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Question Paper

IDT DETAILED TEST - 1 Duration: 80

Details: Test - 1 Marks: 40

Instructions:

 All the questions are compulsory

 Properly mention test number and page number on your answer sheet, Try to upload sheets in
arranged manner.
 In case of multiple choice questions, mention option number only Working notes are
compulsory wherever required in support of your solution
 Do not copy any solution from any material. Attempt as much as you know to fairly judge your
performance.

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Question- 1:

On October 10, 2019, FU ltd. gives a building construction contract to Shivam builders
(contractor). Shivam will construct the building using its own material and labour. The
construction would be completed as per plan and design given by FU ltd. Agreed consideration
for this work is Rs. 1.5 crore + GST. The payment schedule to Shivam is as follows-

Installment 1- 10 percent is payable within 5 days from signing of agreement.

Instalment 2- 25 per cent is payable on casting of first floor slab.

Installment 3 - 15 per cent payable on casting of second floor slab.

Instalment 4- 10 per cent is payable on completion of flooring, stone work, wooden work and
fixing of electrical

Installment 5-Rest is payable on completion of building.

Casting of first floor and second floor slabs is completed on Dec 2, 2019 and Jan 8, 2020,
respectively. Flooring, stone work, etc. are completed on May 12, 2020. Construction of
building is completed on 12 August 2020. When tax invoice should be issued in the above
mentioned case?

(5 marks)

Question- 2:

Akshit has started his new business of real estate by incorporating company named PI Industry
limited on 01.04.2020 and also obtain GST registration from government. PI Real Estate
Company has acquired a land from Mr. X for 30 lakhs thereafter given a 40 lakhs contract to Mr
Ram for construction of 9 floor building. In meanwhile, Company start advertisement of flat and
sold 5 flats before the completion of building(20 lakh each) and balance 4 flats after completion
of building.

PI Industry limited has completed construction and handover possession of flat on time to all
the customers. Mr. Rohit to whom one flat has been sold post completion file a cost for using of
poor quality of material. Mr. Akshit in order to avoid court case take some consultancy service
from his father who is lawyer without any consideration who stays in UK. PI industry limited
agreed to pay INR 5 lakhs to Mr. Rohit for non-filling of court case.

Advice of GST liability on all transaction along with reason.

(6 marks)

Question- 3:

With the help of following information in case of AI Ltd, Delhi for the FY 2019- 20, Determine
the aggregate turnover?

Particular Amount

Sale of Petrol within state 2,00,000

Stock transfer of GST items from City A to City B( both units are within state) 1,00,000

Stock transfer of GST items from State A to state B 4,00,000

Supply of Exempted Goods 50,000

Supply made on which receipt is liable to Pay GST under RCM 2,00,000
Also comment whether AI ltd required to obtain registration or not.

(6 marks)

Question- 4:

Ms. Pawani Sharma is a GST consultant in practice and handled various clients for GST purpose.
Below questions relating to GST are raised by clients. Please advise along with reason:

Question- 4(a): Mr. Rahul of Rajasthan having turnover of 1.49 crores is assigned to state
officer of Rajasthan. However, while verifying the documents and returns submitted by Mr.
Rahul, a CGST officer came know about tax evasion made by Mr. Rahul. For clearance of doubt,
CGST officer issues a shows cause notice to Mr. Rahul and seek clarification on some points.

On receipt of notice, Mr. Rahul wants to challenge the notice on the ground that he is assigned
to Rajasthan state then how CGST officer issued the notice. Advice Mr. Rahul.

(3 marks)

Question- 4(b)

Advice all the clients along with reason regarding who is liable to pay GST?

(i) Mr. Chetan a renowned writer and author of 2 states transferred the copyright of his
published book 2 states to Balaji production limited for a consideration of INR 100 crores.

(ii) Akshit Transport Ltd, a GTA, is engaged in providing service of transportation of goods to the
local authorities who is registered only for the purpose of deducting tax under section 51.

(iii) PNB Bank has appointed Ms. Dilpreet as a direct selling agent to provide services of tele
calls for potential customers and persuade them to avail services of our bank and also to
provide advertisement related to this service for which PNB paid remuneration of INR 50,000 to
Mr. Dilpreet.

(iv) A ltd is owner of 10,000 shares of RIL. A ltd has lent out these shares to B ltd through a SEBI
approved intermediary in terms of security lending scheme, 1997. For this service, A ltd will be
getting due consideration from B ltd.

(4 marks)

Question- 5:

AI Transportation ltd in involve in transportation of people and goods through all means(water,
air, roads) and operate a cruise ship from Mumbai to Goa. You are head of company finance
dept. your junior verify all voucher and come to you to know about treatment of GST for all
inward supply. Guide the junior regarding all relevant applicable provision related to below
transaction:

The company PY year’s turnover is 45 lakhs. As per terms of employment contract, Company
shall provide the residential facility to its employees for which it has taken a house on rent from
DLF property for the consideration of 25,000 per month. To meet business expansion plan,
company has applied for loan from bank. The loan agreement between bank and company,
specified that 10 lacs loan at the rate of 8% shall be provide by the bank if loan is guarantee by
its holding company and in case of default in EMI penal interest of 10,000 shall be paid to bank.
Bank also charges 20,000 for processing fee on 10 lacs loan and company made a default in EMI
payment. Some foreign investors are on visit to company office, for their accommodation,
company has book rooms in lemon tree hotel through Make my trip website (INR 18,000 room
rent for 20 days room rent in 3 star hotel). For the entertainment of foreign delegates, the
company has organized a dance performance of classic singer and paid 1,00,000 as a
consideration.
Mr. Sunil Chhetri captain of Indian football team appointed as brand ambassador of company
for the consideration of 2 lacs. AI ltd also take speed post service from Indian post for 10,000
Rs. The filing fee of 4,500 paid to MCA for filing of return under companies act.

(6 marks)

Question – 6:

(i) What if the same invoice contains both categories of goods i.e. ones exempted for the
purpose of EWBs and taxable, then whether EWB needs to be generated?

(ii) In many cases where manufacturer or wholesaler is supplying to retailers, or where a

consolidated shipment is shipped out, and then distributed to multiple consignees, the
recipient is unknown at the time the goods are dispatched from shipper’s premises. A
very common example is when FMCG companies send a truck out to supply kirana
stores in a particular area. What needs to be done in such cases?

(2+3 marks)

Multiple Choice Question: -

1. The time period prescribed for maintenance of accounts and records, if the taxable person
is a party to an appeal or revision shall

a) Two year after final disposal of such appeal or revision or proceeding, or until the expiry
of thirty-six months from the last date of filing of Annual Return for the year pertaining to
such accounts and records, whichever is later
 b) Two year after final disposal of such appeal or revision or proceeding, or until the expiry
of sixty months from the last date of filing of Annual Return for the year pertaining to such
accounts and records, whichever is later.

c) One year after final disposal of such appeal or revision or proceeding, or until the expiry
of seventy two months from the last date of filing of Annual Return for the year pertaining
to such accounts and records, whichever is later.

d) One year after final disposal of such appeal or revision or proceeding, or until the expiry
of forty months from the last date of filing of Annual Return for the year pertaining to such
accounts and records, whichever is later.

2. The Rahim associates operate a restaurant in Delhi and earn 25 lacs from sale of foods and
for transportation of inward goods (veg and meat), company has taken GTA services from a
firm named Shri ram transportation services for consideration of 1 lacs. Rahim has legal
disputes with vendor, for this, company has take arbitration service from a private firmand
paid 30,000 for same. Compute the tax pay by Rahim associate under RCM or FCM. Assume
tax rate on service is 12% and on goods is 5%.Compute the GST liability of Rahim
associates?

Option sale of food GTA service Arbitration service Total

A 125,000 5000 1,500 131,500

B 125,000 5000 Nil 130,000

C 300,000 Nil 1500 301,500

D 300,000 5000 1,500 306,500

3. Mr. Ram has 30 lakhs turnover from sale of garments in UP state and 20 lakhs in MP state.
Mr. Ram also operate from two different SEZ situated in UP. Mr. Ram also has a business in
different vertical (sale of plastic bottle). Suggest how many GST registration is required as
per law?
(a) 1

(b) 3

(c) 2

(d) 4

4. GST registered supplier - manufacturer, has supplied goods under cover of tax invoice (Rs
20,000 + 5% GST). Tax invoice is dated 30 Aug, 2018 and has been reported in return file for
month Aug, 2018. In which following case, Credit note is not required to be issued?

(a) Goods returned by recipient in Dec, 2018 and supplier returning full amount of Rs 21,000
to the Recipient.

(b) Goods returned by recipient in Dec, 2018 and supplier returning amount of Rs 20,000
only.

(c) Goods returned by recipient in jan, 2019 and supplier returning amount of Rs 21,000 to
the recipient.

(d) Goods returned by recipient in April, 2019 and supplier returning amount of Rs 21,000 to
the recipient.

5. M/s Raj & Sons, a registered person located in the state of west Bengal, is engaged in the
supply of taxable goods. He desires to take part in a trade fair to be held in the state of
Gujarat for supply of such goods. He doesnot have fixed place of business in Gujarat. Which
of the following statement Is correct in the context of obtaining registration in Gujarat?

(a) He has to obtain registration as regular tax payer u/s 22 of CGST Act.

(b) He has to obtain registration as composition tax payer u/s 10 of CGST Act.

(c) He has to obtain registration as casual tax person as defined u/s 2(20) of CGST Act.

(d) He is not required to obtain registration if his aggregate turnover does not exceed 40
lakh.

(5 * 1 marks)