GST Summary by Cma Tharun Raj

That’s It on GST & Customs 1
For CA INTER May 2020

2 That’s It on GST for CA Inter
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without any written permission.
Summary provided in this book and amended answers for questions are the copyright of author whereas the questions
are of the copyright of Institute of Chartered Accountants of India.
All disputes are subject to Chennai Jurisdiction
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That’s It on GST for CA Inter 3
INDEX
REVISION - 1 ____________________________________________________________________________________ 6
Supply, Composite & Mixed Supply, Liability to pay GST ________________________________________________ 6
Supply [Sec. 7 of CGST Act, 2017] ________________________________________________________________ 6
Composite Supply V. Mixed Supply [Sec. 8 of CGST Act, 2017]: ________________________________________ 11
Liability to pay GST [Sec. 9 of CGST Act, 2017] _____________________________________________________ 12
Summary of important circulars: _______________________________________________________________ 15
REVISION – 2 ___________________________________________________________________________________ 21
Value of Supply _______________________________________________________________________________ 21
Meaning & Inclusions - Value of Supply – Sec. 15(1) and Sec. 15(2) of CGST Act, 2017 ______________________ 21
Exclusions from Value of Supply – Sec. 15(3) of CGST Act, 2017: _______________________________________ 22
GST implications on debit note and credit note: ____________________________________________________ 23
REVISION – 3 ___________________________________________________________________________________ 35
Invoice [Sec. 31] & Time of Supply [Sec. 12 & 13] _____________________________________________________ 35
TOS in case of goods covered under FCM: ________________________________________________________ 35
TOS in case of goods covered under RCM: ________________________________________________________ 35
TOS in case of Services covered under FCM: _______________________________________________________ 36
TOS in case of Services covered under RCM: _______________________________________________________ 37
TOS in special situations:______________________________________________________________________ 37
Various documents involved in GST: _____________________________________________________________ 38
REVISION – 4 ___________________________________________________________________________________ 46
Input Tax Credit (ITC) __________________________________________________________________________ 46
Manner of Utilization of Credit [Sec. 49(5) of CGST Act, 2017]: ________________________________________ 47
Conditions for availing ITC [Sec. 16 of CGST Act, 2017]: ______________________________________________ 48
Apportionment of Credit [Sec. 17(1), 17(2) and 17(3) of CGST Act, 2017]: ________________________________ 49
Rule 42 of CGST Rules, 2018 – Manner of availement of ITC w.r.to Inputs and Input Services: ________________ 50
Rule 43 of CGST Rules, 2018 – Manner of availement of ITC w.r.to capital goods: _________________________ 51
Special provision for availment of ITC by Banking company & FI (incl. NBFC) – Sec. 17(4)____________________ 51
Blocked Credits [Sec. 17(5) of CGST Act, 2017]: ____________________________________________________ 52
ITC in Special Circumstances [Sec. 18 of CGST Act, 2017]: ____________________________________________ 54
REVISION – 5 ___________________________________________________________________________________ 69
Provisions of IGST Act, 2017 _____________________________________________________________________ 69
Nature of Supply Inter State or Intra-State [Sec. 7 & Sec. 8 of IGST Act, 2017]: ____________________________ 69
Export of goods Vs. Export of Services: ___________________________________________________________ 70
Deemed inter-state supplies: __________________________________________________________________ 70

Benefits in case of zero-rated supplies: ___________________________________________________________ 70

Supplies in territorial waters (i.e. 12 Nautical Miles from base line) – Sec. 9 of IGST Act, 2017: _______________ 70
REVISION – 6 ___________________________________________________________________________________ 71
Registration & Composition Scheme_______________________________________________________________ 71
Threshold limits for registration and composition scheme: ___________________________________________ 71
An Overview of registration Provisions: __________________________________________________________ 72
Procedure for obtaining registration [Sec. 25]: _____________________________________________________ 73
Special provisions relating to Casual Taxable Person and Non-resident taxable person [Sec. 27]: _____________ 74
Amendment in registration [Sec. 28]: ____________________________________________________________ 75
Cancellation of registration and revocation of cancellation [Sec. 29] :___________________________________ 76
Revocation of cancellation of registration [Sec. 30]:_________________________________________________ 77
Composition Scheme [Sec. 10 of CGST Act, 2017]: __________________________________________________ 85
Person opting for composition scheme can provide services upto 10% of turnover - Newly inserted from FY 2019-20
onwards __________________________________________________________________________________ 86
Overview of forms involved: ___________________________________________________________________ 88
Procedural compliance:_______________________________________________________________________ 88
Option to pay concessional tax @ 6% (CGST - 3% + SGST - 3%) - Notification No. 2/2019 w.e.f 1/4/2019: _______ 89
REVISION – 7 ___________________________________________________________________________________ 94
Exemptions in GST _____________________________________________________________________________ 94
Agriculture related Services: ___________________________________________________________________ 94
Banking and other financial services: ____________________________________________________________ 94
Health Care Services:_________________________________________________________________________ 95
Entry tickets: _______________________________________________________________________________ 96
Insurance Services – Following are exempted: _____________________________________________________ 96
Pension services: ____________________________________________________________________________ 96
Services by Specified organizations: _____________________________________________________________ 97
Charitable and religious service – Following services are exempted: ____________________________________ 97
Incubator & Incubatee Services: ________________________________________________________________ 97
Education Services: __________________________________________________________________________ 98
Government Services: ________________________________________________________________________ 99
Renting services: ___________________________________________________________________________ 100
Sports Services: ____________________________________________________________________________ 101
Services of unincorporated association to its members – Following services are exempted: _________________ 101
OIDAR Services: ____________________________________________________________________________ 102
Construction Services (Not applicable to works contract services): ____________________________________ 102
Advocate Services:__________________________________________________________________________ 103

Transportation Services: _____________________________________________________________________ 104

GTA Services: ______________________________________________________________________________ 106
Exemptions under IGST Act: __________________________________________________________________ 106
Miscellaneous exempted services: _____________________________________________________________ 107
REVISION – 8 __________________________________________________________________________________ 112
Payment Process, Returns, Accounts & Miscellaneous Topics __________________________________________ 112
Payment Process – An overview:_______________________________________________________________ 112
Returns – An Overview: ______________________________________________________________________ 113
GST Practitioner [Sec. 48]:____________________________________________________________________ 115
E-Way Bill: ________________________________________________________________________________ 117

REVISION - 1
Supply, Composite & Mixed Supply, Liability to pay GST
Supply [Sec. 7 of CGST Act, 2017]
Supply - Sec. 7
7(1A) - Classification 7(2) - Excludes (Read

7(1) - Includes of supply as goods with Schedule III)
and services (Read
with Schedule II) 7(3) - CG on the
recommendations
S - Soverign Functions of GST counci*l is
7(1)(a) - Any activity of Govt empowered to
Supply of goods:
for consideration in notify Supply of
the course or 1. Transfer of title in P - Posts (Govt, goods as supply of
furtherance of goods (Present or at Constitutional and services and
business future date) Nominated) viceversa
2. Disposal of A - Actionable Claims
business assets other than lottery,
without betting and gambling
7(1)(b) - Import of consideration L - Legal Fees collected
services for 3. Supply of goods by Court or Tribunal
consideration, by an
whether or not in L - Land Sale (incl. Sale
unincorporated of immovable property,
the course or association or body *GST Council:-
furtherance of where entire
to its members consideration is 1. Article 279A of
business
Supply of Services: recevied after constitution
1. Transfer of right obtaining completion
certificate) 2.Constituted by
to use goods
7(1)(c) - Activities in President of India
Schedule I even though 2. Doing an act, Not E - Employee to
not for consideraton but doing an act or Employer in the course 3.Union FM is its
in the course of Tolerating an act of employment Chairman
furtherance of business 3. Temporary D - Death related 4.State FM & MP of
D - Disposal or business transfer of IPR (Fuenral, Burial,
Mortury etc.,) state affairs in
assets on which ITC has 4. Information charge of revenue
been availed Technology S - Sale in High Seas M 20
Software Services are its members.
R - Related party
transactions (incl. 5. Works Contract 5.Decision making
O - Outside the coutry
transaction between Services movement of goods for GST.
distinct persons)
6. Job Work W - Warehoused goods
I - Import of services by a sale
person from related 7. Supply of food -
persons or establishment Restaurant or
outside India outdoor catering
8. Facilitating or Gifts by employer to employee not
P - Principal Agent
transactions, when agent arranging exceeding `50,000 p.a per employee is
is acting on behalf of transactions in
excluded from supply. Also, any benefit
principal securities.
covered under salary offer document forms
part of salary and is excluded from supply

Summary of Sec. 7(1):

Section reference Nature of Supply Whether Whether it should be in the Point of View
Consideration is course (or) in furtherance of
essential? business?
Section 7(1)(a) Any Activity Yes Yes Supplier
Section 7(1)(b) Import of services Yes Yes (or) No Recipient
Section 7(1)(c) DRIP No D – No D R P – Supplier
read with (Discussed above) R I P - Yes I - Receipient
Schedule I
Important Definitions/Points:
1. Meaning of goods & Services:

“Goods” are defined under section 2(52) of CGST Act, 2017 “Services” are defined under section 2(102) of CGST Act,
2017
“Goods” MEANS every kind of movable property other “Services” MEANS anything other than goods, money and
than money and securities but includes actionable claim, securities but includes activities relating to use of money
growing crops, grass and things attached to or forming or its conversion by cash or by any other mode, from one
part of the land which are agreed to be severed before form, currency or denomination, to another form,
supply or under a contract of supply. currency or denomination for which separate
consideration is charged.
Explanation: Activities in relation to transaction in
securities is included in services
2. Meaning of Consideration:
Consideration
Includes Excludes
Monetary -Payment Non Monetary - Goods Subsidy from CG/SG Refundable Security
received or receivable or Services Deposit
Ü Consideration can be received from recipient or any other person (Presence of Consideration is relevant)
Ü Consideration should be in respect of, in response to, or for the inducement of supply of goods or services
Ü Activity without consideration (or) Consideration without activity; is not a supply u/s 7(1)(a)
M 20
Donations If Donor name displayed
anywhere in the premises
against donation:
Conditional - Obligation on supplier Unconditional - No obligation on Individual Name displayed –
to do something supplier to do anything Not a supply
Business Name displayed –
Supply u/s 7(1)(a)
Supply u/s 7(1)(a) Not a supply

3. Meaning of Person:
"Person"
Central
under "Person"
Govt. or
Income Tax under GST
State Govt.
Act, 1961
Person under IT Act, 1961:- An individual, a HUF, a Company, A Firm, an AOP, local authority, Artificial Juridical
person & other body corporate.
4. Meaning of Business:
Sec. 2(17) of CGST Act, 2017
a) Any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether
or not it is for a pecuniary benefit;
b) Any activity or transaction in connection with or incidental or ancillary to sub clause (a)
c) Any activity or transaction in the nature of sub clause (a), whether or not there is volume, frequency, continuity
or regularity of such transaction;
d) Supply or acquisition of goods including capital goods and services in connection with commencement or closure
of business.
e) Provision by a club, association, society, or any such body (for a subscription or any other consideration) of the
facilities or benefits to its members;
f) Admission, for a consideration, of persons to any premises;
g) Services supplied by a person as the holder of an office which has been accepted by him in the course or
furtherance of his trade, profession or vocation;
h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book
maker in such club; and
i) Any activity or transaction undertaken by the central government, a state government or any local authority in
which they are engaged as public authorities;
5. Meaning of Related: [Transaction value u/s 15 not applicable and value determined in terms of Rules]
As per Explanation to Section 15, persons shall be deemed to be related if –
1. such persons are officers or directors of one another’s businesses; - Mr. X is appointed as officer of Mr. Y’s business
and Mr. Y is appointed as officer of Mr. X’s business. Now Mr. X and Mr. Y are related
2. such persons are legally recognised partners in business; - Partners in a firm are related
3. such persons are employer and employee1;
4. any person directly or indirectly owns, controls or holds twenty-five per cent. or more of the outstanding voting
stock or shares of both of them; - Mr. A invests ≥ 25% in X Ltd. and ≥ 25% in Y Ltd. Now X ltd. and Y Ltd. are related
5. one of them directly or indirectly controls the other; - Meaning of control – Investment > 50%, (or) Majority
common BOD, (or) Controlling operations.
6. both of them are directly or indirectly controlled by a third person; - X Ltd. is controlled by A Ltd. and Y Ltd.
controlled by A Ltd., Now X Ltd. and Y Ltd. are related.
7. together they directly or indirectly control a third person; - X Ltd. invested 28% in A Ltd. and Y Ltd. invested 30% in
A Ltd. As both X Ltd. and Y Ltd. together control A Ltd., X Ltd. and Y Ltd. are related
8. they are members of the same family; (Family MEANS the spouse and children of the person, whether or not
dependent and the parents, grandparents, brothers and sisters of the person if they are wholly and mainly
dependent on the said person)
9. Also, persons who are associated in the business of one another in that one is the sole agent or sole distributor or
sole concessionaire, howsoever described, of the other, shall be deemed to be related.
1
However, services by employee to employer in the course of employment is not treated as supply as per schedule III of CGST Act,
2017.

6. Meaning of various supplies:

Taxable Supply Exempted Supply Non-taxable supply Zero rated supply
Section 2(108) of CGST Act, 2(47) of CGST Act, 2017 2(78) of CGST Act, 16 of IGST Act, 2017
2017 2017
Meaning G/S/GS, which is G/S/GS, which attracts nil G/S/GS, which is Following supplies of
leviable to tax rate of tax (or) Wholly not liable to taxG/S/GS:
exempt from tax and a) Export
includes non- taxable b) Supply to SEZ
supply unit/Developer
Goods not liable to tax – 1) Alcoholic Liquor for Human Consumption & 2) Petroleum products – Crude Oil, Petrol,
Diesel, Aviation Turbine Fuel and Natural Gas
8. Meaning of Aggregate turnover:

As per Sec. 2(6) of CGST Act, 2017 AGGREGATE TURNOVER MEANS aggregate value of
Ü Taxable supplies
Ü Exempt supplies2
Ü Exports
Ü Interstate supplies3
Of persons having same PAN, to be computed on all India basis.
BUT EXCLUDES
Ü Inward supplies on which tax is payable by a person on reverse charge basis
Ü CGST/SGST/UTGST/IGST
9. GST on Sale of Flats/Buildings:

S.No. Before obtaining After obtaining GST Implications Nature of transaction
completion certificate completion certificate
(or) First Occupation, (or) First occupation,
whichever is Earlier whichever is Earlier
(a) Consideration Received - Payable (i.e. Not Works Contract Service
excluded from supply)
(b) - Consideration received Not payable (i.e. Sale of immovable
Excluded from supply) property
(c) Part Consideration Remaining consideration Payable on entire Works Contract Service
received received consideration (i.e. Not
excluded from supply)
10. Meaning of Works Contract:

“Works Contract” – A Contract involving transfer of property in goods as well as supply of services, in relation to
immovable property against a single consideration. [In earlier indirect tax regime, the same was classified under both
goods and services, and in GST it is classified completely as service]
11. Meaning of Job Work:

“Job Work” – Carrying out any process on the goods belonging to other registered person & the words job worker shall
be construed accordingly
2
Includes Non-taxable supplies or nil rated supplies
3
Includes supplies to SEZ unit/Developer (Even though it is zero rated, it is included in aggregate turnover)

12. Meaning of Distinct Persons:

Every registration of a person to their another registration is a distinct person
When a person is required to obtain more than one registration?
13. Meaning of actionable claim:

Ü Right to receive a benefit or recover a debt
Ü Which is legally enforceable
Ü Can be transferred from one person to another
Ü Holder of such right is entitled to receive benefit or recover debt
Actionable Claims
Covered under the definition of Others - Considered as "GOODS"

"MONEY" i.e. Bill of exchange,
Promissory Note, Bearer Cheque
Lottery, Betting, Gambling Others
Not Goods
Supply Not a Supply
7. Position of goods under GST [After implementation of GST] in comparison to earlier system:
Particulars Excise Duty CST VAT GST
Centre Excise State Excise
1. Alcohol for human X ü ü ü X
consumption* (Permanent)
2. Petroleum ü X ü ü X
products (5)* (Temporary)
3. Tobacco & Tobacco ü X X X ü
products
4. Other Goods X X X X ü
* Non-taxable supplies under GST

Composite Supply V. Mixed Supply [Sec. 8 of CGST Act, 2017]:
Composite Mixed
Supply - two or more taxable
Supply - two or more individual
Sec. 2(30) supplies of goods or Sec. 2(74) supplies of goods or
services or both or any services, any combination
combinatin thereof thereof, made in
conjunction with each
other
are naturally bundled and
supplied in conjuction with for a single price where
each other, in the ordinary such supply does not
course of business, one of constitute composite
which is a principal supply supply
Supply of goods (or) Services (or)

both
Whether there involves more

Yes No
than one supply
Whether it is naturally Question of

bundled i.e one cannot be Yes No composite or mixed
supplied witthout other supply shall not arise
Such supply is treated as Composite

Mixed supply
supply
Rate of tax applicable GST rate of principal GST rate of supply having
supply involved highest rate
COMPOSITE SUPPLY MIXED SUPPLY

Meaning? Two or more supplies naturally bundled Two or more supplies not naturally
in the ordinary course of business of bundled in the ordinary course of business
supplier of supplier
Type of supplies Taxable supplies Taxable supplies (or) exempted supplies
involved? (or) non-taxable supplies
How the price Single Price (or) Separate Price Single Price
should be?
Principal supply? Yes, one of the supplies should be Principal supply is not relevant
principal supply
Rate of GST? Rate of principal supply is applicable on Highest rate out of supplies is applicable
all supplies on all supplies
Examples? 1. AC + Installation 1. Inverter + Battery
2. Transportation + Insurance 2. Renting of building + Renting of
3. Replacement of parts during servicing Furniture
of vehicles + Labour Charges 3. Popcorn + Coke in a Theatre

Liability to pay GST [Sec. 9 of CGST Act, 2017]
Note: Sec. 9(4) is now applicable only for notified class of registered
recipient and in case of notified goods or services
Sec. 9(3) – Notified Services for RCM – SIR CG GOT SALAD

S Security Lending as per SEBI – Borrower of securities is liable to pay GST M 20
I Import of services by a person other than non-taxable recipient (NTR = Unregistered individual, Govt. or Trust
importing for other than using it for further supply in the business)
R Renting of motor vehicles by a person other than body corporate to a Body Corporate (Rate of GST opted
should be 5% by the supplier) M 20
C Copyright – Temporary transfer of Copyright relating to original literary, Dramatic, Musical or artisitic works
to a publisher, Music Company, producer or the like. In case of literary works, the supplier (i.e. Author) has
option to pay GST under FCM and if it is opted, for 1 year such option cannot be withdrawn M 20
G GTA Services to person other than Unregistered Individual, HUF or AJP. (Such individual, HUF, AJP should not
have factory)
G Government or Local Authority Services to business entities (Wherever it is taxable)
O Overseeing Committee services to RBI in relation to restructuring NPA’s
T Transfer of right to use by any person to promoter in relation to
• Development rights or floor space index, for construction of a project
• Long term lease of land (30 years or more)
S Sponsorship services by Organizer of event to Firm or Body Corporate (If recipient is other than body corporate
it is covered under FCM)
A Agent Services
1. Insurance Agent to person carrying insurance business
2. Recovery Agent to Banking company/FI/NBFC
3. Direct Selling Agent (other than body corporate/Firm/LLP) to Banking company/NBFC
4. Business Facilitator to Banking Company
5. Agent of Business Correspondent to Business Correspondent

L Legal Services – By Individual Advocate or Firm of advocates to Business entity, whose turnover during
previous year exceeds `20 lakhs/`10 lakhs
A Arbitrator Services to Business entity, whose turnover during previous year exceeds `20 lakhs/`10 lakhs
D Director’s services to Company or Body Corporate
S Security services by any person other than body corporate to any registered person other than Govt/Local
authority/Govt. agencies who got registered only to deduct TDS; or person opting for compositions scheme
Supplier Recipient Charge
Body Corporate (BC) Any Person FCM
Other than BC Unregistered Person FCM
Other than BC Registered - Composition Scheme FCM
Other than BC Registered - CG/SG/LA/GA only to deduct TDS FCM
Other than BC Registered - Other than above RCM
Sec. 9(4) – Purchases by registered person from unregistered persons:
Sec. 9(5) – Liability to pay GST on E Commerce Operator (ECO) in case of notified services:
In case of following categories of services, GST on Intra and interstate supplies shall be paid by ECO:
1. Services by way of transportation of passengers by Radio Taxi, Motor Cab, Maxi Cab and Motor Cycle (Eg: OLA,
UBER)
2. Services by way of providing accommodation in hotels, inns, guesthouses, clubs, campsites or other commercial
places meant for residential or lodging purposes (Eg: Goibibo, Make my Trip)
3. Services by way of housekeeping such as plumbing, carpentry etc., (Eg: Urban Clap, Quikr Services)
Note: In case of (2) and (3) above, if supplier is registered, liability to pay GST is on supplier but not on E
Commerce Operator

Flow chart determining ECO liability:
Sec. 9(5) CGST

Sec. 5(5) IGST
No
Is the
person ECO?
Yes Stop
No
Is supply made
through ECO?
Yes
Is supply of No
service ECO is not liable to pay GST
notified?
Yes
All the provisions of this Act shall apply to ECO as if he is the supplier liable for paying the tax in
relation to the supply of such services
Does ECO has a

physical presence in Yes
ECO will be liable to pay Tax
India (taxable
territory)
No
Any of your
representatives Yes
Such representative shall be liable to pay tax
located in taxable
territory?
No
Such electronic commerce operator shall appoint a person in the taxable territory for the purpose of
paying tax and such person shall be liable to pay tax.

Important points:
1. When ECO is liable to pay GST, they are not required to deduct TCS [Tax Collected at Source under Sec. 51 -
Not applicable for CA Inter]
2. Only in case of notified services [Sec. 9(5)], ECO is liable to pay GST. In other cases, Supplier shall pay GST.
3. Every ECO who is liable to pay GST (or) who is liable to deduct TCS is compulsorily required to get registered
4. Also, every supplier of taxable goods through ECO is compulsorily required to get registered under GST
irrespective of their aggregate turnover
5. Supplier of notified services [Sec. 9(5)] is not required to get registered, if they are supplying only through
ECO. Otherwise, they should register when their aggregate turnover exceeds `20 lakhs (`10 lakhs in case of
special category states)
6. Supplier of other than notified services [Sec. 9(5)] through ECO is required to get registered only when their
aggregate turnover exceeds ` 20 lakhs (` 10 lakhs in case of special category states)
Summary of important circulars:

Circular No. Issue involved? Clarification
Vide Circular No. Whether inter-state movement of it is clarified that such interstate movement of Trains,
1/1/2017 (Dt: various modes of conveyance buses, trucks, tankers, trailers, vessels, containers,
7.7.17), carrying goods or passengers or aircrafts (i.e. any conveyance)
both, or for repairs and - Carrying goods or passengers or both, or
Vide Circular No. maintenance, between distinct - For repairs and maintenance, shall not constitute supply
21/21/2017, persons as specified in section 25(4) and not chargeable to GST.
of the CGST Act [except in cases
where such movement is for further However, applicable CGST/ SGST/ IGST, as the case may
supply of the same conveyance], is be shall be leviable on repairs and maintenance done for
leviable to IGST? such conveyance.
Also, the above circular is extended to interstate

movement of rigs, tools and spares, and all goods on
wheels (like Cranes) and except in case where movement
of such goods is for further supply of the same.
Note: This circular can be applied even in case of intra
state, if there are multiple registrations in the state.
Circular No. When an agent is termed as “Acting An agent should:
57/31/2018 on behalf of principal”? 1. Represent principal in all aspects
2. raise invoice in their name (or) accept invoice in
their name i.e in Agent’s name
Circular No. Whether supply of books, printing of books, pamphlets, brochures, annual reports,
11/11/2017 (Dt: pamphlets, brochures, envelopes, and the like, where only content is supplied by the
20.10.17) annual reports, leaflets, cartons, publisher – Supply of Service
boxes etc., printed with design,
logo, name, address or other printed envelopes, letter cards, printed boxes, tissues,
contents supplied by the recipient of napkins, wall paper etc., printed with design, logo etc.
such supplies, would constitute supplied by the recipient – Supply of goods
supply of goods or supply of
services?
Circular No. Whether activity of bus body Determined on the basis of principal supply involved in
34/8/2018 (Dt: building, is a supply of goods or the transaction
1.3.2018) services?
Circular No. Whether rethreading of tyres is a Supply of rethreaded tyres, where the old tyres belong to
34/8/2018 (Dt: supply of goods or services? the supplier of rethreaded tyres, is a supply of goods. If
1.3.2018) the old tyres belongs to recipient, then it is treated as
supply of service.

Circular No. Whether Priority Sector Lending In GST, there is no exemption to trading in PSLCs. Thus,
34/8/2018 (Dt: Certificates (PSLCs) are outside the PSLCs are taxable as goods. IGST is payable in this case.
1.3.2018) purview of GST and therefore not
taxable?
Circular No. Whether art works sent by artists to It is only when the buyer selects a particular art work
22/22/2017 GST galleries for exhibition not being a displayed at the gallery, that the actual supply takes
dated 21.12.2017 supply ? place and applicable GST would be payable at the time
of such supply
Whether tenancy rights or pagadi In relation to residential property à Exempted
system is chargeable to GST? In relation to commercial property à Taxable
Circular No. 73/47/2018 (Dt: 05.11.2018) has clarified the scope and ambit of principal agent relationship in the context
of a del-credere Agent (DCA)
Who is a DCA? - In commercial trade parlance, a DCA is a selling agent who is engaged by a principal to assist in supply of
goods or services by contacting potential buyers on behalf of the principal. The factor that differentiates a DCA from other
agents is that the DCA guarantees the payment to the supplier. In such scenarios where the buyer fails to make payment
to the principal by the due date, DCA makes the payment to the principal on behalf of the buyer (effectively providing an
insurance against default by the buyer), and for this reason the commission paid to the DCA may be relatively higher than
that paid to a normal agent.
Whether the temporary short-term transaction-based loan extended by the DCA to the recipient (buyer), for which interest
is charged by the DCA, is to be included in the value of goods being supplied by the supplier
Scenario – 1: DCA not making supply on behalf of principal
The interest collected by the agent is not with respect of supply of goods by him and the said interest is for extending loans
or advance and the said interest is EXEMPTED
Scenario – 2: DCA making supply on behalf of principal
The interest collected by the agent is with respect of supply of goods by him and the said interest is for delay in payment
of consideration by recipient and therefore should be included in the value of supply of goods made by him and TAXABLE

QUESTION -1: [SA GST MAY 2018]

Explain the meaning of the term "recipient of supply of goods and/or services" under the CGST Act, 2017.
Answer.
Recipient of supply of goods or services or both, means —
I. where a consideration is payable for the supply of goods or services or both, the person who is liable to
pay that consideration;
II. where no consideration is payable for the supply of goods, the person to whom the goods are delivered
or made available, or to whom possession or use of the goods is given or made available; and
III. where no consideration is payable for the supply of a service, the person to whom the service is rendered,
and (i) any reference to a person to whom a supply is made shall be construed as a reference to the
recipient of the supply, and (ii) shall include an agent acting as such on behalf of the recipient in relation
to the goods or services or both supplied.
QUESTION -2: [SA GST NOV 2018]

Explain the meaning of supply as per provisions of Section 7(1) of Central Goods and Service Tax Act, 2017.
Answer.
As per section 7(1) of CGST Act, 2017, the term supply includes –
(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease
or disposal made or agreed to be made for a consideration by a person, in the course or furtherance of
business;
(b) import of services for a consideration whether or not in the course or furtherance of business;
(c) the activities specified in Schedule I, made or agreed to be made without a consideration; and

List any six state levies, which are subsumed in GST.
Answer.
The State levies which are subsumed in GST are as under: -
• State surcharges and cesses in so far as they relate to supply of goods & services
• Entertainment Tax (except those levied by local bodies)
• Tax on lottery, betting and gambling
• Entry Tax (All Forms) & Purchase Tax
• VAT/ Sales tax
• Luxury Tax
• Taxes on advertisements
Note: Any of the six points may be mentioned.

List the inclusions and exclusions for computing the "Aggregate Turnover" under CGST Act, 2017.
Answer.
Aggregate turnover includes the aggregate value of all:
I. taxable supplies,
II. exempt supplies,
III. exports of goods and/or services and
IV. inter-State supplies of persons having the same PAN., to be computed on all India basis
Aggregate turnover excludes: -
(i) value of inward supplies on which tax is payable by a person on reverse charge basis,
(ii) central tax, State tax, Union territory tax, integrated tax and
(iii) cess
QUESTION -5: [SA GST NOV 2018]

List any four Central levies, which are subsumed in GST.
Answer.
The Central levies which are subsumed in GST are as under:-
a) Central Excise Duty & Additional Excise Duties
b) Service tax

c) Excise duty under Medicinal & Toilet Preparation Act

d) CVD
e) Special CVD
f) Central Sales Tax
g) Central surcharges and cesses in so far as they relate to supply of goods & services
QUESTION -6: [RTP NOV 2018]

Explain the meaning of the term “date of receipt of payment” as per section 13 of the CGST Act, 2017.
Answer
I. “Date of receipt of payment” in terms of section 13 of CGST Act, 2017 refers to the
(a) date on which the payment is recorded in the books of account of the entity (supplier of service) that
receives the payment, or
(b) the date on which the payment is credited to the entity’s bank account, whichever is earlier.
II. Section 7(2)(a) of CGST Act, 2017 read with Schedule III specifies the activities or transactions which shall be
treated neither as a supply of goods nor a supply of services:
1. Services by an employee to the employer in the course of or in relation to his employment.
2. Services by any court or Tribunal established under any law for the time being in force.
3.
a) Functions performed by the Members of Parliament, Members of State Legislature, Members of
Panchayats, Members of Municipalities and Members of other local authorities;
b) Duties performed by any person who holds any post in pursuance of the provisions of the Constitution
in that capacity; or
c) Duties performed by any person as a Chairperson or a Member or a Director in a body established by
the Central Government or a State Government or local authority and who is not deemed as an
employee before the commencement of this clause.
4. Services of funeral, burial, crematorium or mortuary including transportation of the deceased.
5. Sale of land and, subject to paragraph 5(b) of Schedule II, sale of building.
6. Actionable claims, other than lottery, betting and gambling.
[Note: - Any four points may be mentioned.]
QUESTION 7: (SA GST NOV 18)

Decide which person is liable to pay GST in the following independent cases, where the recipient is located in the
taxable territory. Ignore the Aggregate Turnover and Exemption available.
1. Mr. Raghu provided sponsorship services to WE-WIN Cricket Academy, an LLP.
2. 'Safe Trans', a Goods Transport Agency, transported goods of Kapil & Co., a partnership firm which is not
registered under GST.
Answer.
1. In case of services provided by any person by way of sponsorship to anybody corporate or partnership firm / LLP, GST
is liable to be paid under reverse charge by such body corporate or partnership firm / LLP located in the taxable
territory. Therefore, in the given case, WE-WIN Cricket Academy is liable to pay GST under reverse charge.
2. In case of services provided by Goods Transport Agency (GT A) in respect of transportation of goods by road to, inter
alia, any partnership firm whether registered or not under any law; GST is liable to be paid by such partnership firm.
Therefore, in the given case, Kapil & Co. is liable to pay GST under reverse charge.
QUESTION 8: (RTP MAY 2019)

Examine whether supply of food and drink in the following independent cases is exempt from GST :-
(i) “Smart Kids” is a Play School located in Delhi. Smart Kids has outsourced the catering services for supply of food
and drink in the canteen of Play School to BT V Caterers, Delhi for a consideration of ` 8,00,000 per annum.
(ii) Wellness Hospital, a clinical establishment located in Tirupati, is specialised in diabetic treatment. The hospital
has its own canteen – Tasty Foods. The canteen serves the food and drink to the in-patients as advised by the
doctors/nutritionists of the hospital. Apart from this, other patients (who are not admitted) or attendants or visitors
of the in-patients also take food and drink from the canteen.
Answer.
i. Services provided to an educational institution providing services by way of pre-school education and
education up to higher secondary school or equivalent, by way of catering is exempt from GST vide Notification
No. 12/2017 CT (R) dated 28.06.2017 as amended. T hus, in the given case, services provided by BT V Caterers

to Smart Kids are exempt from GST .

ii. Services by way of health care services provided by a clinical establishment, an authorised medical practitioner
or para-medics are exempt from GST vide Notification No. 12/2017 CT (R) dated 28.06.2017 as amended.
In this regard, CBIC has clarified that food supplied by the hospital canteen to the in-patients as advised by the
doctor/nutritionists is a part of composite supply of healthcare services and is not separately taxable. T hus, it is
exempt from GST . However, other supplies of food by a hospital to patients (not admitted) or their attendants
or visitors are taxable.
In view of the same, GST is exempt on the food supplied by T asty Foods to the in- patients as advised by
doctors/nutritionists while other supplies of food by it to patients (not admitted) or attendants/visitors of the
in-patients is taxable.
QUESTION 9: (RTP NOV 2018)

Examine whether GST is payable in the following independent supply of services:
I. Indiana Engineering College, a recognised educational institution, has conducted an entrance test
examination for various courses run by it and charged entrance fees from the applicants.
II. Ramfal Lalaji, an agriculturist, has stored sugarcane in a warehouse. He has taken fumigation services in
the said warehouse from Gupta Pest Control Co. for which he paid the consideration of ` 6,000.
Answer.
I. Services provided by an educational institution by way of conduct of entrance examination against consideration
in the form of entrance fee are exempt from GST vide Notification No. 12/2017 CT (R) dated 28.06.2017 as
amended.
Since in the given case, services provided by Indiana Engineering College, an educational institution are by way
of conduct of entrance examination against entrance fee, the same is exempt and thus, GST is not payable in
this case.
II. Services by way of fumigation in a warehouse of agricultural produce are exempt from GST vide Notification No.
12/2017 CT (R) dated 28.06.2017 as amended. In the present case, since Gupta Pest Control Co. provides services
by way of fumigation in the warehouse of sugarcane [being an agricultural produce], said services are exempt
and GST is not payable on the same.
QUESTION 10: (RTP NOV 2018)

Examine whether the activity of import of service in the following independent cases would amount to supply under
section 7 of the CGST Act, 2017?
I. Miss Shriniti Kaushik received vaastu consultancy services for her residence located at Bandra, Mumbai
from Mr. Racheal of Sydney (Australia). The amount paid for the said service is 5,000 Australian dollar.
II. Miss Shriniti Kaushik received vaastu consultancy services for her residence located at Bandra, Mumbai
from her son, Mr. Varun residing in Sydney (Australia). Further, Miss Shriniti did not pay any consideration
for the said service.
III. Miss Shriniti Kaushik received vaastu consultancy services for her business premises located at Bandra,
Mumbai from her son, Mr. Varun residing in Sydney (Australia). Further, Miss Shriniti did not pay any
consideration for the said service.
Answer.
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 consideration is treated as supply if it is provided in the course or
furtherance of business.

Thus, 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 be treated as supply as she receives vaastu consultancy service for
her business premises, i.e. in course or furtherance of business.
QUESTION 11: (MOCK TEST NOV 18)

Raman is an architect in Chennai. His brother who is settled in London is a well -known lawyer. Raman has taken legal
advice from him free of cost with regard to his family dispute. Examine whether the said activity would amount to
supply under section 7 read with Schedule I of the CGST Act
Would your answer be different if in the above case, Raman has taken advice in respect of his business unit in Chennai?
Answer.
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.
Explanation to section 15, inter alia, provides that persons shall be deemed to be “related persons” if they are members
of the same family. Further, as per section 2(49) of the CGST Act, 2017, family means, —
(i) the spouse and children of the person, and
(ii) the parents, grand-parents, brothers and sisters of the person if they are wholly or mainly dependent on the said
person.
In the given case, Raman has received free of cost legal services from his brother. However, in view of section 2(49) (ii)
above, Raman and his brother cannot be considered to be related as Raman’s brother is a well-known lawyer and is not
wholly/mainly dependent on Raman. Further, Raman has taken legal advice from him in personal matter and not in
course or furtherance of business. Consequently, services provided by Raman’s brother to him would not be treated as
supply under section 7 read with Schedule I of the CGST Act.
In the above case, if Raman has taken advice with regard to his business unit, services provided by Raman’s brother to
him would still not be treated as supply under section 7 of the CGST Act read with Schedule I as although the same are
provided in course or furtherance of business, such services have not been received from a related person.

REVISION – 2
Value of Supply
Meaning & Inclusions - Value of Supply – Sec. 15(1) and Sec. 15(2) of CGST Act, 2017
Subsidy received by supplier
From CG/SG From Others (i.e.

recipient or third party)
Such subsidy shall be

excluded from value Directly linked to price General Subsidy
Such Subsidy shall be Such subsidy shall be

included in Value excluded from value
Conditions for pure agent:
• Supplier should enter into an agreement with recipient to act as pure agent w.r.to an expenditure
• Supplier should recover only the actual amount incurred
• Supplier should not hold title to the goods or services so procured
• Supplier should not use the said goods or services so procured for his personal purpose
Note: Passenger Service Fee (PSF) and User Development Fee (UDF) collected by airline operators from passengers
are to be remitted to airport operator and falls under expenditure incurred as a pure agent M 20

Exclusions from Value of Supply – Sec. 15(3) of CGST Act, 2017:
Discount
At the time of
Before Supply After Supply
Supply
Discount is allowed Discount is known Discount is known

as deduction and before (or) at the after supply
such discount time of supply
should be recorded
in invoice
Discount is not
Eg: Trade Discount Discount is allowed as allowed as
deduction, provided ITC to such deduction
extent has been reversed by
Eg: End of Season
recipient and supplier has issued
Sale Discount
a credit note Eg: Cash Discount
Issue: Whether GST is applicable on additional / penal interest on the overdue loan? Whether such penal interest would
be exempt under Entry 27 of exemption notification or it would be taxable treating it as consideration for liquidated
damages? M 20
Clarification: There are two transaction options involving EMI that are prevalent in the trade. In view of the provisions of
law discussed above, these two options, along with the GST applicability are as follows-
Relevant date for determining exchange rate for the purpose of valuation and computation of GST [Rule 34
of GST Rules, 2017]
Relevant Exchange rate
In Case of goods In Case of Services
Rate notified by CBIC Rate determined as per GAAP

prevailing on time of supply prevailing on time of supply
determined under sec. 12 determined under sec. 13
Note: Exchange gain/loss shall be ignored for the purpose of GST

GST implications on debit note and credit note:

Nature of When? Who? Consequence to Consequence to recipient
document supplier
Debit Recipient has to pay an Supplier to INCREASE in Output tax INCREASE in ITC
Note amount beyond invoice Recipient liability
price
Credit Recipient has to pay an Supplier to DECREASE in Output REVERSAL of ITC (or) INCREASE
Note amount less than the Recipient tax liability in Output tax liability
invoice price
U/s 15(2) of CGST Act any taxes, cess, duties shall be included in the value of supply but TCS is not includable in the value
as it is interim levy but not having character of tax – Circular No. 76/50/2018 GST Dt.31.12.2108
value to be adopted for computing GST on services of Business Facilitator (BF) or a Business Correspondent (BC) to Banking
Company - Circular No. 86/05/2019 GST dated 01.01.2019
ing
b l e b y bank
Paya r R CM
p a n y unde
com

QUESTION -1[SA MAY 2019]

M/s. Apna Bank Limited, a Scheduled Commercial Bank has furnished the following details for the month of August,
2018:
Particulars Amount ` in Crores
(Excluding GST)
Extended Housing Loan to its customers 100
Processing fees collected from its customers on sanction of loan 20
Commission collected from its customers on bank guarantee 30
Interest income on credit card issued by the bank 40
Interest received on housing loan extended by the bank 25
Minimum balance charges collected from current account and saving account holder 01
Compute the value of taxable supply. Give reasons with suitable assumptions.
Answer:
Computation of value of taxable supply of M/s. Apna Bank Limited for the month of August, 2018.
Amount in
Particulars
crores (`)
Housing loan extended to customers Nil
[Since money does not constitute goods, extending housing loan is not a supply.]
Processing fee collected on sanction of loan 20
[Interest does not include processing fee on sanction of the loan. Hence, the same is taxable.]
Commission collected on bank guarantee 30
[Any commission collected over and above interest on loan, advance or deposit are not exempt.]
Interest income on credit card issued by the bank 40
[Services by way of extending loans in so far as the consideration is represented by way of interest
are exempt from tax. However, interest involved in credit card services is not exempt.]
Interest received on housing loan Nil
[Services by way of extending loans in so far as the consideration is represented by way of interest
are exempt from tax.]
Minimum balance charges collected from current account and saving account holder 01
[Any charges collected over and above interest on loan, advance or deposit are not exempt.]
Value of taxable supply 91
QUESTION -2: [SA NOV 18].

Mr. Thiraj, a registered supplier of service in Bangalore (Karnataka State) has provided the following information
for the month of February 2018:
Particulars Amount in `
(i) Intra-state taxable supply of service 5,20,000
(ii) Legal fee paid to a Lawyer located within the state 20,000
(iii) Rent paid to the State Govt. for his office building 30,000
(iv) Received for services towards conduct of exams in Love all University, Pune 16,000
(recognized by law), being an inter-state transaction
Compute the net GST liability (CGST, SGST or IGST) of Mr. Thiraj for the month of February, 2018.
Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively.
All the amounts given above are exclusive of taxes.

Answer:
Computation of net GST liability by Mr. Thiraj for the month of February, 2018
Value of CGST SGST IGST
S.No. Particulars supply @ 9% @ 9% @ 18%
(` ) (` ) (` ) (` )
Output supply
(i) Intra-State taxable supply of services 5,20,000 46,800 46,800
(iv) Services towards conduct of exams in Loveall 16,000 Exempt

University,
Pune [Note-1]
Inward supply
(ii) Legal fee paid to lawyer located 20,000 1,800 1,800
within State [Note-2]
(iii) Rent paid to State Government for Office 30,000 2,700 2,700
Building [Note-3]
Total tax liability 51,300 51,300
Less: Cash paid towards tax payable under reverse (4,500) (4,500)
charge [A] [Note-4]
Output tax payable against which IT C can be set off 46,800 46,800
Less: IT C of tax paid on legal fees and rent (4,500) (4,500)
Output tax payable after set off of IT C 42,300 42,300

[B]
Net GST liability [A] + [B] 46,800 46,800
Notes: -
1. Since Loveall University provides education recognized by law, it is an educational institution and services
provided to an educational institution, by way of conduct of examination by such institution are exempt from
GST.
2. In case of legal services provided by an advocate to any business entity GST is payable under reverse charge by
the recipient of service2.
3. In case of services supplied by, inter alia, State Government by way of renting of immovable property to a
person registered under the CGST Act, GST is payable under reverse charge by the recipient of service
4. The amount available in the electronic credit ledger may be used for making payment towards output tax.
However, tax payable under reverse charge is not an output tax. Therefore, tax payable under reverse charge
cannot be set off against the input tax credit and thus, will have to be paid in cash.

Candy Blue Ltd., Mumbai, a registered supplier, is manufacturing Chocolates and Biscuits. It provides the following
details of taxable inter-state supply made by it for the month of October, 2017.
Amount in
Particulars
(`)
List price of goods supplied inter-state 12,40,000
Items already adjusted in the price given in (i) above:
(1) Subsidy from Central Government for supply of biscuits to Government School. 1,20,000
(2) Subsidy from Trade Association for supply of quality biscuits. 30,000
Items not adjusted in the price given in (i) above:
(3) Tax levied by Municipal Authority 24,000

(4) Packing Charges 12,000

(5) Late fee paid by the recipient of supply for delayed payment of invoice 5,000
Calculate the value of taxable supply made by M/s Candy Blue Ltd. for the month of October, 2017.
Answer:
Computation of value of taxable supply made by Candy Blue Ltd. for the month of October, 2017.
Particulars `
List Price of the goods 12,40,000
Add: Subsidy amounting to ` 1,20,000 received from Central Government [Since subsidy is received NIL
from Government, the same is not includible in the value in terms of section 15 of the CGST
Act, 2017.]
Subsidy received from Trade Association [Since subsidy is received from a non-Government 30,000
body, the same is includible in the value in terms of section 15 of the CGST Act, 2017.]
Tax levied by the Municipal Authority [Includible in the value as per section 15 of the CGST 24,000
Act, 2017]
Packing charges [Being incidental expenses, the same are includible in the value as per 12,000
section 15 of the CGST Act, 2017]
Late fees paid by recipient of supply for delayed payment [Includible in the value as per
section 15 of the CGST Act, 2017] 5,000
Value of taxable supply 13,11,000
Note: In the above solution, list price of the goods and late fee for delayed payment of invoice have been assumed to be
exclusive of taxes.
QUESTION 4:[ SA GST NOV 2018]

Ms. Achintya, a registered supplier in Kochi (Kerala State) has provided the following details in respect of her supplies
made Intra-State for the month of March 2018:
Particulars Amount in `
(i) List price of goods supplied intra-state (exclusive of items given below from ii to v) 3,30,000
(ii) Swachh Bharat cess levied on sale of the goods 12,500
(iii) Packing expenses charged separately in the invoice 10,800
(iv) Discount of 1% on list price of goods was provided (recorded in the invoice of goods)
(v) Subsidy received from State Govt. for encouraging women entrepreneurs 5,000
Compute the value of taxable supply and the gross GST liability of Ms. Achintya for the month of March 2018 assuming
rate of CGST to be 9% and SGST to be 9%. All the amounts given above are exclusive of GST
Answer.
Computation of value of taxable supply and gross GST liability of Ms. Achintya for the month of March, 2018.
Particulars `
List price of the goods 3,30,000
Add: Swachh Bharat Cess (SBC) levied on sale of goods [Note-1] 12,500
Add: Packing expenses [Note-2] 10,800
Less: Subsidy received from State Government [Note-3] (5,000)
Less: Discount @ 1% on list price [Note-4] (3,300)
CGST @ 9% 31,050
SGST @ 9% 31,050
Gross GST liability 62,100

Notes: -
As per section 15 of CGST Act, 2017,
1. Any taxes, duties and cesses levied under any law other than CGST, SGST is includible in the value.
2. Packing expenses being incidental expenses, are includible in the value.
3. Since subsidy is received from State Government, the same is not includible in the value. It has been assumed
that such subsidies are directly linked to the price of the goods. Further, since the same has not been adjusted
in the list price, the same is to be excluded from the list price.
4. Since discount is known at the time of supply, it is deductible from the value.
Note: (i). In the above answer, the term “exclusive” mentioned in the question has been taken to be as “not adjusted
in the list price”, i.e. the list price given in the question is before adjusting the amount of discount and subsidy.
However, it is also possible to take a view that the list price “excludes” amount of discount and subsidy. Therefore,
the same need not be deducted again from the list price to arrive at the taxable value.
(ii) Read SBC as other taxes.
QUESTION -4:[ RTP MAY 2018]

Raman Ltd., a registered supplier in Mumbai (Maharashtra), has supplied goods to Sahil Traders and Jaggi Motors Ltd.
located in Ahmedabad (Gujarat) and Pune (Maharashtra) respectively. Raman Ltd. has furnished the following details
for the current month:
S. Particulars Sahil Traders Jaggi Motors
No. (`) Ltd. (`)
(i) Price of the goods (excluding GST) 20,000 15,000

(ii) Packing charges 600
(iii) Commission 400
(iv) Weighment charges 1,000
(v) Discount for prompt payment (recorded in the invoice) 500
Items given in points (ii) to (v) have not been considered while arriving at price of the goods given in point (i) above.
Compute the GST liability [CGST & SGST or IGST, as the case may be] of Raman Ltd. for the given month. Assume the
rates of taxes to be as under:
Particulars Rate of tax
Central tax (CGST) 9%
State Tax (SGST) 9%
Integrated tax (IGST) 18%
Make suitable assumptions, wherever necessary.
Note: The supply made to Sahil Traders is an inter-State supply.
Answer.
Computation of GST liability
S. Particulars Sahil Jaggi Motors Ltd. (`)
No. Traders (`)
(i) Price of goods 20,000 15,000
(ii) Add: Packing charges (Note-1) 600
(iii) Add: Commission (Note-1) 400
(iv) Add: Weighment charges (Note-1) - 1,000
(v) Less: Discount for prompt payment (Note-2)
- 500
Value of taxable supply 21,000 15,500
IGST payable @ 18% (Note-3) 3,780
CGST payable @ 9% (Note-4) 1,395

SGST payable @ 9% (Note-4) 1,395

Notes:
1. 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].
2. 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.
3. Since supply made to Sahil Traders is an inter-State supply, IGST is payable in terms of section 5 of the IGST Act,
2017.
4. Since supply made to Jaggi Motors Ltd. is an intra-State supply, CGST & SGST is payable on the same
QUESTION -5:[ RTP MAY 18].

Govind, a registered supplier, is engaged in providing services in the neighbouring States from his registered office
located in Mumbai. He has furnished the following details in respect of the inward and outward supplies made during
a tax period:-
Particulars (`)
Inter-State supply of services 1,80,000
Receipt of goods and services within the State 1,00,000
Assume the rates of taxes to be as under:-
Particulars Rate
CGST 9%
SGST 9%
IGST 18%
Note:
(i)Both inward and outward supplies are exclusive of taxes, wherever applicable.
(ii) All the conditions necessary for availing the input tax credit have been fulfilled.
Compute the net GST payable by Govind during the given tax period. Make suitable assumptions if required.
Answer.
Computation of net GST payable by Govind.
Particulars `
IGST @ 18% payable on inter-State supply of services [Being an inter-State supply, 32,400
IGST is payable on the same in terms of section 5 of the IGST Act, 2017] [1,80,000 × 18%]
Less: ITC of CGST @ 9% paid on intra-State receipt of goods and services 9,000
[Cross utilisation of CGST towards IGST] [1,00,000 × 9%]

Less: ITC of SGST @ 9% paid on intra-State receipt of goods and services 9000
[Cross utilisation of SGST towards IGST]
[1000000 ´ 9%]
Net GST payable in cash 14,400
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].

QUESTION -6:[ RTP NOV 18].

M/s. Shri Durga Corporation Pvt. Ltd. is a supplier of goods and services at Kolkata. It has furnished the following
information for the month of February, 20XX:
Particulars Amount
( `)
(i) Intra-State sale of taxable goods including ` 1,00,000 received as advance in January, 20XX, 4,00,000
the invoice for the entire sale value is issued on 15th February, 20XX
Goods purchased from unregistered dealer on 20th February, 20XX (Inter-State purchases
(ii) are worth ` 30,000 and balance purchases are intra-State) 1,00,000
(iii) Services provided by way of labour contracts for repairing a single residential unit otherwise 1,00,000
than as a part of residential complex (It is an intra-State transaction)
(iv) Goods transport services received from a GTA. GTA is paying tax @12% (It is an inter-State 2,00,000
transaction)
Compute net GST liability (CGST, SGST or IGST, as the case may be) of M/s Shri Durga Corporation Pvt. Ltd. for the
month of February, 20XX.
Assume the rates of GST, unless otherwise specified, as under:
CGST 9%
SGST 9%
lGST 18%
Note: -
1. The turnover of M/s. Shri Durga Corporation Pvt. Ltd. was ` 2.5 crore in the previous financial year.
2. All the amounts given above are exclusive of taxes.
Answer
Computation of GST liability of M/s. Shri Durga Corporation Pvt. Ltd. for the month of February, 20XX.
CGST SGST IGST
Particulars Value of Supply
(` ) (` ) (` )
Intra -State sale of taxable goods [Note-1] 4,00,000 36,000 36,000
th
Goods purchased from unregistered dealer on 20 February, Nil Nil Nil
20XX [Note-2]
Services rendered by way of labour contracts for repairing a 1,00,000 9,000 9,000
single residential unit otherwise than as a part of residential
complex [Note-3]
Goods transport services received from GTA [Note-4] 2,00,000 Nil
Total GST liability for the month of February, 20XX 45,000 45,000 Nil
Less: Input tax credit available [Note-5] (` 2,00,000 x 12%) 24,000
Net GST liability for the month of February, 20XX 21,000 45,000 Nil
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.
QUESTION -7 [RTP MAY 2019]

Kamal Book Depot, a wholesaler of stationery items, registered in Mumbai, has received order for supply of stationery
items worth ` 2,00,000/- on 12th November, 20XX from another local registered dealer, Mr. Mehta, Mumbai. Kamal
Book Depot charged the following additional expenses from Mr. Mehta:-
Particulars Amount (`)
(i) Packing charges 5,000
(ii) Freight & Cartage 2,000
(iii) Transit insurance 1,500
(iv) Extra designing charges 6,000
(v) Taxes by Municipal Authority 500
The goods were delivered to Mr. Mehta on 14th November, 20XX. Since Mr. Mehta was satisfied with the quality of
the goods, he made the payment of goods the same day and simultaneously placed another order on Kamal Book
Depot of stationery items amounting to ` 10,00,000 to be delivered in the month of December, 20XX**. On receipt of
second order, Kamal Book Depot allowed a discount of ` 20,000 on the first order placed by Mr. Mehta.
Compute the GST liability of Kamal Book Depot for the month of November, 20XX assuming the rates of GST on the
goods supplied as under:
CGST 9%
SGST 9%
Would your answer be different if expenses (i) to (v) given in above table are already included in the price of ` 2,00,000?
Note:-
(i) All the amounts given above are exclusive of GST .
(ii) Kamal Book Depot and Mr. Mehta are not related persons and price is the sole consideration of the supply.
**Payment and invoice for the second order will also be made in the month of December, 20XX only.
Answer.
Computation of value of taxable supply and tax liability
Particulars Amount (`)
Price of the goods [Note-1] 2,00,000
(i) Packing charges [Note-2] 5,000
(ii) Freight & Cartage [Note-3] 2,000
(iii) Transit Insurance [Note-3] 1,500
(iv) Extra Designing charges [Note-4] 6,000
(v) T axes by Municipal Authority [Note-5] 500
CGST @ 9% 19,350
SGST @ 9% 19,350
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.
2. All incidental expenses including packing charged by the supplier to the recipient are includible in the value of
supply in terms of section 15(2) of the CGST Act, 2017.

3. T he given supply is a composite supply involving supply of goods (stationery items) 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.
4. Any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the
time of, or before delivery of goods or supply of services; is includible in the value of supply vide section 15(2) of
the CGST Act, 2017. T hus, extra designing charges are to be included in the value of supply.
5. T he taxes by Municipal Authorities are includible in the value of supply in terms of section 15(2) of the CGST Act,
2017.
6. In the given case, Mr. Mehta is allowed a discount of ` 20,000 on the goods supplied to him in the month of
November, 20XX. Since the said goods have already been delivered by Kamal Book Depot, this discount will be
a post-supply discount.
Further, value of supply shall not include any discount which is given after the supply has been effected, if—
(i) such discount is established in terms of an agreement entered into at or before the time of such supply and
specifically linked to relevant invoices; and
(ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has been
reversed by the recipient of the supply [Section 15(3) of the CGST Act, 2017].
However, in the given case, post-supply discount given to Mr. Mehta will not be allowed as a deduction from the value
of supply since the discount policy was not known before the time of such supply although the discount can be
specifically linked to relevant invoice (invoice pertaining to stationery items supplied to Mr. Mehta in November,
20XX).
In case the expenses (i) to (v) given in above table are already included in the price of ` 2,00,000: Since these expenses
are includible in the value of supply by virtue of the reasons mentioned in explanatory notes above, no further addition will
be required. Resultantly, the value of taxable supply will be ` 2,00,000 and CGST and SGST will be ` 18,000 and ` 18,000
respectively.
QUESTION -8: [RTP NOV 18].

Red Pepper Ltd., Delhi, a registered supplier, is manufacturing taxable goods. It provides the following details of
taxable inter-State supply made by it for the month of March, 20XX.
Particulars Amount in
(`)
List price of goods supplied inter-state (exclusive of taxes) 15,00,000
Subsidy received from Central Government for supply of taxable goods to Government School. 2,10,000
Subsidy received from a NGO for supply of taxable goods to an old age home 50,000
Tax levied by Municipal Authority 20,000
Packing charges 15,000
Late fee paid by the recipient of supply for delayed payment of invoice 6,000
The list price of the goods takes into account the two subsidies received. However, the other charges/taxes/fee are
charged to the customers over and above the list price. Calculate the value of taxable supply made by M/s Red Pepper
Ltd. for the month of March, 20XX. Rate of IGST is 18%.
Answer.
Computation of value of taxable supply made by Red Pepper Ltd. for the month of March, 20XX
Particulars `
List price of the goods 15,00,000
Add: Subsidy amounting to ` 2,10,000 received from Central Government NIL
[Since subsidy is received from Government, the same is not includible in the value in terms
of section 15 of the CGST Act, 2017]
Subsidy received from NGO

[Since subsidy is received from a non-Government body, the same is includible in the value 50,000
in terms of section 15 of the CGST Act, 2017]
Tax levied by the Municipal Authority 20,000

[Includible in the value as per section 15 of the CGST Act, 2017]
Packing charges 15,000
[Being incidental expenses, the same are includible in the value as per section 15 of the
CGST Act, 2017]
Late fees paid by recipient of supply for delayed payment [Includible in the value as per
section 15 of the CGST Act, 2017] (assumed to be inclusive of taxes) [` 6,000 x 100/118] 5,085
rounded off
QUESTION -9: RTP NOV 18.

With reference to the provisions of GST law, briefly answer the following questions: -
a) Income is received by Maharashtra Government from renting of immovable property to Ganpati Morya Pvt.
Ltd., registered in Maharashtra (Turnover of the company was ` 18 lakh in the preceding financial year). Is
GST payable in the present case? If yes, who is liable to pay the same?
b) Mr. Vivek Goyal, director of A2Z Pvt. Ltd. Company has received sitting fee amounting to ` 1 lakh from A2Z
Pvt. Ltd for attending the Board meetings.
Answer.
a) Notification No. 12/2017 CT (R) dated 28.06.2017 has inter alia exempted the services provided by the State
Government to a business entity with an aggregate turnover of up to ` 20 lakh (` 10 lakh in case of a Special
Category States) in the preceding FY. However, the same shall not apply to services by way of renting of
immovable property.
In the given case, services by way of renting of immovable property is provided by Maharashtra Government
to Ganpati Morya Pvt. Ltd, registered in Maharashtra. Therefore, the above exemption will not apply in this
case even though the turnover of the company was less than ` 20 lakh in the preceding financial year. Thus,
GST is payable in the given case.
Notification No. 13/2017 CT (R) dated 28.06.2017 as amended inter alia provides that reverse charge is
applicable in case of services supplied by the State Government by way of renting of immovable property to
a person registered under the Central Goods and Services Tax Act, 2017. Thus, GST is payable by Ganpati
Morya Pvt. Ltd., being a registered person in the present case.
b) Notification No. 13/2017 CT (R) dated 28.06.2017 inter alia provides that GST on supply of services by
director of a company to the said company located in the taxable territory is payable on reverse charge basis.
Therefore, in the given case, person liable to pay GST is the recipient of services, i.e., A2Z Pvt. Ltd.
Company.
QUESTION -10 [RTP NOV 2019]

M/s. Flow Pro sold a machine to BP Ltd. It provides the following particulars in this regard:-
S. Particulars `
No.
(i) Price of the machine (excluding taxes and incidental charges) 30,000
(ii) Machine was subject to third party inspection. The inspection charges have been directly 5,000
paid by BP Ltd. to the inspection agency.
(ii) Freight charges for delivery of the machine (M/s Flow Pro has agreed 2,000
to deliver the goods at BP Ltd’s premises)

(iv) Subsidy received from State Government on sale of machine under skill Development Programme. 5,000
[T he subsidy is directly linked to the
price].
(v) Discount of 2% is offered to BP Ltd. on the price and recorded in the invoice
Note: Items given in S. No. (ii) to (v) have not been considered in the price at S. No. (i). Determine the value of taxable
supply made by M /s Flow Pro to BP Ltd.
Answer.
Computation of value of taxable supply
Particulars `
Price of the machine (Price ` 30,000 - ` 5,000 subsidy) [Note-1] 25,000
Third party inspection charges [Note-2] 5,000
Freight charges for delivery of the machine value [Note-3] 2,000
Total 32,000
Less: Discount @ 2% on ` 30,000 being price charged to BP Ltd. [Note-4]
600
Value of taxable supply 31,400

Notes:-
1. Since subsidy is received from State Government, the same is deductible to arrive at taxable value under section
15 of the CGST Act, 2017.
2. Any amount that the supplier is liable to pay in relation to such supply but has been incurred by the recipient, is
includible in the value of supply under section 15 of the CGST Act, 2017.
3. Since arranging freight is the liability of supplier, it is a case of composite supply and thus, freight charges are
added in the value of principal supply.
4. Discount given before or at the time of supply if duly recorded in the invoice is deductible from the value of supply
under section 15 of the CGST Act, 2017.
QUESTION -11[MOCK TEST NOV 2019]

Determine taxable value of supply under GST law with respect to each of the following independent services provided
by the registered persons:
Gross amount charged
Particulars
(Rs.)
Fees charged for yoga camp conducted by a charitable trust registered under section 50,000
12AA of the Income-tax Act, 1961
Amount charged by business correspondent from banking company for the services 1,00,000
provided to the rural branch of a bank with respect to Savings Bank Accounts
Amount charged by cord blood bank for preservation of stem cells 5,00,000
Amount charged for service provided by commentator to a recognized sports body 5,20,000
Answer.
Computation of value of taxable supply
Particulars (Rs.)
Fees charged for yoga camp conducted by a charitable trust registered under section 12AA of the Nil
Income-tax Act, 1961 [Note-1]
Amount charged by business correspondent for the services provided to the rural branch of a bank Nil
with respect to Savings Bank Accounts [Note-2]
Amount charged by cord blood bank for preservation of stem cells [Note-3] Nil

Service provided by commentator to a recognized sports body [Note-4] 5,20,000
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.

REVISION – 3
Invoice [Sec. 31] & Time of Supply [Sec. 12 & 13]
TOS in case of goods covered under FCM:
Sec. 12(2) - Time of supply of goods shall be EARLIEST of the following
Actual Date of Due date for issue of Date of receipt

issue of tax tax invoice as per Sec. of payment
invoice 31
General Rule - Specific Rule

Sec. 31(1) a) Date of entry
in books of
accounts
Continous supply Goods sent or b) Date of credit
Supply does not of goods taken on in bank account,
Supply involves involve approval for sale
movement of involving issue of Whichever is
movement of successive or return are EARLIER
goods goods removed before
statement of
accounts or the supply takes
successive place
payments
Inovice shall be
Invoice shall be issued at the Invoice shall be issued
issued before or time of delivery Inovice shall be i.e., as & when
at the time of of goods or issued before or customer approved
removal of making available at the time each
statement is a) Before or at the time
goods for supply goods to the of supply
to the recipient recipient issued or each
payment is b) 6 months from the
received - Sec. date of removal,
31(4) whichever is EARLIER -
Sec. 31(7)
TOS in case of goods covered under RCM:
Time of supply of goods (in case of Reverse charge) shall be

EARLIEST of the following - Sec. 12(3)
Date immediately following Date of receipt of

Date of receipt of 30 days from the date of payment i.e. Entry
goods issuance of inovice by the (or) Debit, whichever
supplier i.e. 31st day from is EARLIER
the date of invoice
Note: GST payable on advances in case of goods covered under RCM

TOS in case of Services covered under FCM:
Time of supply of service - Sec. 13(2)
If invoice is issued within the Due If invoice is not issued within the
date due date
Time of supply shall be EARLIER Time of supply shall be EARLIER of the

of the following 2 dates following 2 dates
Actual Date of Date of receipt of

issuance of payment Date of provision Date of receipt of
invoice of service payment
Date of entry in books

What is the due (or) Date of credit in Date of entry on
date of invoice? bank account, whichever books (or) Date of
is EARLIER credit in bank
account, whichever is
EARLIER
General Rule -
Specific Rule
Sec. 31(2)
Continuous Cessation of
(a) Before supply of services services - Sec.
provision of - Sec. 31(5) 31(6) Note:
service, or
(b) after the • Invoice to be issued
provision of Invoice shall be
service but within within 45 Days for
Time of supply issued when the
30/45 days from supply ceases Banking &
depends on the 3
the provision of w.r.to Insurance, 30 Days
different
service propoctionate
scenarios for Others from the
Amount
date of completion
• Continuous Supply
Due date Due date not Payment linked to of service: A service
ascertainable ascertainable from completion of which takes more
from the Contract the Contract event than 3 months to
complete
Invoice shall be Invoice shall be Invoice shall be

issued on or issued before or issued on or
before the due at the time before the
date of payment supplier receives completion of the
the payment event

TOS in case of Services covered under RCM:
Time of supply in case of reverse charge, shall be EARLIER of

the following - Sec. 13(3)
Date immediately following 60 days

Date of payment (Which is date of
from the date of issue of invoice by
entry in the books (or) date of credit in
the supplier i.e. 61st day from the
bank account, whichever is EARLIER)
DOI
TOS in special situations:

Section Situation TOS
12(4) and In case of Vouchers Identifiable Voucher à At the time of issuance of voucher
13(4) Non-Identifiable Voucher à At the time of redemption of
voucher
12(5) and In case TOS is not ascertainable as Periodical return has been filed à Due date of filing such return
13(5) per any sub section Periodical return not filed à Date of payment of GST
[Applicable in case of evasion of
GST by a taxable person]
12(6) and In case of addition to value in the As and when such additional consideration is received.
13(6) form of interest, late fee etc., for (GST payable on Receipt basis)
delay in payment of consideration
Additional Points:
1. Date of payment
In case of supplier In case of recipient
Date of entry in books (or) Date of Credit in Date of entry in books (or) Date of Debit
Bank A/C whichever is EARLIER in Bank A/C whichever is EARLIER
2. In case of goods covered under FCM, on advances GST is not payable and GST is payable only upon invoice, as the TOS
is Due date of Invoice (or) Actual Date of Invoice, whichever is EARLIER. But in case of services under FCM, GST is payable
on advances.
3. Upto `1,000 received in excess of the invoice, in case of services covered under FCM, TOS can be (i) Date of Invoice
(or) determined as per Sec. 13(2) – Supplier has option to choose
4. In case of supply of services between associated enterprises, where supplier is outside India and recipient is in India,
TOS shall be date of entry in the books of recipient or date of payment to supplier, whichever is EARLIER
5. When goods are taken outside India for exhibition, it is not a supply. But when the same is not brought back within 6
months it is deemed to be supply in terms of Sec. 31(7) M 20

Various documents involved in GST:

S.No Document Situation of issuance? Who will issue? Time of
issue
1 Tax in voice Supplying If supplier is Supplier will Specified
a) Taxable goods registered issue [See above]
b) Taxable services If supplier is Recipient will
unregistered issue in case
of RCM
2 Bill of A registered person Supplier Specified
supply a) Supplying exempted goods or services or both [Same as
(Or) due date of
b) Paying tax under the composition scheme invoice]
shall issue ‘Bill of Supply’
In case of low value supplies (i.e. Value of Supply < ` 200, tax invoice as well as bill of supply not required if the recipient
is unregistered, recipient is not in need of invoice and a consolidated invoice needs to raised by the end of the day.
Note: in case of multiplex theatres, an invoice (E Ticket deemed as invoice) to be issued even if the value of supply is < ` 200 M 20
3 Debit Note a) The Taxable value charged less Supplier Not
(tax invoice<actual taxable value) Specified
b) Tax charged less
(tax invoice < tax payable
4 Credit Note a) Taxable value charged in excess (tax invoice Supplier Before Sep
4
> actual taxable value) end of next
or Note: Credit note cannot be FY (or) date
b) Tax charged in excess issued in case of bad debts of filing
(tax invoice >tax payable) annual
c) Sale return return,
d) Where goods or services or both supplied whichever is
are deficient earlier
5 Revised tax Every registered person who has been granted Supplier Within 1
invoice registration with effect from a date earlier than month from
the date of issuance of certificate of registration Note: Revised tax invoice the date of
to him, may issue revised tax invoices in respect cannot be issued if application certificate of
of taxable supplies effected during the period for registration not made registration
starting from the effective date of registration within 30 days from the date
till the date of the issuance of the certificate of on which liability to register
registration arises
Effective Date of Registration:
If applied within 30 days from the date when
liable à Date on which such person is liable to
register
If not applied within 30 days à Date on which
registration is granted
6 Receipt Supplier Not
Voucher Advance specified
Payment
Note: It is required only if
payment is received before
issuance of invoice
Supplier Recipient
Receipt
Voucher
4
One or more Credit note/Debit Notes can be issued for multiple invoices- Notification No.74/2018 Dated 31.12.2018.

7 Payment A registered person who is liable to pay tax Recipient Not

Voucher under section 9(3) and 9(4) shall issue a payment specified
voucher at the time of making payment to the
supplier
8 Refund Supplier Not
voucher specified
Advance Note: If amount is refunded
Payment after issuance of tax invoice,
then a credit note shall be
Receipt issued by supplier to recipient
Supplier Recipient
Voucher
Refund Voucher
(if no supply, no
tax invoice)
9 Delivery The consigner may issue a delivery challan, for Supplier Not
Challan the purposes of – specified
a) Supply of liquid gas where the quantity at the
time of removal from the place of business of
the supplier is not known.
b) Transportation of goods for job work,
c) Transportation of goods for reasons other
than by way of supply, or

d) Such other supplies as may be notified by the
board.

QUESTION NO-1:[SA MAY 2019]

Examine the following independent cases of supply of goods and services and determine the time of issue of invoice
under each of the cases as per the provisions of CGST Act, 2017:
I. Sakthi Enterprises, Kolkata entered into a contract with Suraj Enterprises, Surat for supply of goods on 31st
October, 2018. The goods were removed from the factory at Kolkata on 11th October, 2018. As per the
agreement, the goods were to be delivered by 31st October, 2018. Suraj Enterprises has received the goods
on 14th October, 2018.
II. Trust and Fun Ltd, an event management company, has provided its services for an event at Kapoor Film
Agencies, Mumbai on 5th June, 2018. Payment for the event was made on 19th June, 2018.
Answer.
I. A registered person supplying taxable goods shall issue a tax invoice, before or at the time of removal of goods
for supply to the recipient, where the supply involves movement of goods.
Therefore, in the given case, invoice has to be issued on or before, 11th October 2018 (the time of removal of
goods).
II. A registered person [other than an insurer/banking company/financial institution, including an NBFC] supplying
taxable services shall issue a tax invoice before or after the provision of service, but within a period of 30 days
from the date of supply of service.
Thus, in the given case, invoice has to be issued within 30 days of 5th June 2018 (date of supply of service), i.e.
on or before, 5th July 2018.
QUESTION NO-2 [SA GST MAY 2018]

M/s Mansh & Vansh Trading Company, a registered supplier, is liable to pay GST under forward charge. Determine
the time of supply from the following information furnished by it:
I. Goods were supplied on 03-10-2017
II. Invoice was issued on 05-10-2017
III. Payment received on 09-10-2017
Answer.
As per section 12 of CGST Act, 2017, the time of supply of goods, tax on which is payable under forward charge, is the
earlier of the following two dates:
I. Date of issue of invoice/last date on which the invoice is required to be issued
II. Date of receipt of payment i.e., the date on which the payment is recorded in the books of account of the supplier or
date on which the payment is credited to the supplier’s bank account, whichever is earlier.
Further, a registered person is required to issue a tax invoice before or at the time of removal of goods for supply to the
recipient. Thus, in the given case, the invoice for supply of goods should have been issued on or before the removal of
goods i.e., on 03-10-2017.
However, since the invoice has not been issued within the prescribed time, the time of supply will be the last date on
which the invoice is required to be issued (03 -10-2017) or date of receipt of payment (09-10-2017), whichever is earlier.
Thus, the time of supply of the goods will be 03-10-2017.
QUESTION NO-3 [SA MAY 2019]

List out the situations in which a Credit note/Debit note may be issued under the CGST Act, 2017.
Answer.
Credit note is required to be issued by the Supplier: -
I. If taxable value charged in the tax invoice is found to exceed the taxable value in respect of supply of goods
and/or services, or
II. If tax charged in the tax invoice is found to exceed the tax payable in respect of supply of goods and/or services,
or
III. if goods supplied are returned by the recipient, or
if goods and/or services supplied are found to be deficient. Debit note is required to be issued by the Supplier: -
I. if taxable value charged in the tax invoice is found to be less than the taxable value in respect of supply of
goods and/or services or
II. if tax charged in the tax invoice is found to be less than the tax payable in respect of supply of goods and/or
services

QUESTION NO-4 [SA NOV 2018]

Mr. Lakhan provides Continuous Supply of Services (CSS) to M/s. TNB Limited. He furnishes the following further
information:
(i) Date of commencement of providing CSS - 01-10-2017
(ii) Date of completion of providing CSS - 31-01-2018
(iii) Date of receipt of payment by Mr. Lakhan - 30-03-2018
Determine the time of issue of invoice as per provisions of CGST Act, 2017, in the following circumstances:
(i) If no due date for payment is agreed upon by both under the contract of CSS.
(ii) If payment is linked to the completion of service.
If M/s. TNB Limited has to make payment on 25-03-2018 as per the contract between them
Answer.
I. Where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at
the time when the supplier of service receives the payment.
Thus, in the given case, the invoice should be issued on or before 30.03.2018 (date of receipt of payment by
Mr. Lakhan).
II. If payment is linked to the completion of an event, the invoice should be issued on or before the date of
completion of that event.
Since in the given case payment is linked to the completion of service, invoice should be issued on or before
31.01.2018 (date of completion of service).
III. Where the due date of payment is ascertainable from the contract, the invoice should be issued on or before
the due date of payment.
If M/s. T NB Limited has to make payment on 25.03.2018 as per the contract between them, the invoice should
be issued on or before 25.03.2018.

Determine with reason whether the following statements are true or false:
I. A registered person shall issue separate invoices for taxable and exempted goods when supplying both taxable
as well as exempted goods to an unregistered person.
II. A Non-banking financial company can issue a consolidated tax invoice at the end of every month for the
supply made during that month.
Answer.
I. The given statement is false.
Where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered
person, a single “invoice -cum-bill of supply” may be issued for all such supplies.
II. The said statement is true.
By virtue of an amendment, a non-banking financial company has been allowed to issue a consolidated tax invoice
or any other document in lieu thereof for the supply of services made during a month at the end of the month.
QUESTION NO-6[RTP MAY 2018]

Royal Sweet Co., Delhi, a registered supplier, has furnished the details of the following few transactions which took
place in November, 20XX:
S. Date Particulars Date of invoice Amount (`)
No.
(i) 11.11.20XX Payment made to an advocate in Delhi 07.07.20XX 1,25,000
(ii) 20.11.20XX Paid sitting fee to Director from Haryana for 15.10.20XX 75,000
meeting held in Delhi on 15.10.20XX
[Inter-State supply]
Assume the rates of taxes to be as under: -

Particulars Rate
CGST 9%
SGST 9%

IGST 18%
You are required to compute GST [CGST & SGST/IGST, as the case may be] payable for the month of November,
20XX along with time of supply of the aforementioned activities.
Answer.
Computation of GST payable for the month of November, 20XX.
S. Particulars Time of supply of CGST SGST IGST Interest (`)
No. services (` ) (` ) (` )
(i) Services from an advocate in 06.09.20XX 11,250 11,250 - 244

Delhi [Note-1 & 3] [Note-4]
(ii) Director’s Sitting fee 20.11.20XX - - 13,500

[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.
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:
(i) 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.
(ii) 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).

Royal Fashions, a registered supplier of designer outfits in Delhi, decides to exhibit its products in a Fashion Show being
organised at Hotel Park Royal, Delhi on 4th January, 20XX. For the occasion, it gets the makeover of its models done
by Aura Beauty Services Ltd., Ashok Vihar, for which a consideration is ` 5,00,000 (excluding GST) has been charged.
Aura Beauty Services Ltd. issued a duly signed tax invoice on 10th February, 20XX showing the lumpsum amount of `
5,90,000 inclusive of CGST and SGST @ 9% each. Royal Fashions made the payment the very next day. Answer the
following questions:
(i) Examine whether the tax invoice has been issued within the time limit prescribed under law?
(ii) Tax consultant of Royal Fashions objected to the invoice raised suggesting that the amount of tax charged
in respect of the taxable supply should be shown separately in the invoice raised by Aura Beauty Services
Ltd. However, Aura Beauty Services Ltd. contended that there is no mandatory requirement of showing tax
component separately in the invoice. You are required to examine the validity of the objection raised by tax
consultant of Royal Fashions?
Answer.

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:
Date of provision of service (04.01.20XX)
Date of receipt of payment (11.02.20XX)
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.
QUESTION NO-8[RTP NOV 2018]

Luv & Kush Pvt. Ltd. of Srinagar, Jammu & Kashmir engaged in the supply of gifts items provides you the following
details:-
S.No. Particulars Date
1. Commencement of the business of supplying goods 01.08.20XX
2. Turnover exceeds ` 10,00,000 on 15.08.20XX
3. Turnover exceeds ` 20,00,000 on 05.09.20XX
4. Application for registration made on 28.09.20XX
5. Registration certificate granted on 06.10.20XX
The company seeks your advice as to how it should raise revised tax invoices for supplies made. Is there any specific
provision for issuance of revised tax invoices to unregistered customers? Explain.
Answer.
A supplier whose aggregate turnover in a financial year exceeds ` 20 lakh in a State/UT [` 10 lakh in special category
states except Jammu & Kashmir and Uttarakhand] is liable to apply for registration within 30 days from the date of
becoming liable to registration (i.e., the date of crossing the threshold limit of ` 20 lakh/ ` 10 lakh) vide section 22 of
CGST Act, 2017.
Where the application is submitted within said period, the effective date of registration is the date on which the person
becomes liable to registration; otherwise it is the date of grant of registration.
Every registered person who has been granted registration with effect from a date earlier than the date of issuance of
registration certificate to him, may issue revised tax invoices in respect of taxable supplies effected during this period
within 1 month from the date of issuance of registration certificate.
In the given case, Luv & Kush Pvt. Ltd is located in Jammu & Kashmir, a special category state. Though the turnover limit
for special category states is ` 10 lakh, Jammu & Kashmir has opted for turnover limit of ` 20 lakh for the purpose of
registration. Thus, since Luv & Kush Pvt. Ltd. has made the application for registration within 30 days of becoming liable
for registration, the effective date of registration becomes the date on which the company becomes liable to
registration i.e. 05.09.20XX.
Thus, Luv & Kush Pvt. Ltd. may issue revised tax invoices against the invoices already issued during the period between
effective date of registration (05.09.20XX) and the date of issuance of registration certificate (06.10.20XX), within 1
month from 06.10.20XX.

Further, Luv & Kush Pvt. Ltd may issue a consolidated revised tax invoice in respect of all taxable supplies made to
unregistered dealers during such period. However, in case of inter-State supplies made to unregistered dealers, a
consolidated revised tax invoice cannot be issued if the value of a supply exceeds ` 2,50,000.

ABC Ltd., a registered supplier has made following taxable supplies to its customer Mr. P in the quarter ending
30th June, 20XX.
Date Bill No. Particulars Invoice value (including GST) [`]
5th April, 20XX 102 Notebooks [10 in numbers] 1,200
10th May, 20XX 197 Chart Paper [4 in number] 600

20th May, 20XX 230 Crayon colors [2 packets] 500
2nd June, 20XX 254 Poster colors [5 packets] 900
22nd June, 20XX 304 Pencil box [4 sets] 700

Goods in respect of bill no. 102, 230 and 254 have been returned by Mr. P. You are required to advise ABC Ltd. whether
it can issue consolidated credit note against all the three invoices?
Answer.
Where one or more tax invoices have been issued for supply of any goods and/or services and
(a) the taxable value/tax charged in that tax invoice is found to exceed the taxable value/tax payable in respect of
such supply, or
(b) where the goods supplied are returned by the recipient, or
(c) where goods and/or services supplied are found to be deficient, the registered person, who has supplied such goods
and/or services, may issue to the recipient one or more credit notes for supplies made in a financial year containing
prescribed particulars.
Thus, one (consolidated) or more credit notes can be issued in respect of multiple invoices issued in a financial year
without linking the same to individual invoices.
Hence, in view of the above-mentioned provisions, M/s ABC Ltd. can issue a consolidated credit note for the goods
returned in respect of all the three invoices.

Mahak Sons is a registered supplier of electronic items and pays GST under regular scheme. On 15th July 20XX, Mahak
Sons received an order from Sunder Trader for supply of a consignment of electronic items. Mahak Sons gets the
consignment ready by 20th July 20XX. The invoice for the consignment was issued the next day, 21st July 20XX. Sunder
Trader could not collect the consignment immediately. Sunder Trader collects the consignment from the premises of
Mahak Sons on 30th July 20XX and hands over the cheque towards payment on the same date. T he said payment is
entered in the books of accounts of Mahak Sons on 31st July, 20XX and amount is credited in their bank account on
1st August 20XX.
You are required to determine the time of supply of the electronic items for the purpose of payment of tax.
Answer.
As per section 12(2) of the CGST Act, 2017, the time of supply in respect of goods shall be the earlier of the following
two dates:-
A) Date of issue of invoice/last date on which the invoice is required to be issue d as per section 31 of the
CGST Act, 2017
B) Date of receipt of payment
Further, as per Notification No. 66/2017 CT dated 15.11.2017, a registered person (excluding composition supplier) has
to pay GST on the outward supply of goods at the time of supply as specified in section 12(2)(a) i.e., date of issue of
invoice or the last date on which invoice ought to have been issued in terms of section 31.
As per section 31(1), the invoice needs to be issued either before or at the time of removal (where supply involves
movements of goods) of goods/delivery of goods/ making goods available to the recipient.
In this case, the invoice is issued before the removal of the goods and is thus, within the time limit prescribed under

section 31(1). T herefore, time of supply for the purpose of payment of tax is the date of issue of invoice, which is 21st
July, 20XX.
QUESTION NO-11:[MOCK TEST NOV 2019]

Discuss the provisions relating to time of supply of goods that are taxable under reverse charge?
Answer.
The time of supply of goods on which GST is payable on reverse charge basis under sub –sections (3) and (4) of section 9
of CGST Act is determined in terms of section 12(3)(a), (b) and (c), as follows: The time of supply for such goods will be the
earliest of the following dates:
Date on which the goods are received, or
Ø Date on which payment is recorded in the books of account of the recipient, or
Ø the date on which the same is debited in his bank account, whichever is earlier, or
Ø Date immediately following 30 days from the date of issue of invoice (or document by some other name in
lieu of invoice) by the supplier.
If it is not possible to determine the time of supply by using these parameters, then the time of supply will be the date of
entry of goods in the books of account of the recipient of supply.

REVISION – 4
Input Tax Credit (ITC)
GSTR – 1: Details of outward supplies to

be furnished by every registered person –
Invoice wise
GSTR – 2A: Based on GSTR – 1 furnished

by every supplier, recipient can generate a
statement of inward supplies in GSTR-2A
auto populated from GSTR -1 filed by
suppliers
GSTR-3B: Consolidated details of outward

supplies, inward supplies, GST payable
and GST paid shall be reported by every
registered person
Electronic Credit Ledger (ECRL) –

Maintained by GSTN for every registered
person and it gets credited as and when
ITC is claimed through GSTR-3B and gets
debited by the amount utilized for
payment of tax liability
GSTR – 9: Annual return to be filed by a

registered person where in reconciliation
should be made between the ITC availed
in terms of GSTR-3B with ITC as per GSTR-
2A, which is usually termed as MATCHING
OF ITC and UNMATCHED ITC SHOULD BE
REVERSED
UNMATCHED ITC not to be reversed in the

following cases:
1. IGST paid on Import of goods

2. GST paid under RCM
3. Credit distributed by ISD
4. 20% of the eligible matched ITC
M 20

Manner of Utilization of Credit [Sec. 49(5) of CGST Act, 2017]:

Principle – 1:
1. There is no restriction w.r.to IGST i.e. IGST Credit can be used for payment of any GST liability and any GST
Credit can be used for payment of IGST liability
2. Amongst other taxes, respective credit can be used for payment of respective liability and Cross utilisation
not allowed
Principle – 2:
Priority IGST Credit CGST Credit SGST Credit UTGST Credit
1 IGST payable CGST payable SGST Payable UTGST Payable
2 CGST Payable (or) SGST (or) IGST payable IGST Payable IGST Payable
UTGST payable – Rule 88A
Principle – 3:
Before utilizing CGST and SGST Credit; Credit of IGST should be completely exhausted. Order of utilization of IGST credit,
as specified in Principle 1
Principle – 4:
For payment of IGST liability, Credits should be utilised in following order:

1.IGST Credit
2.CGST Credit
3.SGST Credit (or) UTGST Credit
Illustration:
Compute net GST payable from the following data:
Particulars CGST SGST IGST
GST payable on outward supply `5,000 `5,000 `5,000
GST paid on inward supply `2,000 `2,000 `10,000
Particulars CGST SGST IGST

Gross GST Payable `5,000 `5,000 ₹ 5,000
(-) IGST Credit used for payment of IGST liability (₹ 5,000)
(-) IGST Credit used for payment of CGST/SGST liability (₹ 2,500) (₹ 2,500)
(-) CGST Credit used for payment of CGST liability (₹ 2,000)
(-) SGST Credit used for payment of SGST liability (₹ 2,000)
Net Liability ₹ 500 ₹ 500 ₹0
Author’s Note: Students may think that they can solve by using IGST Credit of ₹ 5,000 for payment of CGST alone and in
such situation -
There shall be an excess CGST Credit of ₹ 2,000 and payment of SGST liability of ₹ 3,000, which results into unnecessary
cash outflow of ₹ 2,000 even though there is a credit of ₹ 2,000. This is on account of the restriction that CGST Credit
cannot be used for payment of SGST liability. Students are requested to apply care and caution while answering
questions relating to computation of net GST payable.

Conditions for availing ITC [Sec. 16 of CGST Act, 2017]:
Input tax means the central tax (CGST), State tax (IGST) or union territory tax (UTGST charged on supply of
goods or services or both made to a registered person. It also includes tax paid on reverse charge basis and
IGST charged on import of goods. It doesn’t include tax paid under composition levy.
Contents of Invoice for Availing ITC :

if the invoice does not contain all the specified particulars but contains the details of the amount of tax charged,
description of goods or services, total value of supply of goods or services or both, GSTIN of the supplier and recipient and
place of supply in case of inter-State supply, input tax credit may be availed by such registered person.

INWARD SUPPLIES MEANS

Used/Intended to be used in the course
1. Capital Goods-Goods which are capitalized in the books
of furtherance of Business 2. Inputs-Goods others than Capital Good
3. Input Services- Any Services Received
Apportionment of Credit [Sec. 17(1), 17(2) and 17(3) of CGST Act, 2017]:
Sec. 17(1)
Sec. 17(2)
Note: Zero Rated Supplies will be covered in taxable supplies under for the purpose of availement of ITC
Sec. 17(3): MEANING OF EXEMPT SUPPLIES (This definition is only for the purpose of non availement/ reversal of ITC)
1. Supplies notified as exempt (Other than the interest and transportation of goods by vessel – Discussed below)
2. Nil rated supplies
3. Non-taxable supplies
4. Supplies covered under RCM (i.e. Supplier of RCM supplies cannot take any ITC but recipient can take ITC)
5. Sale of land (In such case, the value shall be deemed to be Stamp duty value)
6. Sale of building, where entire consideration is received after obtaining completion certificate or first occupation,
whichever is earlier
7. Sale of securities (In such case, the value shall be deemed to be 1% of the sale value of such security.
The following are excluded from the definition of exempted supply [Even though these are exempt for payment of GST
but not treated as exempt(i.e. treated as taxable) for availing ITC]:
1. Services by way of accepting deposits, extending loans or advances, in so far as the consideration is represented by
way of interest or discount except in case of banking company or Financial institution or NBFC.
2. Services by way of transportation of goods by a vessel from the customs station of clearance in India to a place
outside India.
Further analysis of complex scenarios:

S.No. Type of Supply For the purpose of For the purpose of
payment of GST availement of ITC
1. Export of goods against INR Zero rated Supply Taxable Supply
2. Export of services to Nepal & Bhutan against INR Zero rated Supply Taxable Supply
3. Export of services to UK against INR Taxable Supply Taxable Supply
4. Interest income earned by a bank Exempt Supply Exempt Supply
5. Interest income earned by a trading concern Exempt Supply Taxable Supply
6. Transportation of goods from India to outside India by vessel Exempt Supply Taxable Supply
7. Transportation of goods from outside India to India by vessel Taxable Supply Taxable Supply
8. Transportation of goods from India to outside India by air Exempt Supply Exempt Supply
9. Transportation of goods from outside India to India by air Exempt Supply Exempt Supply
10. Sale of Land Not a Supply Exempt Supply
11. Supply of Securities Not a Supply Exempt Supply
12. Sale of warehoused goods under Customs Not a Supply N.A

Rule 42 of CGST Rules, 2018 – Manner of availement of ITC w.r.to Inputs and Input Services:
T Total IT on I + IS
T1 T2 T3 C1
IT on I + IS used IT on I + IS used Blocked credits u/s Remaining ITC credited

exclusively for non- exclusively for exempt 17(5) to ECrL =
business purpose supplies T – (T1 + T2 + T3)
(i) Exempt supplies include reverse charge

T4 C2
supplies, transactions in securities, sale of land
and sale of building when entire consideration is
received after CC. Credit attributable to I + IS used Common credit
exclusively in taxable supplies
(ii) Aggregate value of exempt supplies and total
including ZRS = C1 – T4
turnover exclude the CED, SED & VAT
D1 D2 C3
Credit attributable to exempt supplies - Credit attributable to non-business Remaining common

' purpose if common I + IS used partly credit
!" = $% &
( for business + non – business
E = Value of ES during tax period purposes = C2 – (D1 + D2)
F = Total turnover during tax period D2 = 5% ´ C2
If no turnover during the tax period / values
not available, values for last period may be Eligible ITC
used. attributable to
business & taxable
Ineligible credits supplies including
ZRS
To be added to output tax liability
• C3 will be computed separately for ITC of CGST, SGST/ UTGST and IGST.
• ∑ (D1 + D2) will be computed for the whole financial year, by taking exempted turnover and aggregate turnover
for the whole financial year. If this amount is more than the amount already added to output tax liability every
month, the differential amount will be added to the output tax liability in any of the month till September of
succeeding year along with interest @ 18% from 1st April of succeeding year till the date of payment.
• If this amount is less than the amount added to output tax liability every month, the additional amount paid
has to be claimed back as credit in the return of any month till September of the succeeding year.

Rule 43 of CGST Rules, 2018 – Manner of availement of ITC w.r.to capital goods:
Treatment in case of Capital goods – 2:

1. Avail 100% ITC w.r.to GST paid and transfer to Electronic Credit Ledger
2. Compute Monthly Credit = ITC availed/60 months (Assumption: Life of capital goods – 5 years or 60 months)
3. For next 60 months from the date of purchase, compute monthly ITC attributable to exempted supply ie.
MONTHLY ITC X (Exempted supply for that month/Total Supply for that month)
4. The above amount to be added to output tax liability for every month, for the next 60 months along with
interest @ 18% p.a. from the date of availement of ITC till the date of addition to output tax liability is paid.
Note: The above procedure not required from the month when CG-2 becomes CG-1 (or) the capital goods are sold
Special provision for availment of ITC by Banking company & FI (incl. NBFC) – Sec. 17(4)

Blocked Credits [Sec. 17(5) of CGST Act, 2017]:
1. Motor Vehicles related:
Motor Vehicles
For transporting
Vessels and Aircraft Others
persons
1. Held as
Capacity ≤ 13 Capacity > 13 stock in trade Other Cases ITC available
2. Used in
business of
1.Held as stock transportation ITC not
Other cases ITC available Eg: Trucks,
in trade of passengers available
lorries,
2. Used in 3. Driving Ambulance,
business of Schools etc.,
ITC not Eg: Stage
transportation available Carriage, 4. Used for
of passengers Contract transportation
3. Driving Carriage, Buses of goods
Schools for
transporting
employees ITC available
ITC available
If ITC available
1. Repairs and w.r.to motor ITC available on
maintenance vehicles, Vessels & those services
2. Insurance Aircrafts
Motor Vehicles,
3. Servicing Vessels & Aircrafts
If ITC not available
4. Hiring, renting w.r.to motor ITC not available
or leasing vehicles, Vessels & on those services
Aircrafts
2. Construction related:
1. Any services Construction

purchased or ITC not available on
of an
2. Works Contract Services received in those inward
immovable
3. Goods relation to supplies
property
EXCEPTIONS:
1. The above discussion is not applicable to supplier i.e. If a works contractor receives construction service
for construction of an immovable property then ITC can be availed on construction services
2. Construction of plant and machinery even though immovable (P&M excludes telecommunication towers
and pipelines laid outside factory)
3. If Construction expenditure is charged to P&L, then also ITC can be availed on above inward supplies

3. Other blocked Credits:

Exception:
Membership of a
club, health & Provided by employer to
fitness centre employee under a
statutory obligation
Exception:
Travel benefits to employees
on vacation (i.e. Leave Travel Provided by employer to
Concession) employee under a statutory
obligation
Non resident taxable Exception:

person (NRTP) Import of goods by NRTP
Exceptions:
Inward Food & Beverages, Outdoor 1. Inward supply and outward supply
Supply Catering, Beauty treatement are same
incl. cosmetic, plastic & hair 2. Inward supply is part of composite or
transplantation, Life mixed outward supply
Insurance & Health Insurance
3. Provided by employer to employee
under a statutory obligation
From a person opting for
composition scheme
For personal Consumption
Goods lost/stolen/ destroyed/written off

(or) disposed by way of gifts or free samples

ITC in Special Circumstances [Sec. 18 of CGST Act, 2017]:
Sec. 18(1)
Where tax credit is claimed under Section 18(1) with respect to closing stock, section 18(2) provides that a registered
person shall not be entitled to take input tax credit in respect of any supply of goods or services or both to him after the
expiry of one year from the date of issue of tax invoice relating to such supply. [THE ABOVE CLOSING STOCK SHOULD
HAVE BEEN PURCHASED WITHIN 1 YEAR]
Note:
Ü An electronic declaration in FORM GST ITC 01 shall be made by the registered person Within 30 days or such extended
time by commissioner, from the date of eligibility of availement of ITC under Sec. 18(1).
Ü This declaration shall be certified by a practicing CA/CMA if the claim of ITC > `2,00,000

Sec. 18(3) - Transfer of ITC:

• Where there is a change in the constitution of a registered person on account of sale, merger, demerger,
amalgamation, lease or transfer of the business with the specific provisions for transfer of liabilities, the said
registered person shall be allowed to transfer the ITC which remains unutilised in his electronic credit ledger to
such sold, merged, demerged, amalgamated, leased or transferred business
• Transferor furnishes details of such transaction on sale of business in form GST ITC-02 electronically in common
portal with request to transfer unutilised tax credit in electronic credit ledger of transferee
• A certificate of CA/CMA is to be furnished and the transfer details to be accepted by the transferee.
• In case of demerger, credit shall be transferred to the new entities in the ratio of net assets [Whether ITC availed
on not on such assets], post demerger
Sec. 18(6)
Sec. 18(4) Sec. 29(5)

Question 1:[SA GST MAY 2019]

Mr. Himanshu, a registered supplier of chemicals, pays GST under regular scheme. He is not eligible for any threshold
exemption. He has made the following outward taxable supplies for the month of September 2018:
Intra-State supply of goods ` 25,00,000
Inter-State supply of goods ` 5,00,000
He has also made the following inward supply:
Intra-State purchase of goods from registered dealer ` 14,00,000
Intra-State purchase of goods from unregistered dealer ` 2,00,000 Inter-State purchase of goods
from registered dealer ` 4,00,000
Balance of ITC at the beginning of September 2018:
CGST ` 95,000
SGST ` 60,000
IGST ` 50,000
Additional Information:
• He purchased a car (Intra-State supply) used for business purpose at a price of ` 6,72,000/- (including CGST
of ` 36,000 & SGST of ` 36,000) on September 15, 2018. He capitalized the full value including GST in the
books on the same date to claim depreciation.
• Out of Inter-State purchase from registered dealer, goods worth ` 1,00,000 were received on October 3, 2018
due to road traffic jams.
Note:
(i) Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively.
(ii) Both inward and outward supplies given above are exclusive of taxes, wherever applicable.
(iii) All the conditions necessary for availing the ITC have been fulfilled except mentioned above.
(iv) Compute the net CGST, SGST and IGST payable in cash by Mr. Himanshu for the month of September, 2018.
Answer:
Computation of net GST payable in cash of Mr. Himanshu for September, 2018
Particulars Value (`) CGST (`) SGST (`) IGST (`)
Total tax liability

Intra-State outward supplies of goods 25,00,000 2,25,000 2,25,000
Inter-State outward supplies of goods 5,00,000 90,000
Total tax liability (A) 2,25,000 2,25,000 90,000
Input Tax Credit (ITC)
Brought forward IT C 95,000 60,000 50,000
Intra-State purchase of goods from registered 14,00,000 1,26,000 1,26,000
dealer [Note-1]
Inter-State purchase of goods from registered 3,00,000 - - 54,000
dealer [Note-1 and Note 4]
Intra-State purchase of goods from 2,00,000 - - -
unregistered dealer [Note-2]
Purchase of car used for business purpose - - - -
[Note-3]
Total ITC (B) 2,21,000 1,86,000 1,04,000
Net GST liability = (A)-(B) 4,000 39,000 (14,000)
Less: Set off from IGST credit [Note-5] 4,000 10,000
Net GST payable in cash Nil 29,000 Nil

Notes:
1. Every registered person is entitled to take credit of input tax charged on any inward supply of goods used/intended to
be used in the course/furtherance of his business.
2. Intra-State supplies received by a registered person from any unregistered supplier, are exempt from the whole of the
tax leviable thereon under reverse charge till 30.09.2019. Since no tax has been paid, so no credit is available.
3. Input tax paid on capital goods cannot be availed as IT C if depreciation has been claimed on such tax component.
Moreover, IT C on motor vehicle (car) is blocked under section 17(5) of CGST Act, 2017.
4. A registered person is entitled to avail input tax in respect of any supply of goods to him only if he has actually received
the said goods. Since goods worth ` 1,00,000 have not been received by Mr. Himanshu in the month of September
2018, credit in respect of same cannot be claimed in the said month.
5. Input tax credit of IGST has been used to pay IGST, CGST and SGST in that order.
Question 2:[SA GST MAY 2018]

Mr. Ajay, a registered supplier of goods, pays GST under regular scheme and provides the following information
for the month of August 2017:
Particulars (` )
(i) Inter-state taxable supply of goods 10,00,000
(ii) Intra state taxable supply of goods 2,00,000
(iii) Intra state purchase of taxable goods 5,00,000
He has the following input tax credit at the beginning of August 2017:
Nature ITC Amount in (`)
CGST 20,000
SGST 30,000
lGST 25,000
Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively.
Both inward and outward supplies are exclusive of taxes wherever applicable.
All the conditions necessary for availing the ITC have been fulfilled. Compute the net GST payable by Mr. Ajay for
the month of August 2017.
Answer.
a) Computation of net GST payable by Mr. Ajay for the month of August, 2017 Working of GST payable on
Outward supplies
S.No. Particulars (` ) GST (`)
(i) Intra-State taxable supply of goods
CGST @ 9% on `2,00,000 18,000
SGST @ 9% on `2,00,000 18,000 36,000
(ii) Inter-State taxable supply of goods
IGST @ 18% on `10,00,000 1,80,000
Computation of total ITC

Particulars CGST @ 9% SGST @ 9% IGST @ 18%
(` ) (` ) (` )
Opening ITC 20,000 30,000 25,000
Add: ITC on Intra-State purchases of taxable goods 45,000 45,000

valuing `5,00,000
Total ITC 65,000 75,000 25,000

Computation of GST payable from cash ledger

Particulars CGST @ 9% SGST @ 9% (`) IGST @ 18% (`)
(` )
GST payable 18,000 18,000 1,80,000
Less: ITC (18,000)-CGST (18,000)-SGST (25,000)-IGST
(47,000)-CGST
(57,000)-SGST
Net GST payable Nil Nil 51,000
Note: ITC of IGST, CGST & SGST have been used to pay IGST in that order.
Question 3: [SA GST MAY 2018]

Fun Pharma Private Limited, a registered supplier is engaged in the manufacture of taxable goods. The company
provides the following information of GST paid on the purchases made/input services availed by it during the
month of September 2017:
Particulars GST paid (`)
(i) Purchase of cabs used for the transportation of its employees 3,30,000
(ii) Inputs consisting of three lots, out of which first lot was received during the month 1,25,000
Capital Goods (out of three items, invoice for one item was missing and GST paid on
(iii) 2,50,000
that item was ` 25,000)
(iv) Outdoor catering service availed on Women's day 72,000
Determine the amount of input tax credit available with M/s Fun Pharma Private Limited for the month of September,
2017 by giving necessary explanations for treatment of various items. All the conditions necessary for availing the input
tax credit have been fulfilled.
Answer.
Computation of input tax credit (ITC) available with Fun Pharma Private Limited for the month of September, 2017
Particulars `
Purchase of cabs used for the transportation of its employees [Note-1] Nil
Inputs consisting of three lots, out of which first lot was received during the month [Note-2] Nil
Capital goods [Note-3] 2,25,000
Outdoor catering service availed on Women’s day [Note-4] Nil
Total ITC 2,25,000
Notes: -
1. Section 17 of CGST Act, 2017 provides that ITC on motor vehicles can be availed, inter alia, when they are used for
making the taxable supply of transportation of passengers i.e., if the taxable person is in the business of transport
of passengers. In the given case, since the supplier is a manufacturer, it cannot avail credit on cabs used for
transportation of its employees.
2. When inputs are received in instalments, ITC can be availed only on receipt of last instalment in terms of section
16 of CGST Act, 2017.
3. ITC cannot be taken on missing invoice. The registered person should have the invoice in its possession to claim ITC
vide section 16 of CGST Act, 2017.
4. ITC on outdoor catering is specifically disallowed unless the same is used for making outward taxable supply of the
same category or as an element of the taxable composite or mixed supply in terms of section 17 of CGST Act, 2017.

Question 4: [SA GST NOV 2018]

CANWIN Ltd., a registered supplier, is engaged in the manufacture of Tanks. The company provides the following
information pertaining to GST paid on the purchases made/input services availed by it during the month of January
2018:
Particulars GST Paid (`)
(i) Purchase of Machinery where debit note is issued 1,15,000
(ii) Input purchased was directly delivered to Mr. Joe, a job worker and a 80,000
registered supplier
(iii) Computers purchased (Depreciation was claimed on the said GST portion 50,000
under the Income-Tax Act, 1961)
(iv) Works Contract services availed for construction of Staff quarters within the 4,25,000
company premises
Determine the amount of ITC available to M/s. CANWIN Ltd. for the month of January 2018 by giving brief
explanations for treatment of various items. Subject to the information given above, all the conditions necessary for
availing the ITC have been fulfilled.
Answer:
Computation of input tax credit (ITC) available with CANWIN Ltd. for the month of January 2018
Particulars GST (`)
Purchase of machinery where debit note is issued [Note-1] 1,15,000
Inputs directly delivered to a job worker supported by a valid document 80,000
Computers [Note-2] Nil
Works contract services availed for construction of staff quarters within the company premises Nil
[Note-3
Total ITC 1,95,000
Notes: -
1. Input tax credit on goods purchased on the basis of debit note which is a valid document is allowed.
2. Where depreciation has been claimed on the tax component of the cost of capital goods and plant and machinery
under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component is not allowed.
3. Input tax credit on works contract services supplied for construction of an immovable property is specifically
disallowed except where it is an input service for further supply of works contract service.
Question 5: [SA GST NOV 2018]

From the following information, compute the Net GST payable for the month of March, 2018: -
Output GST Amount in `
Opening ITC as Per credit ledger
CGST 2,000 Nil
SGST 15,000 1,000
IGST 24,000 37,000
Answer.
Computation of net GST payable for the month of March, 2018
Particulars CGST (`) SGST (`) IGST (`)
Output tax payable 2,000 15,000 24,000
Less: Utilization of IGST Credit (2,000)-IGST (11,000)-IGST (24,000)-IGST
Less: Utilization of SGST Credit (1,000)-SGST

Net GST payable Nil 3,000 Nil
Note: Input tax credit of IGST has been used to pay IGST, CGST or SGST in any manner and in any proportion.

Question 6: [RTP MAY 2018]

Tirupati Traders, a registered supplier of goods, pays GST [CGST & SGST or IGST, as the case may be] under regular
scheme. It has furnished the following particulars for a tax period: -
Particulars `
Value of intra-State supply of goods 12,000
Value of intra-State purchase of goods 10,000
Note:
(i) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively.
(ii) Both inward and outward supplies are exclusive of taxes, wherever applicable.
(iii) All the conditions necessary for availing the input tax credit have been fulfilled.
Compute the net GST payable by Tirupati Traders during the given tax period assuming that there is no opening
balance of input tax credit (ITC). Make suitable assumptions wherever required.
Answer.
(i) 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 SGST is payable on the (`12,000 × 9%) (`12,000 × 9%)
same]
Less: Input tax credit (ITC) on intra-State purchase of goods 900 900
[CGST and SGST paid on the intra-State purchases of goods] (`10,000 × 9%) (`10,000 × 9%)
Net GST payable 180 180
(ii) Computation of net GST payable by Govind

Particulars `
IGST @ 18% payable on inter-State supply of services [Being an inter-State supply, 32,400
IGST is payable on the same in terms of section 5 of the IGST Act, 2017] [1,80,000 × 18%]
Less: ITC of CGST @ 9% paid on intra-State receipt of goods and services 9,000
[Cross utilisation of CGST towards IGST] [1,00,000 × 9%]
Less: ITC of SGST @ 9% paid on intra-State receipt of goods and services 9000
[Cross utilisation of SGST towards IGST]
[1000000 ´ 9%]
Net GST payable in cash 14,400
Notes:
1. CGST shall first be utilised towards payment of CGST and the amount remaining, if any, be utilised towards the
2. SGST shall first be utilised towards payment of SGST and the amount remaining, if any, may be utilised towards the

Shipra Traders is a registered supplier of goods in Assam. It purchased goods valued at ` 10,000 from Kartik Suppliers
located within the same State. Kartik Suppliers charged CGST & SGST separately in its invoice. Subsequently, Shipra
Traders sold goods valuing ` 9,500 to Rabina Manufacturers located in Assam. 20% of the inputs purchased are still
lying in stock and there was no opening stock of goods. Rate of CGST and SGST on supply and purchase of goods is 9%
each. Calculate the net GST payable by Shipra Traders and input tax credit (ITC) to be carried forward, if any.
Answer.
Computation of net GST payable by Shipra Traders
CGST @ 9% SGST @ 9%
Particulars
(` ) (` )

GST payable on intra-State supply of goods 855 855

[Being an intra-State supply, CGST and CGST is [9,500 × 9%] [9,500 × 9%]
payable on the same]
Less: ITC on intra-State purchase of goods 900 900
[ITC of CGST and SGST paid on intra-State purchase is available in full, [10,000 × 9%] [10,000 × 9%]
even if some inputs are lying in stock]
Net GST payable Nil Nil
Input tax credit carried forward in Electronic Credit Ledger
45 45

Granites Textiles Ltd. purchased a needle detecting machine on 8th July, 2017 from Makhija Engineering Works Ltd. for
` 10,00,000 (excluding GST) paying GST @ 18% on the same. It availed the ITC of the GST paid on the machine and
started using it for manufacture of goods. The machine was sold on 22nd October, 2018 for ` 7,50,000 (excluding GST),
as second hand machine to LT. Pvt. Ltd. The GST rate on supply of machine is 18%.
State the action which Granites Textiles Ltd. is required to take, if any, inaccordance with the statutory GST provisions
on the sale of the second-hand machine.
Answer.
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
(b) tax on transaction value.
Accordingly, the amount payable on supply of needle detecting machine shall be computed as follows:
Particulars ` `
Input tax credit taken on the machine (` 10,00,000 × 18%) 1,80,000
Less: Input tax credit to be reversed @ 5% per quarter for 27,000
the period of use of machine 27,000
(i) For the year 2017-18 = (` 1,80,000 × 5%) × 3 quarters
(ii) For the year 2018-19 = (` 1,80,000 × 5%) × 3 quarters 54,000
Amount required to be paid (A) 1,26,000
Duty leviable on transaction value (` 7,50,000 × 18%) (B) 1,35,000
Amount payable towards disposal of machine is higher of 1,35,000
(A) and (B)

Sahab Sales, an air-conditioner dealer in Janakpuri, Delhi, needs 4 air-conditioners for his newly constructed house
in Safdarjung Enclave. Therefore, he transfers 4 air- conditioners [on which ITC has already been availed by it] from its
stock, for the said purpose. Examine whether the said activity amounts to supply under section 7 of the CGST Act,
2017.
Further, a Janakpuri resident, Aakash, approached Sahab Sales. He sold an air- conditioner to Sahab Sales for `
5,000. Aakash had bought the said air-conditioner six months before, for his residence. Does sale of the air
conditioner by Aakash to Sahab Sales amount to supply under section 7 of the CGST Act, 2017?
Answer.
Section 7 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 of the CGST Act, 2017 illustrates the activities to be treated as supply even if made without
consideration. One such activity is 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.
Question 10: [RTP NOV 2018]

Cloud Seven Private Limited, a registered supplier, is engaged in the manufacture of taxable goods. The company
provides the following information pertaining to GST paid on the purchases made/input services availed by it during
the month of February, 20XX:
Particulars GST paid (`)
(i) Trucks used for the transport of raw material 1,20,000
(ii) Foods and beverages for consumption of employees working in the factory 40,000
(iii) Inputs are to be received in five lots, out of which third lot was received 80,000
during the month
(iv) Membership of a club availed for employees working in the factory 1,50,000
(v) Capital goods (out of five items, invoice for one item was missing and GST paid 4,00,000
on that item was ` 50,000)
(vi) Raw material (to be received in March, 20XX) 1,50,000
Determine the amount of input tax credit available with Cloud Seven Private Limited for the month of February, 20XX
by giving necessary explanations for treatment of various items. All the conditions necessary for availing the input tax
credit have been fulfilled.
Answer.
1) Computation of input tax credit (ITC) available with Cloud Seven Private Limited for the month of February, 20XX
Particulars `
Trucks used for the transport of raw material [Note-1] 1,20,000
Foods and beverages for consumption of employees working in the factory [Note-2] Nil
Inputs are to be received in five lots, out of which third lot was received during the month [Note-3] Nil
Membership of a club availed for employees working in the factory [Note-4] Nil
Capital goods (out of five items, invoice for one item was missing and GST paid on that item was ` 3,50,000
50,000) [Note-5]
Raw material to be received in March, 20XX [Note-6] Nil
Total ITC 4,70,000
Notes: -
1. ITC on motor vehicles is disallowed in terms of section 17(5) of the CGST Act, 2017, except when they are used inter
alia, for transportation of goods.
2. ITC on food or beverages is specifically disallowed unless the same is used for making outward taxable supply of the
same category or as an element of the taxable composite or mixed supply- [Section 17(5)].
3. When inputs are received in instalments, ITC can be availed only on receipt of last instalment- [Section 16(2)].
4. Membership of a club is specifically disallowed under section 17(5) of the CGST Act, 2017.
5. ITC cannot be taken on missing invoice. The registered person should have the invoice in its possession to claim ITC
[Section 16(2) of CGST Act, 2017].
6. Input tax credit is available only upon the receipt of goods in terms of section 16(2) of CGST Act, 2017.

Question 11:[RTP MAY 2019]

Mr. Ekaant, a supplier registered in Delhi, is engaged in the business of sale and purchase of plastic raincoats. He
furnishes the following information pertaining to inward/outward supply made by him for the month of July, 20XX:
Particulars Amount (`
in lakh)
Value of inter-State outward supply to registered persons 30
Value of intra-State outward supply to registered persons 50
Value of intra-State outward supply to unregistered persons 15
Value of intra-State inward supply from registered persons 10
Value of inter-State inward supply from registered persons 5
Value of intra-State inward supply from unregistered persons 2
Following additional information is also provided by Mr. Ekaant:-
Particulars Amount (` in lakh)
IGST credit on capital goods purchased in the month of July 1.5
CGST / SGST credit on other inward supplies [including credit of ` 5,000 (CGST and SGST 0.5
each) on account of membership of a club] (CGST and SGST
each)
Availed consultancy services from Mr. Sujit, lawyer located in Delhi [Intra-State services] 1
The amount of IT C brought forward in the month of July, 20XX is as under:-

CGST : ` 2 lakh
SGST : ` 2 lakh
IGST : ` 5 lakh
Calculate the net GST liability (CGST and SGST or IGST , as the case may be) to be paid in cash for the month of July,
20XX by assuming the rates of GST as under:
CGST 9%
SGST 9%
IGST 18%
Note:
(i) All the amounts given above are exclusive of taxes.
(ii) All the conditions necessary for availing the ITC have been fulfilled.
Answer.
Computation of net GST liability of Mr. Ekaant
Particulars Value (`) CGST (`) SGST (`) IGST (`)
Total tax liability
Value of intra-State legal consultancy services 1,00,000 9,000 9,000 -
i.e. inward supplies liable to reverse charge
mechanism (to be paid in cash) (A) [Note-1]
Value of inter-State outward 30,00,000 - - 5,40,000
supplies (B1)
Value of intra-State outward supplies to 65,00,000 5,85,000 5,85,000 -
registered as well as unregistered persons
(B2) (` 50,00,000+ ` 15,00,000)

Total (B) = (B1) +(B2) 5,85,000 5,85,000 5,40,000

Input tax Credit
Brought forward IT C 2,00,000 2,00,000 5,00,000
Value of intra-State inward supplies from 10,00,000 90,000 90,000
registered person [Note-2]
Value of inter-State inward supplies from 5,00,000 - - 90,000

registered person [Note-2]
Value of intra-State inward supplies from 2,00,000 - - -

unregistered person [Note-3]
IGST credit of capital goods [Note- 2] 1,50,000
Credit on other inward supplies purchased in 45,000 45,000 -

the month of July less credit on membership of
a club [Note-2 & 4]
Credit of legal consultancy services [Note-2] 9,000 9,000 -
Total (C) 3,44,000 3,44,000 7,40,000
Net liability (B)-(C) 2,41,000 2,41,000 (2,00,000)
Less: Set off from IGST credit [Note-5] (1,00,000) (1,00,000) -
Liability after set off (D) 1,41,000 1,41,000 Nil
Net GST liability to be paid in cash (A) + (D) 1,50,000 1,50,000 Nil
Notes:-
1. Services supplied by an individual advocate to any business entity located in the taxable territory by way of legal
services, directly or indirectly are taxable under reverse charge mechanism. T hus, tax is payable by the recipient
(Mr. Ekaant) on said services to the Government.
Further, as per section 49(4) of the CGST Act, 2017, amount available in the electronic credit ledger [IT C amount] may
be used for making payment towards output tax. However, tax payable under reverse charge is not an output tax i n
terms of section 2(82) of the CGST Act, 2017. T herefore, tax payable under reverse charge cannot be set off against
the input tax credit and thus, will have to be paid in cash.
2. Every registered person is entitled to take credit of input tax charged on any inward supply of goods and/or services
which are used or intended to be used in the course or furtherance of his business in terms of section 16 of
CGST Act, 2017. Further “input tax” in relation to a registered person includes the tax payable under reverse charge
mechanism in terms of section 2(62) of the CGST Act, 2017.
3. Intra-State supplies received by a registered person from any unregistered supplier, are exempt from the whole
of the central tax leviable thereon under section 9(4) till 30.09.2019 [Notification No.8/2017 CT (R) dated
28.06.2017]. Since no tax has been paid, so no credit is available.
4. Input tax credit is not allowed in respect of membership of a club in terms of section 17(5) of CGST Act, 2017.
5. Input tax credit of IGST has been used to pay IGST and CGST or SGST in any manner and in any proportion.

Question 12 :[SA GST MAY 2019]

Le Marc Ltd. of Nashik, Maharashtra, a registered supplier, is engaged in manufacturing taxable goods. It provides the
following details of items purchased and services availed by it from Gujarat, for the month of March, 20XX:
S. Particulars IGST (`)
No.
1 Motor vehicle purchased for employees to be used for personal as well as business purposes 1,50,000
2 Motor vehicle purchased for transportation of goods within the factory 2,00,000
3 Food items for consumption of employees. T hese items were supplied free of cost to the 2,000
employees in lieu of services rendered by them to the manufacturer in the course of employment.
4 Rent-a-cab facility availed for employees to fulfill a statutory obligation in this regard. T he 36,000
Government has notified such service under section 17(5)(b)(iii)(A) of the CGST Act, 2017.
Calculate the amount of eligible input tax credit for the month of March, 20XX.
Answer.
Computation of eligible input tax credit
Particulars Eligible ITC (`)
Motor vehicle purchased for employees to be used for personal as well as business purposes -
[Note-1]
Motor vehicle purchased for transportation of goods within the factory [Note-1] 2,00,000
Food items for consumption of employees [Note-2] -

Rent-a-cab facility given to employees [Note-3] 36,000
Total eligible input tax credit 2,36,000
Notes:-
As per section 17(5) of the CGST Act, 2017:
1. ITC on motor vehicles and other conveyances is blocked except when they are used—
(i) for making the following taxable supplies, namely :—
(A) further supply of such vehicles or conveyances; or
(B) transportation of passengers; or
(C) imparting training on driving, flying, navigating such vehicles or conveyances;
(ii) for transportation of goods.
Thus, in the given case, IT C on motor vehicle purchased for transportation of goods within the factory will only be allowed
2. IT C in respect of food and beverages is blocked unless the same is used for making outward taxable supply of the
same category or as an element of the taxable composite or mixed supply. Thus, in the given case, IT C of taxes
paid on food for employees is not allowed.
3. IT C on supply of rent-a cab services is not blocked where the Government notifies the services which are
obligatory for an employer to provide such service to its employees. Thus, IT C is available on said service
Question 13:[RTP NOV 2019]

Mr. X, a supplier of goods, pays GST under regular scheme. The amount of input tax credit (ITC) available and output
tax liability under different tax heads is as under:-
Head Output tax liability ITC
IGST 2,000 4,000
CGST 800 2,000

SGST / UT GST 2,500 500

Compute the minimum GST payable in cash by Mr. X. Make suitable assumptions as required.
Answer.
Mr. X can use the IT C to pay his output tax liability. The order of utilisation of IT C is as under:-
(i) IGST credit should first be utilized towards payment of IGST .
(ii) Remaining IGST credit, if any, can be utilized towards payment of CGST and SGST /UT GST in any order and in
any proportion.
(iii) Entire IT C of IGST should be fully utilized before utilizing the IT C of CGST
or SGST /UT GST.
(iv) IT C of CGST should be utilized for payment of CGST and IGST in that order.
(v) IT C of SGST /UT GST should be utilized for payment of SGST /UT GST and IGST in that order. However, IT C of SGST
/UT GST should be utilized for payment of IGST , only after IT C of CGST has been utilized fully.
CGST credit cannot be utilized for payment of SGST /UT GST and SGST /UT GST credit cannot be utilized for payment of
CGST.
Computation of minimum GST payable in cash

Particulars CGST (`) SGST (`) IGST (`)
GST payable 800 2,500 2,000
Less: IT C - (2,000)-IGST (2,000)-IGST
(800)-CGST (500) – SGST
Net GST payable in cash Nil Nil Nil
Since sufficient balance of IT C of CGST is available for paying CGST liability and cross utilization of IT C of CGST and SGST
is not allowed, it is beneficial to use IT C of IGST to pay SGST (after paying IGST liability) to minimize cash outflow

Advise regarding availability of input tax credit (ITC) under the CGST Act, 2017 in the following independent cases:-
(i) AMT Co. Ltd. purchased a mini bus having seating capacity of 16 persons for transportation of its employees
from their residence to office and back.
(ii) Bangur Ceramics Ltd., a manufacturing company purchased two trucks for transportation of its finished goods
from the factory to dealers located in various locations within the country.
(iii) “Hans premium” dealing in luxury cars in Chankyapuri, Delhi purchased five Skoda VRS cars for sale to
customers.
(iv) Sun & Moon Packers Pvt. Ltd. availed outdoor catering service to run a canteen in its factory. T he Factories
Act, 1948 requires the company to set up a canteen in its factory.
Answer.
(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 capac ity 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 IT C 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, IT C on motor vehicles for transportation of goods is allowed
unconditionally.
Therefore, IT C 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, IT C 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, IT C is available on such 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 IT C in respect of outdoor
catering services availed by it as th e same is being provided under a statutory obligation.

Explain the meaning of the term “input tax” under section 2(62) of CGST Act, 2017.
Answer.
As per section 2(62) of CGST Act, 2017, “input tax” in relation to a registered person, means the central tax, State tax,
integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes—
(a) the integrated goods and services tax charged on import of goods;
(b) the tax payable under the provisions of sub-sections (3) and (4) of section 9;
(c) the tax payable under the provisions of sub-section (3) and (4) of section 5 of the IGST Act;
(d) the tax payable under the provisions of sub-section (3) and sub-section (4) of section 9 of the respective SGST Act; or
(e) the tax payable under the provisions of sub-section (3) and sub-section (4) of section 7 of the UTGST Act, but does
not include the tax paid under the composition levy.
Question 16:[MOCK TEST NOV 2019]

Mr. X, a supplier of goods, pays GST under regular scheme. He has made the following outward taxable supplies in a
tax period:
Particulars (Rs.)
Intra-State supply of goods 8,00,000
Inter-State supply of goods 3,00,000
He has also furnished the following information in respect of purchases made by him in that tax period:
Particulars (Rs.)
Intra-State purchases of goods 2,00,000
Inter-State purchases of goods 50,000
Mr. X has following IT Cs with him at the beginning of the tax period:
Particulars (Rs.)
CGST 57,000
SGST Nil
IGST 70,000
Note:
I. Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively.
II. Both inward and outward supplies are exclusive of taxes, wherever applicable.
III. All the conditions necessary for availing the IT C have been fulfilled.
Compute the minimum GST, payable in cash, by Mr. X during the tax period. Make suitable assumptions as required.
Answer.
a) Computation of minimum GST payable in cash by Mr. X on outward supplies
S.No. Particulars (Rs.) GST (Rs.)
(i) Intra-State supply of goods
CGST @ 9% on Rs. 8,00,000 72,000
SGST @ 9% on Rs. 8,00,000 72,000 1,44,000
(ii) Inter-State supply of goods

IGST @ 18% on Rs. 3,00,000 54,000

Total GST payable 1,98,000
Computation of total ITC

CGST SGST IGST
Particulars
@ 9% (Rs.) @ 9% (Rs.) @ 18% (Rs.)
Opening ITC 57,000 Nil 70,000
Add: ITC on Intra-State purchases of goods valuing Rs. 2,00,000 18,000 18,000 Nil
Add: ITC on Inter-State purchases of goods valuing Rs. 50,000 Nil Nil 9,000
Total ITC 75,000 18,000 79,000
Computation of minimum GST payable from cash ledger

Particulars CGST @ 9% (Rs.) SGST @ 9% (Rs.) IGST @ 18% (Rs.)
GST payable 72,000 72,000 54,000
Less: IT C (Nil)-IGST (25,000)-IGST (54,000)-IGST
(72,000)-CGST (18,000) – SGST
Minimum GST payable in cash Nil 29,000 Nil
Note: Since sufficient balance of ITC of CGST is available for paying CGST liability and cross utilization of IT C of CGST and
SGST is not allowed, ITC of IGST has been used to pay SGST (after paying IGST liability) to minimize cash outflow.

REVISION – 5
Provisions of IGST Act, 2017
Nature of Supply Inter State or Intra-State [Sec. 7 & Sec. 8 of IGST Act, 2017]:
Is it supply of
NO
goods/services or Not the taxable event, so stop
both?
YES
Inter-State supply
a) Appears to be export supply but it is
Supplier is located YES required to check definition of export of
in India + POS is goods [2(6)] and export of services [2(7)].
outside India b) If it is the export transaction, it will be the
case of ‘zero rated supply’ and eligible to
get refund by complying the due procedure.
NO
a) Inter-State supply.
Is supply made to YES b) It will be the case of ‘Zero Rated Supply’ and
or by SEZ unit/SEZ eligible to get the refund of ITC; supplier is
developer having an option to pay IGST and can get
refund by complying the due procedure.
NO
Is it import YES
transaction?
Supply of goods imported into the territory
YES
of India, till they cross the customs frontiers
Goods of India, shall be treated to be a supply of
NO goods in the course of inter-state trade or
commerce.
LOS & POS

are in
same state
or UT YES
NO (i.e. import of
Intra-State service)
NO
Supply of services imported into the
Inter-State Supply territory of India shall be treated to be a
supply of services in the course of inter-
state trade or commerce

Export of goods Vs. Export of Services:

Export of goods – Sec. Export of Services – Sec. 2(6) of IGST Act, 2017
2(5) of IGST Act, 2017
Taking goods out of • Supplier of service located in India
India to a place outside • Recipient of Service located outside India
India • Place of supply of service is outside India
• Payment for such service has been received by the supplier of service in convertible
foreign exchange (Except for services to Nepal & Bhutan, as notified by RBI)
• Supplier and recipient are not merely establishments of the same person
Note: If supplier is located in India and Place of supply is outside India, and any of the
other conditions is not satisfied, then it is deemed to be inter-state supply
Deemed inter-state supplies:

The following supplies are deemed to be inter-state supplies, irrespective of location of supplier and place of supply:
1. Supplies to/by SEZ
2. Import of goods
3. Import of services
4. Supply of goods to a tourist
5. Supply of services, where location of supplier is in India and Place of supply is outside India and other conditions
for export of service, not satisfied
6. Supply of goods or services, beyond territorial waters (12 nautical miles from base line) and upto Exclusive
Economic Zone (200 nautical miles from base line)
Benefits in case of zero-rated supplies:

Meaning 1. Export of goods or Services
2. Supplies to SEZ unit/Developer
Whether GST payable No
on outward supply?
Whether GST paid on Yes and can be availed as ITC
inward supply?
Option (i) Pay IGST on outward supply by utilizing ITC and get the refund of gross IGST
Option (ii) Don’t pay any GST on outward supply but get refund of ITC w.r.to GST paid on inward supply
Supplies in territorial waters (i.e. 12 Nautical Miles from base line) – Sec. 9 of IGST Act, 2017:
If location of supplier or place of supply is in territorial waters, then the nearest coastal state/UT shall be taken as the
location of supplier or place of supply
For Example, If a marine engineer registered in Tamil Nadu provides repair services to a shipping company incorporated
outside India, for their ship located in territorial waters of India, and the place of supply is the location where services are
actually performed, then the place of supply is the location of the Ship. But, as the Ship is in territorial waters, place of
supply shall be the nearest coastal state where the ship is located and if the nearest coastal state is Andhra Pradesh, then
the nature of supply is inter-state supply to the marine engineer.

REVISION – 6
Registration & Composition Scheme
Threshold limits for registration and composition scheme:

State Aggregate turnover during current year for Aggregate turnover during PY
registration for opting composition scheme
during CY
Services Goods
1.North Eastern States
a) Manipur
b) Mizoram
> `10 lakhs > `10 lakhs
c) Tripura
`75 lakhs
d) Nagaland
e) Arunachal Pradesh > `20 lakhs
f) Meghalaya > `20 lakhs > `20 lakhs
g) Sikkim > `20 lakhs
h) Assam > `20 lakhs > `40 lakhs `1.5 Crore
2. Himachal Pradesh > `20 lakhs > `40 lakhs `1.5 Crore
3. Uttarakhand > `20 lakhs > `20 lakhs `75 lakhs
4. Pondicherry > `20 lakhs > `20 lakhs `1.5 Crore
5. Telangana > `20 lakhs > `20 lakhs `1.5 Crore
6. Other States (incl J & K) > `20 lakhs > `40 lakhs `1.5 Crore
How to remember?
1. For 4 North Eastern States (MMTN) - Manipur, Mizoram, Tripura & Nagaland - ₹ 10 lakhs limit for both goods and
Services
2. For (USTAMP) - Uttarakhand, Sikkim, Telangana, Arunachal Pradesh, Meghalaya & Pondicherry - ₹ 20 lakhs limit for
both goods and services
3. For all other 21 states - ₹ 20 lakhs limit for services and ₹ 40 lakhs limit for goods
Important Points:
• The limit of ₹ 40 lakhs is applicable only in case of exclusive supply of goods.
• If a person is engaged in exclusive supply of services (or) supply of both goods and services, the limit of ₹ 20 lakhs/10
lakhs should be considered.
• The limit of ₹ 40 lakhs is not applicable in the following cases:
1. Persons who voluntarily got registered
2. Persons who are compulsorily required to get registered under sec. 24
3. Persons making supply of ice cream, edible ice, Pan Masala, Tobacco and tobacco products

An Overview of registration Provisions:
Basic provisions:
1. GSTIN is a 15 digit registration number – First 2 (State Code),
Next 10 (PAN), Next 1 (Entity code within the state), Next 1
(Alphabet “Z”) and last 1 (Check Sum digit)
2. A person shall obtain registration in every state from where
he makes taxable supply
3. Within the state registration is required only in case of
different place of business (Optional). Alternatively, a single
place within the state can be specified as “Principal place of
business” and other places be mentioned as “additional place
of business”

73
That’s It on GST & Customs
Procedure for obtaining registration [Sec. 25]:
Person liable for registration under GST other than NRTP, TDS or TCS deductor, OIDAR Supplier and UIN
File FORM GST REG – 01 within 30 days from the date on which the person has become liable to be registered under section 22(1) or desires to obtain voluntary
registration (Atleast 5 days before commencement of business in case of casual taxable person)
Directly Through facilitation center
Receipt of FORM GST REG – 02 as an acknowledgement for filing application in FORM GST REG - 01
Application is found in order No Issue of notice in FORM GST REG – 03 seeking clarification, information
and/or documents within 3 working days from the date of submission
If no action been taken within Yes
3 working days from the date
If replied in FORM GST REG If reply in FORM GST REG 04 filed
of submission of application,
04 within 7 working days after 7 working days or not filed.
then application for grant of Grant of registration within 3
registration shall be deemed working days in FORM GST REG –
to have been approved 06 from the date of submission
of FORM GST REG - 01 Satisfactory Not Satisfactory
M 20
Bank details may be Issue rejection order in
furnished after FORM GST REG - 05
obtaining registration If no action has been taken within 7 Proper officer shall grant
but within 45 days working days from the date of registration in FORM GST REG 06
from grant of receipt of REG -04, then application within 7 working days from the
registration is deemed to have been approved date of receipt of GST REG - 04
74
Time limit for making application for registration:

S.No Situation Date on which Time limit for making
they are liable for application
registration
1 Casual Taxable Person Commencement Atleast 5 days before
Covered under Sec. (CTP), Non-Resident of business commencement of
24 Taxable Person (NRTP) business
Others Commencement Within 30 days
of business
2 Registered under earlier law 1/7/17
3 Amalgamation/ Date of certificate
Transfer of demerger by order of of incorporation
business high court/ tribunal issued by ROC to
transferee
Other Cases Date of transfer
4 Any other person Date on which
ATO > `20 lakhs/
`10 lakhs/`40
lakhs
Special provisions relating to Casual Taxable Person and Non-resident taxable person [Sec. 27]:
Registration validity = Max. 90 days + 90 days:

} Validity of registration for casual/non-resident taxable person shall be for the period specified in the
application but maximum 90 days.
} On sufficient cause being shown by the said taxable person, PO ay extend the said period of 90 days
by a further period not exceeding 90 days
Advance tax to be paid at the time of registration + extra amount for extension period:
} A CTP/NRTP shall, at the time of submission of application for registration, make an advance deposit
of tax for an amount equal to the estimated tax liability(Net Liability i.e. after adjustment of
estimated ITC) of such person for the period for which registration is sought.
} Where any extension is sought, an additional amount of tax equal to estimated tax liability of such
extended period shall be deposited.
} Advance tax shall be credit to electronic cash ledger, which shall be adjusted against final liability
determined.
Distinguishing points:
Casual Taxable Person (CTP) Non-Resident Taxable Person (NRTP)
A person who occasionally undertakes transactions Any person who occasionally undertakes transactions
involving supply of goods or services or both in the involving supply of goods or services or both, whether
course or furtherance of business, whether as as principal or agent or in any manner, but who has
principal, agent or in any other capacity, in a state/UT no fixed place of business or residence in India
where he has no fixed place of business
Undertakes transactions in the course or furtherance No such requirement
of business
Has a PAN Does not have a PAN. He can take registration as
NRTP with Passport
Application Form – GST REG 01 Application Form – GST REG 10
Files return in Form – GSTR 1, GSTR 3B Files return in Form – GSTR 5
75
That’s It on GST for CA Inter
Amendment in registration [Sec. 28]: Change which does not result in change in PAN
Amendment in Registration certificate shall stand Effective date of amendment
amended upon
Non-core fields Submission of the application for Any particular of the application for
amendment on the common portal registration shall not stand amended
(Deemed Approval) with effect from a date earlier than the
Core fields: Approval of PO required. Such date of submission of the application
1. Name of business amendment shall take effect from the except with the order of the
2. Address of date of occurrence of event warranting commissioner
principal and such amendment
additional place Retrospective amendment in
of business registration is possible only with the
3. Top management order of commissioner
details
Note: If any change leads to change in PAN, old registration should be cancelled and new registration should be
obtained
Procedure for amendment in registration:
Within 15 days
Ap No
p lica n-C
tio ore
n in fiel
RE ds
G- 1
4W
ith
in 1
5d
ays

76
Cancellation of registration and revocation of cancellation [Sec. 29] :
Form GST REG - 16 Form GST REG - 19 Cancellation of registration:

Application by registered person (or) suo-
moto cancellation by officer:
1. Transfer or discontinuance of business
2. Change in constitution of business
3. Taxable person no longer liable to be
registered
Suo-moto cancellation by officer:
1. Contravention of provisions of Act or
Rules
2. Person opting for composition scheme
not filed 3 Consecutive returns
3. Registered person(other than above)
has not filed 6 consecutive returns
4. Registration obtained by fraud
5. Obtained voluntary registration and
Form GST REG - 17 not commenced business within 6
months
Under section 29, the cancellation of the registration can either be initiated by the Department on their own
motion or the registered person can apply for cancellation of their registration.
A proviso to section 29(1) has been inserted to provide that once a registered person has applied for cancellation
of registration or the proper officer seeks to cancel his registration, the proper officer may suspend his
registration during pendency of the proceedings relating to cancellation of registration filed by such registered
person, for such period and in such manner as may be prescribed in Rule 21A vide Notification No. 03/2019 (Dt:
29/01/2019)
The period and manner of suspension of registration as follows:

Situation Effective date of suspension of registration
Where registered person has the registration shall be deemed to be suspended from:
applied for cancellation of (a) the date of submission of the application or
registration (b) the date from which the cancellation is sought, whichever is later,
pending the completion of proceedings for cancellation of registration.
Where cancellation of the Where the proper officer has reasons to believe that the registration of a
registration has been initiated person is liable to be cancelled, he may, after affording the said person a
by the Department on their reasonable opportunity of being heard, suspend the registration of such person
own motion with effect from a date to be determined by him, pending the completion of
the proceedings for cancellation of registration.
A registered person, whose registration has been suspended as above:
- shall not make any taxable supply5 during the period of suspension and
- shall not be required to furnish any return under section 39.
The suspension of registration shall be deemed to be revoked upon completion of the cancellation proceedings
by the proper officer. Such revocation shall be effective from the date on which the suspension had come into
effect.
5
It means that exempt supply can be made by issuing bill of supply and taxable supply can be made without
issuing tax invoice (i.e. GST should not be collected)

77
Revocation of cancellation of registration [Sec. 30]:
As per Rule 23 of the CGST Rules, all

the pending returns to be filed
before revocation of cancellation of
registration, if cancellation of
registration is on account of non
filing of returns
If cancellation is revoked, all

returns pertaining to the period
from the date of order of
cancellation (Prospective/
retrospective) to the date of
revocation of cancellation, should
be filed within 30 days from the
date of order of revocation

78
QUESTION NO-1[SA MAY 2019]

State with brief reason, whether following suppliers of taxable goods are required to register under the GST
Law:
I. Mr. Raghav is engaged in wholesale cum retail trading of medicines in the State of Assam. His
aggregate turnover during the financial year is ` 9,00,000 which consists of ` 8,00,000 as Intra-State
supply and ` 1,00,000 as Inter-State supply.
II. Mr. S.N Gupta of Rajasthan is engaged in trading of taxable goods on his own account and also
acting as an agent of Mr. Rishi of Delhi. His turnover in the financial year 2017-18 is of ` 12 lakhs
on his own account and ` 9 lakhs on behalf of principal. Both turnovers are Intra -State supply.
Answer.
I. Person making any inter-State taxable supply of goods is required to obtain registration compulsorily under
GST laws irrespective of the quantum of aggregate turnover.
Thus, in the given case Mr. Raghav is required to obtain registration compulsorily under GST laws even though
his aggregate turnover does not exceed the threshold limit of ` 10 lakh [since Assam is a Special Category
State] in the financial year.
II. Persons who make taxable supply of goods on behalf of other taxable persons whether as an agent or
otherwise are required to obtain registration compulsorily under GST laws irrespective of the quantum of
aggregate turnover.
Aggregate turnover includes all supplies made by the taxable person, whether on his own account or made
on behalf of all his principals.
Since Mr. S.N Gupta is also acting as an agent of Mr. Rishi of Delhi, he is required to obtain registration
compulsorily under GST laws.

Answer the following questions with respect to casual taxable person under the CGST Act, 2017:
I. Who is a casual taxable person?
II. Can a casual taxable person opt for the composition scheme?
III. When is the casual taxable person liable to get registered?
IV. What is the validity period of the registration certificate issued to a casual taxable person?
V. Can the validity of registration certificate issued to a casual taxable person be extended? If
yes, what will be the period of extension.
Answer.
I. Casual taxable person means a person who occasionally undertakes transactions involving supply of
goods and/or services in the course or furtherance of business, whether as principal, agent or in any
other capacity, in a State/UT where he has no fixed place of business.
II. No, a casual taxable person cannot opt for the composition scheme.
III. A casual taxable person (CT P) is liable to obtain registration compulsorily under GST laws, at least 5
days prior to commencement of business.
However, threshold limit of ` 20 lakh (` 10 lakh in case of Special Category States other than Jammu
& Kashmir) is available in case of CT P making taxable supplies of specified handicraft goods.
IV. The registration certificate issued to a casual taxable person will be valid for:
a) the period specified in the registration application, or
b) 90 days from the effective date of registration whichever is earlier.
V. Yes, the validity of registration certificate issued to a casual taxable person can be extended.
It can be extended by a further period not exceeding 90 days.

Determine the effective date of registration in the following instances:
I. The aggregate turnover of Madhu Ltd., engaged in taxable supply of services the state of Punjab,
exceeded` 20 lakh on 25th August, 2017. It applies for registration on 19th September, 2017 and is i
granted registration certificate on 29th September, 2017.
II. What will be your answer, if in the above scenario, Madhu Ltd. submits the application for registration
on 27th September, 2017 and is granted registration on 5th October, 2017?
Answer.

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A supplier whose aggregate turnover in a financial year exceeds ` 20 lakh in a State/UT [` 10 lakh in Special
Category States except Jammu and Kashmir] is liable to apply for registration within 30 days from the date of
becoming liable to registration (i.e., the date of crossing the threshold limit of ` 20 lakh/` 10 lakh).
Where the application is submitted within the said period, the effective date of registration is the date on
which the person becomes liable to registration; otherwise it is the date of grant of registration.
In the given case, the applicable turnover limit for registration will be ` 20 lakh as Punjab is not a Special
Category State.
I. Since Madhu Ltd. applied for registration within 30 days of becoming liable to registration, the
effective date of registration is 25th August, 2017.
II. In this case, since Madhu Ltd. applies for registration after the expiry of 30 days from the date
of becoming liable to registration, the effective date of registration is 5th October, 2017.
QUESTION NO-4[SA NOV 2018]

Determine with brief reasons, whether the following statements are True or False:
(i) Registration under the CGST Act, 2017 can be cancelled by the proper officer, if the voluntarily
registered person has not commenced the business within three months from the date of
registration.
(ii) Electronic cash ledger balance of ` 5,000 under the major head of IGST can be utilized for
discharging the liability of major head of CGST.
Answer.
I. The said statement is False.
Registration under the CGST Act, 2017 can be cancelled by the proper officer, if the voluntarily
registered person has not commenced the business within six months from the date of registration.
II. The said statement is False.
Amount available under one major head cannot be utilised for discharging the liability under any
other major head.

State the persons who are not liable for registration as per provisions of Section 23 of Central Goods and
Service Tax Act, 2017.
Answer.
As per provisions of Section 23 of CGST Act, 2017, the persons who are not liable for registration are as under–
(a) Person engaged exclusively in supplying goods/services/both that are wholly exempt from tax.
(b) Person engaged exclusively in supplying goods/services/both that are not liable to tax.
(c) Agriculturist to the extent of supply of produce out of cultivation of land.
(d) Persons only engaged in making supplies of taxable goods or services or both liable to reverse
charge.
(e) Persons making inter-State supplies of taxable services up to an aggregate turnover of ` 20 lakh (` 10
lakh in case of special category States except Jammu and Kashmir).
(f) Casual Taxable Persons making taxable supplies of specified handicraft goods up to an aggregate
turnover of ` 20 lakh (` 10 lakh in case of special category States except Jammu and Kashmir) subject
to specified conditions.
(g) Persons making inter-State supplies of specified handicraft goods up to an aggregate turnover of ` 20
lakh (` 10 lakh in case of special category States except Jammu and Kashmir) subject to specified
conditions.
(h) Job workers making inter-State supply of services to a registered person up to an aggregate turnover
of ` 20 lakh (` 10 lakh in case of special category States except Jammu and Kashmir) subject to
specified conditions.
(i) Persons making supplies of services through an electronic commerce operator (other than supplies
specified under section 9(5) of the CGST Act) up to an aggregate turnover of ` 20 lakh (` 10 lakh in
case of special category States except Jammu and Kashmir).
[Note Any 5 points may be mentioned]

80

Mr. Allan, a non-resident person, wishes to provide taxable supply of goods. He has no fixed place of business
or residence in India. He seeks your advise on the following aspects, relating to CGST Act, 2017:
I. When shall he apply for registration?
II. Is PAN mandatory for his registration?
III. What is the period of validity of RC granted to him?
IV. Will he be able to extend the validity of his registration? If yes, what will be the period of
extension?
Answer.
I. Mr. Allan, being a non-resident person, should apply for registration, irrespective of the threshold limit, at
least 5 days prior to the commencement of business.
No, PAN is not mandatory for his registration.
He has to submit a self-attested copy of his valid passport along with the application signed by his authorized
signatory who is an Indian Resident having valid PAN.
However, in case of a business entity incorporated or established outside India, the application for registration
shall be submitted along with its tax identification number or unique number on the basis of which the entity
is identified by the Government of that country or its PAN, if available.
II. Registration Certificate granted to Mr. Allan will be valid for:
(a) Period specified in the registration application, or
(b) 90 days from the effective date of registration whichever is earlier.
III. Yes, Mr. Allan can get the validity of his registration extended. Registration can be extended further by a
period not exceeding 90 days.

Pure Oils, Delhi has started the supply of machine oils and high speed diesel in the month of April, 20XX.
The following details have been furnished by it for the said month:-
Sl.
Particulars `*
No.
(i) Supply of machine oils in Delhi 2,00,000
(ii) Supply of high speed diesel in Delhi 4,00,000
(iii) Supply made through Fortis Lubricants - an agent of Pure Oils in Delhi 1,75,000
(iv) Supply made by Pure Oils from its branch located in Punjab 1,80,000
*excluding GST
Determine whether Pure Oils is liable for registration. Will your answer change, if Pure Oils supplies machine
oils amounting to ` 2,50,000 from its branch located in Himachal Pradesh in addition to the above-mentioned
supplies?
Answer.
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 ` 40 lakhs, if they are exclusively engaged in supply of goods.
However, if such taxable supplies are made from any of the specified special category States, namely, States of
Manipur, Mizoram, Nagaland, Tripura, he shall be liable to be registered if his aggregate turnover in a
financial year exceeds ` 10 lakh. Also, if such taxable supplies are made from any of the USTAMP, he shall be
liable to be registered, if his aggregate turnover in a financial year > ` 20 lakhs
As per section 2(6) of the CGST Act, 2017, aggregate turnover includes the aggregate value of:
} all taxable supplies,
} all exempt supplies,
} exports of goods and/or services and
} all inter-State supplies of persons having the same PAN.

81
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:
S. Particulars Amount
No. (in `)
(i) Supply of machine oils in Delhi 2,00,000
(ii) Add: Supply of high-speed diesel in Delhi 4,00,000
(iii) Add: Supply made through Fortis Lubricants - an agent of Pure Oils in Delhi 1,75,000
(iv) Add: Supply made by Pure Oils from its branch located in Punjab 1,80,000
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 lakhs.
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 it is not liable to be registered.

I. Discuss the circumstances where registration is liable to be cancelled.
II. Explain the order in which liability of taxable person has to be discharged under GST laws.
Answer.
I. Section 29(1) of the CGST Act, 2017 provides that the proper officer may, either on his own motion or on an
application filed by the registered person or by his legal heirs, in case of death of such person, cancel the
registration, in such manner and within such period as may be prescribed, having regard to the
circumstances where:
(a) the business has been discontinued, transferred fully for any reason including death of the
proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
(b) there is any change in the constitution of the business; or
(c) the taxable person, other than the person registered under sub-section (3) of section 25, is no
longer liable to be registered under section 22 or section 24
Further, section 29(2) of the CGST Act, 2017 provides that the proper officer may cancel the registration of
a person from such date, including any retrospective date, as he may deem fit, where, ––
(a) a registered person has contravened such provisions of the Act or the rules made thereunder as
may be prescribed; or
(b) a person paying tax under section 10 has not furnished returns for three consecutive tax periods;
or
(c) any registered person, other than a person specified in clause (b), has not furnished returns for a
continuous period of six months; or
(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not
commenced business within six months from the date of registration;
or
(e) registration has been obtained by means of fraud, willful misstatement or suppression of facts

82
Further, the proper officer shall not cancel the registration without giving the person an opportunity of being
heard.
II. Section 49(8) of CGST Act, 2017 prescribes the chronological order in which the liability of a taxable person
has to be discharged:
(a) self -assessed tax and other dues for the previous tax periods have to be discharged first.
(b) self -assessed tax and other dues for the current tax period have to be discharged next.
(c) Once these two steps are exhausted, thereafter any other amount payable including demand
determined under section 73 or section 74 is to be discharged. In other words, the liability if any,
arising out of demand notice and adjudication proceedings comes last. This sequence has to be
mandatorily followed.
The expression “other dues” referred above mean interest, penalty, fee or any other amount
payable under the Act or the rules made thereunder.

Examine whether the supplier is liable to get registered in the following independent cases:-
(i) Raghav of Assam is exclusively engaged in intra-State taxable supply of readymade garments. His
turnover in the current financial year (FY) from Assam showroom is ` 28 lakh. He has another
showroom in T ripura with a turnover of ` 11 lakh in the current FY.
(ii) Pulkit of Panjim, Goa is exclusively engaged in intra-State taxable supply of shoes. His aggregate
turnover in the current financial year is ` 22 lakh.
(iii) Harshit of Himachal Pradesh is exclusively engaged in intra-State supply of pan masala. His
aggregate turnover in the current financial year is ` 24 lakh.
(iv) Ankit of Assam is exclusively engaged in intra-State supply of taxable services. His aggregate turnover
in the current financial year is ` 25 lakh.
(v) Sanchit of Assam is engaged in intra-State supply of both taxable goods and services. His aggregate
turnover in the current financial year is ` 30 lakh.
Answer.
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. T he threshold limit for a
person making exclusive intra - State taxable supplies of goods is as under:-
} ` 10 lakh for the States of Mizoram, Tripura, Manipur and Nagaland.
} ` 20 lakh for the States of States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and
Uttarakhand.
} ` 40 lakh for rest of India. However, the higher threshold limit of ` 40 lakh is not available to persons
engaged in making supplies of ice cream and other edible ice, whether or not containing cocoa, Pan
masala and Tobacco and manufactured 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.

83
(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. T hus, 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. T hus, Sanchit is liable to get registered under GST as his turnover is
more than the threshold limit.

M/s Siya Ram is a trader of decorative items in Hauz Khas, Delhi. His aggregate turnover exceeded ` 20
lakh in the month of October, 20XX. He applied for registration on GST portal, but missed to submit the
details of his bank account. His tax consultant advised him that prior submission of bank details is mandatory
to obtain registration. Examine whether the advice of Mr. Siya Ram’s tax consultant is correct
Answer.
The advice of Mr. Siya Ram’s consultant that prior submission of bank details is mandatory to obtain
registration is no more valid in law.
A new rule 10A has been inserted in the CGST Rules, 2017 vide Notification No. 31/2019 CT dated 28.06.2019
which allows the registered person to furnish information with respect to details of bank account, or any other
information, as may be required on the common portal in order to comply with any other provision, soon after
obtaining certificate of registration and a GSTIN, but not later than 45 days from the date of grant of
registration or the date on which the return required under section 39 is due to be furnished, whichever is earlier.
This relaxation is however not available for those who have been granted registration as TDS deductor/ TCS
collector under rule 12 or who have obtained suo-motu registration under rule 16.
QUESTION NO-11[MOCK TEST NOV 2019]

Determine the effective date of registration in following cases:
I. The aggregate turnover of Dhampur Footwear Industries of Delhi has exceeded the applicable
threshold limit of Rs. 40 lakh on 1st September. It submits the application for registration on 20th
September. Registration certificate is granted to it on 25th September.
II. Mehta Teleservices is an architect in Lucknow. Its aggregate turnover exceeds Rs. 20 lakh on 25th
October. It submits the application for registration on 27th November. Registration certificate is
granted to it on 5th December.
Answer.
I. Every supplier becomes liable to registration if his turnover exceeds the applicable threshold limit [Rs. 40
lakh in this case] in a finacial year [Section 22 read with Notification No. 10/2019 CT dated 07.03.2019].
Since in the given case, the turnover of Dhampur Industries exceeded Rs. 40 lakh on 1st September, it
becomes liable to registration on said date.
Further, since the application for registration has been submitted within 30 days from such date, the
registration shall be effective from the date on which the person becomes liable to registration [Section
25 read with rule 10 of the CGST Rules, 2017]. Therefore, the effective date of registration is 1st
September.
II. Since in the given case, the turnover of Mehta Teleservices exceeds the applicable threshold limit [Rs. 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. T
herefore, the effective date of registration is 5th December.

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The aggregate turnover of Sangri Services Ltd., Delhi, exceeded Rs. 20 lakh on 12th August. He applied for
registration on 3rd September and was granted the registration certificate on 6th September. You are required
to advice Sangri Services Ltd. as to what is the effective date of registration in its case. It has also sought your
advice regarding period for issuance of Revised Tax Invoices.
Answer.
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 turnover exceeded Rs. 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.

What could be the liabilities (in so far as registration is concerned) on transfer of a business?
Answer.
The transferee or the successor shall be liable to be registered with effect from such transfer or succession and
he will have to obtain a fresh registration with effect from the date of such transfer or succession.

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Composition Scheme [Sec. 10 of CGST Act, 2017]:
What is the meaning of aggregate turnover for determining the eligibility for composition scheme?
Aggregate turnover will be computed on the basis of turnover on an all India basis and will include value of
all taxable supplies, exempt supplies and exports made by all persons with same PAN, but would exclude
inward supplies under reverse charge as well as central, State/Union Territory and Integrated taxes and cess.
Even though consideration represented by way of interest or discount on deposits, loans and advances is
exempted service, it will not be considered for calculating aggregate turnover – Removal of difficulties order
no. 1/2017 – CT dated 13/10/17. (Applicable only for Composition scheme but not for registration)

86
Person opting for composition scheme can provide services upto 10% of turnover - Newly inserted
from FY 2019-20 onwards
• Provided further that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may
supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not
exceeding 10% of turnover in a State or Union territory in the preceding financial year or five lakh
rupees, whichever is higher.
• any person opting for composition scheme to render services during the current year upto 10% of
turnover during the previous year or ₹ 5,00,000, whichever is HIGHER.
• While computing this value of services, for determining the limit of 10% of turnover during PY (or) ₹
5,00,000 whichever is HIGHER, exempted services by way of extending deposits, loans or advances in
so far as the consideration is represented by way of interest or discount, shall not be taken into account.
- Removal of Difficulties Order No. 1/2019.
• The tax rate applicable for these services is the composite rate at which manufacturer, trader or
restaurant
Who cannot opt for composition scheme?
Casual Taxable Person
Outside the state (Interstate) and outside the country (Import)

purchases held in stock on the date of opting for composition
scheme - Applicable during transition
Non resident taxable Person
Service providers (Whether taxable or exempted) other than (a)

restaurant service providers; (b) Services upto a limit allowed
Purchases from Unregistered Supplier held in stock on the date

of opting for composition scheme on which GST not paid under
RCM u/s 9(4)
Manufacturer of certain notified goods - Icecream, Edible ice,

Pan masala, Tobacco & Tobacco products, Aerated Waters M 20
Supplier of goods through E Commerce Operator
Interstate supplier of goods (Whether taxable or exempted)
Non taxable Supplies

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How to opt for composition scheme?
•Select the option to

pay tax under
New
registration compositon scheme
in Part B of FORM
GST REG 01
Migration •Should have filed

from earlier FORM GST CMP 01
indirect tax by specified time
regime
limit
Post •Should file FORM

registration GST CMP 02, prior to
as normal commencement of
tax payer
relevant FY
Other provisions relating to composition scheme:

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Overview of forms involved:

FORM REQUIRED PURPOSE DUE DATE
FORM GST CMP 02 Intimation of willingness to opt for scheme by a Prior to commencement of
registered person financial year
FORM GST ITC 03 Details of inputs lying in stock, inputs in WIP and Within 60 days from the
FG lying in stock and capital goods. – To be filed by commencement of relevant
a person filing FORM GST CMP 02 (For reversal of financial year
ITC on closing stock)
FORM GST CMP 04 Intimation of Withdrawal from Scheme Within 7 days of occurrence
of event
FORM GST ITC 01 Details of inputs lying in stock, inputs in WIP and Within 30 days of the date
FG lying in stick and capital goods – For availment of conversion
of ITC on closing stock on account of conversion
from composition scheme to normal scheme
FORM GST CMP 05 Show Cause Notice on contravention of rules or On Contravention
Act
FORM GST CMP 06 Reply to Show Cause Notice Within 15 days of receipt of
notice
FORM GST CMP 07 Issue of Order Within 30 days of receipt of
reply
FORM GST CMP 08 Return to be filed by a person opting for Within 18 days from the end
composition scheme of the quarter
Procedural compliance:

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Denial of composition scheme on account of non-fulfilment of conditions specified therein -

Prospective (or) Retrospective?
Circular No. 77/51/2018 GST dated 31.12.2018 has clarified that, In case of denial of option to pay tax
under composition levy by the tax authorities, the effective date of such denial shall be from a date,
including any retrospective date, as may be determined by tax authorities. However, such effective
date shall not be prior to the date of contravention of the provisions of the CGST Act/ CGST Rules.
Option to pay concessional tax @ 6% (CGST - 3% + SGST - 3%) - Notification No. 2/2019 w.e.f
1/4/2019:
This option under Notification No. 2/2019 is same as that of composition scheme under sec. 10 of CGST Act, 2017
with the following differences:
Particulars Composition Scheme under Sec. 10 Notification No. 2/2019
1. When Aggregate turnover during previous year ≤ ₹ 1.5 Aggregate turnover during
applicable? Cores (₹ 75 lakhs in case of 8 special category states) previous year ≤ ₹ 50 lakhs
2. To whom it is Manufacturer, Trader & Service provider engaged in Manufacturer, Trader & Any
applicable? Supply of food Service Provider
3. Benefit of 1% (0.5% CGST & 0.5% SGST) on Total Turnover in 6% (3% CGST & 3% SGST) on Total
reduced rates case of Manufacturer Turnover
1% (0.5% CGST & 0.5% SGST) on Taxable Turnover in
case of Trader
5% (2.5% CGST & 2.5% SGST) on Total Turnover in
case of service provider engaged in supply of food
4. Current year ₹ 1.5 Crores/ ₹ 75 lakhs ₹ 50 lakhs
limit for reduced
rates
5. Difference in Manufacturer of notified goods (Ice Cream, Edible Both manufacturer and trader of
Conditions M 20 ice, Pan Masala, Tobacco and Tobacco products, notified goods (Ice Cream, Edible
Aerated Waters) cannot opt for composition scheme ice, Pan Masala, Tobacco and
but a trader of notified goods can opt for Tobacco products, Aerated
composition scheme Waters) cannot opt for this
notification.
Note: All other conditions are same as applicable to composition scheme.
Who are the persons not eligible for composition scheme, but eligible for Noti. No. 2/2019?
A registered person whose aggregate turnover in the preceding financial year does not exceed ₹ 50 lakh and:
a) who is exclusively engaged in supplying services other than restaurant services, or
b) who is engaged in supply of services [other than restaurant services] along with supply of goods and/
or restaurant services of value exceeding ₹ 5 lakh in current FY.
Computation of aggregate turnover for eligibility of Notification No. 2/2019:

Value of all supplies (taxable/exempted) but does not include the following -
1. Inward supplies on which GST is payable under RCM
2. Exempt supplies by way of extending deposits, loans or advances in so far as the consideration is
represented by way of interest or discount
3. GST - CGST/SGST/IGST/GST COMP CESS

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Computation of GST payable under Notification No. 2/2019:

In case of unregistered person as on 1/4/2019:
First Supplies (Taxable or Exempted) from 1/4/2019 till the the date No GST Payable
such person has not exceeded threshold limit for registration (₹ 40
lakhs/ ₹ 20 lakhs/ ₹ 10 lakhs)
Supplies (Taxable or Exempted) after the above threshold limit and GST payable @ 6% (CGST 3% and SGST
upto ₹ 50 lakhs 3%)
Supplies (Taxable or Exempted) after ₹ 50 lakhs GST payable at normal rates on taxable
supplies
In case of registered person as on 1/4/2019:

First Supplies (Taxable or Exempted) upto ₹ 50 lakhs GST payable @ 6% (CGST 3% and SGST
3%)
Supplies (Taxable or Exempted) after ₹ 50 lakhs GST payable at normal rates on taxable
supplies
Note: First supplies of goods or services or both shall, for the purposes of determining eligibility of a person to
pay tax under this notification, include the supplies from 1st April of a FY to the date from which he becomes
liable for registration under the said Act but for the purpose of determination of tax payable under this
notification shall not include the supplies from the first day of April of a financial year to the date from which he
becomes liable for registration under the Act.

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Enumerate the persons who are not eligible to opt for Composition Scheme under section 10(2) of the CGST
Act, 2017.
Answer:
A registered person shall not be eligible to opt for composition scheme if:-
I. he is engaged in supply of services other than supplies referred to in clause (b) of paragraph 6 of
Schedule II.
II. he is engaged in supply of goods not leviable to tax
III. he is engaged in inter-State outward supplies of goods
IV. he is engaged in supply of goods through an electronic commerce operator
V. he is a manufacturer of notified goods, namely, manufacturer of ice cream, pan masala and tobacco.

M/s Sai Trading Company, an eligible registered dealer in goods making intra -state supplies within the state
of Andhra Pradesh, has reported an aggregate turnover of ` 78 Lakhs in the preceding financial year.
I. Determine whether Sai Trading Company will be eligible for composition levy, as on 31-10-2017.
II. Will your answer be different, if in the above scenario, M/s Sai Trading Company is making intra state
supply within the state of Jammu and Kashmir?
Answer:
I. Section 10 of CGST Act, 2017 provides that a registered person, whose aggregate turnover in the preceding
financial year did not exceed `1.5 crore may opt for composition scheme. The turnover limit is ` 75 lakh in
case of Special Category States. However, for Jammu and Kashmir and Uttarakhand, the turnover limit is
` 1.5 crore only.
In the given case, the applicable turnover limit for composition scheme will be ` 1.5 crore as Andhra
Pradesh is not a Special Category State.
Further, since the aggregate turnover of the registered person in the given case does not exceed ` 1.5 crore
and it satisfies other conditions of composition scheme namely, not making inter-State supplies of goods,
it is eligible for composition levy.
II. Since the turnover limit for determining the eligibility for composition scheme in the State of Jammu and
Kashmir is also ` 1.5 crore, Sai Trading Company will be eligible for composition levy with other condition
of not making inter-State supplies of goods being fulfilled.
QUESTION NO:-3[RTP NOV 2018]

M/s. Handsome and Likemi Company, a partnership firm at Mumbai is running a mobile phone showroom.
Along with mobile phone showroom, it is also engaged in providing health and fitness services.
Turnover of the mobile phone showroom was ` 78 lakh and receipts of the health and fitness service was `
26 lakh in the preceding financial year.
(i) With reference to the provisions of the CGST Act, 2017, examine whether the firm can opt for the
composition scheme,
(ii) Will your answer change, if the turnover of the mobile phone showroom was ` 74 lakh and receipts
of the health and fitness service was ` 18 lakh in the preceding financial year?
(iii) If M/s. Handsome and Likemi Company obtain separate registration for their mobile phone
showroom & for health fitness centre, can it opt for composition scheme only for mobile phone
showroom?
Answer:
A registered person, whose aggregate turnover in the preceding financial year did not exceed ` 1.5 crore [` 75
lakh in case of special category States except Jammu and Kashmir and Uttarakhand], may opt for composition
scheme vide section 10 of CGST Act, 2017.
However, he shall not be eligible to opt for composition scheme if, inter alia, he is engaged in the supply of
services other than restaurant services.
(i) In the given case, since M/s Handsome and Likemi Company is engaged in supply of health and
fitness service, it is not eligible to opt for composition scheme irrespective of its turnover in the
preceding financial year.
(ii) The answer will remain the same i.e., M/s. Handsome & Likemi Company will not be eligible to opt
for composition scheme even with the change in the turnovers, as the limit upto which services can
be provided during CY is ` 92 lakhs X 10% = ` 9,20,000 (or) `5,00,000, whichever is HIGHER i.e

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`9,20,000. But services during CY is `26 lakhs

(iii) Where more than one registered persons are having the same Permanent Account Number, the
registered person shall not be eligible to opt for composition scheme unless all such registered
persons opt to pay tax under composition scheme.
Therefore, M/s. Handsome and Likemi Company will not be able to opt for composition scheme
only for mobile phone showroom as all the registrations under the same PAN have to opt for
composition scheme and since the supply of health and fitness service is ineligible for composition
scheme, supply of mobile phones too becomes ineligible for composition scheme.
QUESTION-4[RTP MAY 2020]

(a) Chanchal started providing beauty and grooming services and inaugurated “Care & Care Beauty
Centre” in Janak Puri, Delhi on 01st April, 20XX. She opted to pay tax under Notification No. 2/2019
CT (R) dated 07.03.2019 in the said financial year.
The aggregate turnover of Care & Care Beauty Centre for the quarter ending 30th June, 20XX was
` 20 lakh. Further, for the half year ending 30th September, 20XX, the turnover reached ` 50 lakh.
Care & Care Beauty Centre recorded a rapid growth and the turnover reached ` 70 lakh by the end
of October, 20XX. Determine the total tax liability of Care & Care Beauty Centre by the end of
October, 20XX.
(b) Care & Care Beauty Centre wishes to opt for composition scheme from the next financial year. You
are required to advise it whether it can do so?
Note: Rate of GST applicable on such services is 18%.
Answer.
(a) Notification No. 2/2019 CT (R) dated 07.03.2019 provides an option to a registered person to pay CGST @ 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 financial year, subject to specified conditions.
It is clarified in the notification that first supplies of goods or services or both shall, for the purposes of
determining eligibility of a person to pay tax under this notification, include the supplies from 1st April of a FY
to the date from which he becomes liable for registration under the said Act, but for the purpose of
determination of tax payable under this notification, shall not include the supplies from the first day of April
of a financial year to the date from which he becomes liable for registration under the Act.
Thus, Care & Care Beauty Centre is eligible to pay tax under this notification upto the turnover of ` 50 lakh.
The total tax payable by it is as under:-
Period Tax Rate Turnover (`) Tax liability (`)

I Quarter Since turnover did not exceed ` 20 lakh, it was not20 Lakh Nil
required to obtain registration. Hence, no tax was
required to be paid
II Quarter Effective rate is 6% (CGST+ SGST/ 30 Lakh 1,80,000
UTGST)] [(50-20) lakh]
under Notification No. 2/2019 CT (R)
For the month of October, Normal rate of GST of 18% is to be applied 20 lakh 3,60,000
20XX [(70-50) lakh]
Total tax payable 5,40,000

b) No, Care & Care Beauty Centre cannot opt for composition scheme from the next financial year.
Fundamentally, the composition scheme can be availed in respect of goods and only one service namely,
restaurant service. As regards services other than restaurant services are concerned, only marginal supply of
the such services for a specified value along with the supply of goods and/or restaurant ser vice, as the case
may be, is permitted under section 10(1) of CGST Act, 2017. Therefore, a person engaged exclusively in supply of
services other than restaurant services is not eligible to opt for composition scheme.
QUESTION NO-5[ RTP NOV 2019]

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Mr. Ajay has a registered repair centre where electronic goods are repaired/serviced. His repair centre is
located in State of Rajasthan and he is not engaged in making any inter-State supply of services. His
aggregate turnover in the preceding financial year (FY) is ` 45 lakh.
With reference to the provisions of the CGST Act, 2017, examine whether Mr. Ajay can opt for the
composition scheme in the current financial year (FY)? Is he eligible to avail benefit of concessional payment
of tax under Notification No. 2/2019 CT (R) dated 07.03.2019? Considering the option of payment of tax
available to Mr. Ajay, compute the amount of tax payable by him assuming that his aggregate turnover in
the current financial year is ` 35 lakh.
Will your answer be different if Mr. Ajay procures few items required for providing repair services from
neighbouring State of Madhya Pradesh?
Answer.
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 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 /UT GST )] 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.

94
REVISION – 7
Exemptions in GST
Agriculture related Services:
“AGRICULTURE” means cultivation of plants and

rearing of all life forms of animals, except the
rearing of horses, for food, fibre, fuel, raw material
or other similar products.
Any service in In case of rice,
relation to only loading,
agriculture or unloading, “AGRICULTURAL PRODUCE” means any produce
agricultural packing, storage out of agriculture, on which either no further
produce is or warehousing processing is done or such processing is done as is
EXEMPTED is EXEMPTED.
usually done by a cultivator or producer which does
not alter its essential characteristics but makes it
marketable for primary market
Artificial Fumigation in a Note: Paddy is agricultural produce but rice is not
insemination of warehouse of
an agricultural produce
livestock is agricultural
EXEMPTED produce is
EXEMPTED Services by way of storage/warehousing of cereals,
pulses, fruits, nuts and vegetables, spices, copra,
sugarcane, jaggery, raw vegetable fibres such as
cotton, flax, jute etc., indigo(a tropical plant used for dye),
unmanufactured tobacco, betel leaves, tendu
leaves, coffee and tea.
Banking and other financial services:
Transaction in Money
For a seperate
Without Consideration
consideration
Such transaction is treated as Such activity is neither

"Service" goods nor services
Consideration =
Interest (or) Any other consideration (incl.
Discount interest in case of credit cards)
EXEMPTED TAXABLE -
FCM

95
Services provided by a banking company to Basic Saving Bank Deposit (BSBD) account holders under Pradhan
Mantri Jan Dhan Yojana (PMJDY)
FOREX Transactions (incl. Money changing) Services by an acquiring bank, to any

Supplier Recipient GST person in relation to settlement of an
Bank Bank EXEMPTED amount upto `2,000 in a single
Forex dealer Forex dealer EXEMPTED transaction transacted through credit
Bank Forex dealer EXEMPTED card, debit card, charge card or other
Forex dealer Bank EXEMPTED payment card service i.e., GST on
Bank (or) Forex Customer TAXABLE - FCM processing charges for a transaction
dealer upto `2000 is exempted.
Services by the following persons in respective capacities – 

(a) business facilitator or a business correspondentt to a banking company with respect to accounts in its rural
area branch;- - Exempted & to urban area branch taxable under RCM
(b) any person as an intermediary to a business facilitator or a business correspondent with respect to services
mentioned in entry (a) (If the main agent’s service is exempted then sub agent’s service also exempted)
Services by an intermediary* of financial services located in a multi services SEZ with IFSC status to a customer
located outside India for international financial services in currencies other than INR
*Such intermediary can receive consideration in INR or Foreign Currency for their services. Their services shall
not fall under export of services as POS is location of supplier U/S 13.
Health Care Services:
Following are EXEMPTED
Cord blood banks by Health care services Services of common

way of preservation in relation to animals bio medical waste
of stem cells or birds treatment operators
Health care services

Pre-treatment (Diagnosis); Treatment; Post-treatment (Care) for any disease, illness,
injury, pregnancy incl. transportation in ambulance but does not include cosmetic,
plastic surgery and hair transplantation, other than for restoring body parts affected
due to congenital defects, developmental abnormalities, injury or trauma
Provided in a clinical Hospitals, Nursing home, clinic or any other place

establishment
where health care service is provided
By an authorised
medical practicioner Having a minimum MBBS degree and registered
(or) with Indian Medical Council
by a paramedics Eg: Nurse, Lab technician, Physiotherapist
including ambulance Even though not as a part of health care service

services

96
Ü Renting of rooms to inpatients in hospital and food supplied to inpatients, is part of health care service
and is exempted – Circular No. 27/01/2018 & 32/06/2018
Ü Services provided by consulting doctors to hospitals is also exempted – Circular No. 32/06/2018
Ü Services provided by rehabilitation professionals recognised under the Rehabilitation Council of India
Act, 1992 by way of rehabilitation, therapy or counselling medical establishments, educational
institutions, rehabilitation centres established by Central/State Government/ Union territory or an entity
registered under section 12AA of the Income Tax Act, 1961
Entry tickets:
Following entry tickets are exempted
Irrespective of ticket price Ticket price per person £ `500
- Circus
- Museum - Dance
- Wild life sanctuary - Award Function
- Tiger Reserve - Theatrical Performance
- National Park - Concert
- Zoo - Musical Performance
- Entry to protected monuments - Pagent
- Sporting event
- Planetarium
Insurance Services – Following are exempted:

1. Services of life insurance business provided by way of annuity under National Pension System (NPS)
2. Group life insurance service by Army, Navy, Airforce, coast guard & Central Armed Forces M 20
3. Services of general insurance business provided under government schemes (Targeted to – Agriculture
and farmers; BPL(Below Poverty Line); Women and Infants)
4. Life Insurance under various government scheme (Scheme ends with words Yojana) and Micro life
insurance having sum assured as `2,00,000
5. Insurance services provided to government
6. Reinsurance of any exempted insurance service is also exempted
Pension services:
Contribution under Atal Pension Yojana or any state government operated pension fund is EXEMPTED

97
Services by Specified organizations:
SEBI
ESIC – Employees State

NPS Trust ESIC
Insurance Corporation
EPFO – Employees Provident
Fund Organisation
IRDA – Insurance Regulatory
Services and Development Authority
CMPFO provided EPFO
by SEBI – Securities and
Exchange Board of India
NCCCD – National Centre for
Foreign Cold Chain Development
diplomatic NPS – National Pension
mission IRDA
located in System
India CMPFO – Coal mines
NCCCD provident fund organisation
Charitable and religious service – Following services are exempted:

1. Services by an entity registered under sec. 12AA of Income Tax Act by way of specified charitable
activities – Public health; religion; spirituality; yoga; educational programs to physically or mentally
traumatized persons, prisoners and persons over 65 years; environmental preservation.
2. Services by an old age home run by CG/SG/Charitable trusts – to its residents (aged 60 years or more);
against consideration upto `25,000 per month per member, provided that the consideration charged
is inclusive of charges for boarding, lodging and maintenance
3. Services by a person by way of conduct of religious ceremony
4. Services by special organizations for religious pilgrimage – Kailash mansarovar, Haj
Incubator & Incubatee Services:
Services
provided is Should be approved by Govt. for
Any person exempted Incubator availing exemption
exempted upto
Conditions:
provided is
`50 lakhs
Services
1. PY aggregate receipts < `50 lakhs

2. 3 years not elapsed form
agreement date.
Incubate – A place
Incubatee
where research is
carried

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Education Services:
Under Skill Development initiative scheme, amount paid to

assessment bodies in EXEMPTED
3. Assessment agent or training partner authorized by NSDC or SSC
1. NSDC (National Skill Development Corporation) Setup by CG
2. SSC (Sector Skill Council) established by NSDC
Any course offered by the following:
educational institution by
Services provided to
way of
Services provided by an educational institution by way of conduct of entrance examination against consideration
in the form of entrance fee.
Amount paid to training providers under Deen Dayal Upadyaya Grameena Kousalya Yojana for providing training
in relation to vocational education courses certified by the National Council for vocational training (NCVT)-
Services
For booksprovided
& videow.r.to training
lectures visitprogramme for which entire exp. Is borne by CG/SG/UT © Tharun Raj
www.tharunraj.com
99
Government Services:

100
Renting services:
1. Renting (incl. leasing, licensing) of
Movable Immovable
property property
- Hiring of Residential Commercial

Other goods
means of property property
transport to
carry > 12
passengers to a Commercial Residential For residential For
state RTC Motor Vehciles purpose Commercial
by other than purpose purpose
purpose
- Hiring of BC to BC
means to
transport Taxable - RCM Taxable - FCM Exempted Temporary stay
Taxable - FCM
goods to a GTA Any other
- Hiring of renting of
Electric Vehicle Motor vehicles Value of supply Value of supply
to Local or other goods per day or per day or
Authority Taxable - FCM equivalent < or equivalent > `
M 20 = ` 1,000 1,000
M 20
Exempted
Exempted Entirely taxable - FCM
2. Renting of the precints of religious place meant for general public

registered as a trust under income tax
Accomodation Halls Shops
Per day tariff < ` Per day tariff > Per day tariff < ` Per day tariff > Per month tariff Per month tariff
1,000 or = ` 1,000 10,000 or = ` 10,000 < ` 10,000 > or = ` 10,000
Entirely Taxable Entirely Taxable Entirely taxable

Exempted Exempted Exempted
- FCM - FCM - FCM

101
Sports Services:
Recipient Supplier Recipient Supplier
Others –
Sponsorship services –
Taxable (FCM) Selectors,
services - Exempted
Curators,
technical experts
Body Corporate/Firm ip ed
rsh pt Recognized sports body
so em se
on Ex Ex rvi
Sp es - em ces
ic pt –
rv
se ed
Sponsorship
services – Player,
Taxable (FCM) services – Referee,
Sole proprietor Taxable (FCM) Umpire, Coach,
Team Manager
Unrecognized sports body
Sponsorship services – Taxable (RCM) services – Taxable (FCM)
Services of unincorporated association to its members – Following services are exempted:
Services by an unincorporated body or non

profit entity to its members
For providing As a Resident As a industrial or As a entity for

As a trade union exempted welfare agicultural labour promotion of
services Assocation associaiton trade, commerce
and industry
Upto an amount
of ` 7,500 per Upto an amount
member per of ` 1,000 per
month member per
annum
If the amount charged by a resident welfare association exceeds ` 7,500 per month, then entire amount is
chargeable to GST, provided their aggregate turnover has exceeded the threshold limit. M 20
Annual turnover of RWA Monthly maintenance charge Whether exempt?

More than ₹ 20 lakhs More than ₹ 7,500/- No
₹ 7,500/-or less Yes
₹ 20 lakhs or less More than ₹ 7,500/- Yes
₹ 7,500/-or less Yes

102
OIDAR Services:
Import of Services
OIDAR Services Other than OIDAR Services
By other than By other than

By NTR By NTR
NTR NTR
TAXABLE - RCM - TAXABLE - RCM -

TAXABLE - FCM EXEMPTED
Sec. 9(3) Sec. 9(3)
Ü OIDAR = Online Information Database Access or Retrieval Eg: Amazon Prime, Netflix, Online
Interactive games
Ü NTR = Non Taxable Recipient – Unregistered Individual, Government & Charitable trust registered
under Sec. 12AA of Income Tax Act, 1961 importing such services for other than business or
commerce.
Ü FCM = Forward Charge Mechanism, where liability to pay GST is on Supplier.
Ü RCM = Reverse Charge Mechanism, where liability to pay GST is on recipient.
Ü When GST is payable under RCM, threshold exemption of (20 lakhs/10 lakhs) is not applicable and the
person liable to pay GST i.e. Recipient has to compulsorily get registered under Sec. 24.
Ü Also, the supplier – OIDAR service provider located outside India and making supplies to NTR in India,
is compulsorily required to get registered under Sec. 24.
Ü The IGST paid is available as Credit to the recipient of service, if such recipient is engaged in making
any taxable supplies.
Construction Services (Not applicable to works contract services):
1. Construction of an individual house 2. Construction, repair, alternation, renovation

(irrespective of floor area or cost) not as a part etc., of following projects is EXEMPTED
of complex is EXEMPTED
- Housing for all Mission
Individual House – A house occupied only by one - Pradhan Mantri Awas Yojana (PMAY)
family
3. Transfer of development rights – Floor Space Index (or) Transferable Development Rights by land owner to
promoter/builder is EXEMPTED (+) Long term lease of land (30 years or more) by land owner to promoter/builder
is EXEMPTED, provided the land is used for construction of residential flats and such flats are booked before the
completion certificate.
Exemption w.r.to inward supply of FSI/TDR/Long term lease (in such case liability to pay GST is on promoter/builder under RCM) =
Value of inward supply X 18% X (Floor area of residential flats booked before completion certificate or first
occupation, whichever is earlier) ÷ (Total Floor area of all the flats in the project)

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Advocate Services:
Whether Senior advocate services to another advocate or firm of advocates is EXEMPTED?

ü Yes it is EXEMPTED, provided the ATO of such advocate or firm of advocates during PY ≤ Threshold limit
for registration. Otherwise it is TAXABLE under RCM
ü For the purpose of RCM, Litigant/applicant/Petitioner shall be DEEMED TO BE RECIPIENT and they are
liable to pay GST, provided they are business entity (Other than CG/SG/UT/LA/GA) and having ATO
during PY > Threshold limit for registration.

104
Transportation Services:

For books & video lectures visit www.tharunraj.com

M 20 M 20
Specified goods – 1) Agricultural produce; 2) Food grains (incl. pulses, Flours, milk and salt); 3) Organic Manure; 4) News papers and magazines;
5) Defence or military equipment; 6) Relief materials for natural or man made disasters and 7) Railway equipment and materials
© Tharun Raj
105
106
GTA Services:
Exemptions under IGST Act:

1. Both Supplier of service and recipient of service located outside India – The said service is exempted,
even if place of supply is in India – However, this exemption is not applicable in case of transportation
of goods by vessel from outside India to India (In such case importer of such goods is liable to pay GST
on the transportation service)
2. Services provided by a tour operator to a foreign tourist in relation to a tour conducted wholly outside
India [Tour operator services is intermediary services and the place of supply is the location of supplier.
Even though location of supplier and place of supply is in India in this case, the said service is
exempted]
3. Services provided by an intermediary when location of both supplier and recipient of goods is outside
the taxable territory have been exempted w.e.f. 1-10-2019 – Sr No. 12AA of Notification No. 9/2017-
IT(R) dated 28-6-2017, inserted w.e.f. 1-10-2019. M 20

107
Miscellaneous exempted services:

1. Services by way of transfer of a going concern, as a whole or an independent part thereof
2. Supply of services associated with transit cargo to Nepal and Bhutan
3. Services by way of collecting or providing news by an independent journalist, press trust of India or
United news of India
4. Services of public libraries by way of lending books, publication or any other knowledge enhancing
content or material.
5. Services by an organizer to any person in respect of business exhibition held outside India
6. Services by way of public conveniences such as provision of facilities of bathroom, washroom,

lavatories, urinal or toilet.
7. Service by way of access to a road or a bridge on payment of toll charges
(incl. payment of annuity for toll charges)
8. Services by a performance artist in Folk or classical art forms of music or dance or theatre, where
amount charged is upto `1,50,000 for a performance excluding services provided by such artist as a
brand ambassador.
These are not

exempted
9. Services by way of training or coaching in recreational activities relating to arts or culture or sports[by a
charitable trust]
10. Services supplied by Central Government, State Government, Union territory to their undertakings or
Public Sector Undertakings(PSUs) by way of guaranteeing the loans taken by such undertakings or PSUs
from the banking companies and financial institutions.
11. Services by way of licensing, registration and analysis or testing of food samples supplied by the Food
Safety and Standards Authority of India (FSSAI) to Food Business Operators.
12. Services provided by and to Fédération Internationale de Football Association (FIFA) and its subsidiaries
directly or indirectly related to any of the events under FIFA U-17 Women’s World Cup 2020 to be hosted
in India. Condition to be fulfilled: Director (Sports), Ministry of Youth Affairs and Sports have to certify
that the services are directly or indirectly related to any of the events under FIFA U-17 Women’s World
Cup 2020.
13. Services by way of right to admission to the events organised under FIFA U-17 Women's World Cup
2020.

108
Special points:
Following are the exempted, when provided to a business entity whose turnover during previous year does not
exceed ₹ 20 lakhs/ ₹10 lakhs in case of special category states
1. Services provided by the Central Government, State Government, Union territory or local authority to a
business entity
2. Services provided by an arbitral tribunal to a business entity
3. Services provided by a partnership firm of advocates or an individual as an advocate other than a senior
advocate, by way of legal services to a business entity
4. Services provided by a senior advocate by way of legal services to a business entity
Consequent to change in Threshold limits for registration under GST, to ₹ 40 lakhs/₹20 lakhs/₹10 lakhs, the above
condition of “turnover during previous year does not exceed ₹ 20 lakhs/₹10 lakhs” is replaced to “turnover upto
such amount in the preceding financial year as makes it eligible for exemption from registration”
Whether maritime training institutes are educational institutions? - Circular No. 117/36/2019 GST dated
11/10/2019
It has been clarified that Maritime Training Institutes and their training courses are approved by the Director
General of Shipping which are duly recognised under the provisions of the Merchant Shipping Act, 1958 read
with the Merchant Shipping (standards of training, certification and watch-keeping for Seafarers) Rules, 2014.
Therefore, Maritime Training Institutes are educational institutions under GST Law and the courses conducted
by them are exempt from levy of GST.
QUESTION-1[ SA MAY 2019]

Decide with reason whether the following independent services are exempt under CGST Act, 2017:
I. Gokul Residents' Welfare Association received ` 9,000 per month as contribution from each
member for sourcing of goods and services from third persons for common use of its members.
II. Mr. Vikalp, a performing artist, has received ` 1,58,000 from performance of classical dance and `
90,000 from acting in TV Serial during the month of June 2018.
Answer.
I. Service by an unincorporated body or a registered non-profit entity, to its own members by way of
share of contribution up to an amount of ` 7,500 per month per member for sourcing of goods/services
from a third person for the common use of its members in a housing society or residential complex,
is exempt.
In the given case, monthly contribution per month per member received by Gokul Residents’ Welfare
Association exceeds ` 7,500.
Therefore, entire amount is chargeable to GST
II. Services by an artist by way of a performance in folk or classical art forms of music, dance, or theatre,
if the consideration charged for such performance is not more than ` 1,50,000 are exempt from GST.
In the given case, since the consideration received by the performing artist - Mr. Vikalp for
performance of classical dance is more than ` 1,50,000, said services are not exempt.
Further, consideration received for acting in T V serial is also not exempt since said performance is not
in folk/classical art forms of theatre.
QUESTION-2[ SA MAY 2018]

Examine whether GST is exempted on the following independent supply of services:
I. Teja & Co, a tour operator, provides services to a foreign tourist for tour conducted in
Jammu & Kashmir and receives a sum of ` 3,00,000.
II. Ms. Poorva acts as a Team Manager for Indian Sports League (ISL), a recognised sports body,
for a Tennis tournament organised by Multi brand retail company and received a
remuneration of ` 2,00,000.
Answer.

109
I. Services provided by a tour operator to a foreign tourist are exempt from GST provided such services are
in relation to a tour conducted wholly outside India. Thus, since in the given case, services provided by Teja
& Co. are in relation to a tour conducted within India, the same are not exempt from GST.
II. Services provided by a team manager to a recognised sports body for participation in a sporting event
are exempt from GST provided said sporting event is organised by a recognized sports body. Thus, since
in the given case, the sporting event is not organised by a recognised sports body, the services provided
by Ms. Poorva are not exempt from GST.
QUESTION-3[ SA NOV 2018]

Decide with reason whether the following independent services are exempt under CGST Act, 2017:
1. M/s Fast Trans, a goods transport agency, transported relief materials meant for victims of Kerala
floods being a natural disaster, by road from Delhi to Ernakulam, for a Limited Co.
2. Keyan Enterprises, an event organizer, provided services to Breathing Wall Ltd. by way of organizing
business exhibition at Pragati Maidan in New Delhi as part of Make in India initiative.
Answer.
1. Services provided by a goods transport agency, by way of transport in a goods carriage of, inter alia,
relief materials meant for victims of inter alia natural or man- made disasters are exempt from GST.
Therefore, services provided by M/s Fast Trans will be exempt from GST.
2. Services provided by an organiser to any person in respect of a business exhibition held outside India
is exempt from GST. Since in the given case, the exhibition is organized in India, the services of
organization of event by Kenyan Enterprises will not be exempt from GST.
QUESTION-4[ RTP MAY 2020]

Mr. Vicky Frankyn, an unregistered famous author, received ` 3 crore of consideration from Shiv Bhawan
Publications (SBP) located in Indore for supply of services by way of temporary transfer of a copyright covered
under section 13(1)(a) of the Copyright Act, 1957 relating to original literary works of his new book. He
finished his work & made available the book to the publisher, but has yet not raised the invoice.
Mr. Vicky Frankyn is of the view that SBP is liable to pay tax under reverse charge on services provided by him.
SBP does not concur with his view and is not ready to deposit the tax under any circumstances.
Examine whether the view of Mr. Vicky Frankyn is correct. Further, if the view of Mr. Vicky Frankyn
is correct, what is the recourse available with Mr. Vicky Frankyn to comply with the requirements of GST law
as SBP has completely refused to deposit the tax.
Answer.
Yes, the view of Mr. Vicky Frankyn is correct. GST is payable under reverse charge in case of supply of services
by an author by way of transfer/permitting the use or enjoyment of a copyright covered under section 13(1)(a)
of the Copyright Act, 1957 relating to original literary work to a publisher located in the taxable territory in
terms of reverse charge Notification No. 13/2017 CT(R) dated 28.06.2017. Therefore, in the given case, person
liable to pay tax is the publisher – SBP.
However, since SBP has completely refused to deposit the tax on the given transaction, Mr. Vicky Frankyn has an
option to pay tax under forward charge on the same. For the purpose, he needs to fulfill the following
conditions:
(i) since he is unregistered, he has to first take registration under the CGST Act, 2017
(ii) he needs to file a declaration, in the prescribed form, that he exercises the option to pay CGST on the said
service under forward charge in accordance with section 9(1) of the CGST Act and to comply with all the
provisions as they apply to a per son liable for paying the tax in relation to the supply of any goods and/or
services and that he shall not withdraw the said option within a period of 1 year from the date of exercising
such option;
(iii) he has to make a declaration on the invoice, which he would issue to SBP, in prescribed form.
QUESTION-5 [RTP NOV 2019]

State with reasons, whether GST is payable in the following independent cases:-
(i) Services provided to recognized sports body as curator of national team.
(ii) Services provided by way of transportation of passenger in Metered Cab.
(iii) Services by way of public conveniences such as provision of facilities of washrooms.

110
(iv) Services provided by a player to a franchisee which is not a recognized sports body.
Answer.
(i) Services provided to a recognized sports body by an individual as a player, referee, umpire, coach or team
manager for participation in a sporting event organized by a recognized sports body are exempt from GST
vide Notification No. 12/2017 CT(R) dated 28.06.2017. T hus, GST is payable in case of services provided
to a recognized sports body as curator of national team.
(ii) Service of transportation of passengers, with or without accompanied belongings, inter alia, by metered
cabs are specifically exempt from GST vide Notification No. 12/2017 CT(R) dated 28.06.2017. T hus, GST
is not payable in this case.
(iii) Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories,
urinal or toilets are not liable to GST as it is specifically exempt as per Notification No. 12/2017 CT(R)
dated 28.06.2017. T hus, GST is not payable in this case.
(iv) Services provided by a player to a franchisee which is not a recognized sports body is taxable as it is
not exempt under Notification No. 12/2017 CT(R) dated 28.06.2017. T hus, GST is payable in this case.

The temple of ancestral deity of Mr. Aman goel and his family is located at Beri, Haryana. The temple is run
by a charitable organisation registered under section 12AA of the Income Tax Act, 1961. The family has got
unshakeable faith in their ancestral deity. Mr. Aman is a big entrepreneur having flourishing business of tiles
in Gurugram. Upon the birth of their first child, he donated ` 10 lakh to the said temple for construction
of a sitting hall in the temple. On the main door of the sitting hall, a name plate was placed stating “Donated
by Mr. Aman Goel upon birth of his first child”.
You are required to examine the leviability of GST on the donation received from Mr. Aman Goel?
Answer.
It has been clarified vide Circular No. 116/35/2019 GST dated 11.10.2019 that when the name of the donor is
displayed in the religious institution premises, by placing a name plate or similar such acknowledgement,
which can be said to be an expression of gratitude and public recognition of donor’s act of philanthropy and
is not aimed at giving publicity to the donor in such manner that it would be an advertising or promotion of his
business, then it can be said that there is no supply of service for a consideration (in the form of donation). There
is no obligation (quid pro quo) on part of recipient of the donation or gift to do anything (supply a service).
Therefore, there is no GST liability on such consideration.
In the given case, there is no reference or mention of any business activity of the donor which otherwise would
have got advertised. Thus, since the gift or donation is made to a charitable organization, the payment has the
character of gift or donation and the purpose is philanthropic (i.e., it leads to no commercial gain) and not
advertisement, hence GST is not leviable.
QUESTION-7 [RTP MAY 2020]

Holiday Guest House, situated at Shimla, provides boarding & lodging services to tourists at economical cost.
The charges of a single deluxe room per day are ` 999. Mr. X has booked one deluxe room for two days
during Christmas holidays. You are required to determine whether GST is payable by Holiday Guest House
on the above booking. If yes, determine the amount of GST so payable. Will your answer change, if the
charges of a single deluxe room per day charged by Holiday Guest House are ` 1,000?
Answer.
Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging
purposes, having value of supply of a unit of accommodation below or equal to ` 1,000 per day or equivalent
have been exempted from GST vide an exemption notification.
Thus, in view of the above-mentioned provisions, GST is not payable by Holiday Guest House on the booking
done by Mr. X as the charges for a unit of accommodation per day is less than `1,000.
The answer will remain the same even if the charges of a single deluxe room per day is ` 1,000 as the
exemption is also available in the case where value of supply of a unit of accomodation per day is ` 1,000/ i.e.,
such services are taxable only where value of supply of a unit of accommodation per day exceeds ` 1,000/-.
Thus, no GST is payable by Holiday Guest House on the booking done by Mr. X even if the charges of a single
deluxe room per day is ` 1,000.

111
M/s Damodar Ltd. provides services by way of storage of seasonal fruits and vegetables in Bhatinda, Punjab.
The monthly rental for a godown is ` 15,000. Examine whether GST is payable by M/s Damodar Ltd.
Answer.
Services by way of storage/ warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra,
sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel
leaves, tendu leaves, coffee and tea have been exempted from GST under an exemption notification under
GST.
Thus, no GST is payable on the services provided by M/s Damodar Ltd. by way of storage of seasonal fruits and
vegetables in Bhatinda, Punjab.
2. Exemptions w.r.to FIFA U17 Women’s world cup:

112
REVISION – 8
Payment Process, Returns, Accounts & Miscellaneous Topics
Payment Process – An overview:
ITC Deposit
Payment through
of tax through
PMT 06
dues and GSTR 3B
Challan
other dues
TDS & TCS
through
utility
Refunds
} Electronic Liability Ledger (GST PMT 01); Electronic Credit Ledger (GST PMT 02) and Electronic Cash
Ledger (GST PMT 05)
} Balance in Electronic credit ledger or electronic cash ledger after payment of interest, penalty, fee or
any other amount may be refunded.
} Refund from electronic credit ledger is possible only in 2 cases – Inverted tax structure[Tax rate on output < Tax
rate on inputs]
; Zero rated supplies
} Modes of deposit though GST PMT 06 challan – Internet banking, Debit Card, Credit Card, NEFT/RTGS,
Cash Deposit over the counter[Upto `10,000 per tax period permitted]
} Any discrepancy in ledger is communicated through GST PMT 04
} Refund rejection order by proper officer is passed in GST PMT 03

113
Returns – An Overview:
When registration is granted Registered person whose

after date when person is registration has been cancelled
liable- he has to file First return shall furnish a final return
The date from which he /she a) Within 3 months of the date
liable for registration till the of cancellation [Voluntary]
date on which registration has b) Date of order of cancellation
been granted. [Forcible] (whichever is later)
Final return
First return (GSTR – 10)
Life of registration
During the Life
Regular Scheme Composition Scheme
Basic Return Revised Late Basic Return Revised Late

fee (Under fee (Under
CGST Act + CGST Act +
SGST Act) SGST Act)
Periodical Aggregate a) Quarterly Nil return: INR Periodical Quarterly Nil return :
Return T/o in GSTR 1 20/day GST CMP INR 20/day
previous (Outward Non-Nil return: 08 – By Non-Nil
F.Y does supply) INR 50/day 18th of return : INR
not By notified (max. late fee every 50/day
exceed dates INR 10,000) quarter
INR 1.5 cr. (max .
b) Monthly: late fee
GTSR 3B INR
(Consolidated) 10,000)
By 20th of next
month Annual Annual 200/day (but
[Not Return max. =
Aggregate a) Monthly: required GSTR 4 – 0.25% of
T/o in GSTR 1 - By to file for By 30th turnover in
previous 11th of every FY: 17-18 April of state)
F.Y does month & 18-19] next FY
exceeds
INR 1.5 cr. b) Monthly*:
GSTR 3B
(Consolidated) Annual return is not required to be filed by:
By 20th of next a. Input Service Distributor (ISD)
month b. TDS Deductor
Annual Return GSTR 9 – By 200/day (but c. Casual Taxable Person (CTP)
[May opt not to file for 31st Dec of max. = 0.25% d. Non resident Taxable person (NRTP)
FY:17-18 & 18-19, if next FY of turnover in e. Supplier of OIDAR services located
ATO does not exceed `2 state) outside India and making supplies to non
Crores] taxable recipient in India M 20

114
Other returns:
Status of person Frequency Return Time Limit Revised Late fee
INR (max INR
=10000) (Under
CGST Act + SGST
Act)
Non-resident taxable person Monthly GSTR-5 20th of the following month a) NIL return = INR
(NRTP) or 7 days from the date of 20/day
Note: For CTP, the same provisions expiry of registration, b) Non NIL return
of a normal registered person is whichever is ealier = INR 50/day
applicable (See Note 2)
Online information and database Monthly GSTR-5A 20th of the following month
access or retrieval services (OIDAR)
Impute service Distributer (ISD) Monthly GSTR-6 13th of the following month
Tax deductor Monthly GSTR-7 10th of the following month INR 200/day
E-commerce Operator (ECO) Monthly GSTR-8 10th of the following month
Government Departments and Monthly GSTR-11 As and when refund claim
United Bodies made
GSTR- 3B: Payment of Tax (NOTIFICATION NO.64/2017 – Central Tax, Dated 15-11-2017)
a) Amount of GST payable is NIL = INR 20/day
b) Amount of GST payable is not NIL = INR 50 day
Note 1: Notification No. 13/2018-Central tax, Dated 07-03-2018, [Late fee for GSTR -5A] w.e.f 07/03/2018, the
late fee is INR 200/day for non-Nil return and INR 100/day for NIL return and INR 100/day for Nil return. IF
GSTR – 5A filed before 07-03-2018 but post due date, then late fee was INR 50 and INR 20 respectively
Note 2: The present system of filing of GSTR -3B is extended for 3 months i.e. April to June 2019, till the new
return system is finalized.

115
To be entered in GSTR- 1
GST Practitioner [Sec. 48]:
Following are added vide Notification No. 3/2019 (effective from 1.02.2019)
(1) furnish information for generation of e-way bill;
(2) furnish details of challan in FORM GST ITC-04;
(3) file an application for amendment or cancellation of enrolment under rule 586; and
6
As per section 35(2) of the CGST Act read with rule 58 of the CGST Rules, every owner or operator of
warehouse or godown or any other place used for storage of goods and every transporter, irrespective of
whether he is a registered person or not, shall maintain records of the consigner, consignee and other

116
(4) file an intimation to pay tax under the composition scheme or withdraw from the said scheme
Responsibility for correctness of particulars:

1. The responsibility for correctness of any particulars furnished in the return or other details filed by the GST
practitioners shall continue to rest with the registered person on whose behalf such return and details are
furnished.
2. Any statement furnished by the GST practitioner shall be made available to the registered person on the
GST Common Portal.
3. For every statement furnished by the GST practitioner, a confirmation shall be sought from the registered
person over email or SMS.
4. The registered person before confirming, should ensure that the facts mentioned in the return are true and
correct before signature.
5. However, failure to respond to request for confirmation shall be treated as deemed confirmation.
6. The GST practitioner shall prepare all statements with due diligence and affix his digital signature on the
statements prepared by him or electronically verify using his credentials. If the GST practitioner is found
guilty of misconduct, his enrolment will be liable to be cancelled. A show cause notice would be issued to
him in the form GST PCT-3.
Eligibility Criteria for becoming GST practitioner:
Eligibility
Conditions
Not been convicted by a

competent court for an
Person of Sound Not adjudged as
Citizen of India offence with
Mind insolvent
imprisonment not less
than 2 years
In addition, the person should also satisfy any of the following conditions: -
relevant details of the goods in such manner as may be prescribed. If such persons are not already
registered, they shall obtain a unique enrolment number by applying electronically at the GST portal

117
E-Way Bill:
Validity of E – Way bill:

Cargo Validity period
1 Over Dimensional Cargo (ODC) 1 day for every 20 kms or part
or Multi-modal Transportation (MMT) in which at least one leg thereof
involves transport by ship (Newly Inserted)
2 In other cases (i.e. other than ODC and MMT) 1 day for every 100 kms or part
thereof
Note: the validity of E-way bill may be extended within 8 hours from the time of its expiry (Amended)

118
FAQ’s on E Way Bill:

S.No. Question Answer
1. When E Way bill is not 1. Transportation by non motorized vehicle
required? 2. Goods transported from Customs port, airport, air cargo complex or
land customs station to Inland Container Depot (ICD) or Container
Freight Station (CFS) for clearance by Customs.
3. Goods transported under Customs supervision or under customs seal
4. Transit cargo transported to or from Nepal or Bhutan
5. Movement of goods for Ministry of defence
6. Empty Cargo containers are being transported
7. Consignor transporting goods to or from between place of business
and a weighbridge for weighment at a distance of 20 kms,
accompanied by a Delivery challan.
8. Goods being transported by rail where the Consignor of goods is the
Central Government, State Governments or a local authority.
9. Goods specified as exempt from E-Way bill requirements in the
respective State/Union territory GST Rules.
10. Transport of certain specified goods
ü LPG for supply to household and non domestic exempted
category customers
ü Kerosene oil sold under PDS
ü Postal baggage
ü Natural or cultured pearls
ü Jewellery, goldsmith and silversmith wares
ü Used personal and household effects
2. Whether E Way bill is Yes (Irrespective of whether it involves supply or not)
required if movement of
goods is not for supply?
3. Whether `50,000 limit is Taxable goods. If invoice has both taxable and exempt goods, we need to
for taxable goods or consider the invoice value of taxable goods
exempted goods
4. While computing invoice While determining the limit of ` 50,000 GST TO BE INCLUDED
value, whether GST to be
included or excluded?
5. Who will generate E Way • Registered Person – Eway bill must be generated when there is a
bill? movement of goods of more than ` 50,000 in value to or from a
Registered Person.
• Unregistered Persons – Unregistered persons are also required to
generate e-Way Bill. However, where a supply is made by an unregistered
person to a registered person, the receiver will have to ensure all the
compliances are met as if they were the supplier.
• Transporter – Transporters carrying goods by road, air, rail, etc. need to
generate e-Way Bill if the supplier has not generated an e-Way Bill.
6. Whether transporter is Transporters should generate the Eway bill (as Form EWB-01 or EWB-02)
required to generate if where all the consignments in the conveyance :
supplier has not } Individually (i.e. each invoice/delivery challan) is less than or
generated because the equal to ` 50,000 BUT
invoice value does not } In Aggregate (all documents put together) exceeds ` 50,000
exceed ` 50,000?
7. What are the latest Ü E Way bill cannot be generated, if return is not filed for 2
updates on E Way bill? consecutive tax periods
Ü In case of “Bill to Ship to” transactions, one e way bill is sufficient
and it can be generated either by consignor or by consignee
Ü Multi Vehicle updation is possible in E Way bill

119

M/s. Daksha Enterprises has made a cash deposit of ` 10,000 under minor head 'tax' of major head 'SGST’. It
has a liability of ` 2,000 for minor head "Interest" under the major head "SGST".
State whether M/s. Daksha Enterprises can utilise the amount available for payment of interest.
Answer.
The cash available in any minor head of a major head cannot be utilised for any other minor head of the same
major head.
Therefore, in the given case, amount of ` 10,000 available under minor head ‘tax’ of major head ‘SGST’ cannot
be utilised for payment of liability of `2,000 under minor head ‘interest’ of the same major head.

Discuss the following in terms of provisions of CGST Act, 2017:When shall the interest be payable by a
registered person and what is the maximum rate of interest chargeable for the same?
Answer.
Interest is payable in the following cases:-
• failure to pay tax, in full or in part within the prescribed period,
• undue or excess claim of input tax credit,
• undue or excess reduction in output tax liability.
The maximum rate of interest chargeable for the same is as under -
(a) 18% p.a. in case of failure to pay full/part tax within the prescribed period
(b) 24% p.a. in case of undue or excess claim of input tax credit or undue or excess reduction in
output tax liability.

Ms. Jimmy wants to adjust input tax credit for payment of interest, penalty and payment of tax under reverse
charge. Explain whether she can do so.
Answer.
The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit
ledger which may be used for making any payment towards output tax.
“Output tax” inter alia excludes tax payable on reverse charge basis.
Thus, Ms. Jimmy cannot adjust input tax credit for payment of interest, penalty as also for payment of tax under
reverse charge.

Sahil is a supplier of taxable goods in Karnataka. He got registered under GST in the month of September,
20XX and wishes to pay his IGST liability for the month. Since he’s making the GST payment for the first time,
he is of the view that he needs to mandatorily have the online banking facility to make payment of GST ;
offline payment is not permitted under GST . You are required to apprise Sahil regarding the various modes
of deposit in the electronic cash ledger. Further, advise him with regard to following issues:
(a) Are manual challans allowed under GST?
(b) What is the validity period of the challan?
(c) Is cross utilization among Major and Minor heads of the electronic cash ledger permitted?
Answer.
Section 49(1) of CGST Act, 2017 read with rule 87 of CGST Rules, 2017 provides that the deposit in electronic
cash ledger can be made through any of the following modes, namely:-
(i) Internet Banking through authorised banks;
(ii) Credit card or Debit card through the authorised bank;
(iii) National Electronic Fund T ransfer or Real T ime Gross Settlement from any bank; or
(iv) Over the Counter payment through authorised banks. T hus, offline mode is also permitted under GST .
(a) Manual or physical Challans are not allowed under the GST regime. It is mandatory to generate Challans
online on the GST Portal.
(b) E-challan is valid for a period of 15 days.
(c) Amount entered under any Minor head (T ax, Interest, Penalty, etc.) and Major Head (CGST , IGST , SGST
/UT GST ) of the Electronic Cash Ledger can be utilized only for that liability. Cross-utilization among Major
and Minor heads is not possible.

120

Discuss the correctness of the following statements:-
(i) Once generated, an e-way bill cannot be cancelled.
(ii) E-way bill generated in one State is valid in another State.
Answer.
(i) The said statement is partially correct. Where an e-way bill has been generated, but goods are either
not transported at all or are not transported as per the details furnished in the e-way bill, the e-way bill may be
cancelled electronically on the common portal within 24 hours of generation of the e-way bill.
However, an e-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of
rule 138B of the CGST Rules, 2017.
(ii) The said statement is correct. The e-way bill generated under Goods and Services Tax Rules of any State
or Union territory shall be valid in every State and Union territory.
Question 6 [SA NOV 2018]

A tax payer can file GSTR-1 under CGST Act, 2017, only after the end of the current tax period. State
exceptions to this.
Answer.
A taxpayer can file GST R-1 under CGST Act, 2017, only after the end of the current tax period. However,
following are the exceptions to this rule:
I. Casual taxpayers, after the closure of their business
II. Cancellation of GST IN of a normal taxpayer.
Question 7 [SA MAY 2018]

Who is required to furnish Final Return under CGST Act, 2017 and what is the time limit for the same? Discuss.
Answer.
Every registered person who is required to furnish a return u/s 39(1) of the CGST Act, 2017 and whose registration
has been surrendered or cancelled shall file a Final Return electronically in the prescribed form through the
common portal.
Final Return has to be filed within 3 months of the:
I. date of cancellation or
II. date of order of cancellation whichever is later.
Question 7 [RTP MAY 2019]

M/s Cavenon Enterprises, a registered supplier of designer wedding dresses under regular scheme, has
aggregate annual turnover of ` 30 lakh in the preceding financial year. It is of the view that in the current
financial year, it is permitted to file its monthly statement of outward supplies – GST R-1 - on a quarterly basis
while its accountant advises it to file the same on a monthly basis. You are required to advise M/s Cavenon
Enterprises on the same.
During a given tax period in the current financial year, owing to an off-season, M/s Cavenon Enterprises has
not made any taxable supply. Therefore, M/s Cavenon Enterprises opines that no return under GST is required
to be filed for the said period. You are required to examine the technical veracity of the opinion of M/s Cavenon
Enterprises.
Answer.
Section 37 of the CGST Act, 2017 stipulates that GST R-1 for a particular month is required to be filed on or
before the 10th day of the immediately succeeding month, i.e. on a monthly basis.
However, presently, as a measure of easing the compliance requirement for small tax payers, GST R-1 has been
allowed to be filed quarterly by small tax payers with aggregate annual turnover up to ` 1.5 crore in the
preceding financial year or the current financial year. Tax payers with annual aggregate turnover above ` 1.5
crore will however continue to file GST R- 1 on a monthly basis.
In view of the same, M/s Cavenon Enterprises can file its GST R-1 on quarterly basis as its aggregate turnover
does not exceed ` 1.5 crore in the preceding financial year.
Further, GST R-1 needs to be filed even if there is no business activity in a tax period. Thus, in the present
case, even if no supply has been made by M/s Cavenon Enterprises, a nil return is required to be filed for the
relevant tax period.

121

Mr. Gauri Shiva, a registered person in Punjab, supplies goods taxable @ 12% [CGST @ 6%, SGST @ 6% & IGST
@ 12%] in the States of Punjab and Haryana. He has furnished the following details in relation to
independent supplies made by him in the quarter ending June, 20XX:-
Supply Recipient Nature of supply Value (`)
1 Mr. A, a registered person Inter-State 2,20,000

2 Mr. B, a registered person Inter-State 2,55,000
3 Mr. C, an unregistered person Intra -State 1,80,000
4 Mr. D, an unregistered person Intra-State 2,60,000
5 Mr. M, an unregistered person Inter-State 3,00,000
6 Mr. N, an unregistered person Inter-State 50,000
7 Mr. O, an unregistered person Inter-State 2,50,000
8 Mr. P, an unregistered person Inter-State 2,80,000
9 Mr. Q, a registered person Intra-State 1,50,000
10 Mr. R, a registered person Intra-State 4,10,000
The aggregate annual turnover of Mr. Gauri Shiva in the preceding financial year was ` 1.20 crore. With
reference to rule 59 of the CGST Rules, 2017, discuss the manner in which the details of above supplies are
required to be furnished in GSTR-1.
Answer.
Rule 59 of the CGST Rules, 2017, inter alia, stipulates that the details of outward supplies of goods and/or
services furnished in form GSTR-1 shall include the–
(a) invoice wise details of all –
(i) inter-State and intra-State supplies made to the registered persons; and
(ii) inter-State supplies with invoice value more than two and a half lakh rupees made to the unregistered
persons;
(b) consolidated details of all –

(i) intra-State supplies made to unregistered persons for each rate of tax; and
(ii) State wise inter-State supplies with invoice value upto two and a half lakh rupees made to unregistered
persons for each rate of tax;
Thus, in view of the above-mentioned provisions, Mr. Gauri Shiva should furnish the details of outward supplies
of goods made by him during the quarter ending June 20XX in the following manner:-
Supply Recipient Nature of Value (`) Manner of furnishing

supply details
1 Mr. A, a registered person Inter-State 2,20,000 Invoice-wise details
2 Mr. B, a registered person Inter-State 2,55,000 Invoice-wise details
3 Mr. C, an unregistered Intra-State 1,80,000 Consolidated details of

person supplies 3 and 4
4 Mr. D, an unregistered Intra-State 2,60,000
person
5 Mr. M, an unregistered Inter-State 3,00,000 Invoice-wise details
person
6 Mr. N, an unregistered Inter-State 50,000 Consolidated details of
person supplies 6 and 7

122
7 Mr. O, an unregistered Inter-State 2,50,000

person
8 Mr. P, an unregistered Inter-State 2,80,000 Invoice-wise details
person
9 Mr. Q, a registered person Intra-State 1,50,000 Invoice-wise details
10 Mr. R, a registered person Intra-State 4,10,000 Invoice-wise details

Mr. Ram Narayan, a registered supplier under GST, wants to first discharge his self- assessed tax liability for
the current period before settling the dues for the previous tax period. Examine briefly whether he can do so?
Answer.
As per section 49(8) of the CGST Act, 2017, the liability of a taxable person has to be discharged in a chronological
order as under:-
(a) self -assessed tax and other dues for the previous tax periods have to be discharged first;
(b) the self -assessed tax and other dues for the current period have to be discharged next;
(c) Once these two steps are exhausted, thereafter any other amount payable including demand determined
under section 73 or section 74 of the CGST Act, 2017 to be discharged. In other words, the liability if any,
arising out of demand notice and adjudication proceedings comes last.
This sequence has to be mandatorily followed.
Thus, in view of the above-mentioned provisions, Mr. Ram Narayan cannot discharge his self-assessed tax
liability for the current period before settling the dues for the previous tax period.
Note: GST law has been subject to frequent changes since its inception. Although many clarifications are
continually being issued by way of FAQs or otherwise, many issues continue to arise on account of varying
interpretations on several of its provisions. Therefore, alternate answers may be possible for the above question
s depending upon the view taken.
Question 10 [SA NOV 2018]

Mr. X, a regular tax payer, did not make any taxable supply during the month of July. Is he required to file
any goods and service tax return?
Answer.
A regular tax payer is required to furnish a return u/s 39 for every month 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 monthly return even if he did not make any taxable supply during the month
of July.
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That’s It on GST & Customs 1

For CA INTER May 2020

All disputes are subject to Chennai Jurisdiction

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Benefits in case of zero-rated supplies: ___________________________________________________________ 70

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Transportation Services: _____________________________________________________________________ 104

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Supply [Sec. 7 of CGST Act, 2017]

7(1A) - Classification 7(2) - Excludes (Read

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Summary of Sec. 7(1):

1. Meaning of goods & Services:

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6. Meaning of various supplies:

8. Meaning of Aggregate turnover:

9. GST on Sale of Flats/Buildings:

10. Meaning of Works Contract:

11. Meaning of Job Work:

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12. Meaning of Distinct Persons:

When a person is required to obtain more than one registration?

13. Meaning of actionable claim:

Covered under the definition of Others - Considered as "GOODS"

* Non-taxable supplies under GST

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Composite Supply V. Mixed Supply [Sec. 8 of CGST Act, 2017]:

Supply of goods (or) Services (or)

Whether there involves more

Whether it is naturally Question of

Such supply is treated as Composite

COMPOSITE SUPPLY MIXED SUPPLY

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Liability to pay GST [Sec. 9 of CGST Act, 2017]

Sec. 9(3) – Notified Services for RCM – SIR CG GOT SALAD

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Sec. 9(4) – Purchases by registered person from unregistered persons:

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Flow chart determining ECO liability:

Sec. 9(5) CGST

Does ECO has a

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Summary of important circulars:

Also, the above circular is extended to interstate

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Scenario – 2: DCA making supply on behalf of principal

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QUESTION -1: [SA GST MAY 2018]

QUESTION -2: [SA GST NOV 2018]

QUESTION -3: [SA GST MAY 2018]

QUESTION -4: [SA GST MAY 2018]

QUESTION -5: [SA GST NOV 2018]

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c) Excise duty under Medicinal & Toilet Preparation Act

QUESTION -6: [RTP NOV 2018]

QUESTION 7: (SA GST NOV 18)

QUESTION 8: (RTP MAY 2019)

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to Smart Kids are exempt from GST .

QUESTION 9: (RTP NOV 2018)

QUESTION 10: (RTP NOV 2018)