Srishti Academy (Salem)

SRISHTI ACADEMY

TAXATION – INDIRECT TAX (GST TEST) – 23.02.2018

ALL the questions are compulsory

Each question carries FIVE marks

Marks: 75 Time: 2Hrs & 15Mins

Question No. 1

Shipra Traders is a registered supplier of goods in Assam. It purchased goods valued at Rs. 10,000 from Kartik Suppliers located within the same State. Kartik Suppliers charged CGST & SGST separately in its invoice. Subsequently, Shipra Traders sold goods valuing Rs. 9,500 to Rabina Manufacturers located in Assam. 20% of the inputs purchased are still lying in stock and there was no opening stock of goods. Rate of CGST and SGST on supply and purchase of goods is 9% each. Calculate the net GST payable by Shipra Traders and input tax credit (ITC) to be carried forward, if any.

Question No. 2

M/s Y Ltd. being a trader of laptops has two units in Chennai and in Mumbai.

Place	P.Y. Turnover Rs. in lakhs (Excluding taxes)
Chennai	52.00
Mumbai	12.00

You are required to answer the following:

a) M/s Y Ltd is eligible for composition levy in the current year.

b) If so, M/s Y Ltd can opt composition scheme for Chennai location and normal scheme for Mumbai.

c) Need to give separate intimations for opting composition scheme in each State.

Question No. 3

M/s Moon Pvt. Ltd. in corporated in Chennai on 1st July 2017 has the following details for the year 2017-18:

S.No.	Particulars	Value (Rs. in lacs)
i.	Inter-State exempted supply of goods	4.00
ii.	Intra-State supplies of services	5.00
iii.	Non-taxable supplies	2.00
iv.	Exempted supplies of services	0.60
v.	Value of export of goods	7.00

M/s Moon Pvt. Ltd. is required to register compulsorily under GST Law, advice.

Whether your answer is different if S.No. (i) Above, inter-State taxable supply goods for Rs. 4 lacs.

Question No. 4

Sahab Sales, an air-conditioner dealer in Janakpuri, Delhi, needs 4 air-conditioners for his newly constructed house in Safdarjung Enclave. Therefore, he transfers 4 air-conditioners [on which ITC has already been availed by it] from its stock, for the said purpose. Examine whether the said activity amounts to supply under section 7 of the CGST Act, 2017.

Further, a Janakpuri resident, Aakash, approached Sahab Sales. He sold an air-conditioner to Sahab Sales for Rs. 5,000. Aakash had bought the said air-conditioner six months before, for his residence. Does sale of the air conditioner by Aakash to Sahab Sales amount to supply under section 7 of the CGST Act, 2017?

Question No. 5

State whether the following supplies would be treated as supply of goods or supply of services as per Schedule II of the CGST Act:

a) Renting of immovable property

b) Goods forming part of business assets are transferred or disposed of by/under directions of person carrying on the business, whether or not for consideration.

c) Transfer of right in goods without transfer of title in goods.

d) Transfer of title in goods under an agreement which stipulates that property shall pass at a future date.

Question No. 6

M/s X Ltd. being a registered person supplying taxable goods in the following manner:

Particulars	Rs.
Intra-State supply of goods	18,00,000
Inter-State supply of goods	13,00,000
Intra-State purchases	13,00,000
Inter-State purchases	1,50,000
ITC at the beginning of the relevant tax period:
CGST	1,30,000
SGST	1,30,000
IGST	1,70,000

i. Rate of CGST, SGST and IGST to be 9%, 9% and18% respectively.

ii. Inward and outward supplies are exclusive of taxes.

iii. All the conditions necessary for availing the input tax credit have been fulfilled.

Compute the net GST payable by M/s X Ltd during the tax period. Make suitable assumptions.

Question No. 7

Royal Fashions, a registered supplier of designer outfits in Delhi, decides to exhibit its products in a Fashion Show being organised at Hotel Park Royal, Delhi on 4th January, and 20XX. For the occasion, it gets the makeover of its models done by Aura Beauty Services Ltd., Ashok Vihar, for which a consideration is Rs. 5, 00,000 (excluding GST) has been charged. Aura Beauty Services Ltd. issued a duly signed tax invoice on 10th February, 20XX showing the lumpsum amount of Rs. 5,90,000 inclusive of CGST and SGST @ 9% each. Royal Fashions made the payment the very next day. Answer the following questions:

i. Examine whether the tax invoice has been issued within the time limit prescribed under law?

ii. Tax consultant of Royal Fashions objected to the invoice raised suggesting that the amount of tax charged in respect of the taxable supply should be shown separately in the invoice raised by Aura Beauty Services Ltd. However, Aura Beauty Services Ltd. contended that there is no mandatory requirement of showing tax component separately in the invoice. You are required to examine the validity of the objection raised by tax consultant of Royal Fashions?

Question No. 8

Air Bus Ltd, furnishes you the following information for computation of its GST liability for the month of Oct 2017.

a)	Passenger travelling from Mizoram to Chennai – 2000 passengers, Gross Value per ticket	Rs. 2,500
b)	Passenger travelling from Chennai-USA 500 passengers, USA-CHENNAI – 200 passengers, Gross Value per ticket	Rs. 45,000
c)	Passengers travelling from Mumbai – Tripura - Mumbai with single ticket – 1000 passengers. Gross value per ticket	Rs. 5,000

Air Bus Ltd. charging 40% passenger tax which is not included in the gross value per ticket.

Find the GST liability?

All passengers are travelled in economic class except point (b).

Question No. 9

A hotel owner provided accommodation in Haryana, through an electronic commerce operator – Cool Trips. The hotel owner is not liable to get registered as per the provisions of section 22(1) of the CGST Act.

Who is the person liable to pay GST in this case?

Would your answer be different if the Electronic Commerce Operator Cool Trips does not have a physical presence in India?

Question No. 10

Granites Textiles Ltd. purchased a needle detecting machine on 8th July, 2017 from Makhija Engineering Works Ltd. for Rs. 10,00,000 (excluding GST) paying GST @ 18% on the same. It availed the ITC of the GST paid on the machine and started using it for manufacture of goods. The machine was sold on 22nd October, 2018 for Rs. 7,50,000 (excluding GST), as second-hand machine to LT. Pvt. Ltd. The GST rate on supply of machine is 18%.

State the action which Granites Textiles Ltd. is required to take, if any, in accordance with the statutory GST provisions on the sale of the second-hand machine.

Question No. 11

Determine the time of supply in the following cases assuming that GST is payable under reverse charge:

S. No.	Date of payment by recipient for supply of services	Date of issue of invoice by supplier of services
	(1)	(2)
i.	August 10	June 29
ii.	August 10	June 1
iii.	Part payment made on June 30 and balance amount paid on September 1	June 29
iv.	Payment is entered in the books of account on June 28 and debited in recipient’s bank account on June 30	June 1
v.	Payment is entered in the books of account on June 30 and debited in recipient’s bank account on June 26	June 29

Question No. 12

Mark Agro Products Ltd., furnishes the following details of various services provided by it in the month of August, 2017:

S. No.	Particulars	Amount (Rs.)
1.	Rearing of Silkworm and horticulture	2,50,000
2.	Plantation of tea and coffee	2,00,000
3.	Renting of vacant land for performing marriage ceremony	4,50,000
4.	Sale of wheat on commission basis	50,000
5.	Sale of rice on commission basis	2,00,000

Compute the value of taxable supply of services and the GST liability OF Mark Agro Products Ltd. for the month of August 2017. Assume rate of GST 18%.

Question No. 13

Crunch Bakery Products Ltd sells biscuits and cakes through its dealers, to whom it charges the list price minus standard discount and pays GST accordingly. When goods remain unsold with the dealers, it offers additional discounts on the stock as an incentive to push the sales.

Can this additional discount be reduced from the price at which the goods were sold and concomitant tax adjustments made?

Question No. 14

i. Tirupati Traders, a registered supplier of goods, pays GST [CGST & SGST or IGST, as the case may be] under regular scheme. It has furnished the following particulars for a tax period:-

Particulars	Rs.
Value of intra-State supply of goods	12,000
Value of intra-State purchase of goods	10,000

Note:

1) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively.

2) Both inward and outward supplies are exclusive of taxes, wherever applicable.

3) All the conditions necessary for availing the input tax credit have been fulfilled.

Compute the net GST payable by Tirupati Traders during the given tax period assuming that there is no opening balance of input tax credit (ITC). Make suitable assumptions wherever required.

ii. Govind, a registered supplier, is engaged in providing services in the neighboring States from his registered office located in Mumbai. He has furnished the following details in respect of the inward and outward supplies made during a tax period:-

Particulars	Rs.
Inter-State supply of services	1,80,000
Receipt of goods and services within the State	1,00,000

Assume the rates of taxes to be as under:-

Particulars	Rate
CGST	9%
SGST	9%
IGST	18%

Note:

1) Both inward and outward supplies are exclusive of taxes, wherever applicable.

2) All the conditions necessary for availing the input tax credit have been fulfilled.

Compute the net GST payable by Govind during the given tax period. Make suitable assumptions if required.

Question No. 15

MBM Caretakers, a registered person, provides the services of repair and maintenance of electrical appliances. On April 1, it has entered into an annual maintenance contract with P for its Air Conditioner and Washing Machine. As per the terms of contract, maintenance services will be provided on the first day of each quarter of the relevant financial year and payment for the same will also be due on the date on which service is rendered. During the year, it provided the services on April 1, July 1, October 1, and January 1 in accordance with the terms of contract. When should MBM Caretakers issue the invoice for the services rendered?

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