Good service Tax (GST)

Dicko syah putra ( verified )

Hands-on-project: Distribution of ITC among branches under ISD Kuis Bernilai. 10 min. 4 poin total
Batas Waktu 26 Mar pukul 23.59 WIB

 The head office of LMN Ltd is located in West Bengal and is registered as an input service
distributor (ISD) under GST. It has three branches in different states: the 'Mumbai', 'Haryana'
and 'Tamil Nadu' branches.
 LMN Ltd furnishes the following information for the month of May 2022 and is looking
forward to distributing the below ITC to various branches:

i. GST paid on services used only for the Mumbai

branch: INR5,00,000

ii. IGST, CGST and SGST paid on services used for all branches: INR24,00,000

Turnover of the branches for the financial year is as follows:

Turnover of the Mumbai branch = INR10,00,00,000 (50%)

Turnover of the Haryana branch = INR6,00,00,000 (30℅)

Turnover of the Tamil Nadu branch INR4,00,00,000 (20%)

Apply the skills gained through this week to answer the following questions.

1. Whether the CGST paid on services used only in Mumbai will be distributed to the other
branches?
 Yes
 No

2. What is the amount of credit to be distributed to the Mumbai branch?

 INR 12 Lakh
 INR 4.8 Lakh
 INR 7.2 Lakh
 INR 17 Lakh
 3. What is the amount of credit to be distributed to the Haryana branch?

 INR 12 Lakh
 INR 4.8 Lakh
 INR 7.2 Lakh
 INR 8.7 Lakh

4.What is the amount of credit to be distributed to the Tamil Nadu branch?

 INR 12 Lakh
 INR 4.8 Lakh
 INR 7.2 Lakh
 INR 5.8 Lakh

(Answer)

1. No, the CGST paid on services used only in Mumbai will not be distributed to the other
branches.

 Explanation: CGST is a tax levied by the Central Government on intra-state supplies of goods
and services, which means it is applicable only within a state. Since the services on which
CGST is paid were used only for the Mumbai branch, the credit of CGST cannot be
distributed to other branches located in different states.

2. Credit is to be distributed on a pro-rata basis, based on the turnover of all the branches.
Mumbai branch = INR (10,00,00,000/ 20,00,00,000) * 24,00,000 = INR 12,00,000.

3. Credit is to be distributed on a pro-rata basis, based on the turnover of all the branches.
Haryana branch = INR (6,00,00,000/ 20,00,00,000) * 24,00,000 = INR 7,20,000.

4. Tamil Nadu branch = INR (4,00,00,000/ 20,00,00,000) * 24,00,000 = INR 4,80,000.