil
taken on full value(WN-2)
Nil

35
Capital goods used as parts purchases from supplier who paid
tax of Rs 7,500 Under composition scheme and the composite 1,49,000
tax has not been collected from SG Ltd(WN-3)
Total ITC available
WNs:
1. As per Sec 2(19), “capital goods”, means goods the value of which is
capitalized in the books of account of the person claiming the ITC and which are
used or intended to be used in the course or furtherance of business hence-
a) Machinery
b) Moulds and dies
c) Pollution control equipment
which are used or intended to be used in the course or furtherance of business

are eligible for ITC as capital goods.
2. As per Sec 16(3), ITC shall not be admissible where registered person has
claimed depreciatopn on tax component of the cost of capital goods and plant
and machinery under the provision of Income Tax Act , 1961.
3. As per Sec 17(5)(e), ITC shall not be available In respect of goods or service or
both, on which tax has been paid under Sec 10. Thus, no input tax shall be allowed
of tax paid under composition scheme by the supplier.
80. As per Sec 17(5)(h) of CGST Act 2017, if the value of any goods is written of
in the books of accounts then no ITC shall be allowed in respect of said
input. Where ITC has been taken in respect of said goods the same has to
be paid by recipient. Since, in the given case, ABC Ltd. has availed ITC
thus, to pay Rs.70,000 (Rs.5,00,000 @14%) towards CGST &Rs.70,000 SGST
liability.
81. As per Sec 17(5)(c), ITC credit shall not be available I respect of work
contract services when supplied for construction of an immovable
property. However, credit is allowed where it is an input service for further
supply of work contract service. Hence, JKL Ltd. can avail the ITC of GST
charged on the input service provided by the subcontractor.
82. Computation of ITC available Cloud Seven Private Limited

36
Particulars ITC Remarks
Trucks used for the transport of raw 1,20,000 ITC not blocked since
material used for transport of
goods
Foods and beverages for 0 Ineligible credit u/s
consumption of employees 17(5)(b)
working in the factory
Inputs are to be received in five lots, 0 ITC upon receipt of
out of which third last lot.
lot was received during the month
Membership of a club availed for 0 Ineligible credit u/s
employees working in 17(5)(b)
the factory
Capital goods 350,000 (out of five items,
invoice for one item was
missing and GST paid on
that item was Rs 50,000,
no ITC without Invoice)
Raw material 0 ITC only upon receipt
u/s 16(2)(b)
Total ITC Eligible 470,000
83. Computation of Eligible ITC for Le Marc Ltd

Particulars ITC Remarks
Motor vehicle purchased for 0 ITC blocked since
employees to be used for personal used for transport of
as well as business purposes passenger with
seating capacity<=13
Motor vehicle purchased for 2,00,000 ITC allowed since
transportation of goods within the used for transport of
factory goods
Food items for consumption of 0 Ineligible credit u/s
employees 17(5)(b)
Rent-a-cab facility 36000 ITC Eligible since
provided under a
statutory obligation.
Total ITC Eligible 2,36,000
84. Computation of Net GST Payable by Mr Ekaant for the Month of July 20XX
A.Computation of Tax
payable on Outward
Supply
i.Inter State 30,00,000 - - 540,000
ii.Intra state 65,00,000 585,000 5,85,000 -

37
Total 585,000 585,000 5,40,000
B.ITC Eligible
Opening Credit 2,00,000 2,00,000 5,00,000
Intra state 10,00,000 90,000 90,000 -
Inter State 500,000 - - 90,000
IGST on CG 150,000
Other ITC(WN1) 45,000 45,000 -
ITC on Legal 100,000 9,000 9,000 -
Service
Total 344,000 344,000 740,000
Computation of Net GST
Payable
Tax Payable on Outward 585,000 585,000 5,40,000
Supply
(-)ITC - IGST (100,000) (100,000) (5,40,000)
(-) ITC - CGST (344,000) - -
(-) ITC SGST - (344,000) -
Net GST Liability 141,000 141,000 -
+Tax payable under RCM 9,000 9,000 -
Total GST to be paid in Cash 150,000 150,000 0
Working Notes:
1. Membership in club is a blocked credit as per S. 17(5)(b)
2. Inward supply from unregistered person is not subject to GST unless
notified u/s 9(4)
3. Tax payable under RCM to be paid in cash only.
CHAPTER 6: REGISTRATION
85. As per section 22 of the CGST Act, 2017 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 intraState taxable supplies of
goods is as under:-
(a) ₹ 10 lakh for the States of Mizoram, Tripura, Manipur and Nagaland.
(b) ₹ 20 lakh for the States of States of Arunachal Pradesh, Meghalaya,
Puducherry, Sikkim, Telangana and Uttarakhand.
(c) ₹ 40 lakh for rest of India. However, the higher threshold limit of ₹ 40
lakh is not available to persons engaged in making supplies of ice cream

38
and other edible ice, whether or not containing cocoa, Pan masala and
Tobacco and manufactred tobacco substitutes.
The threshold limit for a person making exclusive taxable supply of services
or supply of both goods and services is as under:-
(a) ₹ 10 lakh for the States of Mizoram, Tripura, Manipur and Nagaland.
(b) ₹ 20 lakh for the rest of India. 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 exceeds ₹10 lakh. Further, he is required to obtain registration in
both Assam and Tripura as he is making taxable supplies from both the
States.
(ii) The applicable threshold limit for registration for Pulkit in the given case
is ₹ 40 lakh as he is exclusively engaged in intra-State taxable supply of
goods. 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.
(iv) 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 exclusive
supply of goods while 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.
(v) 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.
86. When there is a change in PAN, GST registration cannot be amended.
New registration is required for the change in PAN.
87. When a person registers for occasional business in a state, the registration
will be called as Casual taxable person registration. Advance deposit of
taxes are required for such registration.

39
88. (a) Every supplier becomes liable to registration if his turnover exceeds ₹ 20
lakh [in a State/UT other than Special Category States] in a finacial year
[Section 22]. Since in the given case, the turnover of Dhampur Industries
exceeded ₹ 20 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 of the Chapter
III - Registration of CGST Rules, 2017]. Therefore, the effective date of registration
is 1st September.
(b) Since in the given case, the turnover of Mehta Teleservices exceeds ₹ 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.
89. Section 25(1) of the CGST Act stipulates the time-period within which
registration needs to be obtained in various cases. It provides the following
time-limits:
In case of registration needs to be obtained

a person who is liable to within 30 days from the date on which he
be registered under s becomes liable to registration
ection 22 or section 24
a casual taxable person at least 5 days prior to the commencement of
or a non-resident taxable business
person
In view of the aforesaid provisions:
(a) A casual taxable person must obtain registration at least 5 days prior to the
commencement of its business.
(b) As per section 24 of the CGST Act, person making inter-State taxable supply is
liable to get compulsorily registered. Therefore, such person must obtain

40
registration within 30 days from the date on which he becomes liable to
registration.
90. A Permanent Account Number is mandatory to be eligible for grant of

registration. One exception to this is a non-resident taxable person. A non-
resident taxable person may be granted registration on the basis of other
prescribed documents instead of PAN. He has to submit a self-attested
copy of his valid passport along with the application signed by his
authorized signatory who is an Indian Resident having valid PAN and
application will be submitted in a different prescribed form [Section 25(6)
& (7)].
91. A. Section 22 stipulates that every supplier becomes liable to registration if
his turnover exceeds ₹ 20 lakh in a State/UT [₹ 10 lakh in Special Category
States] in a finacial year. However, as per section 24, a person supplying
goods/services or both on behalf of other taxable persons whether as an
agent or not is liable to be compulsorily registered even if its aggregate
turnover does not exceed ₹ 20 lakh during the financial year.
(c) As per section 23, an agriculturist who is only engaged in supply of
produce out of cultivation of land is not required to obtain registration.
92. No, a person without GST registration can neither collect GST from his
customers nor can claim any input tax credit of GST paid by him.
93. No. Every person who is liable to take a registration will have to get
registered separately for each of the States where he has a business
operation (and is liable to pay GST)
94. Yes. In terms of the proviso to sub-section (2) of section 25, a person having
multiple business verticals in a State may obtain a separate registration for
each business vertical, subject to such conditions as may be prescribed.
95. Yes. In terms of sub-section (3) of section 25, a person, though not liable
to be registered under sections 22 or 24 may get himself registered
voluntarily, and all provisions of this Act, as are applicable to a registered
taxable person, shall apply to such person.
96. Turnover limit for registration for supplier of goods in state of Jammu and
Kasmir is 40,00,000. Hence Luv&Kush Pvt limit should apply for registration
within 30 days from the date on which their turnover crosses said limit.
Since the company applies for registration within 30 days that is on 28th sep,
effective date of registration will be 5th September itself.

41
Hence for those invoices issued between 5th September being effective
date and 6th October being date of grant of certificate of registration,
Revised tax invoice to be issued within another 30 days.
Consolidated revised tax invoice can be issued for supply effected during
this period to unregistered recipient except inter state supply for a value
exceeding 2,50,000.

42
98. Every supplies shall be liable to be registered under this Act in the state or
union territory, other than special category states, from where he makes a
taxable supply of gods or services or both, if his aggregate turnover in a
financial year exceeds Rs 20lakhs
Particulars Rs
1) Intra state supply of goods chargeable with GST @18% 6,75,000
2) Intra state supply of goods which are exempt from GST under 5,35,900
sec 11of CGST Act 2017
3) Intra state supply of goods chargeable with Nil rate 7,89,125
Total value of supplies 20,00,025
Working note
1. AS per sec 2(6) of CGST Act 2017 “Aggregate turnover” means the aggregate
value of all taxable supplies (excluding the value of inward supplies on which tax
is payable by a person on reverse charge basis) exempt supplies, export of goods
or services or both and inter state supplies of persons having the same permanent
account number, to be computed on all India basis but excludes central tax,
state tax, union territory tax, Integrated tax and cess. Applying the definition
stated above.
2. Intra state supply of goods chargeable with GST @18% specifically included for
determination of aggregate turnover.
3. Intra state supply of goods which are wholly exempt from GST under sec 11 of
CGST Act 2017 is to be included for determination for determination of aggregate
turnover.
4. Intra state supply of goods chargeable with nil rate of GST is covered under
exempt supplies under sec 11, hence it is to be included in computation of
aggregate turnover.
Conclusion –thus, in this case since aggregate turnover of the company exceeds
Rs 40 Lakhs, it is not liable to get itself registered under GST law.
99. As per section 22 of the CGST Act, 2017, a supplier is liable to be

registered in the State/Union territory from where he makes a taxable
supply of goods or services or both, if his aggregate turnover in a financial
year exceeds ₹ 20 lakh.

43
However, if such taxable supplies are made from any of the specified
special category States, namely, States of Arunachal Pradesh, Assam,
Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal
Pradesh and Uttarakhand, he shall be liable to be registered if his
aggregate turnover in a financial year exceeds ₹ 10 lakh.
As per section 2(6) of the CGST Act, 2017, 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 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 of the CGST Act, 2017 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) of the CGST Act, 2017,
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 for

the month of April, 20XX is computed as under:
Particulars Amount
Supply of machine oils in Delhi 2,00,000
Add:Supply of high speed diesel in Delhi 4,00,000
Add: Supply made through Fortis Lubricants - an agent of 1,75,000

Pure Oils in Delhi 

44
Add: Supply made by Pure Oils from its branch located in 1,80,000
Punjab
Aggregate Turnover 9,55,000
Since the aggregate turnover does not exceed ₹ 40 lakh, Pure Oils is not liable to
be registered.
If Pure Oils made supply of machine oils amounting to ₹ 2,50,000 from its branch
in Himachal Pradesh in addition to the above supply, then threshold limit of
registration will be ₹ 40 lakh
Aggregate Turnover in that case would be ₹ 9,55,000 + ₹ 2,50,000 = ₹ 12,05,000.

So, if Pure Oils supplies machine oils amounting to ₹ 2,50,000 from its branch in
Himachal Pradesh, then also it is not liable to be registered.
CHAPTER 8 : INVOICE
100. Computation of GST payable for the month of November, 20XX
Particulars Time of supply CGST SGST IGST Interest

of services
Services from an 06.09.20XX 11250 11250 - 244

advocate in Delhi [Note-1 & 3] (Note 4)
Director’s Sitting 20.11.20XX - - 13500 -

fee
(Note-2 & 3]
Notes:-
1. Services supplied by an individual advocate to any business entity

located in the taxable territory is a notified service on which tax is
payable on reverse charge basis by the recipient of services.
2. Services supplied by a director of a company to the said company is a
notified service on which tax is payable on reverse charge basis by the
recipient of services.

45
3. As per section 13 of the CGST Act, 2017, the time of supply of services
in case of reverse charge is earliest of the following:-
(a) Date of payment as entered in the books of account of the

recipient or the date on which the payment is debited to his bank
account, whichever is earlier, or
(b) Date immediately following 60 days since the date of issue of

invoice.
Provisions of time of supply as provided under section 13 of the CGST

Act are also applicable for inter-State supply vide section 20 of the
IGST Act.  In view of the aforesaid provisions, the time of supply and
due date for payment of tax in the given cases would be determined
as under:  
a. Time of supply of the services is the date immediately following

60 days since the date of issue of invoice, i.e. 06.09.20XX. The
due date for payment of tax is 20.10.20XX with return of
September, 20XX.
b. Time of supply of service is 20.11.20XX and due date for payment
of tax is 20.12.20XX with return of December, 20XX.
4. The due date for payment of tax in case (i) is 20.10.20XX with return of
September, 20XX. However, the payment of tax is actually made on
11.11.20XX. Thus, payment of tax is delayed by 22 days.
In case of delayed payment of tax, interest @ 18% per annum is
payable for the period for which the tax remains unpaid starting from
the day succeeding the day on which such tax was due to be paid
[Section 50 of the CGST Act, 2017 read with Notification No. 13/2017 CT
dated 28.06.2017]. In view of the same, in the given case, interest
payable would be as follows:
Amount of interest payable = ₹ 22,500 × 18% × 22/365 = ₹ 244 (rounded

off)
101. As per section 25 read with CGST Rules, 2017, where an applicant
submits application for registration within 30 days from the date he
becomes liable to registration, effective date of registration is the date on
which he becomes liable to registration. Since, Sangri Services Ltd.’s

46
turnover exceeded ₹ 20 lakh on 12th August, it became liable to
registration on same day. Further, it applied for registration within 30 days
of so becoming liable to registration, the effective date of registration is the
date on which he becomes liable to registration, i.e. 12th August. As per
section 31 read with CGST Rules, 2017, every registered person who has
been granted registration with effect from a date earlier than the date of
issuance of certificate of registration to him, may issue Revised Tax Invoices.
Revised Tax Invoices shall be issued within 1 month from the date of
issuance of certificate of registration. Revised Tax Invoices shall be issued
within 1 month from the date of issuance of registration in respect of taxable
supplies effected during the period starting from the effective date of
registration till the date of issuance of certificate of registration. Therefore,
in the given case, Sangri Services Ltd. has to issue the Revised Tax Invoices
in respect of taxable supplies effected during the period starting from the
effective date of registration (12th August) till the date of issuance of
certificate of registration (6th September) within 1 month from the date of
issuance of certificate of registration, i.e. on or before 6th October.
102. A registered person paying tax under the provisions of section 10
[composition levy] shall issue, instead of a tax invoice, a bill of supply
containing such particulars and in such manner as may be prescribed
[Section 31(3)(c) read with CGST Rules, 2017]. Therefore, in the given case,
Shyam Fabrics cannot issue tax invoice. Instead, it shall issue a Bill of Supply.
103. Revised tax invoice needs to be issued for the period from effective
date of registration till grant of certificate of registration within another 30
days.
Consolidated revised tax invoice can be issued for supply made to un
registered persons during this period other than interstate supply value
exceeding 250,000.
CHAPTER 9 PAYMENT
104. A. Only online challans are allowed in GST
b. Validity of challan is for 15 days.
c. Minor heads under each major heads can only be utilized for making
respective payments.

47
105. No, as per Section 49 (4) of the CGST Act, 2017 the amount
available in the electronic credit ledger may be used for making any
payment towards ‘output tax’. As per Section 2 (82) of the CGST Act,
2017, output tax means, the CGST/SGST chargeable under this Act on
taxable supply of goods and/or services made by him or by his agent and
excludes tax payable by him on reverse charge basis. Therefore, input tax
credit cannot be used for payment of interest, penalty, and payment
under reverse charge.
106. Yes, as per Section 49 (9) of the CGST Act, 2017 every person who
has paid the tax on goods or services or both under this Act shall, unless the
contrary is proved by him, be deemed to have passed on the full
incidence of such tax to the recipient of such goods or services or both.
107. As per section 2(117) of CGST Act, “valid return” means a return
furnished under sub-section (1) of section 39 on which self-assessed tax
has been paid in full. Hence, in such a case, the return is not considered as
a valid return and also input tax credit will not be allowed to the recipient
of supplies.
108. The advice given by tax manager is valid in law. Payment of taxes by
the normal tax payer is to be done on monthly basis by the 20th of the
succeeding month. Cash payments will be first deposited in the Cash
Ledger and the tax payer shall debit the ledger while making payment in
the monthly returns and shall reflect the relevant debit entry number in his
return. However, payment can also be debited from the Credit Ledger.
Payment of taxes for the month of March shall be paid by the 20th of April.
Composition tax payers will need to pay tax on quarterly basis.
CHAPTER 10 RETURNS
109. Nil returns to be filed even if there is no supply is effected during a
period.
110. Composition tax payer is required to furnish return u/s 39 for every
quarter even if no supplies have been effected during such period. In other
words, filing of Nil return is also mandatory.
Therefore, Mr. X is required to file quarterly return even if he did not render any
taxable supply during the quarter July-September.

48
111. 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/quarter 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 and GSTR-2.
112. As per section 47, any registered person who fails to furnish, inter alia,
the returns required under section 39 by the due date is required to pay a
late fee of ₹ 25 for every day during which such failure continues subject
to a maximum amount ₹ 5,000.
Due date of filing GSTR-3 for a month is 20th day of the succeeding month. Thus,
there is a delay of 30 days [11 + 19] by Mr. Y in filing of GSTR-3 for the month of
September. Hence, late fee of ₹ 750 (₹ 25 x 30) will be payable by Mr. Y.
113. All taxpayers filing return in GSTR-1 to GSTR-3, other than ISD’s,
casual/non-resident taxpayers, taxpayers under composition scheme,
TDS/TCS deductors, are required to file an annual return. Casual tax payers,
non-resident taxpayers, ISDs and persons authorized to deduct/collect tax
at source are not required to file annual return.
114. No. Annual Return has to be filed by every registered person paying
tax as a normal taxpayer. Final Return has to be filed only by those
registered persons who have applied for cancellation of registration. The
Final return has to be filed within three months of the date of cancellation
or the date of cancellation order.

49

Answes: C 1& 2: I, S: Hapter Ntroduction Upply

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ANSWES: CHAPTER 1& 2: INTRODUCTION, SUPPLY

2. Yes. It qualifies as a supply.

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 1

5. Under composite supply, two or more taxable supplies of goods or services or

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 2

6. No it does not qualify as supply

7. The following elements are required to be satisfied for a supply to be

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 3

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 4

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 5

16. (a) Since GST on services provided or agreed to be provided by an arbitral

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 6

17. a) Renting of immovable property service by Govt or Local Authority to a

b) A director of a company providing service to a body corporate being a

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 7

(2) Tax payable under reverse charge basis:

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 8

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 9

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 10

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 11

Particulars Value CGST SGST IGST

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 12

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 13

Fees charged for yoga camp conducted by a charitable trust

Amount charged by business correspondent for the services

Amount charged by cord blood bank for preservation of stem

Service provided by commentator to a recognized sports body

2. Services by business facilitator or a business correspondent to a banking

3. Services provided by cord blood banks by way of preservation of stem cells or

4. Services provided to a recognized sports body only by an individual as a player,

30. (i) Yes. Services provided TO an educational institution by way of

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 14

34. A. Services by way of conduct of entrance examination by education

Nature of services Amount

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 15

CHAPTER 5 : TIME OF SUPPLY

Date of Date Time of

(1) (2) (3)

(1) August 10 June 29 August 29 August 10

(2) August 10 June 1 August 1 August 1

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 16

• 61st day from the date of issue of invoice

• Date of provision of service

• Date of receipt of payment

• Date of issue of invoice/last date on which the invoice is required to be issued

• Date of receipt of payment (Omitted by Notification 66/2017)

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 17

• Date of issue of invoice/last date on which the invoice is required to be issued

• Date of receipt of payment (Omitted by Notification 66/2017)

Date of invoice: 2nd December

Due date of Invoice : 7th December (Being date of delivery of goods)

Hence, the time of supply will be 2nd December.

• Date of payment [3rd November]

• 61st day from the date of issue of invoice [19th April]

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 18

47. Kanu&Kanu of India and Prince Ltd. of US are “associated enterprises” as

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 19

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

. (b) Date of receipt of payment (11.02.20XX)

. (a) Total value of supply of goods or services or both;

. (c) Amount of tax charged in respect of taxable goods or services

In the given Question

CA Inter May 2021 GST – PREPARED BY CA LIJIL LAKSHMAN – LIJBLR@GMAIL.COM 20

Add: Packing charges (Note a) 600

Add :Commission (note a) 400