INTER – IDT (QB – Sep 25/Jan 26) COMPILED BY CA NITIN NAHAR

(a) (i)
(b) (ii)
(c) (ii) and (iii)
(d) (i), (ii) and (iii)

Ans: (b)

17. Which of the following is not eligible for opting composition scheme under sub-sections (1) and (2)
of section 10 of the CGST Act, 2017?
(a) M/s ABC, a firm selling garments solely in Ahmedabad, having aggregate turnover of ₹ 78 lakh
in the preceding F.Y.
(b) A start up company exclusively operating a restaurant in Delhi, having aggregate turnover of
₹ 98 lakh in the preceding F.Y.
(c) A courier service company operating solely in Mumbai having aggregate turnover of ₹ 90 lakh
in the preceding F.Y.
(d) A trader selling grocery items solely in Orissa having an aggregate turnover of
₹ 95 lakh in the preceding F.Y.

Ans: (c)

18. C & Co., a registered supplier in Delhi, opted for composition levy under sub-sections (1) and (2) of
section 10 of the CGST Act, 2017. It sold goods in the fourth quarter of a financial year for ₹
15,00,000 (exclusive of GST). The applicable GST rate on these goods is 12%. C & Co. purchased
goods from Ramesh & Co., registered in Delhi, for ₹ 9,55,000 on which Ramesh & Co. had charged
CGST of ₹ 57,300 and SGST of ₹ 57,300. C & Co. had also purchased goods from E & Co.,
registered in Haryana, for ₹ 2,46,000 on which E & Co. had charged IGST of ₹ 29,520. GST liability
of C & Co. for the fourth quarter of the financial year is-

(a) CGST ₹ 7,500 & SGST ₹ 7,500

(b) CGST ₹ 3,180 & SGST ₹ 32,700
(c) CGST ₹ 32,700 & SGST ₹ 3,180
(d) CGST Nil and SGST Nil

Ans: (a)

19. Goods as per section 2(52) of the CGST Act, 2017 includes:
(i) Actionable claims
(ii) Growing crops attached to the land agreed to be severed before supply.
(iii) Money
(iv) Securities
(a) (i) and (iii)
(b) (iii) and (iv)
(c) (i) and (ii)
(d) (ii) and (iii)

Ans: (c)

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20. Harish Trading Company situated in Haryana, is a dealer of seeds (exempt by exemption notification)
& chemical fertilizers (taxable). He is about to cross the threshold limit of registration under GST and
wants to opt for Composition Scheme under section 10(1) and 10(2) of the CGST Act. His entire
supply is made exclusively within the State of Haryana. You being his Chartered Accountant, advise
whether he can do so or not?
(a) Yes, since aggregate turnover is less than ₹ 1.5 crore.
(b) No, a person effecting supply exempted by way of exemption notification cannot opt for
composition scheme under section 10(1) and 10(2) of the CGST Act.
(c) No, a trader cannot opt for composition scheme.
(d) No, a supplier of chemical fertilizer cannot opt for composition scheme.

Ans: (a)

21. Mr. A has supplied services to Mr. B which are covered under RCM. Both of them are located in
Maharashtra. Which tax shall be paid?
a. CGST & SGST
b. IGST
c. CGST & UTGST
d. CGST & IGST

Ans (a)

22. Ola being an E – commerce operator provides cab services to the passengers through various local
service providers. The liability to pay tax on such services shall be applicable to:
a. Ola
b. Passengers
c. Local Service Providers
d. None

Ans (a)

23. What is the tax rate applicable on a Composition dealer falling under Reverse Charge Mechanism?
a. As applicable to a Composition dealer
b. As applicable to a normal taxpayer
c. Exempt
d. None of the above

Ans (b)
______________________________________________________________________________

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24. Nootan Ltd., a registered person in Indore, Madhya Pradesh, provides details of the following
transactions carried out during the month of June 2024:
Sr. Amount
Particulars
No. in ₹
1. Paid remuneration to Mr. Madan, for the services rendered by him in the 20,00,000
capacity of Director. Company deducted TDS under section 192 (Salary) and
194J (Professional or Technical services) of Income-Tax Act, 1961. Gross
payments made were ₹ 8,50,000 and ₹ 11,50,000 respectively for Salary and
Professional services. (Intra-State supply)
2. Paid rent to Indian Railways, registered in Madhya Pradesh, for its property 1,25,000
located in the same State, which was taken on lease by the company.
3. Paid to XYZ Security Private Limited, for providing security services to its 5,35,000
warehouses across the State. Security agency is not registered under GST.
4. Paid fee to Local Municipal corporation for renewal of the company's factory 4,800
License for the financial year 2024-2025.

Additional Information:
(i) All above figures are exclusive of taxes, wherever applicable.
(ii) Assume the rate of GST as 18%, 9% and 9% for IGST, CGST/SGST respectively.
(iii) Turnover of Nootan Limited for the preceding financial year was
₹ 67 lakh.

You are required to compute the GST payable by Nootan Limited under Reverse Charge basis for
the month of June 2024. Reason for the treatment of each item should form part of the answers. (5
Marks) (Jan 2025 EQ)

Solution: Computation of GST Payable by Nootan Limited under reverse charge

S. CGST SGST
Particulars
No. (₹) (₹)
1. Remuneration paid to Mr. Madan [₹ 1,50,000 × 9%] 1,03,500 1,03,500
[(i) Remuneration paid to director for professional services subjected to
TDS under section 194J of the Income-tax Act is outside the scope
of Schedule III of the CGST Act, 2017 and tax is payable under
reverse charge by the recipient company – Nootan Ltd.
(ii) However, salary of ₹ 8,50,000 paid to director subjected to TDS
under section 192 of the Income-tax Act is not taxable since
services provided by an employee to employer in course of or in
relation to his employment are outside the scope of supply in terms
of Schedule III of the CGST Act, 2017. Thus, the same is neither
supply of goods nor supply of services]
2. Paid rent to Indian Railways Nil Nil
[Tax on renting of immovable property services provided by Indian
Railways is not payable under reverse charge.]

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3. Security services received Nil Nil

[Tax on security services is not payable under reverse charge since
supplier is a body corporate.]
4. Paid fee to Local Municipal Corporation [Not taxable/Exempt - since Nil Nil
the consideration for the services provided by local authority does
not exceed ₹ 5,000.]
Total GST payable by Nootan Ltd. under reverse charge 1,03,500 1,03,500

25. M/s. T is a registered dealer of Andhra Pradesh trading in different types of machinery and its related
different types of services. Their aggregate turnover for the preceding financial year 2022-23 for sale
of machinery was ₹ 1.32 crores, it was first year so they had not started for providing service related
to machinery. From FY 2023-24 they are planning to provide repair and maintenance service of ₹
6.25 lakh for which they have to purchase some raw material of ₹ 5 lakh from the other State (till
date they are purchasing within State only).

From the information given above, examine whether M/s. T can opt for composition scheme under
Section 10(1), 10(2A) or 10(2) of the CGST Act, 2017 for FY 2023-24?
(5 Marks) (Sep 2024 EQ)

Solution:
A registered person is eligible to opt for composition scheme for goods in the current financial year
(FY) provided his aggregate turnover does not exceed ₹1.50 crore [other than in specified Special
Category States] in the preceding FY.

Since aggregate turnover of M/s. T in the preceding FY does not exceed ₹1.5 crore, he is eligible for
composition scheme for goods under section 10(1) and 10(2) of the CGST Act, 2017 in the current
FY.

As per section 10(2A) of the CGST Act, 2017, a registered person who is eligible to pay tax under
section 10(1) and (2) is not eligible for opting for composition under section 10(2A) of the CGST Act,
2017. As per section 10(2A) of the CGST Act, 2017, person engaged in the supply of service is
eligible for composition scheme for payment of tax @ 3% CGST and 3% SGST provided his
aggregate turnover does not exceed ₹ 50 lakh in the preceding FY.

Since turnover of previous year is ₹ 1.32 crore and firm is not dealing in the service only, M/s T
cannot opt for composition scheme under section 10(2A) of the CGST Act, 2017 for FY 2023-24.

A person who opts to pay tax under composition scheme under section 10(1) and 10(2) of the CGST
Act, 2017 is also permitted to supply services [other than restaurant services] upto a value not
exceeding:
(a) 10% of the turnover in a State/U.T. in the preceding financial year,
or
(b) ₹ 5 lakh,
whichever is higher.

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Thus, M/s T is permitted to supply services upto a value of ₹ 13,20,000 i.e. 10% of ₹ 1.32 crores, in
current FY. Further, there is no restriction on composition supplier to receive inter- State inward
supplies of goods or services. Thus, it can be concluded that M/s T can opt for composition scheme
of goods under section 10(1) of the CGST Act, 2017 for FY 2023-24.

26. Mr. Jayesh, a registered supplier of Mumbai, received the following amounts in respect of the various
activities undertaken by him during the month of October, 2022.

S. No Particulars Amount (₹)

(i) Commission received as a recovery agent from a Non-Banking Finance 80,000
Company (NBFC)
(ii) Actionable claim received from normal business debtors 10,50,000
(iii) Amount received from ABC Ltd. for performance of classical dance in 1,74,500
one program.
(iv) Business assets (old computers) given to a friend free of cost, the No amount
market value of all the computers was ₹ 51,000. Charged
No input tax credit has been availed on such computers when used for
business.
(v) Consideration received for one month rent from a registered individual 15,200
person for renting of residential dwelling for use as residence.

Details of Input services:

S. Amount
Particulars
No. (₹)
Paid to an unregistered Goods Transport agency for various consignments 15,100
of transportation of goods by road.
(Each individual consignment in a single carriage was of less than ₹ 1,450.)

Notes:
(i) All the amount stated above in both the tables are exclusive of GST, wherever applicable.
(ii) Aggregate turnover of Mr. Jayesh in previous year was ₹ 42,00,000.

You are required to compute Gross value of supplies, on which GST to be paid by Mr. Jayesh for
the month of October, 2022. (6 Marks) (May 2023 EQ)

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Solution: Computation of gross value of taxable supply on which GST is to be paid by Mr.
Jayesh
Amount
Particulars
(₹)
Commission received as a recovery agent from Non-Banking Financial Company -
[Tax is payable by NBFC under reverse charge.]
Actionable claim received from normal business debtors -
[No tax is payable as actionable claims other than lottery, betting and gambling are
covered under Schedule III, i.e. they are neither supply of goods nor supply of
services.]
Amount received from ABC Ltd. for performance of classical dance [Taxable since 1,74,500
consideration for classical dance performance exceeds
₹ 1,50,000.]
Business assets given free of cost -
[Not a supply as it is made without consideration and not covered in Schedule I
because ITC is not availed on the same.]
Rent from registered individual person -
[Tax is payable by the registered individual person under reverse charge]
Services from unregistered GTA 15,100
[Tax on services provided by unregistered GTA is payable under reverse charge by
Mr. Jayesh being a registered person.]
Gross value of taxable supply on which GST is to be paid by Mr. Jayesh 1,89,600

27. Who are not eligible to opt for composition scheme for goods under GST Laws? (5 Marks) (May
2023 EQ)

Solution:
The registered person who is not eligible for composition scheme for goods under GST law are as
under:
(i) Supplier engaged in making any supply of goods or services which are not leviable to tax.
(ii) Supplier engaged in making any inter-State outward supplies of goods or services.
(iii) Person supplying any goods or services through an electronic commerce operator who is
required to collect tax at source (under section 52).
(iv) Manufacturer of ice cream, panmasala, tobacco, aerated waters, fly ash bricks; fly ash
aggregate, fly ash blocks, bricks of fossil meals or similar siliceous earths, building bricks, earthen
or roofing tiles.
(v) Supplier who is either a casual taxable person or a non-resident taxable person
(vi) Supplier of services exceeding an amount which is higher of 10% of the turnover in a State/U.T.
in the preceding financial year or ₹ 5 lakh.
______________________________________________________________________________

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28. State the person liable to pay GST in the following independent services provided:
(i) Sapna Builders, registered in Haryana, rented out 20 residential units owned by it in Jain
Society to Anant Technologies, an IT based company registered in the State of Haryana, for
accommodation of its employees.
(ii) M/s. Verma Consultants, a partnership firm registered in Delhi as a regular tax payer, paid
sponsorship fees of 1,50,000 at a seminar organized by a private NGO (a partnership firm) in Delhi.
(4 Marks) (Model Test Paper)

Solution:
(i) Services provided by way of renting of residential dwelling for use
as residence except where the residential dwelling is rented to a registered person is exempt from
GST. Further, tax on service provided by way of renting of residential dwelling to a registered person
is payable by the recipient under reverse charge.

Therefore, in the given case, Anant Technologies is liable to pay GST on the residential dwellings
taken on rent by it from Sapna Builders, under reverse charge mechanism.

(ii) In case of services provided by any person other than body corporate by way of sponsorship to
any body corporate or partnership firm, GST is liable to be paid under reverse charge by such body
corporate or partnership firm located in the taxable territory.

Since in the given case, sponsorship services are being provided by the private NGO to a partnership
firm - M/s. Verma Consultants, GST is payable by Verma Consultants on said services under reverse
charge.

29. "Little Smiles", a photography firm, has commenced providing photoshoot services in Delhi from the
beginning of current financial year 2024-25. It has provided the following details of turnover for the
various quarters till December, 2024 :-
S. Amount
Quarter
(₹ in Lakh)
1 April, 2024 - June, 2024 20
2 July, 2024 - September, 2024 30
3 October, 2024 - December, 2024 40

You may assume the applicable tax rate as 18%. Little Smiles wishes to pay tax at a lower rate and
opts for the composition scheme. You are required to advise whether it can do so and calculate the
amount of tax payable for each quarter? (6 Marks) (Model Test Paper)

Solution:
Section 10(2A) of the CGST Act, 2017 provides the turnover limit of ₹ 50 lakh in the preceding
financial year for becoming eligible for composition levy for services. Little Smiles has started the
supply of services in the current financial year (FY), thus, it’s aggregate turnover in the preceding
FY is Nil. Consequently, in the current FY, Little Smiles is eligible for composition scheme for
services. A registered person opting for composition levy for services shall pay tax @ 3% [Effective
rate 6% (CGST+ SGST/UTGST)] of the turnover of supplies of goods and services in the State.

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Further, Little Smiles becomes eligible for the registration when the aggregate turnover exceeds ₹
20 lakh (the threshold limit of obtaining registration). While registering under GST, Little Smiles can
opt for composition scheme for services.

The option of a registered person to avail composition scheme for services shall lapse with effect
from the day on which his aggregate turnover during a financial year exceeds the threshold limit of
₹ 50 lakh.

However, for the purposes of determining the tax payable under composition scheme, the expression
"turnover in State" shall not include the value of supplies from the first day of April of a FY up to the
date when such person becomes liable for registration under the CGST Act.

Thus, for determining the turnover of the State for payment of tax under composition scheme for
services, turnover of April, 2024 - June,2024 quarter [₹ 20 lakh] shall be excluded. On next ₹ 30 lakh
[turnover of July, 2024 - September, 2024 quarter], it shall pay tax@ 6% [3% CGST and 3% SGST].
For the purposes of computing aggregate turnover of a registered person for determining his
eligibility to pay tax under this section, aggregate turnover includes value of supplies from the 1st
April of a FY up to the date of his becoming liable for registration.

Thus, while computing aggregate turnover for determining Little Smiles’s eligibility to pay tax under
composition scheme, value of supplies from the first day of April of a financial year up to the date
when it becomes liable for registration under this Act (i.e. turnover of April, 2024 - June, 2024
quarter), are included.

By the end of July, 2024 - September, 2024 quarter, the aggregate turnover reaches ₹ 50 lakh.
Consequently, the option to avail composition scheme for services shall lapse by the end of July,
2024 - September, 2024 quarter and thereafter, it is required to pay tax at the normal rate of 18%.
Considering the above provisions, the tax payable for each quarter is as under:-
S. GST rate Turnover GST payable
Quarter
No. [CGST + SGST] (₹ in Lakh) (₹ in Lakh)

1 April, 2024 - June, 2024 20 -

2 July, 2024 6% 30 1.8
September, 2024
October, 2024
December, 2024 18% 40 7.21

30. Who are not eligible to opt for composition scheme for goods under GST laws? (5 Marks) (Model
Test Paper)

Solution:
The registered person who is not eligible for composition scheme for
goods under GST law are as under:
(i) Supplier engaged in making any supply of goods or services which are not leviable to tax.
(ii) Supplier engaged in making any inter-State outward supplies of goods or services.

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(iii) Person supplying any services through an electronic commerce operator who is required to
collect tax at source (under section 52).
(iv) Manufacturer of ice cream, panmasala, tobacco, aerated waters, fly ash bricks; fly ash
aggregate, fly ash blocks, bricks of fossil meals or similar siliceous earths, building bricks, earthen
or roofing tiles.
(v) Supplier who is either a casual taxable person or a non-resident taxable person
(vi) Supplier of services exceeding an amount which is higher of 10% of the turnover in a State/U.T.
in the preceding financial year or 5 lakh.
Note: Any 5 points may be mentioned.

31. State the person liable to pay GST in the following independent case:
(i) Legal Fees is received by Abhishek, an advocate, from M/s. Navya Trading Company,
engaged in making taxable supplies and located in Maharashtra, having turnover of ₹ 50 lakh in
preceding financial year.
(ii) Padam Srivastav, an independent director, appointed in accordance with the provisions of the
Companies Act, 2013, of One Fourth Pvt. Ltd., has received sitting fee amounting to ₹ 1 lakh from
One Fourth Pvt. Ltd. for attending the Board meetings.
(6 Marks) (Model Test Paper)

Solution:
(i) If services provided by an individual advocate including a senior advocate
or firm of advocates by way of legal services, directly or indirectly, then GST is payable on reverse
charge basis.
Accordingly, in this case, GST on legal services supplied by an advocate [Mr. Abhishek] to any
business entity [M/s. Navya Trading Company] located in the taxable territory is payable on reverse
charge basis.
Therefore, in the given case, person liable to pay GST is the recipient of services, i.e., M/s. Navya
Trading Company.

(ii) The part of director’s remuneration which is declared as salaries in the

books of a company and subjected to TDS under section 192 of the Income-tax Act (IT Act), is not
taxable being consideration for services by an employee to the employer in the course of or in relation
to his employment in terms of Schedule Ill of the CGST Act,2017.

Further, the part of employee director’s remuneration which is declared separately other than
salaries in the company’s accounts and subjected to TDS under section 194J of the IT Act as fees
for professional or technical services are treated as consideration for providing services which are
outside the scope of Schedule Ill and is therefore, taxable. The recipient of the said services i.e. the
company, is liable to discharge the applicable GST on it on reverse charge basis.

In lieu of the above provisions, Rs. 1 Lakh sitting fees paid to Padam Srivastav, an independent
director, declared separately other than salaries in the company’s accounts and subjected to TDS
under section 194J of the IT Act as fees for professional or technical services, which is outside the
scope of Schedule Ill and is therefore, taxable.

Therefore, recipient of the said services i.e. One 4th Private Limited, is liable to discharge the
applicable GST on it on reverse charge basis.
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32. Determine whether the suppliers in the following cases are eligible for composition levy, under
section 10(1) & 10(2) of the CGST Act, 2017, provided their turnover in preceding year does not
exceed ₹ 1.5 crore:

(i) Shyam Enterprises is engaged only in trading of pan masala in Rajasthan and is registered in
the same State.

(ii) Sahaj Manufacturers has registered offices in Punjab and Haryana and sells goods
manufactured by it in the neighbouring States. (5 Marks) (Model Test Paper)

Solution:
(i) A supplier engaged in the manufacture of notified goods during the preceding financial year is not
eligible for composition scheme under section 10(1) and 10(2) of the CGST Act, 2017. Ice cream
and other edible ice, whether or not containing cocoa, Pan masala, Tobacco and manufactured
tobacco substitutes, aerated waters, fly ash bricks, fly ash aggregate, fly ash blocks, bricks of fossil
meals or similar siliceous earths, building bricks, earthen or roofing tiles are notified under this
category. However, in the given case, since Shyam Enterprises is engaged in trading of pan masala
and not manufacture and his turnover does not exceed 1.5 crore, he is eligible for composition
scheme subject to fulfilment of specified conditions.

(ii) Since supplier of inter-State outward supplies of goods or services is not eligible for composition
levy, Sahaj Manufacturers is not eligible for composition levy.

33. M/s Balaji Electronics, a registered dealer, is supplying all types of electronic appliances in the State
of Karnataka. Its aggregate turnover in the preceding financial year by way of supply of appliances
is 120 lakh.

The firm also expects to provide repair and maintenance service of such appliances from the current
financial year.

With reference to the provisions of the CGST Act, 2017, examine:

(i) Whether the firm can opt for the composition scheme, under section 10(1) and 10(2), for the
current financial year, as the turnover may include supply of both goods and services?
(ii) If yes, up to what amount, the services can be supplied? (5 Marks) (Model Test Paper)

Solution:
(i) The registered person, whose aggregate turnover in the preceding
financial year does not exceed ₹ 1.5 crore, may opt to pay tax under composition levy, under section
10(1) and 10(2) of the CGST Act, 2017. The scheme can be availed by an intra-State supplier of
goods and supplier of restaurant service.

However, the composition scheme permits supply of marginal services (other than restaurant
services) for a specified value along with the supply of goods and restaurant service, as the case
may be.

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