CA FINAL NEW COURSE

INDIRECT TAX LAW

FULL SYLLABUS TEST

Question No. 1 is Compulsory

Attempt any Four Questions out of remaining Five Questions

Total marks 100

Case Study:

XYZ Logistics Limited (XLL) is into warehousing and logistics business. It has two Container
Freight Stations (CFS): one at Inland Container Depot (ICD) Dadri, Uttar Pradesh and other at
ICD Tughlakabad, Delhi. XLL is also engaged in the business of freight forwarding and
multimodal transportation. Intermittently, XLL also deals in trading of goods, primarily in export
to countries outside India.

XLL started its operations on 30th June by setting up head/ corporate office in Gurgaon,
Haryana and two CFS at U.P. and Delhi. Services as well as invoicing to customers was done
from Delhi and U.P. unit only. Top management was placed at the head office for the
management of the company.

The aggregate turnover of the XLL’s Delhi unit crossed Rs 20 lakh on 31st October. It applied for
GST registration for Delhi on 25th November. Registration was granted on 7th December. GST
in respect of stock of goods at Delhi as on 30th October was Rs 50 lakh, on 25th November was
Rs 40 lakh and on 7th December was Rs 20 lakh.

The primary business of XLL is container handling service of import/export containers. In July
next year, a shipper placed a work order on XLL for handling of an export container from ICD
Tughlakabad to Dubai UAE, through Nhava Sheva seaport in Mumbai. XLL was responsible for
stuffing goods in containers at ICD, assisting in obtaining customs clearance, and transportation
of goods from ICD to seaport.

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XLL requested the customer to issue e-way bill for the movement of customs sealed containers
from ICD to seaport as the value of goods in container exceeded Rs 50,000. However, the
customer denied issuing e-way bill stating that the responsibility to issue the same is on the
person who arranges the transport of goods. Consequently, the management of XLL issued e-
way bill with the assistance of a consultant.

There is a green cess that is applicable on the goods handled through CFS for exports outside
India. XLL as a policy deposits green cess with the Government in the name of the customer and
recovers such cess at actuals from the customer.

Few customers of XLL are based out of Nepal & Bhutan. It provides container handling services
for their containers/ cargo which are in transit to Nepal or Bhutan. It receives consideration
from Nepal/ Bhutan customers in INR (Rs).

All the above amounts are exclusive of GST, wherever applicable. Subject to the information
given above, assume that all the other conditions necessary for availing ITC have been fulfilled.

Based on the facts of the case scenario given above, choose the most appropriate answer to
Q. Nos. 1. To 5:-

1. Which of the following statements is correct regarding eligibility of ITC on opening stock
at the time of new registration?
(a) XLL can avail credit of Rs 50 lakh.
(b) XLL can avail credit of Rs 40 lakh.
(c) XLL can avail credit of Rs 20 lakh.
(d) XLL cannot avail credit on opening stock.

2. Which of the following statements is correct regarding GST registration by XLL?

(a) XLL was liable for registration of only Delhi unit.
(b) XLL was liable for registration of Delhi and UP units.
(c) XLL was liable for registration of Delhi, UP and Haryana units.

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 (d) XLL was liable for normal registration at Delhi and UP unit, and ISD registration at
Haryana unit.

3. Which of the following statements is correct regarding generation of e-way bill for
movement from ICD Tughlakabad to Nhava Sheva seaport in Mumbai?
(a) E-way bill was not required to be generated since goods were being transported from
ICD to seaport.
(b) E-way bill was mandatorily required to be generated irrespective of the value of the
goods being transported as such goods were being transported from ICD to seaport.
(c) E-way bill was required to be generated since the value of goods being transported
exceeded Rs 50,000.
(d) E-way bill was rightfully issued by XYZ Logistics Limited being the transporter of goods.

4. Which of the following statements is correct regarding value of container handling

services provided by the company?
(a) Value of the taxable container handling services should exclude transportation cost and
green cess.
(b) Value of the taxable container handling services should exclude green cess but include
transportation cost.
(c) Value of the taxable container handling services should exclude transportation cost but
include green cess.
(d) Value of the taxable container handling services should include transportation cost and
green cess.

5. Which of the following statements is correct regarding invoicing to Nepal/ Bhutan

customers?

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 (a) GST is not chargeable on container handling services provided to Nepal/ Bhutan
customers as the place of supply of such services is outside India.
(b) GST is not chargeable on container handling services provided to Nepal/ Bhutan
customers as the same qualifies as export of service.
(c) GST is not payable on container handling services provided to Nepal/ Bhutan customers
as the supply of services associated with transit cargo to Nepal and Bhutan are exempt
services.
(d) GST is chargeable on container handling services provided to Nepal/ Bhutan customers.

(5 x 2 = 10 marks)

MCQ:

1. Mr. Y was registered under VAT and get provisional registration under GST during
migration to GST. Registration formalities were completed by submitting the required
documents and registration certificate was obtained. After working for few months, he
found that he will not cross the threshold limit required for obtaining registration nor will
he fall into any case where registration is compulsory. Thus, he decides to surrender the
GST number. He has following queries:
1) What would happen to stock of goods and GST liability held on the date of
cancellation of GST number?
2) Can he claim input tax credit and collect tax after cancellation of GST? What would
you suggest your client on the above matter?
a. After cancellation of registration, Mr. Y can sell the stock without any tax liability since
GST number is cancelled. Whatever is the GST liability, except during the month of
cancellation, has to be discharged. After cancellation of GST, he can collect GST from his
customer but he cannot claim any input tax credit of GST paid by him.
b. Before cancellation of GST, Mr. Y has to pay an amount equivalent to the credit of input
tax in respect of inputs held in stock on the day immediately preceding the date of such
cancellation or the output tax payable on such goods, whichever is higher. After

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 cancellation, of GST, he cannot collect GST from his customer nor can he claim any input
tax credit of GST paid by him.
c. Before cancellation of GST, Mr. Y has to pay an amount equivalent to the credit of input
tax in respect of inputs held in stock on the day immediately preceding the date of such
cancellation or the output tax payable on such goods, whichever is lower. After
cancellation of GST, he cannot collect GST from his customer nor can he claim any input
tax credit of GST paid by him.
d. After cancellation of registration, he can sell the stock without any tax liability since GST
number is cancelled. Whatever is the GST liability, except during the month of
cancellation, has to be discharged. After cancellation of GST, he cannot collect GST from
his, customer, but he can claim input tax credit of GST paid by him.

2. Rupam wishes to file an appeal to Appellate Tribunal. In which of the following cases, the
Appellate Tribunal cannot refuse to admit his appeal as per the GST laws?

(i) Amount of tax/ITC or difference in tax/difference in ITC involved exceeds Rs. 50,000

(ii) Amount of fine, fee or penalty determined by the order exceeds Rs 50,000

(iii) Amount of tax/ITC or difference in tax/difference in ITC involved is Rs. 50,000

(iv) Amount of fine, fee or penalty determined by the order is Rs. 50,000

(v) Amount of tax/ITC or difference in tax/ difference in ITC involved is less than Rs 50,000

(vi) Amount of fine, fee or penalty determined by the order is less than Rs 50,000

a) (i) and (ii)

b) (i) and (iii)
c) (ii) and (iv)
d) (v) and (vi)

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3. Mr. Khiladi Kumar, is the Managing Director of Khiladi Equipments (P) Ltd. The company
has offices and factories in Mumbai and is registered under GST. Mr. Khiladi Kumar, has
decided to send food grains and other relief materials worth Rs 50,00,000/- and Rs 20,00,000
respectively through railway and airways to the cyclone hit victims in Kerala in the month of
November, 20XX. The company has contracted Super Airlines and Indian Railways to
transport the materials from Mumbai to Kerala and price for the same has been determined
as Rs 10,00,000/- by air and Rs 50,000/- by railways, excluding taxes. Mr. Khiladi Kumar, seeks
your help to determine what amount of GST is to be paid to Super Airlines and Indian
Railways if applicable GST rate is 18%.

a) Super Airlines: Rs 1,80,000/-; Indian Railways: Nil

b) Super Airlines: Rs 1,80,000/-; Indian Railways: Rs 9,000
c) Super Airlines: Nil; Indian Railways: Rs 9,000/-
d) Super Airlines: Nil; Indian Railways: Nil

4. Mr. A furnished an application form GST APL-01 for filing an appeal against an order issued
by the department on 22nd September, 2018. Consequently a provisional acknowledgement
was issued to him immediately. Mr. A also furnished a certified copy of order to the appellate
authority on 27th September, 2018. What shall be the date of filing of appeal in this case?

a) 22nd September, 2018

b) 27th September, 2018
c) Either (a) or (b) at the option of appellate authority
d) None of the above

5. Examine the following independent services provided in the month of August, 2019 and
compute the value of taxable supply

Sr. No. Particular Rs

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 1 Services by way of waxing of apples to provide it an artificial sheen for 1,00,000
increasing its marketability
2 Admission to a Railway Museum 50,000
3 Transportation of patients to ABC Nursing Home and Bheem 1,20,000
Multispecialty Hospital, in an ambulance owned by XYZ Ltd.
4 Admission to a Telly Award Function [value per ticket per person is Rs 5,10,000
510]
5 Transportation of milk by a goods transport agency 1,50,000

a) 5,60,000
b) 6,60,000
c) 5,10,000
d) 6,30,000

(5 x 2 = 10 marks)

6. M/s. Sunlight Associates, is a management consultancy firm located in Delhi and has
certain foreign clients to whom the firm provides business support services. In regard to one
of the foreign client, certain services were rendered in the month of January, 2018 and the
invoice was duly raised. The firm undertakes such export of services against Letter of
undertaking, i.e. without payment of integrated tax. However, it is likely that the payment
against such invoice would not be received till March, 2019. Is M/s. Sunlight Associates,
required to pay integrated tax on such transaction if the payment is not received till March,
2019? In case integrated tax is payable, is M/s. Sunlight Associates, entitled to claim refund
on this account? State which of the following option is correct

a) Integrated tax is payable by M/s. Sunlight Associates, but refund of payment of such tax
is not allowed

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 b) Integrated tax is payable by the foreign client and M/s. Sunlight Associates can claim ITC
of such payment made
c) Integrated tax is payable by M/s. Sunlight Associates, and refund of payment of such tax
is allowed
d) Integrated tax is not payable and refund of accumulated ITC is allowed

7. In which of the following supplies of goods and services made exclusively to Government
departments, agencies etc., TDS is required to be deducted?

(i) Health Department executed a contract with a local supplier to supply “medical grade
oxygen” of Rs 2.6 lakh (including GST @ 18%) and is making full payment.

(ii) Government school is making a payment of Rs 3.5 lakh to a supplier for supply of cooked
foods as mid-day meal under a scheme sponsored by Central/State Government

(iii) Municipal Corporation of Kolkata purchases a heavy generator from a supplier in Delhi.
Now, it is making payment of Rs 5 lakh and IGST @ 18% on Rs 5 lakh for such purchase.

(iv) Finance Department is making a payment of Rs 3 lakh (including GST @ 18%) to a supplier
of ‘printing & stationery’.

Assume all other conditions for deduction of TDS are fulfilled.

a) (i) , (ii) and (iii)

b) (ii), (iii) and (iv)
c) Only (i) and (ii)
d) Only (iii) and (iv)

8. State which of the following entries are covered under reverse charge:

(i) Sponsorship service supplied by any person to body corporate

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(ii) Supply of service by way of renting of motor vehicle to Mr. A by any person other than a
body corporate opt to pay tax @ 5%

(iii) Service by an author registered under CGST Act who has filed the declaration to a
publisher located in taxable territory

(iv) Security service to Central Government making taxable supply

a) Only (i) above

b) Only (i) & (iv) above
c) (i), (ii) & (iv) above
d) All (i), (ii), (iii) & (iv) above

9. Mr. Avdhesh enters into contract with the supplier of USA to purchase goods after 4
months. The contract price was Rs 8,00,000. Due to recession in international market the
price of the goods reduced to Rs 6,50,000. The special discount offered by the seller to Mr.
Avdhesh was Rs 50,000. Such special discount is not offered generally to all the buyers.

Identify the transaction value to be declared by Mr. Avdhesh in his bill of entry.

a) Rs 8,00,000
b) Rs 7,50,000
c) Rs 6,50,000
d) Rs 6,00,000

10. Punjab Sweets exported its products valuing Rs 25,00,000 but not u/s 50 on 5.5.18, the
rate of duty was 8%. The proper officer granted Let export order on 12.5.18 when rate was
10%. The shipping bill was filed on 8.5.18, duty rate on that date changes to 12.5%. The
export duty was paid on 15.5.18 by Punjab Sweets when the rate 12%.

Identify the rate of duty applicable to Punjab Sweets.

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 a) 8%
b) 10%
c) 12.5%
d) 12%

11. Calculate the value of taxable service of ‘X’ Transport Company engaged in the business of
transport of goods by road. Give reasons for taxability or exemption of each item. No freight
is received from any of the specified category of consignor/consignee. Suitable assumptions
may be made wherever required.

Sr. No. Particulars Rs

1 Total freight charges received by ‘X’ during the year 13,50,000
2 Freight charges received for transporting fruits 1,25,000
3 Freight collected for transporting small consignment for persons who paid 75,000
less than Rs 750 for each consignment
4 Freight collected for transporting goods in small vehicles for persons who 1,50,000
paid less than Rs 1,500 per trip

a) 10,00,000
b) 13,50,000
c) 12,25,000
d) 11,25,000

12. All exporters registered under GST can export goods or services without payment of IGST,
on execution of LUT, except those who have been prosecuted for offence under any law
where taxevade exceeds___________?

a) Rs 100 lakhs

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 b) Rs 150 lakhs
c) Rs 200 lakhs
d) Rs 250 lakhs

13. A registered person can claim refund of any unutilized input tax credit on zero rated
supplies without payment of tax or the credit accumulated on account of inverted tax rate
structure:

a) At the end of the period, but before the expiry of 2 years from the relevant date.
b) Before the expiry of the tax period.
c) Before the expiry of 3 years from the relevant date
d) Before the expiry of 18 months from the relevant date.

14. Happy Singh is the lawful owner of a residential house situated in Chandigarh. The
property has four floors constructed on it. Out of the four floors in his house, first and second
floor are self-occupied and third and fourth floor have been let out for residential purposes.
Ratanjot Singh, who is a tenant on third floor, has surrendered his tenancy rights to
parminder Singh for a tenancy premium of Rs 5,00,000 on 1st June. Parminder Singh has paid
the applicable stamp duty and registration charges on transfer of tenancy rights. Moreover,
Parminder Singh will pay a monthly rent of Rs 50,000 to Happy Singh from June.

Determine the value of taxable supply, in the given case, for the month of June.

a) Happy Singh: Rs 5,50,000; Ratanjot Singh: Nil

b) Happy Singh: Nil; Ratanjot Singh: Rs 5,00,000
c) Happy Singh: Rs 50,000; Ratanjot Singh: Nil
d) Happy Singh: Rs 50,000; Ratanjot Singh: Rs 5,00,000

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15. State which of the following statements are not true?

(i) A taxpayer who makes delayed payment of tax is liable to pay interest at the rate of 18%
for a month or part of the month.

(ii) A taxpayer who makes delayed payment of tax is liable to pay interest at the rate of 15%
for a month or part of the month, if he has bona fide reasons for delay.

(iii) A taxpayer who made delayed payment of tax shall be liable to pay interest at the rate of
24% for a month or part of the month, if he has mala fide reasons for delay.

(iv) A taxpayer who made delayed payment of tax shall be liable to pay interest at the rate of
18% per annum.

a) (i)
b) (i), (ii), (iii)
c) All of the above
d) None of the above

(10 x 1 = 10 marks)

Q-1 ‘All-in-One Stores’ Store' is a chain of departmental store having presence in almost all
metro cities across India. Both exempted as well as taxable goods are sold in such Stores.

The Stores operate in rented properties. All-in-One Stores pay GST under regular scheme.

In Mumbai, the Store operates in a rented complex, a part of which is used by the owner of the
Store for personal residential purpose.

All-in-One Store, Mumbai furnishes following details for the month of October, 20XX:

(i) Aggregate value of various items sold in the Store:

Taxable items- Rs 42,00,000
Items exempted vide a notification- Rs 12,00,000

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 Items not leviable to GST- Rs 3,00,000
(ii) Mumbai Store transfers to another All-in-One Store located in Goa certain taxable items
for the purpose of distributing the same as free samples. The value declared in the invoice
for such items is Rs 5,00,000. Such items are sold in the Mumbai Store at Rs 8,00,000.
(iii) Aggregate value of various items procured for being sold in the Store:
Taxable items- Rs 55,00,000
Items exempted vide a notification – Rs 15,00,000
Items not leviable to GST- Rs 5,00,000
(iv) Freight paid to goods transport agency (GTA) for inward transportation of taxable items-
Rs 1,00,000
(v) Freight paid to GTA for inward transportation of exempted items- Rs 80,000
(vi) Freight paid to GTA for inward transportation of non-taxable items – Rs 20,000
(vii) Monthly rent payable for the complex – Rs 5,50,000 (one third of total space available is
used for personal residential purpose).
(viii) Activity of packing the items and putting the label of the Store along with the sale price
has been outsourced. Amount paid for packing of all the items – Rs 2,50,000
(ix) Salary paid to the regular staff at the Store – Rs 2,00,000
(x) GST paid on inputs used for personal purpose- Rs 5,000
(xi) GST paid on rent a cab services availed for business purpose- Rs 4,000.
(xii) GST paid on items given as free samples- Rs 4,000

Given the above available facts, you are required to compute the following:

A. Input tax credit (ITC) credited to the Electronic Credit Ledger

B. Common Credit
C. ITC attributable towards exempt supplies out of common credit
D. Eligible ITC out of common credit
E. Net GST liability for the month of October, 200X.

Note:

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(1) Wherever applicable, GST under reverse charge is payable @ 5% by All-in-One Stores. Rate
of GST in all other cases is 18%.
(2) All the sales and purchases made by the Store are within Maharashtra. All the purchases
are made from registered suppliers. All the other expenses incurred are also within the
State.
(3) Wherever applicable, the amounts given are exclusive of taxes.
(4) All the necessary conditions for availing the ITC have been complied with.

(14 marks)

Q-2

(a) Pethalal has obtained registration in the current financial year in Uttar Pradesh. His turnover
in the preceding financial year was Rs 19,90,000. He has received the following amounts in
respect of the activities undertaken by him in the month of September:

S. No. Particulars Amount (Rs)

(i) Funeral services 8,80,000
(ii) Services of warehousing of jaggery 50,000
(iii) Electrically operated buses given on hire to Municipal Corporation 5,00,000
(iv) Service provided to recognized sports body as commentator 2,00,000
(v) Commission received as an insurance agent from insurance company 65,000
(vi) Commission received as business facilitator for the services provided to 15,000
the urban branch of a nationalized bank with respect to savings bank
accounts
(vii) Security services (supply of security personnel) provided to Damodar 28,000
Engineering College (DEC)* [registered under GST] for the security of
the college premises

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 *All the engineering courses run by DEC are recognised by the law [The
All India Council for Technical Education (AICTE)]

Further, he has received following services in the month of September:

S. No. Particulars Amount (Rs)

(a) Freight paid to unregistered goods transport agency for his business 1,00,000
activities relating to serial number (i) above
(b) Legal advice received from M/s Kanoon Associates, a partnership firm, 50,000
seeking advice in relation to a tax dispute of the business

All the transactions stated above are intra-State transactions and amounts given are exclusive
of GST, wherever applicable.

You are required to calculate net GST payable by Pethalal for the month of September. There
was no opening balance of input tax credit. Rate of CGST and SGST is 9% each for all the
outward supplies made by Pethalal.

(5 marks)

(b) Pure Oils, Delhi has started the supply of machine oils and high speed diesel in the month of
April, 20x1. The following details have been furnished by it for the said month: -

Particulars Rs *
(i) Supply of machine oils in Delhi 2,00,000
(ii) Supply of high speed diesel in Delhi 4,00,000
(iii) Supply made through Fortis Lubricants- Forties is agent of Pure Oils in Delhi 3,75,000
(iv) Supply made by Pure Oils from its branch located in Punjab 1,80,000
*excluding GST

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Determine whether Pure Oils is liable for registration.

Will your answer change, if Pure Oils has a branch in Nagaland from where he supplies machine
oils amounting to Rs 2,50,000?

(4 marks)

(c) ABC Industries Ltd. of Mumbai imported one machine through vessel from Japan, in the
month of April, 2019. The following particulars are made available:

S. No. Particulars Amount in Japanese Yen (¥)

(i) Cost upto port of exportation incurred by exporter 6,00,000
(ii) Loading charges at port of exportation 25,000
(iii) Freight Charges from port of export to port of import in 1,00,000
India

Following additional amount paid by ABC Industries Ltd.:

S. No. Particulars Amount (Rs)

(i) Designing charges paid to Consultancy firm in New Delhi, which was 8,00,000
necessary for such machine
(ii) Commission paid (not buying commission) to local agent of exporter 1,25,000
(iii) Actual Landing charges paid at the place of importation 15,000
(iv) Actual insurance charges paid to the place of importation are not
ascertainable
(v) Lighterage charges paid at port of importation 20,000

Other Information:

(i) Rate of basic customs duty is 10%

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(ii) Rate of social welfare surcharge is 10%
(iii) Integrated tax leviable under section 3(7) of Customs Tariff Act, 1975 is 12%.
(iv) Ignore GST Compensation Cess.
(v) Rate of exchange to be taken / Japanese Yen (¥) = Rs 0.65.

Arrive at the total custom duty, including Integrated tax payable under section 3(7) of the
Customs Tariff Act, 1975 with appropriate working notes.

(5 marks)

Q-3

(a) M/s KLM Ltd., a publishing and printing house registered in Maharashtra, is engaged in
supply of books, letter cards, envelopes, guides and reference materials. The following
information is provided by the company:

Event Printing of Printing of envelopes

books
Date of entering into printing contract 16th March 20th March
20th March 20th March 25th March
Date of completion of printing 10th April 5th April
Date of issue of invoice 15th May 10th April
Date of removal of books and letter heads to buyer 13th May 7th April
Date of receipt of balance payment 31st May 30th April
In respect of printing of books, content was supplied by the author. For printing of envelopes,
the design and logo were supplied by the buyer.

Determine the time of supply(ies) for the purpose of payment of tax.

(5 marks)

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(b) Sukhdev is a mining engineer. He has crossed the threshold limit for registration under the
GST Law and is duly registered in the State of Maharashtra. He effects the following
transactions in the month of March, 20x1 and wants you to compute the tax payable in cash.
He has filed bond/LUT to claim benefits from zero-rated supplies. The following are the
particulars furnished by him.

Particulars Value of supply

in Rs
(a) Sukhdev being an operating member in mining and exploration 12,00,000
services at Mumbai High, has provided certain services to the Joint
Venture (JV) in which he is also a participant. He believes that the
consideration received from the JV is 'Cost Petroleum' and not
taxable.
(b) He has purchased certain machinery from outside the State, to 6,00,000
render services to the JV at Mumbai High.
(c) He has obtained legal opinion from a local firm of advocates to enter 1,00,000
into the contract with the JV, for providing services to it.
(d) He has obtained accommodation from the State Government to 2,00,000
locate his office close to the sea shore.
(e) He gets a portion of the petroleum silt as part of the compensation 6,00,000
while exploring the petroleum reserves in the Bombay High-which as
per the contract with the Government is part of 'Cost Petroleum'
(f) He sells the petroleum silt to a SEZ Developer in Mumbai 6,80,000
(g) Consideration is received towards transfer of tenancy rights, which 8,00,000
according to Sukhdev is not liable to GST as it has suffered stamp
duty.
(h) On violation of the terms in production sharing agreement, Sukhdev 3,00,000
has paid liquidated damages to the Government
(i) He has been assigned the right to collect royalty on behalf of ---

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 Maharashtra Government, as 'Excess Royalty Collection Contractor'.
He has noticed that the mining lease holders have short paid Rs
2,00,000 as IGST from what had been exempted to him under the
assignment
(j) He has sold self-fabricated machinery through his agent in Mumbai 10,00,000
that has been used for 2 years, the value of which is not available in
the open market. The agent sells it immediately to an unrelated
customer in Mumbai.
(k) Opening Balance and brought forward tax credits are as follows:
- Electronic Cash Ledger- CGST 12,000
- Electronic Credit Ledger- CGST 18,000
- Electronic Credit Ledger- SGST 12,000
- Electronic Credit Ledger- IGST 60,000
(l) Supply value is exclusive of taxes.
Supply of services are taxable at CGST 9%, SGST@9% and
IGST@18%.
Supply of goods are taxable at CGST 2.5%, SGST 2.5% and IGST 5%.

Determine the tax payable in cash.

Provide suitable notes where required.

(4 marks)

(c) Pradhan imported a consignment valuing Rs 8 lakh vide a Bill of Entry presented before PO
on 25th April, 20x1 on which date the rate of customs duty was 11% (BCD@10% and SWS
thereon 10%). On Pradhan's failing to produce requisite documents for the purpose of
assessment, the goods were provisionally assessed at a value of Rs 8 lakh and the duty was paid
accordingly on the same date. The goods were finally assessed at Rs 12 lakh on 9th June, 20x1

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and the differential duty was paid on 12th June, 20x1. Compute the amount of interest, if any,
u/Sec 18 of the Customs Act, 1962.

Assume: GST exempt on imported goods.

(5 marks)

Q-4

(a) Following are the particulars, relating to one of the machine sold by M/s SQM Ltd. to M/s.
ACD Ltd. in the month of February 20x1 at List price of Rs 9,50,000 (Exclusive of taxes and
discount). Further, following additional amounts have been charged from M/s ACD Ltd:

S.No. Particulars Amount

(Rs)
(i) Municipal taxes chargeable on the machine 45,000
(ii) Outward freight charges (Contract was to deliver machine at ACD Ltd.'s 65,000
factory i.e. F.O.R. contract)

Additional information:

(i) M/s SQM Ltd. normally gives an interest-free credit period of 30 days for payment, after
that it charges interest @ 1% p.m. or part thereof on list price.
ACD Ltd. paid for the supply after 45 days but, M/s SQM Ltd. waived the interest payable.
(ii) M/s SQM Ltd. received Rs 50,000 as subsidy, from one non-government organization
(NGO) on sale of such machine. This subsidy was not linked to the price of machine and
also not considered in list price of Rs 9,50,000.
(iii) M/s ACD Ltd. deducted discount of Rs 15,000 at the time of final payment, which was not
as per agreement.

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(iv) M/s SQM Ltd. collected Rs 9,500 as TCS (Tax Collected at Source) under the provisions of
the Income Tax Act, 1961.

Compute the Taxable Value of supply as per provision of GST laws, considering that the price is
the sole consideration for the supply and both parties are unrelated to each other.

Note: Correct legal provision should form part of your answer.

(5 marks)

(b) Input Service Distributor (ISD) of a company is registered separately in the State of Kerala
and is distributing Input Tax Credit (ITC) to other units in the Company. Following details are
furnished for a particular month, and you are required to help the ISD department in supplying
goods and services to customers.

Particulars Amount in Lakh

(Rs)
1) Turnover in the RELEVANT MONTH of each of the units:
2) Mumbai (Maharashtra) 12.00
3) Bangalore (Karnataka) 60.00
4) Hyderabad (Andhra Pradesh) 36.00
5) Trivandrum (Kerala) 72.00
6) Total ITC available during the month with the ISD (includes CGST/SGST 48.00
& IGST) on account of supplies received during the month.
7) From the above, ITC exclusive to Bangalore unit, available as IGST 12.00
credit.
8) From the above, ITC exclusive to Trivandrum and Hyderabad units 6.00
(CGST and SGST of Rs 3.00 lakh each).
9) Rest of the credits available is allocable as common credit to all the

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 units and it is received from local suppliers in Kerala.
10) Basic value of a Debit Note received, during the month, in respect of a 50.00
previous supply, with rate of tax @12% IGST being charged and shown
separately.
11) Total value in the Credit Note received, during the month, applicable 118.00
exclusively to Kerala unit, taxed at the rate of CGST 9% and SGST 9%,
which is charged and indicated separately.

Also make your comments regarding the amount of ITC in Credit Notes, if exceeds the ITC from
invoices and Debit Notes in a particular month for all or any of the units.

(4 marks)

(c) Triveni Alloys imported during June, 20x1 by sea, a consignment of metal scrap weighing
3000 metric tons from U.K. They filed a Bill of Entry for Home Consumption and the Assistant
Commissioner passed an order for clearance of goods and the applicable duty was also paid.
The importer thereafter found on taking delivery from the port Trust authorities, that only
2,500 metric tons of scrap were available at the docks although they had paid duty for the
entire 3,000 metric tons since there was no short landing of cargo. The short delivery of 500
metric tons was also substantiated by the Port Trust authorities, who gave a weighment
certificate to the importer to that effect.

Upon a representation to the Customs Department the importer has been directed in writing to
justify as to which provision of the Customs Act, 1962 governs the importer's claim for
restoration of duty paid on the quantity of 500 metric tons scrap not delivered by the Port
Trust.

Examine the issues involved and briefly discuss the same with reference to the provisions of the
Custom Act, 1962 giving reasons. (5 marks)

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Q-5

(a) X Ltd, received a demand from the department on 1.9.20x1 under Section 73 of the CGST
Act, 2017 where

Amount Rs
CGST & SGST due 5,00,000
Interest @18% p.a. for number of days of delay.
Penalty 10% of tax due or Rs 10,000 whichever is higher

The assessee went for appeal and filed the case in the Appellate Authority on 25.9.20x1. This
appeal has been taken up for hearing on 06-10-20x1.

Case 1: How much has to pay as pre-deposit of duty u/Sec 107(6) of the CGST Act, 2017 and
date of pre- deposit of duty by X Ltd. to entertain appeal by the Appellate Authority.

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

(5 marks)

(b) Seema has self-assessed GST on service rendered by her and has declared it in the return*.
She has paid 80% of the self-assessed tax and for want of liquidity the balance 20% has
remained unpaid for more than a year. The officer has proceeded to recover the unpaid portion
of the self-assessed tax by invoking the provisions Sec 79. Seema argues that she should have
been issued a SCN. Invoking sec 79 to recover the unpaid portion of the tax is an action beyond
his jurisdiction, as fundamental requirement of providing the opportunity of being heard has
not been provided. Also, she argues that in absence of fraud, collusion, willful misstatement,
suppression of facts and contravention of any of the provisions of the tax law, normal period of
limitation should apply. Even if tax is to be paid, she has argued that interest is not payable by
her. Discuss whether her arguments are valid. (4 marks)

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(c) Sun Industries Ltd. sent certain goods by a ship from Calcutta to Colombo in Sri Lanka under
claim for drawback on the said goods under section 75 of the Customs Act, 1962 against
shipping Bill. The ship had passed beyond the territorial waters of India and the engine
developed trouble while the ship was in the high seas falling within the ambit of the expression
'taking out to a place outside India'. The ship returned back and ran aground in India territorial
waters at the port of Pardeep. The fittings, stores and cargo were salvaged (*recovered but in
damaged condition). Discuss the admissibility of claim for drawback by the Company.

(5 marks)

Q-6

(a) Y Ltd. exported service valued at US $ 1,00,000. Supply of service was completed on 15th
November 2018. Payment for this service was received on 30th December, 20x1, Refund claim
was filed by Y Ltd. in respect of tax paid on inputs and input services for Rs 6,00,000 on 31st
January, 20x2. The refund claim was sanctioned on 30th April, 20x2. What is the amount of
refund Y Ltd. will get in accordance with law? What is the relevant date and rate of interest as
per GST law?

(5 marks)

OR

(a)

(i) A Central Government department located at Uttar Pradesh is registered with the
Commercial Tax department UP State for deducting GST. It enters into a contract with a
Public Sector Undertaking (PSU), registered under GST in the State of Delhi, for supplying
goods valued Rs 3,50,000. The PSU argues that no tax is deductible on this supply by the
Central Government Department as it is located outside the State of Uttar Pradesh and

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 therefore not liable to tax under CGST and SGST as it is a local levy and IGST tax deduction is
not applicable if it is located in another State, other than the State in which the department
is registered. You are required to comment on this.
(ii) Would there be any difference if instead of the PSU if it was an entity in the private sector.
Applicable tax rate for deduction is 1% CGST, 1% SGST and 2% IGST.
(iii) If the private sector entity undertakes works contract, for the above department in New
Delhi. What would be the position of tax deduction when the contract value is Rs 5,00,000?
(iv) The disbursing officer has not paid the tax deducted in the month of February 20x1,
amounting to Rs 2,00,000 under CGST and 2,00,000 under SGST, to the Government's
account on the relevant due date, but has paid it on 14th May, 20x1. Further, return for that
month is also filed on that date and the certificate is made available electronically
simultaneously. What are the consequences, on such failures, to the disbursing officer
under the GST law?

(5 marks)

(b) Radhaswamy owns and supplies certain goods costing Rs 30,00,000 in a conveyance hired
from Manikaran Transporters. Market value of said goods is Rs 40,00,000 and tax chargeable
thereon is Rs 4,80,000.

The goods supplied by Radhaswamy and the conveyance [owned by Manikaran Transporters]
used for carriage of such goods are confiscated since Radhaswamy has supplied said goods in
contravention of the provisions of the CGST Act, 2017 with an intent to evade payment of tax.

However, the proper officer intends to give an option to Radhaswamy and Manikaran
Transporters to pay in lieu of confiscation, a fine leviable under section 130 of the CGST, Act,
2017.

Determine the maximum amount of the fine in lieu of confiscation on:

(a) The goods liable for confiscation.

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(b) The conveyance used for carriage of such goods.

(4 marks)

(c) List out the conditions for eligibility for duty credit scrip entitlement under Service Exports
from India Scheme (SEIS) and determine whether the following cases are eligible for benefit
under SEIS.

(i) Mr. Raj has received USD 12,500 as considering for services provided, during the year. He
has also paid USD 3,000 towards services received from abroad. He has also received USD
4,000 towards employment rendered abroad during the year.
(ii) M/s. Services Ltd. Has received the USD 16,000 as foreign exchange during the year towards
share capital.
(iii) Mrs. Anita has received USD 15,000 as consideration for services provided, during the year.

Assume that except for in case (iii) above, others have an active IEC.

(5 marks)

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