SUGGESTED ANSWERS TO QUESTIONS

SECTION-A

1.
(i) (D)
(ii) (Any)
(iii) (Any)
(iv) (Any)
(v) (Any)
(vi) (Any)
(vii) (Any)
(viii) (Any)
(ix) (D)
(x) (B)
(xi) (A)
(xii) (D)
SECTION- B

2. (a)

Total Tax to be deducted

Payment
Particulars contract CGST IGST
due (Rs.) SGST (₹)
value (Rs.) (₹) (₹)
Interior decoration of Andhra
12,39,000 12,39,000 Nil Nil Nil
Bhawan located in Delhi.
Supply of printed books and
printed post cards to a West Delhi 9,72,000 -- Nil Nil Nil
Post Office
Note: The total value of Taxable Supply does not exceed Rs. 2,50,000 hence no tax is deductible.
The answer will remain unchanged
even if Manihar Enterprises is registered under composition scheme. Tax will be deducted in all cases where it
is required to be deducted under section 51 of the CGST Act, 2017 including the scenarios when the supplier is
registered under composition scheme.
2. (b)
(i) E-way bill is mandatorily required to be generated whenever there is a movement of goods of
consignment value exceeding Rs. 50,000, inter alia, in relation to a supply.
Consignment value of goods includes the central tax, State/Union territory tax, integrated tax and cess
charged, if any.
Thus, the consignment value of goods, in the given case, will be Rs. 57,820
Since in the given case the movement of goods is in relation to supply of goods and the consignment
value exceeds Rs. 50,000, e-way bill is mandatorily required to be generated in respect of movement of
goods from West Bengal to Bhubaneswar.
(ii) Non-issuance of e-way bill may result in the following consequences:
(a) Imposition of penalty of Rs. 10,000/- or tax sought to be evaded (wherever applicable), whichever is
greater.
(b) Detention and seizure of goods and the conveyance used to transport the said goods and the same will be
released only on payment of appropriate penalty.
(c) Goods or conveyance so detained/seized shall be liable to be sold or disposed if the penalty is not paid
within 15 days from the date of receipt of the copy of the order levying penalty.
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2. (c)
Conditions to be fulfilled for refund of customs duty
As per Section 26A of the Customs Act, 1962, duty paid on imported goods can be claimed for refund on
account of satisfying the following conditions:
(a) Goods are found defective
The goods are found to be defective or otherwise not in conformity with the specifications agreed upon
between the importer and the supplier of goods
Provided that the goods have not been worked, repaired or used after importation except where such use
was indispensable to discover the defects or non-conformity with the specifications;
(b) Goods are easily identifiable as imported goods
The goods are identified to the satisfaction of the Assistant Commissioner of Customs or Deputy
Commissioner of Customs as the goods which were imported;
(c) No drawback claim is made
The importer does not claim drawback under any other provisions of this Act; and
(d) Activities carried out after importation
(i) The goods are exported; or
(ii) The importer relinquishes his title to the goods and abandons them to customs; or
(iii) Such goods are destroyed or rendered commercially valueless in the presence of the proper ½ officer,
in such manner as may be prescribed and within a period not exceeding 30 days from the date on
which the proper officer makes an order for the clearance of imported goods for home consumption
under section 47.
Note: However, the period of 30 days may, on sufficient cause being shown, be extended by the
Commissioner of Customs for a period not exceeding three months.
No refund under section 26 is allowed in respect of perishable goods and goods which have exceeded their
shelf life.

3. (a)
Time of supply
The explanation to section 14 of the CGST Act, 2017 lays down that the date of receipt of payment is the date
on which the payment is entered in the books of account of the supplier or the date on which the payment is
credited to his bank account, whichever is earlier.
However, the date of receipt of payment is the date of credit in the bank account if such credit in the bank
account is after 4 working days from the date of change in the rate of tax.
In the given case, the payment has been credited in the bank account within 4 working days from the date of
change in the rate of tax. Therefore, the date of receipt of payment is 15" October being the date of entry in
the books of account of the supplier which is earlier than the date of credit of the payment in the bank account
(18th October).
As per section 14(a)(iii) of the CGST Act, 2017, in case of change in rate of tax, if the service is supplied
before the change in rate of tax and the invoice is issued after the change in rate of tax but the payment is
received before such change in rate of tax, the time of supply is the date of receipt of payment.
Therefore, applying the provisions of section 14(a)(iii) to the given case, the time of supply is 15" October.

3. (b)
Contents of Form GSTR-3B
Form GSTR-3B consists of 6 Tables:
 GSTIN number of Registered Person
 Legal name of Registered Person
 Summary of Outward Supply & Inward Supply under Reverse Charge Bifurcation of Inter-state outward
supplies as follows:
 To unregistered Person
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 To Composite taxable Person
 To UIN Holders
 Summary of eligible ITC claim bifurcated into IGST, CGST & SGST/UTSGT and Cess
 Summary of Exempted, Nil rated and Non-GST inward supplies
Details of payment of tax, which includes Category wise tax payable, ITC availed, TDS credit and Tax) paid
in cash along with interest and late fees (Though it is not applicable for initial 2 return. Summary of tax
category wise TDS/TCS credit.

3. (c)
The following supplies considered as deemed exports:
A. Goods supplied by a manufacturer:
 Supply of goods against Advance Authorization/Advance Authorization for Annual Requirement/
DFIA
 Supply of goods to units located in EOU/STP/BTP/EHTP.
 Supply of capital goods against EPCG authorization.
 Supply of marine freight containers by 100% EOU provided said containers are exported within 6
months by another 100% EOU.
B. Goods supplied by a Main contractor/sub-contractor:
 Supply of goods to projects or turnkey contracts financed by multilateral or bilateral agencies/Funds
notified by Department of Economic Affairs (DEA), under International Competitive Bidding.
 Supply of goods to any project where import is permitted at zero customs duty.
 Supply of goods to mega power projects against International Competitive Bidding.
 Supply to goods to UN or international organisations.
Supply of goods to nuclear projects through competitive bidding (need not be international competitive
bidding).

4. (a)
Value of supply and minimum GST liability:-
Total value of taxable services = D 18,00,000
Minimum GST payable in cash = D 3,24,000

4. (b)
(i) Interest payable to Mr. A = D 484.93 or 485
(ii) Interest chargeable to Mr. X = D 1002.74 or 1,003

5. (a)
SEZ Approval Mechanism:
The SEZ approval mechanism is a single-window process provided by a 19-member inter-ministerial SEZ
Board of Approval (BoA).
 The developer has to submit the proposal to the state government.
 The state government forwards this proposal to the BoA along with its recommendation within forty-
five days.
 The developer or applicant can also directly submit the proposal to the BoA.
 The Board, which has been constituted by the Central Government, and is a 19-member Board takes the
decision considering the merits of the proposal. All decisions taken by the Board are by consensus.
 The Board is chaired by the Secretary of the Dept. of Commerce, Ministry of Commerce and Industry.
 The other members are from various bodies and ministries such as the Central Board of Indirect and
Customs (CBIC), the Central Board of Direct Taxes (CBDT), Department of Economic Affairs, Dept. of

3
 Commerce, Ministry of Science and Technology, Ministry of Home Affairs, Ministry of Law and
Justice, Ministry of Urban Development, etc.
 Once the BoA gives its approval, and the central government notifies the area of the SEZ, units are
allowed to be established inside the SEZ.

5. (b)
(i) An appeal against a decision/order passed by any adjudicating authority under the CGST Act or SGST
Act/ UTGST Act is appealable before the Appellate Authority. Thus, Amit Furnishers can file an
appeal to Appellate Authority against the adjudication order passed by the Joint Commissioner of
Central Tax.
Further, such appeal can be filed within 3 months from the date of communication of such
decision/order.
Thus, Amit Furnishers can file the appeal to Appellate Authority on or before 22nd November.
Further, the Appellate Authority can also condone the delay in filing of appeal by 1 month if it is
satisfied that there was sufficient cause for such delay

(ii) GST law makes provisions for cross empowerment between CGST and SGST/UTGST officers to
ensure that a proper officer under the CGST Act is also treated as the proper officer under the
SGST/UTGST Act and vice versa.
Thus, a proper officer can issue orders with respect to both, the CGST as well as the SGST/UTGST
laws.
GST law also provides that where a proper officer under one Act (say CGST) has passed an order, any
appeal/review/ revision/rectification against the said order will lie only with the proper officers of that
Act (CGST Act).
Accordingly, if any order is passed by the proper officer under a SGST Act, any appeal/ review/
revision/ rectification against the said order will lie only with the proper officer under that SGST Act.
Thus, Amit Furnishers is required to file an appeal only with the Central Tax Appellate Authority.

6. (a)

Person Offence Prosecution Arrest Bail

George Non-cognizable offence Upto 5 years No arrest Bailable Offence
Abdul Cognizable offence Upto 5 year Arrest can be ordered Non-Bailable
by Commissioner
without arrest warrant
Rohan Non-cognizable offence Upto 3 Arrest can be ordered Bailable Offence
years with fine by Commissioner of
Central tax

6. (b)
Net GST payable = D Nil
Refund of Tax = D 8,00,000

6. (c)
Assessable value = D 15,30,000

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7. (a)
GSTN Portal has the following advantages:
 Enable the user to lodge his complaint and raise tickets himself.
 To provide all required information and reducing to and fro communication between helpdesk and the
taxpayers, helping to reach a faster resolution.
 Enable the taxpayer to check the progress of resolution of his complaint by using the ticket number
(acknowledgement number generated after a complaint is lodged).
 Check the resolution comments in case the complaint/ticket is closed.
 Based on selection of category/subject and sub-category, portal provides relevant FAQ/pages of User
manual to help the user resolve the problem faced by him.

7. (b)
Amount of pre-deposit to be made by Mala Associates
Section 107(6) provides that no appeal shall be filed before Appellate Authority (AA), unless the appellant
pays:-
 in full, tax, interest, fine, fee and penalty arising from impugned order, as is admitted by him; and
 10% of remaining tax in dispute arising from the impugned order subject to a maximum of Rs. 25 crore, in
relation to which the appeal has been filed.
However, no appeal shall be filed to AA against an order under section 129(3) [order for payment of
penalty for release of detained/seized goods/conveyances], unless a sum equal to 25% of the penalty has
been paid by the appellant.
Thus, in the given case, Mala Associates has to make a pre-deposit of 10% of Rs. 6,00,000, which is Rs.
60,000 (i.e. CGST Rs. 30,000 and SGST Rs. 30,000).
However, when Mala Associates admits the liability of Rs. 2,00,000 (CGST + SGST) and disputes only the
balance tax demanded of Rs. 4,00,000, it has to make a pre-deposit of:
(i) Rs. 2,00,000 + Rs. 20,000 [proportionate penalty on tax admitted] + interest @ 18% p.a. payable on the tax
admitted for the period of delay, and
(ii) 10% of Rs. 4,00,000 which is Rs. 40,000.

7. (c)
Customs duty payable by Padmavati = D 28,875

SECTION - C
8. (a)
a) Gross tax to be paid under forward charges:-
Gross GST liability (IGST) = D 85,200

b) Tax to be paid under reverse charges:-

CGST = D 9,000
SGST = D 9,000

c) Input Tax credit Available for payment of Tax for November, 2022:-
CGST = D 99,000
SGST = D 99,000

d) Net Tax liability to be paid in cash of November 2022:-

CGST = D 9,000
SGST = D 9,000

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8. (b)
(a)
i. Rate of exchange notified by CBIC on the date of presentation of bill of entry is considered
[Explanation to section 14 of the Customs Act, 1962]. It will be 1 Yen = ₹ 0.65
ii. Rate of duty is the rate prevalent on the date of presentation of bill of entry or the rate prevalent on the
date of entry inwards, whichever is later [Section 15 of the Customs Act, 1962]. It will be 15%

(b)
Customs FOB in Indian rupee D 19,81,950
Total CIF (Assessable value) = D 23,12,690

(c)

Value for the purpose of levying integrated tax D 25,67,085.90

Note: Integrated tax leviable under section 3(7) of the Customs Tariff Act, 1975 is
levied on the sum total of the assessable value of the imported goods, customs
duties and applicable social welfare surcharge
Total Custom duty payable (rounded off to nearest rupee) D 5,62,446

_______________________

6
 SUGGESTED ANSWERS TO QUESTIONS
SECTION-A
1.
(i) (C)
(ii) (B)
(iii) (Any)
(iv) (C)
(v) (A)
(vi) (A)
(vii) (D)

2. (a)
(i) Section 10(2A) provides an option to a registered person, who is not eligible to pay tax under sub-
sections (1) and (2) of section 10, of paying tax @ 6% (CGST-3% and SGST/UTGST-3%) provided
his aggregate turnover in the preceding financial year is upto Rs. 50 lakh.
In the given case, PNR & Co. has started the supply of services in the current financial year.
Therefore, its aggregate turnover in the preceding financial year is Nil. Consequently, it is eligible
to avail the benefit of composition scheme under section 10(2A) of the CGST Act in the current
financial year. It becomes liable to the registration when its aggregate turnover exceeds Rs. 20 lakh.
While registering under GST, it has to opt for composition scheme under section 10(2A).
Tax payable by the firm is as follows:
(1) Apr-Jun quarter: Tax payable by the firm in first quarter is nil since the firm‘s turnover [Rs. 12 lakh]
has not yet exceeded the threshold limit of Rs.20 lakh (viz. the threshold limit applicable for
registration in the State of Lucknow).
(2) July-Sep quarter: While computing the tax payable by the firm in second quarter, the turnover from
1st April to the date from which he becomes liable for registration under the Act is to be excluded.
Tax payable will be D 1,50,000
(ii)
(1) Alcoholic liquor for human consumption:
Alcoholic liquor for human consumption is outside the realm of GST.
Hence no duty payable on it.
(2) Opium, Indian hemp and other narcotic drugs and narcotics:
Opium, Indian hemp and other narcotic drugs and narcotics are within the purview of GST, i.e.GST
is leviable on them.
However, State Governments have also retained the power to levy excise duties on such products
manufactured in India. Resultantly, Opium, Indian hemp and other narcotic drugs and narcotics are
subject to GST as well as State excise duties.

2. (b)
In the given situation, three supplies are involved:
(i) Services provided by Geeth Pvt. Ltd. to audiences by way of admission to music concert.
(ii) Services provided by Joy (P) Ltd. to Geeth Pvt. Ltd. by way of organising the music concert.
(iii) Services provided by Hotel Leela Palace to Joy (P) Ltd. by way of accommodation in the Hotel
lawns for organising the music concert.
The CGST and SGST or IGST liability in respect of each of the above supplies is determined as under:
(i) As per the provisions of section 12(6), the place of supply of services provided by way of admission
to, inter alia, a cultural event shall be the place where the event is actually held.

1
 Therefore, the place of supply of services supplied by GeethPvt. Ltd. (Berhampore, West Bengal) to
audiences by way of admission to the music concert is the location of the Hotel Leela Palace, i.e. Chennai,
Tamil Nadu.
Since the location of the supplier (Berhampore, West Bengal) and the place of supply (Chennai, Tamil
Nadu) are in different States, IGST will be leviable.
Therefore, IGST leviable will be computed as follows:
Consideration for supply = Rs. 80,00,000 and IGST @ 18% = Rs. 14,40,000
(ii) Section 12(7)(a)(i) stipulates that the place of supply of services provided by way of organization
of, inter alia, a cultural event to a registered person is the location of such registered person.
Therefore, the place of supply of services supplied by Joy (P) Ltd. (Maharashtra) to Geeth Pvt. Ltd.
(Berhampore, West Bengal) by way of organising the music concert is the location of the registered
person, i.e. Berhampore, West Bengal.
Since the location of the supplier (Maharashtra) and the place of supply (Berhampore, West Bengal)
are in different States, IGST will be leviable.
Therefore, IGST leviable will be computed as follows:
Consideration for supply = Rs.15,00,000
IGST @ 18% on value of supply = Rs.2,70,000
(iii) As per the provisions of section 12(3)(c) of the IGST Act, 2017, the place of supply of services, by
way of accommodation in any immovable property for organizing, inter alia, any cultural function
shall be the location at which the immovable property is located.
Therefore, the place of supply of services supplied by Hotel Leela Palace (Chennai, Tamil Nadu) to
Joy (P) Ltd. (Maharashtra) by way of accommodation in Hotel lawns for organising the music
concert shall be the location of the Hotel Leela Palace, i.e. Chennai, Tamil Nadu.
Since the location of the supplier (Chennai, Tamil Nadu) and the place of supply (Chennai, Tamil
Nadu) are in the same State, CGST and SGST will be leviable.
Therefore, CGST and SGST leviable will be computed as follows:
Consideration for supply = Rs.5,00,000
CGST @ 9% on value of supply = Rs.45,000
SGST @ 9% on value of supply = Rs.45,000

If the price per ticket is fixed at Rs. 500, then no GST would be levied for with respect to admission to the
music concert. Since it is exempt As per Entry no. 81 of notification number 12/2017 dated 28.06.2017

3. (a)
(i) Matching will take place only after the due date of GSTR-3 for the month of November 2022. In the
given case matching will takes place after 20th September 2022.
(ii) Discrepancy is to be communicated by the common portal GSTN to supplier (i.e. Mr. Bharani) in
the Form GST MIS-2.
(iii) Time limit for rectification is 20th October 2022 (i.e. Due date of filling FORM GSTR-3 for the
month succeeding the month in which the discrepancy is made available). Mr. Bharani should pay
tax on it (as per Rule 71(4) of the CGST Rules, 2017).
(iv) Input tax credit of Rs.86,400 shall be added to the output tax liability of Mr. Madhan in his return
to be furnished in FORM GSTR-3 for the month succeeding the month in which the discrepancy is
made available (i.e. 20th November, 2022) with interest @18%.
(v) As per section 42(7) of the CGST Act, 2017 Mr. Madhan can reduce the amount from his output tax
liability and the interest paid will be refunded to his electronic cash ledger account under section
42(9) of the CGST Act, 2017.

2
3. (b)
Net tax payable in cash:
CGST = D Nil
SGST = D 6,500
IGST = D Nil
ITC to be carry forward:
CGST = D 19,500
SGST = D Nil
IGST = D Nil
[Note: Rate of Tax :- CGST @ 9%, SGST @ 9% and IGST @ 18%]

4. (a)
(i) As per section 25(4), a person who has obtained or is required to obtain more than one registration,
whether in one State or Union territory or more than one State or Union territory shall, in respect of
each such registration, be treated as distinct persons for the purposes of this Act. Therefore, units of
Sarvesh & Co. in Himachal Pradesh and Meghalaya are distinct persons under GST.
As per rule 28, the value of the supply of goods between distinct persons, other than where the
supply is made through an agent, shall-
 be the open market value of such supply;
 if open market value is not available, be the value of supply of goods of like kind and quality;
 if value cannot be determined under the above methods, be cost of the supply plus 10% mark-up or
be determined by other reasonable means, in that sequence.
Rule 28 also provides that where the goods are intended for further supply as such by the recipient,
the value shall, at the option of the supplier, be an amount equivalent to 90% of the price charged
for the supply of goods of like kind and quality by the recipient to his customer not being a related
person.
Further, rule 28 provides that where the recipient is eligible for full input tax credit, the value
declared in the invoice by the supplier shall be deemed to be the open market value of the goods or
services.
(ii) In the given case, the option of valuing the goods @ 90% of the price charged by the recipient to his
unrelated customer is not available as the goods are not further supplied as such' but only after
processing at Meghalaya unit.
(iii) However, since the Meghalaya unit is eligible for full ITC, the value declared by the Himachal
Pradesh unit in the invoice for transfer of such products, i.e. Rs.40,00,000 shall be deemed to be the
open market value of the products.
Thus, the value of 2000 products supplied by Sarvesh & Co. to its Himachal Pradesh unit in terms
of rule 28 is the open market value of such products which is Rs.40,00,000.

4. (b)
In case of services supplied by any person located in a non-taxable territory to any person other than non-
taxable online recipient, tax is payable under reverse charge by the person located in the taxable territory.
[Notification No. 10/2017 IT (R) dated 28.06.2017).
Hence, in the given case, since the business support services are provided by Ocean Inc (located in non-
taxable territory) to Cooper Ltd. (person other than non-taxable online recipient and located in taxable
territory), tax is payable under reverse charge by Cooper Ltd.
The time of supply of services taxable under reverse charge is the earlier of the following:
 Date of payment, or
 Date immediately following 60 days since issue of invoice (or any other document in lieu of
invoice) by the supplier.

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Case- I - Since Cooper Ltd makes the payment within 60 days of the date of issue of invoice, the time of
supply is the date of payment, i.e. 28th August, 2022.
Case- II - As Cooper Ltd. makes the payment after 60 days from the date of invoice, time of supply is the
date immediately following the said period of 60 days, i.e. 61st day which is 24th September, 2022.

5. (a)
As per Sec 143 of the Act, supply of goods to a job worker without payment of tax is permissible upon an
intimation.
In the given example, the implications are as follows:
(i)
 On supply of goods to Lego & co. – As per the sec 143 of Act, no tax shall be payable on supply of
goods to Lego & co. before However, the tax will be payable if finished goods is not returned one year
from 30/09/2022.
 Lego & co. sends the finished goods back to the principal i.e Aqua ltd within a period of one year.
Hence post completion of Job Work, no tax is leviable on finished goods returned to Aqua Ltd.
(ii)
 Lego & co. sells the finished goods on behalf of Aqua Ltd- Sec 143, also allows the job worker to
directly sell the goods on behalf of principal, wherein the liability to pay tax is of the principal and not
the job worker. Aqua Ltd is liable to pay GST on sale of Finished gods to customer by Lego & co.
 However, Aqua Ltd. must declare the premises of Lego & co. as an ‗Additional Place of Business‘ and
the sale of finished goods will form part of aggregate turnover of Aqua ltd. Such a declaration is not
required in case.
where :
 Job worker is registered under Sec 25 or
 Principal is engaged in supply of notified goods.

5. (b)
As per explanation to rule 33, a ―pure agent‖ means a person who-
a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur
expenditure or costs in the course of supply of goods or services or both;
b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as
pure agent of the recipient of supply;
c) does not use for his own interest such goods or services so procured; and
d) receives only the actual amount incurred to procure such goods or services in addition to the amount
received for supply he provides on his own account.
The supplier needs to fulfil all the above conditions in order to qualify as a pure agent.
In the given case, FJM Logistics fell field all the above conditions Thus, FJM Logistics qualifies as
a pure agent.
Further, Rule 33 stipulates that notwithstanding anything contained in the provisions of Chapter IV –
Determination of Value of supply, the expenditure or costs incurred by a supplier as a pure agent of the
recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied,
namely-
 the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the
third party on authorisation by such recipient;
 the payment made by the pure agent on behalf of the recipient of supply has been separately
indicated in the invoice issued by the pure agent to the recipient of service; and
 the supplies procured by the pure agent from the third party as a pure agent of the recipient of
supply are in addition to the services he supplies on his own account.

4
 Since conditions (I) to (III) mentioned above are satisfied in the given case, expenses incurred by
FJM Logistics as a pure agent of Eye bell Manufacturers Ltd. shall be excluded from the value of
supply.
Agency charges Rs. 6,50,000 Hotel Exp. Rs. 20,000 Travelling Exp. Rs. 30,000 & Tel Exp. 5,000
included.
 Accordingly, value of supply made by FJM Logistics will be D 7,05,000
6. (a)
(i) Under GST, a registered person can use input tax on purchase to pay output GST tax on supply/sale.
Apart from general ITC rule and list of ineligible ITC, availed ITC of input supplies needs to be
reversed on subsequent occurrence of the below-mentioned event:
 Recipient of supply doesn‘t pay to the supplier within 180 days of issue of the invoice.
 Recipient of supply uses input goods/services for any purpose other than business or for supplying
exempted supplies [like personal use]
 Recipient of supply uses capital goods for any purpose other than business or for supplying
exempted supplies.
 A person transfer his regular GST registration into Composite Scheme [u/s 18(4)] or Cancels GST
registration [u/s 29(5)]
 A person sells Capital goods or Plant and machinery [u/s 18(6)].
(ii) ITC of Any Tax paid against show cause notice u/s 74 of the CGST Act, 2017, is blocked clause (i)
of section 17(5) of the CGST Act, 2017.
Thus the differential GST paid by M/s X Ltd. against show cause notice u/s 74 of the CGST Act,
2017, will not be available as credit to M/s Y ltd.

6. (b)
(i) Advantages of e-invoice for businesses:
 Auto-reporting of invoices into GST return.
 Auto-generation of e-way bill (where required)
 E-invoicing will also facilitate standardization and inter-operability leading to reduction of disputes
among transacting parties.
 Improve payment cycles.
 Reduction of processing costs and thereby greatly improving overall business efficiency, etc.
(ii) There is no much difference indeed. Registered persons continue to create their GST invoices on
their own Accounting/Billing/ERP systems.
These invoices will now be reported to ‗Invoice Reference Portal (IRP)‘.
On reporting, IRP returns the e-invoicing with a unique ‗Invoice Reference Number (IRN)‘ after
digitally signing the e-invoice and adding a Quick Response Code. Then, the invoice can be issued
to the receiver (along with QR Code)
A GST Invoice will be valid only with a valid IRN.

7. (a)
Recovery in instalments (Section 80 of the CGST Act, 2017)
(i) Commissioner can allow payment with interest by defaulter in monthly instalments not exceeding
24 instalments.
(ii) In case of default in payment of any one instalment on its due date, the whole outstanding balance
payable on such date shall become due.
(iii) For seeking instalment facility, taxable person can file application electronically in Form GST
DRC-20.

5
The instalment facility will not be allowed if:
(i) The taxable person has already defaulted on the payment of any amount under GST law and
recovery process is already undergoing;
(ii) The taxable person has not been allowed to make payment in instalments in the preceding financial
year under GST law; and
(iii) The amount for which instalment facility is sought is less than Rs. 25,000

7. (b)
(i) Provisional assessment (Section 60 of the CGST Act, 2017 read with Rule 98 of CGST Rules, 2017):
 As per section 60(1) of the CGST Act, 2017 where the taxable person is unable to determine the
value of goods or services or both or determine the rate of tax applicable thereto, he may request the
proper officer in writing giving reasons for payment of tax on a provisional basis.
 The proper officer (i.e. The Asst. Commissioner/Dy. Commissioner of Central Tax) shall pass an
order, within a period not later than 90 days from the date of receipt of such request, allowing
payment of tax on provisional basis at such rate or on such value as may be specified by him.
 The Asst. Commissioner/Dy. Commissioner of Central Tax provisionally determines the amount of
tax payable by the supplier and is subject to final determination.
 On provisional assessment, the supplier can pay tax on provisional basis but only after he executes a
bond with security, binding them for payment of the difference between the amount of tax as may
be finally assessed and the amount of tax provisionally assessed (Section 60(2) of the CGST Act,
2017)

(ii) No appeals whatsoever can be filed against the following orders:-

(a) Board can fix monetary limits below which no departmental appeal would be filed with respective
authorities.
(b) An order of the Commissioner or other authority empowered to direct transfer of proceedings from
one officer to another officer;
(c) An order pertaining to the seizure or retention of books of account, register and other documents; or
(d) An order sanctioning prosecution under the Act; or
(e) An order passed under section 80 (payment of tax in instalments).

SECTION – B

8.
(i) (A)
(ii) (A)
(iii) (B)

9. (a)
Customs duty payable:-
When Tobacco valued @ D 6 per gram:-
Particulars IN GFA IN Other than GFA
Baggage on which duty is D 1,13,000 D 1,11,050
payable
Duty payable on baggage Duty payable@ 38.50% Duty payable on baggage
@ 38.50% (including 10% (including 10% Social @ Higher rate
Social welfare surcharge) welfare surcharge)

6
When Tobacco valued @ D 5 per gram:-
Particulars IN GFA IN Other than GFA
Baggage on which duty is D 1,12,875 D 1,10,875
payable
Duty payable on baggage @ Duty payable@ 38.50% Duty payable on baggage
38.50% (including 10% (including 10% Social welfare @ Higher rate
Social welfare surcharge) surcharge)

9. (b)
As per rule 6A of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017, the importer
is permitted to send the imported goods for job work. The said rule stipulates that the importer shall
maintain a record of the goods sent for job work during the month and mention the same in the
prescribed monthly statement.
The importer shall send the goods to the premises of the job worker under an invoice or wherever
applicable through an e-waybill, mentioning the description and quantity of the goods. The maximum
period for which the goods can be sent to the job worker shall be 6 months from the date of the invoice/
e-waybill.
The job worker shall-
(i) Maintain an account of receipt of goods, manufacturing process under taken thereon and the waste
generated, if any, during such process;
(ii) Produce the account details before the Jurisdictional Custom Officer as and when required by the
said officer; and
(iii) After completion of the job work, send the processed goods to the importer or to another job
worker as directed by the importer for carrying out the remaining processes, if any, under the
cover of an invoice or an e-waybill.

10. (a)
Re-exportor clearance of unutilized or defective goods [Rule7]
 The importer who has availed the benefit of an exemption notification shall use the goods
imported in accordance with the conditions specified in exemption notification within 6 months of
date of import.
 The importer is allowed to suomoto decide to either re-export or clear the unutilized goods for
home consumption within 6 months from date of import.
The importer who opt store-export such goods shall record the details of necessary export documents in
the monthly statement. Further, the value of such goods for re-export shall not be less than the value of
the said goods at the time of import.
The importer who opts to clear the unutilized or defective goods for home consumption, shall pay the
duty along with interest on the common portal and the particulars of such clearance and the payment of
duty shall be recorded by the importer in the monthly statement.
As per the clarification provided by the circular, the period for calculation of such interest would start
from the date of import of such goods and end with the date of actual payment.

The importer has an option to clear the capital goods imported, after having been used for the specified
purpose, on payment of duty equal to the difference between the duty leviable on such goods but for the
exemption availed and that already paid, if any, at the time of importation, along with interest, at the rate
fixed by the notification issued under section 28AA of the Act, on the depreciated value allowed in
straight line method, as specified below, namely:—

7
(i) For every quarter in the first year @ 4%;
(ii) For every quarter in the second year @ 3%;
(iii) For every quarter in the third year @ 3%;
(iv) For every quarter in the fourth and fifth year @ 2.5%;
(v) And thereafter for every quarter @ 2%.
Explanation–
(i) For the purpose of computing rate of depreciation for any part of a quarter, a full quarter shall be
taken into account.
(ii) The depreciation shall be allowed from the date when the imported capital goods have come into
use for the purpose as specified in the exemption notification up to the date of its clearance.
The importer shall, record the particulars of such clearance and payment of duty in the monthly
statement.

10. (b)
Prohibition and regulation of draw back
The provisions in respect of prohibition and regulation of drawback as contained in section 76 of
the Customs Act,1962 are explained here under:
(1) No drawback is allowed in respect of any goods, the market price of which is less than the amount
of draw back due thereon.
Further, draw back is also not allowed where the amount of drawback in respect of any goods is
less than Rs.50.
(2) If the Central Government is of the opinion that goods of any specified description in respect of
which drawback is claimed are likely to be smuggled back into India, it may, not allow drawback
in respect of such goods.
Or alternatively allow the drawback subject to certain restrictions and conditions.

11. (a)
If the imported goods are exported for repairs, then import duty on re-importation of such repaired goods is
restricted to the fair cost of repairs done abroad, insurance and freight charges.
Conditions to avail the aforesaid benefit:
 the time limit for re-importation is 3 years from the date of export (extended up to 5 years)
 The exported and imported goods must be in the same form and ownership of the goods should also
not have changed.
 This concept is not applicable if the repairs amount to manufacture and exports from EPZ or EOUs.
Customs duty payable after repairs = D 2,67,520
Correctness of contention
The contention of QWE Ltd that it is not liable for customs duty in respect of the re-import of machinery
after repairs, is incorrect.
Customs duty will be liable on the basis of assessable value, which will be the fair value of repairs
(including materials).

11. (b)
Third party exports under FTP
The given scenario is a case of third-party exports. Third-party exports means exports made by an exporter
or manufacturer on behalf of another exporter(s).
Certain conditions are to be satisfied for an export being allowed under third party.
The conditions for being allowed as third-party exports under FTP are:
(i) Export documents such as shipping bills shall indicate name of both manufacturing
exporter/manufacturer and third party exporter(s).

8
(ii) GR declaration, export order and invoice should be in the name of third party exporter.
In the above case, though SDL , GR declaration, export order and invoice are in the name of SDL
(third party exporter), the shipping bill does not have the name of JKL (manufacturer).
Therefore, JKL will not be treated as the exporter in this case.

________________________

9
 SUGGESTED ANSWERS TO QUESTIONS

Section - A

Answer Question No.1 which is compulsory and any four from the rest of this section.

1. Choose the correct answer with justification/workings wherever applicable. 2X7 = 14 Marks
(i) (C)
(ii) (B)
(iii) (D)
(iv) (B)
(v) (C)
(vi) (N.A.)
(vii) (N.A.)

2. (a) 6 Marks
Provisional Attachment to protect revenue in certain cases (section 83 of the CGST Act, 2017)
(1) Where assessment or adjudication are pending under
Section 62 Assessment of non-filers of returns;
Section 63 assessment of unregistered persons;
Section 64 summary assessment in certain special cases;
Section 73 determination of tax not paid other than fraud;
Section 74 determination of tax not paid by reason of fraud;
The Commissioner for protecting the interest of the Government revenue, by order in writing in Form GST
DRC- 22 can attach provisionally any property, including bank account, belonging to the taxable person.

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of one year
from the date of the order made under sub-section.

2 (b) (i) 4 Marks

Case I
As per section 12(3), where both the service provider and the service recipient are located in India, the
place of supply of services directly in relation to an immovable property, including services provided by
interior decorators is the location of the immovable property. However, if the immovable property is
located outside India, the place of supply is the location of the recipient.
Since in the given case, both the service provider (Mr. Maneesh) and the service recipient (Mr. Eshwar) are
located in India and the immovable property is located outside India (Australia), the place of supply will be
the location of recipient, i.e. Himachal Pradesh.
Case II
As per section 13(4), where either the service provider or the service recipient is located outside India, the
place of supply of services directly in relation to an immovable property including services of interior
decorators is the location of the immovable property. Since in the given case, service provider (Mr.
Maneesh) is located in India and service recipient (Mr. Eshwar) is located outside India (Switzerland), the
place of supply will be the location of immovable property, i.e. Singapore.

1
2(b) (ii) 3+1= 4 Marks
1) Advance ruling under GST can be sought by a registered person or a person desirous of obtaining
registration under GST law [Section 95(c) of the CGST Act, 2017].
Therefore, it is not mandatory for a person seeking advance ruling to be registered.
2) As per the definition of advance ruling under section 95(a) of the CGST Act, 2017, advance ruling
decision can be provided by the Authority to an applicant on matters/questions specified in section
97(2) of the said Act, in relation to the supply of goods or services or both being undertaken or
proposed to be undertaken by the applicant. Thus, advance ruling can be sought not only for
activities/transactions proposed to be undertaken but also for activities/transactions already
undertaken by the applicant.
As per section 98(6) of CGST Act, 2017, the Authority for Advance Ruling shall pronounce its
ruling in writing within 90 days from the date of receipt of application.
Hence, in the given case, Pooran Kumar can seek the advance ruling in relation to the supply of
goods being already undertaken by him and the Authority for Advance Ruling shall pronounce its
ruling in writing within 90 days from the date of receipt of application.

3 (a) 8 Marks
Aggregate turnover of Krishna (P) Ltd. ` 39,50,000

Krishna (P) Ltd. is not liable to be registered in Ludhiana, Punjab, as it is engaged exclusively in “Supply
of goods” and the aggregate turnover of the company has not exceeded the threshold limit of Rs.40,00,000.
However, since Krishna (P) Ltd. also makes taxable supplies to Uttarakhand, a specified Special Category
State, the threshold exemption gets reduced to Rs.20 lakh.

The argument of Krishna (P) Ltd. that it is not liable to registration since the threshold exemption of Rs.40
lakh is not being crossed either at Ludhiana, Punjab or Jaipur, Rajasthan and including turnover at
Uttarakhand branch is not correct as firstly, the aggregate turnover to be considered in its case is Rs.20 lakh
and not Rs. 40 lakh and secondly, the same is computed on all India basis and not State-wise.

Apart from this, Krishna (P) Ltd. is also wrong in believing that aggregate turnover is computed only for
the purpose of determining the eligibility limit for composition levy since the aggregate turnover is
required for determining the eligibility for both registration and composition levy.
Last but not the least, Krishna (P) Ltd. is compulsorily required to register under section 24 irrespective of
the turnover limit as it is liable to pay tax on inward supplies under reverse charge and it also makes inter-
State taxable supply.

3(b) 6 Marks
As per para 3 of Schedule II to the CGST Act, any treatment or process which is applied to another
person‟s goods is a supply of services and accordingly is subject to GST rate applicable for services.
In the given case, M/s Frames & Co. (job work) undertakes the process of mounting the steel cabinets of
ZENITH Pvt. Ltd. (principal) on metal frames. In view of para 3 of Schedule II to the CGST Act, the
mounting activity classifies as services even though metal frames are also supplied as a part of the
mounting activity. Accordingly, the job charges will be chargeable to rate of 18%, which is the applicable
rate for services.

2
Further, The value of steel cabinets will not be included in the value of taxable supply made by M/s Frames
& Co. as the supply of cabinets does not fall within the scope of supply to be made by M/s Frames & Co. It
is only required to mount the steel cabinets, which are to be supplied by ZENITH Pvt. Ltd. On metal
frames which are to be supplied by it.
As regards to sale of waste generated during the job work, since M/s Frames & Co. Is registered, the tax
leviable on the supply will have to be paid by it in terms of sec 143(5) of the CGST Act, such supply will
be treated as supply of goods and subject to GST rate applicable for metal waste.
Accordingly, the GST liability of M/s Frames & Co. will be ` 95,400

4 (a) 6 Marks
(i) Invoice value of supply ` 96,600
(ii) Invoice value of supply ` 84,000

4 (b) 8 Marks
(i) As per rule 32(4), the value of supply of services in relation to life insurance business, when the
amount allocated for investment/ savings on behalf of the policy holder is not intimated to the policy
holder at the time of supply of service, is-
(1) in case of single premium annuity policies,10% of single premium charged from the policy holder;
(2) in all other cases, 25% of the premium charged from the policy holder in the first year and 12.5% of
the premium charged from the policy holder in subsequent years;
(3) in case the entire premium paid by the policy holder is only towards the risk cover in life insurance,
the premium so paid.

(ii) Total value of supply = ` 76,87,500

5 (a) 7 Marks
(i) Rule 138(1) provides that e-way Bill is mandatorily required to be generated if the goods are
moved, inter alia, in relation to supply and the consignment value exceeds ` 50,000. Further,
explanation 2 to rule 138(1) stipulates that the consignment value of goods shall be the value,
determined in accordance with the provisions of section 15, declared in an invoice, a bill of supply
or a delivery challan, as the case may be, issued in respect of the said consignment and also includes
CGST, SGST/UTGST, IGST and cess charged, if any, in the document and shall exclude the value
of exempt supply of goods where the invoice is issued in respect of both exempt and taxable supply
of goods.
Accordingly, in the given case, the consignment value will be as follows:
= Rs.49,000 × 118%
= Rs.57,820.
Since the movement of goods is in relation to supply of goods and the consignment value exceeds
Rs.50,000, e-way bill is mandatorily required to be issued in the given case.
(ii) An e-way bill contains two parts namely, Part A to be furnished by the registered person who is
causing movement of goods of consignment value exceeding Rs.50,000/- and part B (transport
details) is to be furnished by the person who is transporting the goods.
Where the goods are transported by the registered person as a consignor or the recipient of supply
as the consignee, whether in his own conveyance or a hired one or a public conveyance, by road,
the said person shall generate the e-way bill on the common portal after furnishing information in
Part B [Rule 138(2)].

3
 Where the goods are transported by railways or by air or vessel, the e-way bill shall be generated by
the registered person, being the supplier or the recipient, who shall, either before or after the
commencement of movement, furnish, on the common portal, the information in Part B [Rule
138(2A)].
Where the goods are handed over to a transporter for transportation by road, the registered person
shall furnish the information relating to the transporter on the common portal and the e-way bill
shall be generated by the transporter on the said portal on the basis of the information furnished by
the registered person in Part A [Rule 138(3)].
Where the consignor or the consignee has not generated the e-way bill and the aggregate of the
consignment value of goods carried in the conveyance is more than Rs.50,000/, the transporter,
except in case of transportation of goods by railways, air and vessel, shall, in respect of inter-State
supply, generate the e-way bill on the basis of invoice or bill of supply or delivery challan, as the
case may be, and may also generate a consolidated e-way bill on the common portal prior to the
movement of goods.

5 (b) 7 Marks
In terms of section 12(2), the time of supply of goods is the earlier of, the date of issue of invoice/last date
on which the invoice is required to be issued or date of receipt of payment. However, Notification No.
66/2017 CT dated 15.11.2017 specifies that 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.
Also, it is important to note that the relief of not paying GST at the time of receipt of advance is available
only in case of supply of goods, the tax on which is payable under forward charge. In case of reverse
charge, GST is payable at the time of payment, if payment is recorded/made before receipt of goods
(advance payment) [Section 12(3)].
Therefore, time of supply of product „A‟, which is taxable under forward charge, is 2nd January, 2022 being
the date of issue of invoice.
However, time of supply of product „B‟, which is taxable under reverse charge, is 15th December 2021 to
the extent of Rs.3,00,000 paid as advance being the earliest of the three stipulated dates namely, date of
receipt of goods (20th January, 2022), date of payment (15th December, 2021) and date immediately
following 30 days of issuance of invoice (9th February, 2022).

For balance Rs.3,00,000, the time of supply of product „B‟ is 20th January, 2022 being the earliest of the
three stipulated dates namely, date of receipt of goods (20th January, 2022), date of payment (5th February,
2022) and date immediately following 30 days of issuance of invoice (9th February, 2022).

6 (a) 7 Marks

M/s BRIJ Ltd. is liable to pay an amount of ` 1,48,500

6 (b) 7 Marks
(i) An appeal against a decision/order passed by any adjudicating authority under the CGST Act or
SGST Act/ UTGST Act is appealable before the Appellate Authority [Section 107(1)]. Thus, Shine
Makers can file an appeal to Appellate Authority against the adjudication order passed by the Joint
Commissioner of Central Tax.
Further, such appeal can be filed within 3 months from the date of communication of such
decision/order [Section 107(1)]. Thus, Shine Makers can file the appeal to Appellate Authority on
4
 or before 22nd January, 2022. Further, the Appellate Authority can also condone the delay in filing
of appeal by 1 month if it is satisfied that there was sufficient cause for such delay [Section 107(4)].

(ii) GST law makes provisions for cross empowerment between CGST and SGST/UTGST officers to
ensure that a proper officer under the CGST Act is also treated as the proper officer under the
SGST/UTGST Act and vice versa. Thus, a proper officer can issue orders with respect to both, the
CGST as well as the SGST/UTGST laws.
GST law also provides that where a proper officer under one Act (say CGST) has passed an order,
any appeal/review/ revision/rectification against the said order will lie only with the proper officers
of that Act (CGST Act). Accordingly, if any order is passed by the proper 12 officer under a SGST
Act, any appeal/ review/ revision/ rectification against the said order will lie only with the proper
officer under that SGST Act. Thus, Shine Makers is required to file an appeal only with the Central
Tax Appellate Authority [Section 6 of CGST Act].

(iii) Shine Makers‟ view is not correct in law. Section 107(6) provides that no appeal shall be filed
before the Appellate Authority, unless the appellant has paid
(a) full amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by
him;
And
(b) a sum equal to 10% of the remaining amount of tax in dispute arising from the impugned order
subject to a maximum of Rs.25 crore*.
*Equivalent amount is required to be deposited with respect to SGST liability.
Since in the given case, Shine Makers disagrees with the entire tax demanded, it has to make a pre-
deposit of 10% of the amount of tax in dispute arising from the impugned order, i.e., 10% of
Rs.54,00,000 which is Rs.5,40,000 (i.e. CGST Rs.2,70,000 and SGST Rs. 2,70,000).

7 (a) 5 Marks
Duties & Powers of Anti-profiteering committee-Section 171(3)
The Authority referred to in sub-section (2) shall exercise such powers and discharge such functions as
may be prescribed.
The Authority can determine the methodology and procedure for determination as to whether the reduction
in the rate of tax on the supply of goods or services or the benefit of input tax credit has been passed on by
the registered person to the recipient by way of commensurate reduction in prices.
The Authority would have the following duties:
(i) to determine whether any reduction in the rate of tax on any supply of goods or services or the
benefit of input tax credit has been passed on to the recipient by way of commensurate
reduction in prices;
(ii) to identify the registered person who has not passed on the benefit of reduction in the rate of tax
on supply of goods or services or the benefit of input tax credit to the recipient by way of
commensurate reduction in prices;
(iii) to order,
 reduction in prices;
 return to the recipient, an amount equivalent to the amount not passed on by way of commensurate
reduction in prices along with interest at the rate of eighteen per cent. from the date of collection of
the higher amount till the date of the return of such amount or recovery of the amount not returned,

5
 as the case may be, in case the eligible person does not claim return of the amount or is not
identifiable, and depositing the same in the Consumer Welfare Fund;
 imposition of penalty; and
 Cancellation of registration.

7 (b)
(i) Deemed Credit provisions applies only if the following conditions are satisfied: 5 Marks
i. Such goods were not wholly exempt from duty of excise or were not nil rated.
ii. The registered person should have the document for procurement of these goods (e.g. he should
possess purchase invoices/bills/challan etc).
iii. A registered person availing this scheme must separately submit the details of stock in hand on 1st
July. The registered person must give details of sales of such goods in the FORM GST TRAN-1 at
the end of each of the six tax periods during which the scheme is in operation.
iv. The amount of credit allowed will be credited to the electronic credit ledger maintained in the
FORM GST PMT-2 on the Common Portal.
v. The stock of goods on which the credit is availed must be easily identified by the registered person
and must be stored accordingly.
(ii) What are the salient features of the GSTIN? 4 Marks

1) GSTIN, known as GST Identification Number, is assigned to every GST registered person.
Before GST was implemented, all dealers registered under the state VAT law were assigned a
unique TIN number by the respective state tax authorities. Similarly, service providers were
assigned a service tax registration number by the Central Board of Indirect taxes and Custom
(CBIC).
Under the GST regime, all registered taxpayers are consolidated into one single platform for
compliance and administration purposes and are assigned registration under a single authority.
Every business operating in a state or Union territory will be assigned a unique Goods and Services
Tax Identification Number, popularly known as GSTIN.

2) Structure of GSTIN
Each taxpayer is assigned a state-wise PAN-based 15-digit Goods and Services Taxpayer
Identification Number (GSTIN).
Here is a format break-down of the GSTIN:
The first two digits represent the state code as per Indian Census 2011. Every state has a unique
code. For instance,
State code of Karnataka is 29
State code of Delhi is 07
The next ten digits will be the PAN number of the taxpayer
The thirteenth digit will be assigned based on the number of registration within a state
The fourteenth digit will be “Z” by default
The last digit will be for check code. It may be an alphabet or a number.
3) How to apply for GSTIN?
It is part of the GST Registration process. Once the application is approved by the GST officer, a
unique GSTIN is allocated to the dealer.

6
 There are two ways to register for GST:
Via GST Online Portal or
Via GST Seva Kendra set up by Government of India
The following details are required to apply for GST :
1. Valid permanent account number (PAN)
2. Valid Indian Mobile phone number
3. Valid e-mail address
4. Prescribed documents and information
5. Place of business
6. Jurisdiction details
7. Valid bank account number from India
8. Indian Financial System Code (IFSC) number of the same bank and branch
9. At least one proprietor / partner / director / trustee / karta / member / with corresponding pan
10. An authorized signatory who is resident of India with valid details including PAN

Section – B

Answer Question No.8 which is compulsory and any two from the rest of this section.

8. Choose the correct answer with justification/workings wherever applicable. 2X3 = 6 Marks
(i) - (D)
(ii) - (C)
(iii) - (B)

9. (a) 4 Marks
Board of Trade has been constituted to advise Government on Policy measures like:
• Improve exports,
• Review export performance,
• Review policy and procedures for import and exports and
• Examine issues relevant for promotion of India‟s foreign trade.
Commerce and Industry Minister will be the Chairman of the BOT. Government shall also nominate up to
25persons. Board of Trade will meet at least once every quarter.

9 (b) 8 Marks
Assessable value (in INR) = ` 15,16,929

10 (a) 8 Marks

(i) False
(ii) False
(iii) False .
(iv) True

7
10 (b) 4 Marks
Features of the Risk Management System:
• The Risk Management System replaces the existing system of concurrent audit and replaced by a Post
Clearance Compliance Verification (Audit) function.
• This system provides the special Customs clearance for Accredited Clients. (Accredited Client means
importer whose value of imports during the previous financial year Rs.10 crores or paid duty more than
Rs.1 crore).
• This system applies only to those importers whose track record is good for the last 3 financial years.
• The RMS is intended to improve the management of the resources of the department to enhance the
efficiency and effectiveness in meeting stakeholder expectations and to bring the Customs processes at
par with the best international practices.

11 (a) 6 Marks
In this case the bank guarantee was for the purpose of security for fulfilment of export obligation. It cannot
be construed as payment of „duty‟. As section 27 applies only to refund of duty and not to refund of other
amounts, the time bar under the said section cannot be invoked to deny the refund.
The facts of given case are similar to the facts of CC us. (Exports) v. Raj Exports (P) Ltd. 2007 (217) ELT
504 (Mad.). The High Court, in the instant case, held that furnishing of bank guarantee for export
obligation could not be regarded as payment of duty; therefore time-bar was not applicable for its return.
The High Court relied on the Supreme Court‟s ruling in the case of Oswal Agro Mills Ltd. and Another v.
Asstt. Collector of Central Excise 1994 (70) ELT 48 (SC), wherein it was held that furnishing of bank
guarantee pursuant to an order of the Court would not be equivalent to payment of excise duty. The
furnishing of bank guarantee is only a security to safeguard the interest of the Revenue. Since section 27
governs the refund of „duty‟, and the bank guarantee is not „duty‟, the limitation prescribed therein for
refund of duty would not apply to refund of a bank guarantee.
Applying the principle laid down in the above said case, the High Court stated that the requirement to
establish that the duty incidence had not been passed on by the assessee to any other person would also not
get attracted since section 27 has no application to this case. Therefore, the stand of the Department is not
correct in law.

11 (b) 6 Marks
Export Promotion Capital Goods Scheme (EPCG) permits exporters to procure capital goods at
concessional rate of customs duty/zero customs duty. In return, exporter is under an obligation to fulfill the
export obligation. Export obligation means obligation to export product(s) covered by
Authorization/permission in terms of quantity or value or both, as may be prescribed/specified by Regional
or competent authority.
Exports to SEZ unit/developer/co-developer will be considered for discharge of export obligation of EPCG
Authorization, irrespective of currency.
The license holder can either procure the capital goods (whether used for pre-production, production or
postproduction) from global market or domestic market. The capital goods can also be imported in CKD/
SKD to be assembled in India.
An EPCG Authorization can also be issued for import of capital goods under Scheme for Project Imports‟.
Export obligation for such EPCG Authorizations would be 6 times of duty saved.

8
 Duty saved amount ₹
Effective duty under Project Imports XXXX

Less: Concessional duty under the EPCG Scheme (XXX)

Duty Saved amount XXXX

However, import of capital goods is subject to „Actual User‟ condition till export obligation is completed.
Therefore, based on the above discussion, Atlas Pvt. Ltd. can import the capital goods under EPCG
Scheme. However, it has to make sure that it does not sell the capital goods till the export obligation is
completed.

_______________________

9
 SUGGESTED ANSWERS TO QUESTIONS
FINAL EXAMINATION
GROUP – IV
(SYLLABUS 2016)
DECEMBER – 2021
Paper-18 : INDIRECT TAX LAWS AND PRACTICE
Time Allowed : 3 Hours Full Marks : 100

Section : A MCQ 20X1 = 20 Marks

Q.1 Which of the following activity is taxable under GST?

(i) Supply of food by a hospital to patients (not admitted) or their attendants or Visitors.
(ii) Transportation of passengers by non-air-conditioned railways
(iii) Services by a brand ambassador by way of folk-dance performance whereconsideration charged is Rs. 1,40,000.
(iv) Transportation of agriculture produce by air from one place to another place in India
(v) Services by way of loading, unloading, packing, storage or warehousing of rice
(vi) Service provided by GTA where consideration charged for transportation of goodsfor a single carriage is Rs. 900
Ans 1. (i), (v), (vi)
2. (iv), (v)
3. (iii), (iv), (v)
4. (i), (iii), (iv)

Q.2 Mahesh is employed in Zed Traders a proprietary concern of Kumar having taxable turnover under GST. Services
provided by Mahesh will be taxable if
Ans 1. Mahesh provides them on regular basis to Zed Traders.
2. None of these
3. Mahesh provides them to the brother of Kumar, not in the course of employment.
4. Mahesh provides them on contract basis to Zed Traders.

Q.3

Ans 1. Mixed supply, Highest tax rate applicable to split air conditioner, i.e., 28%
2. Supply other than composite and mixed supply, Highest tax rate applicable to split airconditioner i.e., 28%
3. Supply other than composite and mixed supply, respective tax rate applicable toeach item
4. Composite supply, Highest tax rate applicable to split air conditioner, i.e., 28%
 Q.4 State whether the following statements are true or false:
1 Zero rated supply means supply of any goods or services or both which attracts nilrate of tax.
2 Exempt supply means export of goods or services or both, or supply of goods or services or both to a Special Economic
Zone developer or a Special Economic Zoneunit.
3 Non-taxable supply means supply of goods or services or both which is not leviable to tax under CGST Act, 2017 but
leviable to tax under the Integrated Goods and Services Tax Act, 2017.
4 ITC may be availed for making zero rated supply of exempt goods.
Ans 1. False, False, False, False
2. False, False, False, True
3. True, True, False, False
4. True, False, False, False

Q.5 Which of the following statements is correct while issuing a tax invoice?

(i) Place of supply in case of inter-State supply is not required to be mentioned

(ii) The power of attorney holder can sign the tax invoice in case the taxpayer or his authorized representative has been
travelling abroad
(iii) Quantity is not required to be mentioned in case of goods when goods are sold on“as is where is basis”
(iv) Description of goods is not required to be given in case of mixed supply of goods
Ans 1. All of the above
2. (ii), (iii)
3. (i), (ii), (iii)
4. None of these

Q.6 Anti-Dumping duly is calculated as

Ans 1. Higher of export price or normal value;
2. Higher of margin of dumping or injury margin;
3. Lower of margin of dumping or injury margin:
4. Lower of export price or normal value

Q.7 What would be the tax rate applicable in case of composite supply?
Ans 1. Tax rate as applicable on respective supply
2. Tax rate of the principal supply or ancillary supply whichever is higher
3. Tax rate as applicable on ancillary supply
4. Tax rate as applicable on principal supply

Q.8 Read the following and choose the correct option:

(i) Indian customs waters extend up to 12 nautical miles:

(ii) Indian customs waters extend up to 24 nautical miles:
(iii) Indian customs waters extend up to exclusive economic zone of India;
(iv) Indian customs waters include territorial waters and extend up to 200 nauticalmiles.
Ans 1. (iii) and (iv)
2. (ii) and (iv)
3. Only (ii)
4. Only (iv)

Q.9 The term „casual taxable person‟ includes

Ans 1. a person occasionally supplying goods or services or both in a State or an Union Territory where-he-has
no fixed place-of-business.
2. None of these
3. a person occasionally supplying goods or services or both in a State or an Union Territory where he has fixed
place of business.
4. Both
 Q.10 Mr. A, a sole proprietor, has to appear before the Appellate Authority. He decides to appear by an authorized
representative. Which of the following persons can be appointed as „authorized representative‟ of Mr. A under GST law?
Ans 1. Sohan, his son, who has been dismissed from a government service lately,
2. All of these.
3. Mukul, a practicing High Court advocate.
4. Rohan, a Company Secretary, who has been adjudged insolvent.

Q.11 Sukanya, a registered supplier, failed to pay the GST amounting to Rs. 5,000 for the month of January, 20XX. The
proper officer imposed a penalty on Sukanya for failure to pay tax. Sukanya believes that itis a minor breach and in
accordance with the provisions of section 126 of the CGST Act, 2017, no penalty is imposable for minor breaches of tax
regulations. In this regard, which of the following statements is true?
Ans 1. Penalty is leviable on Sukanya since the breach is considered as a „minor breach‟ only if amount of tax involved is
Nil.
2. Penalty is not leviable on Sukanya since the breach is considered as a „minor breach‟ if amount of tax involved is up to
Rs. 5,000
3. Penalty is leviable on Sukanya since the breach is considered as a 'minor breach‟ only if amount of tax involved is less
than Rs. 5,000
4. None of these.

Q.12 M/s. Raman Plastics is a manufacturer of plastic toys. It is registered person under GST in Shimla, Himachal Pradesh.
It procures its raw materials from Punjab. During the month of April-2019, it purchased material of Rs. 35.00 Lakh and paid
IGST thereon amounting to Rs. 6.30 Lakh. It supplied 30% of its production in the State of Jammu and Kashmir, whereas
the 70% of is production was supplied taxable @ 0.1% to a merchant exporter during the monthof Apr-2019.
The returns for the month of April 2019 were duly filed in time. The last date upto which the taxpayer can claim refund of
input tax credit on account of inverted dutystructure is
Ans 1. 20-Apr-2021
2. 31-Mar-2022
3. 20-May-2021
4. 20-Apr-2020

Q.13 Manu imported some goods in India, but kept the goods in custom bonded warehouse without clearing it for home
consumption. In the meantime, Manu sold these goods to Sirak while they were in warehouse. The transaction is a
Ans 1. Supply of services.
2. Zero rated supply
3. Supply of goods.
4. Neither supply of goods nor supply of services.

Q.14 State which of the following statement is incorrect:

(i) An agent, supplying goods on behalf of principal where invoice is issued in the name of principal, is required to get
compulsorily registered under GST.
(ii) Persons who are required to deduct tax under section 51, whether or not separately registered under this Act are
compulsory required to get registered under GST withoutany threshold.
(iii) Every person supplying online information and database access or retrieval services from a place outside India to a
registered person in India is compulsoryrequired to get registered under GST without any threshold.
(iv) Persons who supply services. other than supplies specified under sub-section (5) of section 9, through such electronic
commerce operator who is required to collect tax all source under section 52 are compulsory required to get registered
under GST without any threshold.
Ans 1. (i), (ii)
2. None of these
3. (iii), (iv)
4. (i), (iii), (iv)
 Q.15 Countervailing duty under section 9 of the Customs Tariff Act shall not be leviedunless it is determined that:
(i) Subsidy relates to export performance:
(ii) Subsidy relates to use of domestic goods over imported goods in export article:
(iii) Subsidy is conferred on all persons engaged in the manufacture of export article.
Ans 1. (ii) and (iii)
2. All of above
3. (i) and (ii)
4. Only (iii)

Q.16 M/s. Shahrukh Beedi Company (P) Ltd. is a manufacturer of cigarettes. It has been registered under GST in the State
of West Bengal. The turnover of the company from the period April 2018 to March 2019 is Rs. 90,00,000/-. The Excise duly
paid on the cigarettes removed is Rs. 10,00,000/-. CGST and SGST paid on the cigarettes is Rs. 18,00,000/-.
The company also recovered actual freight of Rs. 5,00,000/- on the supply of cigarettes so made during the financial year
2018-19 and charged CGST/ SGST thereon. The company paid RCM @ 5% while availing the services of GTA of Rs.
5,00,000/-.
Compute the aggregate turnover of M/s, Shahrukh Beedi Company (P) Ltd.,
Ans 1. Rs. 1,18,00,000/-
2. Rs. 1,00,00,000/-
3. Rs. 90,00,000/-
4. Rs. 1,05,00,000/-

Q.17 The taxable event under the Customs Act, 1962 is:
Ans 1. Sale of goods into India/ Sale of goods outside India:
2. Manufacture of goods into India for supply outside India.
3. Import of goods into India/ export of goods from India;
4. Supply of goods into India/ Supply of goods from India to outside India:

Q.18 Which of the following statement(s) is/are correct?

(i) Special exemption under section 25 of the Customs Act is granted by issuing anotification;
(ii) General exemption under section 25 of the Customs Act is granted by issuing anorder:
(iii) Special exemption is required to be published in official gazette:
(iv) General exemption is not required to be published in official gazette.
Ans 1. Both (i) and (ii)
2. All of above
3. None of above
4. (ii) and (iv)

Q.19 Aflatoon Spares (P) Ltd., located and registered in Haryana, supplied spare parts (FOBbasis) to Mr. Laxmi Khurana, an
unregistered person, located in Rajasthan. Mr. Laxmi Khurana booked the courier himself with Black Dart Courier (P) Ltd.,
registered in Delhi for delivery in Rajasthan, Black Dart Courier (P) Ltd. picked up the goods from Haryana and delivered
the courier in Rajasthan while passing through the State of Uttar Pradesh.
Determine the place of supply of service provided by Black Dart Courier (P} Lid. to Mr.Laxmi Khurana:
Ans 1. Delhi
2. Rajasthan
3. Uttar Pradesh
4. Haryana

Q.20 Banke Bihari (Pedewala), is a famous sweets manufacturer, located and registered in Mathura, Uttar Pradesh. He
received an order for 200 Kg. of sweets on 2nd May 2019 from M/s. Ghoomghoom Travels (P) Ltd., located and registered
in same locality of Mathura for a total consideration of Rs. 1,00,000/-. All 200 Kg. sweets were delivered to M/s.
Ghoomghoom Travels (P) Ltd. on 5th May 2019, but without invoice, as accountant of Mr. Banke Bihari was on leave on
that day. However, the invoice was raised for the same on 6th May 2019, when the accountant joined the office after leave.
Payment in full was made on 7th May 2019.
Determine the time of supply of goods in this case.
Ans 1. 5th May 2019
2. 7th May 2019
3. 2nd May 2019
4. 6th May 2019
 Section : B SAQ 20X1 = 20 Marks

Q.1 Sheva Charitable trust running a hospital Prana Ltd. by hiring visiting doctors/specialists provides medical services to
patients at a concessional rate charged by hospital for Rs. 3,50,000 and paid to visiting doctors/specialists Rs. 3,00,000.
The tax liability of Prana Ltd. for the retention amount of Rs.50,000 if applicable rate of GST is 18% is .
Answer: Nil

Q.2 can be the Chairperson of the GST council.

Answer: Union Finance Minister

Q.3 Presentation of Bill of entry to the proper officer (is/is not) a taxable event for the purposes of the Customs Act,
1962.

Answer: Is not.

Q.4 Casual taxable person or Non-resident tax payable will get a for making an advance deposit of tax which shall be
credited to his electronic cashledger.

Answer: Temporary Reference Number(TRN)

Q.5 The registration of Sun Associates was cancelled by the proper officer on 1st August 2020, applied for revocation of
cancellation of registration for which revocation order was passed on 31st October 2020. In this case, Sun Associates shall
be required to furnish all the returns for the period from 1st August 2020
to 31st October 2020 within .

Answer: 30th November 2020, [i.e. within a period of 30 days from 31st October 2020].

Q.6 The operator who collects tax shall furnish a statement, electronically Outward supplies of Goods and Services and
Return of goods and services in Form
within the permitted time.

Answer: Form GSTR-8

Q.7 Susan Pvt. Ltd is a distributor of lottery tickets, authorized by the state of Kerala. He sold 1,75,000 lottery tickets to
Vikram Bhat with a guarantee payout @ 80%where the number of tickets proposed is 2,00,000. Find the value of supply ifthe
face value of a lottery ticket is Rs. 250 each and notified price by the state is Rs. 210 each. .

Answer: Rs. 3,67,50,000

Q.8 As per Rule of 50 of CGST Act, 2017 if at the time of receipt of advance the rateof tax is not determinable, the tax may be
paid at .

Answer : 18%

Q.9 In case ship-to State is different from the Bill-to State, the tax components areentered as per the details of the .

Answer: Bill to person (Bill to state)

Q.10 Where imported goods are damaged partially before cleared from the bondedwarehouse, the customs duty payable is
(Nil/partial)

Answer :Nil
Q.11 With reference to the provisions of Foreign Trade Policy 2009-14, discuss, giving reasons, whether the following
statements are true or false:
Waste generated during manufacture in an SEZ Unit can be freely disposed in DTA on payment of applicable customs duty,
without any authorization.
.
Answer: True.

Q.12 In a case where recipient of deemed export supplies claims the refund on suchsupplies, there is no restriction on such
recipient in availing ITC of the tax paidon such supplies is a statement (true/not true)

Answer: True

Q.13 The Municipal corporation of Salem deducts CGST @ 1% from the payment to be made to a notified supplier on 28th
August 2020. The TDS certificate for thetransaction has to be issued on or before .

Answer: 15th of September 2020

Q.14 The applications/ documents/ forms pertaining to refund claims in GST onaccount of shall be filed and
processed manually.

Answer: zero-rated supplies

Q.15 For Assam, the threshold limit for GST registration is .

Answer: Rs. 20 lakhs for services and Rs.40 lakhs for persons engaged exclusively in intra-state supply of goods.

Q.16 Mr. Prem supplied goods to Mr. Janak for Rs. 1,50,000 plus GST 18%, vide Invoice No. 50 dated 23rd December 2020.
Mr.Janak availed the ITC of Rs. 27,000 and confirmed in GSTR-2. However, invoice no. 50 dated 23rd December 2020 was
not reflected in GSTR-1, matching will takes through common portal of GSTN for Mr. Prem on .

Answer: 20th January 2021

Q.17 The Commissioner can allow payment of GST with interest by defaulter in monthly installments not exceeding
installments.

Answer: 24

Q.18 Mr. Rithvik a registered taxable person, was paying tax at composition scheme upto 30th August 2020. However, w.e.f.
31st August, 2020 Mr. Rithvik becomes liable to pay tax under regular scheme. If Input as on 30th August 2020 is Rs.
5,66,400 (inclusive of GST 18% ) and capital goods purchased for Rs. 7,60,000 (invoice date 25th July 2020, GST @12% ), the
eligible ITC to Mr. Rithvik is
.
Answer: Rs. 1,54,800

Q.19 If the amount of pre-deposit becomes refundable to the assessee, he is required to file the refund claim within a period
of .
Answer: 2 Years from the date of receipt of the order

Q.20 E-way bill generation facility of a person paying tax under regular scheme will be blocked if he has not furnished the
returns for a consecutive period of
.
Answer : 2 Tax Periods
 Section C
(4X12 = 48 Marks)
One Laq

7 Marks
Q.1 Radhey and Co. is engaged in the supply of engine oil in Maharashtra and it also supplies petroleum in Mizoram. Its
turnover in the current financial year is Rs.33 lakhs in Maharashtra and Rs. 9 lakhs in Mizoram.
(i) Whether Radhey and Co. is liable to registration in Maharashtra andMizoram?
(ii) What would be your answer, keeping all same if Radhey and Co. is engaged in supply of engine oil and the turnover for
current FY is Rs. 11 lakhs in Mizoram?
(iii) If they are liable to be registered, describe the time limit within which properofficer shall approve the grant of registration.
Answer :
(i) In the given case, since the aggregate turnover of Radhey and Co. exceeds the applicable threshold limit of Rs.
40 lakh, it is liable to obtain registration. It will obtain registration in Maharashtra, but it is not required to obtain
registration in Mizoram as he is not making any taxable supplies from that state.
(ii) Since Radhey and Co. is engaged in the supply of engine oil which is a taxable supply from a special category
state as per section 22, the applicable threshold limit for him gets reduced to Rs.10 lakh. Further, Radhey and
Co. is liable to get registered under GST in both Maharashtra and Mizoram on his aggregate turnover crossing
the threshold limit of Rs.10 lakh.
(iii) The time limit for approving the grant of registration to the applicant by the proper officer if the application and
accompanying documents are found to be in order has been increased from 3 working days to 7 working days
from the date of submission of application for registration [Rule 9(1)].
Further, the time limit for grant of registration after physical verification of the place of business of a person who
fails to undergo the Aadhaar authentication/does not opt for Aadhaar authentication has been reduced to 30 days
from 60 days.

5 Marks
Q.2 Vamsi Pvt. Ltd. registered in Banaras, Uttar Pradesh is engaged in the supply of taxable goods and services. In
March 2021, it sold goods worth Rs.9,00,000 to Girish Enterprises and collected tax @18% on the said goods from the
buyer. However, theactual tax applicable in the given case was 12%.

Vamsi Pvt. Ltd. deposited the tax @12% on these to the government on the due date and retaining the remaining tax
collected. Determine the amount of penalty, if any, that may be imposed on Vamsi Pvt. Ltd. in the given case ignoring
interest payable, if any.

Answer:
In the given case, Vamsi Pvt. Ltd. has collected tax at a wrong rate (i.e.18%), but fails to deposit the full tax collected
to the government i.e. it deposits only tax @12% thereby retaining the remaining tax collected, the amount of penalty
that can be iimposed on Vamsi Pvt. Ltd. is as follows:

Rs. 10,000
Or
An amount equivalent to the tax evaded [Rs.54,000(9,00,000*18%) - (9,00,000*12%)]
Whichever is higher, i.e. Rs. 54,000 (only the bolded part is sufficient to give marks)
 Two Laq

6 Marks
Q.1 Draco Pvt. Ltd. is a company engaged in refining the crude petroleum into petrol. It also sells crude oil to other similar
companies. On October 2019, it acquired a license for exploration of crude petrol from Punjab by entering into Production
sharing contract (PSC) from government. On March 2020 its research team entered into exploration of crude petroleum and
incurred the following expenses:

Expenses for exploration - Rs. 50 lakhs Expenses incurred for development- Rs. 8 lakhs Expenses incurred for production –
Rs. 70 lakhs Royalty paid – Rs. 15 lakhs

After incurring following expenses, Draco Pvt. Ltd. sold the crude petroleum extracted from Punjab to Marvel Pvt. Ltd of
Delhi for a consideration of Rs. 2 Crores on 1st December 2020. As per PSC, the company is entitled to provide 40% of
“profit petroleum”.

The Board of directors (BOD) of Draco Pvt. Ltd wants to know if GST is payable on “profit petroleum” paid to government.
Compute “profit petroleum” payable paid to government and advice the BOD accordingly.

Answer:

Profit Petroleum = Rs. 57,00,000

Amount payable to government (57,00,000*40%) = Rs. 22,80,000
GST is not payable on share of profit

6 Marks
Q.2 QW imported 2500 units of raw material on 12th August, 2020. Of these, 100 units were damaged whilst in transit in
ship from Colombo, from where they were imported and hence could not be used in the manufacture of final finished
product.
There was an exemption notification which was in force during the time of import., which conferred exemption of specified
raw materials imported from abroad and used in manufacture of final product.
QW seeks your advice whether he can claim the benefit of exemption notification inrespect of the entire 2500 units or only in
respect of the 2400 units of raw materials used in final manufacture?
Advise him suitably.
Answer:
The facts of the case are similar to the case of BPL Display Devices Ltd. v. CCEx., (2004) 174 ELT 5 (SC) wherein the
Supreme Court has held that the benefit of the notifications cannot be denied in respect of goods which are intended for use
for manufacture of the final product but cannot be so used due to shortage or leakage.
The Apex Court has held that no material distinction can be drawn between loss on account of leakage and loss on account
of damage. The benefit of said exemption cannot be denied as inputs were intended for use in the manufacture of final
product but could not be so used due to shortage/leakage/damage. It has been clarified by the Supreme Court that words
“for use” have to be construed to mean “intended for use”.
Therefore, the importer can claim the benefit of the notification in respect of the entire lot of the inputs imported including
those that were damaged in transit.
 Three Laq

Q.1 Madesh is a farmer who has harvested 5 tons of wheat and preserved them in his warehouse on 1st March 2021. The
current price of wheat is Rs.30 per kg. Anticipating the wheat price may go down in upcoming days, he entered into a
contract with a Super market owner to sell 5 tons of wheat after 2 months at Rs.30 per Kg on 1st May 2021. The prevailing
market rate as on 1st May 2021 is Rs.25. Thedocumentation charge of Rs.5000 is charged by Madesh. Rate of GST is 5%.
(i) What is amount of GST payable if the wheat is sold for Rs.30 per Kg and the same is paid to Madesh on 1st May 2021 by
actual delivery of goods to supermarket premises?
(ii) What is the amount of GST to be paid if other things being same, what is the implication if the differential amount of Rs.5 per
kg(difference between contract price and prevailing market rate) is paid to Madesh on settlement date without actual
delivery?
6 Marks

Answer:
(i) GST payable = Rs. 7,750

(ii) GST payable = Rs. 250

Q.2 Kiku shopping, an ECO does not provide invoicing solution to its sellers. The invoice is generated by sellers and
received by the buyer without ECO getting to know about it. The payment flows through the ECO. In such cases, on what
value isTCS to be collected? Can TCS be collected on the entire value of the transaction?
3 Marks
Answer:
Section 52(1) of the CGST Act, 2017 mandates that TCS is to be collected on the net taxable value of such supplies in
respect of which the ECO collects the consideration. The amount collected should be duly reported in GSTR-8 and
remitted to the Government. Any such amount collected will be available to the concerned supplier as credit in his
electronic cash ledger.

Q.3 A bill of entry was presented on 30th December, 2020. The vessel carrying goods arrived on 5th January, 2021. Entry
inwards was granted on 10th January, 2021 and the bill of entry was assessed on that date and was also returned to the
importer for payment of duty on that date. The duty amounting to Rs. 3,75,000 was paid by the importer on 21st January,
2021.
Calculate the amount of interest payable under section 47(2) of the Customs Act, 1962, given that there were five holidays
during the period from 11th January, 2021to 20th January, 2021.
3 Marks
Answer:
Interest = Rs.1,079 or Rs. 1,078.76
 Four Laq

Q.1 Examine the implications as regards the bailability and the quantum of punishment on prosecution, in respect of the
following cases pertaining to the month of August2021 under CGST Act, 2017

(i) P collects Rs.290 lakh as tax from its clients and deposits Rs. 280 lakh with the Central government. It is found that he had
falsified financial records and has notmaintained proper records.
(ii) R collects Rs. 560 lakh as tax from clients but deposits only Rs. 30 lakh with theCentral government.
(iii) What will be the implications with regard to punishment on prosecution of „P‟ and „R‟ for the offences? What would be the
position, if „P‟ and „R‟ repeat the offences?
7 Marks
Answer:
(i) As per section 132(1)(d)(iii) of the CGST Act, 2017 failure to pay any amount collected as tax beyond 3 months
from the due date of payment is punishable with specified imprisonment and fine provided the amount of tax
evaded exceeds Rs. 100 lakh. Therefore, the failure to deposit Rs.10 lakh collected as tax will not be punishable
with imprisonment.
Further, falsification of financial records by „P‟ is punishable with imprisonment up to 6 months or with a fine or
both vide section 132(1)(f)(iv) of the CGST Act, 2017 assuming that the falsification of records is with an intention
to evade payment of tax due under the CGST Act, 2017.
(ii) Failure to pay any amount collected as tax beyond 3 months from due date is punishable with imprisonment up to
5 years and with fine, if the amount of tax evaded exceeds Rs. 500 lakh in terms of section 132(1)(d)(i) of the
CGST Act, 2017.
Since the amount of tax evaded by „R‟ exceeds Rs. 500 lakh, i.e. Rs.530 lakh(Rs.560-30), „R‟ is liable to
imprisonment upto 5 years and with fine. It has been assumed that amount of Rs. 530 lakh collected as tax is not
paid to the government beyond 3 months from the due date of payment of tax. Further, the imprisonment shall be
minimum of 6 months in the absence of special and adequate reasons to the contrary to be recorded in the
judgement vide Section 132(3) of the CGST Act, 2017. Such offence is non-bailable in terms of section 132(5) of
the CGST Act, 2017.
(iii) If „P‟ and „R‟ repeat the offence, they shall be punishable for second and for every subsequent offence with
imprisonment up to 5 years and with fine in terms of Section 132(2) of the CGST Act, 2017. Such imprisonment
shall also be minimum 6 months in the absence of special and adequate reasons to the contrary to be recorded in
the judgment.

5 Marks
Q.2 State the compliance with the Dynamic QR Code requirements in certain cases:
Case-I: If a supplier provides/ displays Dynamic QR Code, but the customer opts to make payment without using Dynamic
QR Code, and supplier provides the cross reference of such payment made without use of Dynamic QR Code, on the
invoice. (3 Marks)
Case-II: If a supplier makes available to customers an electronic mode of payment, where though Dynamic QR Code is not
displayed, but the details of merchant as well as transaction are displayed/ captured otherwise. (2 Marks)

Answer:
Case1: In cases where the supplier, has digitally displayed the Dynamic QR Code and the customer pays for the invoice: -
using any mode like UPI, credit/ debit card or online banking or cash or combination of various modes of payment, without
using Dynamic QR Code, and the supplier provides a cross reference of the payment (transaction id along with date, time
and amount of payment, mode of payment like UPI, Credit card, Debit card, online banking etc.) on the invoice; or in cash,
without using Dynamic QR Code and the supplier provides a cross reference of the amount paid in cash, along with date of
such payment on the invoice; said invoice shall be deemed to have complied with the requirement of having Dynamic QR
Code
Case2: In such cases, if the cross reference of the payment made using such electronic modes of payment is made on the
invoice, the invoice shall be deemed to comply with the requirement of Dynamic QR Code.
However, if payment is made after generation/ issuance of invoice, the supplier shall provide Dynamic QR Code on the
invoice.
 Five Laq

Q.1 The aggregate turnover of Sangri Services Ltd. Delhi exceeded Rs. 20 lakhs on 12% 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.
6 Marks
Answer:
A5 per section 25 read with COST 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) tilt 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.

Q.2 6 Marks

Answer:

Total customs duty payable = Rs. 17,37,600

 Six LAQ
(4X3 = 12 Marks)
Q.1 Write short note on the payment of tax under Quarterly Return filing & Monthlypayment of Taxes scheme (QRMP).
Answer: 3 Marks
Registered persons need to pay tax due in each of first two months (by 25th of next month) in the quarter, by selecting
“Monthly payment for quarterly taxpayer” as reason for generating Challan.
Registered persons can either use Fixed Sum Method (pre-filled challan) or Self-Assessment Method (actual tax due), for
monthly payment of tax for first two months, after adjusting ITC.
No deposit is required for the month, if there is nil tax liability. Tax deposited for first 02 months can be used for adjusting
liability for the quarter in Form GSTR-3B and can‟t be used for any other purpose till the filing of return for the quarter.

Q.2 Write short note on the circumstances when the proper officer can authorize „arrest‟of any person under the CGST Act.
Answer: 3 Marks
Section 69 deals with power of arrest when one commits any of the following offences which is punishable under clause (i)
or (ii) of sub-section (1), or under sub-section (2) of sec 132 of CGST Act. The commissioner of CGST can authorize a
CGST officer to arrest a person if he has reasons to believe that the person has committed an offence attracting
punishment prescribed under Section 131(1)(a), (b), (c), (d) or section 132(2). The offences that are punishable under
section 132 are as follows: (a) Supplies any goods or services or both without issue of invoice with the intention to evade
tax
(b) Issues any invoice or bill without supplies leading to wrongful availment or utilisation of input tax credit or refund of tax
(c) Avails input tax credit using invoice or bill referred to in b) above
(d) Collects any amount as tax but fails to pay the same beyond the period of 3 months from the due date
Section 132(1) clause (i) tax evasion above Rs.500 Lakhs attracting imprisonment for a term upto 5 years and fine, or
clause (ii) tax evasion above Rs.200 Lakhs attracting imprisonment upto 3 years and fine or offence orsection 132(2)
[repeated offence – second and subsequent offence attracting imprisonment upto 5 years with fine]
Thus, it means that a person can only be arrested only when there is a tax evasion is more than Rs. 2 crores and the
offences are specified offences as mentioned above. However, such monetary limit shall not be applicable if the offences
are committed again.

Q.3 Write short note on the conditions to be satisfied to take credit under section 140(6)of CGST Act, 2017.
3 Marks
Answer : (i) Such inputs are used or intended to be used for making taxable supplies under this Act;
(ii) The registered person not opted to pay tax under composition levy (Sec 10.)
(iii) The said registered person is eligible for input tax credit on such inputs under this Act;
The said registered person is in possession of invoice evidencing payment of duty under existing law (C.Ex., S.T., CVD, Spl.
CVD., VAT or Entry tax) in respect of inputs; and Such invoice not earlier than 12 months as on 30-6-2017.

Q.4 Write short note on List of items for which special classification is used instead ofHSN system. 3 Marks
Answer: Though most of goods are classified as per the above system of HSN, special classification is used in certain
cases like the following
(i) All goods imported under “project imports-98.01”
(ii) All laboratory chemicals in packs less than 500 gms or 500 ml -98.021
(iii) All baggage of passengers or member of crew-98.03
(iv) Goods for personal use imported by post or air-98.04
(v) Stores on board of vessel or aircraft-98.05
These goods will be classified in these headings, irrespective of actual classification as per the Customs Tariff.

Q.5 Write short note on Licencing of Special Warehousing as per section 2 (43) of TheCustoms Act, 1962.
3 Marks
Answer: Section 58A (1): The Principal Commissioner of Customs or Commissioner of Customs may, subject to such
conditions as may be prescribed, license a special warehouse wherein dutiable goods may be deposited and such
warehouse shall be caused to be locked by the proper officer and no person shall enter the warehouse or remove any
goods therefrom without the permission of the proper officer.
Section 58A (2): The Board may, by notification in the Official Gazette, specify the class of goods which shall be deposited
in the special warehouse licensed under sub-section (1). Consequently, CBEC, vide Notification No. 66/2016 Cus (NT)
dated 14.05.2016 has notified the following class of goods which shall be deposited in a special warehouse:
gold, silver, other precious metals and semi-precious metals and articles thereof;
goods warehoused for the purpose of:
supply to DFS (Duty Free Shops) in a customs area;
supply as stores to vessels/aircrafts under Chapter XI of the Customs Act, 1962;
supply to foreign privileged persons in terms of the Foreign Privileged Persons (Regulation of Customs Privileges) Rules,
1957.
 Section : D Case Study Question

Q.1 Mr. Keshav Sai Krishna has a proprietorship firm in the name of Krishna & Sons in Mumbai. The firm, registered under
GST in the State of Maharashtra, manufactures three taxable products „A‟, „B‟ and „C‟. Tax on „B‟ is payable under reverse
charge. The firm also provides taxable consultancy services.
4+4+4 =12 Marks
The firm has provided the following details for a tax period

With the help of the above-mentioned information, compute the:

(i) GST payable on outward supply.
(ii) Computation of ITC available in the Electronic Credit Ledger.
(iii) Net GST liability payable from Electronic Credit Ledger and/or Electronic Cash Ledger of Krishna & Sons, for the tax
period.
Note: Assume that rate of GST on goods and services are 12% and 18% respectively (Ignore CGST, SGST or IGST for the
sake of simplicity). Subject to the information given above, assume that all the other conditions necessary for availing ITC
have been fulfilled. Turnover of Krishna & Sons was Rs. 1,20,00,000 in the previous financial year

Answer:
(i) Total GST payable on outward supply = Rs. 5,01,600
(ii) Net ITC available = Rs. 2,81,695
(iii) Total GST paid from Electronic Cash Ledger = Rs. 3,18,905
 Suggested Answers_Syl2016_Deccember2019_Paper 18

FINAL EXAMINATION
GROUP - IV
(SYLLABUS 2016)

SUGGESTED ANSWERS TO QUESTIONS

DECEMBER - 2019
Paper-18 : INDIRECT TAX LAWS AND PRACTICE
Time Allowed : 3 Hours Full Marks : 100

The figures in the margin on the right side indicate full marks.
Wherever necessary, you may make suitable assumptions and state them clearly in your answer.
Working notes should form part of the answer.

Section – A
Answer Question No. 1 which is compulsory and any four from the rest of this section.

1. Choose the correct answer with justification/workings wherever applicable: 2×7=14

(i) The term ‘casual taxable person’ includes

(A) A person occasionally supplying goods or services or both in a State or an Union
Territory where he has no fixed place of business.
(B) A person occasionally supplying goods or services or both in a State or an Union Territory
where he has fixed place of business.
(C) Both (A) and (B)
(D) None of the above

(ii) Mahesh is employed in Zed Traders a proprietary concern of Kumar having taxable
turnover under GST. Services provided by Mahesh will be taxable if
(A) Mahesh provides them on contract basis to Zed Traders.
(B) Mahesh provides them on regular basis to Zed Traders.
(C) Mahesh provides them to the brother of Kumar, not in the course of employment.
(D) None of the above.

(iii) What would be the tax rate applicable in case of composite supply?
(A) Tax rate as applicable on principal supply.
(B) Tax rate as applicable on ancillary supply.
(C) Tax rate as applicable on respective supply.
(D) Tax rate of the principle supply or ancillary supply whichever is higher

(iv) What are the supplies on which reverse charge mechanism would apply?
(A) Notified categories of goods or services or both under Section 9(3).
(B) Inward supply of goods or services or both from an unregistered dealer under
9(4).
(C) Both of (A) and (B).
(D) None of the above.

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(v) Which one of the following is exempted from GST?

(A) Any business exhibition
(B) A business exhibition in India
(C) A business exhibition outside India
(D) None of the above

(vi) What is date of receipt of payment?

(A) Date of entry in the books
(B) Date of payment credited into bank account
(C) Earlier of (A) and (B)
(D) Date of filing of return

(vii)Time limit to pay the value of supply with taxes to avail the input tax credit is
(A) Three months
(B) Six months
(C) One hundred and eighty days
(D) Till the date of filing annual return or 30th September of following year whichever is
earlier.

Answer:

1.
(i) (A) A person occasionally supplying goods or services or both in a State or an
Union territory where he has no fixed place of business.
(ii) (C) Mahesh provides them to the brother of Kumar, not in the course of
employment. Supply includes services provided by the employees to the
employer, not in the course of employment.
(iii) (A) Tax rate as applicable to principal supply
(iv) (A) Notified categories of goods or services or both under Section 9(3) as section
9(4) has been deferred presently
(v) (C) A business exhibition outside India
(vi) (C) Earlier of (a) and (b)
(vii) (C) One hundred and eighty days from the date of issue of invoice by supplier

2. In the following cases based on information given and the query, give your comments on
the taxability under GST and the rate of GST applicable, if any: 2×7=14
(i) Space Bazar offers a free bucket with detergent purchased. It is composite supply or
mixed supply? Assume rate of GST for detergent @ 28% and bucket @ 18%.
(ii) Mr. A booked a Rajdhani train ticket, which includes meal. It is composite supply or
mixed supply?
(iii) Mr. Ravi being a dealer in laptops, sold a laptop bag along with the laptop to a
customer, for Rs. 55,000. CGST and SGST for laptop @ 18% and for laptop bag @ 28%.
What would be the rate of tax leviable? Also find the GST liability.
(iv) Renting of vacant land to a stud farm for Rs. 1,50,000. Is it a supply of service? Will GST
be leviable?

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(v) A contract awarded by Kolkata Municipal Corporation (KMC) for repair of a particular
road to M/s B Ltd., with terms and conditions that the entire work should be
completed within 30 days. However, there is a delay of 10 days to complete the work.
KMC charged liquidated damaged of Rs. 1,20,000 and the same recovered from M/s
B Ltd. Applicable rate of CGST 9% and SGST 9%. Previous year turnover of M/s B Ltd.
Rs. 2 crores.
Find the following:
(a) Who is liable to pay GST on what amount?
(b) Total tax liability if any.
(vi) M/s X Ltd. paid penalty under section 49 of the CGST act, 2017, Rs. 2,00,000 to the
Department in the month of October, 2018. Is it taxable under the GST law?
(vii)M/s M & Co. a sole proprietor, is in the business of selling furniture. Its owner took a set
of furniture of furnish his house permanently. Will the transaction be a supply in terms
of GST Act?
Note : ITC on such furniture not availed.

Answer:

2.
(i) This is a mixed supply. These items can be sold separately. Product which has the
higher rate, will apply on the whole mixed bundle. i.e., 28%.
(ii) It is a bundle of supplies. It is composite supply where the products cannot be
sold separately. The transportation of passenger is, therefore, the principal
supply. Rate of tax applicable to the principal supply will be charged to the
whole composite bundle. Therefore, rate of GST applicable to transportation of
passengers by rail will be charged by IRCTC on the booking of Rajdhani ticket.
(iii) If the laptop bag is supplied along with the laptop in the ordinary course of
business, the principal supply is that of the laptop and the bag is an ancillary.
Therefore, it is a composite supply and the rate of tax would be that at
applicable to the laptop. Hence, applicable rate of GST 18% on Rs. 55,000.CGST
is Rs. 4,950 and SGST is Rs. 4,950.
(iv) It is supply of service. GST is liable to be paid.
(v) In the ordinary course it is a supply of service.
However, non performance of contract by the supplier of service in case of
supplies to Government, local authority is covered under exemption.
The fine or penalty chargeable by Government or local authority imposed for
violation of statute, bye-laws, rules or regulations or contract are not leviable to
GST. Hence no liability to GST and no tax liability.
(vi) Such payment is not a supply of service. The fine or penalty chargeable by
Government or local authority imposed for violation of statute, bye-laws, rules or
regulations are not leviable to GST. The penalty of Rs. 2,00,000 is not taxable
under GST law.
(vii) No, the transfer of the furniture by the owner without consideration is not a
supply of goods, because credit is not allowed in case of personal consumption
of business assets under sec 17(5)(g) of CGST Act, and ITC on such furniture is not
availed.

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3. (a) Mr. Lakshminarayanan is a registered supplier in the State of Orissa under the regular
scheme. Following are the details of transaction entered into by him during the half
year ended on 31st March, 2019:
Particulars Amount (Rs.)
Intra-State supplies of product ‘Sun’ (GST rate 12%) 30,00,000
Intra-State supplies of product ‘Moon’ (GST payable by the recipient 10,00,000
under reverse charge)
Export of product ‘Sun’ with payment of GST 5,00,000
Legal services received from an advocate for Product ‘Sun’ 2,00,000
Common inputs used for supplies of above (GST rate 12%) 25,00,000
You are required to determine the net GST liability for the above tax period.

All amounts given above are excluding GST wherever applicable. GST rate on
services is 18%, all conditions for availing the ITC have been complied with. Turnover
during the earlier financial year was Rs. 35 lakhs. 7

(b) Mr. Muktinath, a service provider registered under GST law under the regular scheme,
at Bengaluru (Karnataka), provided taxable service to one of his clients LMN Co. Ltd.,
registered at Mumbai (Maharashtra). The provision of service was completed on
10.09.2018 and credit for payment received was made in the books of Mr. Muktinath
on 11/09/2018.
With effect from 16.09.2018, applicable GST rate was raised from 5% to 12%. The
payment for the service provided was credited in Mr. Muktinath’s bank account on
18.09.2018, and invoice for the same was raised on 23.09.2018.
Mr. Muktinath is of the view that he is liable to pay IGST @ 5% only. However, the
Department took the view that he is liable to pay IGST @ 12%.
Examine the correctness of the rival contentions.
Will your answer be different in the above case if the payment was credited to the
bank account on 14.09.2018 instead of 17.08.2018?

Note: You may assume that all days are working days 7

Answer:

3. (a)
Computation of GST liability
Particulars Amount
(Rs.)
GST on outward supply (Note 1) 3,60,000
GST payable on legal services under reverse charge (Note 3) 36,000
Common credit relating to exempt supply Nil
Total GST liability 3,96,000
Less: ITC (Note 2) (3,00,000 - 66,667) = 2,33,333 2,33,333
Balance GST liability 1,62,667

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Note 1: Computation of GST on outward supply

Particulars Value (Rs.) GST (Rs.)
Intra-State supplies of product “Sun” (GST rate 12%) 30,00,000 3,60,000
Intra-State supplies of product “Moon” (GST payable by 10,00,000 Nil
the recipient under reverse charge)
Export of product “Sun” with payment of GST (export is a 5,00,000 Nil
zero-rated supply)
Total 45,00,000 3,60,000

Note 2: Computation of ITC

Particulars Value (Rs.)
GST on inward supply (Rs. 25,00,000 × 12%) 3,00,000
GST payable on legal services under reverse charge, see note 3 below* Nil
Total ITC as per Electronic credit Ledger 3,00,000
Less: Common credit relating to exempt supply = Rs. 3,00,000 × Rs. 66,667
10,00,000 ÷ Rs. 45,00,000
[Exempt turnover : Rs. 10,00,000; total turnover Rs. 45,00,000]
ITC available 2,33,333

Note 3:
Tax on legal services provided by an advocate to an individual (Mr.
Lakshminarayanan is an individual) is exempted vide entry 45(b) of Notification No.
12/2017. However assuming that the turnover of the entity exceeds the turnover limit
for tax audit, GST under reverse charge would be applicable. In such case the tax
liability on Rs. 200000 will be Rs. 36,000. Same is added to tax liability. The next month
this amount can be claimed as ITC

Alternate answer: If credit for ITC is claimed for GST paid under RCM on advocate
fees of Rs. 36,000 the same will be allowable upto (Rs. 36,000 × 35 lakh / 45 lakhs. = Rs.
28,000. Hence GST net of further ITC of Rs. 28,000 will be Rs. 1,62,667 – Rs. 28,000 = Rs.
1,34,667

(b)
Change in GST rate
As per section 14 of the CGST Act, 2017, in case of change in rate of tax, date of
receipt of payment is earlier of:
(i) Date of entering payment in the books of account of the supplier (11.09.2018),
or
(ii) Date on which the payment is credited to his bank account (18.09.2018).
However, if the payment is credited in the bank account after 4 working days from
the date of change in the rate of tax, the date of receipt of payment will be the
date of credit in the bank account.
In the given case, since the payment has been credited in the bank within 4
working days from the date of change in the rate of tax, the date of receipt of
payment will be 11.09.2018 [i.e., earlier of 11.09.2018 or 18.09.2018].

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Section 14 further provides that where goods and /or services have been supplied
before the change in rate of tax (10.09.2018) and the payment has been received
before the change in rate of tax (11.09.2018), but the invoice for the same is issued
after the change in rate of tax (23.09.2018), the time of supply shall be the date of
receipt of payment.
Therefore, in the given case, the time of supply will be 11.09.2018 and the
applicable rate of tax will be rate prevalent at the time of supply, i.e., IGST @ 5%.
Therefore, the contention of Muktinath is correct. Department’s view is not tenable
in law.
Further, if the date on which the payment is credited to bank account of supplier is
14.09.2018, the date of receipt of payment will continue to be 11.09.2018 [i.e.,
earlier of 11.09.2018 or 14.09.2018] since the payment is credited in the bank
account before change in applicable rate of tax.
Consequently, with other things remaining the same, the time of supply and the
applicable rate of tax will remain the same.

4. Mudra Dancers Pvt. Ltd., owned by Mrs. Anjali, a famous Bharata Natyam dancer,
wishes to organize a ‘Anjali Dance Concert’ in Faridabad (Haryana). Mudra Dancers
Pvt. Ltd. is registered in Amritsar, Punjab. It enters into a contract with an event
management company, Saipriya (P) Ltd. (registered in Delhi) for organizing the said
dance concert at an agreed consideration of Rs. 12,00,000.
Saipriya (P) Ltd. books the lawns of Hotel Dream Palace, Faridabad (registered in
Haryana) for holding the dance concert, for a lump sum consideration of Rs. 5,00,000.
Mudra Dancers Pvt. Ltd. fixes the entry fee to the dance vent at Rs. 5,000. 500 tickets
for ‘Anjali Dance Concert’ are sold.
You are required to identify the different supplies which are involved and to
determine the CGST and SGST or IGST liability, as the case may be, in respect of all
the supplies involved in the outlined situation.
Will your answer be different, if the entry ticket is priced at Rs. 475 per person?
Rates may be taken as SGST 9%, CGST 9% and IGST 18%. 14

Answer:

4.
Particulars
In the given problem, three supplies are involved:
(i) Services provided by Mudra Dancers Pvt. Ltd. to audiences by way of admission to
dance event.
(ii) Services provided by Saipriya (p) Ltd. to Mudra Dancers Pvt. Ltd. by way of
organizing the dance event.
(iii) Service provided by Hotel Dream Palace to Saipriya (p) Ltd. by way of
accommodation in the Hotel lawns for organizing the dance concert.
The CGST and SGST or IGST liability in respect of each of the above supplies is
determined as under:
(i) As per the provisions of section 12(6) of the IGST Act, 2017, the place of supply of
services provided by way of admission to, inter alia, a cultural event shall be the
place where the event is actually held.

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Therefore, the place of supply of services supplied by Mudra Dancers Pvt. Ltd. to
audiences by way of admission to the dance concert is the location of the Hotel
Dream Palace, i.e. Faridabad, Haryana.
Since the location of the supplier (Amristar, Punjab) and the place of supply
(Faridabad, Haryana) are in different States, IGST will be leviable.
Therefore, IGST leviable will be computed as follows:
Consideration for supply (500 tickets @ Rs. 5,000 per ticket) = Rs. 25,00,000
IGST @ 18% on value of supply = Rs. 25,00,000 × 18% = Rs. 4,50,000
(ii) Section 12(7)(a)(i) of IGST Act, 2017 stipulates that the place of supply of services
provided by way of organization of, inter alia, a cultural event to a registered person is
the location of such person.
Therefore, the place of supply of services supplied by Saipriya (P) Ltd. to Mudra
Dancers Pvt. Ltd. (Amristar, Punjab) by way of organizing the dance concert is the
location of the recipient, i.e., Amristar (Punjab).
Since the location of the supplier (Delhi) and the place of supply (Amristar, Punjab) are
in different States, IGST will be leviable.
Consideration for supply = Rs. 12,00,000.
IGST @ 18% on value of supply = Rs. 12,00,000 × 18% = Rs. 2,16,000
(iii) As per the provisions of section 12(3)(c) of the IGST Act, 2017, the place of supply of
services, by way of accommodation in any immovable property for organizing, inter
alia, any cultural function shall be the location at which the immovable property is
located
Therefore, the place of supply of services supplied by Hotel Dream Palace (Faridabad,
Haryana) to Saipriya (P) Ltd. by way of accommodation in any immovable property
for organizing is located at Faridabad, Haryana.
Since the location of the supplier (Faridabad, Haryana) and the place of supply
(Faridabad, Haryana) are in the same State, CGST and SGST will be leviable
Therefore, CGST and SGST leviable will be computed as follows:
Consideration for supply = Rs. 5,00,000
CGST @ 9% on value of supply = Rs. 5,00,000 × 9% = Rs. 45,000
SGST @ 9% on value of supply = Rs. 5,00,000 × 9% = Rs. 45,000
Where the price per entry ticket is Rs. 475.
If the price for the entry ticket for the dance event is fixed at Rs. 475, answer will
change.
In respect of supply of service provided by way of admission to music concert, as
mentioned in point (i) above, There will be no IGST liability if the consideration for the
ticket is Rs. 475, as the inter-State services by way of right to admission to, inter alia,
musical performance are exempt from IGST vide Notification No. 9/2017 IT (R) dated
28.06.2017, if the consideration for right to admission to the event is not more than Rs.
500 per person.
There will be no change in the answer in respect of other supplies mentioned in points
(ii) and (iii) above.
There will be no change in the answer in respect of other supplies as mentioned in
point (ii) and (iii) above.

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5. (a) Specify any three types of returns which are at present required to be filed under GST,
what the returns are for, their frequency and the due date. (not for composition
scheme) 7

(b) Asha Ltd. supplies raw material to a job worker Kareena Ltd. After completing the job-
work, the finished product of 5,000 packets are returned to Asha Ltd. putting the retail
sale price as Rs. 20 on each packet. The product in the packet is covered under MRP
provisions. Determine the transaction value in the hands of Kareena Ltd. under GST
law from the following details: 7
Particulars Value in Rs.
Cost of raw material supplied 30,000
Job worker’s charges including profit 10,000
Transportation charges for sending the raw material to the job worker 3,000
Transportation charges for returning the finished packets to Asha Ltd. 4,500
Asha Ltd. paid certain technology transfer fees to ‘Reena Ltd.’, so that 22,500
‘Kareena Ltd.’ can use the said technology in the given job-work
operation.
Note: Kareena Ltd. offered discount Rs. 2,000, provided full payment is made at the
time of rising invoice and the same is mentioned in the invoice. Asha Ltd. made full
payment at the time of issue of invoice.

Answer:

5. (a) Following table lists the three types of returns currently being filed under GST Law:
Return Particulars Frequency Due Date
Form
GSTR – Details of outward supplies of taxable goods Monthly 10th of the
1 and / or services effected (Section 37 of the next month
CGST Act, 2017).
GSTR – Simple return for Jul 2017 – mar 2018, and Monthly 20th of the
3B thereafter till date next month
GSTR – Annual Return (section 44 of the CGST Act, Annually 31st
9 2017) December of
(a) Who Files: Registered Person other than next financial
an ISD, TDS/TCS Taxpayer, Casual year
Taxable person and Non-resident
Taxpayer.
(b) In this return, the taxpayer needs to
furnish details of expenditure and details
of income for the entire Financial Year.
GSTR – Return for a Non-resident taxable person Monthly 20th of the
5 next month
GSTR – Return for an Input Service Distributor Monthly 13th of the
6 next month
GSTR – Return for authorities deducting tax at Monthly 10th of the
7 source next month

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GSTR – Details of supplies effected through e- Monthly 10th of the

8 commerce operator and the amount of tax next month
collected
GSTR – Final Return Once, when Within three
10 GST months of the
Registration is date of
cancelled or cancellation or
surrendered date of
cancellation
order,
whichever is
later.
GSTR- Details of inward supplies to be furnished by Monthly 28the of the
11 a person having UIN and claiming a refund month following
the month for
which
statement is
filed

(b) Statement showing transaction value of Kareena Ltd.

Particulars Value in Rs.
Cost of raw material supplied Exempted
Supply
Job worker’s charges including profit 10,000
Transportation charges for sending the raw material to the job Exempted
worker Supply
Transportation charges for returning the finished packets to Asha 4,500
Ltd. [Sec. 15(2)(b) of the CGST Act, 2017]
Technology fee [Sec. 15(2)(b) of the CGST Act, 2017] 22,500
Sub-total 37,000
Less: Discount [Sec. 15(3) of CGST Act, 2017] (2,000)
Transaction value (i.e., sole consideration) 35,000
Note: It is very clear that principal to job worker and job worker to principal cannot
be treated as supply as per section 143 of the CGST Act, 2017.

6. (a) Best Ltd. is operating in two states Andhra Pradesh and Tamil Nadu. The tax liability for
the month of July, 2018 is as follows:
Sl. No. Tax Liability Andhra Pradesh (Rs.) Tamil Nadu (Rs.)
1. Output CGST Payable 25,000 10,000
2. Output SGST Payable 10,000 5,000
3. Output IGST Payable 3,000 2,500
4. Input CGST 8,000 13,000
5. Input SGST 15,000 1,500
6. Input IGST 12,000 16,000

Calculate the tax payable for the month of July, 2018. 8

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(b) (i) M/s Ace Ltd. is a registered person under GST law and purchased 10 cars for Rs.
45 lakhs plus 28% GST. M/s Ace Ltd. sold 8 cars for Rs. 55 lakh plus 28% GST.
Find the GST liability in the following two independent cases:
(A) M/s Ace Ltd. is a dealer of motor vehicles
(B) M/s Ace Ltd. is not a dealer of motor vehicles 3

(ii) M/s Expert Driving School Pvt. Ltd. supplied taxable services in the month of
October, 2017 for Rs. 15 lakh (plus GST 18%) to provide training on driving.
Company purchased two vehicles for this purpose namely passenger vehicle for
Rs. 20 lakh plus GST 28% and goods vehicle for Rs. 33 lakh plus GST 28%. Find the
net GST liability/ITC, of M/s Expert Driving School Pvt. Ltd. 3

Answer:

6. (a) Net tax payable for the month of July 2018 is as follows –

Particulars Andhra Pradesh Tamil Nadu

CGST SGST IGST CGST SGST IGST
Output tax 25,000 10,000 3,000 10,000 5,000 2,500
Input credit available for setoff 8,000 15,000 12,000 13,000 1,500 16,000
Input credit adjusted 8,000 10,000 3,000 10,000 1,500 2,500
Tax payable after setting off ITC 17,000 --- --- --- 3,500 ---
Input Tax available for further --- 5,000 9,000 3,000 --- 13,500
set-off
Inter adjustment of ITC 9,000 --- (9,000) --- 3,500 (3,500)
(Note – 1)
Net Tax payable in cash 8,000 --- --- --- --- ---
Input credit carry forwarded to --- 5,000 --- 3,000 --- 10,000
next month

Notes:
1. IGST Input tax credit can be adjusted against Output tax of liability of IGST, CGST,
SGST, UTGST (set off can be done in same Order)
2. SGST Input tax credit cannot be adjusted against output CGST & Vice-Versa
3. CGST & SGST Input tax credit of one State cannot be adjusted against Output
CGST & SGST of other State (same principle is applicable to IGST credit also)

(b) (i) Statement showing net GST liability of M/s Ace Ltd.
Particulars M/s Ace Ltd. is a M/s Ace Ltd. is not Remarks
dealer in motor a dealer in motor
vehicles Rs. in lakh vehicles Rs. in lakh
GST on Supply of 15.40 15.40 Rs. 55 lakh × 28%
goods
Less: ITC (12.60) Not allowed Rs. 45 lakhs × 28%
Net GST Liability 2.80 15.40

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(ii)
GST on output supply
Less: ITC
On passenger vehicle
On goods vehicle
Net Excess ITC c/d
Rs. 2,70,000 (Rs. 15,00,000 @ 18%)
Rs. (5,60,000) (Rs. 20,00,000 @ 28%)
Rs. (9,24,000) (Rs. 33,00,000 @ 28%)
Rs. 12,14,000

7. (a) Mr. Shankar is running a fancy stores and is also having a consulting firm, registered
under the same PAN. During the earlier year, the turnover was Rs. 150 lakhs in the
grocery stores and receipts in the consulting firm was Rs. 9 lakh. In the light of these
facts, answer the following (having regard to the legal provision prevailing in April, 2019):
(i) Examine whether Mr. Shankar eligible to opt for Composition Scheme under CGST
Act.
(ii) Can he opt for the Composition Scheme in respect of the grocery store alone,
though he has the consulting firm also, in addition to the store? 2+3=5

(b) Mr. Nakul, a manufacturer of pesticides registered under the GST law, provides to you
the following information pertaining to the GST paid by him in the month of January,
2019:
Particulars Amount (Rs.)
GST on machinery purchased and sent directly to a job worker 1,20,000
GST on car purchased, exclusively used for business purchases 1,92,000
GST on raw materials purchased (Goods are received in lots/ 5,50,000
installments and 25% of the materials were received in February, 2019)
GST on Medical insurance premium paid for the employees working in 96,000
the factory. Providing this is optional and Mr. Nakul has taken out this
measure to improve the relations with the labourers.

Compute the quantum of input tax credit available to Mr. Nakul for the given month,
adducing detailed note for treatment of each item. 9

Answer:

7. (a)
Eligibility to opt for Composition Scheme
(i) No. Shankar is not eligible for Composition Scheme.
The reason is that the turnover in the earlier year was in excess of Rs. 150 lakhs.
Note: W.e.f. 01.02.2019, other services, with restaurant & catering services, also
eligible vide CGST (Amendment) Act, 2018 for composition scheme, subject to 10%
of turnover in a State or Union Territory in preceding financial year or 5,00,000
whichever is higher.
(ii) No, it is not possible for Mr. Shankar no opt for Composition Scheme, for the
grocery store alone.
All the registrations under the same PAN have to opt for composition scheme in
terms of proviso to section 10(2) of the CGST Act, 2017.

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(b) Computation of input tax credit

Particulars Amount (Rs.)
GST on machinery purchased and sent directly to a job worker 1,20,000

ITC on capital goods directly sent to job worker’s premises under

challan is allowed in terms of section 19(5) of CGST Act, 2017, read
with rule 45(1) of CGST Rules, 2017
GST on car purchased, exclusively used for business purchases Nil

Car figures in the list of blocked assets for ITC and hence no ITC can
be availed.
GST on raw materials purchased (25% of the materials are yet to be Nil
received)

Where the goods against an invoice are received in lots/instalments,

ITC is allowed upon receipt of the last lot/instalment vide first proviso
to section 16(2) of the CGST Act, 2017. ITC can be availed next
month only.
GST on Medical insurance premium paid for the employees working Nil
in the factory

ITC of health insurance is blocked in the given case, since said

services are not notified by Government as obligatory for employer
to provide to its employees under any law – in terms of section
17(5)(b)(iii) of the CGST Act, 2017.
Total ITC available 1,20,000

Section – B
(Customs Duty and FTP)

Answer Question No. 8 which is compulsory and any two from the rest of this section.

8. Choose the most appropriate option for the following [Option to be given in capital letters
A, B, C or D] and give brief reason/justification for your choice or conclusion [1 mark for the
correct choice and 1 mark for reason] : 2×3=6

(i) Determine the correct combination:

Sl. No. Event Sl. No. Effect on customs duty
1 Foods damaged 1 Remission of duty
2 Goods pilfered 2 Abatement of duty
3 Goods destroyed 3 Not liable to pay duty

(A) 1 and 2, 2 and 3, 3 and 1

(B) 1 and 3, 2 and 3, 3 and 2
(C) 1 and 2, 2 and 1, 3 and 3
(D) 1 and 1, 2 and 3, 3 and 2

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(ii) Two sets of sales were effected by Boomerang Ltd. First set 1000 units at Rs. 190 and
second set 900 units at Rs. 200. In terms of rule 7 (Deductive Value) of the Customs
Valuation (Determination of Value of Imported Goods) Rules, 2007, the unit price in
greatest aggregate quantity determined will be
(A) Rs. 200
(B) Rs. 190
(C) Rs. 195
(D) More data is required

(iii) As per the Customs Tariff Act, 1975, the following is not considered to be a way that
constitute circumvention of antidumping duty imposed on an article which may warrant
action by the Central Government:
(A) Altering the description or name or composition of the article subject to imposition
of such anti-dumping duty
(B) Changing the country of its origin or export
(C) Import of such article in an unassembled or disassembled form
(D) Procuring the goods through an Indian subsidiary which is a SEZ unit.

Answer:

8.
(i) A When imported goods are damaged, there will be abatement of customs duty.
In respect of pilfered goods, customs duty is not payable and when goods are
destroyed, there will be remission of duty.
(ii) B The greatest number of units sold at a particular price is 1,000 units. Therefore,
the unit price in the greatest aggregate quantity is Rs. 190.
(iii) D The first three are specifically covered by section 9A(1A) of the Customs Tariff
Act, 1975. Import by a SEZ unit will not attract any anti-dumping duty.

9. (a) A commodity is imported into India from a country covered by a notification issued
by the Central Government under section 9A of the Customs Tariff Act, 1975.
Following particulars are made available:
CIF value of the consignment: US$ 25,000
Quantity imported: 500 kgs
Exchange rate applicable: Rs. 60 = US $ 1
Basic customs duty: 12%
Social Welfare Surcharge @ 10%

As per the notification, the anti-dumping duty will be equal to the difference between
the cost of commodity calculated @ US $ 70 per kg. and the landed value of the
commodity as imported.

Appraise the liability on account of normal duties, cess and the anti-dumping duty.

Assume that only ‘Basic customs duty” (BCD) and education and secondary and
higher education cess are payable. IGST @ 12% is also applicable.
Calculate the Customs Duty Payable. 8

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(b) M/s Globe Ltd. (assessee) imported certain goods at US $ 20 per unit from an exporter
who was holding 30% equity in the share capital of the importer company.
Subsequently, the assessee entered into an agreement with the same exporter to
import the said goods in bulk at US$ 14 per unit. When imports at the reduced price
were effected pursuant to this agreement, the Department rejected the transaction
value stating that the price was influenced by the relationship and completed the
assessment on the basis of transaction value of the earlier imports i.e., at US$ 20 per
unit under rule 4 of the Customs Valuation (Determination of Value of Imported
Goods) Rules, 2007, viz transaction value of identical goods. State briefly, whether the
Department’s action sustainable in law, with reference to decided cases, if any. 4

Answer:

9. (a)
Particulars US $
CIF Value 25,000

Value in Rs.
Assessable value (i.e., 25,000 × Rs. 60) 15,00,000
Add: Customs duty 13.2% on Assessable value (12% + 10% on 12%) 1,98,000
Landed value (or value of imported goods) 16,98,000
Anti-dumping duty (21,00,000 – 16,98,000) 4,02,000
Market value of imported goods (500 kgs × Rs. 60 × US $ 70) = 21,00,000
Open Market Value 21,00,000
Add: IGST @ 12% on Rs. 21,00,000 2,52,000
Total 23,52,000

Total customs duty payable is Rs. 8,52,000 (i.e. 1,98,000 + 4,02,000 + 2,52,000)

Note: In case where imported goods are liable to Anti-Dumping Duty or Safeguard
Duty, calculation of Anti – Dumping Duty or Safeguard duty would be as per the
respective notification issued for levy of such duty. It is also clarified that value for
calculation of IGST as well as Compensation Cess shall also include Anti-Dumping
Duty amount and Safeguard duty amount.

(b) As per Rule 2(2) of the Customs Valuation (Determination of Value of Imported
Goods) Rules, 2007 persons shall be deemed to be related if any person directly or
indirectly owns, controls or holds 5% or more of the outstanding voting stock or shares
or both of them.
In the instant case, the exporter co. held 30% equity share capital of the importer co.
So, it can be said that the two parties are related.

The fact that the assessee had made bulk imports could be a reason for reduction of
import price. But here, as the importer co. has already purchased the same goods
from the exporter co. @ US$ 20 p.u., this price is to be considered as the Assessable
value of the said import.

Therefore, the Department’s action is tenable in law.

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10. (a) An importer imported some goods. Entry inwards granted to the vessel on 7 th
February, and the goods were cleared from Chennai port for warehousing on 8 th
February, after assessment. The Bill of Entry was presented on 1 st February for
warehousing. Assessable value was US$ 10,000. Assume that no additional duty is
payable. The goods were warehoused at Chennai and were cleared from Chennai
warehouse on 4th march. What is the duty payable while removing the goods from
Chennai warehouse on 4 th March? Exchange rates and rate of Customs Duties are as
follows: 6

Particulars Date Exchange rate Basic Customs

declared by the CBE&C Duty
Date of submission of bill of 1st Rs. 55/USD 10%
entry for warehousing February
Date of entry inwards 7th Rs. 59/USD 15%
granted to the vessel February
Date of clearance of goods 4th Rs. 60/USD 12%
from warehouse by March
submission of bill of entry

(b) Compare between ‘Rules’ and ‘Regulations’ under the Customs Act, 1962. Bring out the
differences and similarities, if any. 6

Answer:

10. (a) Relevant rate of duty - date of submission of sub-bill of entry

Relevant exchange rate - date of submission of into bond bill of entry

Total customs duty will be

Basic Customs Duty = Rs. 66,000
+ SWS @ 10% on BCD = Rs. 6,000 (Rs. 66,000 × 10%)
Total customs duty = Rs. 72,600
[w.e.f. 02.02.2018, all goods are exempt from EC and SHEC]

The term ‘CBEC’ has been changed as ‘CBIC’

(b) Difference between the Rules and Regulations

Rules Regulations
(1) Issued by the Government of India (1) Issued by the CBIC
(2) Rules have to be approved by the (2) Regulations do not need to be
Parliament approved by the Parliament
(3) Has statutory force (3) Has statutory force
(4) Power to make rules under Section (4) Power to make regulations as per
156 of Customs Act Section 157 of Customs Act

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11. (a) X Ltd. exported following goods to USA. Discuss whether any duty drawback is
admissible under section 75 of the Customs Act, 1962. 8

Product FOB Value of Exported goods Market price of goods Duty drawback rate
A 2,50,000 1,80,000 30% of FOB
B 1,00,000 50,000 0.75% of FOB
C 8,00,000 8,50,000 3.50% of FOB
D 2,000 2,100 1.50% of FOB

Note: Imported value of product C is Rs. 9,50,000.

(b) Mr. Gopal, an Indian entrepreneur, went to London to explore new business
opportunities on 01.04.2018. His wife also joined him in London on 01.12.2018. The
following details are submitted by them with the Customs authorities on their return to
India on 30.04.2019.
(i) Used personal effects worth Rs. 95,000
(ii) A music system worth Rs. 34,000
(iii) The jewellery brought by Mr. Gopal for Rs. 44,000 and the jewellery brought by his
wife worth Rs. 25,000.
Determine their eligibility with regard to duty free allowance. 4

Answer:

11. (a) Duty draw back amount for all the products are as follows:

Product A:
Drawback amount = 2,50,000 × 30% = Rs. 75,000 or Rs. 1,80,000 × 1/3 = Rs. 60,000
Allowable duty draw back does not exceed 1/3 of the market value.
Hence, the amount of duty drawback allowed is Rs. 60,000

Product B:
Drawback amount allowed is Rs. 750 (i.e., Rs. 1,00,000 × 0.75%).
Since, the amount is more than Rs. 500 even though the rate is less than 1% it is
allowed.

Product C:
No duty drawback is allowed.
Since the value of export is less than the value of import (i.e., negative sale)

Product D:
No duty drawback is allowed.
Since the duty drawback amount is Rs. 30 (which is less than Rs. 50)

Though rate of duty drawback is more than 1%, no duty drawback is allowed.

(b) As per the Baggage Rules, 2016, in case of passengers other than tourists there is no
customs duty on used personal effects and general free allowance is Rs. 50,000 per
passenger. Thus, their duty liability is nil for the personal effects and a music system.

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However, the additional duty free allowance, that is jewellery allowance is

applicable to non-tourist passenger of Indian origin who had stayed abroad for
period exceeding one year. The additional jewellery allowance is as follows:

Gentleman Passenger - Rs. 50,000.

Lady Passenger – Rs. 1,00,000.

Thus, there is no duty liability on the jewellery brought by Mr. Gopal as he had stayed
abroad for period exceeding one year. However, his wife is not eligible for this
additional jewellery allowance as she had stayed abroad for a period less than a
year. Thus, she has to pay customs duty on the amount of jewellery brought by her of
Rs. 25,000.

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 SUGGESTED_ANSWER TO QUESTION_SYL2016_JUNE2019_PAPER-18

FINAL EXAMINATION
GROUP - IV
(SYLLABUS 2016)

SUGGESTED ANSWERS TO QUESTIONS

JUNE - 2019
Paper-18 : INDIRECT TAX LAWS AND PRACTICE
Time Allowed : 3 Hours Full Marks : 100

The figures in the margin on the right side indicate full marks.
Wherever necessary, you may make suitable assumptions
and state them clearly in your answer.
Working notes should form part of the answer.

Section – A
Answer Question No. 1 which is compulsory and any four from the rest of this section.

1. Choose the most appropriate option from the following [Option to be given in capital
letters A, B, C or D] and give brief reason/justification for your choice, the correct choice
or conclusion [1 mark for the correct choice and 1 mark for reason]: 2x7=14

(i) The GST return form to be filed by a Composition dealer/supplier is ________________

and the same had to be furnished _____________________.
(A) GSTR-1, Monthly (B) GSTR-1, Quarterly
(C) GSTR-4, Monthly (D) GSTR-4, Quarterly

(ii) Mr. Ram registered in Chennai has supplied goods to Kochi Fisheries Department, for
a total contract value of ` 2,65,000 inclusive of 18% IGST. The tax to be deducted at
source is (TDS on GST)
(A) Nil (B) ` 2,650
(C) ` 5,300 (D) None of these

(iii) In the electronic ledger, the balance in Input tax credit is shown in
(A) Electronic cash ledger (B) Electronic credit ledger
(C) Electronic confirmation ledger (D) Electronic liability ledger

(iv) A registered supplier, who regularly files monthly GST return, has paid GST of Rs.
72,000 pertaining to the month of May, 2018 on 10-07-2018. The interest payable for
delayed remittance of GST is
(A) ` 710 (B) ` 355
(C) `473 (D) None of these

(v) In case of inter-State supply of goods, the tax(es) levied is/are

(A) CGST only (B) IGST only
(C) CGST and IGST (D) SGST and IGST

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(vi) Lakshmi became liable to be registered under GST law on 10th November, 2018. She
submitted the application for registration on 18th November, 2018. The registration
certificate is issued on 9th December, 2018. The effective date of registration will be
(A) 10th November, 2018 (B) 18th November, 2018
(C) 9th December, 2018 (D) None of these

(vii)A manufacturer who is a registered person under GST has purchased 10000 kgs of
raw material during February, 2019, on which IGST of ` 1,00,000 has been paid. He
has taken 100 kgs for personal use. 200 kgs were stolen from the factory. Only 80% of
the raw materials were consumed during the month for production. The input tax
credit available to him for February, 2019 is
(A) ` 99,000 (B) ` 97,000
(C) ` 98,000 (D) ` 1,00,000

Answer:

1.
(i) D Under the GST law, in case of a Composition dealer, the prescribed return
form is GSTR_4, which shall be filed on quarterly basis.
(ii) A The liability to deduct tax at source arises where the value of supply, excluding
GST, exceeds ` 2,50,000. Here the same will be below ` 2,50,000 [2,65,000 x
100/118]. Hence the liability is nil.
(iii) B Balance of the ITC is shown in Electronics credit ledger. Electronic cash ledger
shows the GST deposited to the credit of the Govt. The set off of GST and the
balance liability is reflected in Electronic Liability ledger.
(iv) A There has been a delay of 20 days in the remittance.
Interest to be calculated at 18%
Same is (72,000X18%X20/365) r/off= ` 710
(v) B As per IGST Rules, for inter-state movement of goods and services is
concerned. IGST will be levied.
(vi) A As per 10(2) of the CGST Rules, 2017, when a person liable for registration,
applies for registration within 30 days, the effective date of registration is the
date when he became liable for registration.
(vi) B ITC is not available in respect of goods taken for personal use as well as those
stolen from the factory. The quantity of raw materials consumed in production
is irrelevant.

2. (a) Mr. Raghuram is running a consulting firm and also a readymade garment showroom,
registered in same PAN. Turnover of the showroom is ` 60 lakh and receipt of the
consultancy firm is ` 12 lakh in the preceding financial year. You are required to
answer the following:
(i) Is Mr. Raghuram eligible for Composition Scheme?
(ii) Whether it is possible for Mr. Raghuram to opt for composition only for Showroom?
(iii) Rework, if Mr. Raghuram is running a restaurant as well as readymade garment
showroom, whether he is eligible for Composition?
(iv) If the turnover of garment showroom is ` 75 lakh in the preceding financial year
and there is no consulting firm whether he is eligible for Composition? 8

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 SUGGESTED_ANSWER TO QUESTION_SYL2016_JUNE2019_PAPER-18

(b) M/s Samson Ltd. being a trader of laptops has two units, one in Chennai and other in
Mumbai.
Place P.Y. Turnover ` in lakhs (Excluding taxes)
Chennai 52
Mumbai 12

You are required to answer the following:

(i) Is M/s Samson Ltd. eligible for composition levy in the current year?
(ii) If so, can M/s Samson Ltd. opt composition scheme for Chennai location and
normal scheme for Mumbai?
(iii) Whether need to give separate intimations for opting composition scheme in
each State? 6

Answer:

2. (a) (i) Mr. Raghuram is providing services in consulting firm hence he is not eligible for
composition scheme.
(ii) If a business is ineligible to opt for composition then all other businesses registered
under the same PAN shall automatically become ineligible for the composition
scheme. So Mr. Raghuram is not eligible for composition scheme only for
showroom.
(iii) Restaurant services and readymade garments show room are eligible for the
composition scheme. Hence Mr. Raghuram is eligible for Composition Scheme,
since, his aggregate turnover is ` 72 lakhs (i.e. less than ` One crore).
(iv) Yes, Mr. Raghuram is eligible for composition scheme as turnover of his firm does
not exceed ` One crore in the preceding financial year

(b) (i) Yes, M/s Samson Ltd. is eligible to avail the composition scheme in both the states
namely Tamil Nadu and Maharashtra. Since, M/s Samson Ltd. has same PAN, and
its aggregate turnover does not exceeds rupees one crore, it is eligible for
composition levy, even though the company has multiple registrations under GST.

(ii) No. M/s Samson Ltd. cannot opt for composition scheme for one location and
normal scheme for another location. Where more than one registered persons
are having the same Permanent Account Number (issued under the Income -tax
Act, 1961), the registered person shall not be eligible to opt for the scheme under
subsection (1) of section 10 of CGST Act, 2017, unless all such registered persons
opt to pay tax under that sub-section.

(iii) Intimation to opt composition scheme in respect of any place of business in any
State or Union Territory shall be deemed to be intimation in respect of all other
places of business registered on the same Permanent Account Number (PAN),
hence there is no need to give separate intimations in each State.

3. (a (i) CMA Mr. Sandesh, an unregistered person under GST, has place of profession in
Bhubaneswar, Odisha, supplies taxable services to Infosys Ltd., a registered
person under GST in Bangalore.
(I) Is it inter-State supply or intra-State supply?
(II) Who is liable to pay GST?
Note: CMA Mr. Sandesh turnover in the P.Y. is ` 18 lakhs. 4

(ii) Mr. Charan of Calicut is trading on his own goods and also acting as an agent of
Mr. Babu of Bengaluru. Mr. Charan turnover in the period 1st July, 2017 to 31st

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 SUGGESTED_ANSWER TO QUESTION_SYL2016_JUNE2019_PAPER-18

March, 2018 is ` 12 lakh in his own account and ` 9 lakh on behalf of principal.
Whether Mr. Charan is liable to register compulsorily under GST law? 2
(iii) Mr. Rajesh is a farmer with an annual turnover in relation to agriculture of `
18,00,000. Since this income is agriculture-related, the turnover is exempt from
GST. However, Mr. Rajesh also supplies plastic bags worth of ` 2,50,000
(taxable goods) along with his crop and charges separately for this. Is Mr. Rajesh
required to register under GST? Advise. 2

(b) Mr. Gopal is a taxable person under GST (who is a wholesaler), is having a stock
worth of ` 5,00,000 as on 01-07-2017. Such person has supplied these goods for `
5,60,000 and on which he has paid CGST @ 9% and SGST @9%.

How much ITC is allowed under Sec. 140(3) of GST in the following independent
cases:
(i) If he is in possession of duty paid document for the stock (namely BED is ` 62,500
and VAT ` 28,125).
(ii) If he is not in possession of duty paid document for the stock, but has invoice
evidencing purchase of goods. 6

Answer:

3. (a) (i) Any person making inter-state supply has to compulsorily obtain registration and
therefore in such cases, section 5(4) of IGST will not come into play.

However, service providers providing aggregate supplies including inter-state

services up to ` 20 lakh will be exempted from GST.

(I) It is inter-state supply.

(II) CMA Mr. Sandesh is not liable to pay IGST if he chooses not to register under
GST. Since, registration is not made mandatory to him. Infosys Ltd. will also not
be liable to pay GST under RCM as Section 9(4) has been deferred presently.

(ii) As per explanation 1 in computing the total turnover, both the value of supply on
his own account that is `12 lakh and on behalf of principal ` 9 lakh will be
aggregated. Hence, the aggregate turnover will be ` 21 lakh. Mr. Charan is liable
to register compulsorily under the GST law.

(iii) Mr. Rajesh is required to register under GST because his aggregate turnover is `
20,50,000 which exceeds the threshold limit of ` 20 lakh.

(b) (i) ITC allowed is equal to BED is ` 62,500 as CGST credit and VAT of ` 28,125 as SGST
credit.

(ii) In accordance with the provisions of Transition Rules, he can claim credit to the
extent of 60% of CGST paid, i.e., ` 30,240/- (` 50,400 @60%) as CGST credit.

In accordance with the provisions of Transition Rules, he can claim credit to the
extent of 60% of SGST paid, i.e., ` 30,240/- (` 50,400 @ 60%) as SGST credit.

Note:
CGST payable is 9% of ` 5,60,000 = `50,400
SGST payable is 9% of ` 5,60,000 = ` 50,400

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 SUGGESTED_ANSWER TO QUESTION_SYL2016_JUNE2019_PAPER-18

4. (a) (i) Myra Ltd. received a protective demand notice from the department of Assistant
Commissioner of Central Tax on 01-09-2017 under Section 73 of the CGST Act,
2017 where
Amount (`)
CGST & SGST 5,00,000
Interest @ 15% p.a. for no. of days delay
Penalty 10% of tax due or ` 10,000 whichever is higher

The assessee went for appeal and filed the case in the Appellate Authority on 25-
09-2017. This appeal has been taken up for hearing on 6-10-2017.

Case 1: How much has Myra Ltd. to pay as pre-deposit of duty under Section
107(6) of the CGST Act, 2017 and date of pre-deposit of duty by Myra Ltd. to
entertain appeal by the Appellate Authority [i.e. Commissioner (Appeals)].

Case 2: Whether your answer is different if the assessee appeals only part of the
amount say ` 3,00,000 is in dispute arising from the said order. 4

(ii) Considered in the example in 4 (a) (i) above, where Appellate Authority passed
the order against the assessee, if so how much Myra Ltd. has to pay as pre-
deposit of duty under Section 112(8) of the CGST Act, 2017 to entertain appeal
by the Goods and Services Tax Appellate Tribunal (GSTAT)? 4

(b) Mr. Yogesh is working in Infosys Company having office in Bengaluru. Infosys
Company is registered under GST. Mr. Yogesh purchased the ticket from Hyderabad
for transportation as passenger by Air from Hyderabad to Chennai. Mr. Yogesh
discloses the name of the organization and its registration number and the place
where the organization is registered. Supplier of service is located at Hyderabad. Find
the following:
(i) Place of supply of service and GST liability.
(ii) Whether your answer is different if Mr. Yogesh has not disclosed the name of
the organization and its registration number? 6

Answer:

4. (a) (i) Case 1: Pre-deposit is ` 50,000 (5,00,000 * 10%) is to deposit on or before 6th
October 2017.

Case 2: Disputed amount ` 3,00,000:

Pre-deposit is ` 2,00,000 plus ` 30,000 (`3,00,000 * 10%) together is ` 2,30,000. It
should be deposited on or before 6th October 2017

(ii) Case 1: Pre-deposit is ` 1,00,000 (5,00,000*20%). It is in addition to pre-deposit of `

50,000 made at first appeal stage.

Case 2: Disputed amount `3,00,000

Further Pre-deposit is ` 60,000 (`3,00,000 * 20%), This is in addition to pre-deposit of
` 30,000 + payment of undisputed tax of ` 2,00,000 towards the deposit i.e., `
2,30,000/- made at first appeal stage.

(b) (i) POS = Bengaluru (i.e. location of recipient of service)

GST = IGST is liable to pay by Air Travel Operator

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(ii) POS =Hyderabad (i.e. Place where the passenger embarks on the continuous
journey)
GST =CGST & SGST is liable to pay by Air Travel Operator

5. (a) (i) What is form GSTR 3B? What are its features? Who is exempt from filing GSTR 3B? 6

(ii) Mr. X, a registered person in Mumbai has made outward supplies of taxable
goods as under:-
Mr. X has become liable for registration on 1st October, 2018. He was granted
registration on 1st January, 2019.
(I) Supplies made from 1st April, 2018 to 30th September, 2018 ` 19,50,000
(II) Supplies made from 1st October, to 31st December, 2018 ` 8,00,000
(III) Supplies made from 1st January, 2019 to 31st January, 2019 ` 2,00,000

The first return furnished by Mr. X is for the month of January, 2019. What is the
taxable turnover to be declared in the return filed for January, 2019? 2

(b) (i) M/s Fotoflash Ltd, is a registered person under GST in Mumbai being a dealer
dealing with second-hand goods. M/s Fotoflash Ltd. supplies a used camera to a
consumer in Chennai for selling price of ` 15,000. The used camera (i.e. second
hand) was purchased for ` 10,000 from a registered dealer in Mumbai, on which
CGST + SGST of ` 1,400 each was charged (i.e. GST rate applicable to cameras is
28%).
M/s Fotoflash Ltd. charged IGST 28% on inter- State supply.
Find the net GST liability in the following independent cases:
(I) If input tax credit is availed.
(II) If input tax credit is not availed. 4

(ii) Cotton Ltd. being a cloth merchant sold gift voucher to customer for ` 2,000 on
10th November to purchase specific cloth from its showroom. Goods actually
purchased by customer on 15th November for ` 2,400. Find the time of supply
and value of supply with regard to gift voucher in the hands of Cotton Ltd. 2

Answer:

5. (a) (i) 1. GSTR-3B is a monthly self-declaration that has to be filed by a registered

dealer from July, 2017 till March, 2018.
The features of GSTR – 3B are given below:
 A separate GSTR – 3B must be filed for each GSTIN
 Tax liability of GSTR – 3B must be paid by the last date of filing GSTR – 3B for
that month
 GSTR-3B cannot be revised

2. Every person who has registered for GST must file the return GSTR-3B including
nil returns. However, the following registrants do not have to file GSTR-3B:
 Input Service Distributors & Composition Dealers
 Suppliers of OIDAR
 Non-resident taxable person

(ii) As per section 40 of the CGST Act, 2017 every registered person who has made
outward supplies in the period between the date on which he become liable to

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registration till the date on which registration has been granted shall declare the
same in the first return furnished by him after grant of registration.

Hence taxable turnover to be declared by Mr. X for January 2019 is (` 8,00,000 + `

2,00,000) = ` 10,00,000.

(b) (i) (I) Net GST liability in case of input tax credit availed:

Particulars Value ` 28% IGST `

Output supply 15,000 4,200
Less: ITC 10,000
CGST 14% (1,400)
SGST 14% (1,400)
Net GST liability 1,400

(II) Net GST liability in case of input tax credit not availed:

Particulars Value ` 28% IGST Remarks

`
Output supply 15,000
Less: purchase price 12,800 ITC will form part of cost.
Difference known as 2,200 616 Charge GST on the margin or profit
margin earned on the goods (` 2,200 *
28%)

(ii) Time of supply is at the time issue of voucher i.e. 10th November.
Value of supply = ` 2,000 for gift voucher.

6. (a) Hema Pesticides Pvt. Ltd., a registered person under the GST law, furnishes the
following data for the GST paid by them in the month of November, 2018:

Particulars Amount
(`)
GST on machinery purchased and used in the factory premises 92,000
GST on machinery purchased and sent directly to a job worker working 42,000
for the company
GST on car purchased (Used mostly for business purposes; 25% usage 2,10,000
estimated for personal use of the directors)
GST on raw materials purchased (Goods are received in lots/instalments 2,00,000
and 25% of the materials were received in February, 2018).
In the earlier month, GST has been paid on another lot, for which 90% 1,60,000
delivery had been completed then and in the current month, balance
materials were received. GST paid in the earlier month was
GST on health insurance premium paid for the employees working in the 24,000
factory. Providing this is optional and the company has taken out this
measure to improve the relations with the labourers.

You are required to determine the quantum of input tax credit available to the above

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registered supplier for the given month. 7

(b) Write a brief note on Special Audit under Section 66 of the CGST Act, 2017. 7
Answer:

6. (a)
Particulars Amount
(`)
GST on machinery purchased and used in the factory premises 92,000

ITC allowable in full in respect of the same.

GST on machinery purchased and sent directly to a job worker working 42,000
for the company

ITC on capital goods directly sent to job worker's premises under challan
is allowed in terms of section 19(5) of CGST Act, 2017 read with rule 45(1)
of CGST Rules, 2017
GST on car purchased (Used mostly for business purposes; 25% usage Nil
estimated for personal use of the directors)

Car figures in the list of blocked assets for ITC and hence no ITC can be
availed.
GST on raw materials purchased (Goods are received in lots/ Nil
instalments and 25% of the materials were received in February, 2018).

Where the goods against an invoice are received in lots/

instalments, ITC is allowed upon receipt of the last lot/instalment vide first
proviso to section 16(2) of the CGST Act, 2017. ITC can be availed next
month only.

In the earlier month, GST has been paid on another lot, for which 90% 1,60,000
delivery had been completed then and in the current month, balance
materials were received. GST paid in the earlier month can now be
claimed as ITC, as per reverse logic of earlier para
GST on health insurance premium paid for the employees working in the Nil
factory. Providing this is optional and the company has taken out this
measure to improve the relations with the labourers.

ITC of health insurance is blocked in the given case, since said services
are not notified by Government as obligatory for employer to provide to
its employees under any law - in terms of section 17(5)(b)(iii) of the CGST
Act, 2017.

(b) Special Audit [Section 66 of the CGST Act, 2017]:

 Special Audit the registered person can be directed to get his records including
books of account examined and audited by a Chartered Accountant or a Cost

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Accountant during any stage of scrutiny, inquiry, investigation or any other

proceedings; depending upon the complexity of the case.

 Procedure: During the scrutiny, inquiry, investigation or any other proceedings of a

registered person, the Assistant Commissioner or any officer senior to him, having
regard to the nature and complexity of the case and the interest of revenue,
might be of the opinion that the value has not been correctly declared or the
credit availed is not within the normal limits.

In such cases, with the prior approval of the Commissioner, the Assistant
Commissioner or any officer senior to him can direct he registered person in FORM
GST ADT-03 to get his records including books of account examined and audited
by a specified chartered accountant or a cost accountant.

 The chartered accountant or a cost accountant will be nominated by the

Commissioner. The chartered accountant or cost accountant so nominated has
to submit a report of such audit within the period of ninety days, duly signed and
certified by him to the Assistant Commissioner.

 On an application made by the registered person or the chartered accountant

or cost accountant or for any material and sufficient reason, the Assistant
Commissioner can extend the said period by a further period of ninety days.

 The provisions of special audit shall have effect even if the accounts of the
registered person have been audited under any other provisions of the GST Act or
any other law for the time being in force.

 The registered person shall be given an opportunity of being heard in respect of

any material gathered on the basis of special audit and which is proposed to be
used in any proceedings against him under this Act or the rules made thereunder.
The expenses of the examination and audit of records, including the
remuneration of such chartered accountant or cost accountant, shall be
determined and paid by the Commissioner.

 On conclusion of the special audit, the registered person shall be informed of the
findings of the special audit in FORM GST ADT-04. Where the special audit results
in detection of tax not paid or short paid or erroneously refunded, or input tax
credit wrongly availed or utilised, the process of demand and recovery will be
initiated against the registered person.

7. (a) Radhakrishna, a registered person under GST, has furnished the following details for
the month of August, 2018:
Particulars Amount (`)
Supply of goods made outside State 10,00,000
Inter-State purchases of goods 8,10,000
Goods taken for personal use in above 10,000

The IGST was paid on 10th October, 2018. Compute the interest payable for the

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 SUGGESTED_ANSWER TO QUESTION_SYL2016_JUNE2019_PAPER-18

delayed payment. 7
Note: The IGST rate for the goods dealt with is 18%.

(b) M/s Xylo Ltd. being a dealer in new cars sold a Petrol Car on which applicable GST
rate is 28% and GST Cess rate is 1%. Transaction value is ` 5,00,000. Find the GST
liability. Can input credit be availed on Cess paid on inward supplies of the car by the
buyer if he is a car dealer? 7

Answer:

7. (a)
Computation of interest payable

Particulars `
IGST on Supply of goods made outside State (10,00,000 x 18%) 1,80,000
Less: Inter-State purchases of goods (8,00,000 x 18%) [ITC is not 1,44,000
available for goods taken for personal use]
Balance IGST payable by Radhakrishna ` 36,000
Due date for payment of IGST 20-09-2018
Actual date of payment 10-10-2018
Number of days of delay in making payment 20
Interest payable at 18% for delay (36,000X18%X20/365) r/off ` 355

(b)
Particulars `
Transaction Value 5,00,000
CGST 14% 70,000
(`5,00,000*14%)
SGST 14% 70,000
(`5,00,000*14%)
Cess 1% 5,000
(`5,00,000*l%)
Invoice price of the car 6,45,000

GST Liability (inclusive of cess = ` 1,45,000)

Yes, input credit can be availed on Cess paid on inward supplies if the buyer in turn is
a car dealer. However, credit of Cess paid can be utilized only towards payment of
Cess liability.

Section – B

(Customs duty and FTP)

Answer Question No. 8 which is compulsory and any two from the rest of this section.

8. Choose the most appropriate option from the following [Option to be given in capital
letters A, B C or D] and give brief reason/justification for your choice, the correct choice
or conclusion [1 mark for the correct choice and 1 mark for reason]: 2x3=6

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(i) In the context of Indian Customs law, ICEGATE means

(A) Indian Customs Electronic Data Interchange Gateway
(B) Indian Customs Electronic Gateway
(C) Inter Continental Electronic Gateway
(D) None of the above

(ii) Transit of goods without payment of customs duty is governed by Section ____________
of the Customs Act, 1962.
(A) 51
(B) 52
(C) 53
(D) 55

(iii) The following is not a condition precedent for grant of duty drawback for re-export of
duty paid goods:
(A) The goods must be clearly identifiable.
(B) The goods should have been actually imported earlier and import duty paid
thereon.
(C) The goods are actually re-exported to any place outside India.
(D) Entire lot of goods imported earlier should be re-exported and no portion should
remain.

Answer:

8.
(i) A This term appears in Shipping Bill (Electronic Declaration) Regulations, 2011
and this is what the term means.
(ii) C Section 53 of the Customs Act, 1962 contains the provisions relating to transit of
certain goods without payment of customs duty.
(iii) D Section 74 of the Customs Act, 1962 contains the necessary conditions. (D)
does not figure therein.

9. Product 'Vertigo' was imported by Mr. Mrinal Sen by air from Singapore to Hyderabad.
The details of the import transaction are as under:
Particulars Euro
Price of 'Vertigo' at Singapore exporter's factory 7,500
Freight from factory of the exporter to load airport (Singapore airport) 300
Loading and handling charges at the local airport 200
Air freight from said airport to Hyderabad airport 1,350
Insurance charges 1,400
Purchase commission 200

Even though the bill of entry was presented on 20-9-2018, the aircraft, having been
diverted to another foreign airport due to technical reasons, landed at the Hyderabad
airport only on 21-9-2018.

The other details furnished by the importer are as under:

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 SUGGESTED_ANSWER TO QUESTION_SYL2016_JUNE2019_PAPER-18

Particulars 20.09.2018 21.09.2018

Rate of basic customs duty 10% 12%
Exchange rate notified by CBEC per € ` 79 `80
Exchange rate prescribed by RBI per € ` 79.50 ` 80.50
Integrated tax leviable under Section 3(7) of the Customs Tariff 6% 12%
Act, 1975

Based on the above date, you are required to calculate the following:
(I) Assessable value of the product for the purpose of levying customs duty.
(II) Customs duty and tax payable. 12

Answer:

9.
Computation of Assessable Value, Customs Duty and Tax payable
Particulars Amount €
Ex-factory price of the goods at Singapore 7,500
Freight from factory of the exporter to load airport (airport in the 300
country of exporter)
Loading and handling charges at the Singapore airport 200
Freight from said airport to the airport of importation in India 1,350
(Hyderabad)
Total cost of transport, loading and handling charges associated with 1,850
the delivery of the imported goods to the place of importation
Add: Cost of transport, loading, unloading and handling charges 1,600
associated with the delivery of the imported goods to the place of
importation (restricted to 20% of FOB value i.e., 7,500 + 300 + 200 = 8,000 [Note 1]
Purchase commission is not to be included Nil
Insurance (actual) 1,400
[Where the actual insurance figure is known, the same has to be taken]
CIF for customs purpose 10,500
Landing charges at Hyderabad airport not to be added to the CIF value in view Nil
of the amendment in rule 10(2) of the CVR vide Notification No. 91/2017-Cm.
(NT) dated 26.09.2017.
Value for customs purpose 10,500
Exchange rate as per CBEC [Note 2] ` 80 per €

Amount (`)
Assessable value @ ` 80 per Euro 8,40,000
Add: Basic customs duty @ 12% [Note 3] 1,00,800
Add: Social Welfare Surcharge (10% on BCD) 10,080
Total 9,50,880
Add: IGST (12%) [Rounded off] [Note 4] 1,14,106
Value of Imported Goods 10,64,986
Total Custom Duty and Tax payable (` 1,00,800 + 10,080 + 1,14,106) ` 2,24,986

Notes:
1) In the case of goods imported by air, the cost of transport, loading, unloading and
handling charges associated with the delivery of the imported goods to the place of
importation shall not exceed 20% of the FOB value of the goods. [Fifth proviso to rule
10(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007
(CVR)].
2) Rate of exchange determined by CBEC is to be considered [Clause (a) of the explanation

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 SUGGESTED_ANSWER TO QUESTION_SYL2016_JUNE2019_PAPER-18

to section 14 of the Customs Act, 1962].

3) Section 15 of the Customs Act, 1962 provides that rate of duty shall be the rate in force on
the date of presentation of bill of entry or the rate in force on the date of arrival of
aircraft, whichever is later.
4) Integrated tax is levied on the sum total of the assessable value of the imported
goods and customs duties [Section 3(8) of the Customs Tariff Act, 1962].

10. (a) Mr. Jayesh, an Indian Entrepreneur, went to China to explore new business
opportunities on 05-04-2017. The following details, regarding imports are submitted by
him with the Customs authorities on return to India on 20-02-2018.
(i) 2 Music systems each worth ` 23,000
(ii) Jewellery brought by Mr. Jayesh worth ` 49,000 (18 Grams)
Write a brief note on his eligibility with regard to duty free baggage allowances as
per the Baggage Rules, 2016. 6

(b) Enumerate what are the eligible projects for the purpose of 'project imports' at
concessional rate of Customs Duty under Customs Tariff. 6

Answer:

10. (a)
Particulars `
Music system 23000*2 46,000
Add: Jewellery 49,000
95,000
Less: GFA 50,000
Dutiable goods 45,000

Total duty payable is `17,325 (i.e. 45,000 * 38.50%)

Note: Since, Mr. Jayesh stay abroad does not exceeds one year, he will not be
eligible for additional jewellery allowance under rule 5 of the Baggage Rules, 2016.

(b) Project Imports:

This concept has been introduced by the Government under the heading 9801 of
the Customs Tariff to cover all machinery, instruments apparatus and appliances,
components or raw materials for initial setting up or expansion of existing units for the
purpose of following eligible projects:

 Industrial plant,
 Irrigation project,
 Power project,
 Mining project,
 Oil & other mineral exploration project
 Other projects as notified by the Central Government. The spare parts of
machinery and raw material etc can be imported upto 10% of value of good.

These above are eligible projects for import at concessional rate of Customs duty.

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11. (a) Calculate the amount of duty drawback allowable under Section 74 of the Customs
Act, 1962 in following cases:
(i) Suresh imported a motor car for his personal use and paid ` 5,00,000 as import
duty. The car is re-exported after 6 months and 20 days.
(ii) Nikita imported wearing apparel and paid ` 50,000 as import duty. As she did not
like the apparel, these are re-exported after 20 days.
(iii) High Tech Ltd. imported 10 computer system paying customs duty of ` 50 lakh.
Due to some technical problems, the computer systems were returned to foreign
supplier after 2 months without using them at all. 6

(b) What is meant by High Seas Sales? What are the benefits of High Sea Sales
Transactions? 6

Answer:

11. (a) (i) The amount of duty drawback is ` 4,40,000 (i.e. ` 5,00,000 @ 88%), since these
goods are used in India.
(ii) Duty drawback is ` Nil, assumed that wearing apparels are re-exported after
being used.
(iii) Duty drawback is ` 49,00,000 (i.e. 50,00,000*98%). Since these good are re-
exported without being used.

(b) High Sea Sale Transaction means Sale Transaction done when goods are actually at
High Sea i.e. during sea transit between Port of Loading and Port of Discharge. The
date of transaction (agreement) should be between Bill of lading date and Vessel
arrival date at Port of discharge. High Sea Sale is done mostly by Traders, sole
Indenting Agent (of the Foreign Supplier) who buys in large quantity and then look
out for buyers at Destination Country.

Benefit of High Sea Sale Transaction are like

(i) Goods are available at short time to final buyers,
(ii) Also instead of buying entire shipment small quantities also can be bought for final
buyers and
(iii) First buyer can buy large quantity of goods at cheap/ reasonable price and sell
at best price to final buyers.

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 Suggested Answer_Syl16_Dec2018_Paper_18

FINAL EXAMINATION
GROUP IV
(SYLLABUS 2016)

SUGGESTED ANSWERS TO QUESTIONS

DECEMBER 2018

Paper- 18: Indirect Tax Laws and Practice

Time Allowed: 3 Hours Full Marks : 100

The figures in the margin on the right side indicate full marks.
Wherever necessary, you may make suitable assumptions and
state them clearly in your answer.
Working Notes should form part of the answer.

SECTION – A
Answer Question No. 1 which is compulsory and any four from the rest of this section.
2×7 = 14
1. Choose the correct answer with justification / workings wherever applicable :
(i) Under GST Act a supply of assortment of sweets, chocolates and firecrackers
packed in a gift hamper is
(a) Joint supply
(b) Composite supply
(c) Mixed supply
(d) Assorted supply
(ii) The due date for filing GSTR – 6 (Return for input Service distributor) is __________ of
the succeeding month.
(a) 10
(b) 13
(c) 18
(d) 20
(iii) Under GST input tax credit cannot be claimed on goods and services used as
inputs if
(a) Goods are purchased on credit.
(b) Goods are received and utilized, the invoice is received after two weeks
from the supplier.
(c) Good are destroyed by fire.
(d) Services are provided by a law firm on which GST has been paid under RCM.

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 Suggested Answer_Syl16_Dec2018_Paper_18
(iv) A person is not liable for registration under GST Act if
(a) Non-resident person making a taxable supply.
(b) An agriculturist selling produce out of cultivation of land.
(c) Dealer engaged in inter-state trade above threshold limit for registration.
(d) Casual taxable person making taxable supply.
(v) It is not mandatory to have the following field in a tax invoice under CGST Rules,
2017 :
(a) Date of its issue.
(b) HSN Code of goods or Accounting Code or Services
(c) Name and Address of the recipient
(d) Date of receipt of goods/services by the recipient.
(vi) Under GST Act the term UIN stands for
(a) User Identification Number
(b) Utility Identification Name
(c) Unique Identification Number
(d) Unique Individual Number
(vii) Following is not a part of the contents of a bill of supply :
(a) Description of Goods or Services or both
(b) Consecutive Serial number
(c) Signature or digital signature if registered of the recipient
(d) Signature or digital signature of the supplier or his authorized representative.
Answer : (1)
(i) (c) Mixed supply
Each of these items can be supplied separately, is not dependant on each other
and not bundled due to natural necessities. (Section 8 of CGST Act).
(ii) (b) Return for input Service distributor has to be filed by 13 th of the next month.
(iii) (c) Goods are destroyed by fire
ITC is not available on goods destroyed u/s. 17(5) of CGST Act.
(iv) (b) An agriculturist selling produce out of cultivation of land.
Income is related to agriculture and hence turnover is exempt from GST and
such agriculturist is not liable for registration under GST.
(v) (d) Date of receipt of goods/services by the recipient.
This is not a field prescribed (RULE 54-Section 31 read with Rule 46 of CGST Rules)
for Tax invoice.
(vi) (c) Unique Identification Number
As per GST Act any notified agency of the United Nations etc. can be granted
this number for claiming GST refund.
(vii) (c) Signature or digital signature if registered of the recipient.
This is not a field required under Section 31 (3) (c) read with Rule 49 of CGST Rules
for Bill of supply.

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 Suggested Answer_Syl16_Dec2018_Paper_18
2. (a) Shankar Pvt. Ltd. was awarded a contract in July 2017 for providing flooring and wall
tiling services in respect of a building located in Delhi by Padmapriya Ltd. As per the
terms of contract, Shankar Pvt. Ltd. was to provide all the required material for
execution of the contract. However, Padmapriya Ltd. also provided a portion of he
material.
Whether the services provided by Shankar Pvt. Ltd. are subject to GST? If yes,
determine the GST liability of Shankar Pvt. Ltd. from the following particulars: 8
Particulars Rs.
(i) Gross amount charged by the Shankar Pvt. Ltd. 6,00,000
(ii) Fair market value of the material supplied by Padmapriya Ltd. 1,00,000
(iii) Amount charged by Padmapriya Ltd. for the material [included 60,000
in (i) above]

Note : CGST 6% and SGST 6%

(b) Explain the concept of supply made in the course or furtherance of business as a
taxable event under GST law. 6

Answer : 2(a)
Works contract is treated as supply of service
Gross amount charged by the Shankar Pvt. Ltd. 6,00,000
Add: Fair market value of the material supplied by Padmapriya Ltd. 1,00,000
Less : Amount charged by Padmapriya Ltd. for the material (60,000)
Total value subject to GST 6,40,000

CGST 6% x 6,40,000 = Rs. 38,400

SGST 6% x 6,40,000 = Rs. 38,400
Total GST liability = Rs. 76,800

Answer : 2(b)
Supply made in the course or furtherance of business:
(a) In the course of business : Every persons carries out certain activities regularly for
running trade or commerce.
(b) Furtherance of business : Every business person use to think how to develop his
business or carrying out new activities. Such activities called as furtherance of
business.
GST is essentially a tax only on commercial transactions. Hence, only those supplies
that are in the course or furtherance of business qualify as supply under GST. Hence,
any supplies made by an individual in his personal capacity do not come under the
ambit of GST unless they fall within the definition of business as defined in the Act.
Sale of goods or service even as avocation is a supply under GST. Therefore, even if
a famous politician paints paintings for charity and sells the paintings even as a one-
time occurrence, the sale would constitute supply.
3. (a) Mrs. Poornima started a business in supply of goods on 12.12.2017 at Salem,
Tamilnadu. During the year ended 31.03.2018, the details of the supplies effected at
her Chennai office are as under :
Supply of taxable goods within State Rs. 16 lakhs
Supply of exempt goods Rs. 5 lakhs

She has not taken any GST registration. Determine the amount of penalty, if any,
which may be imposed by her on 31.03.2018. In respect of taxable goods, SGST is 6%

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 Suggested Answer_Syl16_Dec2018_Paper_18
and CGST is 6%.
Note : Assume that she crossed the Rs.20 lakhs limit on 25.01.2018. 6
(b) Mr. X has cleared goods from his factory on 20 th
May, 2017 for sale to Mr. Y for
Rs. 5,00,000. Effective rate of Excise Duty (ED) @ 12.5%. However ED Rs. 62,500 has
been paid on 6th June, 2017. The consignment received by Mr. Y on 5th July, 2017.
Find the following :
(i) Is Mr. Y eligible for ITC if so, what amount ?
(ii) Time limit within which receipt of inputs should be recorded in the books of
account of Mr. Y.
(iii) Mr. Y recorded receipt of inputs in the books of account on 15.08.2017, if so can
he avail the ITC ? 8

Answer : 3(a)
Penalty for non-registration under GST
Supply of taxable goods within State [SGST @6% and CGST @ 6%] Rs. 16L
Supply of exempt goods Rs. 5L
Aggregate turnover Rs. 21L

Where the aggregate turnover of a supplier making supplies exceeds Rs.20 lakhs in a
financial Year, he is liable to be registered under the act of the concern state or union
territory as the case may be. The said supplier must apply for registration within 30 days on
which he becomes liable for registration.
However, in the given case, Mrs. Poornima became liable to registration on 25.01.2018, she
did not apply for registration within 30 days of becoming liable to registration.
Sec. 122(1)(xi) of the CGST Act, 2017 enjoins that a taxable person who is liable to be
registered under the CGST Act, 2017 but fails to obtain registration shall be liable to pay
penalty of
(a) Rs. 10,000
Or
(b) An amount equivalent to the tax evaded. Whichever is higher
In the given case, (b) is 12% of Rs. 16,00,000 i.e. Rs. 1,92,000.
Hence a sum of Rs. 1,92,000 will be levied a penalty for failure to get himself registered.
Answer : 3(b)
(a) Yes. Mr. Y is eligible to avail the ITC of Rs. 62,500 provided he deals with taxable supplies
being registered person.
(b) Inputs or Input Services recorded in the books of account 30 days from 1-7-2017.
Therefore, Mr. Y should account for by 30th July, 2017.
(c) Since, period of 30 days may, on sufficient cause being shown, be extended by the
Commissioner for a further period not exceeding 30 days.
In the given case Mr. Y can take credit on inputs on 15 th Aug 2017, provided permission
granted by the Commissioner for extension not exceeded 30 days.

4. (a) (i) State the functions of the GSTN, i.e. the role assigned to GSTN. 5
(II) Brahmi Foundation, Noida is registered as a trust under section 12AA of the
Income-tax Act, 1961. With effect from 01.08.2017, it intends to offer its guest
houses to the pilgrims visiting the Noida shrine at Rs. 900 per day and their
marriage hall at Rs. 12,000 per day.
They want to know whether these will attract GST liability. Advise them suitably.
5

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 Suggested Answer_Syl16_Dec2018_Paper_18
(b) In the light of the provisions of GST law as it stands w.e.f. 01.07.2017, briefly explain
as to whether it is taxable service and who is the person responsible for paying GST
in the following situations : 4
(i) Legal service provided by Senior Advocates to business entities.
(ii) Mere Contracts for representation service provided by the Senior Advocates
to any business entity has been entered into through another advocate or
firm of advocates. State the turnover criteria of the previous year which
applies, including the one for special category States.
Answer : 4(a)(i)
Functions of the GSTN (i.e. Role assigned to GSTN):
Creation of common and shared IT infrastructure for functions facing taxpayers has been
assigned to GSTN and these are :
filing of registration application.
filing of return.
creation of challan for tax payment.
settlement of IGST payment (like a clearing house),
generation of business intelligence and analytics etc.

All statutory functions to be performed by tax officials under the GST like approval of
registration, assessment, audit, appeal, enforcement etc. will remain with the respective
tax departments.
Answer : 4(a) (ii)
Renting of precincts of a religious place meant for general public, owned or managed by
an entity registered as a charitable or religious trust under section 12AA of the Income-tax
Act, 1961 is exempt from GST.
However, w.e.f. 1-07-2017, this exemption shall not be applicable to.
1. Renting of rooms where charges are Rs. 1000 or more per day.
2. Renting of premises, community halls, kalyanmandapam or open area, etc where
charges are Rs. 10,000 or more per day.
Thus, the law gives a limited exemption to renting of only religious precincts or a religious
place meant for general public by the entity registered under Section 12AA of the
Income-tax Act or Sec. 10(23C)(v) or Sec.10(23BBA) of the Income-tax Act, 1961.
In the given case, the renting of guest houses is at Rs. 800 per day ; so this will not attract
any GST liability.
However, the marriage halls are rented at Rs. 12,000 per day. Hence this will be reckoned
for GST liability.
If GST is to be avoided, then such renting of marriage hall should be at less than Rs. 10,000
per day.
Brahmi foundation is to be advised accordingly.

Answer : 4(b)
GST payable by whom ?
(i) Where a senior advocate renders representation services for a business entity
whose turnover in the previous year exceeds 20 lakhs, the same is taxable service
in both the situations.
GST will be payable by the Recipient of service, which is the business entity, who is

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 Suggested Answer_Syl16_Dec2018_Paper_18
litigant, applicant or petitioner.

(ii) Recipient of service that is the business entity whose previous year turnover more
than Rs. 20 lakhs, who is the litigant, applicant or petitioner, is liable to pay GST.
In case of special category States is Rs. 10 lakhs.

5. (a) (i) Sarath Pharma Ltd., filed an appeal before the Appellate Tribunal against the order
of the Appellate Authority, wherein the issue was revolving around the place of
supply. The Tribunal decided the issue against the company and in favour of the
Department.
The company is of the strong view that its stand is correct and consequently, there
is need to take the issue to an appellate forum higher than the Appellate Tribunal.
You being the Cost Accountant dealing with indirect tax matters, advise the
company about filing appeal before the suitable forum. 5

(ii) Vaibhav, a registered supplier under GST law, has furnished the following details for
the month of August, 2017 :
Particulars Amounts (Rs.)
Purchase of goods made from outside State 8,00,000
Inter-State supply of goods 10,00,000
Goods taken for personal use in above 20,000

The IGST was paid on 10th October, 2017.

Calculate the interest payable for the delayed payment. 5
You are informed that the IGST rate for all the goods dealt with by Vaibhav is 18%.

(b) Padmaja, a registered supplier, rendered taxable service for Rs. 2 lakhs on
01.12.2017. The tax invoice was raised on 09.12.2017. Payment was received on
22.11.2017.
Determine the time of supply for GST purposes. 4

Answer : 5(a)(i)
Filing of appeal before suitable forum
Where the supplier or the Department is not satisfied with the order passed by the State
Bench or Area Benches of the Appellate Tribunal, appeal can be filed before the High
Court if the High Court is satisfied that such an appeal involves a substantial question of
law [section117(1) of the CGSTAct,2017].
Nevertheless, appeal against orders passed by the National Bench or Regional Benches
of the Tribunal can be filed only before the Supreme Court and not High Court
As per section 109(5) of the Act, only the National Bench or Regional Benches of the
Tribunal can decide appeals where one of the issues involved relates to the place of
supply.
Since the issue involved in the given case relates to place of supply, the appeal in his
case would have been decided by the national bench or regional bench of the tribunal.
Accordingly, Sarath Pharma Ltd., Will have to file an appeal before the supreme court
and not the high court.

Answer : 5(a)(ii)
Computation of interest for belated payment of GST

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 Suggested Answer_Syl16_Dec2018_Paper_18
IGST on Supply of goods made outside State (10,00,000 x 18%) 1,80,000
Less : Inter-State purchases of goods (7,80,000 x 18%) 1,40,400
[ITC is not available for goods taken for personal use]
Balance IGST payable Rs. 39,600
Due date for payment 20-9-2017
Actual date of payment 10-10-2017
Number of days of delay 20
Interest payable at 18% for delay (39, 600x18%x20/365) rounded off Rs. 391
Total marks

Answer : 5(b)
Time of supply in case of Services is the earliest of the following as per Sec 13(2)-

1. The date of issue of invoice by the supplier, if the invoice is issued within the period
prescribed under sub-section (2) of section 31 (30 days from rendering of the service)

2. The date of provision of service, if the invoice is not issued within the period prescribed
under sub-section (2) of section 31

3. Date of receipt of payment

In the instant case even though the invoice has been issued within the time limit prescribed u/s
31(2), it is irrelevant to determine time of supply.

Since the date of receipt of payment (i.e. 22.11.17) is earliest, hence the time of supply shall
be 22.11.17.

6. (a) Explain the accounts and records required to be maintained by registered person
under GST law. 7
(b) M/s. A. Ltd. sold plant and machinery after being used in the manufacture of
taxable goods for Rs. 4,00,000 on 1st November, 2018. GST is payable on
transaction value of plant and machinery 18%. M/s. A. Ltd. had purchased this
machine vide invoice dated 22nd November, 2017 for Rs. 5,50,000 plus GST 18%.
M/s. A Ltd. availed the input tax credit on said plant and machinery. Find the
amount payable by M/s. A. Ltd. under section 18(6) of the CGST Act, 2017 7
Answer : 6(a)
Every registered person is required to self-assess the taxes payable and furnish a return for
each tax period (i.e. the period for which return is required to be filed).
The compliance verification is done by the department through scrutiny of returns, audit
and/or investigation. Thus the compliance verification is to be done through documentary
checks rather than physical controls. This requires certain obligations to be cast on the
taxpayer for keeping and maintaining accounts and records.
As per Section 35(1) of the CGST Act, 2017 :
Every registered person is required maintain a true and correct account of the following:
(a) Production or manufacture of goods.
(b) Inward and outward supply of goods or services, or both
(c) Stock of goods

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 Suggested Answer_Syl16_Dec2018_Paper_18
(d) Input tax credit availed
(e) Output tax payable and paid
(f) Any other particulars deemed necessary
The above records must be maintained at each place of business registered under GST.
In addition, the rules (i.e. Rule 56(1) of the CGST Rules, 2017) also provide that the
registered person shall keep and maintain records of –
(a) Goods or services imported or exported or
(b) Supplies attracting payment of tax on reverse charge along with the relevant
documents, including invoices, bills of supply, delivery challans, credit notes, debit
notes, receipt vouchers, payment vouchers, refund vouchers and e-way bills.

Rule 56(2) of the CGST Rules, 2017 every registered person, other than a person paying tax
under section 10, shall maintain the accounts of stock in respect of goods received and
supplied by him.

It means the above records not required to be maintained by a supplier opting for
composition levy.

Answer : 6(b)
Particulars Amount in Working note
ITC taken on capital goods 99,000 5,50,000 x 18%
Less : 25% reduction (24,750) No. of quarters = 5(5% x 5 = 25% reduction)
Balance ITC 74,250
Tax on Transaction value 72,000 4,00,000 x 18%
Note : M/s. A Ltd. shall pay amount equal to the input tax credit taken on the said
capital goods reduced by 5% per quarter or part thereof from the date of the issue of
the invoice fur such goods or the tax on the transaction value of such capital goods u/s.
15 of the CGST Act, 2017 whichever is higher.
Therefore, M/s. A. Ltd. is liable to pay an amount of Rs. 74,250, being higher than
Rs. 72,000.

7. (a) Under the Service Tax regime, tour operator services were charged at abated rate of
9% whereas in Goods & Services Tax Act, 2017 rate of tax fixed is 5% which resulted
in reduction of tax from 9% to 5%.
You are asked to determine the benefit, if any to be passed by the tour operator to
the recipient of services. 7
(b) Enumerate and Explain the advantages of GST. How has introduction of GST
benefitted the consumers and general public ? 7

Answer : 7(a)
The tax rate reduction benefit to the extent of 4% to be passed on to recipient.
Particulars Service Tax regime GST Remarks
regime
Taxable value 100 100
ST/GST rate (%) 9% 5%
ST/GST (Rs.) 9 5
Reduction of Rs. 4 is benefit to
Total Invoice value 109 105
be passed on to recipient.

Answer : 7(b)
ADVANTAGES OF GST

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 Suggested Answer_Syl16_Dec2018_Paper_18
a) One Nation One Tax.
b) Removal of bundled indirect taxes such as VAT, CST, Service tax, CAD, SAD and
Excise.
c) Removal of cascading effect of taxes; i.e. removes tax on tax.
d) Increased ease of doing business.
e) Lower cost of production, increase in demand will lead to increase in supply.
Hence, this will ultimately lead to rise in the production of goods. Resultantly boost
to make in India initiative.
f) It will boost export and manufacturing activity, generate more employment and
thus increase GDP with gainful, employment leading to substantive economic
growth ;
g) Rationalisation of tax rates, removal of cascading effect will ultimately result in lower
prices benefitting the consumers and general public.
Section- B
Answer Question No. 8 which is compulsory and any two from the rest in this section.
2×3= 6
8. Choose the correct answer with justification/workings wherever applicable.
(i) Under Foreign Trade Policy export and import goods are broadly categorized.
Which of the following statements is correct ?
(A) Free i.e. general goods are allowed to be imported without payment of any
customs duty.
(B) Restricted goods are banned and not allowed to import or export.
(C) Restricted goods are allowed to be imported only if used for re-export.
(D) Restricted goods are allowed to be imported or exported only with
authorization.
(ii) Which of the following is a document not required to be filled for claiming of duty
drawback on re-export ?
(A) Import Invoice
(B) Evidence of payment of duty at the time of import.
(C) Export bill with packing list
(D) Permission from CBEC authorizing re-export of goods
(iii) Derelict are goods that
(A) are abandoned by the owner in an emergency with a hope of recovering it
later.
(B) Owner has no intention to abandon but get sunk and drift to the shore.
(C) Owner has no intention to abandon but float and drift to the shore.
(D) Are abandoned by owner of goods without any hope of recovery.

Answer : 8
(i) (d)
Restricted goods are allowed to be imported or exported only with
authorization as per FTP – 2015 – 2020. Other choices are incorrect.

(ii) (d)
It is not permission from CBEC but from RBI authorizing re-export of goods
which is to be filed where applicable.

(iii) (d)
Derelict goods are those abandoned by owner of goods without any hope

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 Suggested Answer_Syl16_Dec2018_Paper_18
of recovery. Other choices are incorrect.

9. (a) After staying aboard for 16 months, Mr. Vayudev shifted his residence to India from
Sydney to Kolkata on 12.10.2017. At the time of landing at Kolkata, he brought
the following Items :
Sl. No. Particulars Amount (Rs.)
(i) Gold bars 30 grams valued at 90,000
(ii) Alcoholic liquor 4 litres valued at 10,000
(iii) 20 boxes of cigarettes, each box containing 10 nos., 4,000
valued at
(iv) One notebook computer 1,00,000
(v) One PC meant for personal use 40,000
(vi) Hand pistol 83,000
You are required to compute the customs duty payable by him for the baggage.
7
(c) In the context of foreign trade policy, what do you understand by the term “Standard
Input Output Norms (SION)”? What are the basic requirements of SION? 5
Answer : 9(a)
Baggage allowance and duty payable
Sl. No. Particulars Amount (Rs.)
1. Gold bars 30 gram valued at 90,000
[No DFA for gold bars ; only for gold jewellery it is available]
2. Alcoholic liquor 2 litres valued at 5,000
[DFA available for 2 litres]
3. 20 boxes of cigarettes, each box containing 10 nos. valued at 2,000
[DFA available for 100 sticks only]
4 One notebook computer Nil
[Fully covered by DFA]
5. One PC meant for personal use 40,000
[DFA is not allowable for a PC]
5. Hand pistol Nil
[Covered by DFA]
Gross value of baggage 1,37,000
Less : General free allowance 50,000
Customs duty payable for 87,000
Customs duty at 36.05% 31,363

Answer : 9(b)
Standard Input Output Norms :
Standard Input Output Norms or SION in short is standard norms which define the amount
of input/inputs required to manufacture unit of output for export purpose, SION is notified
by DGFT in the Handbook, and is approved by its Boards of Directors.
Input output norms are applicable for the products such as electronics, engineering,
chemical, food products including fish and marine products, handicraft, plastic and
leather products, etc.
An application for modification of existing Standard Input-Output norms may be filed by
manufacturer exporter and merchant-exporter.
The Directorate General of Foreign Trade (DGFT) from time to time issue notifications for
fixation or addition of SION for different export products. Fixation of Standard Input
Output Norms facilitates issues of Advance License to the exporters of the items without

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 Suggested Answer_Syl16_Dec2018_Paper_18
any need for referring the same to the Headquarter office of DGFT on repeat basis.
Basics Requirements of Standard Input Output Norms
For fixation/ medication of Standard Input Output Norms (SION) following details are
required :
Technical Details of the export product as per the details given in Appendix 33.
Chartered Engineer certificate certifying the import requirements of raw materials in
the format given in Appendix 32B.
Production and Consumption data of the manufacturer / supporting manufacturer of
the preceding three licensing years as given in serial no. 3 of sub section XII, duly
certified by the Chartered accountant/Cost Accountant/Jurisdiction Excise Authority.

10. (a) From the particulars given below, find out the assessable value of the imported goods
under the Customs Act, 1962 : 8
US $
(I) Cost of the machine at the factory of the exporting country 10,000
(ii) Transport charges incurred by the exporter from his factory to 500
the port for shipment
(iii) Handling charges paid for loading the machine in the ship 50
(iv) Buying commission paid by the importer 50
(v) Freight charges from exporting country to India 1,000
(vi) Exchange Rate to be considered 1$ - Rs. 65

(b) Under Foreign Trade Policy (FTP), explain what is Board of Trade (BOT) ? 4

Answer : 10(a)
Statement showing assessable value for imported goods :
S. Particulars Value US $ Working
No.
i) Cost of the machine at the factory of the 10,000
exporting country
ii) Transport charges incurred by the 500
exporter from his factory to the port for
shipment
iii) Handling charges paid for loading the 50
machine in the ship.
FOB Value of Exporter 10,550
iv) Buying commission paid by the importer - Not addable into the
assessable value
v) Cost of insurance 118.6875 @1.125% on FOB value
vi) Freight charges from exporting country to 1,000
India
vi) CIF Value 11,668.6875
vii) 1% Unloading charges 116.686875 1% on CIF value
Assessable value (in USD) 11,785.3743
75
viii) Assessable value (in INR) 7,66,049 65 x US $ 11,785.374375
= 7,66,049

Answer : 10(b)

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 Suggested Answer_Syl16_Dec2018_Paper_18
Board of Trade has been constituted to advise Government on Policy measures like :
Improve exports,
Review export performance,
Review policy and procedures for import and exports and
Examine issues relevant for promotion of India’s foreign trade.
Commerce and Industry Minister will be the Chairman of the BOT. Government shall also
nominate up to 25 persons. Board of Trade will meet at least once every quarter.

11. (a) A consignment of 800 metric tonnes of edible oil of Malaysian origin was imported by
a charitable organization in India for free distribution to below poverty line citizens in
a backward area under the scheme designed by the Food and Agricultural
Organisation. This being a special transaction, a nominal price of US $ 10 per metric
tone was charged for the consignment to cover the freight and insurance charges.
The Customs House found out that at or about the time of import of this gift
consignment, there were following imports of edible oil of Malaysian origin :
Sl. No. Quantity imported in metric tones Unit price in US $ (CIF)
(i) 20 260
(ii) 100 220
(iii) 500 200
(iv) 900 175
(v) 400 180
(vi) 780 160

The rate of exchange on the relevant date was 1 US $ = Rs. 63.00 and the rate of
basic customs duty was 15% ad valorem. There is no IGST.
Calculate the amount of duty leviable on the consignment under the Customs Act,
1962 with appropriate assumptions and explanations where required. 6
(b) Examine whether benefit of Service Exports from India Scheme (SEIS) can be availed
with respect to notified services provided by service providers located in India in the
current financial year in the following independent cases : 6
(i) Net Foreign Exchange (NFE) earned by Mr. Raj, a service provider, in the
preceding financial year is USD 4,500.
(ii) X & Co., is a partnership firm, supplier of taxable services, has earned net
foreign exchange to the turn of USD 17,500 in the preceding financial year.
(iii) Mr. Roshan, a service provider, has earned net foreign exchange of USD 13,000
in the preceding financial year. Out of this, USD 4,000 has been paid to Mr.
Roshan through the credit card of the foreign client.
Note: All the above service providers have an active IEC at the time of rendering services.

Answer : 11(a)

Calculation of amount of duty payable : -

Exchange rate of $ 1 = Rs.63
CIF Value (800 metric tonnes x 160 USD x Rs.63) = Rs. 80,64,000
Add : Landing charges 1% on CIF = Rs. 80,640
Assessable Value = Rs. 81,44,640
15% Basic Customs duty on Rs.81,44,640 = Rs. 12,21,696

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 Suggested Answer_Syl16_Dec2018_Paper_18
Add : Education cess @2% on 12,21,696 = Rs. 24,434
Add : Secondary and higher education cess @ 1% 12,21,696 = Rs. 12,217
Total custom duty payable = Rs. 12,58,347
Note : 1) More than one transaction value for identical goods is given, we are to take
the lowest price of the quantity which is nearest to the quantity of import.
2) It is assumed that landing charges are incurred.

Alternative answer of Question no. 11. (a) with assumption.

that landing charges are not incurred:-

Calculation of amount of duty payable:—

exchange rate of $ 1 = Rs. 63
CIF Value (800 metric tonnes x 160 USD x Rs. 63)/Assessable Value = Rs. 80,64,000
15% Basic Customs duty on Rs. 80,64,000 = Rs. 12,09,600
Add: Education cess @ 2% on Rs. 12,09,600 = Rs. 24,192
Add: Secondary and higher education cess @ 1% on Rs. 12,09,600 = Rs. 12,096
Total custom duty payable = Rs. 12,45,888

Notes:
1. More than one transaction value for identical goods are given, we are supposed to take
the lowest price of the quantity which is nearest to the quantity of import.
2. It is assumed that landing charges are not incurred.

Answer : 11(b)
(i) Mr. Raj is not eligible for SEIS Scheme as his net foreign exchange earnings are less
than USD 10,000 (minimum limit for individuals)

(ii) X & Co., being a partnership firm eligible for SEIS Scheme as their net foreign
exchange exceeds the limit of USD 15,000 (minimum limit for firms).

(iii) Foreign exchange earned through credit cards is counted for the purpose of
computing the limit of minimum net foreign exchange required for being eligible to
SEIS Scheme. Thus, Mr. Roshan is eligible for SEIS Scheme.

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 Suggested Answers_Syl2016_June2018_Paper 18

FINAL EXAMINATION
GROUP - IV
(SYLLABUS 2016)

SUGGESTED ANSWERS TO QUESTIONS

JUNE - 2018
Paper-18 : INDIRECT TAX LAWS AND PRACTICE
Time Allowed : 3 Hours Full Marks : 100

The figures in the margin on the right side indicate full marks.
Wherever necessary, you may make suitable assumptions and state them clearly in your answer.
Working notes should form part of the answer.

Section – A
Answer Question No. 1 which is compulsory and any four from the rest of this section.

1. Choose the correct answer with justification/workings wherever applicable: 2×7=14

(i) GST is a __________________ based tax.

(a) Territory
(b) Origin
(c) Destination
(d) None of the above

(ii) A new supplier has taxable intra-State sales, exempt intra-State sales and export
sales of goods. He should get himself registered under GST law, where
(a) the aggregate value of taxable intra-State goods exceeds ` 20 lakhs.
(b) the aggregate value of taxable as well as exempt intra-State goods exceeds ` 20
lakhs.
(c) the aggregate value of all the three items exceeds ` 20 lakhs.
(d) the aggregate value of taxable intra-State goods as well as export sales exceeds
` 20 lakhs.

(iii) Following is an intra-State supply:

(a) Goods sent from Delhi to another dealer in Delhi.
(b) Goods sent from Delhi to a SEZ in Noida, Uttar Pradesh.
(c) Goods sent from Delhi to Chandigarh branch (Haryana) of the same supplier.
(d) None of the above

(iv) A casual taxable person is required to obtain registration where he makes

(a) Taxable inter-State supply.
(b) Taxable inter-State or intra-State supply.
(c) Taxable inter-State or intra-State supply whose proposed value exceeds `20
lakhs.
(d) In none of the above situations.

(v) Subbu, a registered supplier based at Erode coached the staff of a software company
in Hyderabad, which is registered. The classes were held at Erode. The place of supply is:
(a) As mutually agreed upon
(b) As decided by the Department, whichever is more favourable to them.
(c) Erode
(d) Bengaluru

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 Suggested Answers_Syl2016_June2018_Paper 18

(vi) Advance ruling can be declared to be void by the Authority if it has been obtained
by an applicant/appellant by:
(a) Fraud
(b) Suppression of facts
(c) Misrepresentation of facts
(d) Any one of the above

(vii)For the year 2017-18 due date of filling of annual return is 31.12.2018. The books and
records of 2017-18 must be maintained till
(a) 31.03.2024
(b) 31.12.2024
(c) 31.12.2026
(d) 31.03.2034

Answer:

1.
(i) c Under GST law, the share of GST goes to the State where the destination
lies or
where the movement of goods ends, unlike VAT, where it went to the
State where the movement originated.
(ii) c For the purposes of registration under the GST law, aggregate turnover
has to be considered. All three items given in the problem are included in
the ambit of the term aggregate turnover.
(iii) a For intra-State supply, the origin and destination must be in the same
State or Union Territory.
(iv) b As per section 24 of the CGST Act, 2017, a casual taxable person making
supply of taxable goods is required to obtain registration. It does not
matter whether such supply is intra-State or inter-State.
(v) All four As per sec 12(5) of the IGST Act, PoS for service in relation to training
choices provided to a registered person is the place of recipient of service. Here,
given the software company in Hyderabad is the recipient of service. So, the
are correct answer will be Hyderabad.
incorrect
(vi) d Sec 104 of CGST Act 2017 specifies the three cases - Viz. fraud,
suppression of material facts, mis-representation of facts as reasons for
holding advance ruling to be void.
(vii) b 31.12.2024 - As per section 36 of CGST Act books and records are to be
maintained for 72 months (6 Years) from the date of furnishing the return.

2. (a) What is the difference in tax consequence between intra-State (from HO to branch in
same State) and inter-State stock transfers (from HO to branch in different State) of the
same supplier, which is a private limited company? What kind of GST will be levied? 6

(b) Sakshitha Pvt. Ltd., a registered supplier, furnish the following details relating to
supplies effected during December, 2017: 8
Particulars Amount (`)
Sale price charged to customers within State (Excluding GST) 10,00,000
Service charges levied in the invoices 11,000
Packing and forwarding expenses incidental to sale 14,200
Weighment charges, shown separately in invoices 7,800
Commission charged to buyers 15,000
Prompt payment discount, indicated in invoice 1%, if payment made
within 1 month.

The rates of taxes for the goods supplied are as under:

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Particulars Rate
CGST 6%
SGST 6%
IGST 12%
Additional information: 60% of the customers did not make the payment within one
month from the date of supply. Hence the supplier recovered the prompt payment
discount offered to them.

Answer:

2. (a) GST will be leviable only where the supply is made by an entity having a GST number
to another GST number.

Where a supplier has branch within the same State, only one GST registration and GST
number will be there.

Hence transfer to a branch within the same State will not attract any GST.

Where the company has a branch in another State, separate registration is required
in the said State, hence the GST number in that State will be different.

As a consequence, when the company transfers stock to its branch in different State,
it will be treated as inter-State supply. As a consequence, IGST will be leviable.

Intra-state stock transfer is taxable only when entity has more than one registration in
one state. In that case, CGST plus SGST will be levied.

(b) Determination of GST liability

Particulars Amount (`)
Sale price charged to customers within State (Excluding GST) 10,00,000
Add: Service charges levied in the invoices [See Note 1] 11,000
Packing and forwarding expenses incidental to sale [See Note 1] 14,200
Weighment charges, shown separately in invoices [See Note 1] 7,800
Commission charged to buyers [See Note 1] 15,000
10,48,000
Less: Prompt payment discount, indicated in invoice 1% [See Note 2] 10,000
Value of taxable supply 10,38,000
SGST payable at 6% 62,280
CGST at 6% 62,280

Notes:
1. As per section 15 of the CGST Act, 2017, all incidental receipts like service
charges, commission, packing & forwarding, weighment charges will form part of
the taxable supply.
2. Prompt payment discount is deductible, since it is known at the time of supply. It is
immaterial that 60% of the customers did not make the payment within the
eligible period of 1 month. When the supplier issues debit note and recovers the
same from buyers, the same will become taxable then.

3. (a) Mr. X a dealer dealing with intra-State supply of goods and services has place of
business in India furnished the following information in the financial year 2017-18:
(i) Sale of taxable goods by Head Office located in Chennai for ` 1,00,000.
(ii) Supply of taxable services by Branch office at Bengaluru for ` 50,000.
(iii) Supply of goods exempted from GST ` 10,000.
(iv) Export of goods and services for ` 2,00,000.
(v) Sale of goods acting as agent on behalf of principal for ` 15,00,000.

Advice Mr. X whether he is required to register himself under GST law. 7

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(b) Vimala Transports & Co., a partnership firm based at Chennai, is running a regular
tourist bus service, carrying passengers and goods from Chennai to Bengaluru in
Karnataka State and Trivandrum in Kerala State, with effect from 1st September, 2017.

The firm wants to know whether such inter-State movement of various modes of
conveyance carrying goods or passengers or both, between distinct persons as
specified in section 25(4) of the CGST Act [except in cases where such movement is
for further supply of the same conveyance],is coming under IGST.

You are required to advise the firm suitably. 7

Answer:

3. (a)
Statement showing aggregate turnover in a Financial Year
Particulars Value in (`)
Sale of taxable goods by Head Office located in Chennai 1,00,000
Supply of taxable services by Branch office at Bengaluru 50,000
Supply of goods exempted from GST 10,000
Export of goods and services 2,00,000
Sale of goods acting as agent on behalf of principal 15,00,000
Aggregate turnover 18,60,000
Since, aggregate turnover does not exceeds ` 20 lakhs, Mr. X is not required to
register under GST.

Alternative answer: As per sec. 24(vii) of the CGST Act where it is states that persons
who make taxable supply of goods or services or both on behalf of other taxable
persons whether as an agent or otherwise, have to mandatorily take registration
irrespective of their amount of turnover. As per this provision, threshold limit of ` 20
lakhs (` 10 lakhs in special categories of states) is not applicable for intermediaries.
Further "As per Section 22 of the Central Goods and Service tax Act, “Every supplier
shall be liable to be registered under this Act in the State or Union territory, other than
special category states, from where he makes a taxable supply of goods or services
or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees.”

(b) Case study

The legal provisions in GST laws are as under:
a) As per section 24(1)(i) of the CGST Act, persons making any inter-State
taxable supply shall be required to be registered under this Act. [Persons
making inter- State supplies of taxable services and having an aggregate
turnover upto ` 20 lakh in a financial year have been exempted from
obtaining compulsory registration under section 24(i) of the CGST Act
b) As per section 25(4) of the said Act a person who has obtained or is required
to obtain more than one registration, whether in one State or Union territory
or more than one State or Union territory shall, in respect of each such
registration, be treated as distinct persons for the purposes of this Act.
c) Schedule I to the said Act specifies situations where activities are to be
treated as supply even if made without consideration which also includes
supply of goods or services or both between related persons or between
distinct persons as specified in section 25, when made in the course or
furtherance of business
d) Section 7(2) of the CGST Act envisages that activities or transactions
undertaken by the Central Government, a State Government or any local
authority in which they are engaged as public authorities, as may be notified
by the Government on the recommendations of the Council, shall be
treated neither as a supply of goods nor a supply of services.

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Against the above background, the issue of inter-state movement of goods like
movement of various modes of conveyance, between distinct persons as specified in
section 25(4) of the said Act, not involving further supply of such conveyance,
including trucks, buses, etc., (a) carrying goods or passengers or both; or (b) for
repairs and maintenance, [except in cases where such movement is for further
supply of the same conveyance] was discussed in GST Council's meeting held on
11th June, 2017 and the Council recommended that such inter-state movement shall
be treated 'neither as a supply of goods or supply of service' and therefore not be
leviable to IGST.

In view of the above, the inter-state movement of goods like movement of various
modes of conveyance, between distinct persons as specified in section 25(4) of the
CGST Act including the bus services, may not be treated as supply and consequently
IGST will not be payable on such supply. [Circular No. 1/1/2017 IGST dated 07.07.2017]

4. (a) (i) Explain the concept of recovery in installments under Section 80 of CGST Act 2017
giving the circumstances in which such facility can be allowed and will not be
allowed to the defaulter. 5
(ii) Write a brief note on provisional assessment under section 60 of the CGST Act, 2017.
4

(b) Balaji & Co., a partnership firm, intend to start a business in Rajasthan, for supply of
garments, mostly meant for overseas buyers. As regards the classification of the
goods, there some difficulties in determination. Can the firm seek advance ruling from
the Authority for Advance ruling in respect of the issue of classification of goods? Can
the firm also seek ruling on issues involving place of supply of goods? 5

Answer:

4. (a) (i) Recovery in installments (Sections 80 of the CGST Act, 2017)

 Commissioner can allow payment with interest by defaulter in monthly
installments not exceeding 24 installments.
 In case of default in payment of any one installment on its due date, the
whole outstanding balance payable on such date shall become due.
 For seeking installment facility, taxable persons can file application
electronically in form GST DRC-20.

The installment facility will not be allowed if:

 The taxable person has already defaulted on the payment of any amount
under GST law and recovery process is already undergoing;
 The taxable person has not been allowed to make payment in installments in
the preceding financial year under GST law; and
 The amount for which installment facility is sought is less than ` 25,000/-

(ii) Provisional assessment (Section 60 of the CGST Act, 2017):

According to section 60(1) of the CGST Act, 2017 where the taxable person is
unable to determine the value of goods or services or both or determine the rate
of tax applicable thereto, he may request the proper officer in writing giving
reasons for payment of tax on a provisional basis.

The proper officer (i.e. The Asst. Commissioner/Dy. Commissioner of Central Tax)
shall pass an order, within a period not later than 90 days from the date of receipt
of such request, allowing payment of tax on provisional basis at such rate or on
such value as may be specified by him.

The Asst. Commissioner/Dy. Commissioner of Central Tax provisionally determines

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 Suggested Answers_Syl2016_June2018_Paper 18

the amount of tax payable by the supplier and is subject to final determination.

On provisional assessment, the supplier can pay tax on provisional basis but only
after he executes a bond with security, binding them for payment of the
difference between the amount of tax as may be finally assessed and the
amount of tax provisionally assessed (Section 60(2) of the CGST Act, 2017).

(b) Advance Ruling

Advance ruling under GST can be sought by a registered person or a person desirous
of obtaining registration under GST law [Section 95(c) of the CGST Act, 2017].
Therefore, it is not mandatory for a person seeking advance ruling to be registered.

Section 97(2) of the CGST Act, 2017 enjoins that the questions/matters on which
advance ruling can be sought. It provides that advance ruling can be sought for,
inter alia, determining the classification of any goods or services or both. Therefore,
Balaji & Co. can seek the advance ruling for determining the classification of the
goods proposed to be supplied by him.

Determination of place of supply is not one of the specified questions/matters on

which advance ruling can be sought under section 97(2). Further, section 96 of the
CGST Act, 2017 provides that AAR constituted under the provisions of an SGST
Act/UTGST Act shall be deemed to be the AAR in respect of that State/Union territory
under CGST Act also.

Thus, AAR is constituted under the respective State/Union Territory Act and not the
Central Act. This implies that ruling given by AAR will be applicable only within the
jurisdiction of the concerned State/Union territory.

It is also for this reason that the questions on determination of place of supply cannot
be raised with the AAR. Hence, the applicant cannot seek the advance ruling for
determining the place of supply of the goods proposed to be supplied by the
applicant.

5. (a) Enumerate and Explain the types of Audits envisaged under GST law. 10

(b) Admission to True Theater is ` 90 per ticket for a Tamil Movie as well as for a Hindi
Movie plus entertainment tax 10% on Tamil Movies and 20% on other languages. In
the month of November, True Theater sold 2000 tickets of Tamil Movies and 1500
tickets of Hindi Movies. Find the value of taxable supply of service. Applicable rate of
GST 18% & 28% respectively. Find the GST liability if any? 4

Answer:

5. (a) GST envisages three types of Audit.

1. By a Chartered Accountant or a Cost Accountant.
2. By Tax Authorities
3. Special Audit

1. Audit by Chartered Accountant or a Cost Accountant:

Every registered person whose aggregate turnover during a financial year

exceeds two crore rupees has to get his accounts audited by a Chartered
Accountant or a Cost Accountant and furnish a copy of audited annual
accounts and a reconciliation statement, duly certified, in FORM GSTR-9C.

2. Audit by Tax Authorities (section 65 of the CGST Act, 2017):

The Commissioner or any officer authorised by him, can undertake audit of any

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registered person for such period, at such frequency and in such manner as may
be prescribed.

Section 65(3) of the CGST Act, 2017 the registered person shall be informed by
way of a notice not less than fifteen working days prior to the conduct of audit in
such manner as may be prescribed.

Section 65(4) of the CGST Act, 2017 the audit under sub-section (1) shall be
completed within a period of three months from the date of commencement of
the audit:
Provided that where the Commissioner is satisfied that audit in respect of such
registered person cannot be completed within three months, he may, for the
reasons to be recorded in writing, extend the period by a further period not
exceeding six months.

3. Special Audit [Section 66 of the CGST Act, 2017]:

The registered person can be directed to get his records including books of
account examined and audited by a Chartered Accountant or a Cost
Accountant during any stage of scrutiny, inquiry, investigation or any other
proceedings; depending upon the complexity of the case.

Procedure:
During the scrutiny, inquiry, investigation or any other proceedings of a registered
person, the Assistant Commissioner or any officer senior to him, having regard to
the nature and complexity of the case and the interest of revenue, might be of
the opinion that the value has not been correctly declared or the credit availed
is not within the normal limits.

In such cases, with the prior approval of the Commissioner, the Assistant
Commissioner or any officer senior to him can direct the registered person in
FORM GST ADT-03 to get his records including books of account examined and
audited by a specified chartered accountant or a cost accountant. The
chartered accountant or a cost accountant will be nominated by the
Commissioner.

The chartered accountant or cost accountant so nominated has to submit a

report of such audit within the period of ninety days, duly signed and certified by
him to the Assistant Commissioner, extendable by further 90 days. On conclusion
of the special audit, the registered person shall be informed of the findings of the
special audit in FORM GST ADT-04.

Where the special audit results in detection of tax not paid or short paid or
erroneously refunded, or input tax credit wrongly availed or utilised, the process
of demand and recovery will be initiated against the registered person.

(b) Statement showing value of taxable supply of service and GST liability:

Value of taxable services:

Tamil Movie ` 1,98,000 (` 99 × 2000 tickets)
Hindi Movie ` 1,62,000 (` 108 × 1500 tickets)

Particulars 9% CGST 9% SGST 14% CGST 14% SGST

GST liability (`) 17,820 17,820 22,680 22,680

Working note:
Particulars Tamil Movie (`) Hindi Movie (`)
Rate per ticket 90 90

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Add: Entertainment tax 9 18

Value of taxable supply 99 108
Applicable GST rate 18% 28%

6. (a) Achutha Motors Pvt. Ltd., have been served a show cause notice (SCN) on 2nd November,
2021 under section 73(1) of the CGST Act, 2017, alleging that the supplier had made
short remittances of GST for the months of September, October and November, 2017.
The department has afforded a personal opportunity of being heard on 15th November,
2021.

The company seeks you expert advice in drafting the written submissions to be
tendered at the time of personal hearing, in respect of the SCN. You are required to
draft the reply on their behalf. You may assume that there is no change in legal position
during November, 2021 and that it remains the same as it is at present. 8

(b) Which are the input goods and services on which a registered dealer cannot claim
Input Tax credit under Section 17(5) of CGST Act, 2017. Give any six points/items. 6

Answer:

6. (a) Reply to SCN received from Department

Against the SCN, the reply to the SCN in the written submissions should incorporate
the following major points:

(i) The SCN issued by the Department under section 73(1) of the CGST Act, 2017,
alleging under payment of GST for the months of September, October and
November, 2017 is not warranted on the facts and circumstances of the case
and is opposed to equity, law and justice.

(ii) The time limit for issue of SCN under section 73(1) of the CGST Act, 2017 is at least
3 months prior to the time limit specified for issuance of order under section 73(10)
of the Act.

The adjudication order under section 73(10) of the Act, has to be issued within 3
years from the due date for furnishing of annual return for the financial year to
which the short-paid tax relates to.

The due date stipulated for furnishing annual return for a financial year is on or
before the 31st day of December following the end of such financial year
[Section 44 of the CGST Act, 2017].

Consequently, SCN under section 73(1) of the Act, can be issued by the
Department within 2 years and 9 months from the due date for furnishing of
annual return for the financial year to which the short-paid tax relates to.

(iii) The SCN has been issued for the period encompassing the months of September,
October and November, 2017, which falls in the financial year (FY) 2017-18.

Due date for furnishing annual return for the F.Y. 2017-18 is 31.12.2018 and 3 years'
period from due date of filing annual return lapses on 31.12.2021.

As a logical corollary, SCN under section 73(1) ought to have been issued latest
by 30.09.2021.

(iv) Since the SCN has been issued after 30.09.2021, the entire proceeding is barred
by limitation and deemed to be concluded under section 75(10) of the Act.

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(v) It is therefore prayed that the entire proceedings which are barred by limitation,
may kindly be dropped and justice rendered.

(b) Item on which Input Tax Credit (ITC) is not applicable Goods & Services Sec. 17(5) of
the CGST Act, 2017:
A) Motor vehicle (except few cases)
B) Goods and/or services provided in relation to:
i) Food and beverages, outdoor catering, beauty treatment, health services,
cosmetic and plastic surgery, except under specified circumstances;
ii) Membership of a club, health and fitness center;
iii) Rent-a-cab, life insurance, health insurance except where it is obligatory for
an employer under any law;
iv) Travel benefits extended to employees on vacation such as leave or home
travel concession;
C) Works contract services when supplied for construction of immovable property,
other than plant & machinery, except where it is an input service for further
supply of works contract;
D) Goods or services received by a taxable person for construction of immovable
property on his own account, other than plant & machinery, even when used in
course or furtherance of business;
E) Goods and/ or services on which tax has been paid under composition scheme;
F) Goods or services or both received by a non-resident taxable person except on
goods imported by him;
G) Goods and/or services used for private or personal consumption, to the extent
they are so consumed;
H) Goods lost, stolen, destroyed, written off, gifted, or free sample;
I) Any tax paid due to short payment on account of fraud, suppression, mis-
declaration, seizure, and detention.

7. (a) State the duties and powers of the Ant-profiteering Committee under GST law. 6

(b) Shankar Texmaco P Ltd. (STPL), having its registered office at Salem, Tamil Nadu, is a
manufacturer of dyeing machinery. It manufactures and installs the machinery at the
places opted by the buyers. For each machine manufactured and installed by it, STPL
gets a subsidy of ` 3 lakhs.

Poorni Dyers Ltd. (PDL), having their registered office at Coimbatore, Tamil Nadu have
ordered a machinery from STPL, to be erected at their place of manufacture at Palghat,
Kerala.

The base price of the machine is ` 25 lakhs. For each machinery, there is a separate
handling charge of ` 50,000.

PDL have opted to take an additional warranty for ` 20,000 for an extended service
period of 1 year, in addition to the free warranty provided by STPL. The installation costs
of ` 80,000 charged by STPL, will be met by PDL. STPL offers a cash discount of 2%, where
the payment is made within a month. If the payment is not so made, it not only recovers
the discount earlier offered, but also charges interest at 18% for the period of delay.

A machinery was supplied on 21st November, 2017, the tax invoice also being issued the
same day.

Ascertain the transaction value of the machine sold to MTL and the GST payable
[SGST & CGST or IGST] by STPL. You are further informed that MTL made the actual
payment only on 10th January, 2018.

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You are informed that the GST rates applicable for the product as under: 8

SGST 6%
CGST 6%
IGST 12%

Answer:

7. (a) Duties of Anti-profiteering committee-Section 171(3)

The Authority would have the following duties:

(i) to determine whether any reduction in the rate of tax on any supply of goods or
services or the benefit of input tax credit has been passed on to the recipient by
way of commensurate reduction in prices;
(ii) to identify the registered person who has not passed on the benefit of reduction
in the rate of tax on supply of goods or services or the benefit of input tax credit
to the recipient by way of commensurate reduction in prices;
(iii) to order,
• reduction in prices;
• return to the recipient, an amount equivalent to the amount not passed on by
way of commensurate reduction in prices along with interest at the rate of
eighteen percent, from the date of collection of the higher amount till the date
of the return of such amount or recovery of the amount not returned, as the
case may be, in case the eligible person does not claim return of the amount or
is not identifiable, and depositing the same in the Consumer Welfare Fund;
• imposition of penalty; and
• Cancellation of registration.

(b) Computation of transaction value

Amount (`)
Basic price of the machinery 25,00,000
Add: Handling charges met by the buyer 50,000
[All incidental expenses are includible in transaction value]
Additional warranty charges [Includible since transaction value includes 20,000
all items, except those which are specifically excluded]
Installation costs [Any amount charged for anything done by the 80,000
supplier in respect of the supply of goods at the time of, or before
delivery of goods is includible in the value of supply in terms of section
15(2)(c) of CGST Act, 2017]
Subsidy provided by agent of foreign manufacturer 3,00,000
[As per Sec. 15(2)(e) of the CGST Act, subsidies directly linked to the
price excluding subsidies provided by the Central Govt. and State Govt.
is to be added to the price of the machinery]
29,50,000
Less: Cash discount at 2% of 25L 50,000
[Cash discount offered at the time of original supply to be deducted. It
is immaterial that the payment was not made in time. At that time, debit
note can be issued for recovering discount as well as for interest
chargeable]
Transaction value of the machine supplied 29,00,000
IGST at 12% on above 3,48,000

Note:
The place of supply of the machine is the place of installation of the machinery. Thus,
this will be an Inter-state supply and hence IGST is payable.
It is assumed that subsidy is received from agent of foreign manufacturer and hence

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 Suggested Answers_Syl2016_June2018_Paper 18

is added to the price. In case it is subsidy from Central/State Govt. same will not be
added to the price.

Section – B
(Customs Duty and FTP)

Answer Question No. 8 which is compulsory and any two from the rest of this section.

8. Choose the most appropriate option for the following [Option to be given in capital letters
A, B, C or D] and give brief reason/justification for your choice the correct choice or
conclusion [1 mark for the correct choice and 1 mark for reason] : 2×3=6

(i) For filing an appeal before the Commissioner (Appeals), the amount of pre-deposit
required under the Customs Act, 1962 is
(A) 5% of the demand, subject to a maximum of ` 5 crore
(B) 5% of the demand, subject to a maximum of ` 7.5 crore
(C) 7.5% of the demand, subject to a maximum of ` 7.5 crore
(D) 7.5% of the demand, subject to a maximum of ` 10 crore

(ii) Where a person of Indian origin stays abroad for 36 months and returns to India on 21-
1-2017 for having residence in India, the GFA for used household articles (Baggage) is
(A) ` 1 lakh
(B) ` 3 lakhs
(C) ` 5 lakhs
(D) None of the above

(iii) Anti-dumping duty payable by a SEZ in respect of an import is

(A) Nil
(B) 5% of the customs duty
(C) 7.5% of the customs duty
(D) 10% of the customs duty

Answer:

8.
(i) D As per Section 129E of the Customs Act, 1962, as amended by Finance (No. 2)
Act, 2014 w.e.f. 6-8-2014, provides that for filing appeal before the Commissioner
(Appeals), a pre-deposit of 7.5%, subject to a maximum of ` 10 crore shall be
made.
(ii) C The GFA is linked to the period for which the person has stayed abroad. If the
same exceeds 2 years, the GFA is ` 5 lakhs for transfer of residence.
(iii) A No anti-dumping duty is payable by a SEZ, as they are exempted from the same.

9. (a) Explain the importance of Inland Container Terminal (ICD) and Container Freight
Station as an infrastructure facility for export or import. Distinguish between the two.
2+4=6

(b) An importer imported some goods for subsequent sale in India at $10,000 on
Assessable value basis. Relevant exchange rate and rate of duty are as follows:

Particulars Date Exchange rate Rate of Basic

declared by the CBEC Customs Duty
Date of submission of bill of 25th February, 2018 ` 58/USD 10%
entry

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 Suggested Answers_Syl2016_June2018_Paper 18

Date of entry inwards 5th March, 2018 ` 58.75/USD 12%

granted to the vessel

Calculate Assessable value and Customs Duty in Indian rupees? (Education cess is
2% & SAH education cess is 1%) 6

Answer:

9. (a) Inland Container Depot (ICD) and Container Freight Station (CFS)
Generally, an exporter or import placed far way from the gateway port for
clearance of import or export of goods. However, irrespective of distance from the
servicing gateway port, prefers to move cargo by road to CFS (a transit facility where
he stuffs cargo in containers and containers are transported to port for loading on
board the ship). Both ICD and CFS is an infrastructure facility, owned and operated
by public or private authority, especially designed for offering services of handling,
storage and movement of containerized cargo and cargo under Customs
supervision.

Distinction between ICD and CFS

Inland Container Depot (ICD) Container Freight Station (CFS)
It is a place where containers are It is a place where containers are stuffed.
aggregated for onwards movement to Unstuffed and aggregation / segregation
or from the ports. of cargo takes place.
ICD's are located outside the port No site restrictions apply for CFS.
towns.
An ICD may have a CFS attached to it CFS is treated as an extension of a port /
ICD/air-cargo complex.
Movement of shipment by road and rail. Movement of shipment by road.

(b) Relevant rate of duty for the imported goods is 12% (i.e. Date of submission of bill of
entry or Date of entry inwards granted to the vessel whichever is later)

Exchange Rate is ` 58 per USD (i.e. the rate of CBE & C as on the date of submission
of Bill of entry by the importer)

Assessable value = ` 5,80,000 (i.e. USD 10,000 × ` 58)

Basic Customs Duty = ` 69,600 (i.e. ` 5,80,000 × 12%)
2% Education cess = ` 1,392 (i.e. ` 69,600 × 2%)
1% SAH education cess = ` 696 (i.e. ` 69,600 × 1%)
Total Customs Duty = ` 71,688.

10. (a) (i) The assessee imported furnace oil and supplied the same to sister unit for
generation of electricity, which is used by the assessee. The assessee claimed
exemption on import of furnace oil. The assessee also obtained a clarification from
Development Commissioner for claiming exemption. However, irrespective of the
clarification from Development Commissioner, a show cause notice (SCN)
demanding duty was issued on the assessee more than 1 year (i.e. longer limitation)
after he had imported furnace oil on behalf of its sister unit.

Is the issue of the SCN in the extended period of limitation valid in law? 4

(ii) The assessee filed an appeal to Commissioner, but mistakenly gave it to the
adjudicating officer who had passed the original order, who sent it to the
Commissioner after few days delay. The appellate authority rejected the appeal on
the ground that the appeal was not received in time in his office.
Is the rejection of appeal justified? 4

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(b) Under Indian FTP, write a brief note on Advance Authorisation. 4

Answer:

10. (a) (i) Validity of SCN using extended period of limitation

Issue
The issue for consideration is whether the issue of SCN under the longer period of
limitation is valid in law.

Analysis
Longer period of limitation is available under section 28 of the Customs Act, 1962,
where the assessee has misstated facts or there has been wilful suppression or
misstatement of facts.

The assessee had shown bona fide conduct by seeking clarification from
Development Commissioner and in a sense had offered its activities to
assessment.

Therefore, mere non-payment of duties could not be equated with collusion or

willful misstatement or suppression of facts. Judgment is given in favour of the
assessee.

Reference may be made to the decision in Uniworth Textiles Ltd. v. CCEx. 2013
(288) ELT161 (SC)

(ii) Rejection of appeal by Commissioner, whether justified

The issue to be decided is whether the appeal can be rejected on the ground
that it was not filed in time.

The appeal had been filed in time, but reached different wing of the same
building. Since, the appeal was received by the adjudicating officer who has
passed the original order, he ought to have sent it to the other wing of the same
building, but he had not done the same.

Therefore, the order passed by the appellate authority cancelling the appeal on
the ground that it was not received in time, could not be accepted.

Hence the appellate authority should entertain the appeal of the assessee and
pass appropriate orders on merits and in accordance with law, after affording
him an opportunity of being heard. The rejection of appeal is not justified.

Reference may be made to the decision in Chakiat Agencies vs. UOI 2015 (37)
STR 712 (Mad.).

(b) Advance Authorization:

(i) Exporters having past export performance (in at least preceding two financial
years) shall be entitled for Advance Authorization for annual requirement.
(ii) Materials imported under advance authorization will 'Actual user condition'. These
imported goods will not be transferable even after completion of export
obligation. However, holder of advance authorization will have an option to
dispose of product manufactured out of duty free inputs once export obligation is
completed.
(iii) Advance authorization is issued for inputs in relation to the resultant product on
the basis of SION (Standard Input Output Norms). If SION for a particular item is
not fixed, Regional Authority (RA) based on self-declaration by applicant except
certain specified products, can issue advance authorization.
(iv) It is necessary to establish that inputs actually used in manufacture of the export

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 Suggested Answers_Syl2016_June2018_Paper 18

product should only be imported under advance authorization and inputs

actually imported must be used in the export product, for redeeming the
authorization.

11. (a) (i) Mr. Amol owns a sole proprietorship firm, 'Safe and Super Importers'. Mr. Amol has
never been to any place outside India. The firm proposes to import a product. Mr.
Amol is not sure of the correct classification of the product under Customs Tariff.
His Tax Consultant has informed him that the said classification issue has been
decided by the CESTAT in a different case. However, Mr. Amol does not want to
take any chances and is desirous of obtaining a ruling from the Authority for
Advance Ruling under section 28H of the Customs Act, 1962 with respect to the
classification of the product to be imported by it.

In the light of recent amendments, state whether Safe and Super Importers can
seek advance ruling in the present case under the Customs Act, 1962? 3

(ii) Basant, a non-resident intends to provide a taxable service under a joint venture in
collaboration with a non-resident, but has entertained some doubts above its
valuation.
Aarohi, Basant's friend, has obtained an 'Advance Ruling' from the Authority for
Advance Ruling on an identical point. Basant proposes to follow the same ruling in
his case. Basant has sought your advice as his consultant whether he could follow the
ruling given in the case of Aarohi. Explain with reasons. 3

(iii) Explain relevance of Boat Note as per Boat Note Regulations. 2

(b) The Scope of Foreign trade policy 2015-2020 provides direction to promote Indian
Exports. In this context outline the Scope of FTP. 4

Answer:

11. (a) (i) With effect from 01.03.2015, a resident firm can also apply for AAR. The sole
proprietorship will have to satisfy the test of residency as per section 2(42) of the
Income Tax Act, 1961 to be eligible to apply for an advance ruling.

Therefore, Safe and Super Importers, being a resident proprietorship firm, is an

eligible applicant for advance ruling.

Since in the given case, question intended to be raised by Safe and Super
Importers is already decided by the CESTAT. Advance ruling cannot be sought by
it.

(ii) An advance ruling is binding only on the applicant who has sought it. In the given
problem, in view of the aforesaid provision, Basant cannot make use of the
advance ruling pronounced in the identical case of his friend, Aarohi. Basant
should obtain a ruling from the Authority of Advance Ruling by making an
application along with a fee of 2,500.

(iii) Boat Note:

In India we have certain ports where the ship cannot come to the shore for
unloading or loading goods due to depth of the Sea or vessel may not find the
time in having berth in the port. In such cases goods are sent to shore in a small
cargo (i.e. it may be loaded in a small boat and sent to shore). As per the Boat
Note Regulations such a small boat must be accompanied by a Boat Note issued
by the Customs Officer. The boat note must be in duplicate and machine
numbered. Separate forms are prescribed for export cargo, import cargo and
transshipment cargo.

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 Suggested Answers_Syl2016_June2018_Paper 18

(b) Scope of FTP is as under:

1) Policy for regulating import and export of goods and services.
2) Exports Promotional Measures.
3) Duty Remission and Duty Exemption Scheme for promotion of exports.
4) Export Promotion Capital Goods (EPCG) Scheme.
5) Export Oriented Undertakings (EOU/EHTP/STP & BTP) Schemes.
6) Deemed Exports.
7) Quality complaints and Trade Disputes.

Thus the policy provides direction to promote Indian Exports through export
promotion, duty remission, EOU Schemes and quality improvement

Note: Special Economic Zones covered under separate Act namely Special
Economic Zones Act, 2015 and are not part of FTP.

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 Postal Test Paper_P18_Final_Syllabus 2016_Set 1

Paper – 18: Indirect Tax Laws & Practice

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 Postal Test Paper_P18_Final_Syllabus 2016_Set 1

Paper – 18: Indirect Tax Laws & Practice

Full Marks: 100 Time allowed: 3 hours

Answer Question No. 1 which is compulsory and any five from the rest

1.(a) Fill in the blanks: [5×1=5]

(i) The person opting for the composition scheme must neither be a casual taxable
person nor a taxable person.
(ii) Services by an artist by way of a performance in folk or classical art forms of
music/ dance/ theatre are exempted from GST, if the consideration charged for
such performance is not more than .
(iii) In customs, means transfer from one conveyance to another with or
without payment of duty.
(iv) As per the Customs Tariff Act, (single/ double/ triple/ quadruple) dash
signifies primary classification of article covered by the heading.
(v) Advance authorisation is remain valid for months from the date of issue of
such authorisation.

(b) Choose the most appropriate alternative: [5×1=5]

(i) The place which is used for unloading of imported goods and loading of exported
goods, is called:
(a) Inland Container Depot
(b) Land customs station
(c) Customs station
(d) Customs area

(ii) In case of transport of goods by rail within India, which of the following item is an
exempted supply from GST?
(a) Transport of postal mails and postal bags;
(b) Transport of defence and military equipments;
(c) Transportation of household effects;
(d) Transport of alcoholic beverages.

(iii) Goods & Services Taxpayer Identification Number (GSTIN) is a state-wise PAN-based
number of:
(a) 10 digit
(b) 13 digit
(c) 14 digit
(d) 15 digit

(iv) The frequency to file GSTR-2 is:

(a) Monthly
(b) Quarterly
(c) Semi-annually
(d) Yearly

(v) “Adjudicating authority” means any authority, appointed or authorised to pass any
order or decision under CGST Act, but does not include:
(a) the Central Board of Excise and Customs
(b) the Revisional Authority
(c) the Authority for Advance Ruling
(d) All of the above.

(c) State true or false with reasons: [5×2=10]

(i) Services by way of transportation of goods by inland waterways are exempted
from GST.

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 Postal Test Paper_P18_Final_Syllabus 2016_Set 1

(ii) The place of supply of online information and database access or retrieval
services will be location of the provider of service.
(iii) The due date to file GSTR-1 is 15th of the next month.
(iv) A public warehouse is owned and managed by a Government body like Central
Warehousing Corporation.
(v) Importer Exporter Code Number (IEC Number) is a unique 15 digit code.

2.(a) Best Cars Ltd sells a car worth ` 5,00,000 to Sundar Automobiles. Best Cars Ltd. incurred
packing charges of ` 6,000 on the car. Best Cars Ltd. provided a discount of 1% on the
car price, as part of Diwali scheme.
Best Cars Ltd agreed to provide a further discount of 0.5% if Sundar Automobiles makes
payment by 31st of the month via net banking. Sundar Automobiles makes the
payment by 31st of the month using net banking. Find the Net GST liability in the hands
of Best Cars Ltd. Applicable rate of GST is 18%. [10]

(b) State the need of GST Compensation Cess. [6]

3.(a) A Ltd., becomes the successful bidder. The spectrum is assigned to A Ltd., for a total
consideration of ` 1000 crores in the month of June 2018.
Government permitted to pay as one time charge payable, in full upfront or in
installments as the case may be.
A Ltd., chooses to make in installments over a period of 5 years. Installment due fallen
on or after 1st July 2020 is leviable to GST?
Whether your answer is different if periodic payment required to be made by the
assignee. [7]

(b) M/s Hind IT Co. imported laptops with Hard Disc Drives (HDD) preloaded with operating
software like Windows XP, XP home etc. The department has claimed that the said
laptop along with the operating software was classifiable and assessable as a single
unit. It is the claim of the assessee that the software loaded HDD should be classified
and assessed separately as an exemption is available as per notification issued under
section 25(1) of the Customs Act, 1962. Decide with a brief note whether the action
proposed by the department is correct in law. [9]

4.(a) Mr. A, a registered person received goods from Mr. B, an unregistered dealer. Mr. B
issues invoice on 1st July 2020.
Find the time of supply of goods in following independent cases:
(i) Mr. A received goods on 15th July 2020, payment of which is not made yet.
(ii) Mr. A received goods on 3rd August 2020 & made payment for the same on 4th
August 2020.
(iii) Mr. A made payment on 8th July and received goods on the same date.
Mr. A received goods on 10th July 2020 & made payment for the same on 9th July
2020. [12]

(b) M/s X Ltd. is a manufacturer of textile products. Company received order from
Government to supply goods to defense (exempted supply). The turnover of other
taxable goods and exempted goods are ` 4 crores and ` 1 crore respectively.
Common inputs on which GST paid is ` 20,000.
Calculate the eligible ITC on common inputs. [4]

5.(a) What is Bill of Supply? State the contents of a Bill of Supply. [12]

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 Postal Test Paper_P18_Final_Syllabus 2016_Set 1

(b) Under what circumstances it may be beneficial to claim refund of un-utilized credit
when exports of goods or services are made without payment of tax? [4]

6.(a) State the matters on which advance ruling can be sought as per CGST Act. [8]

(b) Compute the duty payable under the Customs Act, 1962 for an imported equipment
based on the following information:
(i) Assessable value of the imported equipment US $10,100.
(ii) Date of Bill of Entry 25.4.2020 basic customs duty on this date 12% and exchange
rate notified by the Central Board of Excise and Customs Us $ 1 = ` 65.
(iii) Date of Entry inwards 21.4.2020 Basic customs duty on this date 16% and
exchange rate notified by the Central Board of Excise and Customs US $ 1 = ` 60.
(iv) IGST u/s 3(7) of the Customs Tariff Act, 1975: 12%.

Social Welfare Surcharge = 10%.

Make suitable assumptions where required and show the relevant workings and round
off your answer to the nearest Rupee. [8]

7.(a) Describe the duties & powers of Anti-profiteering Committee as per CGST Act. [8]

(b) Importer BOPP Ltd. imported two consignments of ethyl alcohol which were allowed to
be cleared for home consumption on execution of a bond undertaking to produce
license within a month. Since, appellant failed to fulfill the obligation, proceedings were
initiated which culminated in confiscation of the goods under Section 111(d) of the
Customs Act, 1962 and imposition of penalty on the importer under section 112(a) of
the Customs Act, 1962. Examine the correctness of the decision in terms of statutory
provisions. [8]

8. Write short note on

(a) Project import under customs. [8]
(b) Service Export from India scheme under FTP. [8]

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 Postal Test Paper_P18_Final_Syllabus 2016_Set 2

Paper – 18: Indirect Tax Laws & Practice

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 Postal Test Paper_P18_Final_Syllabus 2016_Set 2

Paper – 18: Indirect Tax Laws & Practice

Full Marks: 100 Time allowed: 3 hours

Answer Question No. 1 which is compulsory and any five from the rest

1.(a) Fill in the blanks: [5×1=5]

(i) Central Goods and Services Tax is levied and collected by .
(ii) Services provided by a goods transport agency, by way of transport in a goods
carriage, is exempted from GST, where consideration charged for transportation
of all goods for a single consignee does not exceed .
(iii) The place of supply of online information and database access or retrieval
services will be the location of the of service.
(iv) As per section 2(18) of the Customs Act, the term means taking out of
India to a place outside India.
(v) are levied by the central govt. upon recommendation made by
the Tariff Committee to provide protection to any industry established in India.

(b) Choose the most appropriate alternative: [5×1=5]

(i) If a person, opting for composition scheme is liable to be registered on 1st Oct. 2020
and he has applied for registration on 17th Nov. 2020 and registration granted on
20th Nov. 2020, then the effective date of registration will be:
(a) 20th Nov. 2020
(b) 1st Oct. 2020
(c) 17th Nov. 2020
(d) 1st April, 2021

(ii) The type of bill of entry which is used for ex-bond clearance for home consumption
from the warehousing, is
(a) Form I (white)
(b) Form II (yellow)
(c) Form III (green)
(d) None of the above.

(iii) Which of the following good/ goods is/ are covered under GST Compensation
Cess?
(a) Pan Masala
(b) Tobacco and tobacco products
(c) Motor vehicles
(d) All of the above.

(iv) Mr. C of Chennai supplied goods to M/s Smart Jet Airlines of Chennai flying
between Delhi-Mumbai. The goods are loaded in the aircraft in Delhi. The place of
supply of goods will be:
(a) Chennai
(b) Delhi
(c) Mumbai
(d) None of the above.

(v) Which of the following is/ are duty exemption scheme(s) under FTP?
(A) Advance Authorisation Scheme
(B) Duty Free Import Authorisation Scheme
(C) Merchandise Export from India Scheme

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 Postal Test Paper_P18_Final_Syllabus 2016_Set 2

(D) Service Export from India Scheme

(a) Only (A)

(b) Both (A) & (B)
(c) Both (C) & (D)
(d) All (A), (B), (C) & (D)

(c) State true or false with reasons: [5×2=10]

(i) The term redemption fine means Option to pay fine in lieu of confiscation.
(ii) GSTR-4 is to be filed on monthly basis.
(iii) A registered person cannot avail Input Tax Credit unless he is in possession of a tax
invoice or a debit note.
(iv) The basic concept of Input Tax Credit (ITC) is to encourage the cascading effect
of duty.
(v) Services received by the Reserve Bank of India from outside India in relation to
management of foreign exchange reserves is exempt from GST.

2.(a) X Bank Ltd., furnishes the following information relating to services provided and the
gross amount received
` (lakhs)
Merchant Banking Services 8
Asset Management (including portfolio management 3
Service charges for services to the Government of India 1.5
Interest on overdraft and cash credits 2
Banker to the issue 5
Locker rent 2
Repayment of financial lease made by the customer to the bank ` 80 lakhs which
includes a principal amount of ` 50 lakhs.
Compute the value of taxable supply of services under “Banking and other financial
services” as per the Central Goods and Services Tax Act, 2017 and also find the CGST
and SGST where rate of GST is 9% each.
Note: Input Tax Credit availed by the bank on the asset which is given on financial
lease. [10]

(b) Write about the guiding principle and the functions of the GST Council. [6]

3.(a) What is the taxable event under GST? Discuss. [8]

(b) Mr. A, a taxable service provider, provided taxable supply of services to Mr. B. The
contract of service entered into between them stipulated that Mr. A will bear all the
taxes, duties and other liabilities in connection with discharge of his obligations. While
the service was being provided, an amendment in the law shifted the liability to pay
GST in case of such taxable supply of services from service provider to service receiver
retrospectively, i.e. reverse charge provisions were made applicable.
You are required to answer the following questions with the help of the decided case
law(s), if any:
(i) Can Mr. B, who is the person liable to pay GST under reverse charge, shift the
burden of such GST on Mr. A by deducting the same from the payment made
against the bills raised by Mr. A?
(ii) Can Mr. B ask the Revenue to recover GST from Mr. A since the contract of
service stipulates that Mr. A will bear all the taxes, duties and other liabilities in
connection with discharge of his obligations? [8]

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 Postal Test Paper_P18_Final_Syllabus 2016_Set 2

4.(a) M/s. X Ltd. of Chennai, engaged in various businesses has provided the following
services, whose values are listed below. Compute its GST liability:
(1) Service of interior decoration in respect of immovable property located in Jammu:
` 5 lakhs;
(2) Service of renting of commercial buildings in Delhi: ` 15 lakhs;
(3) Architectural services to an Indian Hotel Chain which has business establishment in
Mumbai for its newly acquired property in Sydney: ` 25 lakhs;
(4) Services provided as an Indian agent undertaking marketing in India of goods of a
foreign seller: ` 51 lakhs;
(5) Services provided as travel agent undertaking marketing in India of services of a
foreign seller: ` 1 lakhs.
Applicable rate of GST is 18%. [9]

(b) The goods imported by Fidelity Industries were detained on 22-5-2019. However, Fidelity
Industries did not produce the required documentary evidence. Consequently, the
impugned goods were seized on 2-8-2019. The Department issued a show cause notice
to Fidelity Industries on 15-1-2021. Fidelity Industries put forth the question of limitation
alleging that the impugned show cause notice had been issued after a period of six
months from the date of the seizure as one envisaged under section 110(2) of the
Customs Act, 1962 and hence, it was time-barred. The goods were taken on 22-5-2019;
but, the show cause notice was issued on 15-1-2021 which was after a lapse of six
months. So, Fidelity Industries sought for quashing of the said show cause notice and
also for the return of the goods. Do you think that the contention of the Fidelity
Industries is tenable in law? Discuss. [7]

5.(a) State the eligible as well as ineligible capital goods for import under EPCG Scheme. [6]

(b) From the particulars given below, find out the assessable value of the imported goods
under the Customs Act, 1962.
US $
(i) Cost of the machine at the factory of the exporting country 10,000
(ii) Transport charges incurred by the exporter from his factory
to the port for shipment. 500
(iii) Handling charges paid for loading the machine
in the ship 50
(iv) Buying commission paid by the importer 50
(v) Freight charges from exporting country to India 1,000
(vi) Exchange Rate to be considered 1$ = ` 65
[10]

6.(a) X Ltd., a unit in SEZ, received services from various service providers in relation to
authorized operations in SEZ during the month July, 2020. The following details are
furnished for the month July, 2020:
(i) Value of Taxable services used exclusively for authorised operations within SEZ: `
5,00,000 (exemption from GST availed).
(ii) Value of Taxable Services used by SEZ units and DTA units: ` 8,00,000. GST paid
@18%.
(iii) Value of Taxable Service used wholly for DTA units: ` 3,00,000. GST paid @18%.
(iv) Export Turnover of SEZ Unit: ` 1,00,00,000

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 Postal Test Paper_P18_Final_Syllabus 2016_Set 2

(v) Turnover of DTA Unit: ` 60,00,000.

Compute the Input Tax Credit and amount of refund if any?
Note: All input services used by SEZ for its authorized operations only. [8]

(b) What is Credit Note and Debit Note as per CGST Act? [8]

7.(a) What is revocation of cancellation of registration under GST? [5]

(b) M/s P Ltd. appoints M/s Q Ltd. for laying of pipelines inside its factory premises which
resulting into movable property. For which M/s P Ltd. purchased pipelines for `
10,00,000 plus GST 12%. On completion of works contract service M/s Q Ltd charged for
` 2,00,000 plus GST 18%. Find the eligible input tax credit to M/s P Ltd. [6]

(c) State the advantages of voluntary registration under GST. [5]

8.(a) X Pvt. Ltd. engaged in providing taxable services by way of training and coaching
activities in relation of information Accounting and Auditing. Since 1st July 2020, it has
the following details in respect of that activity for the month of September, 2020:
Date of issuance invoice Date on which payment Amount in `
received
16.09.2020 03.10.2020 2,50,000
20.10.2020 06.10.2020 25,000
02.10.2020 30.09.2020 1,25,000
The date of change in effective rate of tax in this case is 01-10-2020 from 12% to 18%.
These services are rendered in August 2020. Find the Time of Supply of service, effective
rate of tax and due date of payment of tax. [9]

(b) State the features of Foreign Trade Policy 2015-20. [7]

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 P‐18: Indirect Tax Laws and Practice ‐ Bit Questions

Choose the most appropriate answer giving justification.

1. Following is not a tax which has been substituted by GST 2

(A) Central Excise Duty
(B) Service tax
(C) State VAT
(D) Profession tax

2. In an intra-state supply, following are levied under GST 2

(A) SGST and GGST
(B) Only IGST
(C) Only CGST
(D) CGST and IGST

3. GST is a __________________ based tax.

(A) Territory
(B) Origin
(C) Destination
(D) None of the above

4. A new supplier has taxable intra-State sales, exempt intra-State sales and export
sales of goods. He should get himself registered under GST law, where
(A) the aggregate value of taxable intra-State goods exceeds ₹20 lakhs
(B) the aggregate value of taxable as well as exempt intra-State goods exceeds ₹20
lakhs
(C) the aggregate value of all the three items exceeds ₹20 lakhs
(D) the aggregate value of taxable intra-State goods as well as export sales exceeds
₹20 lakhs

5. Following is an intra-State supply:

(A) Goods sent from Delhi to another dealer in Delhi
(B) Goods sent from Delhi to a SEZ in Noida, Uttar Pradesh
(C) Goods sent from Delhi to Chandigarh branch (Haryana) of the same supplier
(D) None of the above

6. A casual taxable person is required to obtain registration where he makes

(A) Taxable inter-State supply
(B) Taxable inter-State or intra-State supply
(C) Taxable inter-State or intra-State supply whose proposed value exceeds ₹20
lakhs
(D) In none of the above situations

7. Subbu, a registered supplier based at Erode coached the staff of a software company
in Hyderabad, which is registered The classes were held at Erode. The place of supply
is:
(A) As mutually agreed upon
(B) As decided by the Department, whichever is more favourable to them
(C) Erode
(D) Hyderabad

8. Advance ruling can be declared to be void by the Authority if it has been obtained
by an applicant/appellant by:
(A) Fraud
(B) Suppression of facts
(C) Misrepresentation of facts
(D) Any one of the above

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 P‐18: Indirect Tax Laws and Practice ‐ Bit Questions

9. For the year 2017-18 due date of filling of annual return is 31.12.2018. The books and
records of 2017-18 must be maintained till
(A) 31.03.2024
(B) 31.12.2024
(C) 31.12.2026
(D) 31.03.2034

10. For filing an appeal before the Commissioner (Appeals), the amount of p re-deposit
required under the Customs Act, 1962 is
(A) 5% of the demand, subject to a maximum of ₹5 crore
(B) 5% of the demand, subject to a maximum of ₹7.5 crore
(C) 7.5% of the demand, subject to a maximum of ₹7.5 crore
(D) 7.5% of the demand, subject to a maximum of ₹10 crore

11. Where a person of Indian origin stays abroad for 36 months and returns to India on 21-
1-2017 for having residence in India, the GFA for used household articles (Baggage) is
(A) ₹1 lakh
(B) ₹3 lakhs
(C) ₹5 lakhs
(D) None of the above

12. Anti-dumping duty payable by a SEZ in respect of an import is

(A) Nil
(B) 5% of the customs duty
(C) 7.5% of the customs duty
(D) 10% of the customs duty

13. Which of the following central taxes has been subsumed in the ambit of GST?
(A) Central Excise duty
(B) Service Tax
(C) CVD on import
(D) All of the above

14. GST is payable on th e services provided by the employee to the employer in th e

course of employment on:
(A) Regular basis
(B) Contract basis as employed by the company
(C) Contract basis as employed by a contractor
(D) None of the above

15. If a person, opting for composition scheme is liable to be registered on 1st Oct. 2017
and he has applied for registration on 17th Nov. 2017 and registration granted on 20th
Nov. 2017, then the effective date of registration will be:
(A) 20th Nov. 2017
(B) 1st Oct. 2017
(C) 17th Nov. 2017
(D) 1st April, 2018

16. In case of transport of goods by r ail within India, which of the following item is an
exempted supply?

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 P‐18: Indirect Tax Laws and Practice ‐ Bit Questions

(A) Transport of postal mails and postal bags

(B) Transport of defence and military equipments
(C) Transportation of household effects
(D) Transport of alcoholic beverages

17. Mr. C of Chennai supplied goods to M/s Smart Jet Airlines of Chennai flying between
Delhi-Mumbai. The goods are loaded in the aircraft in Delhi. The place of supply of
goods will be:
(A) Chennai
(B) Delhi
(C) Mumbai
(D) None of the above

18. Which of the following is/ are duty exemption scheme(s) under FTP?
(A) Advance Authorisation Scheme
(B) Duty Free Import Authorisation Scheme
(C) Merchandise Export from India Scheme
(D) Service Export from India Scheme
(A) Only (A)
(B) Both (A) & (B)
(C) Both (C) & (D)
(D) All (A), (B), (C) & (D)

19. The place which is used for unloading of imported goods and loading of exported
goods, is called:
(A) Inland Container Depot
(B) Land customs station
(C) Customs station
(D) Customs area

20. The type of bill of entry which is used for ex-bond clearance for home consumption
from the warehousing, is
(A) Form I (white)
(B) Form II (yellow)
(C) Form III (green)
(D) None of the above

21. Which of the following good/ goods is/ are covered under GST Compensation Cess?
(A) Pan Masala
(B) Tobacco and tobacco products
(C) Motor vehicles
(D) All of the above

22. The due date to file GSTR-6 (Return for Input Service Distributor) is:
(A) 10th of the next month
(B) 13th of the next month
(C) 15th of the next month
(D) 20th of the next month

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23. Goods under CGST Act excludes:

(A) Securities
(B) Unsecured debts
(C) Right to participate in the draw to be held in a lottery
(D) Growing crops

24. In computation of aggregate turnover for composition levy, which of the following
item should be excluded from the aggregate turnover?
(A) The value of exported goods/services
(B) Inter-state supplies between distinct persons having same PAN
(C) Compensation Cess
(D) Supply on own account and on behalf of principal.

25. If a person is liable to be regis tered on 11th Oct 2017 and he h as applied for
registration on 17th Oct 201 7, the effe ctive date of registration for composition levy
will be:
(A) 17th Oct 2017
(B) 11th Oct 2017
(C) 11th Nov 2017
(D) 17th Nov 2017

26. The due date to file GSTR-6 (Return for Input Service Distributor) is:
(A) 10th of the next month
(B) 13th of the next month
(C) 18th of the next month
(D) 20th of the next month

27. In cases of change in rate of tax and amount is credited to the bank account after 4
working days from the date of change in rate of tax, the date of receipt of payment
will be:
(A) Date of book entry or date of bank entry, whichever is earlier
(B) Date of bank entry
(C) Date of book entry
(D) Date of book entry or date of bank entry, whichever is later

28. ABC Ltd has income from renting of vacant land to a stud firm of ₹1,00,000 and
leasing of vacant land to a cattle firm of ₹50,000. The value of taxable supply will be:
(A) ₹1,00,000
(B) ₹50,000
(C) ₹1,50,000
(D) Nil

29. In case of supply of services, the tax invoice shall be prepared in the manner of:
(A) Only original
(B) Two copies
(C) Three copies
(D) Four copies

30. The form of application for registration, used by a non-resident taxable person is:

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(A) GST REG-01

(B) GST REG-02
(C) GST REG-05
(D) GST REG-09

31. If a case involves a substantial question of law and doesn’t not involve any issue
relating to place of supply, an appeal against orders passed by the State Bench or
Area Bench of the Appellate Tribunal shall lie to:
(A) Supreme Court
(B) High Court
(C) Appellate Authority
(D) None of the above

32. Under GST Act a supply of assortment of sweets, chocolates and firecrackers packed
in a gift hamper is
(A) Joint supply
(B) Composite supply
(C) Mixed supply
(D) Assorted supply

33. The due date for filing GSTR – 6 (Return for input Service distributor) is __________ of the
succeeding month.
(A) 10
(B) 13
(C) 18
(D) 20

34. Under GST input tax credit cannot be claimed on goods and services used as inputs if
(A) Goods are purchased on credit
(B) Goods are received and utilized, the invoice is received after two weeks from the
supplier
(C) Good are destroyed by fire
(D) Services are provided by a law firm on which GST has been paid under RCM

35. A person is not liable for registration under GST Act if

(A) Non-resident person making a taxable supply
(B) An agriculturist selling produce out of cultivation of land
(C) Dealer engaged in inter-state trade above threshold limit for registration
(D) Casual taxable person making taxable supply

36. It is not mandatory to have the following field in a tax invoice under CGST Rules, 2017 :
(A) Date of its issue
(B) HSN Code of goods or Accounting Code or Services
(C) Name and Address of the recipient
(D) Date of receipt of goods/services by the recipient

37. Under GST Act the term UIN stands for

(A) User Identification Number
(B) Utility Identification Name
(C) Unique Identification Number
(D) Unique Individual Number

38. Following is not a part of the contents of a bill of supply:

(A) Description of Goods or Services or both
(B) Consecutive Serial number

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(C) Signature or digital signature if registered of the recipient

(D) Signature or digital signature of the supplier or his authorized representative

39. Under Foreign Trade Policy export and import goods are broadly categorized Which
of the following statements is correct?
(A) Free i.e. general goods are allowed to be imported without payment of any
customs duty
(B) Restricted goods are banned and not allowed to import or export
(C) Restricted goods are allowed to be imported only if used for re-export
(D) Restricted goods are allowed to be imported or exported only with authorization

40. Which of the following is a document not required to be filled for claiming of duty
drawback on re-export?
(A) Import Invoice
(B) Evidence of payment of duty at the time of import
(C) Export bill with packing list
(D) Permission from CBEC authorizing re-export of goods

41. Derelict are goods that

(A) are abandoned by the owner in an emergency with a hope of recovering it later
(B) Owner has no intention to abandon but get sunk and drift to the shore
(C) Owner has no intention to abandon but float and drift to the shore
(D) Are abandoned by owner of goods without any hope of recovery

42. The GST return form to be filed by a Composition dealer/supplier is ________________

and the same had to be furnished _____________________.
(A) GSTR-1, Monthly
(B) GSTR-1, Quarterly
(C) GSTR-4, Monthly
(D) GSTR-4, Quarterly

43. Mr. Ram registered in Chennai has supplied goods to Kochi Fisheries Department, for
a total contract value of ₹2,65,000 inclusive of 18% IGST. The tax to be deducted at
source is (TDS on GST)
(A) Nil
(B) ₹2,650
(C) ₹5,300
(D) None of these

44. In the electronic ledger, the balance in Input tax credit is shown in
(A) Electronic cash ledger
(B) Electronic credit ledger
(C) Electronic confirmation ledger
(D) Electronic liability ledger

45. A registered supplier, who regularly files monthly GST return , has paid GST of ₹72,000
pertaining to the month of May, 2018 on 10-07-2018. The interest payable for delayed
remittance of GST is
(A) ₹710
(B) ₹355
(C) ₹473
(D) None of these

46. In case of inter-State supply of goods, the tax(es) levied is/are

(A) CGST only
(B) IGST only

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(C) CGST and IGST

(D) SGST and IGST

47. Lakshmi became liable to be registered under GST law on 10th November, 2018. She
submitted the application for registration on 18th November, 2018. The registration
certificate is issued on 9th December, 2018. The effective date of registration will be
(A) 10th November, 2018
(B) 18th November, 2018
(C) 9th December, 2018
(D) None of these

48. A manufacturer who is a registered person under GST has purchased 10000 kgs of raw
material during February, 2019, on which IGST of ₹1,00,000 has been paid He has
taken 100 kgs for personal use. 200 kgs were stolen from the factory. Only 80% of the
raw materials were consumed during the m onth for production. The i nput tax credit
available to him for February, 2019 is
(A) ₹99,000
(B) ₹97,000
(C) ₹98,000
(D) ₹1,00,000

49. In the context of Indian Customs law, ICEGATE means

(A) Indian Customs Electronic Data Interchange Gateway
(B) Indian Customs Electronic Gateway
(C) Inter Continental Electronic Gateway
(D) None of the above

50. Transit of goods without payment of customs duty is governed by Section ____________
of the Customs Act, 1962.
(A) 51
(B) 52
(C) 53
(D) 55

51. The following is not a condition precedent for grant of duty drawback for re-export of
duty paid goods:
(A) The goods must be clearly identifiable
(B) The goods should have been actually imported earlier and import duty paid
thereon
(C) The goods are actually re-exported to any place outside India
(D) Entire lot of goods imported earlier should be re-exported and no portion should
remain

52. The term ‘casual taxable person’ includes

(A) A person occasionally supplying goods or services or both in a State or an Union
Territory where he has no fixed place of business
(B) A person occasionally supplying goods or services or both in a State or an Union
Territory where he has fixed place of business
(C) Both (A) and (B)
(D) None of the above

53. Mahesh is employed in Zed Traders a proprietary concern of Kuma r having taxable
turnover under GST. Services provided by Mahesh will be taxable if
(A) Mahesh provides them on contract basis to Zed Traders
(B) Mahesh provides them on regular basis to Zed Traders
(C) Mahesh provides them to the brother of Kumar, not in the course of employment

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(D) None of the above

54. What would be the tax rate applicable in case of composite supply?
(A) Tax rate as applicable on principal supply
(B) Tax rate as applicable on ancillary supply
(C) Tax rate as applicable on respective supply
(D) Tax rate of the principle supply or ancillary supply whichever is higher

55. What are the supplies on which reverse charge mechanism would apply?
(A) Notified categories of goods or services or both under Section 9(3)
(B) Inward supply of goods or services or both from an unregistered dealer under
9(4)
(C) Both of (A) and (B)
(D) None of the above

56. Which one of the following is exempted from GST?

(A) Any business exhibition
(B) A business exhibition in India
(C) A business exhibition outside India
(D) None of the above

57. What is date of receipt of payment?

(A) Date of entry in the books
(B) Date of payment credited into bank account
(C) Earlier of (A) and (B)
(D) Date of filing of return

58. Time limit to pay the value of supply with taxes to avail the input tax credit is
(A) Three months
(B) Six months
(C) One hundred and eighty days
(D) Till the date of filing annual return or 30th September of following year whichever
is earlier

59. Determine the correct combination:

Sl.No. Event Sl. No. Effect on Customs Duty
1 Foods damaged 1 Remission of duty
2 Goods pilfered 2 Abatement of duty
3 Goods destroyed 3 Not liable to pay duty
(A) 1 and 2, 2 and 3, 3 and 1
(B) 1 and 3, 2 and 3, 3 and 2
(C) 1 and 2, 2 and 1, 3 and 3
(D) 1 and 1, 2 and 3, 3 and 2

60. Two sets of sales wer e effected by Boomerang Ltd First set 1000 units at ` 190 and
second set 900 units at ` 200. In terms of rule 7 (Deductive Value) of the Customs
Valuation (Determination of V alue of Imported Goods) Rules, 2007, the unit p rice in
greatest aggregate quantity determined will be
(A) ` 200
(B) ` 190
(C) ` 195
(D) More data is required

61. As per the Customs Tariff Act, 1975, the following is not considered to be a way that
constitute circumvention of antidumping duty imposed on an article which may
warrant action by the Central Government:

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(A) Altering the description or name or composition of the article subject to

imposition of such anti-dumping duty
(B) Changing the country of its origin or export
(C) Import of such article in an unassembled or disassembled form
(D) Procuring the goods through an Indian subsidiary which is a SEZ unit

Answer:

(1) (D) Profession tax

Profession tax is levied by Municipalities, Corporations and local bodies. This tax is not
replaced by GST. All other taxes mentioned in the alternatives are covered by GST
(2) (A) SGST and GGST
In case of supply within the Sta te, both SG ST and CGST will be levied at the
applicable rates. IGST is applicable only in case of inter-state supply
(3) (C) Destination
Under GST law, the share of GS T goes to the State where the destination lies or where
the movement of goods e nds, unlike V AT, where it went to the State where the
movement originated
(4) (C) the aggregate value of all the three items exceeds ₹20 lakhs
For the purposes of regi stration under the GST law, aggregate turnover has to be
considered All three items given in the problem are included in the ambit of the term
aggregate turnover
(5) (A) Goods sent from Delhi to another dealer in Delhi
For intra-State supply, the origin and destination must be in the same State or Union
Territory
(6) (B) Taxable inter-State or intra-State supply
As per section 24 of t he CGST Act, 2017, a casual taxable person making supply of
taxable goods is required to obtain registration. It does not matter whether such
supply is intra-State or inter-State
(7) (D) Hyderabad
As per sec 12 (5) of the IGST Act, PoS for service in relation to training provided to a
registered person is the place of reci pient of service. Here, the software company in
Hyderabad is the recipient of service. So, the correct answer will be Hyderabad
(8) (D) Any one of the above
Sec 104 of CGST Act 2017 specifies the three cases - Viz. fraud, suppression of material
facts, mis-representation of facts as reasons for holding advance ruling to be void
(9) (B) 31.12.2024
As per section 36 of CGST Act books and records are to be maintained for 72 months
(6 Years) from the date of furnishing the return
(10) (D) 7.5% of the demand, subject to a maximum of ₹10 crore
As per Section 129E of the Cust oms Act, 1962, as amended by Finance (No. 2) Act,
2014 w.e.f. 6-8-2014, provides that for filing appeal b efore the Commissioner
(Appeals), a pre-deposit of 7.5%, subject to a maximum of ₹10 crore shall be made
(11) (C) ₹5 lakhs
The GFA is linked to the period for which the person has stayed abroad If the sa me
exceeds 2 years, the GFA is ₹5 lakhs for transfer of residence
(12) (A) Nil
No anti-dumping duty is payable by a SEZ, as they are exempted from the same
(13) (D) All of the above
In the GST regime, all t he above taxes, such as — Centr al Excise duty, Serv ice Tax,
CVD on import, Spl. CVD on import, Central Cesses etc have been subsumed in the
ambit of GST
(14) (C) Contract basis as employed by a contractor

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Supply includes the services provided by the employee to the employer in the course
of employment on Contract basis as employed by a contractor. So, GST is payable
(15) (A) 20th Nov. 2017
If a person, opting for composition scheme is liable to be registered on 1st Oct. 2017
and he has applied for registration on 17th Nov. 2017 and registration granted on 20th
Nov. 2017, then the effective date of registration will be 20th Nov. 2017 (i.e. the date
of grant of registration), provided no discrepancies found
(16) (B) Transport of defence and military equipments
In case of services by way of transportat ion of goods by rail or a vessel from one
place in India to another, the goods like defence or military equipments, agricultural
produce, milk, salt and food grain including flours, pul ses and rice, organic manure
et(C) are exempted from GST
(17) (B) Delhi
Where the goods are supplied on boa rd a conveyance including a vessel, an
aircraft, a train or a motor vehi cle, place of supply of goods will be the loc ation at
which such goods are taken on board So, the place of supply will be Delhi
(18) (B) Both (A) & (B)
Both Advance Authorisation Scheme and Duty Free Import Authorisation Scheme are
duty exemption schemes. The last two schemes are reward schemes under FTP
(19) (A) Inland Container Depot
After the imported goods are unloaded at the port, the containers are carried to
Inland Container Depots for storage purpose. From these depots goods can be
cleared for Dom estic Tariff Area or cleare d for export. Inland Container Depots are
used for unloading of imported goods and loading of exported goods
(20) (C) Form III (green)
The bill of ent ry of Fo rm III (green) is used for ex-bond clearance for ho me
consumption from the warehousing
(21) (D) All of the above
Pan masala, tobacco and tobacco products, cigarettes, aerated waters, motor
vehicles etc goods are covered under GST Compensation Cess
(22) (B) 13th of the next month
The GSTR-6 (Return for Input Service Distributor) is to be filed on a monthly basis and
the due date is 13th of the next month
(23) (A) Securities
Goods means every kind of movable property other than money and securities but
includes actionable claim, growing crops, grass and things attached to or forming
part of the land which are agreed to be se rved before supply or under a contract of
supply. The second & third options are examples of actionable claim
(24) (C) Compensation Cess
In computation of aggr egate turnover for composition levy, the i tems like Inward
supplies on whi ch the recipient is required to pa y tax under Reverse Charge
Mechanism (RCM), CGST, SGST, UTGST, IGST and Compensation Cess
(25) (B) 11th Oct 2017
Rule 10(2) provides that if person has applied for registration within 30 days from the
date when he is liable to obtain registration, the effective date is when he is liable to
be registered
(26) (B) 13th of the next month
The GSTR-6 (Return for Input Service Distributor) is to be filed on a monthly basis and
the due date is 13th of the next month
(27) (B) Date of bank entry
in cases of change in rate of tax, the date of receipt of payment is the date of credit
in the bank account if such credit is after four working days from the date of change
in rate of tax
(28) (A) ₹1,00,000

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Renting of vac ant land to a st ud firm will be liable for GST as rearing of horses has
been excluded from exemption but leasing of vacant land to a cattle firm is
exempted vide entry no. 54 of exemption notification no. 12/2017-CT (Rate)
(29) (B) Two copies
In case of supply of services, the tax invoice shall be prepared in the manner of two
copies — the original copy being marked as original for recipient and the duplicate
copy being marked as duplicate for supplier
(30) (D) GST REG-09
The form of application for registration, used by a non-resident taxable person is GST
REG-09
(31) (B) High Court
If a case i nvolves a substantial question of l aw and doe sn‘t not involve any i ssue
relating to place of sup ply, an appeal against orders passed by the St ate Bench or
Area Bench of t he Appellate Tribunal shall lie to High Court and it may admit such
appeal
(32) (C) Mixed supply
Each of these items can be supplied separately, is not dependant on each other and
not bundled due to natural necessities. (Section 8 of CGST Act)
(33) (B) 13
Return for input Service distributor has to be filed by 13th of the next month.
(34) (C) Good are destroyed by fire
ITC is not available on goods destroyed u/s. 17(5) of CGST Act
(35) (B) An agriculturist selling produce out of cultivation of land
Income is related to agriculture and hence turnover is exempt from GST and such
agriculturist is not liable for registration under GST
(36) (D) Date of receipt of goods/services by the recipient
This is not a field prescribed (RULE 54-Section 31 read with Rule 46 of CGST Rules) for
Tax invoice
(37) (C) Unique Identification Number
As per GST Act any noti fied agency of the United Nations etc can b e granted this
number for claiming GST refund
(38) (C) Signature or digital signature if registered of the recipient
This is not a fi eld required under Section 31 (3) (c) read with Rule 49 of CGST Rules for
Bill of supply
(39) (D) Restricted goods are allowed to be imported or exported only with authorization
Restricted goods are allowed to be imported or exported only with authorization as
per FTP – 2015 – 2020. Other choices are incorrect
(40) (D) Permission from CBEC authorizing re-export of goods
It is not permission from CBEC but from RBI authorizing re-export of goods which is to
be filed where applicable
(41) (D) Are abandoned by owner of goods without any hope of recovery
Derelict goods are those abandoned by own er of goods without any hope of
recovery. Other choices are incorrect
(42) (D) GSTR-4, Quarterly
Under the GST Law, in case of a Composition dealer, the prescribed return form is
GSTR – 4, which shall be filed on quarterly basis
(43) (A) Nil
The liability to deduct tax at source arises where the value of supply excluding GST
exceeds ` 2,50,000. Here the same will be below ` 2,50,000 [2,65,000 x 100 / 118].
Hence the liability is nil
(44) (B) Electronic credit ledger
Balance of the ITC is shown in Electronics credit ledger. Electronic cash ledger shows
the GST deposited to the credit of the Govt. T he set off of GST and the balance
liability is reflected in Electronic Liability Ledger
(45) (A) ₹710
There has been a delay of 20 days in the remittance

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Interest to be calculated at 18%

Same is [72,000 x 18% x 20/365] r/off = ` 710
(46) (B) IGST only
As per IGST Rules, for inter-state movement of goods and services is concerned IGST
will be levied
(47) (A) 10th November, 2018
As per 10(2) of the CGST Rules, 2017, when a person l iable for registration applies for
registration within 30 days, t he effective date of re gistration is the date whe n he
became liable for registration
(48) (B) ₹97,000
ITC is not available in respect of goods taken for personal use as well as those stolen
from the factory. The quantity of raw materials consumed in production is irrelevant
(49) (A) Indian Customs Electronic Data Interchange Gateway
This term appears in Shipping Bill (Electronic Declaration) Regulations, 2011 and this is
what the term means
(50) (C) 53
Section 53 of the Customs Act, 1962 contains the provisions relating to transit of
certain goods without payment of customs duty
(51) (D) Entire lot of goods imported earlier should be re-exported and no portion should
remain
Section 74 of the Customs Act, 1962 contains the necessary conditions
(52) (A) A person occasionally supplying goods or services or both in a State or an Union
Territory where he has no fixed place of business
A person occasionally supplying goods or services or bo th in a S tate or an Union
Territory where he has no fixed place of business
(53) (C) Mahesh provides them to the brother of Kumar, not in the course of employment
Mahesh provides them to the brother of Kumar, not in the course of employment.
Supply includes services provided by the employees to the employer, not in the
course of employment
(54) (A) Tax rate as applicable on principal supply
Tax rate as applicable to principal supply
(55) (A) Notified categories of goods or services or both under Section 9(3)
Notified categories of goods or services or both under Section 9(3) as Section 9(4) has
been deferred presently
(56) (C) A business exhibition outside India
(57) (C) Earlier of (A) and (B)
(58) (C) One hundred and eighty days
One hundred and eighty days from the date of issue of invoice by supplier
(59) (A) 1 and 2, 2 and 3, 3 and 1
When imported goods are damaged, t here will be abatement of customs dut y. In
respect of pilfered goods, customs duty is not payable and when goo ds are
destroyed, there will be remission of duty
(60) (B) ` 190
The greatest number of units sold at a particular price is 1,000 units. Therefore, the unit
price in the greatest aggregate quantity is ` 190
(61) (D) Procuring the goods through an Indian subsidiary which is a SEZ unit
The first three are specifically covered by section 9A(1A) of the Customs Tariff Act,
1975. Import by a SEZ unit will not attract any anti-dumping duty

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 Answer to MTP_Final_Syllabus 2016_Jun2023_Set1

Paper 18- Indirect Tax Laws and Practice

DoS, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 1
 Answer to MTP_Final_Syllabus 2016_Jun2023_Set1

Paper 18- Indirect Tax Laws and Practice

Full Marks: 100 Time allowed: 3 hours

The figures in the margin on the right side indicate full marks.
Working notes should form part of the answer.

Section - A
Answer Question No. 1 which is compulsory and any four from the rest of this section.

1. Choose the correct answer with justification/ workings wherever applicable: [7×2=14]

(i) The GST return form to be filed by a Composition dealer/supplier is ________________

and the same had to be furnished _____________________.
(a) GSTR-1, Monthly
(b) GSTR-1, Quarterly
(c) GSTR-4, Monthly
(d) GSTR-4, Quarterly

(ii) Under GST Act a supply of assortment of sweets, chocolates and firecrackers packed
in a gift hamper is:
(a) Joint supply
(b) Composite supply
(c) Mixed supply
(d) Assorted supply

(iii) In case of supply of services, the tax invoice shall be prepared in the manner of:
(a) Only original
(b) Two copies
(c) Three copies
(d) Four copies

(iv) Mr. C of Chennai supplied goods to M/s Smart Jet Airlines of Chennai flying between
Delhi-Mumbai. The goods are loaded in the aircraft in Delhi. The place of supply of
goods will be:
(a) Chennai
(b) Delhi
(c) Mumbai
(d) None of the above.

(v) ABC Ltd. has income from renting of vacant land to a stud firm of ₹1,00,000 and leasing
of vacant land to a cattle firm of ₹50,000. The value of taxable supply will be:
(a) ₹1,00,000
(b) ₹50,000
(c) ₹1,50,000
(d) Nil

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 Answer to MTP_Final_Syllabus 2016_Jun2023_Set1

(vi) Under GST, Act the term UIN stands for:

(a) User Identification Number
(b) Utility Identification Name
(c) Unique Identification Number
(d) Unique Individual Number

(vii) In computation of aggregate turnover for composition levy, which of the following
item should be excluded from the aggregate turnover?
(a) The value of exported goods/services
(b) Inter-state supplies between distinct persons having same PAN
(c) Compensation Cess
(d) Supply on own account and on behalf of principal

Answer:

(i) (d) Under the GST law, in case of a Composition dealer, the prescribed return form
is GSTR-4, which shall be filed on quarterly basis.

(ii) (c) Mixed supply - Each of these items can be supplied separately, is not
dependent on each other and not bundled due to natural necessities. (Section
8 of CGST Act)

(iii) (b) Two copies - In case of supply of services, the tax invoice shall be prepared in
the manner of two copies — the original copy being marked as original for
recipient and the duplicate copy being marked as duplicate for supplier

(iv) (b) Delhi - Where the goods are supplied on board a conveyance including a
vessel, an aircraft, a train or a motor vehicle, place of supply of goods will be
the location at which such goods are taken on board So, the place of supply
will be Delhi.

(v) (a) ` 1,00,000 - Renting of vacant land to a stud firm will be liable for GST as rearing
of horses has been excluded from exemption but leasing of vacant land to a
cattle firm is exempted vide entry no. 54 of exemption notification no. 12/2017-
CT (Rate).

(vi) (c) Unique Identification Number - As per GST Act, any notified agency of the
United Nations etc. can be granted this number for claiming GST refund.

(vii) (c) Compensation Cess - In computation of aggregate turnover for composition

levy, the items like Inward supplies on which the recipient is required to pay tax
under Reverse Charge Mechanism (RCM), CGST, SGST, UTGST, IGST and
Compensation Cess.

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 Answer to MTP_Final_Syllabus 2016_Jun2023_Set1

2. (a) (i) Hot Breads Pvt. Ltd is the supplier of bakery products registered in the current
financial year (2022-23) w.e.f. 1st Oct. 2022. In the month of Oct. 2022 total
taxable supplies `88 lakhs.
Answer the following:
(1) Company is eligible for Composition Scheme?
(2) If so company wants to pay tax @1% being a trader. However, the Deputy
Commissioner of Central Tax contended that the assessee is liable to pay
tax @5% under the Food and Restaurant Services category? Advise. [4]
(ii) M/s X Ltd. a dealer, offer combo packs of shirt, watch, wallet, book and they are
bundled as a kit and this kit is supplied for a single price and the supply of one
item does not naturally necessitate the supply of other elements. Is it composite
supply or mixed supply & what would be the rate of tax leviable thereon and
why? [3]

(b) M/s. X Ltd. of Chennai, engaged in various businesses has provided the following
services, whose values are listed below. Find the place of supply & compute its GST
liability:
(1) Service of interior decoration in respect of immovable property located in
Jammu: ` 5 lakh;
(2) Service of renting of commercial buildings in Delhi: ` 15 lakh;
(3) Architectural services to an Indian Hotel Chain which has business establishment
in Mumbai for its newly acquired property in Sydney: ` 25 lakhs;
(4) Services provided as an Indian agent undertaking marketing in India of goods
of a foreign seller: ` 51 lakhs;
(5) Services provided as travel agent undertaking marketing in India of services of
a foreign seller: ` 1 lakhs. Applicable rate of GST 18%. [5+2=7]

Answer:
(a) (i) (1) Hot Breads Pvt. Ltd. is eligible for composition levy in the current year.
(2) The supply of food and restaurant services category is the only service included
under the composition scheme. For a business to be categorised as food and
restaurant services, there needs to be an element of service involved.
In the given case, supply of bakery products, there is only a supply of goods i.e.
food items but there is no element of supply of service. Hence supply of bakery
products is eligible to pay GST @1%, under the Traders category and not Food
and Restaurant Services category. Therefore, department contention is not
correct.
(ii) The supply is a mixed supply. In this case, the product which attracts the highest
rate of tax in the mixed supply will be the applicable rate of tax.

(b)
Particulars Value (` in Working note
lakhs)
Interior decoration 5 POS = J&K (Sec 12(3)(a) of IGST Act) taxable
services territory. IGST will be levied

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Renting of commercial 15 POS = Delhi (Sec 12(3)(b) of IGST Act)

buildings Taxable territory IGST will be levied
Architectural services 25 PoS = Mumbai (Sec 12(3)(a) of IGST Act).
Taxable territory IGST will be levied
Marketing of Goods 51 PoS = Chennai (sec 13(8) of IGST Act)
Taxable territory CGST & SGST will be levied.
Travel agent 1 PoS = Chennai (sec 13(8) of IGST Act)
Taxable territory CGST & SGST will be levied.
Taxable supply of 97
services

Particulars CGST SGST IGST

GST liability (` in lakhs) 4.68 4.68 8.10

3. (a) (i) Mr. A of Rajasthan has effected following supplies within the State of
Rajasthan. You are required to determine whether he is required to obtain
registration under GST law.

Particulars `
(1) Intra-State supply of goods agricultural produce grown out of 5,50,000
cultivation of land by family members
(2) Intra-State supply of goods which are wholly exempt from GST 6,00,000
u/s 11 of CGST Act, 2017
(3) Intra-State supply of goods chargeable with GST @5% 8,50,000
(4) Intra-State supply of services which are wholly exempt from tax 50,000
[4]
(ii) State any six categories of person who are required to be registered
compulsorily under CGST Act, 2017. [3]

(b) (i) M/s X Ltd. manufacturer of product ‘A’ and ‘B’. Product ‘A’ is cleared on
payment of duty whereas product ‘B’ is exempt from payment of excise duty.
Inputs used exclusively for product ‘A’ of ` 2,00,000 suffered excise duty ` 25,000
and product ‘B’ of ` 1,00,000 suffered excise duty paid ` 12,500. Common inputs
of ` 3,00,000 is used for product ‘A’ as well as ‘B’ which also suffered excise duty
` 37,500.
As on 1-7-2017, Finished goods of Product ‘A’ worth ` 10,00,000 and Product ‘B’
worth of ` 5,00,000 is in Stock. How much ITC credit is allowed to M/s X Ltd under
GST under Section 140(1) and 140(4) of the CGST Act, 2017. W.e.f. 1-7-2017
Product ‘A’ as well as ‘B’ taxable with CGST 6% as well as SGST 6%.
Note: Manufacturer is in possession of relevant duty paid documents on inputs.
[4]
(ii) State any three conditions need to be satisfied to take credit u/s 140(6) of the
CGST Act in case of duty based on capacity of production. [3]

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Answer:
(a) (i) Computation of Aggregate value of taxable supplies (amount in `):
(1) Intra-State supply of goods agricultural produce grown out of 5,50,000
cultivation of land by family members [WN-1]
(2) Intra-State supply of goods which are wholly exempt from GST u/s 6,00,000
11 of CGST Act, 2017 [WN-2]
(3) Intra-State supply of goods chargeable with GST @ 5% [WN-3] 8,50,000
(4) Intra-State supply of services which are wholly exempt from tax 50,000
[WN-4]
Total Value of supplies 20,50,000
Working Notes:
(1) An agriculturalist is not liable to obtain registration under the Act to the
extent of supply of produce out of cultivation of land. Since Mr. A is
engaged in supply of other goods and services also, he is not covered
under section 23. In such a case the aggregate turnover will include all
supplies made by him including supply of agricultural produce.
(2) Intra-State supply of goods which are wholly exempt from GST under
Section 11 of CGST Act, 2017 is to be included since the same is specifically
included in the definition of aggregate turnover.
(3) Intra-State supply of goods chargeable with GST @ 5% is specifically
included for determination of aggregate turnover.
(4) Intra-State supply of services though exempt from tax is specifically
included in the definition of aggregate turnover.

Since he is engaged in intra state supply of both goods and services from
Rajasthan, the applicable threshold limit for registration will be ` 20 lakh. As the
aggregate turnover exceeds ` 20,00,000, hence Mr. A is required to obtain
registration under GST law.

(ii) Compulsory registration in certain cases [Section 24]: The following category of
persons are mandatorily required to obtain the registration under GST
irrespective of their turnover:
1. persons making any inter State taxable supply [It must be noted that
Central Government has granted exemption from Registration to
person making interstate supplies of taxable services having aggregate
turnover not exceeding ` 20 lakh (` 10 lakhs in case of Special Category
States of Mizoram, Tripura, Manipur and Nagaland) (Notification No.
10/2017-IT dated 13-10-2017 w.e.f. 13-10-2017)]
2. Casual taxable person (CTP) who does not have a fixed place of
business in the State or Union Territory from where he wants to make
supply: (However, threshold limit of 20 lakh (10 lakh in case of Special
Category States of Mizoram, Tripura, Manipur and Nagaland) is
available in case of CTP who is making inter State taxable supplies of
notified handicraft goods and availing the benefit of exemption from
registration as mentioned in point (i) above.]

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3. persons who are required to pay tax under reverse charge i.e. recipient
of supply is liable to pay tax;
4. person who are required to pay tax under Section 9(5) i.e. E-Commerce
operator who is required to pay tax on specified services;
5. non-resident taxable persons making taxable supply;
6. persons who are required to deduct tax u/s 51, whether or not
separately registered under this Act;

(b) (i) ITC c/f under Sec. 140(1) is as follows:

Inputs used exclusively for Product ‘A’ = ` 25,000
Inputs used commonly for “A & B” = ` 25,000(` 37,500 x ` 10 Lakhs/ ` 15 Lakhs)

ITC allowed under Sec. 140(3) is as follows:

Inputs used exclusively for Product ‘B’ = ` 12,500
Inputs used commonly for “A & B” = ` 12,500 (` 37,500 x ` 5 Lakhs / ` 15 Lakhs)

Total ITC under section 140(4) = ` 75,000

(ii) Conditions need to be satisfied to take credit u/s 140(6) of the CGST Act:
(1) Such inputs are used or intended to be used for making taxable supplies
under this Act;
(2) The registered person not opted to pay tax under composition levy (Sec
10.);
(3) The said registered person is eligible for input tax credit on such inputs
under this Act;
(4) The said registered person is in possession of invoice evidencing payment
of duty under existing law (C.Ex., S.T., CVD, Spl. CVD., VAT or Entry tax) in
respect of inputs; and
(5) Such invoice not earlier than 12 months as on 30-6-2017.

4. (a) (i) X Ltd. received a protective demand notice from the department Assistant
Commissioner of Central Tax on 1.9.2022 under Section 73 of the CGST Act, 2017
where
Amount `
CGST & SGST due = 5,00,000
Interest = @15% p.a. for no. of days delay.
Penalty = 10% of tax due or ` 10,000 whichever is higher

The assessee went for appeal and filed the case in the Appellate Authority on
25.9.2022. This appeal has been taken up for hearing on 06-10-2022.
Case 1: How much has to pay as pre-deposit of duty under section 107(6) of
the CGST Act, 2017 and date of pre- deposit of duty by X Ltd. to entertain appeal
by the Appellate Authority (i.e. Commissioner (Appeals)).
Case 2: Whether your answer is different if the assessee appeals only part of the

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amount say ` 3,00,000 is in dispute arising from the said order. [4]
(ii) Considered the previous question where Appellate Authority passed the order
against the assessee, if so how much has to pay as pre-deposit of duty under
section 112(8) of the CGST Act, 2017 to entertain appeal by the Goods and
Services Tax Appellate Tribunal (GSTAT). [3]

(b) (i) Riya Tours Co. has arranged four package tours during January 2023. The
particulars of the services and charges are as under:
(1) Tour 1: Charges received ` 35 lakhs. The package includes transportation,
accommodation, food, and tourist guide, entry fees for monuments.
(2) Tour 2: Charges received ` 65 lakhs. The package includes transportation
and accommodation for stay.
(3) Tour 3: Charges received ` 40 lakhs. The charges are solely for arranging
accommodation for stay. However, the bills issued to the clients do not
mention it clearly that the charges are solely for arranging the
accommodation for stay.
(4) Tour 4: Charges received ` 50 lakhs (inclusive of charges of stay). The bill
issued to the client’s mentions it clearly that the charges are solely for
arranging the accommodation for stay.
Compute the value of taxable supply of services and GST.
Note: Applicable rates of GST 5% and 18%. All transactions taken place at inter-
state level. [4]

(ii) M/s Shakshi Associates, a recovery agent (located in Chennai) empaneled by

State Bank of India, Local Head Office, Nungambakkam, Chennai. The following
service supplied by M/s Shakshi Associates in the month of Nov. 20XX are as
follows:
(1) Fee of ` 2,25,825 for supply of services in relation to recovery of dues from
the defaulting Borrowers at the place of business/occupation and if such
Borrowers is/are unavailable at the place of business then at his/ her
residence.
(2) Supply of services with regard to demand for recovery or taking possession
of the security from defaulting Borrowers, for which separate fee charge
from the bank ` 55,175/-
Find the following:
(A) Is it supply of service.
(B) If so, who is liable to pay GST.
(C) Find the GST liability
Note: Assume the applicable rate of GST for recovery agent services is @18%. [3]

Answer:
(a) (i) Case 1: Pre-deposit is ` 50,000 (5,00,000 x 10%) is to deposit on or before 6th
October 2022.
Case 2: Disputed amount ` 3,00,000: Pre-deposit is ` 2,00,000 plus ` 30,000 (`
3,00,000 x 10%) together is ` 2,30,000. It should be deposited on or before 6th

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October 2022.
(ii) Pre-deposit is ` 1,00,000 (5,00,000 × 20%). It is in addition to pre-deposit of ` 50,000.
Case 2: Disputed amount ` 3,00,000:
Pre-deposit is ` 2,00,000 plus ` 60,000 (` 3,00,000 × 20%) together is ` 2,30,000, it is
in addition to pre-deposit of `30,000.

(b) (i) Statement Showing Taxable supply of services & GST liability of Riya Tours Co.
for January 2023
Particulars Value ` in lakhs Value ` in lakhs
Tour 1: Packaged Tour 35
Tour 2: Transportation and 65
Accommodation
Tour 3: Accommodation for stay 40
Tour 4: Accommodation for stay 50
Taxable supply of services 150 40
GST Rate 5% 18%
IGST 7.50 7.20
Less: ITC Not allowed Allowed
Net GST liability 7.50 7.20

(ii) (A) Yes. It is taxable supply of service.

(B) State Bank of India being recipient of service is liable to pay GST under
Reverse Charge Mechanism (RCM).
(C) GST liability = ` 50,580 [i.e. ` 2,25,825 + 55,175) x 18%].

5. (a) (i) Who can opt for QRMP Scheme? [3]

(ii) How the payment of tax is termed under QRMP Scheme? [4]

(b) Asha Ltd. supplies raw material to a job worker Kareena Ltd. After completing the job-
work, the finished product of 5,000 packets are returned to Asha Ltd. putting the retail
sale price as ` 20 on each packet. The product in the packet is covered under MRP
provisions. Determine the transaction value in the hands of Kareena Ltd. under GST law
from the following details:
Particulars Value in `
Cost of raw material supplied 30,000
Job worker’s charges including profit 10,000
Transportation charges for sending the raw material to the job worker 3,000
Transportation charges for returning the finished packets to Asha Ltd. 4,500
Asha Ltd. paid certain technology transfer fees to ‘Reena Ltd’, so that 22,500
‘Kareena Ltd’ can use the said technology in the given job-work
operation and the same amortized in the books of job-worker
Note: Kareena Ltd offered discount ` 2,000, provided full payment is made at the
time of raising invoice and the same is mentioned in the invoice. Asha Ltd. made

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full payment at the time of issue of invoice.

[7]
Answer:
(a) (i) Following registered person (hereinafter RP) can file quarterly returns and pay tax
on monthly basis w.e.f. 01.01.2021 under Quarterly Return filing & Monthly
Payment of Taxes (QRMP) scheme:
• An RP who is required to file Form GSTR 3B with Aggregate Annual Turn Over
(AATO) of up to ` 5 Cr. in the previous financial year is eligible. If AATO
crosses ` 5 Cr. during a qtr., RP will become in-eligible for the Scheme from
next quarter.
• Any person obtaining a new registration or opting out of Composition
Scheme can also opt for this Scheme.
• The option to avail this Scheme can be availed GSTIN wise. Therefore, few
GSTINs for that PAN can opt for the Scheme and remaining GSTINs can
remain out of the Scheme.

(ii) Payment of tax under the QRMP scheme:

• Registered Persons need to pay tax due in each of first two months (by 25th
of next month) in the Quarter, by selecting “Monthly payment for quarterly
taxpayer” as reason for generating Challan.
• Registered Persons can either use Fixed Sum Method (pre-filled challan) or
Self-Assessment Method (actual tax due), for monthly payment of tax for
first two months, after adjusting ITC.
• No deposit is required for the month, if there is nil tax liability.
• Tax deposited for first 02 months can be used for adjusting liability for the
qtr. in Form GSTR-3B and can’t be used for any other purpose till the filing
of return for the qtr.

(b) Statement showing transaction value of Kareena Ltd.

Particulars Value in `
Cost of raw material supplied Exempted
supply
Job worker’s charges including profit 10,000
Transportation charges for sending the raw material to the job Exempted
worker supply
Transportation charges for returning the finished packets to Asha 4,500
Ltd. [Sec. 15(2)(b) of the CGST Act, 2017]
Technology fee [Sec. 15(2)(b) of the CGST Act, 2017] 22,500
Sub-total 37,000
Less: Discount [Sec. 15(3) of CGST Act, 2017] (2,000)
Transaction value (i.e. sole consideration) 35,000
Note: It is very clear that principal to job worker and job worker to principal cannot
be treated as supply as per section 143 of the CGST Act, 2017.

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6. (a) Write in details about the consequences of transportation of goods without issue of
invoice. [6]

(b) M/s Lips Ltd., manufactures four types of ‘Nail Polishes’, namely Sweety, Pretty, Beauty,
Tweety. The Company has taken input tax credit of ₹3,00,000 on the common inputs
used in the manufacture of ‘Nail Polishes’. Common inputs also used partly for non-
business purposes. During the financial year 2022-23 (w.e.f. 1-7-2022) the company
manufactured 1000 liters of each type of ‘Nail Polishes’. The Company was not in a
position to maintain separate set of records with regards to inputs used for final
products. GST payable on final goods @12%.

You are required to calculate the net GST payable by M/s Lips Ltd. for the year 2022-
23 from the following data:
Product Description Sale price
Name (Exclusive of GST)
Sweety Sale to Domestic Tariff Area ₹ 30 per 20ml. bottle
Pretty Sale to a Special Economic Zone (SEZ) ₹ 40 per 20ml. bottle
Beauty Sale to A Ltd. of USA ₹ 50 per 20ml. bottle
Tweety Sale to Defence Canteen (Exempted from GST) ₹ 60 per 20ml. bottle
[8]
Answer:
(a) Transportation of goods without issue of invoice:

(1) The consigner may issue a delivery challan, serially numbered not exceeding sixteen
characters, in one or multiple series, in lieu of invoice at the time of removal of goods
for transportation, containing the prescribed details for the purposes of —
 supply of liquid gas where the quantity at the time of removal from the place of
business of the supplier is not known,
 transportation of goods for job work,
 transportation of goods for reasons other than by way of supply, or
 such other supplies as may be notified by the Board,
(2) The delivery challan shall be prepared in triplicate, in case of supply of goods, in the
following manner, namely:
 the original copy being marked as original for consignee;
 the duplicate copy being marked as duplicate for transporter; and
 the triplicate copy being marked as triplicate for consigner.

(3) Where goods are being transported on a delivery challan in lieu of invoice, the same
shall be declared as specified in rule 138.

(4) Where the goods being transported are for the purpose of supply to the recipient but
the tax invoice could not be issued at the time of removal of goods for the purpose of
supply, the supplier shall issue a tax invoice after delivery of goods.

(5) Where the goods are being transported in a semi knocked down or completely
knocked down condition -
 the supplier shall issue the complete invoice before dispatch of the first
consignment;
 the supplier shall issue a delivery challan for each of the subsequent
consignments, giving reference of the invoice;

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 each consignment shall be accompanied by copies of the corresponding delivery

challan along with a duly certified copy of the invoice; and
 the original copy of the invoice shall be sent along with the last consignment.

(b) Statement showing GST on outward supplies:

Product Description Sale price Transaction GST liable Remarks
Name (Exclusive of Value (₹) to pay (₹)
GST)
Sweety Sale to ₹ 30 per 15,00,000 1,80,000 ₹ 15,00,000 (1000
Domestic Tariff 20ml. bottle litres ×
Area 1000ml./ 20ml × ₹
30) GST = ₹ 1,80,000
(₹ 15,00,000 × 12%)
Pretty Sale to a unit of ₹ 40 per 20,00,000 Zero rated ₹ 20,00,000 (1000
SEZ 20ml. bottle supplies litres ×
(treated as 1000ml./ 20ml x ₹
exports) 40)
Beauty Sale to A Ltd. of ₹ 50 per 25,00,000 Zero rated ₹ 25,00,000 (1000
USA (export 20ml. bottle supplies litres ×
sales) 1000ml./ 20ml x ₹
50)
Tweety Sale to ₹ 60 per 30,00,000 Exempted ₹ 30,00,000 (1000
Defence 20ml. bottle litres ×
Canteen 1000ml./ 20ml × ₹
(Exempted 60)
from GST)
Total 90,00,000 1,80,000

As per Section 17(3) of the CGST Act, 2017 read with rule 42(1)(i) and rule 42(1)(j) of the CGST
Rules, 2017 proportionate reversal of credit is as follows:
Particulars ITC reversal (₹) Working note
Input tax credit proportionate 1,00,000 (₹30,00,000/ ₹90,00,000) x ₹
reversal on common inputs [rule 3,00,000
42(1)(i)]
Credit attributable to non-business 15,000 ₹3,00,000 x 5%
purposes on common inputs [rule
42(1)(j)]
Total 1,15,000

Quantum of eligible ITC (Rule 42(1)(k) of the CGST Rules, 2017) is ₹1,85,000/-
[ͅ₹ 3,00,000 – (1,00,000 + 15,000)]
Statement showing net GST liability or excess credit:
Therefore, the GST payable on taxable supply of goods = ₹ 1,80,000
Less: ITC credit allowed = ₹1,85,000
Excess ITC can be carried forward into next month = ₹ ( 5,000)

7. Answer the following: [7+7=14]

(a) Write a short note on Anti-profiteering committee and its duties and powers.
(b) Write a brief note on Special Audit under Section 66 of the CGST Act, 2017.

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Answer:
(a) Anti-profiteering Committee [Section 171(2)]:
The Central Government may, on recommendations of the Council, by notification, constitute
an Authority, or empower an existing Authority constituted under any law for the time being
in force, to examine whether input tax credits availed by any registered person or the
reduction in the tax rate have actually resulted in a commensurate reduction in the price of
the goods or services or both supplied by him.

The National Anti-Profiteering Authority shall be a five members’ committee consisting of:
• a Chairman who holds or has held a post equivalent in rank to a Secretary to the
Government of India; and
• four Technical Members who are or have been Commissioners of State tax or central tax
or have held an equivalent post under existing laws.
• The Additional Director General of Safeguards under the CBIC (Board) shall be the
Secretary to the Authority.
The Authority shall cease to exist after the expiry of two years from the date on which the
Chairman enters upon his office unless the Council recommends otherwise.

Duties & Powers of Anti-profiteering committee [Section 171(3)]:

The Authority referred to in sub-section (2) shall exercise such powers and discharge such
functions as may be prescribed.
The Authority can determine the methodology and procedure for determination as to
whether the reduction in the rate of tax on the supply of goods or services or the benefit of
input tax credit has been passed on by the registered person to the recipient by way of
commensurate reduction in prices.
The Authority would have the following duties:
(i) to determine whether any reduction in the rate of tax on any supply of goods or
services or the benefit of input tax credit has been passed on to the recipient by way
of commensurate reduction in prices;
(ii) to identify the registered person who has not passed on the benefit of reduction in
the rate of tax on supply of goods or services or the benefit of input tax credit to the
recipient by way of commensurate reduction in prices;
(iii) to order,
• reduction in prices;
• return to the recipient, an amount equivalent to the amount not passed on by way
of commensurate reduction in prices along with interest at the rate of eighteen per
cent. from the date of collection of the higher amount till the date of the return of
such amount or recovery of the amount not returned, as the case may be, in case
the eligible person does not claim return of the amount or is not identifiable, and
depositing the same in the Consumer Welfare Fund;
• imposition of penalty; and
• Cancellation of registration.

(b) Special Audit [Section 66 of the CGST Act, 2017]:

 Special Audit the registered person can be directed to get his records including books
of account examined and audited by a Chartered Accountant or a Cost Accountant
during any stage of scrutiny, inquiry, investigation or any other proceedings; depending
upon the complexity of the case.
 Procedure: During the scrutiny, inquiry, investigation or any other proceedings of a
registered person, the Assistant Commissioner or any officer senior to him, having regard

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to the nature and complexity of the case and the interest of revenue, might be of the
opinion that the value has not been correctly declared or the credit availed is not within
the normal limits.
In such cases, with the prior approval of the Commissioner, the Assistant Commissioner
or any officer senior to him can direct he registered person in FORM GST ADT-03 to get
his records including books of account examined and audited by a specified chartered
accountant or a cost accountant.
 The chartered accountant or a cost accountant will be nominated by the
Commissioner. The chartered accountant or cost accountant so nominated has to
submit a report of such audit within the period of ninety days, duly signed and certified
by him to the Assistant Commissioner.
 On an application made by the registered person or the chartered accountant or cost
accountant or for any material and sufficient reason, the Assistant Commissioner can
extend the said period by a further period of ninety days.
 The provisions of special audit shall have effect even if the accounts of the registered
person have been audited under any other provisions of the GST Act or any other law
for the time being in force.
 The registered person shall be given an opportunity of being heard in respect of any
material gathered on the basis of special audit and which is proposed to be used in any
proceedings against him under this Act or the rules made thereunder. The expenses of
the examination and audit of records, including the remuneration of such Chartered
Accountant or Cost Accountant, shall be determined and paid by the Commissioner.

On conclusion of the special audit, the registered person shall be informed of the findings of
the special audit in FORM GST ADT-04. Where the special audit results in detection of tax not
paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilized, the
process of demand and recovery will be initiated against the registered person.

Section - B
Answer Question No. 8 which is compulsory and any two from the rest of this section.

8. Choose the correct answer with justification/ workings wherever applicable: [3×2=6]

(i) ________ means vessel or cargo which is abandoned in sea without any hope of
recovering it.
(a) Derelict
(b) Jetsam
(c) Flotsam
(d) Wreck

(ii) The type of bill of entry which is used for ex-bond clearance for home consumption
from the warehousing, is:
(a) Form I (white)
(b) Form II (yellow)
(c) Form III (green)

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(d) None of the above

(iii) Under Foreign Trade Policy export and import goods are broadly categorized. Which
of the following statements is correct?
(a) Free i.e. general goods are allowed to be imported without payment of any
customs duty.
(b) Restricted goods are banned and not allowed to import or export.
(c) Restricted goods are allowed to be imported only if used for re-export.
(d) Restricted goods are allowed to be imported or exported only with
authorization.

Answer:
(i) (a) Derelict means vessel or cargo which is abandoned in sea without any hope of recovering
it. Goods are not thrown from the vessel to prevent it from sinking.

(ii) (c) The bill of entry of Form III (green) is used for ex-bond clearance for home consumption
from the warehousing

(iii) (d) Restricted goods are allowed to be imported or exported only with authorization as per FTP
– 2015 – 2020. Other choices are incorrect.

9. (a) Discuss the Services offered by Inland Container Depot (ICD) and Container Freight
Station (CFS). [4]

(b) (i) The assessee M Ltd. entered into a joint venture with a foreign collaborator N for
promotion and selling of antennas, accessories and other communication
equipment. The agreement between them indicates that N owned majority of
equity shares in M Ltd. Technical Services were provided by N to M Ltd, for various
functions that were carried out in respect of manufacture of antenna system in
India, for which technical services fee was paid to N by M Ltd. Based on the
above facts, the department opined that both M Ltd. and N were related persons
in terms of rule 2(2)(1) and 2(2)(iv) of the Customs Valuation (Determination of
Price of Imported Goods) Rules, 1988 and that the technical fee paid by M Ltd.
was includible in the assessable value of the imported components in terms of
Rule 9(1)(c) of the Rules. Decide. [2]
(ii) Following particulars are available in respect of consignment of goods imported:
(1) Cost at the factory of the exporter: US$ 20,000
(2) Carriage/freight/insurance upto the port of shipment in the exporter’s
country: US$ 400
(3) Charges for loading on to the ship at the shipping port: US$ 100
(4) Freight charges of the ship for transport upto the Indian port: US$ 1,200

Compute the assessable value for the purpose of levy/payment of customs

duties. [6]

DoS, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 15
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Answer:
(a) Inland Container Station (ICD) and Container Freight Station (CFS) handle only containerized
shipment, thus special kind of facilities are provided like:
• Sheds for temporary storage of cargo and container yard for temporary storage of
container,
• Customs clearance facility
• Cargo handling equipment and container handling equipment
• Arranging manpower for stuffing the cargo into container and destuffing the cargo from
container
• Road/rail connectivity to and from serving gateway port.
• Bonded warehousing facility
• Maintenance and repair of container unit
• Packaging, palletisation (i.e. a portable platform on which goods can be moved, stocked,
and stored) fumigation (i.e. disinfect with chemical fumes).

(b) (i) Technical fee cannot be added simply because the importer and exporter are ‘Related
Persons’. It can be added only if it is related to imported goods itself. Here, import was for
components while technical fee was for manufacture of antenna systems. The fee is not
connected to imported goods. Hence, not includible.
(ii) Statement showing assessable of imported goods
Particulars Value in Workings
US$
Cost at the factory (ex-factory price) 20,000
Carriage/freight/insurance upto the port 400
of shipment
Charges for loading on the ship at the 100
shipping port
Free On Board (FOB) 20,500
Insurance charges @1.125% on FOB 230.625 US$ 20,500 x 1.125% = 230.625
Freight charges 1,200 Actual taken into account
CIF Value/ Assessable value 21,930.625

Note: Since exchange rate is not given; therefore, the assessable value cannot be
computed in Indian Rupees.

10. (a) The adjudication order was passed and was forwarded to the assessee. However,
assessee did not receive the same. It learned about the order only after receipt of a
letter from the Superintendent, nearly after two years, directing it to pay the dues as
per said order. Thereafter, a copy of that order was made available to the assessee.
The appeal filed by the assessee against the said order was rejected by the
Commissioner (Appeals) as well as by the Tribunal, as being barred by limitation. The
assessee contended that the appeal could not be held to be barred by limitation as
no order was received by it. Justify. [5]

(b) Mention the category of sales made to the Domestic Tariff Area (DTA) that can be
counted for positive Net Foreign Exchange (NFE). [7]

DoS, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 16
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Answer:
(a) The High Court noted that the period of limitation prescribed under erstwhile section 85(3)
[now section 85(3A)] of the Finance Act, 1994 to prefer an appeal against order-in-original is
3 months [now 2 months]. The said period begins from the date of receipt of the decision or
the order of adjudicating authority. Further, section 37C(2) of the Central Excise Act, 1944
stipulates that every decision/order passed or any summons/ notice issued under the said Act
is deemed to have been served on the date on which such decision, order or summons is
tendered or delivered by post or is affixed in the prescribed manner.

Thus, a perusal of section 37C (as supported by erstwhile section 85(3) [now section 85(3A)] of
the Finance Act, 1994) shows insistence upon the service of such adjudication order upon the
assessee. Hence, the observation in the Tribunal’s order that the order- in-original had been
forwarded to the assessee on a particular date was not sufficient in the eyes of law to start
computing the period of limitation.
The High Court observed that neither the order of Commissioner (Appeals) nor the order of
Tribunal recorded a finding that the adjudication order was actually tendered to the assessee
on a particular date or received by him on a particular date.

The High Court quashed and set aside both the orders - order of Commissioner (Appeals) and
the order of Tribunal, and placed back the matter for fresh consideration before
Commissioner (Appeals).

(b) Category of sales made to the Domestic Tariff Area (DTA) that can be counted for positive Net
Foreign Exchange (NFE):
(i) Supplies in DTA to holders of Advance Authorization / Advance Authorization for annual
requirement/ DFIA under duty exemption/ remission scheme/ EPCG scheme subject to
certain exceptions.
(ii) Supplies affected in DTA against foreign exchange remittance received from overseas.
(iii) Supplies to other EOU/ EHTP/ STP/ BTP/ SEZ units.
(iv) Supplies made to bonded warehouses set up under FTP and/ or under section 65 of
Customs Act and Free Trade and Warehousing Zones (FTWZ), where payment is
received in foreign exchange.
(v) Supplies of goods and services to such organizations which are entitled for duty free
import of such items in terms of general exemption notification issued by MoF.
(vi) Supplies of Information Technology Agreement (ITA-1) items and notified zero duty
telecom/ electronics items.
(vii) Supplies of items like tags, labels, printed bags, stickers, belts, buttons or hangers to DTA
unit for export.

11. (a) Write a short note on Appeals to the Customs, Excise and Service Tax Appellate
Tribunal (CESTAT). [8]

(b) From the following identify correct category for grant of status certificate to X Ltd:
Type of Exports in US $ Current Year Previous Previous
(From April - Oct) Year 1 Year 2

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 Answer to MTP_Final_Syllabus 2016_Jun2023_Set1

1. Exports of goods without 1,25,000 11,00,000 5,80,000

Weightage US$
2. Exports of services without 1,55,000 4,20,000 3,95,000
Weightage US$
3. FOR value for Deemed Exports (₹) 50,00,000 1,25,00,000 1,20,00,000

Exchange rate notified by the CBIC as on 1st April of Previous Year 2, 1st April of Previous
Year 1 and 1st April of Current Year is ₹ 55/USD, ₹ 58/USD and ₹ 60/USD respectively. [4]
Answer:
(a) Sec. 129 Customs Act, 1962 deals with appeals to the CESTAT:
(1) CESTAT hears appeals against orders of Commissioner as adjudicating authority and
Commissioner (Appeals).
(2) CESTAT is final fact finding authority
(3) Appeal should be in prescribed form EA-3
(4) Appeal should be filed within 3 months from the date of receipt of order in the prescribed
form EA 3.
(5) The Tribunal shall hear and decide every appeal within a period of 3 years.
(6) If stay is granted by Tribunal for recovery, appeal shall be decided within 180 days. W.e.f.
10-5-2013 CESTAT may further extend the period of stay, by not more than185 days in the
following cases:
(i) on an application made in this behalf by a party and
(ii) on being satisfied that the delay in disposing of the appeal is not attributable to such
party
In case the appeal is not disposed of within the total period of 365 days from the date
of the stay order, the stay order shall, on the expiry of 365, stand vacated.
(7) Fee for filing an appeal

Amount, interest and penalty demanded Fee for filing an appeal

≤ ₹ 5,00,000 ₹ 1,000
> ₹ 5,00,000 ≤ ₹ 50,00,000 ₹ 5,000
> ₹ 50,00,000 ₹10,000

(8) Monetary limit of the Single Bench of the Tribunal to hear and dispose of appeals
enhanced from ₹ 10 lakh to ₹ 50 lakh [Section 35D (3)] (w.e.f. 10-5-2013)
(9) Tribunal can condone the delay for any number of days.
(10) Tribunal can refuse petty appeals below ₹ 2 lakhs.
(11) CBIC can extend time limit for sanctioning departmental appeal by 30 days in Customs
(w.e.f. 6-8-2014):
The Committee of Principal Commissioner or Commissioners or Principal Chief
Commissioner/Chief Commissioners is required to take decision regarding filing of
departmental appeal within 3 months. This period can be extended up to 30 days by CBIC,
on sufficient cause being shown (presumably by the Committee itself)- proviso to section
129D(3) of Customs Act 1962.

(b) Statement showing exports for shipments during last two years and current year up to 31st Oct:
Type of Exports in US$ Current Year in Previous Year 1 in US$ Previous Year 2 in
US$ US$
(From April - Oct)

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 Answer to MTP_Final_Syllabus 2016_Jun2023_Set1

1. Exports of goods without 1,25,000 11,00,000 5,80,000

Weightage
2. Exports of services without 1,55,000 4,20,000 3,95,000
Weightage
3. FOR value for Deemed 83,333.33 2,15,517.24 2,18181.82
Exports US$
TOTAL 3,63,333.33 17,35,517.24 11,93,181.82

X Ltd. export performance as on the date of application made to RA/Development

Commissioner (DC) is US$ 3.292 Million (i.e. 32,92,032.39 US$ /10,00,000). Therefore, X Ltd. is eligible
for One Star Export House status.

DoS, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 19
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PAPER – 19 SYLLABUS 2022
INDIRECT TAX LAWS & PRACTICE
Time Allowed: 3 Hours Full Marks: 100
The figures in the margin on the right side indicate full marks.

SECTION – A (Compulsory)

1. Choose the correct option: [15 x 2 =30]

(i) Under GST Act a supply of assortment of sweets, chocolates and firecrackers packed in gift
hamper is
a. Joint supply
b. Composite supply
c. Mixed supply
d. Assorted supply

(ii) What happens if the turnover of a registered person paying taxes under composition scheme
during the year 2022-23 crosses threshold limit?
a. He can continue under composition scheme till the end of the financial year.
b. He will be liable to pay tax at normal rates of GST on the entire turnover for the
financial year 2022-23
c. He will cease to remain under the composition scheme with immediate effect
d. He will cease to remain under the composition scheme from the quarter following the
quarter in which the aggregate turnover exceeds threshold limit

(iii) Mr. A has started intra-state supply of goods from Delhi. He is required to obtain registration
if his aggregate turnover exceeds___________ during a financial year.
a. ` 10 lakh
b. ` 20 lakh
c. ` 30 lakh
d. ` 40 lakh

(iv) Kesar Maharaj, a registered supplier, gave a classical dance performance in an auditorium.
The consideration charged for the said performance is ` 1,60,000. Such performance is not
for promotion of any product/services. Rate of CGST and SGST on such services is 9% each.
Assuming the services supplied by him to be intra State supplies, which of the following
statement are true?
a. GST liability of Kesar Maharaj is Nil
b. Kesar Maharaj is liable to pay CGST and SGST of ` 14,400 and ` 14,400 respectively.
c. Kesar Maharaj is liable to pay CGST and SGST of `900 and `900 respectively.
d. None of the above.

(v) Calculate Free on Board value from following: Ex-factory price of exporter- ` 10,000;
Expenses upto loading of goods by foreign exporter- ` 12,000. Post importation cost- ` 8000:

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a. ` 30,000
b. ` 22,000
c. ` 18,000
d. ` 22,250.

vi) Is E-way bill mandatory in case of transport of the handicraft goods from one State to another
State by a person who has been exempted from the requirement of obtaining registration?
a. E-way Bill is not required as the supplier is exempt from the requirement of obtaining
registration.
b. E- way Bill is mandatory only if the value of consignment is more than `50,000
c. E-way Bill is mandatory even if the value of consignment does not exceed `50,000
d. None of the above

(vii) Mr. A purchase redeemable vouchers worth INR 8000/- on 1st January. The vouchers are
redeemable against purchase of any goods. The vouchers are valid till 30 th June. What will be
the time of supply in case of such vouchers?
a. 1st January
b. 30th June
c. The date of redemption of vouchers
d. None of the above.

(viii) What is the time limit for taking ITC on invoices pertaining to a financial year?
a. 180 days
b. 1 year
c. Due date of filling return for the month of September of the next financial year or the
date of filling annual return, whichever is earlier
d. No limit

(ix) Mr. Ram registered in Chennai has supplied goods to Kochi Fisheries Department, for total
contract value of ` 2,65,000 inclusive of 18% IGST. The tax to be deducted at sources is (TDS
on GST):
(a) Nil
(b) ` 2,650
(c) ` 5,300
(d) None of these

(x) The due date for filling GSTR – 6 (Return for input Service distribution) is _______ of the
succeeding month.
a. 10
b. 13
c. 18
d. 20

(xi) GST is payable by the recipient under reverse charge on:

a. Sponsorship services

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INDIRECT TAX LAWS & PRACTICE
b. Transport of good by rail
c. Transport of passengers by air
d. All of the above

(xii) If any doubt arises in respect of interpretation of FTP, the said doubt should be forwarded to
__________:
a. CBIC
b. DGFT
c. Government
d. Courts.

(xiii) What is the General Free Allowance for passengers coming from Nepal by land route?
a. Nil
b. ` 50,000
c. ` 15,000
d. ` 25000.

(xiv) At present manufacture, and other operations in which bonded warehouse is not allowed?
a. Public Bonded Warehouse
b. Special Bonded warehouses
c. Only Private Bonded warehouse
d. Both (a) and (b).

(xv) Value of inputs covered by Advanced authorization ₹25 lakh. Export must be of
________________ minimum value addition:
a. 100%
b. 15%
c. 20%
d. 50%

Answer:

(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv)
c d d b b c c c a b d b a c b

SECTION-B
(Answer any five questions out of seven questions given. Each question carries 14 Marks.)

2. (a) Explain the provisions relating to tax liability on Composite supply and mixed supply. [7]

(b) Discuss non-resident taxable person? Analyze the provision relating to filling of returns by
non-resident taxable persons. [7]

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INDIRECT TAX LAWS & PRACTICE
Answer:

(a) Composite and Mixed Supplies (Section 8 of CGST Act, 2017):

Composite supply is similar to the concept of “bundled service” as under Service Tax Laws in the
earlier regime. Both Composite supply and Mixed supply consist of two or more taxable supplies
of goods or services or both but the main difference between the two is that Composite supply is
naturally bundled i.e., goods or services are usually provided together in normal course of business
and cannot be separated. Whereas in Mixed supply, the goods or services can be sold separately.

Composite Supply:
Composite supply consists of two or more goods/services, which is naturally supplied with each
other in the ordinary course of business and one of them is a principal supply. The items cannot be
supplied separately.

Note: Principal supply means the supply of goods or services, which constitute the predominant
element of a composite supply and to which another supply is ancillary/secondary.

Following two conditions are necessary for composite supply:

(A) Supply of two or more goods or services together, and
(B) It should be a natural bundle and they cannot be separated

Example:
Booking of Air Tickets which involves cost of the meal to be provided during travel will be
Composite supply and tax will be calculated on the principle supply which in this case is
transportation passengers through flight.

Mixed supply:
In Mixed supply two or more individual supplies combination of goods or services with each other
for a single price. Each of these items can be supplied separately and is not dependent on each other.
In other words, the combination of goods or services are not bundled due to natural necessities, and
they can be supplied individually in the ordinary course of business.
For tax liability purpose, mixed supply consisting of two or more supplies shall be treated as a
supply of that item which has the highest tax rate.

Example:
Diwali gift hamper which consist of different Items like sweets, chocolates, cakes, dry fruits packed
in one pack is Mixed supply as these items can be sold separately and it shall be treated as a supply
of that particular item which attracts the highest rate of tax.

(b) 1. “Non-resident taxable person” means any person who occasionally undertakes transactions
involving supply of gods or services or both, whether as principal or agent or in any other
capacity, but who has no fixed place of business or residence in India.

2. Filling of Returns by Non-Resident Taxable Persons (NRTP) [Section 39(5) read with Rule
63 of CGST Rules]:

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INDIRECT TAX LAWS & PRACTICE
Particulars Explanation
(A) Monthly return A registered NRTP is not required to the file separately the
Statement of Outward Supplies, Statement of Inward
Supplies and Return like a normal tax Payer. In place of the
same, a simplified monthly tax return has been prescribed in
Form GSTR-5 for a NRTP for every calendar month or part
thereof. NRTP shall incorporate the details of outward
supplies and inward supplies in GSTR-5
(B) Last date of filling The details in GSTR-5 should be furnished within 13 days
return after the end of the calendar month or within 7 days after the
last day of validity period of the registration. Whichever is
earlier. [Amended by Finance Act, 2022 w.e.f. 01-10-2022]
(C) Payment of NRTP shall pay the tax, interest, penalty, fees or any other
Interest, penalty amount payable under the CGST Act or rule thereunder if
fee or any other return is not furnished as per the above time limit.
amount payable.

3. (a) Well-Being Nursing Home has received the following amounts in the month of Jan 2023 in
lieu of various services rendered by it in the same month. You are required to determine its
GST liability from the details furnished below:

Sl. No. Particulars (₹ in lakh)

(i) Palliative care for terminally ill patients at patient’s home (Palliative 30
care is given to improve the quality of life of patients who have a
serious or life-threatening disease but the goal of such care is not to
cure the disease)
(ii) Services provided by cord blood bank unit of the nursing home by 24
way of preservation of stem cells
(iii) Hair transplant services 100
(iv) Ambulance services to transport critically ill patients from various 12
locations to nursing home
(v) Transportation of patients in an ambulance on behalf of the State 10
Governments against consideration
(vi) Naturopathy treatments. Such treatment is a recognized system of 80
medicine in terms of section 2(h) of the Clinical Establishments Act,
2010
(vii) Plastic surgery to restore anatomy of a child affected due to an 30
accident.
(viii) Pranic healing treatments. Such treatment is not a recognized system 120
of medicine in terms of section 2(h) of the Clinical Establishments Act,
2010
(ix) Mortuary services 10

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INDIRECT TAX LAWS & PRACTICE
Note: All the amounts given above are exclusive of GST. Further, Well-Being Nursing Home
is registered person under GST. Applicable rate of GST 18%. All transactions are at intra-
State level. [7]

(b) Ram & Co., being a registered person under GST supplied the following in the month of
January 2023:
Particulars Value in ₹
Taxable supply of goods 20,00,000
Exempted supply of goods 5,00,000
Sale of land 12,50,000
Recovery Agent services supplied to OK Bank 2,50,000
Deposit on which interest received 2,00,000
Total 42,00,000

Common inputs for the relevant tax period is ₹2,00,000.

GST applicable rate on outward supply of goods @ 28%
Compute the GST liability. [7]

Answer:
(a)
Sl. Particulars ₹ in lakh
No.
(i) Palliative care for terminally ill patients Exempted supply
(ii) cord blood bank services Exempted supply
(iii) Hair transplant services 100
(iv) Ambulance services Exempted supply
(v) Transportation of patients in an ambulance on Exempted supply under entry 3 of NT
behalf of the State Governments 12/2017 CT.
(vi) Naturopathy treatments Exempted supply
(vii) Plastic surgery (warranted) Exempted supply
(viii) Pranic healing services 120
(ix) Mortuary services Excluded from the scope of supply
(i.e. covered under Schedule III of
CGST Act, 2017)
(x) Taxable supply 220
(xi) CGST 9% 19.80
(xii) SGST 9% 19.80

(b) Statement showing net GST liability: (₹)

Output tax = 5,60,000
Add: ITC reversed = 95,238
Out tax liability = 6,55,238
Less: ITC = (2,00,000)
Net GST liability = 4,55,238

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Working note:
(1) Exempted supply:
₹
Exempted supply of goods 5,00,000
Sale of land 12,50,000
Recovery Agent services supplied to OK Bank 2,50,000
Total 20,00,000

(2) Net ITC allowed = ₹1, 04,762 (₹2, 00,000 - ₹ 95,238)

(3) GST liability on outwards supply = ₹20, 00,000 × 28% = ₹5,60,000
(4) ITC not allowed as per Rule 42(1) (i) of CGST Rules, 2017 = 2, 00,000 × 20 L/42 L
= ₹95,238/-
(5) Sale of land and Recovery Agent to a banking company is treated as exempted supply as per
Section 17(3) of the CGST Act, 2017
(6) W.e.f. 25.1.2018, interest on deposits should not include in exempted supply. However, it is
included in total turnover.

4. (a) Briefly explain the concept of TDS and TCS under GST Law. [7]

(b) Explain “Related persons” and “distinct persons” under GST. [7]

Answer:

4. (a) The concepts of TDS and TCS are an under:

(1) Tax Deduction at Sources (TDS): Tax Deduction at Sources (TDS) is a system, initially
introduced by the Income Tax Department. It is one of the modes/methods to collect tax,
under which, certain percentage of amount is deducted by a recipient at the time of making
payment to the supplier.

It is similar to “pay as you earn” scheme also known as Withholding Tax, in many other
counties. It facilities sharing of responsibility of tax Government. It acts as a powerful
instrument to prevent tax evasion and expands the tax net, as it provided for the creation of
an audit trail. Section 51 of CGST Act provided for deduction of tax at sources in certain
circumstances. This Section specifically list out the deductors who are mandated by the
Central Government to deduct tax at sources, the rate of tax deduction and the procedure for
remittance of the tax deducted.

(2) Tax Collection at Sources (TCS): On the other hand, Tax Collection at Source (TCS) has
similarities with TDS, as well as a few distinctive features. TDS refers to the tax which is
deducted when the recipient of goods or services make some payments under a contract etc.,
while TCS refers to the tax which is collected by the electronic commerce operator when a
supplier supplies some goods or services through its portal and the payment for the supply
is collected by the electronic commerce operator.

Section 52 provides for collection of tax at source in certain circumstances. The Section
specifically lists out the tax collecting persons who are mandated by the Central Government

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INDIRECT TAX LAWS & PRACTICE
to collect tax at sources, that rate of tax collection and the procedure for remittance of the
tax collected.

The amount of tax deducted/collected is reflected in the Electronic Cash Ledger of the
deductee/supplier respectively.

(b) Related Persons:

As per Explanation to Section 15, persons shall be deemed to be “related persons” if––
(i) such persons are officers or directors of one another’s businesses;
(ii) such persons are legally recognized partners in business;
(iii) such persons are employer and employee;
(iv) any person directly or indirectly owns, controls or holds 25% or more of the outstanding
voting stock or shares of both of them;
(v) one of them directly or indirectly controls the other;
(vi) both of them are directly or indirectly controlled by a third person;
(vii) together they directly or indirectly control a third person; or
(viii) they are members of the same family;
(A) the term “person” also includes legal persons;
(B) 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.

Distinct persons specified under section 25 of CGST Act, 2017:

Every place of business of a person where separate registration is obtained for output supply will
be considered as distinct person.

Section 25(4), A person who has obtained or is required to obtain more than one registration,
whether in one State or Union territory or more than one State or Union territory shall, in respect of
each such registration, be treated as distinct persons for the purposes of this Act.

Section 25(5), where a person who has obtained or is required to obtain registration in a State or
Union territory in respect of an establishment, has an establishment in another State or Union
territory, then such establishments shall be treated as establishments of distinct persons for the
purposes of this Act.

5. (a) The Times Group being an event organizer located at New Delhi organized Miss India 2022
beauty pageant in India in the following Cities for M/s Femina Miss India a registered person
located in Mumbai:
City No. of Days Fee in ₹
New Delhi 12 12 crores
Chennai 18 18 crores
Mumbai 20 20 crores
Total 50 50 crores
Determine the place of supply of service if contract specifies clear details.
Also determine the place of supply of service if contract specifies lump sum amount of ₹48
crores. [7]

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(b) M/s. Money Express Ltd., Jaipur is an authorized money changer registered under FEMA,
1999. It enters into the following transactions of money changing:
(1) Sold 10,000 US $ @1 US $= ₹71
(2) Purchased 1,000 Euro @ 1 Euro = ₹ 70
(3) Purchased 1,000 GBP @ 1 GBP = ₹ 99
(4) Sold 50,000 units of currency ABC @ 1 ABC = ₹ 15
(5) Sold 9680 US $ for 6,8000 GBP
(6) RBI reference rate for the various currencies at the relevant time:
1US $ = ₹70
1 Euro = ₹ 71
1 GBP = ₹ 100
You are required to calculate value of taxable supply of service and tax thereon if all charges
are excusive GST. Applicable GST rate – 18%. [7]

Answer:

5. (a) The place of supply of service if contract specifies clear details:

City No. of ₹ in Location of Place of supply of service GST

Days crores supplier of = where the respective
services event in held
New Delhi 12 12 New Delhi New Delhi CGST & SGST
Chennai 18 18 New Delhi Chennai IGST
Mumbai 20 20 New Delhi Mumbai IGST
Total 50 50

The place of supply of service if contract specifies lump sum amount:

City No. of ₹ in Location of Place of supply of GST
Days crores supplier of service = where the
services respective event in held
New Delhi 12 11.52 New Delhi New Delhi CGST & SGST
Chennai 18 17.28 New Delhi Chennai IGST
Mumbai 20 19.20 New Delhi Mumbai IGST
Total 50 48.00

(b) The value of taxable supply of service shall be computed as follows (amount in ₹):
(1) Sales of 10,000 US $ [(Selling Rate- RBI reference rate) x Units of foreign 10,000
currency sold = ₹ (71-70) x 10,000]
(2) Purchase of 1,000 Euro [(RBI reference rate – Buying rate) x Units of 1,000
foreign currency purchased of = ₹(71-70) x 1,000]
(3) Purchase of 1,000 GBP = ₹ (100-99) x 1,000 1,000
(4) Sold 50,000 units of currency ABC = 50,000 x ₹ 15 ₹ 1% 7,500
(1% of the gross amount of currency exchanged in Indian Rupees)

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Directorate of Studies, The Institute of Cost Accountants of India
 FINAL EXAMINATION SET - 1
MODEL ANSWER TERM – DECEMBER 2023
PAPER – 19 SYLLABUS 2022
INDIRECT TAX LAWS & PRACTICE
(5) Direct conversion of GBP into US$
[Value of Service = 1% of (Lower of ‘Amount 1 or Amount 2’)]
Amount 1=9,680 US $ x ₹ 70 = ₹ 6,77,600
Amount 2 = 6,800 GBP x ₹ 100= ₹ 6,80,000 6,776
Total value of taxable supply 26,276
CGST @ 9% 2,365
SGST @ 9% 2,365

6. (a) Briefly discuss Remission of Duties and Taxes on Export Promotion scheme [RODTEP]. [7]
(b) Analyze the Concept of “Deemed exports” with reference to Foreign Trade Policy. [7]

Answer:

(a) The Government had recently announced the introduction of a new scheme “Remission of Duties
and Taxes on Exported Products” (RoDTEP) to replace the Merchandise Exports from India Scheme
(MEIS) available to exporters of goods.

RoDTEP has been made effective for exports from 1st January 2021 in respect of those exports
where intention to claim the benefit has been manifested on the shipping bills. RoDTEP is going to
give a boost to Indian exports by providing a level playing field to domestic industry abroad.

Objective of RODTEP Scheme:

The Scheme’s objective is to refund, currently un-refunded duties and taxes. The scheme has been
introduced with an objective to neutralize the taxes and duties suffered on exported goods which
are otherwise not credited or remitted or refunded in any manner and remain embedded in the export
goods. This scheme provides for rebate of all hidden Central, State, and Local duties/taxes/levies
on the goods exported which have not been refunded under any other existing scheme namely:
 Mandi Tax,
 Municipal Taxes,
 Property Taxes,
 VAT,
 Coal Cess,
 Central Excise duty on fuel,
 Electricity duty on purchase of electricity,
 Stamp duty on export documents; etc.
will now be refunded under this particular scheme.
All the items under the MEIS and the RoSCTL (Rebate of State and Central Taxes and Levies) are
now under the purview of the RoDTEP Scheme.

(b) Deemed Exports (i.e. Supply of goods from DTA to EOU):

Goods manufactured in India and supplies from DTA to EOU, EHTP, STP & BTP units will be
regarded as deemed exports and DTA supplier shall be eligible for export incentives.
I. The following supplies considered as deemed exports:
A. Goods supplied by a manufacturer:

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Directorate of Studies, The Institute of Cost Accountants of India
 FINAL EXAMINATION SET - 1
MODEL ANSWER TERM – DECEMBER 2023
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INDIRECT TAX LAWS & PRACTICE
1. Supply of goods against Advance Authorization/Advance Authorization for
Annual Requirement/ DFIA.
2. Supply of goods to units located in EOU/STP/BTP/EHTP.
3. Supply of capital goods against EPCG authorization.
4. Supply of marine freight containers by 100% EOU provided said containers
are exported within 6 months by another 100% EOU.

B. Goods supplied by a Main contractor/sub-contractor:

1. Supply of goods to projects or turnkey contracts financed by multilateral or
bilateral agencies/Funds notified by Department of Economic Affairs (DEA),
under International Competitive Bidding.
2. Supply of goods to any project where import is permitted at zero customs duty.
3. Supply of goods to mega power projects against International Competitive
Bidding.
4. Supply to goods to UN or international organisations.
5. Supply of goods to nuclear projects through competitive bidding (need not be
international competitive bidding).

II. Benefits for Deemed Exports:

Deemed exports shall be eligible for any/all of following benefits:
1. Advance Authorization/Advance Authorization for Annual requirement/DFIA
2. Deemed Export Drawback
3. Domestic supplies to EOUs would be treated as deemed exports under Section 147
of CGST/SGST Act and refund of tax paid on such supplies given to the supplier or
recipient as the case may be.

7. (a) Mrs. A, a person of India origin, aged 40 years came to India to tour along with her baby aged
1½ years. She carried with her following goods:
(1) Personal effects like clothes of Mrs. A valued at ₹ 40,000
(2) Used personal effects of infant valued at ₹ 60,000
(3) Laptop worth ₹ 65,000
(4) Travel souvenirs valued at ₹ 25,000
(5) 1 liter wine worth ₹ 5,000
(6) Mobile worth ₹ 20,000
(7) Digital camera ₹ 60,000
(8) Cigars 20 worth ₹ 1,340
Compute the customs duty payable. [7]

(b) Compute the assessable value and Custom duty payable from the following information:
(i) FOB value of machine – 8,000 UK Pounds
(ii) Freight paid (air)- 2,500 UK Pounds
(iii) Design and development charges paid in UK – 500 UK Pounds
(iv) Commission payable to local agent @ 2% of FOB in Indian ₹
(v) Date of bill of entry – 24-10-2022 (Rate BCD 10%, Exchange rate as notified by CBIC
₹90 per UK Pound)

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 FINAL EXAMINATION SET - 1
MODEL ANSWER TERM – DECEMBER 2023
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INDIRECT TAX LAWS & PRACTICE
(vi) Date of arrival of aircraft – 20-10-2022 (Rate BCD 18%, Exchange rate as notified by
CBIC ₹ 85 per UK Pound)
(vii) Integrated tax leviable under Section 3(7) of CTA, 1975 - @12%
(viii) Insurance charge actually paid but details not available. [7]

Answer:

(a) Computation of Customs duty payable by Mrs. A (amount in ₹):

(1) Personal effect like clothes of Mrs. A Exempt

(2) Used personal effect of infant Exempt
(3) Laptop Exempt
(4) Travel souvenir Exempt
(5) Wine (upto 2 liters can be accommodated in GFA) 5,000
(6) Mobile 20,000
(7) Digital camera 60,000
(8) Cigars (upto 25 nos. Can be accommodated in GFA) 1,340
Total dutiable goods imported (that can be accommodated in GFA) 86,340
Less: General Free Allowance under Rule 3 50,000
Balance goods on which duty is payable 36,340
Customs duty@ 38.5% (inclusive of SWS) 13,991

(b) Computation of Assessable value & customs duty-

FOB cost £ 8,000
Add: Design and development charge paid in UK £ 500
Total 8,500
Exchange rate to be applied in 1£(Pound)=₹ 90, as notified by CBIC on date
of presentation of bill of entry. ₹ 90
Total sum in Indian ₹ ₹ 7, 65,000
Add: Commission to the Agent @ 2% of FOB cost x ₹ 90 per pound ₹ 14,400
FOB Value as per customs ₹ 7,79,400
Add: Insurance charge (1.125% of Customs FOB) ₹ 8,768.25
Add: Air freight (Restricted to 20% Customs FOB) ₹ 1,55,880.00
Total CIF Value being Assessable Value 9,44,048.25
Add: Basic Customs duty @10% (Rate of Custom duty is applicable of the
date of presentation of Bill of Entry since it is presented after arrival of ₹
aircraft) [1] ₹ 94,404.83
Add: SWS@10% of [1] [2] ₹ 9,440.48
Total for Integrated tax leviable u/s 3(7) ₹ 10,47,893.56
Add: Integrated tax @ 12% of ₹ 10,47,893.56 [3] 1,25,747.23
Total imported cost(rounded off) 11,73,640.79
Total customs duty & Integrated tax payable – [1]+ [2]+[3] (rounded off) ₹ 2,29,593

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Directorate of Studies, The Institute of Cost Accountants of India
 FINAL EXAMINATION SET - 1
MODEL ANSWER TERM – DECEMBER 2023
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INDIRECT TAX LAWS & PRACTICE
8. (a) Multi-Level Marketing (MLM) is a marketing strategy in which the distributor is
compensated for the sales of the other salespeople that they recruit. This recruited sales force
is referred to as the participant’s “downline”, and can provide multiple levels of
compensation. In this model, distributors sell products directly to consumers by means of
relationship referrals or by encouraging others to join the company as a distributor. In this
model, usually three kinds of incentives/rewards are earned by the distributor-
 Profit margin earned on sale of goods purchased from the MLM company (hereafter
referred to as “company”);
 Incentive received for buying certain quantum of goods; and
 Consideration for identification of persons who can further be appointed as
distributors.
Justify. [7]

(b) Sundar Motors is a car dealer selling cars of an international car company. It also provides
maintenance and repair services of the cars sold by it as also of other cars. It seeks your advice
on availability of input tax credit in respect of the following expenses incurred by it during
the course of its business operations:
(i) Cars purchased from the manufacturer for making further supply of such cars. Two of
such cars are destroyed in accidents while being used for test drive by potential customers.
(ii) Works contract services availed for constructing a car washing shed in its premises. [7]

Answer:
(a) Decision: Recently, honorable tribunal held that:
(A) Profit margin: Sale of goods by distributors to the seller is not in the nature of service but is
in the nature of sale of goods, on which VAT is applicable because after sale, those products
cease to belong to the company, but belong to the Distributor. Hence Tax is not applicable.
However, after GST it is treated as supply of goods which will attract GST.
(B) Buying Commission (i.e. Discount): Incentive received for quantum of goods purchased by
the distributor from the company is in the nature of voluble discount. Hence, outside the
ambit of Tax.
(C) Downline Marketing: The activity of a Distributor of identifying distributors is considered
as Business Auxiliary service on which tax will apply. This case law is whole good under
GST Law also.

(b) The availability of input tax credit (ITC) in respect of the various expenses incurred by Sundar
Motors is discussed below:
(i) ITC on cars purchased from the manufacturer for making further supply of such cars will be
allowed (i.e. exception to section 17(5)(a) of CGST Act, 2017).
However, ITC on the cars destroyed in accident will not be allowed as the ITC on goods
destroyed for whichever reason is specifically blocked under section 17(5)(h) of CGST Act.
(ii) the car washing shed is not a plant and machinery and the works contract service is not used
for further supply of works contract service, ITC thereon will not be allowed (Section
17(5)(c) of CGST Act, 2017).

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Directorate of Studies, The Institute of Cost Accountants of India
 POSTAL TEST PAPER
FINAL SYLLABUS 2022
PAPER - 19
INDIRECT TAX LAWS AND PRACTICE
Time Allowed: 3 Hours Full Marks: 100
The figures in the margin on the right side indicate full marks.
Answer Question No. 1 and 8 are compulsory and any four from Question No. 2, 3, 4, 5, 6 & 7.

SECTION - A
1. Choose the correct alternative. Provide justification in each case. 1 mark is allotted for correct
selection and 1 mark for the justification: [12×2=24]
(i) The person was operating under normal scheme, but now he wants to convert in
composition scheme/which form he must file?
(a) Form GST CMP-01
(b) Form GST CMP-02
(c) Form GST CMP-03
(d) Form GST CMP-04.

(ii) M/s X Academy made certain gifts to its employees, as—

(A) Mr. B ` 50,000
(B) Mr. N ` 47,000
(C) Mr. Y ` 57,000
Which of these gifts shall be liable to GST?
(a) (A), (B) & (C)
(b) (A) & (C)
(c) Only (C)
(d) None of the above.

(iii) Mr. O of USA came to Chennai for personal visit and booked a room in Taj Hotel of
Chennai. What type of GST is liable to be paid by Taj Hotel of Chennai where payment
received in US Dollars?
(a) CGST + SGST
(b) IGST
(c) Zero rate of GST
(d) None of the above

(iv) Every registered taxable person who has made outward supplies in the period between the
date on which he became liable to registration till the date on which registration has been
granted shall declare the same in the:
(a) first return filed by him after grant of registration
(b) first two returns filed by him after grant of registration
(c) FORM GSTR-7
(d) FORM GSTR-11.

(v) What is the prescribed monetary limit of Integrated Tax for Additional or Joint
Commissioner of Central Tax for issuance of show cause notices and orders under Section
73 and 74 read with Section 20 of the IGST Act?
(a) Not exceeding ` 10 lakhs
(b) Above ` 200 lakhs and not exceeding ` 2 crore
(c) Above ` 2 crore without any limit

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 POSTAL TEST PAPER
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INDIRECT TAX LAWS AND PRACTICE
(d) Any amount without any limit

(vi) Where shall the Advance Ruling Authority be located?

(a) The Authority shall be located in each State/ Union Territory.
(b) The Authority shall be located in Centre.
(c) The Authority shall be located in both Centre & State.
(d) None of the above.

(vii) It is the responsibility of the anti-profiteering authority to examine whether—

(a) ITC availed by a taxable person or the reduction in price on account of reduction in
tax rate have resulted in commensurate reduction in price of goods/services;
(b) ITC availed by a taxable person or the reduction in price on account of reduction in
tax rate has actually resulted in an increase in price of goods/services.
(c) Payment of tax on profit is made by the registered persons on time.
(d) (a) and (b) both.

(viii) 1,00,000 MT goods are imported for `10 lakh but goods actually received are 95,000 MT.
In this case, value of goods liable to duty is—
(a) `10,00,000
(b) `9,50,000
(c) `50,000
(d) `10,50,000.

(ix) Determine price to be taken for computing deductive value in rule 7: Sale quantity- 80 units
@ `90, 50 units @ `95, 25 units @ `105, 40 units @ `100:
(a) `105
(b) `100
(c) `95
(d) `90

(x) What is the General Free Allowance for passengers coming from Nepal by land route?
(a) Nil
(b) `50,000
(c) `15,000
(d) `25,000.

(xi) The time limit beyond which if goods are not returned, the capital goods sent for job
work shall be treated as supply
(a) One year
(b) Five years
(c) Six months
(d) Three years

(xii) C Pvt Ltd. merges into X Pvt Ltd Can the unutilized balance of ITC in C Pvt Ltd. of
`80 lacs be transferred to the electronic ledger of X Pvt Ltd.?
(a) Yes
(b) No
(c) Not applicable
(d) Discretion of X Pvt Ltd.

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 POSTAL TEST PAPER
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Section - B

2.(a) RTS Tours Co. has arranged four package tours during October 2022. The particulars of the
services and charges are as under:
(1) Tour 1: Charges received ` 35 lakhs. The package includes transportation, accommodation,
food, and tourist guide, entry fees for monuments.
(2) Tour 2: Charges received ` 65 lakhs. The package includes transportation and accommodation
for stay.
(3) Tour 3: Charges received ` 40 lakhs. The charges are solely for arranging accommodation
for stay. However, the bills issued to the clients do not mention it clearly that the charges are
solely for arranging the accommodation for stay.
(4) Tour 4: Charges received ` 50 lakhs (inclusive of charges of stay). The bill issued to the client’s
mentions it clearly that the charges are solely for arranging the accommodation for stay.
Compute the value of taxable supply of services and GST.
Note: Applicable rates of GST 5% and 18%. All transactions taken place at inter State level. [7]

(b) ABC & Co., a Chartered Accountants firm issued invoice for services rendered to Mr. Ram on 5th
August 2022. Determine the time of supply in following independent cases:
(i) The provisions of services were completed on 1st July 2022.
(ii) The provisions of services were completed on 15th July 2022.
(iii) Mr. Ram made the payment on 3rd July 2022, where provisions of services were remaining to
be completed.
(iv) Mr. Ram made the payment on 15th August 2022, where provisions of services were
remaining to be completed. [8]

3.(a) M/s Lips Ltd., manufactures four types of ‘Nail Polishes’, namely Sweety, Pretty, Beauty, Tweety.
The Company has taken input tax credit of `3,00,000 on the common inputs used in the
manufacture of ‘Nail Polishes’. Common inputs also used partly for non-business purposes.
During the financial year the company manufactured 1000 litres of each type of ‘Nail Polishes’.
The Company was not in a position to maintain separate set of records with regards to inputs used
for final products. GST payable on final goods @12%.
You are required to calculate the net GST payable by M/s Lips Ltd. for the year from the following
data:
Product Name Description Sale price (Exclusive of GST)
Sweety Sale to Domestic Tariff Area `30 per 20ml. bottle
Pretty Sale to a Special Economic `40 per 20ml. bottle
Zone (SEZ)
Beauty Sale to A Ltd. of USA `50 per 20ml. bottle
Tweety Sale to Defence `60 per 20ml. bottle
Canteen(Exempted from GST)
[10]
(b) Write a short note on Consolidated E-way Bill under GST. [5]

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Directorate of Studies, The Institute of Cost Accountants of India
 POSTAL TEST PAPER
FINAL SYLLABUS 2022
PAPER - 19
INDIRECT TAX LAWS AND PRACTICE

4.(a) What is an Advance Ruling? State the objectives of Advance Ruling. To whom the Advance Ruling
is applicable? State the questions on which the Advance Ruling is sought for. [2+4+2+3=11]

(b) Describe the duties of Anti-profiteering Committee as per sec. 171(3). [4]

5.(a) M/s X Academy being provider of taxable services has obtained centralized registration in
Chennai for its offices in Hyderabad and Cochin under the Finance Act, 1994. The Chennai Office
has the balance credit of Rs 5 Lakhs as on 30-06-2017.
Can M/s X Academy distribute the credit to Hyderabad and Cochin. If so in which ratio. Explain?
[3]
(b) ABC Technologies Ltd., has imported certain equipment from Japan at an FOB cost of 2,00,000
Yen (Japanese). The other expenses incurred by M/s. ABC Technologies in this connection are as
follows:
(i) Freight from Japan to India Port 20,000 Yen
(ii) Insurance paid to Insurer in India `10,000
(iii) Designing charges paid to Consultancy firm in Japan 30,000 Yen
(iv) M/s. ABC Technologies had expended `1,00,000 in India for certain development activities
with respect to the imported equipment
(v) ABC Technologies had incurred road transport cost from Mumbai port to their factory
in Karnataka `30,000
(vi) The Central Board of Indirect Taxes and Customs had notified for purpose of section 14(3) of
the Customs Act, 1962 exchange rate of 1 Yen = `0.3948. The interbank rate was 1 Yen =
`0.40
(vii) M/s ABC Technologies had effected payment to the Bank based on exchange rate 1 Yen =
`0.4150
(viii) The commission payable to the agent in India was 5% of FOB cost of the equipment in
Indian Rupees Arrive at the assessable value for purposes of customs duty under the
Customs Act, 1962 providing brief notes wherever required with appropriate assumptions.
[12]

6.(a) State the cases where MEIS (Merchandise Export from India Scheme) duty credit scrips are not
allowed. [8]

(b) Mention the common provisions which are applicable to both MEIS (Merchandise Export from
India Scheme) and SEIS (Service Export from India Scheme). [7]

7.(a) Mr. Gopal, an Indian entrepreneur, went to London to explore new business opportunities on
01.04.20XX. His wife also joined him in London on 01.12.20XX. The following details are
submitted by them with the Customs authorities on their return to India on 30th April (next year):
(A) used personal effects worth `95,000
(B) a music system worth `34,000
(C) the jewellery brought by Mr. Gopal for `44,000 and the jewellery brought by his wife worth
`25,000
Determine their eligibility with regard to duty free allowance. [5]

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Directorate of Studies, The Institute of Cost Accountants of India
 POSTAL TEST PAPER
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INDIRECT TAX LAWS AND PRACTICE

(b)(i) With reference to the provisions of GST law, determine the place of supply of the service in the
following cases and also, explain whether the said supply will amount to export of service.
(1) Mr. Z, a supplier registered in Hyderabad (Telangana), procures goods from China and
directly supplies the same to a customer in US. With reference to the provisions of GST law,
examine whether the supply of goods by Mr. Z to customer in US is an inter-State supply.
(2) RST Inc., a corn chips manufacturing company based in USA, intends to launch its
products in India. However, the company wishes to know the taste and sensibilities of
Indians before launching its products in India. For this purpose, RST Inc. has approached
ABC Consultants, Mumbai, (Maharashtra) to carry out a survey in India to enable it to
make changes, if any, in its products to suit Indian taste.
The survey is to be solely based on the oral replies of the surveyees; they will not be provided any
sample by RST Inc. to taste. ABC Consultants will be paid in convertible foreign exchange for
the assignment. [4]
(ii) S Advertisers conceptualized and designed the advertising campaign for a new product
launched by Moon Pvt. Ltd. for a consideration of `15,00,000. S Advertisers owed `1,20,000
to one of its vendors in relation to the advertising service provided by it to Moon Pvt. Ltd.
Such liability of S Advertisers was discharged by Moon Pvt. Ltd. Moon Pvt. Ltd. delayed the
payment of consideration on thus, paid `15,000 as interest. Assume the rate of GST to be 18%.
Determine the value of taxable supply made by S Advertisers. [6]

Section - C

8.(a) Mrs. Kala, a registered supplier of Jaipur (Rajasthan), has made the following supplies in the
month of January, 20XX:
(i) Supply of a laptop bag along with the laptop to a customer of Mumbai for ₹ 55,000 (exclusive
of GST).
(ii) Supply of 10,000 kits (at ₹ 50 each) amounting to ₹ 5,00,000 (exclusive of GST) to Ram Fancy
Store in Kota (Rajasthan). Each kit consists of 1 hair oil, 1 beauty soap and 1 hair comb.
(iii) 100 kits are given as free gift to Jaipur customers on the occasion of Mrs. Kala’s birthday.
Each kit consists of 1 hair oil and 1 beauty soap. Cost of each kit is ₹ 35, but the open market value
of such kit of goods and of goods of like kind and quality is not available. Input tax credit has not
been taken on the goods contained in the kit.
(iv) Event management services provided free of cost to her brother for his son’s marriage function
in Indore (Madhya Pradesh). Cost of providing said services is ₹ 80,000, but the open market value
of such services and of services of like kind and quality is not available.
(v) 1,400 chairs and 100 coolers hired out to Function Garden, Ajmer (Rajasthan) for ₹ 3,30,000
(exclusive of GST) including cost of transporting the chairs and coolers from Mrs. Kala’s godown
at Jaipur to the Function Garden, Ajmer. Mrs. Kala has paid the cost of transportation of chairs and
coolers to an unregistered Goods Transport Agency (GTA) [located in the State of Rajasthan] @ ₹
20 (exclusive of GST) for each chair and each cooler and in turn, has charged ₹ 20 only for each
chair and each cooler from Function Garden for transportation of the same.
(vi) Interest of ₹ 6,400 (inclusive of GST) was collected by Mrs. Kala in January from Ram Fancy
Store, Kota for the payment received with a delay of 30 days.

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Directorate of Studies, The Institute of Cost Accountants of India
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INDIRECT TAX LAWS AND PRACTICE
Assume rates of GST to be as under: Laptop 18%, Laptop bag 28%, Hair oil 18%, Beauty soap
28%, Hair comb 12%, Event Management service 5%, Service of renting of chairs and coolers
12% and Transportation services 5%.
From the above information, formulate the strategy such that the GST liability (CGST and SGST
and/ or IGST, as the case may be) of Mrs. Kala for the month of January, 20XX can be moderate.
[8]
(b) The goods manufactured by Royal Ltd. have been exempted from GST with effect from 15th
November 20XX. Earlier these goods were liable to tax @ 18%. Its inputs were liable to GST @
12%. Following information is supplied on 15th November 20XX:
(i) The inputs costing ₹ 1,44,720 are lying in stock.
(ii) The inputs costing ₹ 77,184 are in process.
(iii) The finished goods valuing ₹ 4,82,400 are in stock, the input cost is 50% of the value. Royal
Ltd. also purchased capital goods for ₹ 2,00,000 by paying GST 28% (invoice dated 10th July
20XX)
The balance in electronic credit ledger account shows credit balance of ₹ 2,79,104. The department
has asked Royal Ltd. to reverse the credit taken on inputs referred above. However, Royal Ltd.
contends that credit once validly taken is indefeasible and not required to be reversed. After
combine reading of all the facts, advice in the light of the relevant provision of GST laws. Further,
what would be your advice, if the balance in electronic credit ledger receivable account as on 15th
November 20XX were ₹ 29,104? [8]

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Directorate of Studies, The Institute of Cost Accountants of India