TAXATION

TOTAL MARKS 50
Course: CA Intermediate

Paper: Taxation Marks: 50

Test: GST Time Allowed: 1.5 Hour
SPC Receipt No: ___________
Test ID: 02531

MCQ (5 x 1 Mark)
1) GST is payable by the recipient under reverse charge on

a. Sponsorship service

b. Transport of goods by rail

c. transport of passenger by air

d. all of the above

2) M/s ABC made an arrangement with M/x PQR for supply of goods on 15th July, at this time goods
didn't cross frontiers. The payment of goods has been made on 16th July, while the invoice was
made on 18th July. What will be the time of supply in such a case?

a. 15th July

b. 16th July

c. 18th July

d. 16th July or 18th July whichever is suitable to supplier

3) Which of the following is included while computing the value of supply of goods under GST?

a. Price of the goods

b. Packing charges of the goods

c. Tax levied by Municipal Authority on sale of the goods

d. All of the above

4) In case supplier has deposited the taxes but the receiver has not received the documents, is
receiver entitled to avail credit?

a. Yes, it will be auto populated in recipient monthly returns

b. No as one of the conditions of 16(2) is not fulfilled

 c. Yes, if the receiver can prove later that documents are received subsequently

d. None of the above

5) Is it mandatory to start a fresh series of invoice in every financial year?

a. Yes

b. No

c. Totally at the option of supplier

d. None of the above

PRACTICAL

Q1) Singhal Brothers, registered in Uttarakhand has supplied 30 tons of a chemical @ INR 50,000 per ton
(excluding taxes) to P of Uttarakhand on 8th September, 20XX. The invoice for the supply has also been issued
on the same date. Further, following additional amounts were also charged from P:
Particulars Amount
Freight 1,80,000
Packing charges 1,10,000
Weighing charges 20,000
Cost of instrument specially purchased by Singhal Brothers to manufacture the chemical 3,10,000

As per the terms of the contract of supply, Singhal Brothers is required to get the chemical inspected by an
independent testing agency before the delivery of the same to P. P has paid such inspection charges
amounting to INR 12,000 directly to the testing agency. Singhal Brothers has also received INR 50,00,000 as a
subsidy from State Government for setting up chemical manufacturing plant in Uttarakhand.

P is required to make payment within 15 days of supply in terms of the contract. However, P delayed the
payment of consideration and made payment in November, 20XX and thus paid INR 15,000 as interest. You
are required to calculate the GST liability in this case. Assume the rate of GST to be 18%.

Note: Singhal Brothers and P are not related and price is the sole consideration for the supply. Marks 8

Q2) R is selling certain goods comprising of set of articles at a consolidated price of INR 80,000. R claims that
the value of various articles and GST rate on such articles are as under

a) Articles ‘X’ INR 40,000 5%

b) Articles ‘Y’ INR 30,000 18%

c) Articles ‘Z’ INR 10,000 Exempt

How much GST is payable by R if

a) All articles are sold separately?

b) All articles are sold as one set for a consolidated price of INR 80,000? Marks 5
 Q3) Gupta & Sons, a registered supplier, paying tax under normal scheme is wholesale supplier of ready-made
garments located in Bandra, Mumbai. On 5th September, 20XX, Mohini, owner of Charming Boutique located
in Dadar, Mumbai, approached Gupta & Sons for supply of a consignment of customised dresses for ladies
and kids.

Gupta & Sons gets the consignment ready by 2nd December, 20XX and informs Mohini about the same. The
invoice for the consignment was issued the next day, 3rd December, 20XX.

Due to some reasons, Mohini could not collect the consignment immediately. So, she collects the
consignment from the premises of Gupta & Sons on 18th December, 20XX and hands over the cheque for
payment on the same date. The said payment is entered in the accounts on 20th December, 20XX and
amount is credited in the bank account on 21st December, 20XX.

You are required to determine the time of supply of the readymade garments supplied by Gupta & Sons to
Mohini elaborating the relevant provisions under the GST law. Marks 4

Q4) Mr. Thiraj, a registered supplier of service in Bangalore (Karnataka State) has provided the following
information for the month of February:
Particulars Amount
(i) Intra-state taxable supply of service 5,20,000
(ii) Legal fee paid to a Lawyer located within the state 20,000
(iii) Rent paid to the State Govt. for his office building 30,000
(iv) Received for services towards conduct of exams in Loveall University, Pune 16,000
(recognized by law), being an inter-state transaction

Compute the net GST liability (CGST, SGST or IGST) of Mr. Thiraj for the month of February. Rate of CGST,
SGST and IGST are 9%, 9% and 18% respectively.

All the amounts given above are exclusive of taxes. Marks 6

Q5) Luv & Kush Pvt. Ltd. of Srinagar, Jammu & Kashmir engaged in supply of services provides you following
details:

S. No. Particulars Date

1. Commencement of the business of supplying services 01.08.20XX
2. Turnover exceeds INR 10,00,000 on 15.08.20XX
3. Turnover exceeds INR 20,00,000 on 05.09.20XX
4. Application for registration made on 28.09.20XX
5. Registration certificate granted on 06.10.20XX

The company seeks your advice as to how it should raise revised tax invoices for supplies made. Is there any
specific provision for issuance of revised tax invoices to unregistered customers? Explain. Marks 5

Q6) Enumerate the conditions necessary for availing ITC under GST law. Marks 5
Q7) Mr. Zafar of Assam, provides the following information for the preceding FY 20XX-YY. You are required to
find out the aggregate turnover for the purpose of eligibility of composition levy scheme and determine
whether he is eligible for composition levy scheme or not, for the F.Y. 20YY-ZZ.
Particulars Amount
(L)
Value of taxable outward supplies (out of above, INR 10 lakh was in course of inter-state 50.00
supply)
Value of exempt supplies (which include INR 30 lakh received as interest on loans & 70.00
advances)
Value of inward supplies on which he is liable to pay tax under reverse charge 5.00
Value of exports 5.00
All the amounts in Lakhs and are exclusive of GST.

Marks 6

Q8) State the person liable to pay GST in the following independent cases provided recipient is located in the
taxable territory:

(a) Services supplied by an insurance agent to an insurance company.

(b) Services supplied by a recovery agent to a car dealer.

(c) Security services (services provided by way of supply of security personnel) provided by a partnership
firm to a registered person paying tax under regular scheme. Marks 6