1. M/s Trendy Threads (Proprietor Ms.

Maya) is involved in offering Fashion Styling and

Apparel services. The firm, registered in Jaipur (Rajasthan) under GST law, made the
following supplies in the month of March 2023:
(i) Provided Fashion Consulting services to Vogue Couture of Jaipur amounting to Rs.
450,000.
(ii) Sold 800 garment sets (at Rs. 1,200 per set) amounting to Rs. 960,000 to Mr. Khan in
Jodhpur (Rajasthan). Each set comprised 1 embroidered kurta, 1 pair of matching trousers,
and 1 scarf.
(iii) Organized a runway event in Udaipur. Royal Designs Pvt. Ltd., a registered entity in
Mumbai (Maharashtra), sponsored the event, for which Trendy Threads received Rs.
720,000.
(iv) Distributed 150 gift sets containing 1 scarf and 1 brooch to customers on the occasion of
the firm's 3rd anniversary. Each set's cost is Rs. 280. The open market value of such goods is
unavailable, and no input tax credit has been claimed.
(v) Provided complimentary styling services to Ms. Priya, a friend of Ms. Maya, to assist in
setting up her boutique in Bangalore. The cost of services rendered is Rs. 80,000, but the
open market value isn't ascertainable.
(vi) Supplied custom-designed ethnic wear sets packed in special boxes to a boutique in Delhi
(NCR) as per contract, amounting to Rs. 1,800,000. The cost of these designer boxes is
included in the Rs. 18 lakhs.
(vii) Mr. Khan incurred an interest payment of Rs. 6,450 (inclusive of GST) due to delayed
payment to Trendy Threads.
Additional Information:
(a) Ms. Maya engaged an Advocate for legal advisory services related to GST matters, for
which she paid Rs. 120,000. Assume it as an Intra State Supply.
(b) Trendy Threads purchased 900 meters of premium fabric at an aggregate cost of Rs.
720,000 in March 2023 for further supply. Purchases were made from a supplier in Surat,
Gujarat.
(c) Health insurance premium of Rs. 250,000 was paid by the firm for its employees, as per
the company policy. There's no legal obligation for providing insurance.
(d) A company car was purchased in the firm's name for Ms. Maya's daily commute. The
GST amount included in the car's invoice is Rs. 170,000.
(e) Other Input Tax Credits for March 2023: IGST Rs. 320,000, CGST Rs. 28,000, and SGST
Rs. 28,000.
(f) Opening balance of SGST Input Tax Credit is Rs. 40,000.
(g) Assume the following GST rates:
S. no. Particulars Rate of Rate of CGST Rate of SGST
 IGST
1 Ethnic Wear 18% 9% 9%
2 Special Boxes 28% 14% 14%
3 Premium Fabric 12% 6% 6%
4 Scarf 18% 9% 9%
5 Brooch 18% 9% 9%
6 Sponsorship 28% 14% 14%
7 Consulting 18% 9% 9%
Services
8 Health 5% 2.50% 2.50%
Insurance
9 Tax Advisory 18% 9% 9%
Services
Compute: (1) Total Output GST liability of Trendy Threads for the month of March 2023. (2)
Total Input Tax Credit eligible for March 2023. (3) Net GST Liability of Trendy Threads for
March 2023. Working notes should be included in your answer.
2. Mr. Gupta is engaged in multiple businesses and is a registered supplier under GST in the
State of Karnataka. Mr. Gupta provides the following information for the month of
September 2023:
Outward Supply:
(i) Provided consulting services (which were procured from an unregistered supplier) without
any consideration to his sister-in-law in Bangalore (market value of supply was Rs. 98,000).
(ii) Sold a consignment of 15 smartphones to M/s Tech World Ltd. in the State of Karnataka
as per the instruction of a third party, M/s Gadget Connect of Telangana. Rs. 7,20,000
(iii) Rendered software development services to M/s Digital Solutions, a registered entity in
Mysore, Karnataka. The services were performed at the client's office in Bangalore. Rs.
1,20,000
(iv) Leased out 10 office spaces in a commercial building in Bangalore at a rent of Rs. 20,000
per month per space. Rs. 2,00,000
(v) Provided Sponsorship services to Global Insights Pvt. Ltd., a market research firm in
Mumbai, Maharashtra. Rs. 1,50,000
(vi) Received an advance payment during the month for future intra-state supply. Rs.
12,00,000
Inward Supply:
(i) Imported computer peripherals from China, and the goods arrived at Bangalore Airport
and reached Mr. Gupta's registered premises on 30.09.2023. The total value of goods is Rs.
6,50,000, inclusive of customs duty and social welfare surcharge but exclusive of IGST.
(ii) Availed GTA services from M/s Fast Movers of Chennai for transporting traded goods,
where CGST/SGST @ 4.5% each, and IGST @ 9% were applicable. Rs. 1,80,000
(iii) Apart from the above, received 12 invoices involving IGST of Rs. 80,000 during the
current month.
Mr. Gupta provided the following additional information:
(a) Turnover for the previous financial year was Rs. 75 lakhs.
(b) He had availed services in an inter-state transaction with a taxable value of Rs. 5,50,000
and a tax rate of 18%. Payment for the same to the supplier was not made until the current
month (overdue for 181 days as of 01.07.2023). However, tax due under the said transaction
was paid to the Government, and credit was availed in the month of the transaction itself.
(c) Purchased a laptop on July 20th for Rs. 72,000 from Gadget Land of Bangalore. The GST
rate on the laptop is 18%. The price of Rs. 72,000 does not include the GST amount. The
laptop will be used for business purposes.
(d) Out of the advance received for future supply, Rs. 6,00,000 relates to the supply of goods,
and the rest relates to services.
(e) The rate of CGST, SGST, and IGST is 9%, 9%, and 18%, respectively, for both inward
and outward supplies of goods and services. The same rate is also applicable for inward
supplies received, except where otherwise provided.
(f) All the amounts given are exclusive of taxes wherever applicable.
From the information provided above, compute the net GST liability payable in cash (CGST
and SGST or IGST, as the case may be) for the month of September 2023. The assessee
wants to make the cash payment of GST under SGST head as far as possible.
Solutions:
Q1
Calcultation of Output GST Liability
Amount CGST SGST IGST
Particulars
(Rs.) (Rs.) (Rs.) (Rs.)
i) Supply of Professional Services 40,500 40,500
450000
Intra state supply [450000x 9%] [450000x 9%]
ii) Supply of garment sets 86,400 86,400
[Since supplies are naturally bundled 960000
[960000x 9%] [960000x 9%]
tax rate of principle supply]
Since sponsorship services are
provided to a body corporate - tax is
720000 Nil
payable under reverse charge by
iii) recipient.
iv) Free gifts to customers
[Not a supply as it is made without
consideration and is also not covered in Nil
Schedule I because customers are not
related persons.]
Professional services provided free of
v) cost
[Not a supply as it is made without
Nil
consideration and is also not covered in
Schedule I because sister being
0 independent is not a related person.]
Supply of silk dresses in designer
324000
vi) boxes
[Since supply of silk dresses in
designer boxes is naturally bundled it is
a composite supply which is treated as 1800000
the supply of the principal supply (viz. [1800000x 18%]
silk dresses). Accordingly rate of
principal supply i.e. silk dresses will be
charged.]
Interest received for delayed payment
6,450 492 492
vii) (excluding GST)
[Includible in value of original supply.
Further since it is received in February [6450*100
[5466x9%] [5466x9%]
itself time of supply is when it is /118]
received i.e. February5.]

Total Output GST liability on

34,86,450 1,27,392 1,27,392 324000
Forward Charge Supplies
B. GST liability on inward supplies under reverse charge
(i) Services of Senior Advocate 120000 10800 10800
[Tax is payable under reverse charge
on the Senior Advocate Services .
Further, it is an intra-State supply.

(1) Total Output Tax Liability (A+B) 1,38,192 1,38,192 3,24,000

C. Input tax credit

Purchase of Silk Dupatta 720000 86,400
[7,20,000×12%]
Life Insurance Premium of Employees 250000
ITC on Life Insurance Premium is
Blocked under Section 17(5) hence no
credit would be available for the same.
Also, Life insurance premium paid by
the firm was not a Statutory Obligation.

Purchase of Car 170000

ITC on Purchase of Motor Vehicle is
Blocked under Section 17(5) hence no
credit would be available for Car
purchase even if it purchased for the
use of Business.
Other Input Tax Credit (Given and it is 3,20,000
28000 28000
Assumed to be Eligible Credit)
Opening Balance of ITC 40000
ITC of GST paid under RCM on Senior 150000
10800 10800
Advocate Services

(2) Total ITC available for set off 38800 78800 4,06,400

D. Computation of net GST payable in

cash
Total tax liability on outward supplies 1,27,392 1,27,392 3,24,000
Less: ITC OF IGST against IGST Tax 3,24,000
Less: ITC OF IGST against CGST Tax 82,400

Less: ITC of CGST and SGST against 38,800 78,800

there Liab

Forward charge liability on outward -

supplies payable in cash after set off of
ITC
Reverse charge liability on inward 10,800 10,800
supplies payable in cash without set off
of ITC
[Tax payable under reverse charge,
being not an output tax, cannot be set
off against ITC and thus, will have to be
paid in cash.]
(3) Total net GST liability payable in cash 16,992 59,392 0
Computation of net GST payable in cash for the month of July 2023

S. Particulars Amount CGST SGST IGST

No. (Rs.) (Rs.) (Rs.) (Rs.)
A. GST liability on outward supply
(i) Services provided supplied without Nil - - -
consideration
[Not a supply as it is made without
consideration and is also not covered in
Schedule I because services have been
supplied to an unrelated person and ITC
has also not been availed on the same.]

(ii) Consignment of smartphones supplied 7,20,000 129600

at the instruction of third person

[Since supply is a bill to ship to supply [7,20,000

where the goods are delivered on the ×18%]
direction of a third person-M/S Gadget,
goods are deemed to be received by
M/S gadget and thus, the place of
supply is Telengana. Hence, it is an
inter-State supply.]
(iii) Software development services to M/s 1,20,000 10,800 10,800 NIL
Digital Solutions
[Intra-State supply] [120,000 [120,000
×9%] ×9%]
(iv) Office space on rent 2,00,000 18,000 18,000
[It is a Taxable Supply as per Section 7] [200,000 [200,000
×9%] ×9%]
(v) Sponsorship services to Global Insights 1,50,000 - - -
[Tax is payable by the Body corporate
under reverse charge.]
(vi) Advance received for intra-State supply 12,00,000 1,08,000 1,08,000

[Tax on advance received for supply of [12,00,0 [12,00,0

goods of Rs. 12,00,000 will be payable 00×9%] 00×9%]
at the time of issuance of invoice.]
Total tax liability on outward supplies 1,36,800 1,36,800 1,29,600
B. GST liability on inward supplies under reverse charge
(i) GTA services availed from M/s Speed 1,80,000 9,000
Trans
[Tax is payable under reverse charge [1,80,000
on the GTA services received by a ×5%]
registered person and on which tax is
payable @ 5%. Further, it is an inter-
State supply since supplier is located in
Kolkata and place of supply is
Maharashtra (location of registered
recipient)]

C. Input tax credit

Import of computer accessorie [Input 6,50,000 1,17,000
tax, inter alia, includes IGST charged on [6,50,000
import of goods] ×18%]
GTA services availed 1,80,000 9,000

IGST on invoices received during the 80,000

month
Less: Input tax reversed -99,000
Reversal of ITC on Account of Non
Payment of Services within 180 Days
from the Date of Invoice
ITC on Laptop used 72000 6480 6480
Total ITC available for set off 6480 6480 1,07,000

D. Computation of net GST payable in

cash
Total tax liability on outward supplies 1,36,800 1,36,800 1,29,600
Less: ITC of IGST -6,480 -6,480 -1,07,000
Forward charge liability on outward - 22,600
supplies payable in cash after set off of
ITC
Reverse charge liability on inward
supplies payable in cash without set off
of ITC
[Tax payable under reverse charge, 9,000
being not an output tax, cannot be set
off against ITC and thus, will have to be
paid in cash.]
Total net GST liability payable in cash 1,43,280 1,43,280 31,600