2b CA Intermediate GST Question Bank 8th Edition Dec 2021 Exam

CA INTERMEDIATE
th
GST - 8 Edition
230 Pages
26 SETs
280 Questions
170 MCQs
28 Rank Holder from Tax Batch of CA Suraj Agrawal Sir
AIR-22
Sonali Agrawal
AIR-30
AIR-42 AIR-49
Mohammad Zohaib Belal Mehak Goyal
IDT-90 Marks DT-87 Marks Tax-84 Marks DT-81 Marks DT-81 Marks IDT-79 Marks
Sobhit Chauhan Zeinab Raja Kamna Gupta Bhawna Bisht Shivek Madaan Preeti Rawat
CMA Final CMA Intermediate CA Intermediate CMA Final CMA Final CMA Intermediate
SURAJ AGRAWAL TAX CLASS

MRP. 125/-
THANKS TO MY FAMILY &
STUDENTS FOR CONTINUOUS
SUPPORT & LOVE.
CA SURAJ AGRAWAL
GST Question Bank (8th Edition – 1st Print) for CA INTERMEDIATE - DEC 2021 EXAM
Updated with Circulars/Notifications upto 30.04.2021
Print Date - 31.10.2021
PREFACE
Taxation is a dynamic subject, which is not only a vast subject but also difficult to
comprehend in view of frequent amendments. Yet it is the scoring subject of your
syllabus. In addition, practice in the field of Taxation is also highly remunerative.
My association with the students has helped me to bring this Question Bank in its
present form – simplified, comprehensive and easy to understand.
8th edition of GST Question Bank incorporates the followings in various sets:
 CA Inter RTP Questions (From May 2018 to Nov 2021)
 Past Exam questions with answer as suggested by ICAI (From May 2018 to
May 2021)
 Past ICAI Mock Test Papers
 Past ICAI GST Sample Questions
Hope this Question Bank serves the purpose of the students. I shall be thankful to the
readers for their suggestions, criticism and feedback if any.
All questions/Solutions are updated as per current law applicable for Dec 2021 exam
This question Bank is based on GST Book issued to CA INTERMEDIATE Students
Email: [email protected]; Mobile: 85272 30445
ACKNOWLEDGEMENT
This Question Bank is a result of sincere efforts of our family members, colleagues,
associates, well-wishers and students, whose contribution cannot go unacknowledged.
Master Reyaan, my wife CA Monika Agrawal and my mother deserve special mention
for the time (on which they had the first right) they allowed me for this book.
I dedicate this book to my beloved late Grandparents & Papa.
CA Suraj Agrawal
GST Question Bank (8th Edition – 1st Print) for CA INTERMEDIATE - DEC 2021 EXAM
Updated with Circulars/Notifications upto 30.04.2021
Print Date - 31.10.2021
“One more step towards success”

PROFILE – CA SURAJ AGRAWAL
CA Suraj Agrawal is a Commerce Graduate [B.Com (H)] from Kolkata University and has
qualified CA in November 2005 in First Attempt from Kolkata. He has also secured All India
27th Rank in CA-Foundation – 1st level (First Attempt – 70% marks).
Besides CA, he has completed Certification Course of International Taxation of the ICAI in
2009. He has also qualified CPA (Certified Public Accountant) examination from AICPA
(USA) in 2009 with more than 90 Marks in each of four papers in First Attempt [Presently, he is
inspired to complete CIMA, London as well as LLM in International Taxation (UK) by Year
2024]
He has started his career by joining Direct Tax Department of Reliance Industries Limited,
Mumbai and worked for near 2 years in core tax team. He has also worked in Taxation Division
of Chaturvedi & Shah (Chartered Accountants), Delhi followed by Tax Division of Ernst &
Young, Gurgaon, India (A Leading Big 4 Firm having International Presence). During the
working tenure of more than 4 years, he is exposed to in-depth theoretical and practical
knowledge of Direct Taxation & has a consultancy exposure in various industries including
Energy - Oil & Gas, Airlines, Retail, Infrastructure and Shipping Industries.
With the above academic and practical knowledge, he is in teaching profession from more than
12 years to serve professional students (taught 20,000 CA/CMAs Students till date). His in-
depth coverage of legal provisions in Tax with practical approach is very well recognized
among the students. He is also an associate member of ICAI and is also providing services as
Tax Consultant to various organisations.
He was also a member in WTO, FEMA & International Tax Study Group of the NIRC of the
ICAI for the year 2011-12 and was member of International Taxation & FEMA Research
Study Group of NIRC of the ICAI for the year 2010-11. He is regularly contributing tax articles
and various opinions on subjects of Direct Taxation including International Taxation in various
leading magazines [Taxmann] and professional forums.
CA Suraj Agrawal
“CA Rank Holder, Qualified CPA (USA), B.Com (H)”
Email: [email protected]
Contact: +91 85272 30445
Subjects: DIRECT TAX (INTER & FINAL)
FB: http://www.facebook.com/suraj.agrawal.564
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Inside
S. No. Particulars Page No. Total Questions
GST - PRACTICE TEST PAPER - SET ‘A’

1 A.01 – A.06 9 Questions
[Source - MTP I (Dec 2021 Exam)]
GST - PRACTICE TEST PAPER - SET ‘B’

2 B.01 – B.06 10 Questions
[Source - RTP (Dec 2021 Exam)]
GST - PRACTICE TEST PAPER - SET ‘C’

3 C.01 – C.06 8 Questions
[Source - July 2021 (New Syllabus) - Suggested]
GST – PRACTICE TEST PAPER – SET ‘D’

4 D.01 – D.08 14 Questions
[Source - July 2021 (Old Syllabus) - Suggested]
GST - PRACTICE TEST PAPER - SET ‘E’

5 E.01 – E.06 9 Questions
[Source - RTP (May 2021 Exam)]
GST - PRACTICE TEST PAPER - SET ‘F’

6 F.01 – F.08 13 Questions
[Source - MTP I (May 2021 Exam)]
GST - PRACTICE TEST PAPER - SET ‘G’

7 G.01 – G.06 12 Questions
[Source - MTP II (May 2021 Exam)]
GST - PRACTICE TEST PAPER - SET ‘H’

8 H.01 – H.06 9 Questions
[Source - Jan 2021 (New Syllabus) - Suggested]
GST - PRACTICE TEST PAPER – SET ‘I’

9 I.01 – I.06 10 Questions
[Source - Jan 2021 (Old Syllabus) - Suggested]
GST - PRACTICE TEST PAPER - SET ‘J’

10 J.01 – J.06 9 Questions
[Source - Nov 2020 (New Syllabus) - Suggested]
GST - PRACTICE TEST PAPER - SET ‘K’

11 K.01 – K.06 10 Questions
[Source - Nov 2020 (Old Syllabus) - Suggested]
GST - PRACTICE TEST PAPER - SET ‘L’

12 L.01 – L.08 15 Questions
[Source - RTP (Nov 2020 Exam)]
GST - PRACTICE TEST PAPER - SET ‘M’
13 M.01 – M.08 17 Questions
GST - PRACTICE TEST PAPER - SET ‘N’

14 N.01 – N.06 8 Questions
[Source - MTP (Nov 2020 Exam)]
GST - PRACTICE TEST PAPER - SET ‘O’

15 O.01 – O.08 13 Questions
[Source - MTP (May 2020 Exam)]
GST - PRACTICE TEST PAPER - SET ‘P’

16 P.01 – P.12 19 Questions
[Source - Nov 2019 (New + Old) - Suggested]
GST - PRACTICE TEST PAPER - SET ‘Q’

17 Q.01 – Q.08 17 Questions
GST - PRACTICE TEST PAPER - SET ‘R’

18 R.01 – R.10 18 Questions
[Source - May 2019 (New + Old) - Suggested]
GST - PRACTICE TEST PAPER - SET ‘S’

19 S.01 – S.06 9 Questions
GST - PRACTICE TEST PAPER - SET ‘T’

20 T.01 – T.12 21 Questions
[Source - Nov 2018 (New + Old) - Suggested]
GST - PRACTICE TEST PAPER - SET ‘U’

21 U.01 – U.10 10 Questions
GST - PRACTICE TEST PAPER - SET ‘V’

22 V.01 – V.08 17 Questions
[Source - May 2018 (New + Old) - Suggested]
GST - PRACTICE TEST PAPER - SET ‘W’

23 W.01 – W.04 4 Questions
24 GST - PRACTICE TEST PAPER - SET ‘X’ X.01 – X.08 19 Questions
25 GST - PRACTICE TEST PAPER - SET ‘Y’ Y.01 – Y.08 24 Questions
26 GST - PRACTICE TEST PAPER - SET ‘Z’ Z.01 – Z.24 30 Questions
MCQ GST MCQ - SET ‘A’ 12 Pages 65 MCQs

GST By CA Suraj Agrawal SATC A.1
GST - PRACTICE TEST PAPER - SET A
CA Intermediate Exam - Dec 2021
(From GST 8th Edition Question Bank)
Source: CA Intermediate Exam - Mock Test Paper I (Dec 2021 Exam)
Updated/Amended with Notifications/Circulars upto 30.04.2021
For Admission / Inquiry - Whatsapp at 8527230445 (11am to 6pm)
1. [Supply, Registration & Exemption] Ms. Adisha, a Doctor having in-patient facility in her hospital is a registered
person under GST.
She availed interior decoration services from her spouse without any consideration being paid. She also availed
IT related services from her sister-in-law without any consideration. Both services were for the purpose of her
profession.
Ms. Adisha provided treatment of various diseases in her hospital and apart from that she also provided the
following services in her hospital-
(a) Plastic surgery to enhance the beauty of the face
(b) Ambulance service for transportation of patients
(c) Renting of space to run medical store in hospital premises
She is also a consultant in other hospitals and received ₹ 40,00,000 as consultancy fee from the other hospitals.
Further, she also provides canteen facility and received ₹ 55,000 from in-patients, ₹ 35,000 from patients who are
not admitted and ₹ 25,000 from visitors for the same facility.
She filed GSTR-3B for the month of June with some errors. She filed the Annual return for the said financial year
on 31st October of the next year, whereas due date for the said Annual return is 31 st December of the next year.
Proper Officer of the department cancelled the registration certificate of Ms. Adisha suo-motu on 31st July. Order
of cancellation was served on 5th August. However, she applied for revocation of the same and got her
registration certificate revoked.
All the amounts given above are exclusive of taxes, wherever applicable. All the supply referred above is intra-
State unless specified otherwise.
From the information given above, choose the most appropriate answer for the following questions -
(i) Which of the following is a correct statement as per the provisions of CGST Act, 2017?
(i) Service availed from her Spouse is a deemed supply
(ii) Service availed from her Sister-in-Law is a deemed supply
(iii) Service availed from her Spouse is not a deemed supply
(iv) Service availed from her Sister-in-Law is not a deemed supply
(a) (i) and (iv)
(b) (iii) and (iv)
(c) (ii) and (iii)
(d) (i) and (ii)
(ii) Compute the taxable value of supply of canteen service provided by Ms. Adisha?
(a) ₹ 25,000
(b) ₹ 35,000
(c) ₹ 60,000
(d) ₹ 80,000
(iii) Ms. Adisha should have applied for revocation of cancellation of registration certificate by
(a) 5th August
(b) 20th August
(c) 30th August
(d) 4th September
SURAJ AGRAWAL TAX CLASS | NEW DELHI | +91 85272 30445
(iv) Maximum time permissible for rectification of error committed in monthly return of June is________
(a) 20th July
(b) 20th October of the next year
(c) 31st October of the next year
(d) 31st December of the next year
(v) Determine which of the following services provided by Ms. Adisha and her hospital is exempt from GST?
(i) Plastic surgery to enhance the beauty of the face
(ii) Ambulance service for transportation of patients
(iii) Renting of space to run medical store in hospital premises
(iv) Consultancy service by Ms. Adisha in other hospitals
(a) (i), (ii) & (iv)
(b) (i), (ii)
(c) (ii) & (iv)
(d) (i) & (iii)
2. [Value of Supply] Discount given after the supply has been effected is deducted from the value of taxable supply,
if –
(i) such discount is given as per the agreement entered into at/or before the supply
(ii) such discount is linked to the relevant invoices
(iii) proportionate input tax credit is reversed by the recipient of supply
(a) (i)
(b) (i) and (ii)
(c) (ii) and (iii)
(d) (i), (ii) and (iii)
Question No. Answer
1 (i) (a) (i) and (iv)
(ii) (c) ₹ 60,000
(iii) (d) 4th September
(iv) (b) 20th October of the next year
(v) (c) (ii) & (iv)
2. (d) (i), (ii) and (iii)
3. [PAYMENT OF TAX] SATC Pvt. Ltd., a supplier of goods, pays GST under regular scheme. It has made the
following outward taxable supplies in a tax period:
Particulars Amount (₹)
Intra-State supply of goods 8,00,000
Inter-State supply of goods 3,00,000
It has also furnished the following information in respect of purchases made by it in that tax period:
Intra-State purchases of goods 2,00,000
Inter-State purchases of goods 50,000
The company has following ITCs with it at the beginning of the tax period:
CGST 57,000
SGST Nil
IGST 70,000
Note:
(i) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively.
(ii) Both inward and outward supplies are exclusive of taxes, wherever applicable.
(iii) All the conditions necessary for availing the ITC have been fulfilled.
Compute the minimum GST, payable in cash, by SATC Pvt. Ltd. for the tax period. Make suitable assumptions as
required.
Solution:
Computation of GST payable on outward supplies
S. Particulars CGST @9% SGST @9% (₹) IGST @18% Total

No. (₹) (₹) (₹)
(i) Intra-State supply of goods for ₹ 8,00,000 72,000 72,000 1,44,000
(ii) Inter-State supply of goods for ₹ 3,00,000 54,000 54,000
Total GST payable 1,98,000
Computation of total ITC
Particulars CGST SGST IGST

@9% (₹) @9% (₹) @18% (₹)
Opening ITC 57,000 Nil 70,000
Add: ITC on Intra-State purchases of goods valuing ₹ 2,00,000 18,000 18,000 Nil
Add: ITC on Inter-State purchases of goods valuing ₹ 50,000 Nil Nil 9,000
Total ITC 75,000 18,000 79,000
Computation of minimum GST payable from electronic cash ledger
Particulars CGST SGST IGST Total

@9% (₹) @ 9% (₹) @18% (₹) (₹)
GST payable 72,000 72,000 54,000 1,98,000
Less: ITC [First ITC of IGST should be utilized in full - first (Nil)IGST (25,000) (54,000) 79,000
against IGST liability and then against CGST and SGST IGST IGST
liabilities in a manner to minimize cash outflow]
(72,000)CGST (18,000)SGST 90,000
Minimum GST payable in cash Nil 29,000 Nil 29,000
Note: Since sufficient balance of ITC of CGST is available for paying CGST liability and cross utilization of ITC of CGST
and SGST is not allowed, ITC of IGST has been used to pay SGST (after paying IGST liability) to minimize cash
outflow. CGST Credit balance to be carry forward is ₹ 3,000.
4. [VALUE OF SUPPLY] M/s. Flow Pro, a registered supplier, sold a machine to BP Ltd. It provides the following
information in this regard: -
S. No. Particulars Amount (₹)
(i) Price of the machine [excluding taxes and other charges mentioned at S. Nos. (ii) and 25,000
(iii)]
(ii) Third party inspection charges 5,000

[Such charges were payable by M/s Flow Pro but the same have been directly paid by
BP Ltd. to the inspection agency. These charges were not recorded in the invoice
issued by M/s Flow Pro.]
(iii) Freight charges for delivery of the machine 2,000

[M/s Flow Pro has agreed to deliver the goods at BP Ltd.’s premises]
(iv) Subsidy received from the State Government on sale of machine under Skill 5,000
Development Programme [Subsidy is directly linked to the price]
(v) Discount of 2% is offered to BP Ltd. on the price mentioned at S. No. (i) above and
recorded in the invoice
Note: Price of the machine is net of the subsidy received.
Determine the value of taxable supply made by M/s Flow Pro to BP Ltd.

Solution:
Computation of value of taxable supply made by M/s. Flow Pro to BP Ltd.

Price of the machine 25,000
[Since the subsidy is received from the State Government, the same is not includible in the value of
supply in terms of section 15(2)(e)]
Third party inspection charges 5,000
[Any amount that the supplier is liable to pay in relation to the supply but has been incurred by the
recipient and not included in the price actually paid or payable for the goods, is includible in the value
of supply in terms of section 15(2)(b)]
Freight charges for delivery of the machine 2,000

[Since arranging freight is the liability of supplier, it is a case of composite supply and thus, freight
charges are added in the value of principal supply.]
Total 32,000
Less: Discount @ 2% on ₹ 25,000 being price charged to BP Ltd. 500
[Discount given before or at the time of supply if duly recorded in the invoice is deductible from the
value of supply in terms of section 15(3)(a)]
Value of taxable supply 31,500
5. [COMPOSITION SCHEME] A person availing composition scheme, under sub-sections (1) & (2) of section 10, in
Haryana during a financial year crosses the turnover of ₹ 1.5 crore in the month of December. Will he be allowed
to pay tax under composition scheme for the remainder of the year, i.e. till 31st March? Please advise.
Solution:
No. The option to pay tax under composition scheme lapses from the day on which the aggregate turnover of the person
availing composition scheme for goods during the financial year exceeds the specified limit (₹ 1.5 crore). Once he
crosses the threshold, he is required to file an intimation for withdrawal from the scheme in prescribed form within 7
days of the occurrence of such event.
Every person who has furnished such an intimation, may electronically furnish at the common portal, a statement in
prescribed form containing details of the stock of inputs and inputs contained in semi-finished or finished goods
held in stock by him on the date on which the option is withdrawn, within a period of 30 days from the date from which
the option is withdrawn.
6. [TAX INVOICE] Kartik & Co., a registered supplier under GST, provides the following information regarding
various tax invoices issued by it during the month of March 20XX:
(a) Value of supply charged in invoice no. 1 was ₹ 2,50,000 against the actual taxable value of ₹ 2,30,000.
(b) Tax charged in invoice no. 4 was ₹ 32,000 against the actual tax liability of ₹ 68,000 due to wrong HSN code
being chosen while issuing invoice.
(c) Value charged in invoice no. 8 was ₹ 3,20,000 as against the actual value of ₹ 4,20,000 due to wrong quantity
considered while billing.
Kartik & Co. asks you to answer the following:

1. Who shall issue a debit/credit note under CGST Act?
2. Whether debit note or credit note has to be issued in each of the above circumstances?
3. What is the maximum time-limit available for declaring the credit note in the GST Return?
Solution:
1. The debit/credit note shall be issued by the registered person who has supplied the goods and/or services, i.e.
Kartik & Co.
2. Yes, debit/credit note need to be issued in each of the circumstances as under:
(i) A credit note is required to be issued as the taxable value in invoice no. 1 exceeds the actual taxable value.
(ii) A debit note is required to be issued as the tax charged in the invoice no. 4 is less than the actual tax
payable.
(iii) A debit note is required to be issued as the value of supply charged in the invoice no. 8 is less than the
actual value.
3. The details of the credit note cannot be declared later than the return for the month of September following the end
of the financial year in which such supply was made or the date of furnishing of the relevant annual return,
whichever is earlier.
7. [PAYMENT OF TAX] M/s ABC & Co., have defaulted in filing the return under Section 39 of CGST Act, 2017 i.e.
GSTR-3B for the month of March, 20XX within the specified due date. Reason for such delay is attributable to
delay in closure of Books for March 20XX, which have been finalised during May 20XX.
The GST Common portal prompted for payment of late fees payable under Section 47 of CGST Act, 2017 for a
sum of ₹ 2,000 under CGST and SGST each.
Accountant, of M/s ABC & Co., sought your confirmation for payment of such late fees through the balance
available in Electronic Credit Ledger for the late fees. Give your guidance in this regard.
Solution:
Section 49(3) of the CGST Act, 2017 provides that the amount available in the electronic cash ledger may be used for
making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act
or the rules made there under in prescribed manner.
Further, section 49(4) provides that the amount available in the electronic credit ledger may be used for making any
payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in prescribed manner.
Accordingly, as per the combined reading of the above provisions, late fees shall be paid only through electronic cash
ledger and not possible through electronic credit ledger.
Thus, contention of the accountant of M/s ABC & Co., is not correct and the above amount shown on the common portal
has to be deposited in Electronic Cash Ledger under appropriate minor head, through any of the specified modes.
8. [BASICs of GST] Write a short note on various Lists provided under Seventh Schedule to the Constitution of
India.
Solution:
Seventh Schedule to Article 246 of the Constitution contains three lists which enumerate the matters under
which the Union and the State Governments have the authority to make laws.
(i) List - I (UNION LIST):

It contains the matters in respect of which the Parliament (Central Government) has the exclusive right to make laws.
(ii) List - II (STATE LIST):

It contains the matters in respect of which the State Government has the exclusive right to make laws.
(iii) List - III (CONCURRENT LIST):

It contains the matters in respect of which both the Central & State Governments have power to make laws.
9. [GST RETURN] Discuss the eligibility for QRMP scheme under GST?
Solution:
Registered persons (other than supplier of online information and database access or retrieval services (OIDAR) located
in non-taxable territory and providing such services to a non-taxable online recipient), having an aggregate turnover up
to ₹ 5 crore in the preceding financial year, and who have opted to furnish quarterly return under QRMP scheme
are eligible for QRMP scheme as the class of persons who shall furnish a return for every quarter from January,
2021 onwards, and pay the tax due every month.
Thus, the taxpayers whose aggregate turnover is up to ₹ 5 crore in the preceding financial year are eligible for QRMP
scheme. For computing aggregate turnover, details furnished in returns for tax periods in the preceding financial year
shall be taken into account.

Class Notes

GST By CA Suraj Agrawal SATC B.1
GST - PRACTICE TEST PAPER - SET B
Source: CA Intermediate Exam - RTP (Dec 2021 Exam)
1. [EXEMPTION] MM Charitable Trust is registered under section 12AA of the Income-tax Act, 1961. The
trust conducted a three day residential yoga camp among people on the occasion of International
yoga day for the advancement of yoga and charged ₹ 7,500 per person inclusive of stay and food.
The trust also conducted programmes for the advancement of education of persons aged above 65
years in metro cities. A nominal fee was charged for the same.
The trust received following donations during the month of September:-

(i) Solid Steels Pvt. Ltd. donated a RO water plant to the trust costing ₹ 75,000 and displayed its
company name in the RO system installed at the premises of the trust as “Donated by Solid Steels
Private Limited-trusted by all’.
(ii) Mr. Prasanna, a lawyer donated chairs to the trust costing ₹ 25,000 and ‘Love all’ is printed on all
chairs donated by him to the trust.
The following are the details of GST payment made by the firm-
(i) GST of ₹ 1,75,000 was paid for the purchase of motor vehicle for transportation of needy persons
(Seating capacity including driver is 13).
(ii) GST of ₹ 2,45,000 was paid for works contract services availed from Super Builders for
construction of Trust’s office building.
MM Charitable Trust also owns and manages a gurudwara. It rented the community hall located in the
precincts of the gurudwara for a rent of ₹ 8,500 per day for a marriage function. It also rented the
commercial shop located in the precincts of the gurudwara for a rent of ₹ 10,000 per month per shop.
You can assume that the Trust is registered under GST and all the transactions are intra - State only.
Conditions for availing ITC are fulfilled subject to the above- mentioned information.
Based on the information given above, choose the most appropriate answer for the following
questions [A to D]-
A. Which of the following activities conducted by trust is exempt from GST?

(a) Advancement of Yoga
(b) Advancement of education
(c) Both (a) and (b)
(d) Neither of the activities
B. Determine the value of taxable supply in respect of donations received by the Trust?
(a) ₹ 25,000
(b) ₹ 75,000
(c) ₹ 1,00,000
(d) Nil
C. Compute the amount of input tax credit that can be claimed by the Trust?
(a) ₹ 1,75,000
(b) ₹ 2,45,000
(c) ₹ 4,20,000
(d) Nil

D. Which of the following statements is/are correct under GST law in respect of gurudwara managed
by MM Charitable Trust?
(a) Renting of community hall is taxable while renting of commercial shop is exempt.
(b) Renting of community hall is exempt while renting of commercial shop is taxable.
(c) Both renting of community hall and renting of commercial shop are taxable.
(d) Both renting of community hall and renting of commercial shop are exempt.
2. [SUPPLY] Determine which of the following independent cases will be deemed as supply even if made
without consideration in terms of Schedule I of the CGST Act, 2017?
(i) AB & Associates transfers stock of goods from its Mumbai branch to Kolkata depot for sale of
such goods at the depot.
(ii) Mr. Raghuveer, a dealer of air-conditioners permanently transfers the motor vehicle free of
cost. ITC on said motor vehicle is blocked.
(iii) Mrs. Riddhi, an employee of Sun Ltd., received gift from her employer on the occasion of
Diwali worth ₹ 21,000.
(a) (i)
(b) (ii)
(c) (iii)
(d) Both (i) and (ii)
3. [ITC] PZY Ltd. is engaged in manufacturing of motor car. The company paid following amount of GST
to its suppliers against the invoices raised to it. Compute the amount of ineligible input tax credit
under GST law:-
S. No. Particulars GST Paid

(₹)
1. General insurance taken on cars manufactured by PZY Ltd. 1,00,00,000
2. Buses purchased for transportation of employees (Seating capacity 23) 25,00,000
3. Life and health insurance for employees under statutory obligation 6,00,000
4. Outdoor catering in Diwali Mela organized for employees 3,50,000
(a) ₹ 9,50,000
(b) ₹ 3,50,000
(c) ₹ 1,31,00,000
(d) ₹ 28,50,000
4. [TAX INVOICE] Which of the following statements is/are incorrect under GST law:-
(i) If the supplier has erroneously declared a value which is more than the actual value of goods
or services provided, then he can issue credit note for the same.
(ii) If the supplier declared some special discount which is offered after the supply is over, then
he cannot issue credit note under GST law for the discount offer.
(iii) If quantity received by the recipient is more than what has been declared in the tax invoice,
then supplier can issue debit note for the same.
(iv) There is no time limit to declare the details of Credit note in the return.
(a) (i),(ii) and (iv)
(b) (i) and (iv)
(c) (iv)
(d) (i) and (iii)
5. [TIME OF SUPPLY] Ms. Pearl is a classical singer. She wants to organize a classical singing function,
so she booked an auditorium on 10th August for a total amount of ₹ 20,000. She paid ₹ 5,000 as
advance on that day. The classical singing function was organized on 10th October. The auditorium
owner issued invoice to Ms. Pearl on 25th November amounting to ₹ 20,000. Pearl made balance
payment of ₹ 15,000/- on 30th November. Determine the time of supply in this case.
(a) Time of supply is 25th November for ₹ 20,000.
(b) Time of supply is 25th November for ₹ 5,000 & 30th November for ₹ 15,000.
(c) Time of supply is 10th August for ₹ 5,000 & 10th October for ₹ 15,000.
(d) Time of supply is 10th October for ₹ 20,000.

6. [E-WAY BILL] ABC Ltd. generated e-way bill on 12th February at 14.00 hrs. It used over- dimensional
cargo for a distance of 100 km. When the validity period of the e -way bill will expire?
(a) Midnight of 13th – 14th February
(b) Midnight of 17th – 18th February
(c) At 14.00 hrs. of 13th February
(d) At 14.00 hrs. of 14th February
Answer Key
1(A) (B) (C) (D) 2 3 4 5 6

(a) (b) (d) (b) (a) (b) (c) (c) (b)
7. [E-INVOICE] Determine in which of the following independent cases, e-invoicing is applicable?

(i) Harnam & Co., dealing in interior decoration products made supplies to various registered and
unregistered persons in the preceding financial year. The aggregate turnover of Harnam & Co. in
the preceding financial year is ₹ 60 crore.
(ii) Rich & Poor Bank, registered under GST has an aggregate turnover of ₹ 75 crore in the preceding
financial year.
Solution:
All registered businesses with an aggregate turnover (based on PAN) in any preceding financial year from
2017-18 onwards greater than ₹ 50 crore are required to issue e-invoices in respect of B2B supplies (supply
of goods and/or services to a registered person).
Further, following entities are exempt from the mandatory requirement of e-invoicing:-
(a) Special Economic Zone units
(b) Insurer or banking company or financial institution including NBFC
(c) GTA supplying services in relation to transportation of goods by road in a goods carriage
(d) Supplier of passenger transportation service
(e) Person supplying services by way of admission to exhibition of cinematograph films in multiplex screens
Thus, above mentioned entities are not required to issue e-invoices even if their turnover exceeds ₹ 50 crore
in the preceding financial year from 2017-18 onwards.
In view of the above mentioned provisions, the answer to the independent cases are as under:-
(i) The aggregate turnover of Harnam & Co. exceeds the threshold limit of aggregate turnover applicable for
e-invoicing. Thus, Harnam & Co. is mandatorily required to issue e-invoices in respect of supplies
made to registered persons.
(ii) Banking company is specifically exempt from mandatory requirement of e-invoicing even if the turnover
exceeds ₹ 50 crore in the preceding financial year. Thus, e- invoicing is not applicable to Rich & Poor
Bank.
8. [PAYMENT OF TAX] Mr. Nikunj, a supplier of goods, pays GST under regular scheme. He is not
eligible for any threshold exemption. He has made the following outward taxable supplies in the
month of August :-
₹
Intra State supplies of goods 6,00,000
Inter State supplies of goods 2,00,000
has also furnished following information in respect of purchases made by him from registered dealers
during August :-
Intra State purchase of goods 4,00,000
Inter State purchase of goods 50,000
Balance of ITC available at the beginning of the August:-

CGST 15,000
SGST 35,000
IGST 20,000

Note:
(i) Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively, on both inward and outward
supplies.
(ii) Both inward and outward supplies given above are exclusive of taxes, wherever applicable.
Compute the minimum GST payable by Mr. Nikunj in cash for the month of August.
Solution:
Computation of GST liability of Mr. Nikunj for the month of August
S.No. Particulars (₹) GST (₹)

(i) Intra-State supply of goods
CGST @ 9% on ₹ 6,00,000 54,000
SGST @ 9% on ₹ 6,00,000 54,000 1,08,000
(ii) Inter-State supply of goods
IGST @ 18% on ₹ 2,00,000 36,000
Particulars CGST @ 9% SGST @ 9% IGST @ 18%

(₹) (₹) (₹)
Opening ITC 15,000 35,000 20,000
Add: ITC on Intra-State purchases of goods 36,000 36,000
valuing ₹ 4,00,000
Add: ITC on Inter-State purchases of goods 9,000
valuing ₹ 50,000
Total ITC 51,000 71,000 29,000
Computation of minimum GST payable in cash
Particulars CGST @ 9% SGST @ 9% IGST @ 18%

(₹) (₹) (₹)
GST payable 54,000 54,000 36,000
Less: ITC credit of IGST to be first utilised (29,000)
towards payment of IGST
ITC of CGST to be utilised for payment of CGST (51,000)
and IGST in that order.
ITC of SGST to be utilised for payment of SGST (54,000)
and IGST in that order.
ITC of SGST to be utilised for payment of (7,000)-SGST
IGST, only after ITC of CGST has been utilised
fully.
Minimum GST payable in cash 3,000 Nil Nil
9. [VALUE OF SUPPLY] Namo Shankar Ltd., a registered supplier in Mumbai (Maharashtra), has supplied
goods to Narad Traders and Nandi Motors Ltd. located in Ahmedabad (Gujarat) and Pune
(Maharashtra) respectively. Namo Shankar Ltd. has furnished the following details for the current
month:
S. No. Particulars Narad Traders Nandi Motors

(₹) Ltd. (₹)
(i) Price of the goods (excluding GST) 10,000 30,000
(ii) Packing charges 500
(iii) Commission 500
(iv) Weighment charges 2,000
(v) Discount for prompt payment (recorded in 1,000
the invoice)

Items given in points (ii) to (v) have not been considered while arriving at price of the goods given in
point (i) above.
Compute the GST liability [CGST & SGST or IGST, as the case may be] of Namo Shankar Ltd. for the
given month. Assume the rates of taxes to be as under:
GST Rate of tax

Central tax (CGST) 9%
State Tax (SGST) 9%
Integrated tax (IGST) 18%
Make suitable assumptions, wherever necessary.
Note: The supply made to Narad Traders is an inter-State supply.
Solution:
Computation of GST liability
S. Particulars Narad Traders Nandi Motors
No. (₹) Ltd. (₹)
(i) Price of goods 10,000 30,000
(ii) Add: Packing charges (Note-1) 500
(iii) Add: Commission (Note-1) 500
(iv) Add: Weighment charges (Note-1) - 2,000
(v) Less: Discount for prompt payment (Note-2) - 1,000
Value of taxable supply 11,000 31,000
IGST payable @ 18% (Note-3) 1,980
CGST payable @ 9% (Note-4) 2,790
SGST payable @ 9% (Note-4) 2,790
Notes:
1. Incidental expenses, including commission and packing, charged by supplier to recipient of supply is
includible in the value of supply. Weighment charges are also incidental expenses, hence includible in the
value of supply [Section 15 of the CGST Act, 2017].
2. Since discount is known at the time of supply, it is deductible from the value in terms of section 15 of the
CGST Act, 2017.
3. Since supply made to Narad Traders is an inter-State supply, IGST is payable in terms of section 5 of the
IGST Act, 2017.
4. Since supply made to Nandi Motors Ltd. is an intra-State supply, CGST & SGST is payable on the same.
10. [REGISTRATION] Examine whether the liability to register compulsorily under section 24 of the CGST
Act, 2017 arises in each of the independent cases mentioned below:
(1) Heera, a supplier in Haryana, is exclusively engaged in supply of potatoes produced out of
cultivation of his own land, within Haryana and also outside Haryana.
(2) Aanya of Telangana is exclusively engaged in intra-State supply of toys. Its aggregate turnover in
the current financial year is ₹ 22 lakh.
Solution:
(1) Section 24 of the CGST Act, 2017 provides that persons making any inter-State taxable supply of goods
are required to obtain registration compulsorily under GST laws irrespective of the quantum of aggregate
turnover.
However, as per section 23 of the CGST Act, 2017, an agriculturist, to the extent of supply of
produce out of cultivation of land, is not liable to registration.
Heera is exclusively engaged in cultivation and supply of potatoes. Thus, he is not liable to registration
irrespective of the fact that he is engaged in making inter -State supply of goods. Further, Heera
will not be liable to registration, in the given case, even if his turnover exceeds the threshold limit.

(2) As per section 22 of the CGST Act, 2017 read with Notification No. 10/2019 CT dated 07.03.2019, a
supplier is liable to be registered in the State/Union territory from where he makes a taxable supply of
goods and/or services, if his aggregate turnover in a financial year exceeds the threshold limit.
The threshold limit for a person making exclusive intra-State taxable supplies of goods is as under:-
(a) ₹ 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland.
(b) ₹ 20 lakh for the States, namely, States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,
Telangana and Uttarakhand.
(c) ₹ 40 lakh for rest of India except persons engaged in making supplies of ice cream and other edible
ice, whether or not containing cocoa, Pan masala and Tobacco and manufactured tobacco
substitutes.
Since Aanya is making taxable supplies from Telangana, she will not be eligible for higher threshold
limit available in case of exclusive supply of goods. The applicable threshold limit for registration for
Aanya in the given case is ₹ 20 lakh. Thus, she is liable to get registered under GST.

GST By CA Suraj Agrawal SATC C.1
GST - PRACTICE TEST PAPER - SET C
Source: CA Intermediate - July 2021 Exam (New Syllabus)
1. [Supply + Value of Supply + ITC + Payment of Tax] X Electronics is a registered manufacturer of electrical
appliances. It made contract with dealers, that purchase of air conditioners of capacity 1.5 ton in the month of
March, 20XX of quantity of more than 50 units will entitle them for 10% discount. Inter-State supply made during
the month of March 20XX is ₹ 50,00,000.
Details of Intra-State supply:

Supply of Microwave Oven 15,00,000
Supply of Refrigerators with Stabilizers being a mixed supply, rate of GST on Refrigerator is 40,00,000
28% (14% CGST & 14% SGST), rate of GST on Stabilizer is 18% (9% CGST & 9% SGST)
Supply of Air Conditioners of capacity 1.5 Ton @ ₹ 50,000 per Air Conditioner 50,00,000
Intra-State inward supplies are:

Raw material 20,00,000
Paid Gym membership for employees 50,000
Truck purchased for transportation of goods 30,00,000
X Electronics made supply of Air Conditioners (capacity 1.5 ton) to only one dealer named Mr. L.
Gym membership for employees is not obligatory for X Electronics under any law.
Opening Balance of ITC is as under:

CGST: ₹ 58,000
SGST: ₹ 70,000
IGST: ₹ 10,00,000
Note:
(i) Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively for both inward and outward supplies except
where specifically provided.
(ii) Both inward and outward supplies are exclusive of taxes.
(iii) All the conditions for availing the ITC have been fulfilled.
Compute the Net GST payable in cash by X Electronics for the month of March, 20XX.

Answer:
Computation of net GST payable in cash by X Electronics for March 20XX
Particulars Amount CGST SGST IGST

(₹) (₹) (₹) (₹)
I. Intra-State supply
Supply of microwave oven 15,00,000 1,35,000 1,35,000
Supply of refrigerators with stabilizers 40,00,000 5,60,000 5,60,000
[Being mixed supply, the supply shall be treated as a supply
of that particular supply which attracts the highest rate of tax
and taxed accordingly. Thus, it will be taxed @ 14% CGST
and 14% SGST.]
Supply of 100 (₹ 50 lakh/ ₹ 50,000) air conditioners 45,00,000 4,05,000 4,05,000
[Since 100 air conditioners have been supplied, [₹ 50,00,000
discount @ 10% will be available] x 90%]
II. Inter-State supply @ 18% 50,00,000 9,00,000
Total outward tax liability 11,00,000 11,00,000 9,00,000
Less: Input Tax Credit (Refer Working Note below)
IGST credit first utilized towards payment of IGST. Remaining amount can be 1,00,000 9,00,000
utilized towards CGST and SGST in any order and in any proportion (IGST) (IGST)
CGST credit set off against CGST liability and SGST credit set off against SGST 5,08,000 5,20,000
liability as CGST credit cannot be utilized towards payment of SGST and (CGST) (SGST)
vice versa.
Net GST liability payable in cash 4,92,000 5,80,000 Nil
Working Note
Computation of ITC available with X Electronics
(₹) (₹) (₹)
Opening balance of ITC 58,000 70,000 10,00,000
Intra-State inward supplies
Raw material 20,00,000 1,80,000 1,80,000
Gym membership for employees 50,000 Nil Nil
[ITC on membership of a health and fitness centre is blocked if
there is no statutory obligation for the employer to provide the
same.]
Truck purchased for transportation of goods 30,00,000 2,70,000 2,70,000
[ITC on motor vehicles used for transportation of goods is not
blocked.]
Total ITC 5,08,000 5,20,000 10,00,000
Note: In the above answer, tax payable in cash has been computed by setting off the IGST credit against CGST liability.
However, since IGST credit can be set off against CGST and SGST liability in any order and in any proportion, the same
can be set off against CGST and/or SGST liabilities in different other ways as well. In all such cases, net CGST and net
SGST payable in cash will differ though the total amount of net GST payable (₹ 10,72,000) in cash will remain the same.
It has been presumed that there is one supply transaction for 100 ACs and thus, the discount has been given in
the invoice itself. Alternatively, even if there have been multiple supply transactions for the ACs during the
month and the discount has been given vide credit note, it has been presumed that the credit note has been
issued in March 20XX and all other conditions prescribed in section 15(3)(b) of the CGST Act, 2017 have been
complied with. Thus, the effect of the discount has been adjusted in the month of March 20XX itself.

2. [INPUT TAX CREDIT] A Ltd. procured the following goods in the month of March, 20XX.
Inward Supplies GST (₹)

(1) Goods used in constructing an additional floor of office building 18,450
(2) Goods given as free sample to prospective customers 15,000
(3) Trucks used for transportation of inputs in the factory 11,000
(4) Inputs used in trial runs 9,850
(5) Confectionery items for consumption of employees working in the factory 3,250
(6) Cement used for making foundation and structural support to plant and machinery 8,050
Compute the amount of ITC available with A Ltd. for the month of March 20XX by giving necessary explanations.
Assume that all the other conditions necessary for availing ITC have been fulfilled.
Answer:
Computation of amount of ITC available for the month of March 20XX
S. No. Particulars GST (₹)

(1) Goods used in construction of additional floor of office building [ITC on goods received by a Nil
taxable person for construction of an immovable property on his own account is blocked even if
the same is used in the course or furtherance of business. It has been assumed that cost of
construction of additional floor has been capitalized.]
(2) Goods given as free samples to prospective customers Nil

[ITC on goods disposed of by way of free samples is blocked.]
(3) Trucks used for transportation of inputs in the factory 11,000

[ITC on motor vehicles used for transportation of goods is not blocked.]
(4) Inputs used in trial runs 9,850

[Being used in trial runs, inputs are used in the course or furtherance of business and hence ITC
thereon is allowed.]
(5) Confectionary items for consumption of employees working in the factory Nil
[ITC on food or beverages is blocked unless the same is used in same line of business or as an
element of the taxable composite or mixed supply. Further, ITC on goods and/or service used
for personal consumption is blocked.]
(6) Cement used for making foundation and structural support to plant and machinery 8,050
[ITC on goods used for construction of plant and machinery is not blocked. Plant and
machinery includes foundation and structural supports through which the same is fixed to earth.]
Total eligible ITC 28,900
3. [Supply under GST] Explain the composite supply and mixed supply. If a trader launches a package sales for
marriage containing double bed, refrigerator, washing machine, wooden wardrobe at a single rate. He is issuing
invoice showing value of each goods separately. Whether this is case of mixed supply or composite supply.
Explain.
Answer:
Composite supply comprises of two or more taxable supplies of goods or services or both, or any combination thereof,
which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which
is a principal supply.
Mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in
conjunction with each other by a taxable person for a single price where such supply does not constitute a composite
supply.

Items such as double bed, refrigerator, washing machine and wooden wardrobe are not naturally bundled and also
the invoice for the supply shows separate values for each item i.e., the package is not supplied for a single
price.
Therefore, supply of such items as a package will neither constitute a composite supply nor a mixed supply.
Thus, the various items of the package will be treated as being supplied individually.
Note: The question specifies that the various items are supplied at a ‘single rate’. The “single rate” expression is
construed as single rate of tax in the above answer.
4. [Registration] P Ltd, a registered person provided following information for the month of M a r c h , 20XX:

Intra-State outward supply 8,00,000
Inter-State exempt outward supply 4,00,000
Turnover of exported goods 20,00,000
Payment of IGST 1,20,000
Payment of CGST and SGST 45,000 each
Payment of custom duty on export 40,000
Payment made for availing GTA services 3,00,000
GST is payable on Reverse Charge for GTA services.
Explain the meaning of aggregate turnover u/s 2(6) of the CGST Act and compute the aggregate turnover of P Ltd. for
the month of March, 20XX. All amounts are exclusive of GST
Answer
The term aggregate turnover means the aggregate value of:
(i) all taxable supplies
(ii) exempt supplies,
(iii) exports of goods or services or both and
(iv) inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but
excluding
(a) central tax, State tax, Union territory tax, integrated tax and cess.
(b) the value of inward supplies on which tax is payable by a person on reverse charge basis
Computation of aggregate turnover of P Ltd. for the month of

March, 20XX
Particulars Amount
(₹)
In terms of the definition of the aggregate turnover given above, the aggregate turnover of P Ltd.
has been computed as follows:
Intra-State outward supply 8,00,000
Inter-State exempt outward supply 4,00,000
Turnover of exported goods 20,00,000
Payment of IGST Nil
Payment of CGST and SGST Nil
Payment of customs duty on export 40,000
Payment made under reverse charge for availing GTA services Nil
Aggregate turnover 32,40,000

5. [Exemption] XYZ Pvt. Ltd. manufactures beauty soap with the brand name 'Forever beauty'. XYZ Pvt. Ltd. has
organized a concert to promote its brand. Ms. Mahima, its brand ambassador, who is a leading film actress, has
given a classical dance performance in the said concert.
The proceeds of the concert is ₹ 1,25,000.
(i) Explain with relevant provisions of GST, whether Ms. Mahima will be required to pay any GST.
(ii) What will be the answer if the proceeds of the concert is donated to a charitable organization?
Answer:
(i) Services by an artist by way of a performance in classical art forms of, inter alia, dance, are exempt from GST, if
the consideration charged for such performance is not more than ₹ 1,50,000.
However, such exemption is not available in respect of service provided by such artist as a brand ambassador.
Since Ms. Mahima is the brand ambassador of ‘Forever Beauty’ soap manufactured by XYZ Pvt. Ltd., the services
rendered by her by way of a classical dance performance in the concert organized by XYZ Pvt. Ltd. to
promote its brand will not be eligible for the above-mentioned exemption and thus, be liable to GST.
(ii) Even if the proceeds of the concert will be donated to a charitable organization, she will be liable to GST.
6. [GST Return] Explain who is required to furnish final return, time limit for filing of final return and late fee for
delay in filing final return.
Answer:
Every registered person who is required to furnish a return and whose registration has been surrendered or cancelled is
required to file a final return.
The final return has to be filed within 3 months of the:

(i) date of cancellation or
(ii) date of order of cancellation whichever is later.
Quantum of late fee for not filing the final return is as follows:
(i) ₹ 100 for every day during which such failure continues or
(ii) ₹ 5,000 whichever is lower.
An equal amount of late fee is payable under the respective SGST/UTGST Act as well.
7. [Registration] Examine the following cases and explain with reasons whether the supplier of goods is liable to
get registered in GST:
(i) Krishna of Himachal Pradesh is exclusively engaged in intra-State taxable supply of readymade suits. His
turnover in the current financial year from Himachal Pradesh showroom is ₹ 25 lakh. He has two more
showrooms one in Manipur & another in Sikkim with a turnover of ₹ 15 lakh and ₹ 18 lakh respectively in the
current financial year.
(ii) Ankit of Telangana is exclusively engaged in intra-State taxable supply of footwears. His aggregate turnover
in the current financial year is ₹ 25 lakh:
(iii) Aakash of Uttar Pradesh is exclusively engaged in intra-State supply of pan masala. His aggregate turnover
in the current financial year is ₹ 30 lakh.
Answer:
Every person engaged in making a taxable supply is required to obtain registration if his aggregate turnover exceeds ₹ 20
lakh in a financial year. An enhanced threshold limit for registration of ₹ 40 lakh is available to persons engaged
exclusively in intra-State supply of goods in specified States.
(i) The applicable threshold limit for registration gets reduced to ₹ 10 lakh in case a person is engaged in making
taxable supply from a Special Category State.
Since Krishna is making taxable supply from Manipur – a Special Category State, the applicable threshold
limit will get reduced to ₹ 10 lakh. Thus, it is liable to be registered under GST as its aggregate turnover exceeds
the said threshold limit.

(ii) Since Ankit is exclusively engaged in intra-State supply of goods in Telangana, which is not a specified State for
enhanced threshold limit, the applicable threshold limit for registration is ₹ 20 lakh.
Thus, Ankit is liable to be registered under GST as its aggregate turnover exceeds the said threshold limit.
(iii) Though the enhanced threshold limit for registration of ₹ 40 lakh is available to Uttar Pradesh, the same will not be
applicable if the person is engaged in supply of pan masala.
In view of the same, the applicable threshold limit for Aakash is ₹ 20 lakh. Thus, it is liable to be registered under
GST as its aggregate turnover exceeds the said threshold limit.
8. [GST Practitioner] Who can be registered as Goods and Service Tax Practitioners under Section 48 of the CGST
Act?
Answer:
Following persons can be registered as Goods and Service Tax Practitioners:
Any person who,
(i) is a citizen of India;
(ii) is a person of sound mind;
(iii) is not adjudicated as insolvent;
(iv) has not been convicted by a competent court;
and satisfies any of the following conditions (any one), namely that:
(a) he is a retired officer of the Commercial Tax Department of any State Government or of the CBIC, who,
during his service under the Government, had worked in a post not lower in rank than that of a
Group-B gazetted officer for a period of not less than 2 years; or
(b) he has been enrolled as a sales tax practitioner or tax return preparer under the existing law for a period
of not less than 5 years;
(c) He must have passed:

i. a graduate or postgraduate degree or its equivalent examination having a degree in Commerce,
Law, Banking including Higher Auditing, or Business Administration or Business Management from
any Indian University established by any law for the time being in force; or
ii. a degree examination of any Foreign University recognized by any Indian University as
equivalent to the degree examination mentioned in sub-clause (i); or
iii. any other examination notified by the Government, on the recommendation of the Council, for this
purpose; or
iv. has passed any of the following examinations, namely
a) final examination of the Institute of Chartered Accountants of India; or
b) final examination of the Institute of Cost Accountants of India; or
c) final examination of the Institute of Company Secretaries of India

GST By CA Suraj Agrawal SATC D.1
GST - PRACTICE TEST PAPER - SET D
Source: CA Intermediate - July 2021 Exam (Old Syllabus)
1. [VALUE OF SUPPLY & ITC] Kaira Air Ltd. located in Anand, Gujarat is engaged in manufacturing of Air
Coolers and Air Purifiers. They supply goods all over India and their aggregate turnover during F.Y. 2019-20
was ₹ 125 lakh. The details of various activities undertaken during the month of January 2021 are as
follows:

(i) Outward supplies made during the month: 14,00,000
(a) Within Gujarat 11,00,000
(b) Outside Gujarat 3,00,000
(ii) On 5th January 2021, the company had issued 10 exchange vouchers @ 1,000 each
of which can be exchanged/redeemed against purchase of Air cooler worth ₹ 10,000
each at any of the company's outlets in the State of Gujarat. Out of the above, 7
vouchers were encashed during the month of January 2021 & rest 3 were encashed
during the month of February 2021.
(iii) Purchase of material within Gujarat which includes material worth ₹ 3,00,000 8,00,000
purchased from M/s. Kalpana Industries registered as a Composition dealer.
(iv) In respect of few invoices worth ₹ 1,00,000 raised during the month of October 2020,
the stipulated condition was to pay the dues within 1 month from the date of raising
of invoices, otherwise interest @ 24% was payable on supplies made against such
invoices. The buyers failed to pay the dues within the stipulated time and made the
payment together with interest of ₹ 11,200 during the month of January 2021.
(v) Send 10 managers for 15 days training course organized by IIM Ahmedabad, Gujarat 50,000
on 5th January 2021. The IIM provides Participation Certificates at the end of the
course.
The Rates of GST applicable on various supplies are as follows:

Nature of Supply CGST SGST IGST
Goods 6% 6% 12%
Services 9% 9% 18%
Composition Supplies 2.5% 2.5% -
Opening balances of input tax credit as on 1st January, 2021 were as follows:
CGST (₹) SGST (₹) IGST (₹)
4,000 10,000 5,000
All the figures mentioned above other than S. No. (iv) are exclusive of taxes.
Both Inward & Outward supplies within the State of Gujarat are Intra State supplies and outside Gujarat
supplies are Inter State Supplies.
Calculate the amount of tax payable in cash by Kaira Air Ltd. for the month of January 2021. Brief and
suitable notes should form part of your answer.

Answer:
Computation of tax payable in cash by Kaira Air Ltd. for January 2021
Particulars Amount CGST SGST IGST
(₹) (₹) (₹) (₹)
I. Output tax
Outward supplies within Gujarat 11,00,000 @ 6% 66,000 66,000
Outward supplies outside Gujarat 3,00,000 @ 12% 36,000
Supply of 10 exchange vouchers 10,000 @ 6% 600 600
[Since supply is identifiable at the time of issue of
the 10 vouchers, the time of supply is the date of
their issue and are thus the same are taxable in
January itself irrespective of the time of their
redemption.]
Interest for delayed payment [Includible in value 10,000 1,200
and taxable when the same is received, i.e. in [11,200 x 100/112]
January.] [Since inclusive of
GST]
Total output tax liability (A) 66,600 66,600 37,200
II. Input tax credit
Opening balance 4,000 10,000 5,000
Purchase of material within Gujarat [No credit on 5,00,000 30,000 30,000
material purchased from composition dealer as he [₹ 8,00,000 –
cannot collect any tax from the recipient on ₹ 3,00,000] @ 6%
supplies made by him.]
Training course organized by IIM Gujarat 50,000 @ 9% 4,500 4,500
[Not exempt. Short duration programmes offered
by IIMs for which participation certificate is
awarded are not ‘qualification recognized by law’.]
Total ITC (B) 38,500 44,500 5,000
Net GST payable in cash = (A) - (B) 28,100 22,100 32,200
[IGST credit be first utilized for payment of IGST liability and then for payment
of CGST and SGST liability in any order and in any proportion. After
exhausting IGST credit, CGST and SGST credit to be utilized. ITC of CGST
cannot be utilized for payment of SGST and vice versa.]
Note:
1. It has been assumed that interest for delayed payment has been collected in respect of inter-State sale of
goods. However, interest on delayed payment can also be assumed in respect of intra-State sale.
2. [IMPORTANT] Input Tax Credit: SRI Petrol Pump is a licensed petrol pump of M/s. IOC Corporation and
engaged in the sale of (a) petrol (b) HSD & (c) Mobil.
During the month of March 20XX, total sales of M/s. SRI Petrol Pump is as follows:
Item Sale Value (₹)
Petrol 7,00,000
Diesel 15,00,000
Mobil 3,00,000
Details of Purchases of M/s. SRI Petrol Pump during March 20XX are as follows:
Item Purchase Value
Petrol 5,00,000
Diesel 16,00,000
Mobil 2,00,000
[All the figures above are exclusive of GST and rate of GST is 9% CGST and 9% SGST on applicable
items.]

Other Information:
(i) Every month M/s. IOC Corporation charges license fees from SRI Petrol Pump for grant of license and
the same is charged based on total quantity of sale of all the products. During the month of March
20XX, the amount of License fees charged by IOC Corporation was ₹ 1,00,000 plus CGST & SGST @
9% each.
(ii) Administrative Expenses incurred by SRI Petrol Pump was ₹ 50,000 on which CGST & SGST @ 6%
each were paid.
You are required to calculate the amount of taxable supply under GST, available input tax credit and net
liability of SRI Petrol Pump for the month of March 20XX. Kindly provide appropriate reason wherever
necessary.
Answer:
Computation of value of taxable supply and net GST liability of SRI Petrol Pump for March, 20XX
Particulars Amount
(₹)
Supply of Petrol Levy of GST on petrol and diesel has been deferred and thus, being not -
Supply of Diesel leviable to tax, the supply of the same is non-taxable supply. -
Supply of Mobil @ 9% 3,00,000
Value of taxable supply 3,00,000
Tax liability CGST SGST
Total outward tax liability [₹ 3,00,000 x 9%] 27,000 27,000
Less: Input Tax Credit (Refer Working Note below) 19,440 19,440
Net GST liability payable in cash 7,560 7,560
Working Note
Computation of ITC available with SRI Petrol Pump
Particulars Amount CGST SGST
(₹) (₹) (₹)
Inward supply of Petrol Being Non-taxable supply, no GST is 5,00,000 - -
Inward supply of Diesel payable thereon and hence, no ITC. 16,00,000 - -
Inward supply of Mobil Being used in the course or furtherance 2,00,000 18,000 18,000
License fees @ 9% of business, ITC is available 1,00,000 9,000 9,000
Administrative expenses @ 6% 50,000 3,000 3,000
Less: Ineligible ITC attributable to exempt supply [License fee and (10,560) (10,560)
administrative expenses are used for making both taxable supply of mobil
and exempt supply of petrol and diesel, hence ITC attributable to exempt
supply will be reversed as under:
Ineligible ITC = Common ITC x Exempt supply/ Aggregate turnover
Common ITC = ₹ 9,000 + ₹ 3,000 = ₹ 12,000
Exempt supply = ₹ 7,00,000 + ₹ 15,00,000 = ₹ 22,00,000
Aggregate turnover = ₹ 7,00,000 + ₹ 15,00,000 + ₹ 3,00,000 = ₹ 25,00,000
Ineligible ITC = 12,000 x 22,00,000/25,00,000 = ₹ 10,560
Eligible ITC 19,440 19,440
3. [Important] SUPPLY UNDER GST: M/s. Chand is a manufacturer of Paper products having factory at Pune,
Maharashtra. M/s. Kela and M/s. Bela of Mumbai, Maharashtra are appointed as agents to sell the products
on behalf of M/s. Chand with the conditions that both of them guarantee the realization of payment from
buyers.
Both M/s. Kela and M/s. Bela provide short-term borrowing facilities to buyers for timely payment of dues
against supplies made to them and for this they charge interest from the ultimate buyer. While M/s. Kela
raises invoices in the name of M/s. Chand and M/s. Bela raises invoices in its own name.
In light of provisions contained in Para 3 of Schedule I of CGST Act, kindly explain treatment of interest
charged by M/s. Kela and M/s. Bela in above mentioned cases.

Answer:
M/s. Kela and M/s. Bela are del credere agents (DCA) of M/s. Chand as they guarantee the payment to the
supplier.
A DCA falls under the ambit of ‘agent’ under Para 3 of Schedule I of the CGST Act, 2017 if the invoice for supply
of goods is issued by the DCA in its own name.
However, if the invoice for supply of goods is issued by the supplier to the customer, either himself or through
DCA, the DCA is not an ‘agent’ in terms of Para 3 of Schedule I. Thus, while M/s. Bela is an agent of M/s.
Chand in terms of Para 3 of Schedule I, M/s. Kela is not.
Where the DCA is not an agent under Para 3 of Schedule I, the temporary short-term loan being provided by DCA
to the buyer is a supply of service by the DCA to the recipient on principal-to-principal basis and is an
independent supply. Said supply is specifically exempt from tax. Thus, interest charged by M/s. Kela is an
independent supply and is exempt from tax.
Where the DCA is an agent under Para 3 of Schedule I, the temporary short -term credit being provided by DCA to
the buyer no longer retains its character of an independent supply and is subsumed in the supply of the goods
by the DCA to the recipient.
The value of the interest charged for such credit is included in the value of supply of goods by DCA to the
recipient. Thus, interest charged by M/s. Bela will be included in the value of goods supplied by it.
4. [Payment of Tax] MNI Ltd. provides following details for the month of March 20XX:
(i) While filling GST return of March 20XX on 20-04-20XX(within the prescribed due date), they came to
know that one bill of January 20XX consisting tax amount of ₹ 50,000 was not considered while filling
return for the month of January 20XX (Return was filed on 20-02-20XX, within the prescribed due date).
(ii) MNI Ltd. has paid the above shortfall of ₹ 50,000 of January 20XX, through GSTR-3B for the month of
March 20XX (payment through cash ledger was ₹ 30,000 and payment through credit ledger was
₹ 20,000).
MNI Ltd. got a notice regarding interest payment u/s 50 of the CGST Act, 2017. MNI Ltd. assumed that
they paid self-assessed tax and both returns were also filed timely so they were not liable for payment
of interest. They seek your opinion regarding whether,
(a) They are liable to pay interest u/s 50 of the CGST Act.
(b) If they had filed return of January 20XX on 20-04-20XX (Self assessed tax also paid on 20-04-20XX
of ₹ 50,000 (payment through cash ledger was ₹ 30,000 and payment through credit ledger was
₹ 20,000) then also they are liable to pay interest u/s 50 of the CGST Act.
Answer:
(i) As per section 50 of the CGST Act, 2017, in case of delayed payment of tax, interest @ 18% p.a. is payable
from the date following the due date of payment to the actual date of payment of tax.
Further, the interest on tax payable in respect of supplies made during a tax period and declared in the return
for the said period furnished after the due date is payable on the net tax liability paid through electronic
cash ledger.
In the given case, MNI Ltd. has defaulted in making the payment of ₹ 50,000 in the return of January 20XX.
Therefore, it will be liable to pay interest @ 18% p.a. from 21.02.20XX till the date of payment.
Further, since the return for the month of January, 20XX has been filed on the due date, MNI Ltd. will
be liable to pay interest on the gross tax liability i.e., ₹ 50,000 and not on net tax liability paid in cash.
(ii) If MNI Ltd. had filed the return for the month of January, 20XX on 20.04.20XX, i.e. after the prescribed due
date and the tax of ₹ 50,000 is also paid on 20.04.20XX, interest will be payable on net tax liability paid
through electronic cash ledger i.e., ₹ 30,000.

5. [REGISTRATION] Answer the following individual independent cases with reference to the provisions of
registration under the CGST Act, 2017 and the rules made thereunder:
(i) Govardhan is an agriculturist engaged in supply of produce out of cultivation of land. He utilizes
services of Manu who is a commission agent as per the Agricultural Produce Marketing Committee Act.
Turnover of Manu is above the threshold limit prescribed. Manu wants to know whether he is liable to
get registered under GST Act or not.
(ii) Anubhav is dealing in supply of taxable goods and services in the state of Gujarat. His turnover from
intra-State supply of taxable goods is ₹ 16 lakh and inter-state supply of taxable services is ₹ 22 lakh.
He is of the opinion that his aggregate turnover is within the limit so he is not required to get
registered. Advise him.
Answer:
(i) A commission agent under APMC Act is not liable to be compulsorily registered since it provides exempt
services of sale/purchase of agricultural produce on behalf of an agriculturist being a non-taxable person as
he supplies produce out of cultivation of land.
Moreover, such commission agents are otherwise also exempt from registration since any person engaged
exclusively in the business of supplying exempt services is not liable to registration.
Therefore, Manu is not liable to get registered under GST law.
(ii) A supplier who is supplying both goods and services is required to obtain registration in the State (other than
special category States) from where he makes a taxable supply if his aggregate turnover exceeds
specified threshold limit of ₹ 20 lakh in a financial year.
In the given case, the aggregate turnover of goods and services supplied by Anubhav (₹ 38 lakh) exceeds the
threshold limit and thus, he is required to obtain registration.
6. [REGISTRATION] Zen Pvt. Ltd. is a dealer in goods having registered office at Noida, Uttar Pradesh and
shops are located at Noida, Uttar Pradesh and Chennai, Tamil Nadu.
Details of various supplies both inward and outward undertaken by them during March 20XX quarter are
given in the table below:
All the values given in the table are inclusive of GST (CGST/SGST/ UTGST/IGST), wherever applicable.
Applicable IGST Rate is 5% and CGST & SGST @ 2.5% each, on inward & RCM supplies as well.

(i) Export of goods to China from Noida 20,00,000
(ii) Goods supplied to SEZ located at Delhi from Noida 15,00,000
(iii) Supply of goods directly to customer from location of job worker at Lucknow (U.P.) 2,00,000
after completion of job work. (Intra state)
(iv) Sales from Chennai Shop (Inter State) 11,00,000
(v) Local sales at Noida (Intra State) 25,00,000
(vi) Services of transport availed from M/s. ABC Transport (Inter State) 3,00,000
(vii) Commission paid to Mr. Nagar, Sales Executive which is not part of the terms of 50,000
employment. (Intra State)
Calculate the aggregate turnover of Zen Pvt. Ltd. for March 20XX quarter. Brief and suitable notes should
form part of your answer.

Answer:
Computation of aggregate turnover of Zen Pvt. Ltd.
[Excluding GST]
(i) Exports of goods to China from Noida [Includible in the aggregate turnover] 20,00,000
(ii) Goods supplied to SEZ located at Delhi from Noida 15,00,000
(iii) Supply of goods directly to customer from location of job worker – includible in 1,90,476
the aggregate turnover of Zen Pvt. Ltd. (₹ 2,00,000 x 100/105) (₹ 2,00,000 x 100/105)
(iv) Sales from Chennai shop (Inter-State) 10,47,619
[Includible in the aggregate turnover. Further, IGST be excluded from the [₹ 11,00,000 × 100/105]
same]
(v) Local sales at Noida (Intra-State) 23,80,952
[Includible in the aggregate turnover. Further, CGST and SGST be excluded [₹ 25,00,000 × 100/105]
from the same]
(vi) Services of transport availed [Inward supplies are not included Nil
(vii) Commission paid to sales executive in aggregate turnover] Nil
Total aggregate turnover 71,19,047
 It has been assumed that exports of goods have been made without payment of tax.
 It has been assumed that supply of goods to SEZ have been made without payment of tax.
7. [REGISTRATION] M/s. S Corporation has made default in furnishing returns. It has not filed returns from the
month of June 2020. The proper officer cancelled its registration with effect from 1st January 2021 by an
order dated 1st January 2021. It applied for revocation of cancellation of registration and the order for
revocation of cancellation of registration was passed on 1st March 2021. What are the provisions regarding
filing returns before making such an application of revocation of cancellation of registration for the given
case?
Answer:
Where the registration is cancelled suo-moto by the appropriate officer, the registrant seeking revocation of the
order, has to apply for the revocation of cancellation within 30 days from the date of service of the order of
cancellation of registration.
Further, he has to furnish all the returns due till the date of such cancellation before the application for revocation
can be filed.
Further, he should also pay any amount due as tax along with any amount payable towards interest, penalty, and
late fee in respect of the said returns.
Thus, in the given case, before making an application for revocation of cancellation of registration, M/s S.
Corporation should file all returns due for the period from June 2020 till 1 st January 2021.
8. [SUPPLY UNDER GST] List down the activities/transactions specified under schedule III of the GST Act as
non- supplies or 'Negative List'.
Answer:
The activities/transactions specified under Schedule III of the CGST Act as non-supplies or “Negative List”
are as follows:––
(i) Services by an employee to the employer in the course of or in relation to his employment.
(ii) Services by any court or Tribunal established under any law for the time being in force.
(iii) Functions performed by the Members of Parliament, Members of State Legislature, Members of Panchayats,
Members of Municipalities and Members of other local authorities.
(iv) Duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that
capacity.
(v) Duties performed by any person as a Chairperson or a Member or a Director in a body established by the
Central Government or a State Government or local authority and who is not deemed as an employee before
the commencement of this clause.
(vi) Services of funeral, burial, crematorium or mortuary including transportation of the deceased.
(vii) Sale of land and, subject to paragraph 5(b) of Schedule II, sale of building.
(viii) Actionable claims, other than lottery, betting and gambling.
9. [Tax Invoice] To whom mandatory E-invoicing is applicable?
Answer:
W.e.f 01/04/2021; Mandatory e-invoicing is applicable to all notified registered businesses (except specified class of
persons) with an aggregate turnover greater than ₹ 50 crore (based on PAN) in any preceding financial year from
2017-18 onwards.
10. [Tax Invoice] Which entities are exempt from mandatory requirement of E-invoicing?
Answer:
The following entities are exempt from mandatory requirement of e-invoicing:-
(a) Special Economic Zone units
(b) Insurer or banking company or financial institution including NBFC
(c) GTA supplying services in relation to transportation of goods by road in a goods carriage
(d) Supplier of passenger transportation service
(e) Person supplying services by way of admission to exhibition of cinematograph films in multiplex screens
11. [Tax Invoice] What are the advantages of E-Invoicing?
Answer:
The advantages of e-invoicing are as follows:-
(i) Auto-reporting of invoices into GST returns and auto-generation of e-way bill (wherever required)
(ii) Reduction in transcription errors
(iii) Elimination of fake invoices
(iv) Reduction in tax evasion
(v) Reduction in disputes among transacting parties
(vi) Improvement in payment cycles
(vii) Reduction in processing costs
(viii) Eco-friendly as it eliminates paper
12. [Tax Invoice] Under what circumstances, a registered person is required to issue a "Bill of Supply"?
Answer:
A registered person is required to issue a “bill of supply” in the following two circumstances:-
(a) In case of supplying exempted goods and/or services or
(b) In case of payment of tax under composition levy.
13. [E-Way Bill] What are the documents required to be carried by a person-in-charge of a conveyance?
Answer:
The documents required to be carried by a person-in-charge of a conveyance are as under:-
(i) Tax invoice; or
QR code with embedded IRN may be produced electronically in case of e- invoice; or
bill of supply; or
delivery challan; as the case may be
(ii) a copy of the e-way bill in physical form; or

e-way bill number in electronic form; or
e-way bill number mapped to a RFID embedded on to the conveyance [except in case of rail or air or vessel].
14. [Tax Invoice] What are the circumstances under which "Debit Notes" needs to be issued by a taxable
person?
Answer:
The circumstances under which debit note needs to be issued by a taxable person are:-
(a) The taxable value declared in the invoice is less than the actual value of the supply;
(b) The tax charged in the invoice is less than the actual tax payable in respect of the supply;
(c) The quantity received by the recipient is more than what has been declared in the tax invoice and the customer
choses to retain the same.

Class Notes

GST By CA Suraj Agrawal SATC E.1
GST - PRACTICE TEST PAPER - SET ‘E’
Source: CA Intermediate Exam - RTP (May 2021 Exam)
1. [Exemption + ITC + Tax Invoice] M/s Aditi & Co, a partnership firm registered under GST, is
undertaking various Government projects.
The firm has let out on hire the following vehicles-
(i) A motor vehicle to carry more than 15 passengers to a State Government Electricity
Department
(ii) An electric motor vehicle to carry more than 12 passengers to Local Municipal Corporation
(iii) An electric motor vehicle to carry up-to 12 passengers to State Transport Undertaking
The firm provided the following additional information for the month of October:
(i) Works contract services were availed for construction of immovable property being plant and
machinery, where value of GST component was ₹ 1,10,000.
(ii) GST amounting to ₹ 70,000 was paid on account of demand of the Department due to fraud in
returns filed.
(iii) Goods valuing ₹ 10,00,000, (GST on the same ₹ 1,00,000) were received 180 days ago (invoice
also issued on the date of receipt of supply) for which payment has been made till date to an
extent of ₹ 4,00,000 towards value, ₹ 40,000 towards tax.
The firm made two independent outward supplies in which value of supply was understated in one
case by ₹ 75,000 and overstated by ₹ 45,000 in the other case.
The firm received certain supply of goods from registered persons on which tax was payable under
reverse charge basis.
All the amounts given above are exclusive of taxes, wherever applicable. All transactions
referred to above are intra-State. All the conditions for availing ITC have been fulfilled subject to
the information given above.
From the information given above, choose the most appropriate answer for questions given
below:-
A. In respect of vehicles let out on hire by the firm, services that are exempt from GST are
(i) Letting on hire a motor vehicle to State Electricity Department (>15 passengers)
(ii) Letting on hire an electric vehicle to Local Municipality (> 12 passengers)
(iii) Letting on hire an electric vehicle to State Transport Undertaking (<12 passengers)
(a) (i)
(b) (ii)
(c) (i) and (iii)
(d) (ii) and (iii)
B. Determine the amount of eligible ITC to be claimed by the firm for the month of October.
(a) ₹ 70,000
(b) ₹ 1,10,000
(c) ₹ 1,80,000
(d) Nil
C. Determine the amount of ITC to be added to the output tax liability.

(a) ₹40,000
(b) ₹ 60,000
(c) ₹ 1,00,000
(d) Nil

D. Which of the following is correct in respect of document to be issued by the firm for
understatement and overstatement of invoice value?
(i) Debit note is to be issued for ₹ 75,000.
(ii) Credit note is to be issued for ₹ 75,000.
(iii) Debit note is to be issued for ₹ 45,000.
(iv) Credit note is to be issued for ₹ 45,000.
(a) i & iii
(b) ii & iii
(c) i & iv
(d) ii & iv
E. Which of the following statements is correct in respect of supply of goods received by the firm
which are taxable under reverse charge?
(i) Firm shall issue a payment voucher at the time of making payment to supplier.
(ii) Firm shall issue invoice for supply of goods.
(iii) Firm shall issue receipt voucher at the time of making payment to supplier.
(iv) Firm is not required to issue any document in respect of such supply.
(a) i
(b) i & ii
(c) ii & iii
(d) iv
2. [Exemption] Sahil, a resident of Delhi, is having a residential property in Vasant Vihar, Delhi which
has been given on rent to a family for ₹ 50 lakh per annum. Determine whether Sahil is liable to pay
GST on such rent.
(a) Yes, as services by way of renting is taxable supply under GST.
(b) No, service by way of renting of residential property is exempt.
(c) No, service by way of renting of residential property does not constitute supply.
(d) Sahil, being individual, is not liable to pay GST.
3. [Basic of GST] Various taxes have been subsumed in GST to make one nation one tax one market
for consumers. Out of the following, determine which taxes have been subsumed in GST.
(i) Basic customs duty levied under Customs Act, 1962
(ii) Taxes on lotteries
(iii) Environment tax
(a) (ii)
(b) (ii) and (iii)
(c) (iii)
4. [Supply] 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)
5. [Registration] Mr. Z of Himachal Pradesh starts a new business and makes following supplies in
the first month-
(i) Intra-State supply of taxable goods amounting to ₹ 17 lakh
(ii) Supply of exempted goods amounting to ₹ 1 lakh
(iii) Inter-State supply of taxable goods amounting to ₹ 1 lakh.
Whether he is required to obtain registration?
(a) Mr. Z is liable to obtain registration as the threshold limit of ₹ 10 lakh is crossed.
(b) Mr. Z is not liable to obtain registration as he makes exempted supplies.
(c) Mr. Z is liable to obtain registration as he makes the inter-State supply of goods.
(d) Mr. Z is not liable to obtain registration as the threshold limit of ₹ 20 lakh is not crossed.
ANSWER KEY
1(A) 1(B) 1(C) 1(D) 1(E) 2 3 4 5
(b) (b) (b) (c) (a) (b) (a) (c) (c)

6. [Composition Scheme] “Wedding Bells”, a wedding photographer, has commenced providing pre-
wedding shoot services in Jaipur from the beginning of current financial year 2020-2021. It has
provided the following details of turnover for the various quarters till December, 20XX:-
S. No. Quarter Amount
(₹ in lakh)
1 April, 20XX - June, 20XX 20
2 July, 20XX - September, 20XX 30
3 October, 20XX - December, 20XX 40
You may assume the applicable tax rate as 18%. Wedding Bells 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?
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. Wedding Bells 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, Wedding Bells 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.
Further, Wedding Bells becomes eligible for the registration when the aggregate turnover exceeds ₹ 20 lakh
(the threshold limit of obtaining registration). While registering under GST, Wedding Bells 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 this Act.
Thus, for determining the turnover of the State for payment of tax under composition scheme for services,
turnover of April, 20XX – June, 20XX quarter [₹ 20 lakh] shall be excluded. On next ₹ 30 lakh [turnover of
July, 20XX – September, 20XX 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 Wedding Bells’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, 20XX – June, 20XX quarter), are
included.
By the end of July, 20XX – September, 20XX quarter, the aggregate turnover reaches ₹ 50 lakh.
Consequently, the option to avail composition scheme for services shall lapse by the end of July, 20XX –
September, 20XX 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. Quarter GST rate Turnover GST payable
No. [CGST + SGST] (₹ in lakh) (₹ in lakh)
1 April, 20XX – June, 20XX - 20 -
2 July, 20XX – September, 20XX 6% 30 1.8
3 October, 20XX – December, 20XX 18% 40 7.2

7. [Supply + Reverse Charge] Mr. Priyam, director of Sun Moon Company Private Limited, provided
service to the company for remuneration of ₹ 1,25,000. Briefly answer whether GST is applicable in
the below mentioned independent cases? If yes, who is liable to pay GST?
(i) Mr. Priyam is an independent director of Sun Moon Company Private Limited and not an
employee of the company.
(ii) Mr. Priyam is an executive director, i.e. an employee of Sun Moon Company Private Limited. Out
of total remuneration amounting to ₹ 1,25,000, ₹ 60,000 has been declared as salaries in the
books of Sun Moon Company Private Limited and subjected to TDS under section 192 of the
Income-Tax Act (IT Act). However, ₹ 65,000 has been declared separately other than salaries in
the Sun Moon Company Private Limited’s accounts and subjected to TDS under section 194J
of the IT Act as professional services.
Solution:
(i) As per Para I of Schedule III of the CGST Act, services by an employee to the employer in the course of
or in relation to his employment are non-supplies, i.e. they are neither supply of goods nor supply of
services. Services provided by the independent directors who are not employees of the said
company to such company, in lieu of remuneration as the consideration for the said services,
are clearly outside the scope of Schedule III of the CGST Act and are therefore taxable. Further,
such remuneration paid to the directors is taxable in hands of the company, on reverse charge basis.
Thus, GST is applicable in this case and Sun Moon Company Private Limited is liable to pay
GST.
(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 III.
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 III 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, ₹ 60,000 declared as salaries in the books of Sun Moon Company
Private Limited 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 III.
Further, ₹ 65,000 declared separately other than salaries in the Sun Moon Company Private Limited’s
accounts and subjected to TDS under section 194J of the IT Act as professional services is treated as
consideration for providing services which is outside the scope of Schedule III and is
therefore, taxable. The recipient of the said services i.e. the Sun Moon Company Private
Limited, is liable to discharge the applicable GST on it on reverse charge basis.
8. [Based on Recent Amendments] – GST RETURN

(a) Miss Kashi is a registered intra-State supplier of goods in Haryana. During the months of August
and September, she was out of station on a religious pilgrimage with her family for 55 days.
Thus, no business transaction was made during August. Miss Kashi is of the opinion that as
there is no transaction, there is no need to file monthly return [GSTR-3B] for the month of
August. However, her tax consultant has advised her to file nil GSTR-3B. Whether the advice
given by tax consultant is correct? Explain.
(b) Will your answer in (a) change, if Miss Kashi has placed an order for some purchases during
August over her mobile phone, which has been received in her premises and she intends to
take input tax credit on the same?
(c) Assuming in (a) above, Miss Kashi does not have internet facility in her mobile and there is no
facilitation centre notified by the Commissioner, whether no return is required to be filed in the
absence of means to file return? Explain.

Solution:
(a) The advice given by tax consultant is correct.
Under GST law, filing of GSTR-3B is mandatory for all normal and casual taxpayers, even if there is no
business activity in any particular tax period. For such tax period(s), a Nil GSTR-3B is required to be
filed.
Therefore, in the given case, even though Miss Kashi was out of station on a religious pilgrimage with her
family for 55 days and thus, could not do any business transaction during the month of August, she is still
required to file Nil GSTR-3B for that month.
(b) Nil GSTR-3B means that the return has nil or no entry in all its Tables. Since in the present
case, Miss Kashi has received certain purchases, she cannot file Nil GSTR-3B, as the said
purchases will need to be disclosed in the “Table for Eligible ITC” in GSTR-3B.
Thus, Miss Kashi is required to file monthly return, GSTR-3B for the month of August.
(c) GSTR-3B can be submitted electronically on the common portal, either directly or through a
Facilitation Centre notified by the Commissioner. Further, a Nil GSTR-3B can be filed through an SMS
using the registered mobile number of the taxpayer.
Thus, Miss Kashi is required to file Nil GSTR-3B for the month of August through an SMS using
her registered mobile number even though there is no internet facility in her mobile and no
Facilitation Centre notified by the Commissioner.
9. [Based on Recent Amendments] TAX INVOICE - Bali Limited, a registered taxpayer, provides security
services to registered persons from Mumbai office and Delhi office. The aggregate turnover of
Mumbai office and Delhi office in the preceding financial year (FY 2020-21) is ₹ 30 crore and ₹ 25
crore respectively. For the month of April in the current financial year (FY 2021-22), Bali Limited
prepares duplicate invoices and does not issue e-invoice as it is of the view that it’s aggregate
turnover does not cross the threshold limit to make it liable for issuing e- invoices.
Briefly explain whether the view taken by Bali Limited is correct in law? Also explain the
advantages of e-invoicing, if any.
Solution:
The view taken by Bali Limited is not correct in law.
W.e.f. 01/04/2021, All notified registered businesses (except specified class of persons) with an aggregate
turnover (based on PAN) in the preceding financial year greater than ₹ 50 crore are required to issue e-
invoices.
The eligibility is based on aggregate annual turnover on the common PAN. Thus, the aggregate total turnover
of Bali Limited is more than ₹ 50 crores (considering both the GSTINs) and is required to issue e-invoices.
Further, where e-invoicing is applicable, there is no need of issuing invoice copies in triplicate/duplicate.
E-invoice has many advantages for businesses, which have been given as under:-
(i) Auto-reporting of invoices into GST return and auto-generation of e-way bill (wherever
required). Under e-invoicing, business has to report the B2B invoice data only once in the e-invoice form
and the same is reported in multiple forms (GSTR-1, e-way bill etc.). E-way bill can be auto-generated
using e-invoice data. GSTR-1 can also be auto-populated with the e-invoice data. It will become part of
the business process of the taxpayer.
(ii) Accuracy/Reconciliation. Since same data is reported to tax department as well as to the buyer to
prepare his inward supplies (purchase) register, transcription errors are reduced. On receipt of
information through GST System, buyer can do reconciliation with his Purchase Order.
(iii) Early payment. E-invoicing facilitates standardisation and inter-operability leading to reduction of
disputes among transacting parties and thus, improving payment cycles.
(iv) Cost reduction. E-invoicing helps in reducing processing costs and thus, leads to improvement of
overall business efficiency.
(v) Reduction of tax evasion. Since a complete trail of B2B invoices is available with the Department, it
will enable the system-level matching of input tax credit and output tax thereby reducing the tax evasion.
(vi) Elimination of fake invoices. E-invoicing eliminates the fake invoices. Claiming fictitious input tax
credit (ITC) by raising fake invoices is also one of the biggest challenges currently faced by tax-
authorities. The e-invoice system helps to curb the actions of unscrupulous taxpayers and reduce the
number of fraud cases as the tax authorities have access to data in real-time.
(vii)Paper Elimination. E-invoicing helps in paper elimination and thereby it is eco-friendly.

GST By CA Suraj Agrawal SATC F.1
GST - PRACTICE TEST PAPER - SET ‘F’
Source: CA Intermediate Exam - Mock Test Paper I (May 2021 Exam)
1. Explore Logistics, a Goods Transport Agency registered under GST provided GTA services
(taxable @ 5%) to the following persons-
(a) Sahil Traders, an unregistered Partnership firm.
(b) Mr. Aadi, a casual taxable person, who is not registered under GST.
(c) Small Traders co-operative society registered under Societies Registration Act.
In a particular consignment, Explore Logistics transported the following-

(a) Defence Equipments
(b) Railway Equipments
(c) Organic Manure
Explore Logistics opted to charge GST @ 12% from October. It provided GTA Services to Mahajan
Steels Pvt. Ltd. on 1st October and issued an invoice dated 5th November. Payment was received
on 6th November.
It provided both inter-State and intra-State service to various registered as well as unregistered
persons.
Based on the information provided above, choose the most appropriate answer for the following
questions-
A. Which of the following persons are liable to pay GST on reverse charge in respect of the
GTA services (taxable @ 5%) provided by Explore Logistics
(i) Sahil Traders
(ii) Mr. Aadi
(iii) Small Traders Co-operative society
(a) i & ii
(b) ii & iii
(c) i & iii
(d) i, ii & iii
B. Out of items transported by Explore Logistics, which of the following is/ are exempt from
GST?
(i) Defence Equipments
(ii) Railway Equipments
(iii) Organic Manure
(a) i
(b) i & ii
(c) i & iii
(d) i , ii & iii
C. What will be the time of supply in respect of the services provided by Explore Logistics to
Mahajan Steels Pvt. Ltd.?
(a) 6th November
(b) 5th November
(c) 30th November
(d) 1st October

D. Which of the following statements is correct in respect of services provided by Explore
Logistics to Mahajan Steels Pvt. Ltd.
(a) Mahajan Steels Pvt. Ltd. is liable to pay GST
(b) Explore Logistics is liable to pay GST
(c) Service provided by Explore Logistics to Mahajan Steels Pvt. Ltd. is exempt under GST
(d) Mahajan Steels Pvt. Ltd. is liable to pay 50% GST and remaining 50% will be paid by
Explore Logistics
E. In respect of which of the following supplies, Explore Logistics has to provide invoice-wise
details in GSTR-1?
(i) Inter-State supplies to registered person with invoice value not exceeding ₹ 2,50,000
(ii) Inter-State supplies to unregistered person with invoice value not exceeding ₹ 2,50,000
(iii) Inter-State supplies to unregistered person with invoice value exceeding ₹ 2,50,000
(iv) Intra-State supplies to registered person with invoice value not exceeding ₹ 2,50,000
(a) i & iv
(b) i & ii
(c) ii & iii
(d) i, iii & iv
2. Lovely & Co., a registered person, supplies taxable goods to unregistered persons. It need not
issue tax invoice for the goods supplied on 16th April, if the value of the goods is and the
recipient does not require such invoice.
(a) ₹ 1,200
(b) ₹ 600
(c) ₹ 150
(d) ₹ 200
3. Can a registered person opting for composition scheme collect GST on his outward supplies?
a) Yes, in all cases
b) Yes, only on such goods as may be notified by the Central Government
c) Yes, only on such services as may be notified by the Central Government
d) No
4. What is the validity of the registration certificate?

a) One year
b) Two years
c) Valid till it is cancelled
d) Five years.
Answer Key
Question No. Answer

1(A) (c) i & iii
1(B) (c) i & iii
1(C) (d) 1st October
1(D) (b) Explore Logistics is liable to pay GST
1(E) (d) i, iii and iv
2 (c) ₹150
3 (d)
4 (c)

5. Bunty Pvt. Ltd., a supplier of goods, pays GST under regular scheme. It has made the following
outward taxable supplies in a tax period:
Inter-State purchases of goods 70,000
The company has following ITCs with it at the beginning of the tax period:
CGST 79,800
SGST Nil
IGST 98,000
Note:
Compute the minimum GST, payable in cash, by Bunty Pvt. Ltd. for the tax period. Make suitable
assumptions as required.
Solution:
S. Particulars CGST SGST IGST Total
No. @9% (₹) @ 9%(₹) @ 18%(₹) (₹)
(i) Intra-State supply of goods for ₹ 11,20,000 1,00,800 1,00,800 2,01,600
(ii) Inter-State supply of goods for ₹ 4,20,000 75,600 75,600

@ 9% (₹) @ 9% (₹) @ 18% (₹)
Opening ITC 79,800 Nil 98,000
Add: ITC on Inter-State purchases of goods valuing ₹ 70,000 Nil Nil 12,600
Total ITC 1,05,000 25,200 1,10,600

Particulars CGST SGST IGST@ 18% Total(₹)
@ 9%(₹) @ 9% (₹) (₹)
GST payable 1,00,800 1,00,800 75,600 2,77,200
Less: ITC [First ITC of IGST should be utilized in full - (Nil) (35,000) (75,600) 1,10,600
first against IGST liability and then against CGST and IGST IGST IGST
SGST liabilities in a manner to minimize cash outflow]
(1,00,800) (25,200) 1,26,000
CGST SGST
Minimum GST payable in cash Nil 40,600 Nil 40,600
Note : Since sufficient balance of ITC of CGST is available for paying CGST liability and cross utilization of
ITC of CGST and SGST is not allowed, ITC of IGST has been used to pay SGST (after paying IGST liability)
to minimize cash outflow.

6. Hangover Ltd., Delhi, a registered supplier, is manufacturing taxable goods. It provides the
following details of taxable inter-State supply made by it during the month of March:-
S. Particulars Amount
No. (₹)
(i) List price of taxable goods supplied inter-State (exclusive of taxes) 24,00,000
(ii) Subsidy received from the Central Government for supply of taxable goods 3,36,000
to Government School (exclusively related to supply of goods included at
S. No. 1)
(iii) Subsidy received from an NGO for supply of taxable goods to an old age 80,000
home (exclusively related to supply of goods included at S. No. 1)
(iv) Tax levied by Municipal Authority 32,000
(v) Packing charges 24,000
(vi) Late fee paid by the recipient of supply for delayed payment of consideration 9,600
(Recipient has agreed to pay ₹ 9,600 in lump sum and no additional amount is
payable by him)
The list price of the goods is net of the two subsidies received. However, the other
charges/taxes/fee are charged to the customers over and above the list price.
Calculate the total value of taxable supplies made by Hangover Ltd. during the month of March.
Rate of IGST is 18%.
Solution:
Computation of total value of taxable supplies made by Hangover Ltd. during the month of March
Particulars (₹)
List price of the goods 24,00,000
Subsidy amounting to ₹3,36,000 received from the Central Government NIL
[Since the subsidy is received from the Government, the same is not includible in the value in
terms of section 15]
Subsidy received from NGO 80,000
[Since the subsidy is received from a non-Government body and directly
linked to the supply, the same is includible in the value in terms of section 15]
Tax levied by the Municipal Authority 32,000
[Includible in the value as per section 15]
Packing charges 24,000
[Being incidental expenses, the same are includible in the value as per section 15]
Late fees paid by recipient of supply for delayed payment 8,136
[Includible in the value as per section 15 - As the amount of interest
received is a lump sum amount, the same has to be taken as inclusive of GST]
[₹9,600 x 100/118] rounded off
Total value of taxable supplies 25,44,136
7. M/s Shubhank Associates, a partnership firm, provided recovery agent services to Neelkanth
Credits Ltd., a non-banking financial company and a registered supplier, on 15th January. Invoice
for the same was issued on 7 th February and the payment was made on 18 th April by Neelkanth
Credits Ltd. Bank account of the company was debited on 20th April.
Determine the following:
(i) Person liable to pay GST
(ii) Time of supply of service

Solution:
(i) Tax on services supplied by a recovery agent to, inter alia, a non- banking financial company (NBFC) is
payable under reverse charge by such non-banking financial company.
Therefore, in the given case, person liable to pay GST is the NBFC - Neelkanth Credits Ltd.
(ii) As per section 13(3) of the CGST Act, the time of supply of service on which GST is payable under
reverse charge is earlier of the following:-
(i) Date of payment as entered in the books of account of the recipient (18th April) or the date on which
the payment is debited in his bank account (20th April), whichever is earlier;
(ii) Date immediately following 60 days since issue of invoice by the supplier, i.e. 9 th April.
Thus, time of supply of service is 9th April.
8. Fair Oils, Delhi has supplied machine oil and high-speed diesel in the month of April as per the
details given in table below. Fair Oils is not yet registered.
Sl. Particulars Amount

No. (₹)*
(i) Supply of machine oil in Delhi 9,00,000
(ii) Supply of high speed diesel in Delhi 18,00,000
(iii) Supply of machine oil made in Punjab by Fair Oils from its branch located in 12,00,000
Punjab
*excluding GST
Determine whether Fair Oils is liable for registration.
Solution:
As per section 22 read with Notification No. 10/2019 CT dated 07.03.2019, a supplier is liable to be registered
in the State/Union territory from where he makes a taxable supply of goods and/or services, if his aggregate
turnover in a financial year exceeds the threshold limit.
(b) ₹ 20 lakh for the States, namely, States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,
(c) ₹ 40 lakh for rest of India except persons engaged in making supplies of ice cream and other edible ice,
whether or not containing cocoa, Pan masala and Tobacco and manufactured tobacco substitutes.
The threshold limit for a person making exclusive taxable supply of services or supply of both goods
and services is as under:-
(b) ₹ 20 lakh for the rest of India.
As per section 2(6), aggregate turnover includes the aggregate value of:
(i) all taxable supplies,
(ii) all exempt supplies,
(iii) exports of goods and/or services and
(iv) all inter-State supplies of persons having the same PAN.
The above is computed on all India basis. Further, the aggregate turnover excludes central tax, State tax,
Union territory tax, integrated tax and cess. Moreover, the value of inward supplies on which tax is payable
under reverse charge is not taken into account for calculation of ‘aggregate turnover’.
Section 9(2) provides that CGST is not leviable on five petroleum products i.e. petroleum crude, motor spirit
(petrol), high speed diesel, natural gas and aviation turbine fuel. As per section 2(47), exempt supply includes
non-taxable supply. Thus, supply of high speed diesel in Delhi, being a non-taxable supply, is an
exempt supply and is, therefore, includible while computing the aggregate turnover.

In the backdrop of the above-mentioned discussion, the aggregate turnover of Fair Oils for the month
of April is computed as under:
S. No. Particulars Amount (in ₹)
(i) Supply of machine oils in Delhi 9,00,000
(ii) Add: Supply of high speed diesel in Delhi 18,00,000
(iii) Add: Supply of machine oil made by Fair Oils from its branch located in Punjab 12,00,000
Aggregate Turnover 39,00,000
Fair Oils is making exclusive supply of goods and hence the threshold limit for registration would be
₹ 40,00,000. Since the aggregate turnover does not exceed ₹ 40,00,000, Fair Oils is not liable to be
registered.
9. Narayan Singh, a registered supplier, has received advance payment with respect to services to
be supplied to Shelly. His accountant asked him to issue the receipt voucher with respect to
such services to be supplied. However, he is apprehensive as to what would happen in case a
receipt voucher is issued, but subsequently no services are supplied. You are required to advise
Narayan Singh regarding the same.
Solution:
Narayan Singh is required to issue a receipt voucher at the time of receipt of advance payment with respect
to services to be supplied to Shelly. A receipt voucher is a document evidencing receipt of advance money
towards a supply of goods and/or services or both. A registered person, on receipt of advance payment with
respect to any supply of goods or services or both, shall issue a receipt voucher or any other document,
evidencing receipt of such payment.
Where, on receipt of advance payment with respect to any supply of goods or services or both the registered
person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in
pursuance thereof, the said registered person may issue to the person who had made the payment, a refund
voucher against such payment.
Therefore, in case subsequently no services are supplied by Narayan Singh, and no tax invoice is
issued in pursuance thereof, Narayan Singh may issue a refund voucher against such payment to
Shelly.
10. Briefly explain the leviability of GST or otherwise on petroleum crude, diesel, petrol, Aviation
Turbine Fuel (ATF) and natural gas.
Solution:
Petroleum crude, diesel, petrol, ATF and natural gas are presently not leviable to GST. GST will be levied on
these products from a date to be notified on the recommendations of the GST Council.
Till such date, central excise duty continues to be levied on manufacture/production of petroleum crude,
diesel, petrol, ATF and natural gas and inter-State/intra-State sale of the same is subject to CST/ VAT
respectively.
11. If a return has been filed, how can it be revised if some changes are required to be made?
Solution:
In GST since the returns are built from details of individual transactions, there is no requirement for having a
revised return. Any need to revise a return may arise due to the need to change a set of invoices or debit/
credit notes. Instead of revising the return already submitted, the system allows changing the details of those
transactions (invoices or debit/credit notes) that are required to be amended. They can be amended in any of
the future GSTR-1 in the tables specifically provided for the purposes of amending previously declared
details.
As per section 39(9), omission or incorrect particulars discovered in the returns filed u/s 39 can be rectified in
the return to be filed for the month during which such omission or incorrect particulars are noticed. Any tax
payable as a result of such error or omission will be required to be paid along with interest.
The rectification of errors/omissions is carried out by entering appropriate particulars in “Amendment Tables”
contained in GSTR-1.
12. Milan Charitable trust, registered under section 10(23C)(v) of the Income-tax Act, 1961, manages a
temple in Shahdara, Delhi. It has given on rent a community hall, located within temple premises,
to public for celebration of Teej Mela. Rent charged is ₹ 9,900. You are required to determine whether
the services provided by Milan Charitable trust are liable to GST.
Solution:
Services by a person by way of renting of precincts of a religious place meant for general public, owned or
managed by an entity registered as a trust or an institution under section 10(23C)(v) of the Income-tax Act are
exempt provided renting charges of premises, community halls, kalyanmandapam or open area are not
₹10,000 or more per day.
Thus, in the given case, renting of community hall by Milan Charitable Trust is exempt from GST, as
rent is less than ₹10,000 per day.
13. Alpy Ltd., have filed their GSTR-3B for the month of July, 20XX within the due date prescribed
under Section 39 i.e. 20.08.20XX. Post filing of the return, the registered person has noticed
during September 20XX that tax dues for the month of July, 20XX have been short paid for
₹ 72,000. Alpy Ltd., has paid the above shortfall of ₹72,000, through GSTR-3B of September 20XX,
filed on 20.10.20XX [payment through Cash ledger - ₹54,000 and Credit ledger ₹ 18,000]. Examine
the Interest payable under the CGST Act, 2017.
What would be your answer if, GSTR-3B for the month of July, 20XX has been filed belatedly on
20.10.20XX and the self-assessed tax of ₹ 72,000/- has been paid on 20.10.20XX [payment through
electronic cash ledger - ₹54,000 and electronic credit ledger ₹18,000]
Notes:
 There exists adequate balance in Electronic Cash & Credit ledger as on 31.07.20XX for the
above short fall.
 No other supply has been made nor tax payable for the month of July, 20XX other than
₹ 72,000/- missed out to be paid on forward charge basis.
 Ignore the effect of leap year, if applicable in this case.
Solution:
Interest is payable under Section 50 of the CGST Act, 2017 in case of delayed payment of tax @ 18% per
annum from the date following the due date of payment to the actual date of payment of tax.
As per proviso to Section 50(1), interest is payable on the net tax liability paid in cash, only if the return to be
filed for a tax period under Section 39, has been filed after the due date to furnish such return.
In the above scenario, Alpy Ltd., has defaulted in making the payment for ₹72,000 on self- assessment basis
in the return for the month of July, 20XX. Accordingly, interest is payable on the gross liability and
proviso of sub-section 50(1) shall not be applicable.
Thus, the amount of interest payable by Alpy Ltd., is as under:- Period of delay = 21st August, 20XX to 20th
October, 20XX = 60 days
Hence, amount of interest = ₹72,000 x 18% x 60/365 = ₹2,130 (rounded off)
Alternatively, if Alpy Ltd., have filed the return for the month of July, 20XX on 20.10.20XX, beyond the
stipulated due date of 20.08.20XX and if the self-assessed tax for July, 20XX has been paid on 20.10.20XX,
Interest under proviso to Section 50(1) shall be payable on the tax paid through Electronic Cash Ledger
only.
Hence Interest is payable from 21st August 20XX till 20th October 20XX = 60 days
Amount of Interest = ₹54,000 x 18% x 60/365 = ₹1,598 (rounded off)

Class Notes

GST By CA Suraj Agrawal SATC G.1
GST - PRACTICE TEST PAPER - SET ‘G’
Source: CA Intermediate Exam - Mock Test Paper II (May 2021 Exam)
1. Ms. Anjali is engaged in supply of services. She is registered under GST and has opted to pay tax
under composition scheme for service provider under section 10(2A) of the CGST Act. The turnover
for the quarter ending June 2021 was ₹ 12,00,000.
During July, she crossed the aggregate turnover of ₹ 50 lakh and opted out of composition scheme.
She also started trading of goods in July 2021.
She supplied an order to Breathe Well LLP on ex-factory basis, the details of which are as follows-
(i) Basic price of the product ₹53,000
(ii) Outward freight ₹12,000
(iii) Packing Charges ₹5,000
(iv) Discount given on receiving payment ₹2,000
(not included in invoice)
For supplies, provided to Breathe Well LLP, she received half of the amount as advance on 22nd July
2021. The goods were dispatched from her factory on 25th July 2021 and delivered on 28th July 2021.
She raised the invoice on 30th July 2021 and the balance payment was also received on the same
date.
Ms. Anjali received 25 invoices from various suppliers involving GST of ₹ 1,50,000 for the month of
July 2021. While filing GSTR-3B for the said month on 20th August 2021, she found that only 20
invoices involving GST of ₹ 1,00,000 were uploaded by the suppliers
Ms. Anjali supplied goods to the following persons-

Sl. No. Recipient Value of Supply
1 Mr. Pawan - an unregistered person ₹ 150
2 Mr. Umesh, a registered person ₹ 110
3 Rains Trust, an unregistered entity ₹ 250
None of the above persons requires a tax invoice.
All the amounts given above are exclusive of taxes, wherever applicable. All the supply referred above
is intra-State unless specified otherwise. Conditions applicable for availment of ITC are fulfilled
subject to the information given above.
Based on the information provided above, choose the most appropriate answer for the following
questions-
A. Compute the tax liability for the quarter ending June under CGST and SGST?
(a) ₹ 30,000 each
(b) ₹ 12,000 each
(c) ₹ 6,000 each
(d) ₹ 36,000 each
B. Compute the value of Supply made by Ms. Anjali to Breathe Wall LLP?
(a) ₹ 56,000
(b) ₹ 58,000
(c) ₹ 68,000
(d) ₹ 75,000
C. Determine the amount of ITC that can be claimed by Ms. Anjali for the month of July 2021?
(a) ₹ 1,00,000
(b) ₹ 1,10,000
(c) ₹ 1,05,000
(d) ₹ 1,50,000
D. Determine the time of supply made to Breathe Wall LLP?

(a) 22nd July
(b) 25th July
(c) 28th July
(d) 30th July
E. Ms. Anjali need not issue invoice to which of the following persons?
(a) Mr. Pawan
(b) Mr. Pawan and Umesh
(c) Mr. Pawan and Rains Trust
(d) Need not issue invoice to all the three persons
2. An exempt supply includes-

(i) Supply of goods or services or both which attracts Nil rate of tax
(ii) Non-taxable supply
(iii) Supply of goods or services or both which are wholly exempt from tax under section 11 of the
CGST Act or under section 6 of IGST Act
(a) (i)
(b) (i) and (ii)
(c) (i) and (iii)
3. ‘P’ Ltd. has its registered office, under the Companies Act, 2013, in the State of Maharashtra from
where it ordinarily carries on its business of taxable goods. It also has a warehouse in the State of
Telangana for storing said goods. What will be the place of business of ‘P’ Ltd. under the GST law?
a) Telangana
b) Maharashtra
c) Both (a) and (b)
d) Neither (a) nor (b)
4. Within how many days an application for revocation of cancellation of registration can be made?
a) Within 7 days from the date of service of the cancellation order.
b) Within 15 days from the date of issue of the cancellation order.
c) Within 45 days from the date of issue of the cancellation order.
d) Within 30 days from the date of service of the cancellation order.
Solution:
Question No. Answer Question No. Answer
1(A) (d) ₹ 36,000 each 2. (d) (i), (ii) and (iii)
1(B) (b) ₹ 58,000 3. (c)
1(C) (c) ₹ 1,05,000 4. (d)
1(D) (b) 25th July
1(E) (a) Mr. Pawan

5. [PAYMENT OF TAX] Hari & Co., a supplier of goods, pays GST under regular scheme. It has made the
following outward taxable supplies in a tax period:
Inter-State purchases of goods 2,50,000
Hari & Co. has following ITCs with it at the beginning of the tax period:
CGST 57,000
SGST 60,000
IGST 1,40,000
Note:
(iii) All the conditions necessary for availing ITC have been fulfilled.
Compute the minimum GST, payable in cash, by Hari & Co. for the tax period and the ITC to be carried
forward to the next month. Make suitable assumptions as required.
Solution:
S. Particulars CGST SGST IGST Total
No. @ 9% (₹) @ 9% (₹) @ 18% (₹) (₹)
(i) Intra-State supply of goods for ₹ 10,00,000 90,000 90,000 1,80,000
(ii) Inter-State supply of goods for ₹ 8,00,000 1,44,000 1,44,000


@ 9% (₹) @ 9% (₹) @ 18% (₹)
Opening ITC 57,000 60,000 1,40,000
Add: ITC on Inter-State purchases of goods valuing ₹ 2,50,000 Nil Nil 45,000
Total ITC 84,000 87,000 1,85,000

Particulars CGST SGST IGST Total
@ 9% (₹) @ 9% (₹) @ 18% (₹) (₹)
GST payable 90,000 90,000 1,44,000 3,24,000
Less: ITC [First ITC of IGST should be utilized in full - (38,000) (3,000) (1,44,000) 1,85,000
first against IGST liability and then against CGST and IGST IGST IGST
SGST liabilities in a manner to minimize cash outflow]
(52,000) (87,000) 1,39,000
CGST SGST
Minimum GST payable in cash Nil Nil Nil Nil
ITC balance to be carried forward next month 32,000 Nil Nil 32,000
Note: The above computation is one of the many ways to set off the ITC of IGST (₹ 41,000-after set off
against IGST liability) against CGST and SGST liability to compute minimum GST payable in cash. To
illustrate, IGST of ₹ 10,000 can be set off against SGST payable and IGST of ₹ 31,000 can be set off against
CGST payable. In this situation also, the net GST payable will be nil but the ITC of CGST and SGST to be
carried forward will be ₹ 25,000 and ₹ 7,000 (totalling to ₹ 32,000) respectively. However, if the entire ITC of
₹ 41,000 is set off against CGST payable, then SGST of ₹ 3,000 will be payable in cash thus, increasing the
cash outflow. Therefore, such a set off would not be advisable for computing the minimum GST payable.
6. [Value of Supply] Kavya Ltd., a registered supplier, has supplied machinery to Ayesha Ltd. (a supplier
registered in the same State). It provides following particulars regarding the same:
No. (₹)
(i) Price of machinery (exclusive of taxes and discounts) 5,50,000
(ii) Part fitted in the machinery at the premises of Ayesha Ltd. 20,000
[Amount has been paid by Ayesha Ltd. directly to the supplier. However, it was
Kavya Ltd.’s liability to pay the said amount. The said amount has not been
recorded in the invoice issued by Kavya Ltd.)
(iii) Installation and testing charges for machinery, not included in price 25,000
(iv) Discount @ 2% on price of the machinery mentioned at S. No. (i) above (recorded
in the invoice)
(v) Kavya Ltd. provides additional discount @ 1% at year end, based on additional
purchase of other machinery for which adjustment is made at the end of the
financial year without any change in individual transactions.
Determine the value of taxable supply made by Kavya Ltd. to Ayesha Ltd.
Solution:
Computation of value of taxable supply made by Kavya Ltd. to Ayesha Ltd.
Particulars Amount
(₹)
Price of machinery (exclusive of taxes and discounts) 5,50,000
Amount paid by Ayesha Ltd. directly to the supplier for the part fitted in the machinery 20,000
[Any amount that the supplier is liable to pay in relation to a supply but which has been
incurred by the recipient of the supply and not included in the price actually paid or payable
for the goods is includible in the value of supply in terms of section 15(2)(b) of the CGST Act,
2017.]
Installation and testing charges 25,000

[Any amount charged for anything done by the supplier in respect of the supply of goods at
the time of/before delivery of goods is includible in the value of supply in terms of section
15(2)(c) of the CGST Act, 2017.]
Less: Discount @ 2% on the price of machinery [₹5,50,000 x 2%] 11,000

[Since discount is given at the time of supply of machinery and recorded in the invoice, the
same is deductible from the value of the supply in terms of section 15(3)(a) of the CGST Act,
2017.]

Less: Additional 1% discount at year end Nil
[Though the additional discount is established before/at the time of supply, it is not
deductible from the value of supply in terms of section 15(3)(b) of the CGST Act, 2017 as
the same is not linked to any specific transaction and is adjusted by the parties at the end
of the financial year.]
7. [Exemption] Kashi Enterprises, an event organizer, provided services to Brisk n Frisk Ltd. by way of
organizing business exhibition in New Delhi as part of Make in India initiative. Kashi Enterprises
claims that it is not required to pay GST as the services provided by way of organizing business
exhibition are exempt from GST. Examine the technical veracity of the claim of Kashi Enterprises, in
the given case.
Solution:
No, the claim made by Kashi Enterprises that it is not required to pay GST is not correct. Services provided
by an organiser to any person in respect of a business exhibition are exempt from GST only when such
business exhibition is held outside India.
However, since in the given case, the exhibition is being organized in India, the services of organization of
event by Kashi Enterprises will not be exempt from GST.
8. [Registration] Examine whether the supplier is liable to get registered in the following independent
cases:-
(i) Aadi of Assam is exclusively engaged in intra-State supply of taxable services. His aggregate
turnover in the current financial year is ₹ 25 lakh.
(ii) Atri of Assam is engaged in intra-State supply of both taxable goods and services. His aggregate
turnover in the current financial year is ₹ 30 lakh.
Solution:
As per section 22 of the CGST Act, 2017 read with Notification No. 10/2019 CT dated 07.03.2019, a supplier
is liable to be registered in the State/Union territory from where he makes a taxable supply of goods and/or
services, if his aggregate turnover in a financial year exceeds the threshold limit.
The threshold limit for a person making exclusive taxable supply of services or supply of both goods and
services is as under:-
(b) ₹ 20 lakh for the rest of India.
(i) Though Aadi is dealing in Assam, he is not entitled for higher threshold limit for registration as the same is
applicable only in case of exclusively supply of goods and he is exclusively engaged in providing services.
Thus, the applicable threshold limit for registration in this case is ₹ 20 lakh and hence, Aadi is
liable to get registered under GST.
(ii) Since Atri is engaged in supply of both taxable goods and services, the applicable threshold limit for
registration in his case is ₹ 20 lakh. Thus, Atri is liable to get registered under GST as his turnover is
more than the threshold limit.
9. [Introduction] GST is a simplified tax structure. Justify the statement.
Solution:
GST is a simplified tax structure. The statement is justified. Simpler tax regime with fewer exemptions along
with reduction in multiplicity of taxes under GST has led to simplification and uniformity in tax structure. The
uniformity in laws, procedures and tax rates across the country makes doing business easier. Common
system of classification of goods and services across the country ensures certainty in tax administration
across India.
10. [E-Way Bill] Brief explain when is it not mandatory to furnish the details of conveyance in Part-B of the
e-way bill?
Solution:
E-way bill is valid for movement of goods by road only when the information in Part-B is furnished as per
Rule 138 of the CGST Rules, 2017.
However, details of conveyance may not be furnished in Part-B of the e-way bill where the goods are
transported for a distance of up-to 50 km within the State/Union territory:
 from the place of business of the consignor to the place of business of the transporter for further
transportation or
 from the place of business of the transporter finally to the place of business of the consignee.
11. ITC - [Important] Prashank Trade Links, registered under GST trades in exempt goods and provides
taxable services. On 1st October, the exemption available on its goods gets withdrawn.
Analyze the scenario and determine the eligibility of Prashank Trade Links for availing ITC, if any, on
inputs and/or capital goods used in the supply of exempt goods.
Solution:
If the exempt supply made by a registered person becomes a taxable supply, provisions of section 18(1)(d)
of the CGST Act, 2017 become applicable. In the given case, since Prashank Trade Links is a registered
person, section 18(1)(d) will be applicable.
As per section 18(1)(d) of the CGST Act, 2017, Prashank Trade Links will be entitled to take credit of input tax
in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock
relatable to such exempt supply and on capital goods exclusively used for such exempt supply on the day
immediately preceding the date from which such supply becomes taxable, i.e. 30 th September.
ITC on capital goods will be reduced by 5% per quarter or part thereof from the date of invoice.
12. [Tax Invoice] Cutiee Toys Ltd., a wholesaler of toys registered in Chandigarh, is renowned in the local
market for the variety of toys and their reasonable prices. Cutiee Toys Ltd. makes supply of 100
pieces of baby’s learning laptops and chat learning phones to Baniya General Store on 25th
September by issuing a tax invoice amounting to ₹ 1,00,000.
However, the said toys were returned by Baniya General Store on 30 th September. Discuss which
document Cutiee Toys Ltd. is required to issue in such a case?
Solution:
Cutiee Ltd. is required to issue a credit note in such a case.
As per section 34 of the CGST Act, 2017, where one or more tax invoices have been issued for supply of any
goods or services or both and the goods supplied are returned by the recipient the registered person,
who has supplied such goods or services or both, may issue to the recipient one or more credit notes for
supplies made in a financial year containing such particulars as may be prescribed.
Therefore, Cutiee Ltd. is required to issue a credit note to Baniya General Store for the good returned.

GST By CA Suraj Agrawal SATC H.1
GST - PRACTICE TEST PAPER - SET H
Source: CA Intermediate - JAN 2021 Exam (New Syllabus)
1. [Value of Supply & Payment of Tax] Star Ltd., a registered supplier in Karnataka has provided the
following details for supply of one machine-:
Particulars Amount in (₹)
(1) List price of machine supplied [exclusive of items given below from (2) to (4)] 80,000
(2) Tax levied by Local Authority on sale of such machine 6,000
(3) Discount of 2% on the list price of machine was provided (recorded in the
invoice of machine)
(4) Packing expenses for safe transportation charged separately in the invoice 4,000
Star Ltd. received ₹ 5,000 as subsidy from a NGO on sale of each such machine, The Price of ₹ 80,000
of the machine is after considering such subsidy.
During the month of February, 20XX, Star Ltd. supplied three machines to Intra-State customers and
one machine to Inter-State customer.
Star Ltd. purchased inputs (intra-State) for ₹ 1,20,000 exclusive of GST for supplying the above four
machines during the month.
The Balance of ITC at the beginning of February, 20XX was:

CGST SGST IGST
₹ 18,000 ₹ 4,000 ₹ 26,000
Note:
(i) Rate of CGST, SGST and IGST to be 9%,9% and 18% respectively for both inward and outward
supplies.
(ii) All the amounts given above are exclusive of GST.
Compute the minimum net GST payable in cash by Star Ltd. for the month of February, 20XX.
Answer:
Computation of value of taxable supply
Particulars Amount
(₹)
List price of the machine 80,000
Add: Tax levied by Local Authority on the sale of machine 6,000
[Tax other than GST, if charged separately, are includible in the value in terms of section 15 of
the CGST Act, 2017.]
Add: Packing expenses for safe transportation 4,000
[Includible in the value as per section 15 of the CGST Act, 2017.]
Add: Subsidy received from a NGO on sale of each machine 5,000
[Subsidy received from a non-Government body and which is directly linked to the price, the
same is included in the value in terms of section 15 of the CGST Act, 2017.]
Total 95,000
Less: Discount @ 2% on ₹ 80,000 1,600
[Since discount is known at the time of supply and recorded in invoice, it is deductible from the
value in terms of section 15 of the CGST Act, 2017.]

Computation of minimum net GST payable in cash by Star Ltd.
Particulars CGST (₹) SGST (₹) IGST (₹)
Sale of machine 25,218 25,218 16,812
[Intra-State sales = ₹ 93,400 × 3 machines = ₹ 2,80,200; 2,80,200×9% 2,80,200 ×9% 93,400×18%
Inter-State sales = ₹ 93,400 × 1 machine = ₹ 93,400]
Total output tax 25,218 25,218 16,812
Less: Set off of IGST against IGST and SGST (9,188) (16,812)
[IGST credit first be utilized towards payment of IGST,
remaining amount can be utilized towards CGST and SGST in
any order and in any proportion]
Less: Set off of CGST against CGST and SGST against (25,218) (14,800)
SGST [CGST credit cannot be utilized towards payment of
SGSTand vice versa.]
Minimum net GST payable in cash Nil 1,230
Working Note:
Computation of total ITC available
Opening balance of ITC 18,000 4,000 26,000
Add: Inputs purchased during the month 10,800 10,800
[₹ 1,20,000 ×9%] [₹ 1,20,000 ×9%]
Total ITC available 28,800 14,800 26,000
2. [Exemption] Green Agro Services, a registered person provides the following information relating to
its activities during the month of February, 20XX:
Gross Receipts from (₹)
Services relating to rearing of sheeps 6,00,000
Services by way of artificial insemination of horses 4,00,000
Processing of sugarcane into jaggery 8,00,000
Milling of paddy into rice 7,50,000
Services by way of fumigation in a warehouse of agricultural produce 1,80,000
All the above receipts are exclusive of GST. Compute the value of taxable supplies under GST laws
for the month of February, 20XX.
Answer:
Computation of value of taxable supplies
Particulars Amount
(₹)
Services relating to rearing of sheeps Nil
[Exempt since services relating to rearing of all life forms of animals, except horses, for food
etc. are exempt.]
Services by way of artificial insemination of horses 4,00,000
[Not exempt since services of artificial insemination are exempt only of livestock other than
horses.]
Processing of sugarcane into jaggery 8,00,000
[Not exempt, since processes which alter the essential characteristics of agricultural produce
are not exempt and processing of sugarcane into jaggery changes the essential
characteristics of sugarcane.]
Milling of paddy into rice 7,50,000
[Not exempt, since this process, being carried out after cultivation is over, is not an
intermediate production process in relation to cultivation of plants and it also changes the
essential characteristics of paddy.]
Services by way of fumigation in a warehouse of agricultural produce Nil
[Specifically exempt from GST.]
Value of taxable supplies 19,50,000

3. [Exemption] Satya Sai Residents Welfare Association, a registered person under GST has 30
members each paying ₹ 8,000 as maintenance charges per month for sourcing of goods and services
from third persons for common use of its members.
The Association purchased a water pump for ₹ 59,000 (inclusive of GST of ₹ 9,000) and availed input
services for ₹ 23,600 (inclusive of GST of ₹ 3,600) for common use of its members during February
20XX.
Compute the total GST payable, if any, by Satya Sai Residents Welfare Association, for February
20XX. GST rate is 18%. All transactions are intra-State.
There is no opening ITC and all conditions for ITC are fulfilled.
Answer:
Computation of total GST payable by Satya Sai Residents Welfare Association
Particulars Value GST@ 18%
(₹) (₹)
Maintenance charges received 2,40,000
[₹ 8,000 × 30 members]
[Services by RWA to its members for sourcing of goods or services from a third
person for the common use of its members in a housing society are exempt
provided the share of contribution per month per member is up-to ₹ 7,500.
Otherwise, entire amount is taxable.]
Total GST payable [It has been logically presumed that maintenance 43,200
charges are exclusive of GST.]
Note: Residents Welfare Association is entitled to take ITC of GST paid by them on capital goods, goods and
input services, used by it for making supplies to its members and use such ITC for discharge of GST liability
on such supplies where the amount charged for such supplies is more than ₹ 7,500 per month per
member.
Thus, Satya Sai Residents Welfare Association can avail ITC of GST paid on water pump purchased
(₹ 9,000) and input services availed (₹ 3,600). Net GST payable in that case will come out ₹ 30,600.
4. [Important] Tax Invoice - ABC Cinemas, a registered person engaged in making supply of services by
way of admission to exhibition of cinematograph films in multiplex screens was issuing consolidated
tax invoice for supplies at the close of each day in terms of section 31(3)(b) of CGST Act, 2017 read
with fourth proviso to rule 46 of CGST Rules, 2017.
During the month of October, 20XX, the Department raised objection for this practice and asked to
issue separate tax invoices for each ticket.
Advise ABC Cinemas for the procedure to be followed in the light of recent notification.
Answer:
The procedure to be followed by ABC Cinemas, a registered person engaged in making supply of services by
way of admission to exhibition of cinematograph films in multiplex screens, is as under:-
The option to issue consolidated tax invoice is not available to a supplier engaged in making supply of
services by way of admission to exhibition of cinematograph films in multiplex screens. Thus, ABC Cinemas
cannot issue consolidated tax invoice for supplies made by it at the close of each day.
ABC Cinemas is required to issue an electronic ticket.
The said electronic ticket shall be deemed to be a tax invoice, even if such ticket does not contain the
details of the recipient of service but contains the other information as prescribed to be mentioned.

5. [Amended] E-Way Bill - Agni Ltd. a registered supplier wishes to transport cargo by road between two
cities situated at a distance of 368 kilometres. Calculate the validity period of e-way bill under rule
138(10) of CGST Rules, 2017 for transport of the said cargo, if it is over dimensional cargo or
otherwise.
Answer:
The validity period of e-way bill under rule 138(10) of the CGST Rules, 2017 for transport of cargo by
road between two cities situated at a distance of 368 km is as under:
(i) If it is over dimensional cargo: the validity period of the e-way bill is one day from relevant date Up-to 20
km and one additional day for every 20 km or part thereof thereafter.
Thus, validity period in given case:
= 1 day + 18 days
= 19 days
(ii) If it is a cargo other than over dimensional cargo: the validity period of the e- way bill is one day from
relevant date Up-to 200 km and one additional day for every 200 km or part thereof thereafter.
Thus, validity period in given case:

= 1 day + 1 days
= 2 days
6. [Important] Return - The aggregate turnover of Mr. Prithvi, a registered person for the FY 2018-19 and
2019-20 were ₹ 140 lakh and ₹ 170 lakh respectively. He has not filed the annual return (GSTR-9) under
section 44(1) of CGST Act, 2017 before the due date.
Discuss the penal provisions, if any, for not filing the returns before the due date.
Answer:
The penal provisions for not filing the annual return (GSTR-9) under section 44(1) of the CGST Act, 2017
before the due date are as under:-
(a) ₹ 100 for every day during which such failure continues,
or
(b) 0.25% of the turnover of the registered person in the State/Union Territory whichever is lower.
Note:- It may be noted that filing of GSTR-9 has been made voluntary in respect of financial years 2018-19
and 2019-20 for the registered persons whose turnover is less than ₹ 2 crores and who have not furnished the
said annual return before due date.
Here, the annual return is deemed to be furnished on the due date if it has not been furnished before
the due date.
7. [Important] Reverse Charge - Mr. Anurag, a famous Author is engaged in supply of services by the
way of transfer or permitting the use or enjoyment of a copyright covered under clause (a) of sub-
section (1) of section 13 of the Copyright Act, 1957 relating to original literary works to a publisher.
Explain in brief the conditions under which an Author can choose to pay tax under forward charge.
Answer:
Mr. Anurag, an author, can choose to pay tax under forward charge provided he fulfills the following
conditions:-
(i) He has taken registration under the GST law.
(ii) He has filed a declaration, in the prescribed form, that he exercises the option to pay tax on the said
service under forward charge and, to comply with all the provisions of the GST law as they apply to a
person liable for paying the tax in relation to the supply of any goods and/or services and that he shall not
withdraw the said option within a period of 1 year from the date of exercising such option.
(iii) He makes a declaration on the invoice issued by him in prescribed form to the publisher.

8. [Registration] Under the provision of section 29(1) of CGST Act, 2017 read with rule 21A of CGST
Rules, 2017 related to suspension of registration if the registered person has applied for cancellation
of registration, what is the period and manner of suspension of registration?
Answer:
Where a registered person has applied for cancellation of registration, the registration shall be
deemed to be suspended from:
(a) the date of submission of the application or
(b) the date from which the cancellation is sought, whichever is later, pending the completion of
proceedings for cancellation of registration.
Such person shall not make any taxable supply during the period of suspension and shall not be required to
furnish any return.
The expression “shall not make any taxable supply” mean that the registered person shall not issue a tax
invoice and, accordingly, not charge tax on supplies made by him during the suspension period.
9. [Amended] Registration - Explain the circumstances under which proper officer can cancel the
registration on his own of a registered person under CGST Act, 2017.
Answer:
The circumstances under which proper officer can cancel the registration on his own of a registered person
under the CGST Act, 2017 are as under:-
(i) A registered person has contravened any of the following prescribed provisions of the GST law:
(a) he does not conduct any business from the declared place of business.
(b) he issues invoice/bill without supply of goods/services in violation of the provisions of GST law.
(c) he violates the provisions of anti-profiteering.
(ii) A person paying tax under composition levy has not furnished returns for 3 consecutive tax periods.
(iii) A registered person paying tax under regular scheme has not furnished returns for continuous period of 6
months.
(iv) Voluntarily registered person has not commenced the business within 6 months from the date of
registration.
(v) Registration was obtained by means of fraud, wilful misstatement or suppression of facts.
Further, As per Rule 21, the registration granted to a person is liable to be cancelled, if the said
person,-
a. violates the provisions relating to furnishing of bank details.
b. avails input tax credit in violation of the provisions of Section 16 of the Act or the rules made
thereunder; or
c. furnishes the details of outward supplies in FORM GSTR-1 under section 37 for one or more tax
periods which is in excess of the outward supplies declared by him in his valid return under
section 39 for the said tax periods; or
d. violates the provision of Rule 86B.

Class Notes

GST By CA Suraj Agrawal SATC I.1
GST - PRACTICE TEST PAPER - SET ‘I’
Source: CA Intermediate - Jan 2021 Exam (Old Syllabus)
1. Girish Trading Private Limited, a body corporate registered in the State of West Bengal, pays GST
under the regular scheme. It is not eligible for any threshold exemption. The Company has provided
the following information regarding its outward taxable supplies for the month of March, 20XX:
Intra-State supply of goods: ₹ 50,00,000
Inter-State supply of goods: ₹ 22,00,000
Following are the details of inward taxable supplies received during the month of March, 20XX:
Intra-State purchase of goods from Registered Supplier: ₹ 6,10,000
Inter-State purchase of goods from Registered Supplier: ₹ 16,00,000
Additional Information:
(i) The Company has no brought forward ITC credit for the month of March, 20XX.
(ii) Girish Trading Private Limited had additionally collected ₹ 1,000 as penalty for delay in payment
by one of his customers (Not included in value of outward supplies mentioned above)
(iii) The Company has paid ₹ 12,000 (Intra-State supply) as rent for hiring of a motor vehicle for the
business use by one of its directors for the month of March, 20XX (Not included in value of inward
supplies mentioned above). Invoice for the same dated 7th March, 20XX was received in the month
of April, 20XX.
(iv) The Company had placed an order for receiving goods (Intra-State supply) worth ₹ 1,10,000 latest
by 30th March, 20XX. However, due to vehicle breakdown, the goods were delivered only on 1st
April, 20XX. Invoice was received on 31st March, 20XX (Included in value of inward supplies
mentioned above).
Note:
(1) Applicable rate of CGST, SGST and IGST is 9%, 9% and 18% respectively.
(2) Amount of inward and outward supplies stated above are exclusive of taxes.
Compute the net GST liability (CGST, SGST, IGST) of Girish Trading Private Limited for the month of
March 20XX.
Answer:
Computation of net GST liability of Girish Trading Private Limited for March, 20XX
Output tax
Intra -State supply of goods 4,50,000 4,50,000
[₹ 50,00,000 [₹ 50,00,000
×9%] ×9%]
Inter -State supply of goods 3,96,000
[₹ 22,00,000
×18%]
Penalty on delayed payment [Includible in value in 153
terms of section 15 of the CGST Act, 2017. It has [₹ 1,000 x
been assumed that penalty collected is inclusive of 18/118]
GST.]
Total Output Tax (A) 4,50,000 4,50,000 3,96,153
Input tax
Intra -State purchase of goods 45,000 45,000
₹ 5,00,000 (6,10,000-1,10,000) [₹ 5,00,000 [₹ 5,00,000
[ITC on goods worth ₹ 1,10,000 is not available as ×9%] ×9%]
such goods are not received in the month of May.]
Inter -State purchase of goods 2,88,000
[₹ 16,00,000
×18%]
Rent paid for hiring of a motor vehicle - -
[ITC on renting or hiring of motor vehicles is blocked
in terms of section 17 of the CGST Act, 2017.]
Total ITC (B) 45,000 45,000 2,88,000
Net GST liability (A)-(B) 4,05,000 4,05,000 1,08,153
Note:
It has been assumed that penalty collected is in respect of inter-State sale. However, it is also possible to
assume that penalty collected is in respect of intra-State sale.
2. M/s P, a registered supplier of Rajasthan, has received the following amounts in respect of the
activities undertaken by her during the month of March, 20XX.
No. (in ₹)
1 Amount received for warehousing of jaggery. 50,000
2 Commission received as business facilitator for the services provided to the 20,000
urban branch of a nationalized bank with respect to savings bank accounts
3 Amount received for services by way of labour contracts for repairing a single 10,000
residential unit otherwise than as a part of residential complex
4 Amount received for acting as brand ambassador for corporate client 75,000
5 Amount received for service provided to the Indian Olympic Association as 80,000
team manager of national team.
All the transactions stated above are Intra-State transactions and all amounts are exclusive of GST.
You are required to compute gross value of taxable supply on which GST is to be paid by M/s P for the
month of March, 20XX by giving necessary explanations for treatment of various items.
Answer:
Computation of value of taxable supply on which GST is to be paid by M/s P
Particulars Amount
(₹)
Amount received for warehousing of jaggery Nil
[Specifically exempt from GST]
Commission received as business facilitator Nil
[Services provided by a business facilitator to a banking company with respect to accounts
only in its rural area branch are exempt from GST. In the given case since services are
being provided to urban branch of the bank, they are taxable. However, the tax payable
thereon is to be paid by the recipient of services i.e. banking company, under reverse
charge. Hence, M/s P will not be liable to pay GST on commission received for said
services.]
Amount received for services by way of labour contracts 10,000
[Services by way of pure labour contracts of construction, erection, commissioning, or
installation of original works pertaining to a single residential unit otherwise than as a part of
a residential complex are exempt from GST. Since such services are being provided for
repairing the residential unit, they are not eligible for exemption.]
Amount received for acting as brand ambassador for corporate client 75,000
[Liable to tax as it is not specifically exempt.]
Amount received for service provided as team manager Nil

[Exempt, since services provided by a team manager to Indian Olympic Association (viz. a
recognized sports body) are exempt.]
Total value of taxable supply on which GST is to be paid by M/s P 85,000

3. Vansh Traders, a registered supplier, is providing restaurant services in Manipur. It has turnover of
₹ 55 lakh in the preceding financial year 2019-20. It has started providing intra-State event
management services in the current financial year 2020-21 and discontinued rendering restaurant
services.
With reference to the provisions of the CGST Act, 2017, examine whether Vansh Traders can opt for
the composition scheme under section 10 of the CGST Act, 2017 in the current financial year?
Answer:
A registered person who is exclusively engaged in providing services other than restaurant services is not
eligible for the composition scheme under sub-sections (1) and (2) of section 10 of the CGST Act, 2017.
However, Such person is eligible for the benefit of concessional payment of tax under composition scheme
under sub-section (2A) of section 10 of the CGST Act, 2017 provided his aggregate turnover in the
preceding financial year does not exceed ₹ 50 lakh.
Since Vansh Traders is engaged exclusively in supply of services other than restaurant services (viz. event
management services) in the current financial year 2020-21, it is not eligible for composition scheme under
sub-sections (1) and (2) of section 10 in said FY.
Further, since its aggregate turnover in the preceding financial year 2019-20 exceeds ₹ 50 lakh, it cannot opt
for the composition scheme under sub-section (2A) of section 10 also in the current financial year 2020-21.
4. Happy Trader, a sole proprietorship firm, started a business of dealing in supply of both exempted as
well as taxable goods in Assam. Happy Trader has furnished the following details relating to the sales
made for the month of April, 2020. All amounts are exclusive of GST.
Intra-State sale of goods chargeable with GST@ 12% 15,00,000
Intra-State sale of non-taxable goods 5,00,000
Intra-State sale of alcoholic liquor for human consumption 2,00,000
Intra-State sale of Tobacco 3,00,000
With reference to the above and provisions of CGST Act, 2017,

(i) Compute the aggregate turnover.
(ii) Examine whether Happy Trader is liable to be registered under the Act, with reasons for the same.
(iii) What is the threshold limit for taking registration in this case?
Answer:
Particulars (₹)
Intra-State sale of goods chargeable with GST @ 12% 15,00,000
[Aggregate turnover includes value of all outward taxable supplies.]
Intra-State sale of non-taxable goods 5,00,000

[Non-taxable supply, being an exempt supply is included in aggregate turnover.]
Intra-State sale of alcoholic liquor for human consumption 2,00,000
[Sale of alcoholic liquor for human consumption, being a non-taxable supply, is an exempt
supply and is therefore, included in aggregate turnover.]
Intra-State sale of tobacco 3,00,000
[Aggregate turnover includes value of all outward taxable supplies.]
Aggregate turnover 25,00,000
(ii) & (iii) Every person engaged in making a taxable supply is required to obtain registration if his aggregate
turnover exceeds ₹ 20 lakh in a financial year.
An enhanced threshold limit for registration of ₹ 40 lakh is available to persons engaged exclusively in intra-
State supply of goods in specified States.
However, it is not applicable in case such person is engaged in supply of tobacco.

In view of the same, the applicable threshold limit of registration for Happy Traders is ₹ 20 lakh. Thus,
it is liable to be registered under the CGST Act as its aggregate turnover exceeds the said threshold
limit.
5. Yash & Co. a manufacturer and supplier of plastic goods, is registered under GST in the state of
Maharashtra. Yash & Co. sold plastic goods to a retail seller in Punjab, at a value of ₹ 43,000
(excluding GST leviable @ 18%). Now, it wants to send the consignment of such plastic goods to the
retail seller in Punjab.
You are required to examine and advise Yash & Co., whether e-way bill is mandatorily required to be
generated in respect of such movement of goods under GST laws?
Answer:
E-way bill is mandatorily required to be generated whenever there is a movement of goods of consignment
value exceeding ₹ 50,000, inter alia, in relation to a supply.
Consignment value of goods, inter alia, includes the central tax, State/Union territory tax, integrated tax and
cess charged, if any. The consignment value of goods, in the given case, will be ₹ 50,740 [₹ 43,000 +
(₹ 43,000 ×18%)].
Thus, in the given case, since the movement of goods is in relation to supply of goods and the consignment
value exceeds ₹ 50,000, e-way bill is mandatorily required to be generated in respect of movement of goods
from Maharashtra to Punjab.
6. [Amended] Laxmi Traders a supplier of electric goods, is registered under GST in the state of
Karnataka. Laxmi Traders receives 200 invoices for inward supply of goods and services, involving
GST of ₹ 8,00,000, from various suppliers during the month of February, 2021.
Compute the input tax credit (ITC) that can be claimed by Laxmi Traders in his GSTR-3B for the month
of February, 2021 to be filed by 20th March, 2021 in the following independent situations assuming
that GST of ₹ 8,00,000 is otherwise eligible for input tax credit:
Situation 1st: Out of 200 invoices, 160 invoices involving GST of ₹ 7,00,000 have been uploaded by the
suppliers in their respective GSTR-1 filed on the prescribed due date thereof.
Situation 2nd: Out of 200 invoices, 140 invoices involving GST of ₹ 5,00,000 have been uploaded by the
suppliers in their respective GSTR-1 filed on the prescribed due date thereof.
Answer:
Computation of ITC that can be claimed by Laxmi Traders
Situation 1st
Invoices Amount of ITC involved Amount of ITC that can be
in the availed (₹)
invoices (₹)
160 invoices uploaded in GSTR-1 7 lakh 7 lakh
[Refer Note 1]
40 invoices not uploaded in GSTR-1 1 lakh 0.35 lakh
[Refer Note 2]
Total ITC that can be claimed 8 lakh 7.35 lakh
Situation 2nd
Invoices Amount of ITC involved Amount of ITC that can be
in the availed (₹)
invoices (₹)
140 invoices uploaded in GSTR-1 5 lakh 5 lakh
[Refer Note 1]
60 invoices not uploaded in GSTR-1 3 lakh 0.25 lakh
[Refer Note 2]
Total ITC that can be claimed 8 lakh 5.25 lakh

Notes:
(1) Full ITC can be availed on the invoices uploaded by the suppliers in their GSTR-1s.
(2) ITC on invoices not uploaded by the suppliers in their GSTR-1s is restricted to 5% (w.e.f. 01/01/2021) of
eligible ITC available on invoices uploaded in GSTR-1s.
7. Answer the following individual independent cases with reference to the provisions of filing of various
returns under the CGST Act, 2017 and the rules made thereunder:
(i) While preparing the annual return for the FY 2020-21 in the month of September 2021, Mr. Rahul
realized that while filing his GSTR-3B for the month of March, 2021, he has erroneously mentioned
taxable turnover as ₹ 10,51,000 instead of ₹ 15,10,000.
He now wants to know whether the error can be rectified. State your views on the same, with
reasons.
(ii) Mr. Vivek, whose aggregate turnover for the FY 2020-21 is ₹ 1.5 crore has forgotten to file his
annual return under section 44(1) of the CGST Act, 2017, before the due date for the said year. He
wants to know whether he would be subject to any penal consequences under the provisions of
the CGST Act, 2017. State your views on the same with reasons.
Answer:
(i) Omission or incorrect particulars discovered in the returns filed can be rectified in the return to be filed for
the tax period during which such omission or incorrect particulars are noticed, Up-to:
(i) due date of filing of return for the month of September following the end of the financial year [i.e., 20th
October of next financial year]
or
(ii) actual date of filing of the relevant annual return, whichever is earlier.
Since in the given case, Mr. Rahul noticed the error while preparing the annual return for FY 2020-
21 in the month of September 2021, he can rectify the error so noticed.
(ii) Mr. Vivek is liable to following penalty for not filing annual return under section 44(1) of the CGST Act,
2017 Up-to the due date:
(a) ₹ 100 for every day during which such failure continues,
or
(b) 0.25% of the turnover of the registered person in the State/Union Territory (i.e. ₹ 37,500),
whichever is lower.
Note : It may be noted that filing of GSTR-9 has been made voluntary in respect of financial year 2020-21
for the registered persons whose turnover is less than ₹ 2 crores and who have not furnished the said
annual return before due date. Here, the annual return is deemed to be furnished on the due date if it
has not been furnished before the due date.
8. Explain the statutory provisions for cancellation or suspension of registration under sub-section 2 of
section 29 of the CGST Act, 2017:
Answer:
The proper officer may cancel the registration of a person from such date, including any retrospective date, as
he may deem fit, in the following cases:-
(i) A registered person has contravened any of the following prescribed provisions of the GST law:
(a) he does not conduct any business from the declared place of business
(b) he issues invoice/bill without supply of goods/services in violation of the provisions of GST law
(c) he violates the provisions of anti-profiteering.
(d) he violates the provision relating to furnishing of bank details.
(ii) A person who opted for composition levy has not furnished returns for 3 consecutive tax periods.
(iii) A registered person has not filed returns for continuous period of 6 months.

(iv) Voluntarily registered person has not commenced the business within 6 months from the date of
registration.
(v) Registration was obtained by means of fraud, wilful misstatement or suppression of facts.
Proper officer shall not cancel the registration without giving the person an opportunity of being heard.
During pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the
registration for prescribed period and in prescribed manner.
9. Explain the following terms regarding e-way bill under the relevant CGST Rules:
(i) Consolidated e-way bill in case of road transport.
(ii) Acceptance/rejection of e-way bill.
Answer:
(i) Consolidated e-way bill in case of road transport
Consolidated e-way bill (EWB) is a single document containing the details of multiple e-way bills (even
with different validity periods) in respect of multiple consignments of various consignors and consignees
being transported in a single vehicle/ conveyance generated by the transporter to carry a single
document instead of carrying separate documents for each consignment in the conveyance
(ii) Acceptance/rejection of e-way bill

The details of the e-way bill generated shall be made available to:
supplier (if registered), where the information in Part A of e-way bill is furnished by recipient/transporter, or
recipient (if registered), where the information in Part A of e-way bill is furnished by supplier/transporter,
who shall communicate his acceptance or rejection of the consignment covered by the e-way bill.
If such person does not communicate the acceptance/rejection within

 72 hours from the time of the details being made available to him on the common portal or
 the time of delivery of goods,
whichever is earlier, it will be deemed that he has accepted the details.
10.
(i) Explain with reasons whether transfer of title and /or possession is necessary for a transaction to
constitute supply of goods under the laws of GST.
(ii) Explain the provisions relating to the transactions where tax invoice is not required to be issued
under the CGST Act, 2017.
Answer:
(i) In terms of Schedule II of the CGST Act, 2017, for a supply to constitute the supply of goods, either the
title in the goods is to be transferred immediately or the title in goods is to be transferred under an
agreement which stipulates that property in goods shall pass at a future date upon payment of full
consideration as agreed.
Therefore, transfer in title irrespective of the transfer of possession is necessary in such cases.
(ii) The tax invoice is not required to be issued under the CGST Act, 2017 in the case of supply of goods
and/or services of value less than ₹ 200 to an unregistered recipient who does not require such invoice.
Further, the tax invoice is also not required to be issued under the CGST Act, 2017 in the case of:-
(a) supply of liquid gas where the quantity at the time of removal from the place of business of the
supplier is not known,
(b) transportation of goods for job work,
(c) transportation of goods for reasons other than by way of supply, or
(d) such other supplies as may be notified by the Board.

GST By CA Suraj Agrawal SATC J.1
GST - PRACTICE TEST PAPER - SET ‘J’
Source: CA Intermediate - Nov 2020 Exam (New Syllabus)
1. [ITC Chapter] KNK Ltd., a registered supplier of Mumbai is a manufacturer of heavy machines. Its
outward supplies (exclusive of GST) for the month of January, 20XX are as follows:
S.N. Particulars Amount (₹)

(i) Inter-State 85,00,000
(ii) Intra-State 15,00,000
Applicable rate of CGST, SGST and IGST on outward supply are 9%, 9% and 18% respectively.
Details of GST paid on inward supplies during the month of January, 20XX are as follows:
S.N. Particulars CGST SGST

paid (₹) paid (₹)
(i) Raw material A 60,000 60,000
(of which 70% of inputs procured were used and 30% were in stock
at the end of the January, 20XX)
(ii) Raw material B 50,000 50,000
(of which 90% material received in factory and remaining material
completely damaged due to a road accident on the way to factory.
There was no negligence on the part of the KNK Ltd.)
(iii) Construction of pipelines laid outside the factory premises 30,000 30,000
(iv) Insurance charges paid for trucks used for transportation of goods. 55,000 55,000
Additional Information:
(i) There is no opening balance of any input tax credit and all the conditions necessary for availing
the input tax credit (ITC) have been fulfilled.
(ii) Details of GST paid on inward supplies are available in GSTR-2A except for item (i) i.e. Raw
Material A, for which supplier has not filed its GSTR-1 for the month of January 20XX, hence
corresponding input tax credit (ITC) is not reflecting in GSTR-2A of KNK Ltd. in January,
20XX.
Compute the following:

(i) Amount of eligible input tax credit (ITC) available for the month of January, 20XX.
(ii) Minimum net GST payable in cash, for the month of January, 20XX after using available input tax
credit.
Working notes should form part of your answer.

Answer
(i) Computation of amount of eligible ITC available for the month of January, 20XX
S. Particulars CGST (₹) SGST (₹)

No.
(i) Raw materials B (90%) [Note-1] 45,000 45,000
(ii) Construction of pipelines laid outside the factorypremises [Note-2] Nil Nil
(iii) Insurance charges paid for trucks used for transportation of goods 55,000 55,000
[Note-3]
(iv) Raw materials A [Note-4] Nil Nil
(v) Eligible ITC on invoices the details of which are available in 1,00,000 1,00,000
GSTR-2A (45,000 + (45,000 +
55,000) 55,000)
(vi) ITC on invoices the details of which are not available in GSTR-2A, i.e. 5,000 5,000
the invoices which have not been uploaded by the suppliers in their
GSTR-1 [Note-4]
Total eligible ITC 1,05,000 1,05,000
Notes:
1. ITC on goods destroyed is blocked under section 17 of the CGST Act, 2017.
2. ITC on works contract services availed for construction of plant and machinery is allowed but
pipelines laid outside the factory premises are excluded from the definition of plant and
machinery and hence, ITC thereon is blocked.
3. ITC on motor vehicles used for transportation of goods is allowed. Further, ITC is also allowed
on insurance services relating to motor vehicles, ITC on which is allowed.
4. Where invoice has not been uploaded by the supplier in its GSTR-1, 5% of the eligible ITC
available in respect of the uploaded invoices can be claimed by the recipient, i.e. 5% of
₹1,00,000.
(ii) Computation of minimum net GST payable in cash for the month of January, 20XX
Particulars Value (₹) CGST SGST IGST

@ 9% (₹) @ 9% (₹) @ 18% (₹)
Inter-State outward supplies 85,00,000 15,30,000
Intra-State outward supplies 15,00,000 1,35,000 1,35,000
Total output tax payable 1,35,000 1,35,000 15,30,000
Less: Set off of CGST and SGST credit against
CGST and SGST liability respectively (1,05,000) (1,05,000)
Minimum net GST payable in cash 30,000 30,000 15,30,000
2. [IMPORTANT] VALUE OF SUPPLY - Following are the particulars, relating to one of the machine
sold by SQM Ltd. to ACD Ltd. in the month of February 20XX at list price of ₹ 9,50,000 (exclusive
of taxes and discount).
Further, following additional amounts have been charged from ACD Ltd:

(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) 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 SQM Ltd. waived the interest payable.
(ii) SQM Ltd. received ₹ 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 ₹ 9,50,000.
(iii) ACD Ltd. deducted discount of ₹ 15,000 at the time of final payment, which was not as per
agreement.
(iv) SQM Ltd. collected ₹ 9,500 as TCS (tax collected at source) under the provisions of the Income
Tax Act, 1961.
Compute the value of taxable supply as per the 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.
Answer
Computation of Value of taxable supply
List price (exclusive of taxes and discount) 9,50,000
(i) Municipal taxes [Note-1] 45,000
(ii) Outward freight charges [Note-2] 65,000
Notes:
1. Tax other than GST, if charged separately, are includible in the value in terms of section 15.
2. Since contract is to deliver machine at buyer’s factory, it is a composite supply wherein the freight
charges will be added to the value of principal supply of machine.
3. Value of supply includes interest charged for delayed payment. However, since the interest on delayed
payment has been waived off, the same has not been added to the value.
4. Subsidy provided by non-Government bodies is includible in the value in terms of section 15 provided the
same is directly linked to the price. Since subsidy received from NGO is not directly linked to the
price of the machine, the same has not been added to the value.
5. Since the discount was not known or agreed to at the time of supply of goods to the buyers, such
discount cannot be reduced from the price, in terms of section 15.
6. TCS is not includible in the value of supply as it is an interim levy not having the character of tax.
3. In the following independent cases, decide, who is liable to pay GST, if any.
You may assume that recipient is located in the taxable territory. Ignore the aggregate turnover and
exemption available.
(i) 'Veer Transport', a registered Goods Transport Agency (GTA) paying IGST @ 12%, transported
goods by road of Dilip & Company, a sole proprietary firm (other than specified person) which is
not registered under GST or any other Law
(ii) Mr. Kamal Jain, an unregistered famous author, received ₹ 20 lakh of consideration from PQR
Publications Ltd. for supply of services by way of temporary transfer of a copyright covered under
section 13(1)(a) of the Copyright Act, 1957 relating to original literary works of his new book.
Answer
(i) In case of a GTA service, where GST is payable @ 5% and recipient is one of the specified recipients, tax
is payable by the recipient of service under reverse charge.
However, where GST is payable @ 12%, tax is payable under forward charge by the supplier of
service. Therefore, in the given case, tax is payable under forward charge by "Veer Transport", a
registered GTA.
Note In the given case, since the recipient of service is other than specified recipient, i.e.,
unregistered sole proprietorship firm, GTA service is exempt from GST. However, in the above
answer, the said exemption has been ignored since the question specifically requires the
students to ignore the exemptions, if any, available.
(ii) Supply of services by an author by way of transfer of a copyright covered under section 13(1)(a) of the
Copyright Act, 1957 relating to original literary works to a publisher located in the taxable territory is
taxable under reverse charge mechanism.
Thus, in the given case, the recipient of service, i.e. PQR Publications Ltd. is liable to pay GST.
The tax can be paid by the author under forward charge if the author is a registered person. Since
in the given case, the author is an unregistered person, the said option is not available to him.
4. BBD Pvt. Ltd. of Gujarat exclusively manufactures and sells product 'Z' which is exempt from GST
vide notifications issued under relevant GST legislations. The company sells 'Z' only within
Gujarat and is not registered under GST laws. The turnover of the company in the previous year
2019-20 was ₹ 50 lakh. The company expects the sales to grow by 10% in the current year 2020-21.
However, effective 01.01.2021, exemption available on 'Z' was withdrawn by the Central Government
and GST@ 5% was imposed thereon. The turnover of the company for the nine months ended on
31.12.2020 was ₹ 42 lakh.
BBD Pvt. Ltd. is of the opinion that it is not required to get registered under GST for current
financial year 2020-21.
Examine the above scenario and advise BBD Pvt. Ltd. whether it needs to get registered under
GST or not.
Answer
For a supplier exclusively engaged in intra-State supply of goods, the threshold limit of turnover to obtain
registration in the State of Gujarat is ₹ 40 lakh. However, a person exclusively engaged in the business of
supplying goods and/or services that are not liable to tax or are wholly exempt from tax is not liable to
registration.
Therefore, since BBD Pvt. Ltd. was engaged exclusively in supplying exempted goods till 31.12.2020, it
was not required to be registered till that day; though voluntary registration was allowed.
The position, however, will change from 01.01.2021 as the supply of goods become taxable from that
day and the turnover of BBD Pvt. Ltd. is more than ₹ 40 lakh. Since the aggregate turnover limit of
₹ 40 lakh includes exempt turnover also, turnover of ‘Z’ till 31.12.2020 will be considered for
determining the threshold limit even though the same was exempt from GST.
Therefore, BBD Pvt. Ltd. needs to register within 30 days from 01.01.2021.

5. "It is mandatory to furnish the details of conveyance in Part-B of E-way Bill."
Comment on the validity of the above statement with reference to provisions of E-Way Bill under
CGST Rules, 2017.
Answer
The given statement is partially valid.
An e-way bill is valid for movement of goods by road only when the information in Part-B
– which includes details of conveyance - is furnished.
However, the details of conveyance may not be furnished in Part-B of the e-way bill where the
goods are transported for a distance of up-to 50 km within the State/Union territory:
(a) from the place of business of the consignor to the place of business of the transporter for further
transportation or
(b) from the place of business of the transporter finally to the place of business of the consignee.
6. "In Form GSTR-1, submission of invoice-wise details of outward supplies is mandatory for all
kind of invoices issued during the tax period."
Comment on the validity of the above statement with reference to GST laws.
Answer
The said statement is not valid.
In respect of following outward supplies, consolidated details and not invoice-wise details are required to
be uploaded in the GSTR-1:
(a) Intra-State supplies made to unregistered persons for each rate of tax
(b) Inter-State supplies made to unregistered persons with invoice value up-to ₹ 2,50,000 for
each rate of tax separately for each State.
7. Who can impose restrictions on utilization of input tax credit (ITC) available in the electronic credit
ledger and under what circumstances can restrictions be imposed under the CGST Rules 2017?
Answer [RULE 86A - Payment of Tax Chapter (SATC Book)]

The Commissioner or an officer (not below the rank of an Assistant Commissioner) authorised by him has
been empowered to impose restrictions on utilization of ITC available in the electronic credit ledger.
The restrictions can be imposed under the CGST Rules, 2017 in the following circumstances:
(i) ITC has been availed on the basis of tax invoices/valid documents -
 issued by a non-existent supplier or by a person not conducting any business from the registered
place of business; or
 without receipt of goods and/or services; or
 the tax in relation to which has not been paid to the Government.
(ii) Registered person availing ITC has been found non-existent or not to be conducting any business
from the registered place of business; or
(iii) Registered person availing ITC is not in possession of tax invoice/valid document.
8. Explain the order of discharge of tax and other dues as per the provisions of Section 49(8) of the
CGST Act, 2017.
Answer
The order of discharge of tax and other dues as per provisions of Section 49(8) of the CGST
Act, 2017 is as under:-
(a) self-assessed tax and other dues related to returns for the previous tax periods should be discharged
first.
(b) the self-assessed tax and other dues for the current period should be discharged next.
(c) Lastly, any other amount payable including demand determined under section 73 or section 74 should be
discharged.

9. With reference to provisions of the CGST Act, 2017 discuss in brief, when ''Importation of
services" is to be considered as supply and when it is not to be considered as supply.
Answer
Importation of services for a consideration whether or not in the course or furtherance of business is to be
considered as supply.
Importation of services by a person without consideration is deemed as supply provided the

following two conditions are satisfied:-
(a) such import is from related person or from his establishments located outside India, and
(b) such import is in the course or furtherance of business.
In case any or both of the above two conditions is/are not satisfied, the import of services without
consideration shall not be deemed as supply.

GST By CA Suraj Agrawal SATC K.1
GST - PRACTICE TEST PAPER - SET ‘K’
Source: CA Intermediate - Nov 2020 Exam (Old Syllabus)
1. [Important] EXEMPTION - Anand Trust, Kolkata is registered under section 12AA of the Income Tax Act,
1961. It has provided following particulars relating to the activities carried out by it for the month of
March, 20XX.
Donation received against display of name of a city based school in annual religious 5,00,000
book published by the Trust
Receipts from sale of food in Anand food court, located in the Trust premises 2,00,000
Refundable deposit of ₹ 2,00,000 and annual fees of ₹ 1,00,000 received from 3,00,000
restaurants (located in West Bengal) using brand name and logo of Anand
Food Court
Donation received for Pooja organized in Trust premises on occasion of ‘Shivratri’ 1,00,000
Receipts from Skill Development Program for Senior Citizens (aged more than 4,00,000
65 years) residing in Kolkata
Amount received for activities relating to preservation of Tigers in Sunderbans, West 3,00,000
Bengal
Letting out of precincts of a religious place owned by the Trust in Kolkata 2,00,000
(Rent ₹ 10,000 per day)
From the given information, you are required to calculate the value of taxable supply.
Answer:
Donation received against publishing the name of a school in annual religious 5,00,000
publication of the Trust
[Being a non-charitable activity, the service provided by the Trust is not eligible for exemption
from GST.]
Receipts from sale of food in food court in the premises of the Trust 2,00,000
from GST.]
Annual fees received from restaurants for use of brand name and logo of food court 1,00,000
from GST. However, deposit being refundable in nature cannot be construed as consideration.]
Donation received for pooja organized in Trust premises on occasion of 'Shivratri' Nil
[Services of conduct of a religious ceremony are exempt from GST.]
Receipts from skill development program for senior citizens (aged more than 65 years) 4,00,000
residing in Kolkata
[Skill development program conducted by the Trust for persons over the age of 65 years is not
a charitable activity since such persons are not residing in rural area, but in an urban area
(Kolkata). Being a non-charitable activity, said service provided by the Trust is not eligible for
exemption from GST.]

Amount received for activities relating to preservation of Tigers in Sunderbans, West Nil
Bengal
[Being a charitable activity of preservation of wildlife, the service provided by the Trust is
eligible for exemption from GST.]
Letting out of precincts of religious place owned by the Trust in Kolkata 2,00,000
[Renting of precincts of a religious place meant for general public owned by a charitable trust is
exempt only when the rent is less than ₹ 10,000 per day. Since the rent is ₹ 10,000 per day,
the same is not eligible for exemption.]
Total value of taxable supply 14,00,000
2. Guru Enterprises (Delhi), a registered taxpayer, made a taxable supply to Y Ltd. (Delhi). The value
related details of the said supply are as follows :
Particulars Amount
(₹)
Price of goods (does not include any tax or discounts) 10,00,000
Tax levied by the Municipal Authority 10,000
Subsidy received from Jiva Enterprises Pvt Ltd. (The price above is 1,00,000
after consideration of such subsidy amounts)
Amount incurred by Y Ltd. for post delivery inspection. (Charges 5,000
incurred post receipt of goods by Y Ltd.)
In respect of the above supply, Guru enterprises had procured some raw material from X Ltd., for
which it owed ₹ 25,000. The said amount was directly paid by Y Ltd. to X Ltd. and is not included in
the price of goods mentioned above.
The payment of consideration for the said supply was delayed by Y Ltd. and hence an interest
amount of ₹ 20,000 (inclusive of GST) was also charged by Guru Enterprises.
The applicable tax rate on such supply is as follows CGST @ 6%, -SGST@6% and IGST@ 12%.
You are required to determine the taxable value as well as the applicable tax liability for the said
transaction.
Answer
Computation of taxable value and tax liability
Particulars Amount
(₹)
Price of goods (exclusive of tax and discounts) 10,00,000
Add: Tax levied by Municipal Authority 10,000
[Tax other than GST, if charged separately, are includible in the value in terms of section 15.]
Add: Subsidy received from Jiva Enterprises Pvt. Ltd. 1,00,000
[Subsidy provided by non-Government bodies and which is directly linked to the price is
includible in the value in terms of section 15.]
Add: Post-delivery inspection charges -
[As per section 15, anything done by the supplier in respect of the supply of goods after the
delivery of goods is not includible in value.]
Add: Amount directly paid by Y Ltd. to X Ltd. 25,000
[Liability of the supplier, in relation to the supply being valued, if discharged by the recipient of
supply and not included in the price, is includible in the value in terms of section 15.]
Add: Interest 17,857
[Interest for delayed payment of consideration is includible in the value in terms of section 15.
It has been presumed that interest is inclusive of GST ₹ 20,000 x 100/112 (rounded off).]
CGST @ 6% 69,171
SGST @ 6% 69,171

3. Important: ABC Ltd., is a contractor executing works contract service, situated in Tamil Nadu. It
entered into an agreement with XYZ Ltd. (another registered person in Tamil Nadu) to provide works
contract services in various States in South India. The precise location details were to be shared
later. In this regard, ABC Ltd. received an advance of ₹ 1 Crore (including GST).
You are to advise ABC Ltd. whether:

(A) ABC Ltd. is liable to pay GST on such advance amount.
(B) Whether the tax liability is to be paid as CGST + SGST or IGST
(C) What would be the tax rate at which such tax liability is to be paid?
Answer
(A) Supply includes inter alia all forms of supply made or agreed to be made. Thus, advance payment for a
supply agreed to be made is liable to tax.
In case of services, the time of supply is issue of invoice or receipt of payment, whichever is earlier.
Therefore, in the given case, ABC Ltd. will be required to pay tax on advance of ₹ 1 crore at the time of
receipt of advance.
(B) Where at the time of receipt of advance, nature of supply is not determinable, the same is treated as
inter-State supply and thus, IGST is charged thereon.
(C) Where at the time of receipt of advance, rate of tax is not determinable, tax is paid at the rate of 18%.
4. Seven Wonders Pvt Ltd., a registered supplier, is involved in manufacturing of taxable goods.
Following information has been provided by the company pertaining to GST paid on purchases
made/input services availed by it during the month of January, 20XX.
Particulars Amount
(₹)
Raw Material (To be received in February, 20XX) 2,00,000
Capital Goods 5,00,000
(Invoice missing for one out of 5 items and GST paid on the same was ₹ 70,000)
GST paid on free samples distributed 6,000
Trucks used for transportation of raw materials 1,50,000
GST paid on health insurance policies (Not under statutory obligation) 80,000
It may be assumed that all the other necessary conditions for availing input tax credit have been
complied with.
Determine the amount of input tax credit that can be availed by Seven Wonders Pvt. Ltd., in the
month of January, 20XX.
Answer
Particulars (₹)
Raw material -
[Since the raw material is not received in January, 20XX, ITC in respect of the same cannot be
availed in January, 20XX.]
Capital goods 4,30,000

ITC can be availed only on the basis of a valid document. Thus, ITC in respect of the item for
which the invoice is missing cannot be availed.]
GST paid on free samples distributed -

[ITC on goods written off or disposed of by way of free samples is blocked under section 17 of
the CGST Act.].
Trucks used for transportation of raw materials 1,50,000
[ITC on motor vehicles used for transportation of goods is allowed unconditionally.]
GST paid on health insurance policies -

[ITC on health insurance taken for employees is allowed only when there is a statutory
obligation on the employer to provide the same.]
ITC that can be availed in the month of January 20XX 5,80,000

5. Examine eligibility of input tax credit in the following cases in accordance with GST laws:
(i) Repairs and maintenance of tempos used by XYZ Limited for transportation of finished goods.
(ii) Company procuring health insurance services for benefit of its employees (Procurement of
health insurance is mandatory under Factories Act, 1948).
(iii) Supply of outdoor catering services at the Annual General Meeting of ABC Ltd.
(iv) Luxury motor vehicle (seating capacity of 5 persons) bought by XYZ Ltd. (engaged in soap
manufacturing business) for its directors.
(v) Motor Vehicle used by courier agency for transportation of courier consignments.
Answer
(i) ITC on motor vehicles used for transportation of goods is allowed. Further, ITC is allowed on repair and
maintenance services relating to motor vehicles, ITC on which is allowed.
Therefore, repairs and maintenance of tempos used by XYZ Limited for transportation of finished goods
is eligible for ITC.
(ii) ITC on health insurance services is allowed only when such services are provided by an employer to its
employees under a statutory obligation.
Since in the given case, procurement of health insurance is mandatory under the Factories Act, 1948,
health insurance service procured by the company for benefit of its employees is eligible for ITC.
(iii) ITC on catering services is allowed only when such services are
(i) used by a registered person for making outward catering supply or as an element of a taxable
composite or mixed supply, or
(ii) provided by an employer to its employees under a statutory obligation.
In view of the above, outdoor catering service supplied at the Annual General Meeting of ABC Ltd. is not
eligible for ITC.
(iv) ITC on motor vehicles for transportation of persons with seating capacity of up to 13 persons (including
driver), can be availed only if the taxable person is in the business of transportation of passengers or is
providing the services of imparting training on driving such motor vehicles or is in the business of supply
of such motor vehicles.
In view of the above, luxury motor vehicle of seating capacity of 5 persons bought by XYZ Ltd. for its
directors is not eligible for ITC as XYZ Ltd. is engaged in manufacturing business.
(v) ITC on motor vehicles is allowed when such motor vehicle is used for transportation of goods.
Therefore, motor vehicle used by courier agency for transportation of courier consignments is eligible for
ITC.
6. The aggregate turnover of X Ltd. in Delhi exceeds the applicable threshold limit for registration on
1st December. The application for registration is submitted on 20 th December. Registration certificate
is granted on January 1. Determine the effective date of registration along with reasoning.
Answer
Where a person submits the application for registration within 30 days of becoming liable for registration, the
effective date of registration is the date on which the person becomes liable to registration; otherwise it is the
date of grant of registration.
Since X Ltd. applied for registration within 30 days of becoming liable to registration, the effective date of
registration is 1st December.
7. M/s Sonu is an agent undertaking supply of goods on behalf of another taxable person i.e. Mr.
Ghanshyam. The turnover of M/s Sonu does not exceed the applicable threshold limit. Is M/s Sonu
required to obtain registration under GST? Explain in brief.
Answer
A person who makes taxable supply of goods on behalf of other taxable persons whether as an agent or
otherwise is mandatorily required to obtain registration irrespective of the quantum of the aggregate turnover.
Therefore, in the given case, M/s Sonu is mandatorily required to obtain registration irrespective of the fact
that its turnover does not exceed the applicable threshold limit.

8. Briefly discuss the following with reference to GST law:
(i) Revised Tax Invoice·
(ii) Bill of Supply
(iii) Receipt Voucher
(iv) Payment Voucher
(v) Refund Voucher
Answer
(i) A registered person who has been granted registration with effect from a date earlier than the date of
issuance of certificate of registration to him may, issue a revised tax invoice against the invoices already
issued during said period, within 1 month from the date of issuance of certificate of registration in
prescribed manner.
(ii) A registered person supplying exempted goods and/or services or paying tax under composition levy,
shall issue in prescribed manner, a bill of supply instead of a tax invoice, containing prescribed
particulars.
(iii) A registered person shall, on receipt of advance payment with respect to any supply of goods and/or
services, issue a receipt voucher or any other document, containing prescribed particulars, evidencing
receipt of such payment.
(iv) A registered person who is liable to pay tax under reverse charge under section 9(3)/(4) of the CGST Act
shall issue a payment voucher at the time of making payment to the supplier.
(v) Where, on receipt of advance payment with respect to any supply of goods and/or services the
registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is
issued in pursuance thereof, the said registered person may issue to the person who had made the
payment, a refund voucher against such payment.
9. Briefly discuss GSTR-5 return
Solution
A registered non-resident taxable person is required to file a simplified monthly tax return in Form GSTR-5
for every calendar month or part thereof incorporating the details of its outward supplies and inward supplies.
GSTR-5 should be furnished within 20 days after the end of the calendar month or within 7 days after the last
day of validity period of the registration, whichever is earlier.
10. Briefly discuss Final Return under GST. Mention persons who are not required to file annual return
under GST.
Solution
Every registered person who is required to furnish return u/s 39(1) and whose registration has been
surrendered or cancelled is required to file a final return electronically in prescribed form within 3 months of
the:
(i) date of cancellation, or,
(ii) date of order of cancellation, whichever is later.
Following persons are not required to file the annual return:

(i) Casual taxable persons.
(ii) Non- resident taxable person
(iii) Input service distributors
(iv) Persons authorized to deduct/collect tax at source under section 51/52 of the CGST Act and
(v) Person supplying OIDAR services from outside India to unregistered persons in India

Class Notes

GST By CA Suraj Agrawal SATC L.1
GST - PRACTICE TEST PAPER - SET ‘L’
Source: CA Intermediate Exam - RTP (Nov 2020 Exam)
1. PTL Pvt. Ltd. is a retail store of merchandise located in 25 States and/or UTs in the country. For the
purpose of clearance of stock of merchandise and to attract consumers, PTL Pvt. Ltd. launched
scheme of “Buy One Get One Free” for the same type of merchandise, for instance, one shirt to be
given free with purchase of one shirt. For saving cost, PTL Pvt. Ltd. directly purchases
merchandise from the manufacturers.
In the month of May, in order to save employee cost, PTL Pvt. Ltd. purchased a tempo traveller
worth ` 12,00,000 with seating capacity of 25 persons (including driver) for transportation of its
employees.
Further, for ensuring the well-being of its employees, PTL Pvt. Ltd. voluntarily obtained the health
insurance cover of ` 2,00,000 for each employee in the same month. The premium of ` 1,500 per
employee has been paid by the company for 100 employees.
In the month of July, Mr. Raghav, a customer of the company, filed a law suit in the Court, against
the company for not supplying goods of the value of ` 1,00,000. PTL Pvt Ltd. engaged Mr. Ram, an
advocate, to represent it in Court for an agreed consideration of ` 25,000. As per the terms of the
contract, Mr. Ram issued an invoice on 5th July. However, consideration was not paid till February
next year.
Note - All the amounts given above are excluding taxes and all transactions are intra- State
transactions. Rates of tax are CGST - 9% and SGST – 9%. However, for tempo traveller, the rates of
taxes are CGST - 14% and SGST – 14%.
In relation to the above, answer the following questions:
(i) With respect to “Buy One, Get One” offer, which of the following statements is true:
(a) It will not be considered as supply at all since no consideration is involved in one of the
items.
(b) Supply of item for which consideration is charged is a supply under section 7 of the CGST
Act, 2017 while supply of the other item supplied free of cost is not a supply.
(c) These are two individual supplies where a single price is charged for the entire supply.
Since a single price is charged, the same will always be taxed as a mixed supply.
(d) These are two individual supplies where a single price is charged for the entire supply. Their
taxability will depend upon as to whether the supply is a composite supply or a mixed
supply.
(ii) Eligible input tax credit for the month of May (i) on the purchase of tempo traveller and (ii) on
health insurance premium paid (assuming that all other conditions, for availing input tax credit
have been complied with) is:
(a) (i) CGST - Nil, SGST - Nil and (ii) CGST - Nil, SGST - Nil
(b) (i) CGST - ` 1,68,000, SGST - ` 1,68,000 and (ii) CGST - Nil, SGST - Nil
(c) (i) CGST - Nil, SGST - Nil and (ii) CGST - ` 18,000, SGST - ` 18,000
(d) (i) CGST - ` 1,68,000, SGST - Rs1,68,000 and (ii) CGST - ` 18,000, SGST - ` 18,000

(iii) Which of the following statements is true in respect of the services of advocate availed by the
company?
(a) CGST-` 2,250 and SGST- ` 2,250 on advocate services are payable by PTL Pvt Ltd. ITC
availed thereon is to be added to its output tax liability with interest as consideration along
with tax is not paid within 180 days of the issuance of invoice.
(b) CGST-` 2,250 and SGST- ` 2,250 on advocate services are payable by Mr. Ram. ITC availed
thereon is to be added to output tax liability of PTL Pvt Ltd. with interest as consideration
along with tax is not paid within 180 days of the issuance of invoice.
(c) CGST-` 2,250 and SGST- ` 2,250 on advocate services are payable by PTL Pvt. Ltd. The
condition of payment of consideration along with tax within 180 days of the issuance of
invoice does not apply in the given case.
(d) CGST-` 2,250 and SGST- ` 2,250 on advocate services are payable by Mr. Ram. The
condition of payment of consideration along with tax within 180 days of the issuance of
invoice does not apply in the given case.
2. [Important] Mr. Kumar started interior designing practice from the month of January. His turnover
up to the month of March was ` 12,50,000. On 30th June, his turnover exceeded ` 20,00,000 &
reached to ` 20,05,000.
Mr. Kumar applied for GST registration (as regular taxpayer) on 15th July and registration was
granted to him on 25 th July.
On 16th July, he entered into a contract for designing the flat of Mr. Shyam. The service was
completed on 22nd July and Mr. Kumar issued invoice on the same day for ` 6,00,000.
On 5th July, Mr. Kumar purchased capital goods amounting to ` 4,50,000 and from 25th July to 31st
July, he availed services amounting to ` 1,75,000 for the purpose of completing the service.
On 1st August, Mr. Kumar got another contract for interior designing from Mr. Ram, which he
accepted on 2nd August. The service was completed on 6th August and invoice was issued on 7th
August for ` 5,00,000. Payment was received on 29th August.
Note: All values are excluding taxes, unless specifically mentioned. Mr. Kumar makes only intra-
State outward supplies and all purchases are also intra-State. Rates of tax are CGST - 9% and SGST
– 9%.
In relation to the above, answer the following questions:

(i) The effective date of registration for Mr. Kumar is-
(a) 30th June
(b) 15th July
(c) 25th July
(d) 16th July
(ii) Mr. Shyam can issue a revised tax invoice till-

(a) 23rd October
(b) 8th September
(c) 25th September
(d) 25th August
(iii) Eligible input tax credit available with Mr. Kumar for the month of July is-
(a) CGST ` 40,500 & SGST ` 40,500
(b) CGST ` 15,750 & SGST ` 15,750
(c) CGST ` 56,250 & SGST ` 56,250
(d) CGST ` 36,000 & SGST ` 36,000
(iv) The time of supply of services provided by Mr. Kumar to Mr. Ram is-
(a) 7th August
(b) 1st August
(c) 29th August
(d) 06th August
(v) If instead of opting for regular scheme, Mr. Kumar opts to pay tax under section 10(2A) of the
CGST Act, 2017, the tax liability for the month of July will be-
(a) Nil
(b) CGST ` 54,000 & SGST ` 54,000
(c) CGST ` 18,000 & SGST ` 18,000
(d) CGST ` 78,150 & SGST ` 78,150
3. During the month of May, Z Ltd. sold goods to Y Ltd. for ` 2,55,000 and charged GST @ 18%.
However, owing to some defect in the goods, Y Ltd. returned the goods by issuing debit note of
` 40,000 in the same month. Z Ltd. records the return of goods by issuing a credit note of ` 40,000
plus GST in the same month. In this situation, GST liability of Z Ltd. for the month of May will be-
(a) ` 45,900
(b) ` 38,700
(c) ` 53,100
(d) ` 40,000
4. 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) Nil
5. Mr. Raghu avails services of Mr. Raja, a Chartered Accountant, as under-

(i) Audit of financial accounts ` 55,000
(ii) Tax audit and annual filing ` 10,000
(iii) Income-tax return filing of Mr. Raghu’s wife ` 5,000
All the above amounts are exclusive of taxes and the applicable rate of GST on these services is 18%.
The accountant of Mr. Raghu has booked the entire expenses of ` 70,000 plus GST in the books of
account. Mr. Raghu is eligible to take input tax credit of -
(a) ` 13,500
(b) ` 11,700
(c) ` 9,900
(d) ` 1,800
6. TT Pvt. Ltd., registered in Rajasthan, furnished following information for the month of June:
(i) Inter-State sale of goods for ` 1,25,000 to JJ Enterprises registered in Haryana
(ii) Inter-State purchases of goods from XYZ company, registered in Punjab, for ` 40,000
(iii) Intra-State purchases of goods from RR Traders, registered in Rajasthan, for ` 65,000
The applicable rate of GST is 18%. All the above amounts are exclusive of taxes.
GST liability payable in cash is-

(a) CGST ` 1,800 & SGST ` 1,800
(b) SGST ` 3,600
(c) IGST ` 3,600
(d) CGST ` 3,600
7. Pradeep Traders, registered in Haryana, sold goods for ` 2,05,000 to Balram Pvt. Ltd. registered in
Uttar Pradesh (GST is leviable @ 5% on said goods). As per the terms of sales contract, Pradeep
Traders has to deliver the goods at the factory of Balram Pvt. Ltd. For this purpose, Pradeep
Traders has charged freight of ` 2,400 from Balram Pvt. Ltd. GST is leviable @ 12% on freight. What
would be the net GST liability to be paid in cash in this case assuming that the amounts given
herein are exclusive of GST?

(a) IGST-` 37,332
(b) IGST-` 10,370
(c) CGST-` 18,666 and SGST-` 18,666
(d) CGST-` 5,185 and SGST-` 5,185
8. Prem & Sons had taken GST registration on 1st January but failed to furnish GST returns for the
next 6 months. Owing to this, the proper officer cancelled its registration on 25th July and served
the order for cancellation of registration on 31st July. Now, Prem & Sons wants to revoke the
cancellation of registration. Prem & Sons can file an application for revocation of cancellation of
registration on or before.
(a) 30th August
(b) 29th August
(c) 29th September
(d) 29th October
9. XX, registered in Delhi, purchased books from PC Traders, registered in Uttar Pradesh. Books are
exempt from GST. XX arranged the transport of these books from a goods transport agency (GTA)
which charged a freight of ` 9,000 for the same. GST is payable @ 5% on such GTA services. Which
of the following statement is correct in the given context:
(a) GST of ` 450 is payable by XX on revere charge basis.
(b) Supply of goods and supply of GTA service is a composite supply wherein supply of goods is
the principal supply and since principal supply is an exempt supply, no tax is payable on
freight.
(c) Since exempt goods are being transported, service provided by GTA for transporting the same
is also exempt.
(d) GST of ` 450 is payable by the GTA.
10. Kalim & Associates made an application for cancellation of GST registration in the month of March
due to closure of its business. Its application for cancellation of GST registration was approved on
14th September. In the given case, Kalim & Associates is:
(a) required to file Final Return on or before 13 th December
(b) not required to file Final Return
(c) required to file Final Return on or before 30th September
(d) required to file Final Return on or before 14th December
SUGGESTED ANSWERS
1.
(i) (d)
(ii) (b)
(iii) (c)
2.
(i) (a)
(ii) (d)
(iii) (c)
(iv) (a)
(v) (c)
3. (b)
4. (a)
5. (b)
6. (c)
7. (b)
8. (a)
9. (a)
10. (d)

11. [IMPORTANT]
(a) [ITC Chapter] Babla & Bros. is exclusively engaged in making exempt supply of goods and is
thus, not registered under GST. On 1st October, the exemption available on its goods gets
withdrawn. On that day, the turnover of Babla & Bros. was ` 50 lakh.
Examine the eligibility of Babla & Bros. for availing ITC, if any.
(b) [ITC Chapter] Mamta Sales trades in exempt goods and provides taxable services. It is registered
under GST. On 1st October, the exemption available on its goods gets withdrawn. Analyze the
scenario and determine the eligibility of Mamta Sales for availing ITC, if any, on inputs and/or
capital goods used in the supply of exempt goods.
Solution:
(a) Since the exemption available on goods being supplied by Babla & Bros. is withdrawn, it becomes liable
to registration as its turnover has crossed the threshold limit (for registration) on the day when the
exemption is withdrawn.
Assuming that Babla & Bros. applies for registration within 30 days of 1st October and it obtains such
registration, it will be entitled to take credit of input tax in respect of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock on the day immediately preceding the date
from which it becomes liable to pay tax, i.e. 30th September [Section 18(1)(a) of the CGST Act, 2017].
Input tax paid on capital goods will not be available as input tax credit in this case.
(b) If the exempt supply made by a registered person becomes a taxable supply, provisions of section
18(1)(d) of the CGST Act, 2017 become applicable. In the given case, since Mamta Sales is a registered
person, section 18(1)(d) will be applicable.
As per section 18(1)(d), Mamta Sales will be entitled to take credit of input tax in respect of inputs held
in stock and inputs contained in semi-finished or finished goods held in stock relatable to such exempt
supply and on capital goods exclusively used for such exempt supply on the day immediately
preceding the date from which such supply becomes taxable, i.e. 30th September.
Input tax credit on capital goods will be reduced by 5% per quarter or part thereof from the date
of invoice.
12. [Payment of Tax] Suhasini is a registered software consultant. On account of her ill health, she
could not provide any services during the month of October. However, she had to incur all the
expenses relating to her office. She paid ` 75,000 to various vendors. Total GST involved on the
goods and services procured by her is ` 13,500. Out of the total bills paid by her, one bill for
` 15,000 relates to security services availed for security of her office, tax on which is payable under
reverse charge. GST involved in such bill is ` 2,700.
Suhasini is of the opinion that for the month of October, no GST is payable from electronic cash
ledger as she has sufficient balance of ITC for payment of GST under reverse charge on security
services.
Do you think Suhasini is right? Explain with reasons.
Solution:
The amount available in the electronic credit ledger, i.e. input tax credit may be used for making any
payment towards output tax. Output tax, in relation to a taxable person, means the tax chargeable on
taxable supply of goods or services or both made by him or by his agent but excludes tax payable by him
on reverse charge basis.
Therefore, input tax credit cannot be used to pay the tax liability under reverse charge. The same is always
required to be paid through electronic cash ledger and not electronic credit ledger.
Thus, Suhasini is wrong and she should pay GST of ` 2,700 on security service through electronic
cash ledger.

13. [Important] Supply under GST + Payment of Tax + ITC - ‘XY’ of Kolkata is engaged in supply of
various goods and services. It pays GST under regular scheme. The following information is
provided by it for the month of July:
Payments Amount Receipts Amount (`)

(`)
Inter-State purchases of office 1,40,000 Inter-State supply of office stationery 2,00,000
stationery
Repairing of lorry used to 1,00,000 Intra-State supply of 500 combi packs 4,00,000
transport goods from containing one calculator and one
warehouse to clients’ location diary
[Intra-State supply]
Intra-State supply of services of 1,00,000
business correspondent to
Shubhvidhi Bank with respect to
accounts in its urban area branch
The following additional information is provided by ‘XY’ in relation to the above receipts and
payments:
(i) 10% of the inter-State supply of office stationery are made to unregistered persons.
(ii) Each combi pack (containing a calculator and a diary) is priced at ` 800. The calculator and the
diary are individually priced at ` 700 and ` 200 respectively.
(iii) An invoice of ` 40,000 towards purchase of office stationery is missing and no other tax paying
document is available in respect of such goods.
(iv) All the figures mentioned above are exclusive of taxes, wherever applicable.
(v) Rates of CGST, SGST and IGST for all services, office stationery and calculator are 9%, 9% and
18% respectively. Rates of CGST, SGST and IGST for diary are 14%, 14% and 28% respectively.
(vi) Subject to the information given above, all the necessary conditions for availing input tax credit
have been fulfilled.
Details of opening balances of input tax credit as on 1st July is given hereunder:
Tax Amount (`)

CGST 5,000
SGST 5,000
IGST 80,000
Compute the minimum net GST [CGST, SGST or IGST, as the case may be] payable in cash by ‘XY’ for
the month of July.
Solution:
Computation of minimum net GST payable in cash by ‘XY’ for the month of July
Particulars Value (`) CGST (`) SGST (`) IGST (`)

Total tax liability
Inter-State supply of stationery [Note 1] 2,00,000 36,000
Intra-State supply of 500 combi packs of calculators and 4,00,000 56,000 56,000
diaries [Note-2] (500 x (4,00,000 (4,00,000
800) x 14%) x 14%)
Intra-State supply of services of business 1,00,000 9,000 9,000
correspondent to a Shubhvidhi Bank with respect to (1,00,000 (1,00,000
accounts in its urban area branch [Note-3] x 9%) x 9%)

Total tax liability 65,000 65,000 36,000
Input tax credit (ITC)
Brought forward ITC 5,000 5,000 80,000
Inter-State purchase of office stationery [Note-4] 1,00,000 18,000
Intra-State repairing of lorry used for transportation of 1,00,000 9,000 9,000
goods [Note-5]
Total ITC 14,000 14,000 98,000
Minimum net GST payable in cash
IGST credit being set off against IGST liability (36,000)
IGST credit being used to pay CGST and SGST liability in (11,000) (51,000)
any order and in any proportion
CGST and SGST credit being used to pay CGST and (14,000) (14,000)
SGST liability respectively CGST SGST
Minimum net GST payable in cash 40,000 Nil Nil
Notes:-
1. Taxable supplies made by a registered person are liable to tax irrespective of whether they are made to
a registered person or to an unregistered person.
2. Supply of calculator and diary as a combi pack with a single price of ` 800 is a mixed supply. Being a
mixed supply comprising of two supplies, it shall be treated as supply of that particular supply
which attracts highest rate of tax.
3. Services provided by a business facilitator/ business correspondent to a banking company only with
respect to accounts in its rural area branch are exempt and not with respect to accounts in its urban
area branch.
4. ITC can be taken only on the basis of a valid tax paying document. Thus, ITC will not be available on
goods for which the invoice is missing.
5. ITC on motor vehicles used for transportation of goods is allowed. Further, ITC is allowed on repair and
maintenance services relating to motor vehicles, ITC on which is allowed.
Note: IGST credit, after being set off against IGST liability, can be utilised against CGST and SGST liability in
any order and in any proportion. Thus, there cannot be one answer for the minimum net CGST and SGST
payable in cash as the amount of CGST and SGST liabilities are the same as also the amount of ITC for
CGST and SGST is also the same.
14. [EXEMPTION] Mutiservices Private Ltd., registered in Punjab, is engaged in supplying a variety of
services. Its turnover was ` 35 lakh in the preceding financial year. It has provided the following
information for the month of April:
Particulars Amount (`)

Fee for the coaching provided to students for competitive exams. The coaching 6,24,000
centre is run by Mutiservices Private Ltd. in Punjab (Intra-State transaction)
Receipts for services provided in relation to conduct of examination in Pureit 19,200

University, Delhi (providing education recognized by Indian law), being an inter-State
transaction
Amount received for transportation of students and faculty from their residence to 24,000
Lotus Public School - a higher secondary
school – and back (Intra-State transaction)
Amount received for providing the security and housekeeping services in Dhaani 36,000
Public School – a pre-school (Intra-State transaction)
Note: Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively. All the amounts given
above are exclusive of taxes.
Compute the total GST liability of Multiservices Private Ltd. for the month of April.
Solution:
Computation of net GST liability of Multiservices Private Ltd. for the month of April:
Particulars Value of CGST SGST IGST @

supply @ 9% @ 9% 18%
(`) (`) (`) (`)
Fee for the coaching provided to students for competitive 6,24,000 56,160 56,160
exams [Note-1]
Services towards conduct of examination in Pureit University, 19,200 -
Delhi [Note-2]
Services of transportation of students and faculty from their 24,000 -
residence to Lotus Public School and back [Note-3]
Security and housekeeping services in Dhaani Public School 36,000 - -
[Note-4]
Total GST liability 56,160 56,160
Notes:-
1. Coaching centre run by Mutiservices Private Ltd. is not an educational institution since competitive
exam coaching does not lead to grant of a qualification recognized by law. Therefore, fee received for
coaching provided at such coaching centre is taxable.
2. Since Pureit University provides qualification recognized by law, it is an educational institution and
services provided to an educational institution, in relation to conduct of examination by such institution
are exempt from GST.
3. Since Lotus Public School provides education up to higher secondary school, it is an educational
institution and services of transportation of students, faculty and staff provided to an educational
institution are exempt.
4. Since Dhaani Public School provides pre-school education, it is an educational institution. Security and
housekeeping services provided within the premises of an educational institution are exempt.
15. [RETURN] The due date for payment of tax by a person paying tax under section 10 of the CGST Act,
2017, i.e. a composition supplier is aligned with the due date of return to be filed by the said person.
Discuss the correctness or otherwise of the statement.
Solution:
The statement is not correct. Every registered person paying tax under section 10, i.e. a composition
supplier, is required to file a return annually in Form GSTR-4. Form GSTR-4 for a financial year should be
furnished by 30 th April of the succeeding financial year. However, a composition supplier is required to pay
his tax on a quarterly basis.
A quarterly statement for payment of self-assessed tax in GST CMP-08 is required to be furnished by 18th
day of the month succeeding such quarter.
Therefore, while the return is to be furnished annually, payment of tax needs to be made on a quarterly
basis, by a composition supplier.

GST By CA Suraj Agrawal SATC M.1
GST - PRACTICE TEST PAPER - SET ‘M’
1. [REVERSE CHARGE] Mr. Vicky Frankyn, an unregistered famous author, received ` 3 crore of
consideration from Shiv Bhawan Publications (SBP) located in Indore for supply of services by way
of temporary transfer of a copyright covered under section 13(1)(a) of the Copyright Act, 1957
relating to original literary works of his new book. He finished his work & made available the book to
the publisher, but has yet not raised the invoice.
Mr. Vicky Frankyn is of the view that SBP is liable to pay tax under reverse charge on services
provided by him. SBP does not concur with his view and is not ready to deposit the tax under any
circumstances.
Examine whether the view of Mr. Vicky Frankyn is correct. Further, if the view of Mr. Vicky Frankyn is
correct, what is the recourse available with Mr. Vicky Frankyn to comply with the requirements of
GST law as SBP has completely refused to deposit the tax.
Solution:
Yes, the view of Mr. Vicky Frankyn is correct. GST is payable under reverse charge in case of supply of
services by an author by way of transfer/permitting the use or enjoyment of a copyright covered under
section 13(1)(a) of the Copyright Act, 1957 relating to original literary work to a publisher located in the
taxable territory in terms of reverse charge Notification No. 13/2017 CT(R) dated 28.06.2017. Therefore, in
the given case, person liable to pay tax is the publisher – SBP.
However, since SBP has completely refused to deposit the tax on the given transaction, Mr. Vicky Frankyn
has an option to pay tax under forward charge on the same. For the purpose, he needs to fulfill the
following conditions:
(i) since he is unregistered, he has to first take registration under the CGST Act, 2017
(ii) he needs to file a declaration, in the prescribed form, that he exercises the option to pay CGST on the
said service under forward charge in accordance with section 9(1) of the CGST Act and to comply with
all the provisions as they apply to a person liable for paying the tax in relation to the supply of any
goods and/or services and that he shall not withdraw the said option within a period of 1 year from the
date of exercising such option;
(iii) he has to make a declaration on the invoice, which he would issue to SBP, in prescribed form.
2. [CHARGE OF GST] - Chanchal started providing beauty and grooming services and inaugurated
“Care & Care Beauty Centre” in Janak Puri, Delhi on 01st April, 20XX. She opted to pay composition
tax under section 10(2A) in the said financial year.
The aggregate turnover of Care & Care Beauty Centre for the quarter ending 30th June, 20XX was
` 20 lakh. Further, for the half year ending 30th September, 20XX, the turnover reached ` 50 lakh.
Care & Care Beauty Centre recorded a rapid growth and the turnover reached ` 70 lakh by the end of
October, 20XX.
Determine the total tax liability of Care & Care Beauty Centre by the end of October, 20XX.

Solution:
Section 10(2A) provides an option to a registered person to pay maximum CGST @ 3% [Effective rate 6%
(CGST+ SGST/ UTGST)] on first supplies of goods and/or services upto an aggregate turnover of ` 50 lakh
made on/after 1st April in any financial year, subject to specified conditions.
It is clarified in the notification that first supplies of goods or services or both shall, for the purposes of
determining eligibility of a person to pay tax under this notification, include the supplies from 1st April of a
FY to the date from which he becomes liable for registration under the said Act, but for the purpose of
determination of tax payable under this notification, shall not include the supplies from the first day of April
of a financial year to the date from which he becomes liable for registration under the Act.
Thus, Care & Care Beauty Centre is eligible to pay tax under this notification upto the turnover of
` 50 lakh. The total tax payable by it is as under:-
Period Tax Rate Turnover Tax liability

(`) (`)
I Quarter Since turnover did not exceed ` 20 lakh, it was not 20 Lakh Nil
required to obtain registration. Hence, no tax was
required to be paid
II Quarter Effective rate is 6% (CGST+ SGST/ UTGST)] 30 Lakh 1,80,000
Under Section 10(2A). [(50-20)
lakh]
For the month of Normal rate of GST of 18% is to be applied 20 lakh 3,60,000
October, 20XX [(70-50)
Lakh]
Total tax payable 5,40,000
3. [SUPPLY] - The temple of ancestral deity of Mr. Aman goel and his family is located at Beri, Haryana.
The temple is run by a charitable organisation registered under section 12AA of the Income Tax Act,
1961. The family has got unshakeable faith in their ancestral deity. Mr. Aman is a big entrepreneur
having flourishing business of tiles in Gurugram. Upon the birth of their first child, he donated ` 10
lakh to the said temple for construction of a sitting hall in the temple. On the main door of the sitting
hall, a name plate was placed stating “Donated by Mr. Aman Goel upon birth of his first child”.
You are required to examine the leviability of GST on the donation received from Mr. Aman Goel?
Solution:
GST Circular has clarified that when the name of the donor is displayed in the religious institution premises,
by placing a name plate or similar such acknowledgement, which can be said to be an expression of
gratitude and public recognition of donor’s act of philanthropy and is not aimed at giving publicity to the
donor in such manner that it would be an advertising or promotion of his business, then it can be said that
there is no supply of service for a consideration (in the form of donation). There is no obligation (quid pro
quo) on part of recipient of the donation or gift to do anything (supply a service). Therefore, there is no GST
liability on such consideration.
In the given case, there is no reference or mention of any business activity of the donor which otherwise
would have got advertised. Thus, since the gift or donation is made to a charitable organization, the
payment has the character of gift or donation and the purpose is philanthropic (i.e., it leads to no
commercial gain) and not advertisement, hence GST is not leviable.
4. [EXEMPTION] Holiday Guest House, situated at Shimla, provides boarding & lodging services to
tourists at economical cost. The charges of a single deluxe room per day are ` 999. Mr. X has
booked one deluxe room for two days during Christmas holidays. You are required to determine
whether GST is payable by Holiday Guest House on the above booking. If yes, determine the
amount of GST so payable.
Will your answer change, if the charges of a single deluxe room per day charged by Holiday Guest
House are ` 1,000?

Solution:
Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging
purposes, having value of supply of a unit of accommodation below or equal to ` 1,000 per day or equivalent
have been exempted from GST vide an exemption notification.
Thus, in view of the above-mentioned provisions, GST is not payable by Holiday Guest House on the
booking done by Mr. X as the charges for a unit of accommodation per day is less than `1,000.
The answer will remain the same even if the charges of a single deluxe room per day is ` 1,000 as the
exemption is also available in the case where value of supply of a unit of accommodation per day is ` 1,000/
i.e., such services are taxable only where value of supply of a unit of accommodation per day exceeds `
1,000/-. Thus, no GST is payable by Holiday Guest House on the booking done by Mr. X even if the charges
of a single deluxe room per day is ` 1,000.
5. [EXEMPTION] M/s Damodar Ltd. provides services by way of storage of seasonal fruits and
vegetables in Bhatinda, Punjab. The monthly rental for a godown is ` 15,000. Examine whether GST
is payable by M/s Damodar Ltd.
Solution:
Services by way of storage/ warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra,
sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco,
betel leaves, tendu leaves, coffee and tea have been exempted from GST under an exemption notification
under GST.
Thus, no GST is payable on the services provided by M/s Damodar Ltd. by way of storage of seasonal fruits
and vegetables in Bhatinda, Punjab.
6. [REGISTRATION] M/s Siya Ram is a trader of decorative items in Hauz Khas, Delhi. His aggregate
turnover exceeded ` 20 lakh in the month of October, 20XX. He applied for registration on GST
portal, but missed to submit the details of his bank account. His tax consultant advised him that
prior submission of bank details is mandatory to obtain registration. Examine whether the advice of
Mr. Siya Ram’s tax consultant is correct.
Solution:
The advice of Mr. Siya Ram’s consultant that prior submission of bank details is mandatory to obtain
registration is no more valid in law.
Rule 10A has been inserted in the CGST Rules, 2017 which allows the registered person to furnish
information with respect to details of bank account, or any other information, as may be required on the
common portal in order to comply with any other provision, soon after obtaining certificate of registration
and a GSTIN, but not later than 45 days from the date of grant of registration or the date on which the return
required under section 39 is due to be furnished, whichever is earlier.
This relaxation is however not available for those who have been granted registration as TDS deductor/ TCS
collector under rule 12 or who have obtained suo-motu registration under rule 16.

7. IMPORTANT [RETURN] - Mr. Gauri Shiva, a registered person in Punjab, supplies goods taxable @
12% [CGST @ 6%, SGST @ 6% & IGST @ 12%] in the States of Punjab and Haryana. He has
furnished the following details in relation to independent supplies made by him in the quarter
ending June, 20XX:-
Supply Recipient Nature Value (`)

of supply
1 Mr. A, a registered person Inter-State 2,20,000
2 Mr. B, a registered person Inter-State 2,55,000
3 Mr. C, an unregistered person Intra -State 1,80,000
4 Mr. D, an unregistered person Intra-State 2,60,000
5 Mr. M, an unregistered person Inter-State 3,00,000
6 Mr. N, an unregistered person Inter-State 50,000
7 Mr. O, an unregistered person Inter-State 2,50,000
8 Mr. P, an unregistered person Inter-State 2,80,000
9 Mr. Q, a registered person Intra-State 1,50,000
10 Mr. R, a registered person Intra-State 4,10,000
The aggregate annual turnover of Mr. Gauri Shiva in the preceding financial year was ` 1.20
crore. With reference to rule 59 of the CGST Rules, 2017, discuss the manner in which the details of
above supplies are required to be furnished in GSTR-1.
Solution:
Rule 59 of the CGST Rules, 2017, inter alia, stipulates that the details of outward supplies of goods
and/or services furnished in form GSTR-1 shall include the–
(a) invoice wise details of all –
(i) inter-State and intra-State supplies made to the registered persons; and
(ii) inter-State supplies with invoice value more than two and a half lakh rupees made to the
unregistered persons;
(b) consolidated details of all –
(i) intra-State supplies made to unregistered persons for each rate of tax; and
(ii) State wise inter-State supplies with invoice value upto two and a half lakh rupees made to
unregistered persons for each rate of tax;
Thus, in view of the above-mentioned provisions, Mr. Gauri Shiva should furnish the details of outward
supplies of goods made by him during the quarter ending June 20XX in the following manner:-
Supply Recipient Nature Value (`) Manner of

of supply furnishing details
1 Mr. A, a registered person Inter-State 2,20,000 Invoice-wise details
2 Mr. B, a registered person Inter-State 2,55,000 Invoice-wise details
3 Mr. C, an unregistered person Intra-State 1,80,000 Consolidated details of
4 Mr. D, an unregistered person Intra-State 2,60,000 supplies 3 and 4
5 Mr. M, an unregistered person Inter-State 3,00,000 Invoice-wise details
6 Mr. N, an unregistered person Inter-State 50,000 Consolidated details of
7 Mr. O, an unregistered person Inter-State 2,50,000 supplies 6 and 7
8 Mr. P, an unregistered person Inter-State 2,80,000 Invoice-wise details
9 Mr. Q, a registered person Intra-State 1,50,000 Invoice-wise details
10 Mr. R, a registered person Intra-State 4,10,000 Invoice-wise details

8. [E-WAY BILL] - Discuss the correctness of the following statements:-
(i) Once generated, an e-way bill cannot be cancelled.
(ii) E-way bill generated in one State is valid in another State.
Solution:
(i) The said statement is partially correct. Where an e-way bill has been generated, but goods are
either not transported at all or are not transported as per the details furnished in the e-way bill, the e-
way bill may be cancelled electronically on the common portal within 24 hours of generation of the e-
way bill.
However, an e-way bill cannot be cancelled if it has been verified in transit in accordance with the
provisions of rule 138B of the CGST Rules, 2017.
(ii) The said statement is correct. The e-way bill generated under Goods and Services Tax Rules of any
State or Union territory shall be valid in every State and Union territory.
9. [PAYMENT OF TAX] - Mr. Ram Narayan, a registered supplier under GST, wants to first discharge
his self- assessed tax liability for the current period before settling the dues for the previous tax
period. Examine briefly whether he can do so?
Solution:
As per Section 49(8) of the CGST Act, 2017, the liability of a taxable person has to be discharged in a
chronological order as under:-
(a) self -assessed tax and other dues for the previous tax periods have to be discharged first;
(b) the self -assessed tax and other dues for the current period have to be discharged next;
(c) Once these two steps are exhausted, thereafter any other amount payable including demand
determined under section 73 or section 74 of the CGST Act, 2017 to be discharged. In other words, the
liability if any, arising out of demand notice and adjudication proceedings comes last.
This sequence has to be mandatorily followed.
Thus, in view of the above-mentioned provisions, Mr. Ram Narayan cannot discharge his self-assessed tax
liability for the current period before settling the dues for the previous tax period.
10. Mr. Mandeep, a registered dealer, is doing building material business in the State of Assam. He
availed architect services for his business from his friend in London free of cost. He also availed
designing services from his brother in London for ` 5 Lakhs for his personal purposes.
He availed services which are liable to tax under reverse charge for which date of invoice was
01.09.20XX, payment date as per his books of account and as per his bank account was 15.11.20XX
and 18.11.20XX respectively.
His turnover for the current financial year is as follows:

Taxable supply of goods – ` 55 Lakhs Exempt supply of goods – ` 16 Lakhs
Inward supply liable to tax under reverse charge – ` 8 Lakh
He intends to start providing services also from the next financial year and also to avail composition
scheme. He also wishes to make supplies to the Government.
Based on the information given above, choose the most appropriate answer for the following
questions:-
A. In respect of services imported by Mr. Mandeep, which of the following is a correct statement?
(i) Architect services for his business from his friend in London free of cost is considered as a
supply
(ii) Designing services from his brother in London for ` 5 Lakh for his personal purposes is
considered as a supply.
(iii) Architect services for his business from his friend in London free of cost is not considered
as a supply
(iv) Designing services from his brother in London for ` 5 Lakh for his personal purposes is not
considered as a supply.
(a) i & ii
(b) i & iv
(c) ii & iii (answer)
(d) iii & iv
B. The time of supply of services, received by him and taxable under reverse charge, is
(a) 01.09.20XX
(b) 01.11.20XX (answer)
(c) 15.11.20XX
(d) 18.11.20XX
C. Aggregate turnover of Mr. Mandeep for the given financial year will be,
(a) ` 63 Lakhs
(b) ` 79 Lakhs
(c) ` 71 Lakhs (answer)
(d) ` 47 Lakhs
11. In case he supplies services to State Government by way of any activity in relation to any function
entrusted to a Municipality under Article 243W of the Constitution, in the next financial year, which
of the following will be exempt?
(i) Pure Services
(ii) Composite supply of goods and services in which value of supply of goods constitutes not more
than 25% of value of said composite supply
(iii) Composite supply of goods and services in which value of supply of service constitutes not
more than 25% of value of said composite supply
(a) i & iii
(b) ii & iii
(c) i, ii & iii
(d) i & ii (answer)
12. ABC Ltd. is a registered pharmaceutical company. The company invented one drug for instant cure
of cancer. They supplied free samples of this medicine to various doctors. What will be the tax
treatment of these free samples under GST?
(a) ABC Ltd. is liable to pay tax on supply of free samples and eligible to claim input tax credit.
(b) ABC Ltd. is not liable to pay tax on supply of free samples but eligible to claim input tax credit.
(c) ABC Ltd. is neither liable to pay tax on supply of free samples nor eligible to claim input tax
credit. (answer)
(d) ABC Ltd. is liable to pay tax on supply of free samples but not eligible to claim input tax credit.
13. Kala Niketan School is an educational institution providing pre-school education and education up
to higher secondary school. Which of the following services are exempt if provided to Kala Niketan
School?
(i) Transportation of students, faculty and staff
(ii) Catering services
(iii) Cleaning services performed in such educational institution
(a) (i)
(b) (i) and (iii)
(c) (ii) and (iii)
(d) (i), (ii) and (iii) (answer)
14. Which of the following service is not exempt under GST?

(a) Loading and unloading of paddy
(b) Loading and unloading of sugarcane
(c) Loading and unloading of tea bags (answer)
(d) Loading and unloading of potato
15. Which of the following is not covered under Schedule III of CGST Act, 2017?
(a) Director’s monthly salary under employment agreement
(b) Sitting fees to independent directors for attending AGMs
(c) Payment to employee for providing broking services to the employer for purchase of commercial
property. Such services do not form part of the employment contract entered into by the employer with
the employee.
(d) Both (b) and (c) (answer)

16. Calculate the amount of eligible input tax credit-
S. No. Particulars GST paid (`)

1. A Mini bus having seating capacity of 15 persons (including driver) used for 15,00,000
running on hire
2. Car having seating capacity of 8 people used for business purposes 1,00,00,000
3. Car having seating capacity of 4 persons used for imparting training on 50,00,000
driving such car
4. Special purpose vehicle having seating capacity of 2 persons used for 60,00,000
transportation of goods
(a) ` 2,25,00,000/-
(b) ` 2,10,00,000/-
(c) ` 1,25,00,000/- (answer)
(d) `75,00,000/-
17. Mr. Avishkar is a painter registered under GST in Delhi. He sends his artwork for exhibition in
Mumbai. At what point of time, supply is considered to have been made under GST?
(a) When painting is completed.
(b) When painting is sent for exhibition in Mumbai.
(c) When painting is displayed at the exhibition in Mumbai.
(d) When painting is purchased by one of the visitors in the exhibition. (answer)

Class Notes

GST By CA Suraj Agrawal SATC N.1
GST - PRACTICE TEST PAPER - SET ‘N’
Source: CA Intermediate Exam - Mock Test Paper (Nov 2020 Exam)
1. Mr. Harihar, a supplier of goods, pays GST under regular scheme. He has made the following
outward taxable supplies in a tax period:
Particulars (`)
He has also furnished the following information in respect of purchases made by him in that tax
period:
Particulars (`)
Inter-State purchases of goods 2,50,000
Mr. Harihar has following ITCs with him at the beginning of the tax period:
Particulars (`)
CGST 57,000
SGST 60,000
IGST 1,40,000
Note:
Compute the minimum GST payable in cash, by Mr. Harihar for the tax period and the ITC to be
carried forward to the next month. Make suitable assumptions as required.
Solution:
S.No. Particulars CGST @ SGST @ IGST @ Total

9% 9% 18% (`)
(`) (`) (`)
(i) Intra-State supply of goods for `10,00,000 90,000 90,000 1,80,000
(ii) Inter-State supply of goods for `8,00,000 1,44,000 1,44,000


Particulars CGST @ SGST @ 9% IGST @
9% (`) 18%
(`) (`)
Opening ITC 57,000 60,000 1,40,000
Add: ITC on Intra-State purchases of goods valuing ` 3,00,000 27,000 27,000 Nil
Add: ITC on Inter-State purchases of goods valuing ` 2,50,000 Nil Nil 45,000
Total ITC 84,000 87,000 1,85,000
Computation of minimum GST payable from cash ledger

Particulars CGST @ 9% SGST @ 9% IGST @ Total GST
(`) (`) 18% (`)
(`)
GST payable 90,000 90,000 1,44,000 3,24,000
Less: ITC [First ITC of IGST should be utilized in full - (38,000) (3,000) IGST (1,44,000) 1,85,000
first against IGST liability and then against CGST IGST IGST IGST
and SGST liabilities in a manner to minimize cash
outflow]
(52,000) (87,000) 1,39,000
CGST SGST
Minimum GST payable in cash Nil Nil Nil Nil
ITC balance to be carried forward next 32,000 Nil Nil 32,000
month
Note : The above computation is one of the many ways to set off the ITC of IGST (` 41,000-after set off
against IGST liability) against CGST and SGST liability to compute minimum GST payable in cash. To
illustrate, IGST of ` 10,000 can be set off against SGST payable and IGST of ` 31,000 can be set off
against CGST payable. In this si tuation also, the net GST payable will be nil but the ITC of CGST and
SGST to be carried forward will be ` 25,000 and ` 7,000 (totaling to ` 32,000) respectively. However, if
the entire ITC of ` 41,000 is set off against CGST payable, then SGST of ` 3,000 will be payable in cash
thus, increasing the cash outflow. Therefore, such a set off would not be advisable for computing the
minimum GST payable.
2. Shri Krishna Pvt. Ltd., a registered supplier, furnishes the following information relating to goods
sold by it to Shri Balram Pvt. Ltd.-
S. Particulars Amount (`)

No.
(i) Price of the goods [excluding taxes and other charges mentioned at S. Nos. 1,00,000
(iii), (v) and (vi)]
(ii) Municipal tax 2,000
(iii) Inspection charges 15,000
(iv) Subsidy received from Shri Ram Trust 50,000
[Subsidy is directly linked to the goods supplied]
(v) Late fees for delayed payment inclusive of GST 1,000
[Shri Balram Pvt. Ltd. paid the late fees. However, these charges were
ultimately waived by Shri Krishna Pvt. Ltd. and the amount was refunded to
Shri Balram Pvt. Ltd. during the same month]
(vi) Weighment charges 2,000
[Such charges were paid by Shri Balram Pvt. Ltd. to Radhe Pvt. Ltd. on
behalf of Shri Krishna Pvt. Ltd.]
Note: Price of the goods is net of the subsidy received.

Determine the value of taxable supply made by Shri Krishna Pvt. Ltd. to Shri Balram Pvt. Ltd.

Solution:
Computation of value of taxable supply made by Shri Krishna Pvt. Ltd. to Shri Balram Pvt. Ltd.
Particulars Amount
(`)
Price of the goods 1,00,000
Municipal tax 2,000
[Includible in the value as per section 15(2)(a)]
Inspection charges 15,000
[Any amount charged for anything done by the supplier in respect of the supply of goods at
the time of/before delivery of goods is includible in the value as per section 15(2)(c)]
Subsidy received from Shri Ram Trust 50,000
[Since the subsidy is received from a non-Government body and directly linked to the
supply, the same is includible in the value in terms of section 15(2)(e)]
Late fees for delayed payment Nil
[Not includible since the same is waived off]
Weighment charges paid to Radhe Pvt. Ltd. on behalf of Shri Krishna Pvt. Ltd. 2,000
[Any amount that the supplier is liable to pay in relation to the supply but has been incurred
by the recipient and not included in the price actually paid or payable for the goods, is
includible in the value of supply in terms of section 15(2)(b)]
3. Modern Security Co. provides service of testing of electronic devices. In one case, it tested a batch
of devices on 4th and 5th September but could not raise invoice till 19th November because of some
dispute about the condition of the devices on return. The payment was made in December.
What is the method to fix the time of supply of the service?
Solution:
The time of supply of services, if the invoice is not issued in time, is the date of payment or the date of
provision of service, whichever is earlier [Section 13(2)(b)]. In this case, the service is provided on 5th
September but not invoiced within the prescribed time limit. Therefore, 5th September, the date of provision
of service, being earlier than the date of payment, will be the time of supply.
4. Examine whether the supplier is liable to get registered in the following independent cases:-
(i) Happy Ltd. of Himachal Pradesh is exclusively engaged in intra-State supply of pan masala. It’s
aggregate turnover in the current financial year is ` 24 lakh.
(ii) Akki Ltd. of Assam is exclusively engaged in intra-State supply of taxable services. It’s
(iii) Aaru Ltd. of Assam is engaged in intra-State supply of both taxable goods and services. It’s
Solution:
(a) ` 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland.
(b) ` 20 lakh for the States of States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana
and Uttarakhand.
(c) ` 40 lakh for rest of India.
However, the higher threshold limit of ` 40 lakh is not available to persons engaged in making supplies of
ice cream and other edible ice, whether or not containing cocoa, Pan masalas and Tobacco and
manufactured tobacco substitutes.

The threshold limit for a person making exclusive taxable supply of services or supply of both
goods and services is as under:-
(a) ` 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland.
(b) ` 20 lakh for the rest of India.
In the light of the afore-mentioned provisions, the answer to the independent cases is as under:-
(i) Happy Ltd. being exclusively engaged in supply of pan masala is not eligible for higher threshold limit of
` 40 lakh. The applicable threshold limit for registration in this case is ` 20 lakh. Thus, Happy Ltd. is
(ii) Though Akki Ltd.is dealing in Assam, it is not entitled for higher threshold limit for registration as the
same is applicable only in case of exclusive supply of goods while it is exclusively engaged in providing
services. Thus, the applicable threshold limit for registration in this case is ` 20 lakh and hence, Akki Ltd.
is liable to get registered under GST.
(iii) Since Aaru Ltd. is engaged in supply of both taxable goods and services, the applicable threshold limit
for registration in this case is ` 20 lakh. Thus, Aaru Ltd. is liable to get registered under GST as it’s
turnover is more than the threshold limit.
5. Angira Ltd. is a supplier of taxable goods in Karnataka. It got registered under GST in the month of
September, 20XX and wishes to pay its IGST liability for the month. Since it is making the GST
payment for the first time, it is of the view that it needs to mandatorily has the online banking facility
to make payment of GST; offline payment is not permitted under GST. You are required to apprise
Angira Ltd. regarding the various modes of deposit in the electronic cash ledger. Further, advise it
with regard to following issues:
(a) Are manual challans allowed under GST?
(b) What is the validity period of the challan?
Solution:
As per the provisions of CGST Act, 2017 read with relevant rules, the deposit in electronic cash
ledger can be made through any of the following modes, namely:-
(i) Internet Banking through authorised banks;
(ii) Credit card or Debit card through the authorised bank;
(iii) National Electronic Fund Transfer or Real Time Gross Settlement from any bank; or
(iv) Over the Counter payment through authorised banks for deposits up to ten thousand rupees per
challan per tax period, by cash, cheque or demand draft.
Thus, offline mode is also permitted under GST subject to specified conditions.
(a) Manual or physical Challans are not allowed under the GST regime. It is mandatory to generate
Challans online on the GST Portal.
(b) Challan is valid for a period of 15 days.
6. Explain the meaning of the term "recipient of supply of goods and/or services" under the CGST Act,
2017.
Solution:
Recipient of supply of goods or services or both, means-
(i) where a consideration is payable for the supply of goods or services or both, the person who is liable to
pay that consideration;
(ii) where no consideration is payable for the supply of goods, the person to whom the goods are delivered
or made available, or to whom possession or use of the goods is given or made available; and
(iii) where no consideration is payable for the supply of a service, the person to whom the service is
rendered, and
(iv) any reference to a person to whom a supply is made shall be construed as a reference to the recipient of
the supply, and
(v) shall include an agent acting as such on behalf of the recipient in relation to the goods or services or
both supplied.

7. List out the situations in which a Credit note/Debit note may be issued under the CGST Act,
2017.
Solution:
Credit note is required to be issued by the Supplier:-
(i) If taxable value charged in the tax invoice is found to exceed the taxable value in respect of supply of
goods and/or services, or
(ii) If tax charged in the tax invoice is found to exceed the tax payable in respect of supply of goods and/or
services, or
(iii) if goods supplied are returned by the recipient, or
(iv) if goods and/or services supplied are found to be deficient.
Debit note is required to be issued by the Supplier:-

(i) if taxable value charged in the tax invoice is found to be less than the taxable value in respect of supply
of goods and/or services or
(ii) if tax charged in the tax invoice is found to be less than the tax payable in respect of supply of goods
and/or services.
(iii) if excess supply is made.
8. M/s. Nanco Bank Limited, a Scheduled Commercial Bank has furnished the following details for the
month of August, 20XX:
Particulars Amount ` in Crores
(excluding GST)
Extended Housing Loan to its customers 100
Processing fees collected from its customers on sanction of loan 20
Interest received on housing loan extended by the bank 25
Minimum balance charges collected from current account and saving 01
account holder
Compute the value of taxable supply. Give reasons with suitable assumptions.
Solution:
Computation of value of taxable supply of M/s. Nanco Bank Limited for the month of August, 20XX
Amount in
Particulars crores
(`)
Housing loan extended to customers Nil
[Since money does not constitute goods, extending housing loan is not a supply.]
Processing fee collected on sanction of loan 20
[Interest does not include processing fee on sanction of the loan. Hence, the same is
taxable.]
Interest received on housing loan Nil
[Services by way of extending loans in so far as the consideration is represented by way of
interest are exempt from tax.]
Minimum balance charges collected from current account and saving account holder 01
[Any charges collected over and above interest on loan, advance or deposit are not
exempt.]
Value of taxable supply 21

Class Notes

GST By CA Suraj Agrawal SATC O.1
GST - PRACTICE TEST PAPER - SET ‘O’
Source: CA Intermediate Exam - Mock Test Paper (May 2020 Exam)
1. Ms. Riya is a multi-faceted business personality. She is registered under GST from April, 20XX.
She supplied a package consisting of stapler, calculator and charger at a single price of ` 300/. Rate of GST for
stapler, calculator and charger is 5%, 12% and 18% respectively.
She wants to opt for composition levy.
She received following payments during the month of May, 20XX:

 earned ` 160,000 by performing in western music in a cultural event at a Resort
 earned ` 50,000 by providing services by way of renting of residential dwelling for use as boutique.
 received ` 70,000 by way of rent for letting of agro machinery
Ms. Riya made a supply during June, 20XX, details of which are as follows:-
 Basic price of the product – ` 45,000
 Tax collected at source under Income-tax Act, 1961 – ` 2,500
 She received a subsidy of ` 3,500 from Green Foundation Pvt. Ltd for usage of green energy and the
subsidy was linked to saving energy
Ms. Riya provides the following information regarding receipt of inward supply during July, 20XX:
 received invoice for goods having GST Component of ` 30,000. Goods were to be delivered in 5 lots, out of
which three lots were received in the current month.
 purchased a car having GST component of ` 1,50,000 for the usage in a driving school owned by her
 availed health insurance service for her employees on her own and paid GST of ` 7,000 thereon
Transactions referred above are intra-State only. Conditions necessary for claiming input tax credit (ITC) have
been fulfilled subject to the information given above.
From the information given above, choose the most appropriate answer for the following questions:-
(i) What would be the nature of supply and the applicable rate of GST for the supply of package made by Ms.
Riya (when not registered under composition scheme) :-
(a) composite Supply & applicable rate 12%
(b) mixed Supply & applicable rate 18%
(c) composite Supply & applicable rate 18%
(d) mixed Supply & applicable rate 12%
(ii) Ms. Riya can opt for composition scheme if she does not undertake the supply of
(i) Aerated water
(ii) Tobbaco
(iii) Pan masala
(iv) Milk
(a) i & ii
(b) iii & iv
(c) i, ii & iii
(d) ii, iii & iv
(iii) Out of payments received by Ms. Riya in month of May 20XX, exempt Supply amounts to_____
(a) ` 50,000
(b) ` 70,000

(c) ` 1,20,000
(d) ` 1,60,000
(iv) In respect of supply made by Ms. Riya in June 20XX, the value of supply under section 15 of CGST Act, 2017
is
(a) ` 45,000
(b) ` 47,500
(c) ` 48,500
(d) ` 51,000
(v) Eligible amount of input tax credit that can be claimed by Ms. Riya in the month of July 20XX is,
(a) ` 30,000
(b) ` 37,000
(c) ` 1,50,000
(d) ` 1,57,000
2. Which of the following services received without consideration for business use amount to supply?
1. Import of services by a person in India from his son well-settled in Australia
2. Import of services by a person in India from his brother well-settled in Canada
3. Import of services by a person in India from his brother (wholly dependent on such person in India) in
France
4. Import of services by a person in India from his daughter (wholly dependent on such person in India) in
Russia
(a) 1), 3) and 4)
(b) 2), 3) and 4)
(c) 2) and 3)
(d) 1) and 2)
3. Balaji Ltd. has provided following information for the month of April:
(a) Intra-State outward supply ` 8,00,000/-
(b) Inter-State exempt outward supply ` 5,00,000/-
(c) Turnover of exported goods ` 10,00,000/-
(d) Payment made for availing GTA services ` 80,000/-
Calculate the aggregate turnover of Balaji Ltd. as per Section 2(6) of the CGST Act, 2017
(a) ` 8,00,000/-
(b) ` 23,80,000/-
(c) ` 23,00,000/-
(d) ` 18,00,000/-
4. Alcoholic liquor for human consumption is subjected to

(a) State excise duty
(b) Central Sales Tax/Value Added Tax
(d) GST
Answer Key
1.
(i) (b)
(ii) (c)
(iii) (b)
(iv) (a)
(v) (c)
2. (a)
3. (c)
4. (c)

5. Mr. Charlie, a registered supplier of goods at Bhatinda who pays GST under regular scheme, has made the
following transactions (exclusive of tax) during April 20XX:
Source Purchases (`) Sales (`) Tax Rate

Rajasthan 5,00,000 10,00,000 18%
Punjab 2,50,000 8,00,000 9% each for SGST & CGST
Total 7,50,000 18,00,000
He has complied with all the conditions for availing the input tax credit (ITC) and has the following ITC credit on 01-
04-20XX:
Source CGST (`) SGST (`) IGST (`)

Taxes 50,000 30,000 1,00,000
Compute the minimum net CGST, SGST and IGST payable by Mr. Charlie during April 20XX in cash?
Solution:
Computation of net CGST, SGST and IGST payable in cash by Mr. Charlie during April, 20XX
Particulars Amount CGST @ 9% SGST @ IGST @
(`) (`) 9% 18%
(`) (`)
Sales made outside Bhatinda (Rajasthan) – 10,00,000 1,80,000
[Being inter-State sale, the same is liable to IGST.]
Sales made in Punjab 8,00,000 72,000 72,000
Total GST payable 72,000 72,000 1,80,000
ITC available during April 20XX for set off [Refer Working Note 72,500 52,500 1,90,000
Below]
Less: Set off of IGST ITC against IGST and SGST tax liability (10,000) (1,80,000)
respectively IGST IGST
Less: Set off of CGST ITC against CGST tax liability (72,000)
CGST
Less: Set off of SGST ITC against SGST tax liability (52,500)
SGST
Net tax liability payable in cash Nil 9,500 Nil
Net ITC available 500 Nil Nil
Working Note
ITC available during April, 20XX is computed as under:-
Particulars Amount CGST @ 9% SGST @ IGST @
(`) (`) 9% 18%
(`) (`)
Opening balance of ITC 50,000 30,000 1,00,000
Purchases from Rajasthan 5,00,000 90,000
[Being inter-State purchase, IGST would have been paid on it.]
Purchases from Punjab 2,50,000 22,500 22,500
Total input tax credit 72,500 52,500 1,90,000
Note: Since sufficient balance of ITC of CGST is available for paying CGST liability and cross- utilization of ITC of CGST
and SGST is not allowed, ITC of IGST has been used to pay SGST (after paying IGST liability) to minimize cash outflow.

6. Kaashi Ltd. supplies machinery to Alisha Ltd. (Dealer in same State), provides following particulars regarding
the same. Determine the value of taxable supply of machinery.
S. No. Particulars Amount
(`)
(i) Price of Machinery (exclusive of taxes and discounts) 5,50,000
(ii) One part is directly fitted in machinery at place of Alisha Ltd. (amount paid by Alisha Ltd. 20,000
directly to supplier, as per contract this amount should be paid by Kaashi Ltd. and not
included in price)
(iv) Discount 2% on machinery price (recorded in the invoice)
(v) Kaashi Ltd. provides additional 1% discount at year end, based on additional purchase of
other machinery(discount is not linked to the relevant invoice and proportionate ITC has not
been reversed by Alisha Ltd.
Solution:
No. (`)
(ii) Add: Amount paid by Alisha Ltd. directly to the supplier for a part fitted in the machinery 20,000
[Note-1]
(iii) Add: Installation and testing charges [Note-2] 25,000
(iv) Less: Discount 2% on machinery price [` 5,50,000 x 2%] [Note-3] (11,000)
(v) Less: Additional 1% discount at year end [Note-4] Nil
Notes:
As per section 15 of CGST Act, 2017
1. Any amount that the supplier is liable to pay in relation to a supply but which has been incurred by the recipient of
the supply and not included in the price actually paid or payable for the goods shall be included in the value of supply.
2. Any amount charged for anything done by the supplier in respect of the supply of goods at the time of, or before
delivery of goods shall be included in the value of supply.
3. Since discount is given at the time of supply of machinery and recorded in the invoice, the value of the supply shall not
include such discount.
4. Though the additional discount is established before or at the time of supply, it shall not be excluded from the value of
supply as the same is not linked to the relevant invoice and proportionate ITC has not been reversed by Alisha Ltd.
7. “Richmond kidz” is a Play School located in Delhi. Richmond Kids has outsourced the catering services for
supply of food and drink in the canteen of Play School to Ashoka Caterers, Delhi for a consideration of ` 8,00,000
per annum.
Examine whether supply of food and drink/catering services from Ashoka Caterers to “Richmond kidz” is exempt
from GST.
Solution:
Services provided to an educational institution providing services by way of pre-school education and
education up to higher secondary school or equivalent, by way of catering is exempt from GST vide
exemption notification under GST.
Thus, in the given case, services provided by Ashoka Caterers to Richmond Kidz are exempt from GST.

8. Balaji Hospital, a clinical establishment located in Tirupati, is specialised in cardiac treatment. The hospital has
its own canteen – Healthy Foods. The canteen serves the food and drink to the in-patients as advised by the
doctors/nutritionists of the hospital. Apart from this, other patients (who are not admitted) or attendants or
visitors of the in-patients also take food and drink from the canteen.
Examine whether supply of food and drink/catering services to the in-patients and other patients (who are not
admitted) or attendants or visitors of the in-patients is exempt from GST.
Solution:
Services by way of health care services provided by a clinical establishment, an authorised medical
practitioner or para-medics are exempt from GST vide exemption Notification under GST. In this regard, CBIC
has clarified that food supplied by the hospital canteen to the in- patients as advised by the doctor/nutritionists
is a part of composite supply of healthcare services and is not separately taxable. Thus, it is exempt from
GST.
However, other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are
taxable.
In view of the same, GST is exempt on the food supplied by Healthy Foods to the inpatients as
advised by doctors/nutritionists while other supplies of food by it to patients (not admitted) or
attendants/visitors of the in-patients is taxable.
9. Determine the effective date of registration in following cases:

(i) Apsara Teleservices is an architect in Lucknow. Its aggregate turnover exceeds ` 20 lakh on 25th October. It
submits the application for registration on 27th November. Registration certificate is granted to it on 5th
December.
(ii) The aggregate turnover of Prink Footwear Industries of Delhi has exceeded the applicable threshold limit of ` 40
lakh on 1st September. It submits the application for registration on 20th September. Registration certificate is
granted to it on 25th September.
Solution:
(i) Every supplier becomes liable to registration if his turnover exceeds the applicable threshold limit in a
financial year. Since in the given case, the turnover of Apsara Teleservices exceeds the applicable
threshold limit [` 20 lakh] on 25th October, it becomes liable to registration on said date.
Further, since the application for registration has been submitted after 30 days from the date such person
becomes liable to registration, the registration shall be effective from the date of grant of registration.
Therefore, the effective date of registration is 5th December.
(ii) Every supplier becomes liable to registration if his turnover exceeds the applicable threshold limit [` 40
lakh in this case] in a financial year. Since in the given case, the turnover of Prink Industries exceeded
`40 lakh on 1st September, it becomes liable to registration on said date.
Further, since the application for registration has been submitted within 30 days from such date, the
registration shall be effective from the date on which the person becomes liable to registration.
Therefore, the effective date of registration is 1st September.
10. Advise regarding availability of input tax credit (ITC) under the CGST Act, 2017 in the following independent
cases:-
(i) Maharaja Electronics Ltd., a manufacturing company purchased three trucks for transportation of its
finished goods from the factory to dealers located in various locations within the country.
(ii) Grow ever Handloom Pvt. Ltd. availed outdoor catering service to run a canteen in its factory. The
Factories Act, 1948 requires the company to set up a canteen in its factory.

Solution:
(i) Section 17(5) of the CGST Act, 2017, inter alia, blocks input tax credit in respect of motor vehicles for
transportation of persons with certain exceptions. However, ITC on motor vehicles for transportation
of goods is allowed unconditionally.
Therefore, ITC on trucks purchased by Maharaja Electronics Ltd for transportation of its finished goods
from the factory to dealers located in various locations within the country is allowed.
(ii) Section 17(5) of the CGST Act, 2017 inter alia, blocks input tax credit in respect of outdoor catering
services. However, ITC is available on such services, when the same are provided by an employer
to its employees under a statutory obligation.
Thus, in view of the above- mentioned provisions, Grow ever Handlooms Pvt. Ltd. can avail ITC in
respect of outdoor catering services availed by it as the same is being provided under a statutory
obligation.
11. Examine the following independent cases of supply of goods and services and determine the time of issue of
invoice under each of the cases as per the provisions of CGST Act, 2017:
(i) Radha Krishna Enterprises, Vrindavan entered into a contract with Shyam Enterprises, Surat for supply of
goods on 31st October, 20XX. The goods were removed from the factory at Vrindavan on 11th October, 20XX. As
per the agreement, the goods were to be delivered by 31st October, 20XX. Shyam Enterprises has received the
goods on 14th October, 20XX.
(ii) Celebration Ltd, an event management company, has provided its services for an event at Star Film Agencies,
Mumbai on 5th June, 20XX. Payment for the event was made on 19th June, 20XX.
Solution:
(i) A registered person supplying taxable goods shall issue a tax invoice, before or at the time of removal of
goods for supply to the recipient, where the supply involves movement of goods.
Therefore, in the given case, invoice has to be issued on or before, 11th October 20XX (the time of
removal of goods).
(ii) A registered person [other than an insurer/banking company/financial institution, including an NBFC]
supplying taxable services shall issue a tax invoice before or after the provision of service, but within a
period of 30 days from the date of supply of service.
Thus, in the given case, invoice has to be issued within 30 days of 5th June 20XX (date of supply of
service), i.e. on or before, 5th July 20XX.
12. Explain the services provided by way of tolerating non-performance of a contract and its chargeability under
the provisions of the CGST Act, 2017.
Solution:
Non-performance of a contract is the failure to fulfill the obligations under a contract. It is generally one of the
conditions stipulated in any contract for supply of goods/services.
The agreement entered into between the parties stipulates that both the service provider and service recipient
abide by the terms and conditions of the contract. In case any of the parties breach the contract for any
reason including non-performance of the contract, then such person is liable to pay damages in the form of
fines or penalty to the other party.
Tolerating non-performance of a contract in lieu of damages or fines is a supply in terms of section 7 of the
CGST Act, 2017 as it is made for a consideration by a person in the course or furtherance of business.
Further, tolerating non-performance of a contract is treated as a supply of service in terms of section 7 read
with Schedule II of CGST Act, 2017.
However, in case of supplies to Government, non-performance of contract by the supplier of service for which
consideration in the form of fines or liquidated damages is payable is exempt from GST.

13. If a return has been filed, how can it be revised if some changes are required to be made?
Solution:
Under GST laws, since the returns are built from details of individual transactions, there is no requirement for
having a revised return. Any need to revise a return may arise due to the need to change a set of invoices or
debit/ credit notes.
Instead of revising the return already submitted, the system allows changing the details of those transactions
(invoices or debit/credit notes) that are required to be amended. They can be amended in any of the future
GSTR- 1 (upto a prescribed time limit) in the tables specifically provided for the purposes of amending
previously declared details.
The omission or incorrect particulars discovered in the returns filed under section 39 can be rectified in the
return to be filed for the month/quarter during which such omission or incorrect particulars are noticed.
Any tax payable as a result of such error or omission will be required to be paid along with interest.
The rectification of errors/omissions is carried out by entering appropriate particulars in “Amendment Tables”
contained in GSTR-1.

Class Notes

GST By CA Suraj Agrawal SATC P.1
GST - PRACTICE TEST PAPER - SET ‘P’
Source: CA Intermediate - Nov 2019 Exam (suggested)
1. IMPORTANT: M/s. Grey, a registered taxable person under regular scheme provides following
information in respect of supplies made by it during the month of Jan, 20XX:
(All amount
in rupees)
(i) Inter-state supply of goods 1,00,000
(ii) Intra-state supply of 500 packets of detergent @ ` 400 each alongwith a plastic
bucket worth ` 100 each with each packet, being a mixed supply. (Rate of GST on
detergent is 18% and on plastic bucket is 28%)
(iii) Supply of online educational journals to M/s. Pinnacle, a private coaching centre 50,000
providing tuitions to students of Class X-XII, being intra-state supply.
M/s. Grey has also received the following inward supplies:
(iv) Inter-state supply of goods (out of which invoice for goods worth ` 20,000 is 70,000
missing and no other tax paying document is available)
(v) Repairing of bus with seating capacity of 20 passengers used to transport its
employees from their residence, being intra-state supply. 50,000
Details of opening balances of ITC as on 1-1-20XX are as follows:

CGST 5,000
SGST 5,000
IGST 40,000
Following additional information is provided:

(a) Rate of GST in respect of all inward and outward supplies except item (ii) above is 18%. i.e.
CGST and SGST @ 9% and IGST @ 18%.
(b) All figures mentioned above are exclusive of taxes.
(c) All the conditions for availing the ITC have been fulfilled except specifically given and M/s. Grey
is not eligible for any threshold exemption.
Compute the minimum net GST payable in cash by M/s. Grey for the month of Jan, 20XX.

Answer:
Computation of minimum net GST payable in cash by M/s. Grey
for the month of Jan, 20XX
Particulars Value (`) CGST (`) SGST (`) IGST (`)
Total tax liability
Inter-State supply of goods 1,00,000 18,000
Intra-State supply of 500 packets of detergents along 2,00,000 28,000 28,000
with a plastic bucket [Note-1] (500 x 400) (2,00,000 x (2,00,000 x
14%) 14%)
Supply of online educational journal to private 50,000 4,500 4,500

coaching centre [Note-2] (50,000 x (50,000 x
9%) 9%)
Total tax liability (A) 32,500 32,500 18,000
Input tax credit (ITC)

Inter-State purchase of goods [Note-3] 50,000 9,000
Repairing of bus with seating capacity of 20 50,000 4,500 4,500
passengers [Note-4]
Total ITC (B) 9,500 9,500 49,000
Minimum net GST payable in cash
Less: Set off of IGST liability from IGST credit (18,000)
Set off IGST credit against CGST and SGST liability (23,000) (8,000)
in any order and in any proportion
Set off of CGST and SGST credit against CGST and (9,500) (9,500)
SGST liability respectively
CGST SGST
Minimum net GST payable in cash Nil 15,000 Nil
Notes:-
1. Supply of detergent and bucket together with a single price of ` 400 is a mixed supply. Being a mixed
supply comprising of two supplies, it shall be treated as supply of that particular supply that attracts
highest rate of tax (28%).
2. Supply of online educational journal is exempt only when the same is provided to an educational
institution which provides a qualification recognised by law. Since, the private coaching centre does
not provide any recognised qualification, the supply of online educational journals to the same will be
taxable.
3. ITC can be taken only on the basis of a valid tax paying document. Thus, ITC will not be available on
goods for which the invoice is missing.
4. ITC on motor vehicles for transportation of persons with seating capacity > 13 persons (including the
driver) used for any purpose is allowed. Further, ITC is allowed on repair and maintenance services
relating to motor vehicles, ITC on which is allowed.
Note: Under the amended position of law, the IGST credit, after being set off against IGST liability, can be
utilised against CGST and SGST liability in any order and in any proportion. Thus, there cannot be one
answer for the minimum net CGST and SGST payable in cash [i.e. GST liability] as the amount of CGST
and SGST liabilities are the same as also the amount of ITC for CGST and SGST is also the same.

2. Know & Grow Publishers, a registered dealer in India, paid an advance of ` 50,000 to Mr. Ganatra, an
author (an unregistered person), for the copyright covered under Section 13(1)(a) of the Copyright
Act, 1957, of his original literary work on 5-9-20XX. It made the balance payment of ` 1,50,000 on 12-
12-20XX.
You are required to determine the time of supply, if Mr. Ganatra raised the invoice on:
a. 6-10-20XX, or
b. 17-12-20XX
Answer:
GST on supply of services by an author by way of transfer or permitting the use or enjoyment of a
copyright covered under section 13(1)(a) of the Copyright Act, 1957 relating to original literary works to a
publisher is payable under reverse charge by such publisher, i.e. Know & Grow Publishers.
The time of supply of service, on which GST is payable under reverse charge, is earlier of the
following:
(a) Date of payment as entered in the books of account of the recipient or date on which payment is
debited from the bank account, whichever is earlier
or
(b) 61st day from the date of issue of invoice by the supplier
(i) If the invoice is issued on 06.10.20XX, time of supply is as under:

 For the payment of ` 50,000: 05.09.20XX [earlier of date of payment and 61st day from date
of issue of invoice]
 For the payment of ` 1,50,000: 06.12.20XX [earlier of date of payment and 61st day from date
(ii) If the invoice is issued on 17.12.20XX, time of supply is as under:

 For the payment of ` 50,000: 05.09.20XX [earlier of date of payment and 61st day from date
 For the payment of ` 1,50,000: 12.12.20XX [earlier of date of payment and 61st day from date
3. Explain the registration requirements under GST law in the following independent cases:
(i) Mr. Ahmad of Jammu engaged in the business of supplying tobacco based Pan Masala with
an aggregate turnover of ` 24 lacs.
(ii) Mr. Lepcha of Mizoram is engaged in the supply of papers with an aggregate turnover of ` 13
lacs.
Will your answer be different if Mr. Lepcha is located in Meghalaya?
Answer:
(i) A person is eligible for enhanced threshold limit of ` 40 lakh in the State of Jammu and Kashmir if he is
engaged exclusively in intra-State supply of goods.
However, the enhanced threshold limit is not applicable if the person is engaged, inter alia, in the
supply of pan masala and all goods of chapter 24 i.e. Tobacco and manufactured tobacco
substitutes. In that case, the normal threshold limit of ` 20 lakh will be applicable.
In view of said provisions, in the given case, Mr. Ahmad is liable to register since his aggregate
turnover (` 24 lakh) exceeds the applicable threshold limit for registration of ` 20 lakh.
(ii) The enhanced threshold limit of ` 40 lakh as applicable to a person engaged exclusively in intra-
State supply of goods, is not applicable to Mizoram [a specified Special Category State]. Instead,
a lower threshold limit of ` 10 lakh for registration is applicable for Mizoram.
Thus, in the given case, Mr. Lepcha of Mizoram is liable to register since his aggregate turnover (`
13 lakh) exceeds the applicable threshold limit for registration of ` 10 lakh.
The enhanced threshold limit of ` 40 lakh is also specifically not applicable in the State of
Meghalaya. Instead, the normal threshold limit of ` 20 lakh for registration is applicable to it.
Therefore, if Mr. Lepcha is located in Meghalaya, he is not liable to register since his aggregate
turnover (` 13 lakh) does not exceed the applicable threshold limit for registration of ` 20 lakh.
4. Mr. Shah, a consignor is required to move goods from Ahmedabad (Gujarat) to Nadiad (Gujarat). He
appoints Mehta Transporter for movement of goods. Mehta Transporter moves the goods from
Ahmedabad (Gujarat) to Kheda (Gujarat). For completing the movement of goods from Kheda
(Gujarat) to Nadiad (Gujarat), Mehta Transporter now hands over the goods to Parikh Transporter.
Explain the procedure regarding e-way bill to be followed by consignor and transporter as per
provisions of GST law and rules made thereunder.
Answer:
In the given scenario, only one e-way bill is required to be issued.
Part A can be filled by either Mr. Shah or recipient of goods or Mehta Transporter on the appropriate
authorisation.
Where the goods are transferred from one conveyance to another, the consignor or the recipient, who has
provided information in Part A, or the transporter shall, before such transfer and further movement of
goods, update the details of conveyance in the e-way bill on the common portal in Part B.
Thus, on reaching Kheda, Mr. Shah or the recipient of the goods, who has filled Part A of the e-way bill, or
Mehta Transporter can, before the transfer and further movement of goods, update the details of
conveyance in Part B of the e-way bill.
Further, the consignor or the recipient, who has furnished the information in Part A, or the transporter, may
assign the e-way bill number to another registered or enrolled transporter for updating the information in
Part B for further movement of the consignment.
Thus, on reaching Kheda, Mr. Shah or the recipient of the goods, or Mehta Transporter can assign the said
e-way bill to Parikh Transporter who will thereafter update the details of conveyance in Part B.
However, upon updation of the details of the conveyance by Parikh transporter in Part B, Mr. Shah or
recipient, as the case may be, who has furnished the information in Part A shall not be allowed to assign
the e-way bill number to another transporter.
5. [CHARGE OF GST] - Explain in brief the conditions to be fulfilled by a registered person under GST
law for availing the option to pay concessional tax @ 3% (effective rate 6%) under GST as per the
provisions of Section 10(2A).
Answer:
The registered person desirous of availing the option to pay concessional tax @ 3% (effective rate
6%) should -
(i) not be engaged in making any supply which is not leviable to tax.
(ii) not be engaged in making any inter-State outward supply of goods.
(iii) neither be a casual taxable person nor a non-resident taxable person.
(iv) not be engaged in making any supply through an electronic commerce operator who is required to
collect tax at source.
(v) not be engaged in making supplies of notified goods.
(vi) neither collect any tax from the recipient nor be entitled to any input tax credit.
(vii) issue a bill of supply instead of tax invoice.
(viii) not have the aggregate turnover in the preceding financial year exceeding ` 50 lakh
(ix) not be eligible for composition scheme under Section 10(1).
6. RETURN - Discuss the provisions of Section 39(9) of the CGST Act, 2017, relating to rectification of
errors/omissions in GST returns already filed and also state its exceptions. State the time limit for
making such rectification.
Answer:
Omission or incorrect particulars discovered in the returns filed under section 39 can be rectified in the
return to be filed for the month/quarter during which such omission or incorrect particulars are noticed.
Any tax payable as a result of such error or omission will be required to be paid along with interest.
Exception
Section 39(9) of the CGST Act does not permit rectification of error/omission discovered on account of
scrutiny, audit, inspection or enforcement activities by tax authorities.

The time limit for making such rectification is earlier of the following dates:
(i) Due date for filing return for September month of next financial year or
(ii) Actual date of filing annual return
7. RETURN - Explain the consequences, if the taxable person under GST law files the GST return
under Section 39(1) of the CGST Act, 2017, but does not make payment of self- assessment tax.
Answer:
If the taxable person under GST law files the GST return under section 39(1) of the CGST Act, 2017, but
does not pay the self-assessment tax, the return is not considered as a valid return.
Since the input tax credit can be availed only on the basis of a valid return, the taxable person, in the
given case, will not be able to claim any input tax credit.
He shall pay interest, penalty, fees or any other amount payable under the CGST Act for filing return
without payment of tax.
8. PAYMENT OF TAX - State the items which are to be debited· to electronic liability register of the
taxable person under the CGST Act, 2017 and rules thereunder.
Answer:
The items to be debited to electronic liability register of the taxable person are as under:-
(a) all amounts payable towards tax, interest, late fee and any other amount as per return filed;
(b) all amounts payable towards tax, interest, penalty and any other amount determined in a proceeding
by an Assessing authority or as ascertained by the taxable person;
(c) the amount of tax and interest as a result of mismatch.
(d) any interest amount that may accrue from time to time.
9. IMPORTANT: Alfa Institute of Management (AIM), a private college, is registered under GST in the
State of Punjab. AIM provides the following particulars for the month of April, 20XX:
SI. Particulars Amount (`)

No.
i. Tuition fee received from students pursuing management courses recognised by 18,00,000
Punjab University, established by an Act of State Legislature
ii. Tuition fee received from students pursuing under- graduate courses 8,50,000
recognised by Stan University, London under Dual Degree programmes
iii. Fee received from students of competitive exam training academy run by a 5,40,000
Department of AIM
iv. Mess fees received from students (Mess is run by AIM on its own) 3,20,000
v. Amount paid to Local Municipal Corporation for premises taken on rent for 50,000
conducting coaching classes for competitive exams
vi. Legal services availed from Top Care & Co., a Partnership firm of advocates, for 20,000
the competitive exam training academy (Intra-state transaction)
Note:
Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively for both outward and inward
supplies.
All the amounts given above are exclusive of taxes, wherever applicable.
All the conditions necessary for availing the ITC have been fulfilled, wherever applicable. No opening
balance of ITC under any head of tax.
From the information given above, you are required to calculate the Value of taxable supply and net
GST liability (CGST, SGST or IGST as the case may be) to be paid in cash, if any, by AIM for the
month of April, 20XX.

Answer:
Computation of value of taxable supply and net GST liability to be paid in cash by AIM for
April, 20XX
Particulars Amount
(`)
Tuition fee received from students pursuing recognized management courses [Note-1] Nil
Tuition fee received from students pursuing under-graduate courses recognized by Foreign 8,50,000
University [Note-2]
Fee received from students of Competitive Exam Training Academy [ Note-3] 5,40,000
Mess fees received from students [Note-4] Nil
Total value of taxable supply 13,90,000
Particulars CGST (`) SGST (`)
GST liability under forward charge @ 9% [Note-5] 1,25,100 1,25,100
Services on which tax is payable under reverse charge:
Rent paid to Local Municipal Corporation [Note-6] 4,500 4,500
Legal services received from Top Care & Co., a partnership firm of 1,800 1,800
advocates1 [Note-7]
GST liability under reverse charge payable in cash [A] [Note-8] 6,300 6,300
Output tax payable against which ITC can be set off 1,25,100 1,25,100
Less: ITC of renting immovable property and legal services 6,300 6,300
Output tax payable after set off of ITC [B] 1,18,800 1,18,800
Net GST liability payable in cash [A] + [B] 1,25,100 1,25,100
Notes:-
1. Services provided by an educational institution to its students are exempt. Further, educational
institution means inter alia an institution providing services by way of education as a part of a
curriculum for obtaining a qualification recognised by an Indian law.
Therefore, tuition fee received by Punjab University, being an educational institution, is exempt, since it
provides qualification recognised by Indian law.
2. Tuition fee received by Stan University is taxable since Stan University is not an educational institution
as qualification provided by it is not recognised by Indian law.
3. Fee received from students of competitive exam training academy is taxable as Department of AIM is
not an educational institution since competitive exam training does not lead to grant of a recognized
qualification.
4. Catering services provided by educational institutions to its students are exempt. It has been assumed
that the mess fees has been charged from the students pursuing the qualification recognised by law.
5. Since all the services provided are intra-State, CGST and SGST @ 9% is charged
6. GST is payable under reverse charge in case of renting of immovable property services supplied by a
local authority to a registered person.
7. GST is payable under reverse charge in case of legal services supplied by a firm of advocates to a
business entity
8. The amount available in the electronic credit ledger may be used for making payment towards output
tax. However, tax payable under reverse charge is not an output tax. Therefore, tax payable under
reverse charge cannot be set off against the input tax credit and thus, will have to be paid in cash.

10. ITC CHAPTER - Dina Ltd., a registered supplier from Maharashtra, is engaged in the manufacturing
of Passenger auto. The company provides the following details of purchases made/services availed
by it during the month of March, 20XX:
SI. Particulars GST Paid
No. (`)
i. Purchase of iron which is used as a raw material 2,50,000
[Goods were received in two instalments, first one in March, 20XX and the second
instalment was received in April, 20XX]
ii. Purchase of accessories which were delivered directly to the dealers of the 90,000
company. Only invoice was received by Dina Ltd.
iii. Purchase of Bus (seating capacity 15) for the transportation of employees from 1,97,000
their residence to company and back
iv. Input tax on general insurance taken on a car used by Executives of the company 5,200
for official purposes
v. Payment made to M/s Tasty Caterers for providing daily breakfast & lunch to the 54,700
employees of the company, as a voluntary staff welfare measure
You are required to determine the eligible Input tax credit available to M/s Dina Ltd. for the month of
March, 20XX, by giving brief explanations for treatment of various items. Subject to the information
given above, all the other conditions necessary for availing input tax credit have been fulfilled.
Answer:
Computation of input tax credit (ITC) available with Dina Ltd. for the month of March 20XX
Particulars ITC (`)
Purchase of iron used as a raw material [Note-1] Nil
Purchase of accessories delivered directly to the dealers of the company [Note-2] 90,000
Bus for the transportation of employees [Note-3] 1,97,000
General insurance taken on car used by executives of the company for official purpose [Note- Nil
4]
Payment made to caterer for providing breakfast and lunch to the employees of company Nil
[Note-5]
Notes:-
1. When inputs are received in instalments, ITC can be availed only on the receipt of last instalment.
Hence, since last instalment is received in April 20XX, ITC cannot be availed in March 20XX.
2. Goods delivered to another person on the direction of the registered person by way of transfer of
documents of title or otherwise, either before or during the movement, are deemed to have been
received by such registered person. Thus, ITC is available to the registered person, on whose
order/direction the goods are delivered to a third person.
3. ITC on motor vehicles for transportation of persons with seating capacity > 13 persons (including the
driver) used for any purpose is allowed.
4. ITC on motor vehicles for transportation of persons with seating capacity ≤ 13 persons (including the
driver) is blocked except when the same are used for (i) making further taxable supply of such motor
vehicles (ii) making taxable supply of transportation of passengers (iii) making taxable supply of
imparting training on driving such motor vehicles. Further, ITC is not allowed on services of general
insurance relating to such ineligible motor vehicles.
Since, the car is not used for any of the eligible purposes, ITC thereon is blocked and thus, ITC on
general insurance taken on such car is also blocked.
5. ITC on outdoor catering is blocked except (i) in the case of sub-contracting, i.e. when such service is
used by the taxpayer who is in the same line of business (ii) when such service is provided by the
employer to its employees under a statutory obligation.
Since the company is not an outdoor caterer and it is providing such services to its employees as a
voluntary staff welfare measure, ITC on such outdoor catering services is blocked.

11. CHARGE OF GST - M/s Pranav Associates, a Partnership firm, provided recovery agent service to
Newtron Credits Ltd., a NBFC and a registered supplier, on 15th January, 20XX. Invoice for the same
was issued on 7th February, 20XX and the payment was made on 18th April, 20XX by Newtron Credits
Ltd. Bank account of company was debited on 20 th April, 20XX. Determine the following:
(i) Person liable to pay GST
(ii) Time of supply of service.
Answer:
(i) Tax on services supplied by a recovery agent to, inter alia, a non- banking financial company is payable
under reverse charge by such non-banking financial company.
Therefore, in the given case, person liable to pay GST is the NBFC - Newton Credits Ltd.
(ii) The time of supply of service on which GST is payable on reverse charge basis is earlier of the
following:-
(a) Date of payment as entered in the books of account of the recipient (18th April, 20XX) or the date on
which the payment is debited in his bank account (20th April, 20XX), whichever is earlier;
(b) Date immediately following 60 days since issue of invoice by the supplier,
i.e. 9th April, 20XX.
Thus, time of supply of service is 9th April, 20XX.
12. TAX INVOICE - Kartik & Co., a registered supplier under GST, provides the following information
regarding various tax invoices issued by it during the month of March, 20XX:
(i) Value of supply charged in an invoice was ` 2,50,000 against the actual taxable value of
` 2,30,000.
(ii) Tax charged in an invoice was ` 32,000 against the actual tax liability of ` 68,000 due to wrong
HSN code being chosen while issuing invoice.
(iii) Value charged in an invoice was ` 3,20,000 as against the actual value of ` 4,20,000 due to
wrong quantity considered while billing.
Kartik & Co. asks you to answer the following:

(1) Who shall issue a Debit/Credit Note under CGST Act, 2017?
(2) Whether Debit Note or Credit Note has to be issued in each of the above circumstances and, if
so, quantify the amount for which it is to be issued.
(3) What is the maximum time-limit available for declaring the credit note in the GST Return?
Answer:
(1) The debit/credit note shall be issued by the registered person who has supplied the goods and/or services,
i.e. Kartik & Co.
(2) Yes debit/credit note need to be issued in each of the circumstances as under:
(i) A credit note is required to be issued as the taxable value in invoice exceeds the actual taxable
value. The credit note should be issued for the excess value of supply charged in the invoice, i.e.
` 20,000.
(ii) A debit note is required to be issued as the tax charged in the invoice is less than the actual tax
payable. The debit note should be issued for the amount of tax which is charged less, i.e. ` 36,000.
(iii) A debit note is required to be issued as the value of supply charged in the invoice is less than the
actual value. The debit note should be issued for the amount of value which is charged less, i.e.
` 1,00,000.
(3) The details of the credit note cannot be declared later than the return for the month of September
following the end of the financial year in which such supply was made or the date of furnishing of the
relevant annual return, whichever is earlier.
13. REGISTRATION - Examine, with reason, whether registration is required under CGST Act, 2017 in
the following independent cases:
(i) Aadhav Computers of Gujarat is providing Computer Maintenance Service. Aggregate turnover
of Aadhav Computers is ` 15 Lakh which comprises both inter- state and intra-state supply.
(ii) Soft Wings of West Bengal, exclusively trading in garments, supplies its taxable goods to
various States in India. Aggregate turnover of Wild Wings is ` 35 Lakh.

Answer
(i) Registration is compulsory for suppliers engaged in inter-State supply. However, threshold exemption of
` 20 lakh [` 10 lakh in case of Specified Special Category States] is available in case of inter-State supply
of taxable services.
Therefore, Aadhav Computers (aggregate turnover ` 15 lakh) is not required to obtain registration as it
is engaged in inter-State supply of taxable services and thus, is eligible for threshold exemption of ` 20
lakh applicable for Gujarat.
(ii) The threshold limit for registration in the State of West Bengal for the persons engaged exclusively in
supply of goods, is ` 40 lakh. However, registration is compulsory if the supplier is engaged inter-State
supply of goods. The threshold exemption of ` 20 lakh/ ` 10 lakh is not available in case of inter-State
supply of taxable goods.
Thus, Soft Wings is required to obtain registration.
Note: In the above question, “Wild” Wings be read as “Soft” Wings.
14. Mr. Alok, a registered supplier of taxable goods, filed GSTR 3B for the month of January, 20XX on
15th April, 20XX. The prescribed due date to file the said GSTR 3B was 20th February, 20XX. The
amount of net GST payable on supplies made by him for the said month worked out to be ` 36,500
which was paid on the same date of filing the return. Briefly explain the related provisions and
compute the amount of interest payable under the CGST Act, 2017 by Mr. Alok.
Answer:
Interest is payable in case of delayed payment of tax @ 18% per annum from the date following the due
date of payment to the actual date of payment of tax .
Thus, the amount of interest payable by Mr. Alok is as under:- Period of delay = 21st February, 20XX to 15th
April, 20XX
= 55 days
Hence, amount of interest = ` 36,500 x 18% x 55/365

= ` 990
15. Discuss about the exemption available to the services provided by an Old Age Home under the
CGST Act, 2017.
Answer
The services provided by an old age home to its residents are exempt if the following conditions are
fulfilled:
(i) the old age home is run by Central Government, State Government or an entity registered under
section 12AA of the Income-tax Act, 1961.
(ii) The consideration charged is upto ` 25,000 per month per member.
(iii) The consideration charged is inclusive of charges for boarding, lodging and maintenance.
(iv) The residents of the old age home are aged 60 years or more.
16. Documents based on which ITC is taken should contain at least certain details. What are they?
Answer
The documents based on which ITC is taken should contain at least the following details:
(i) Amount of tax charged
(ii) Description of goods or services
(iii) Total value of supply of goods and/or services
(iv) GSTIN of the supplier and recipient
(v) Place of supply in case of inter-State supply
17. Discuss about the late fee levied for delay in filing :
(i) Final Return
(ii) Annual Return

Answer
(i) The late fee levied for delay in filing final return is:
(a) ` 100 for every day during which such failure continues or
(b) ` 5,000
whichever is lower.
(ii) The late fee levied for delay in filing annual return is:
(a) ` 100 for every day during which such failure continues, or
(b) 0.25% of the turnover of the registered person in the State/Union Territory
18. COMPOSITION SCHEME (VIEW I) - Mr. Zafar of Assam, provides the following information for the
preceding financial year 2019-20. You are required to find out the aggregate turnover for the
purpose of eligibility of composition levy scheme under Section 10(1) and determine whether he is
eligible for composition levy scheme or not, for the F.Y. 2020-21.
Particulars Amount
(` in lakh)
Value of taxable outward supplies (out of above, ` 10 lakh was in course of inter- 50.00
state transactions).
Value of exempt supplies (which include ` 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 are exclusive of GST.
Answer:
Computation of aggregate turnover of Mr. Zafar for FY 2019-20 for the purpose of eligibility of
composition levy scheme under Section 10(1)
Particulars Amount
in lakh (`)
Value of taxable outward supplies 50
[Value of all taxable supplies including inter-State supplies are includible in aggregate
turnover]
Value of exempt supplies 40
[Value of exempt supplies is includible in aggregate turnover. However, value of supply
of exempt services by way of extending deposits, loans or advances in so far as the
consideration is represented by way of interest or discount, though exempt, is not
includible in aggregate turnover for determining eligibility for composition
scheme]
Value of inward supplies on which Mr. Zafar is liable to pay tax under reverse charge Nil
[Excludible from aggregate turnover]
Value of exports 5
[Includible in aggregate turnover]
Aggregate turnover for determining eligibility for composition scheme 95
A registered person of Assam is eligible to opt for composition levy if his aggregate turnover does not
exceed ` 1.5 crore in the preceding financial year provided he is not engaged in inter-State outward
supplies of goods.
Therefore, in the given case, assuming that he is not engaged in making any inter-State outward supply of
goods in FY 2020-21, Mr. Zafar is eligible to opt for composition levy for FY 2020-21 since his aggregate
turnover does not exceed ` 1.5 crore in FY 2019-20.

19. COMPOSITION SCHEME (VIEW I) - M/s United Electronics, a registered dealer, is supplying all types
of electronic appliances in the State of Karnataka. Their aggregate turnover in the financial year
2019-20 by way of supply of appliances was ` 120 Lakh.
The firm also expects to provide repair and maintenance service of such appliances from the financial
year 2020-21.
With reference to the latest amendments made in the CGST Act, 2017, examine:
(i) Whether the firm can opt for the composition scheme for the financial year 2020-21, as the
turnover may include supply of both goods and services?
(ii) If yes, up to what amount, the supply of service can be provided?
Answer
(i) The registered persons, whose aggregate turnover in the preceding financial year did not exceed ` 1.5
crore, may opt to pay tax under composition levy. 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.
Thus, M/s United Electronics can opt for composition scheme for the financial year 2020-21 as its
aggregate turnover is less than ` 1.5 crore in the preceding financial year and it is not engaged in inter-
State outward supplies.
(ii) The registered person opting for composition scheme can also supply services (other than restaurant
services) for a value up to 10% of the turnover in the preceding year or ` 5 lakh, whichever is higher, in
the current financial year.
Thus, M/s United Electronics can supply repair and maintenance services up to a value of ` 12 lakh
[10% of ` 120 lakh or ` 5 lakh, whichever is higher] in the current financial year 2020-21.

Class Notes

GST By CA Suraj Agrawal SATC Q.1
GST - PRACTICE TEST PAPER - SET ‘Q’
1. Miss. Raksha is engaged in providing private coaching services in Noida, Uttar Pradesh and is not
registered under GST till 25-Sep-20XX. Her aggregate turnover is ` 19,00,000/- on 30-Sep-20XX. She
got GST registration on 30-Sep-20XX. Which of the following options are available to her?
(a) She can pay tax @ 18%, charge it from customer and avail full input tax credit on procurements made.
(b) She can pay tax @ 6% under composition scheme under Section 10(2A) for service providers but she
cannot charge GST from customer and also cannot avail input tax credit.
(c) She is not liable for registration since her aggregate turnover is less than ` 40,00,000/-
(d) Either (a) or (b)
2. Mr. Arun, a registered supplier, is engaged in selling sweets. The sweets are sold in boxes and the
cost of each sweet box is ` 500/-. In order to increase his turnover, he purchased certain juice cans @
` 20/- each and added juice can with every sweet box as a gift. A sweet box along with free juice can is
sold at ` 500/- each.
Which of the statements is correct?

(a) He is liable to pay tax on ` 520/- and eligible to claim input tax credit on purchase of juice cans
(b) He is liable to pay tax on ` 500/- and not eligible to claim input tax credit on purchase of juice cans
(c) He is liable to pay tax on ` 500/- and also eligible to claim input tax credit on purchase of juice
cans
(d) Either (a) or (b)
3. Which is not considered as supply under GST Law?

(a) Stock transferred from one establishment in Delhi to another establishment in Gurgaon, Haryana
registered under same PAN.
(b) CA Ram supplies accounting services to CA Radha in lieu of taxation services received from CA
Radha.
(c) A Health club supplies lunch to its members at its annual meeting against a nominal charge.
(d) Mr. A sells a flat to Mr. B
(i) Date of completion certificate - 31/01/20XX
(ii) Date of agreement with buyer - 01/02/20XX
(iii) Consideration received - 05/02/20XX
4. With reference to the provisions relating to transaction value under Section 15 of the CGST Act, 2017,
which of the following is not correct?
(a) Central excise duty will not be included in transaction value for supply of tobacco.
(b) Municipal taxes paid by tenant will be included in transaction value for supply of renting service.
(c) Entertainment tax included in movie ticket will form part of transaction value.
(d) Customer makes payment of freight which is payable by the supplier, directly to the service provider.
However, supplier does not include this amount in the invoice. Such amount will be included in transaction
value of the supplier.

5. Which of the following services are notified under section 9(3) of CGST Act, 2017or section 5(3) of
IGST Act, 2017 the tax on which shall be paid on reverse charge basis by the recipient of such supply:
(i) Supply of security services provided by a person other than a body corporate to a composition
taxpayer
(ii) Services supplied by an insurance agent to insurance company located in taxable territory
(iii) Supply of services by way of renting of hotel accommodation through e-commerce operator.
(iv) Supply of notified categories of goods or services or both by a supplier, who is not registered, to
specified class of registered persons.
Choose from the following options:

(a) (i)& (ii)
(b) Only (ii)
(c) (i), (ii), (iii)
(d) (i) & (iv)
6. M/s. Comfortable (P) Ltd. is registered under GST in the State of Odisha. It is engaged in the business
of manufacturing of iron and steel products. It has received IT engineering services from M/s. High-Fi
Infotech (P) Ltd. for ` 11,00,000/- (excluding GST@ 18%) on 28-Oct-20XX. Invoice for service rendered
was issued on 5-Nov-XX. M/s Comfortable (P) Ltd. made part-payment of ` 4,20,000/- on 30-Nov-XX.
Being unhappy with service provided by M/s High-fi Infotech (P) Ltd., it did not make the balance
payment. Deficiency in service rendered was made good by M/s High-Fi Infotech (P) Ltd. by 15-Feb-
XY. M/s. Comfortable (P) Ltd. made payment of ` 3,00,000/- on 15-Feb-XY and balance payment was
made on 6-June-20XY, i.e. after 180 days of issue of invoice.
Input tax credit available in respect of IT engineering services received from M/s. High-Fi Infotech (P)
Ltd. in financial year 20XX-XY:
(a) ` 1,98,000/-
(b) Nil
(c) ` 64,068/-
(d) ` 1,09,831/-
7. Mr. Dev Anand is engaged in providing services of facilitating sale and purchase of securities to
various clients. He is also engaged in trading of securities. His turnover details are as follows:
Trading of securities ` 40,00,000/-, Brokerage on account of facilitating transactions in securities

` 30,00,000/- You are required to ascertain aggregate turnover of Mr. Dev Anand under GST:
(a) ` 30,00,000/-
(b) ` 40,00,000/-
(c) ` 70,00,000/-
(d) ` NIL.
8. Mr. Pappu Singh, commenced his business in Feb-20XX. He has established following units:
1. Unit A (in SEZ) and Unit B (non-SEZ) in the State of Maharashtra
2. Unit C in Delhi
3. Unit D and E in the State of Goa
Mr. Pappu Singh has approached you to help him in determining the States and number of
registrations he is required to take under GST (presuming the fact that he is making taxable supply
from each State and his aggregate turnover exceeds the threshold limit):
(a) Maharashtra-2: Delhi-1, Goa–Optional 1 or 2
(b) Maharashtra-Optional 1 or 2: Delhi-1, Goa-Optional 1 or 2
(c) Maharashtra-1: Delhi-1, Goa-1
(d) Maharashtra-2: Delhi-1, Goa-2

9. A non-resident taxable person is required to apply for registration:
(a) within 30 days from the date on which he becomes liable to registration
(b) within 60 days from the date on which he becomes liable to registration
(c) at least 5 days prior to the commencement of business
(d) None of the above
10. Which of the following activity shall be treated neither as a supply of goods nor a supply of services?
(i) Permanent transfer of business assets where input tax credit has been availed on such assets
(ii) temporary transfer of intellectual property right
(iii) transportation of deceased
(iv) services by an employee to the employer in the course of employment
(a) (i)& (iii)
(b) (ii)& (iv)
(c) (i) & (ii)
(d) (iii) & (iv)
11. REGISTRATION CHAPTER Examine whether the supplier is liable to get registered in the following
independent cases:-
(i) Raghav of Assam is exclusively engaged in intra-State taxable supply of readymade garments. His
turnover in the current financial year (FY) from Assam showroom is
(ii) ` 28 lakh. He has another showroom in Tripura with a turnover of ` 11 lakh in the current FY.
(iii) Pulkit of Panjim, Goa is exclusively engaged in intra-State taxable supply of shoes. His aggregate
turnover in the current financial year is ` 22 lakh.
(iv) Harshit of Himachal Pradesh is exclusively engaged in intra-State supply of pan masala. His
(v) Ankit of Assam is exclusively engaged in intra-State supply of taxable services. His aggregate
turnover in the current financial year is ` 25 lakh.
(vi) Sanchit of Assam is engaged in intra-State supply of both taxable goods and services. His
Solution:
As per Section 22 of the CGST Act, 2017 read with Notification No. 10/2019 CT dated 07.03.2019, a
supplier is liable to be registered in the State/Union territory from where he makes a taxable supply of goods
and/or services, if his aggregate turnover in a financial year exceeds the threshold limit. The threshold limit for
a person making exclusive intra - State taxable supplies of goods is as under:-
(a) ` 10 lakh for the States of Mizoram, Tripura, Manipur and Nagaland.
(b) ` 20 lakh for the States of States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and
Uttarakhand.
(c) ` 40 lakh for rest of India. However, the higher threshold limit of ` 40 lakh is not available to persons
engaged in making supplies of ice cream and other edible ice, whether or not containing cocoa,
Pan masala and Tobacco and manufactured tobacco substitutes.
(b) ` 20 lakh for the rest of India.
In the light of the afore-mentioned provisions, the answer to the independent cases is as under:-
(i) Raghav is eligible for higher threshold limit of turnover for registration, i.e. ` 40 lakh as he is exclusively
engaged in intra-State supply of goods. However, since Raghav is engaged in supplying readymade
garments from a Special Category State i.e. Tripura, the threshold limit gets reduced to ` 10 lakh. Thus,
Raghav is liable to get registered under GST as his turnover exceeds ` 10 lakh. Further, he is required to
obtain registration in both Assam and Tripura as he is making taxable supplies from both the States.

(ii) The applicable threshold limit for registration for Pulkit in the given case is ` 40 lakh as he is exclusively
engaged in intra-State taxable supply of goods. Thus, he is not liable to get registered under GST as his
turnover is less than the threshold limit.
(iii) Harshit being exclusively engaged in supply of pan masala is not eligible for higher threshold limit of ` 40
lakh. The applicable threshold limit for registration in this case is ` 20 lakh. Thus, Harshit is liable to get
registered under GST.
(iv) Though Ankit is dealing in Assam, he is not entitled for higher threshold limit for registration as the same
is applicable only in case of exclusive supply of goods while he is exclusively engaged in providing
services. Thus, the applicable threshold limit for registration in this case is ` 20 lakh and hence, Ankit is
(v) Since Sanchit is engaged in supply of both taxable goods and services, the applicable threshold limit for
registration in his case is ` 20 lakh. Thus, Sanchit is liable to get registered under GST as his turnover is
more than the threshold limit.
12. IMPORTANT (4 Marks): ITC CHAPTER Advice regarding availability of input tax credit (ITC) under the
CGST Act, 2017 in the following independent cases:-
(i) AMT Co. Ltd. purchased a mini bus having seating capacity of 16 persons for transportation of its
employees from their residence to office and back.
(ii) Bangur Ceramics Ltd., a manufacturing company purchased two trucks for transportation of its
finished goods from the factory to dealers located in various locations within the country.
(iii) “Hans premium” dealing in luxury cars in Chankyapuri, Delhi purchased five Skoda VRS cars for
sale to customers.
(iv) Sun & Moon Packers Pvt. Ltd. availed outdoor catering service to run a canteen in its factory. The
Factories Act, 1948 requires the company to set up a canteen in its factory.
Solution:
(i) Section 17(5) of the CGST Act, 2017, inter alia, blocks input tax credit in respect of motor vehicles for
transportation of persons having approved seating capacity of not more than 13 persons (including the
driver), except when they are used for certain specified purposes.
Since in the given case, the mini bus has a seating capacity of 16 persons, the ITC thereon will not be
blocked.
(ii) Section 17(5) of the CGST Act, 2017, inter alia, blocks input tax credit in respect of motor vehicles for
transportation of persons with certain exceptions. Thus, ITC on motor vehicles for transportation of goods
is allowed unconditionally.
Therefore, ITC on trucks purchased by Bangur Ceramics Ltd for transportation of its finished goods from
the factory to dealers located in various locations within the country is allowed.
(iii) Section 17(5) of the CGST Act, 2017, inter alia, blocks input tax credit in respect of motor vehicles for
transportation of persons having approved seating capacity of not more than 13 persons (including the
driver), except when they are used for making further supply of such motor vehicles.
Being a dealer of cars, “Hans Premium” has purchased the cars for further supply. Therefore, ITC on such
cars is allowed even though seating capacity is less than 13.
(iv) Section 17(5) of the CGST Act, 2017 inter alia, blocks input tax credit in respect of outdoor catering
services. However, ITC is available on such services, when the same are provided by an employer to its
employees under a statutory obligation.
Thus, in view of the above- mentioned provisions, Sun & Moon packers Pvt. Ltd. can avail ITC in respect
of outdoor catering services availed by it as the same is being provided under a statutory obligation.

13. VALUE OF SUPPLY M/s. Flow Pro sold a machine to BP Ltd. It provides the following particulars in
this regard:-
S. Particulars `
No.
(i) Price of the machine (excluding taxes and incidental charges) 30,000
(ii) Machine was subject to third party inspection. The inspection charges 5,000
have been directly paid by BP Ltd. to the inspection agency.
(ii) Freight charges for delivery of the machine (M/s Flow Pro has agreed 2,000
to deliver the goods at BP Ltd’s premises)
(iv) Subsidy received from State Government on sale of machine under skill 5,000
Development Programme. [The subsidy is directly linked to the
price].
(v) Discount given on price of the machine (recorded in the invoice) 2%
Note: Items given in S. No. (ii) to (v) have not been considered in the price at S. No. (i).
Determine the value of taxable supply made by M/s Flow Pro to BP Ltd.
Solution:
Particulars `
Price of the machine (Price ` 30,000 - ` 5,000 subsidy) [Note-1] 25,000
Third party inspection charges [Note-2] 5,000
Freight charges for delivery of the machine value [Note-3] 2,000
Total 32,000
Less: Discount @ 2% on ` 30,000 being price charged to BP Ltd. [Note-4] 600
Notes:-
1. Since subsidy is received from State Government, the same is deductible to arrive at taxable value under
section 15 of the CGST Act, 2017.
2. Any amount that the supplier is liable to pay in relation to such supply but has been incurred by the
recipient, is includible in the value of supply under section 15 of the CGST Act, 2017.
3. Since arranging freight is the liability of supplier, it is a case of composite supply and thus, freight charges
are added in the value of principal supply.
4. Discount given before or at the time of supply if duly recorded in the invoice is deductible from the value of
supply under section 15 of the CGST Act, 2017.
14. EXEMPTION CHAPTER State with reasons, whether GST is payable in the following independent
cases:-
(i) Services provided to recognized sports body as curator of national team.
(ii) Services provided by way of transportation of passenger in Metered Cab.
(iii) Services by way of public conveniences such as provision of facilities of washrooms.
(iv) Services provided by a player to a franchisee which is not a recognized sports body.
Solution:
(i) Services provided to a recognized sports body by an individual as a player, referee, umpire, coach or
team manager for participation in a sporting event organized by a recognized sports body are exempt
from GST vide Notification No. 12/2017CT(R) dated 28.06.2017. Thus, GST is payable in case of services
provided to a recognized sports body as curator of national team.

(ii) Service of transportation of passengers, with or without accompanied belongings, inter alia, by metered
cabs are specifically exempt from GST vide Notification No. 12/2017 CT(R) dated 28.06.2017. Thus, GST
is not payable in this case.
(iii) Services by way of public conveniences such as provision of facilities of bathroom, washrooms,
lavatories, urinal or toilets are not liable to GST as it is specifically exempt as per Notification No. 12/2017
CT(R) dated 28.06.2017. Thus, GST is not payable in this case.
(iv) Services provided by a player to a franchisee which is not a recognized sports body is taxable as it is not
exempt under Notification No.12/2017 CT (R) dated 28.06.2017. Thus, GST is payable in this case.
15. TIME OF SUPPLY Mahak Sons is a registered supplier of electronic items and pays GST under regular
scheme. On 15th July 20XX, Mahak Sons received an order from Sunder Trader for supply of a
consignment of electronic items. Mahak Sons gets the consignment ready by 20th July 20XX. The
invoice for the consignment was issued the next day, 21st July 20XX. Sunder Trader could not collect
the consignment immediately. Sunder Trader collects the consignment from the premises of Mahak
Sons on 30th July 20XX and hands over the cheque towards payment on the same date. The said
payment is entered in the books of accounts of Mahak Sons on 31st July, 20XX and amount is
credited in their bank account on 1st August 20XX.
You are required to determine the time of supply of the electronic items for the purpose of payment of
tax.
Solution:
As per section 12(2) of the CGST Act, 2017, the time of supply in respect of goods shall be the earlier
of the following two dates:-
(d) Date of issue of invoice/last date on which the invoice is required to be issued as per section 31 of the
CGST Act, 2017
(e) Date of receipt of payment
Further, as per Notification No. 66/2017 CT dated 15.11.2017, a registered person (excluding composition
supplier) has to pay GST on the outward supply of goods at the time of supply as specified in section 12(2)(a)
i.e., date of issue of invoice or the last date on which invoice ought to have been issued in terms of section 31.
As per section 31(1), the invoice needs to be issued either before or at the time of removal (where supply
involves movements of goods) of goods/delivery of goods/ making goods available to the recipient.
In this case, the invoice is issued before the removal of the goods and is thus, within the time limit prescribed
under section 31(1). Therefore, time of supply for the purpose of payment of tax is the date of issue of invoice,
which is 21st July, 20XX.
16. IMPORTANT [TAX INVOICE] - ABC Ltd., a registered supplier has made following taxable supplies to
its customer Mr. P in the quarter ending 30th June, 20XX.
Date Bill Particulars Invoice value

No. (including GST) [`]
5th April, 20XX 102 Notebooks [10 in numbers] 1,200
10th May, 20XX 197 Chart Paper [4 in number] 600
th
20 May, 20XX 230 Crayon colors [2 packets] 500
2nd June, 20XX 254 Poster colors [5 packets] 900
22nd June, 20XX 304 Pencil box [4 sets] 700
Goods in respect of bill no. 102, 230 and 254 have been returned by Mr. P. You are required to advise
ABC Ltd. whether it can issue consolidated credit note against all the three invoices?

Solution:
Where one or more tax invoices have been issued for supply of any goods and/or services and
(a) the taxable value/tax charged in that tax invoice is found to exceed the taxable value/tax payable in
respect of such supply, or
(b) where the goods supplied are returned by the recipient, or
(c) where goods and/or services supplied are found to be deficient,
the registered person, who has supplied such goods and/or services, may issue to the recipient one or more
credit notes for supplies made in a financial year containing prescribed particulars.
Thus, one (consolidated) or more credit notes can be issued in respect of multiple invoices issued in a
financial year without linking the same to individual invoices.
Hence, in view of the above-mentioned provisions, M/s ABC Ltd. can issue a consolidated credit note for the
goods returned in respect of all the three invoices.
17. [PAYMENT OF TAX] - Mr. X, a supplier of goods, pays GST under regular scheme. The amount of input
tax credit (ITC) available and output tax liability under different tax heads is as under:-
Head Output tax liability ITC
IGST 2,000 4,000
CGST 800 2,000
SGST/ UTGST 2,500 500
Compute the minimum GST payable in cash by Mr. X. Make suitable assumptions as required.
Solution:
Mr. X can use the ITC to pay his output tax liability. The order of utilisation of ITC is as under:-
(i) IGST credit should first be utilized towards payment of IGST.
(ii) Remaining IGST credit, if any, can be utilized towards payment of CGST and SGST/UTGST in any order
and in any proportion.
(iii) Entire ITC of IGST should be fully utilized before utilizing the ITC of CGST or SGST/UTGST.
(iv) ITC of CGST should be utilized for payment of CGST and IGST in that order.
(v) ITC of SGST /UTGST should be utilized for payment of SGST/UTGST and IGST in that order. However,
ITC of SGST/UTGST should be utilized forpayment of IGST, only after ITC of CGST has been utilized
fully.
(vi) CGST credit cannot be utilized for payment of SGST/UTGST and SGST/UTGST credit cannot be utilized
for payment of CGST.
Computation of minimum GST payable in cash
Particulars CGST (`) SGST (`) IGST (`)

GST payable 800 2,500 2,000
Less: ITC - (2,000)-IGST (2,000)-IGST
(800)-CGST (500) – SGST
Net GST payable in cash Nil Nil Nil
Since sufficient balance of ITC of CGST is available for paying CGST liability and cross utilization of
ITC of CGST and SGST is not allowed, it is beneficial to use ITC of IGST to pay SGST (after paying
IGST liability) to minimize cash outflow.

Class Notes

GST By CA Suraj Agrawal SATC R.1
GST - PRACTICE TEST PAPER - SET ‘R’
Source: CA Intermediate - May 2019 Exam (suggested)
1. Mr. Himanshu, a registered supplier of chemicals, pays GST under regular scheme. He is not eligible
for any threshold exemption. He has made the following outward taxable supplies for the month of
January 20XX:
Intra-State supply of goods ` 25,00,000
Inter-State supply of goods ` 5,00,000
He has also made the following inward supply:
Intra-State purchase of goods from registered dealer ` 14,00,000
Inter-State purchase of goods from registered dealer ` 4,00,000
Balance of ITC at the beginning of January 20XX:
CGST ` 95,000
SGST ` 60,000
IGST ` 50,000
Additional Information :
 He purchased a car (Intra-State supply) used for business purpose at a price of ` 6,72,000/-
(including CGST of ` 36,000 & SGST of ` 36,000) on January 15, 20XX. He capitalized the full value
including GST in the books on the same date to claim depreciation.
 Out of Inter-State purchase from registered dealer, goods worth ` 1,00,000 were received on
February 3, 20XX due to road traffic jams.
Note:
(i) Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively.
(ii) Both inward and outward supplies given above are exclusive of taxes, wherever applicable.
(iii) All the conditions necessary for availing the ITC have been fulfilled except mentioned above.
(iv) Compute the net CGST, SGST and IGST payable in cash by Mr. Himanshu for the month of
January 20XX.
Answer
Computation of net GST payable in cash of Mr. Himanshu for January 20XX
Particulars Value (`) CGST (`) SGST IGST
(`) (`)
Total tax liability
Intra-State outward supplies of goods 25,00,000 2,25,000 2,25,000
Inter-State outward supplies of goods 5,00,000 90,000
Total tax liability (A) 2,25,000 2,25,000 90,000
Input Tax Credit (ITC)
Intra-State purchase of goods from registered dealer 14,00,000 1,26,000 1,26,000
[Note-1]
Inter-State purchase of goods from registered dealer 3,00,000 - - 54,000
[Note-1 and Note 4]
Purchase of car used for business purpose [Note-2] - - - -
Total ITC (B) 2,21,000 1,86,000 1,04,000

Net GST liability = (A)-(B) 4,000 39,000 (14,000)
Less: Set off from IGST credit [Note-4] 4,000 10,000
Net GST payable in cash Nil 29,000 Nil
Notes:
1. Every registered person is entitled to take credit of input tax charged on any inward supply of goods
used/intended to be used in the course/furtherance of his business.
2. Input tax paid on capital goods cannot be availed as ITC if depreciation has been claimed on such tax
component. Moreover, ITC on motor vehicle (car) is blocked under section 17(5) of CGST Act, 2017.
3. A registered person is entitled to avail input tax in respect of any supply of goods to him only if he has
actually received the said goods. Since goods worth ` 1,00,000 have not been received by Mr. Himanshu
in the month of September 20XX, credit in respect of same cannot be claimed in the said month.
4. Input tax credit of IGST has been used to pay IGST and then with CGST and SGST in any order.
2. M/s. Apna Bank Limited, a Scheduled Commercial Bank has furnished the following details for the
month of August, 20XX:
Amount ` in
Particulars Crores
(Excluding GST)
Extended Housing Loan to its customers 100
Processing fees collected from its customers on sanction of loan 20
Commission collected from its customers on bank guarantee 30
Interest income on credit card issued by the bank 40
Interest received on housing loan extended by the bank 25
Minimum balance charges collected from current account and saving account 01
holder
Compute the value of taxable supply. Give reasons with suitable assumptions.
Answer
Computation of value of taxable supply of M/s. Apna Bank Limited for the month of August, 20XX
Particulars Amount in
crores (`)
Housing loan extended to customers Nil
[Since money does not constitute goods, extending housing loan is not a supply.]
Processing fee collected on sanction of loan 20
[Interest does not include processing fee on sanction of the loan. Hence, the same is
taxable.]
Commission collected on bank guarantee 30
[Any commission collected over and above interest on loan, advance or deposit are not
exempt.]
Interest income on credit card issued by the bank 40
interest are exempt from tax. However, interest involved in credit card services is not
exempt.]
Interest received on housing loan Nil
interest are exempt from tax.]
Minimum balance charges collected from current account and saving account holder 01
[Any charges collected over and above interest on loan, advance or deposit are not
exempt.]
Value of taxable supply 91

3. Decide with reason whether the following independent services are exempt under CGST Act, 2017:
1. Gokul Residents' Welfare Association received ` 9,000 per month as contribution from each
member for sourcing of goods and services from third persons for common use of its members.
2. Mr. Vikalp, a performing artist, has received ` 1,58,000 from performance of classical dance and
` 90,000 from acting in TV Serial during the month of June 20XX.
Answer
1. Service by an unincorporated body or a registered non-profit entity, to its own members by way of share
of contribution up to an amount of ` 7,500 per month per member for sourcing of goods/services from a
third person for the common use of its members in a housing society or residential complex, is exempt.
In the given case, monthly contribution per month per member received by Gokul Residents’ Welfare
Association exceeds ` 7,500.
Therefore, exemption will not be available and GST would be payable on the full amount of ` 9,000.
2. Services by an artist by way of a performance in folk or classical art forms of music, dance, or theatre, if
the consideration charged for such performance is not more than ` 1,50,000 are exempt from GST.
In the given case, since the consideration received by the performing artist- Mr. Vikalp for performance of
classical dance is more than ` 1,50,000, said services are not exempt.
Further, consideration received for acting in TV serial is also not exempt since said performance is not in
folk/classical art forms of theatre.
4. Examine the following independent cases of supply of goods and services and determine the time of
issue of invoice under each of the cases as per the provisions of CGST Act, 2017:
(i) Sakthi Enterprises, Kolkata entered into a contract with Suraj Enterprises, Surat for supply of
goods on 30th September, 20XX. The goods were removed from the factory at Kolkata on 11th
October, 20XX. As per the agreement, the goods were to be delivered by 31st October, 20XX. Suraj
Enterprises has received the goods on 14th October, 20XX.
(ii) Trust and Fun Ltd, an event management company, has provided its services for an event at
Kapoor Film Agencies, Mumbai on 5th June, 20XX. Payment for the event was made on 19th June,
20XX.
Answer:
(i) A registered person supplying taxable goods shall issue a tax invoice, before or at the time of removal of
goods for supply to the recipient, where the supply involves movement of goods.
Therefore, in the given case, invoice has to be issued on or before, 11th October 20XX (the time of
removal of goods).
(ii) A registered person [other than an insurer/banking company/financial institution, including an NBFC]
supplying taxable services shall issue a tax invoice before or after the provision of service, but within a
period of 30 days from the date of supply of service.
Thus, in the given case, invoice has to be issued within 30 days of 5th June 20XX (date of supply of
service), i.e. on or before, 5th July 20XX.
5. M/s. Daksha Enterprises has made a cash deposit of ` 10,000 under minor head 'tax' of major head
'SGST’. It has a liability of ` 2,000 for minor head "Interest" under the major head "SGST".
State whether M/s. Daksha Enterprises can utilise the amount available for payment of interest.
Answer
The cash available in any minor head of a major head cannot be utilised for any other minor head of the same
major head.
Therefore, in the given case, amount of ` 10,000 available under minor head ‘tax’ of major head ‘SGST’
cannot be utilised for payment of liability of ` 2,000 under minor head ‘interest’ of the same major head.

6. State with brief reason, whether following suppliers of taxable goods are required to register under
the GST Law :
(i) Mr. Raghav is engaged in wholesale cum retail trading of medicines in the State of Assam. His
aggregate turnover during the financial year is ` 9,00,000 which consists of ` 8,00,000 as Intra-
State supply and ` 1,00,000 as Inter-State supply.
(ii) Mr. S.N Gupta of Rajasthan is engaged in trading of taxable goods on his own account and also
acting as an agent of Mr. Rishi of Delhi. His turnover in the financial year 2020-21 is of ` 12 lakhs
on his own account and ` 9 lakhs on behalf of principal. Both turnovers are Intra -State supply.
Answer
(i) Person making any inter-State taxable supply of goods is required to obtain registration compulsorily
under GST laws irrespective of the quantum of aggregate turnover.
Thus, in the given case Mr. Raghav is required to obtain registration compulsorily under GST laws even
though his aggregate turnover does not exceed the threshold limit.
(ii) Persons who make taxable supply of goods on behalf of other taxable persons whether as an agent or
otherwise are required to obtain registration compulsorily under GST laws irrespective of the quantum of
aggregate turnover.
Aggregate turnover includes all supplies made by the taxable person, whether on his own account or
made on behalf of all his principals.
Since Mr. S.N Gupta is also acting as an agent of Mr. Rishi of Delhi, he is required to obtain registration
compulsorily under GST laws.
7. Enumerate the persons who are not eligible to opt for Composition Scheme under section 10(2) of the
CGST Act, 2017.
Answer
A registered person shall not be eligible to opt for composition scheme if:-
(i) Save as provided in sub-section (1), he is engaged in supply of services other than supplies referred to
in clause (b) of paragraph 6 of Schedule II.
(ii) he is engaged in supply of goods not leviable to tax
(iii) he is engaged in inter-State outward supplies of goods
(iv) he is engaged in supply of goods through an electronic commerce operator
(v) he is a manufacturer of notified goods, namely, manufacturer of ice cream, aerated water, pan masala
and tobacco.
8. List out the situations in which a Credit note/Debit note may be issued under the CGST Act, 2017.
Answer
Credit note is required to be issued by the Supplier:-
(i) If taxable value charged in the tax invoice is found to exceed the taxable value in respect of supply of
goods and/or services, or
(ii) If tax charged in the tax invoice is found to exceed the tax payable in respect of supply of goods and/or
services, or
(iii) if goods supplied are returned by the recipient, or
(iv) if goods and/or services supplied are found to be deficient.
Debit note is required to be issued by the Supplier:-

(i) if taxable value charged in the tax invoice is found to be less than the taxable value in respect of supply of
goods and/or services or
(ii) if tax charged in the tax invoice is found to be less than the tax payable in respect of supply of goods
and/or services

9. [Important] Answer the following questions with respect to casual taxable person under the CGST
Act, 2017 :
(i) Who is a casual taxable person?
(ii) Can a casual taxable person opt for the composition scheme?
(iii) When is the casual taxable person liable to get registered?
(iv) What is the validity period of the registration certificate issued to a casual taxable person?
(v) Can the validity of registration certificate issued to a casual taxable person be extended? If yes,
what will be the period of extension?
Answer
(i) Casual taxable person means a person who occasionally undertakes transactions involving supply of
goods and/or services in the course or furtherance of business, whether as principal, agent or in any other
capacity, in a State/UT where he has no fixed place of business.
(ii) No, a casual taxable person cannot opt for the composition scheme.
(iii) A casual taxable person (CTP) is liable to obtain registration compulsorily under GST laws, at least 5 days
prior to commencement of business.
However, threshold limit of ` 20 lakh (` 10 lakh in case of Special Category State) is available in case of
CTP making taxable supplies of specified handicraft goods.
(iv) The registration certificate issued to a casual taxable person will be valid for:
a) the period specified in the registration application, or
b) 90 days from the effective date of registration
(v) Yes, the validity of registration certificate issued to a casual taxable person can be extended. It can be
extended by a further period not exceeding 90 days.
10. IMP: Mr. Uttam Ku mar a registered supplier of service in Kolkata, has provided following information
for the month of October, 20XX:
No. Particulars Amount in (`)
1. Intra-State taxable supply of service 6,40,000
2. Amount received from Kapola Pvt. Ltd., for service provided to company. 5,00,000
(He is a director in Kapola P. Ltd.), being Intra-State transaction.
3. Paid legal fee to senior advocate for one legal matter within State, being 50,000
Intra-State transaction.
4. Amount received for service provided by him as a commentator. to a local 1,20,000
recognized sports body, being Intra-State transaction
5. Amount received for acting as a coach in recreational activities relating to 30,000
sports, from one local charitable entity registered under section12AA of
the Income Tax Act, 1961, being Intra-_State transaction.
Compute the net GST liability (CGST, SGST or IGST) of Mr. Uttam Kumar for the month of October,
20XX.
Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively.
All the amounts given are exclusive of CGST, SGST and IGST, wherever applicable.
Answer
Computation of net GST liability of Mr. Uttam Kumar October, 20XX
Particulars Amount (`) CGST (`) SGST (`)
Intra-State taxable supply of service 6,40,000 57,600 57,600
Add: Amount received from Kapola Pvt. Ltd. for service provided to 5,00,000 Nil Nil
company, being intra-State transaction [Note-1]
Add: Legal fee paid to senior advocate for one legal matter within 50,000 4,500 4,500
the State, being intra-State transaction [Note-2]
Add: Amount received for services provided as a commentator to a 1,20,0000 10,800 10,800
local recognized sports body, being intra-State transaction [Note-3]
Add: Amount received for acting as a coach in recreational activities 30,000 Nil Nil
relating to sports from one local charitable entity registered under
section 12AA of the Income Tax Act, 1961, being intra-

State transaction [Note-4]
Total tax payable 72,900 72,900
Less: Cash paid towards tax payable under reverse charge [A] 4,500 4,500
[Note-5]
Output tax payable against which ITC can be set off 68,400 68,400
Less: ITC of tax paid on legal fees paid to senior advocate 4,500 4,500
Output tax payable after set off of ITC [B] 63,900 63,900
Net GST liability [A] + [B] 68,400 68,400
Notes:-
1. Services supplied by a director of a company to the said company are taxable under reverse charge and
thus, the tax leviable thereon will be paid by the company.
2. Services provided by a senior advocate by way of legal services are taxable under reverse charge and
thus, the tax leviable thereon will be paid by Mr. Uttam Kumar.
3. Services provided to a recognized sports body by an individual as a player, referee, umpire, coach or
team manager for participation in a sporting event organized by a recognized sports body is exempt from
GST vide exemption notification. However, services provided as a commentator to a local recognized
sports body is taxable.
4. Services by way of coaching in recreational activities relating to sports by charitable entities registered
under section 12AA of the Income-tax Act are exempt from GST vide exemption notification.
5. The amount available in the electronic credit ledger may be used for making payment towards output tax.
However, tax payable under reverse charge is not an output tax. Therefore, tax payable under reverse
charge cannot be set off against the input tax credit and thus, will have to be paid in cash.
6. It has been assumed that services provided to Kapola Pvt. Ltd. by Mr. Uttam Kumar are in the capacity of
being a director in the company.
7. It has been assumed that the turnover of Mr. Uttam Kumar in the previous year 2020-21 exceeded
` 20,00,000.
8. It has been assumed that the matter for which the legal fees is paid to the senior advocate is in the course
or furtherance of business.
11. Koli Ltd. supplies machinery to Ghisa Ltd. (Dealer in same State), provides following particulars
regarding the same. Determine the value of taxable supply of machinery.
No. Particulars Amount

(`)
(i) Price of Machinery (exclusive of taxes and discounts) 5,50,000
(ii) One part is directly fitted in machinery at place of Ghisa Ltd. 20,000
(amount paid by Ghisa Ltd. directly to supplier, as per contract this amount
should be paid by Koli Ltd. and not included inprice)
(iv) Discount 2% on machinery price (recorded in the invoice)
(v) Koli Ltd. provides additional 1% discount at year end, based on additional purchase
of other machinery
Answer
Computation of taxable value of supply of machinery
(`)
(ii) Add: Amount paid by Ghisa Ltd. directly to the supplier for a part fitted in the 20,000
machinery [Note-1]
(iii) Add: Installation and testing charges [Note-2] 25,000

(iv) Less: Discount 2% on machinery price [` 5,50,000 x 2%] [Note-3] (11,000)
(v) Less: Additional 1% discount at year end [Note-4] Nil
Notes:
As per Section 15 of CGST Act, 2017
1. Any amount that the supplier is liable to pay in relation to a supply but which has been incurred by the
recipient of the supply and not included in the price actually paid or payable for the goods shall be
included in the value of supply.
2. Any amount charged for anything done by the supplier in respect of the supply of goods at the time of, or
before delivery of goods shall be included in the value of supply.
3. Since discount is given at the time of supply of machinery and recorded in the invoice, the value of the
supply shall not include such discount.
4. Though the additional discount is established before or at the time of supply, it shall not be excluded from
the value of supply on the assumption that the same is not linked to the relevant invoice and proportionate
ITC has not been reversed by Ghisa Ltd.
12. Jamku Ltd. a registered person is engaged in the business of spices. It provides following details for
GST paid during October, 20XX.
No. Particulars GST Paid (`)

1. Raw spices purchase
50,000
 Raw spices used for furtherance of business
20,000
 Raw spices used for personal use of Directors
2. Electric machinery purchased to be used in the manufacturing process. 25,000
3. Motor vehicle used for transportation of the employee 55,000
4. Payment made for material and to contractor for construction of staff quarter. 1,25,000
Determine the amount of ITC available to Jamku Ltd. for the month October, 20XX with all related
workings and explanations.
All the conditions necessary for availing the ITC have been fulfilled.
Answer
Computation of ITC available with Jamku Ltd. for the month of October 20XX
Particulars GST paid
`
Purchase of raw spices for furtherance of business [Note-1] 50,000
Purchase of raw spices for personal use of directors [Note-2] Nil
Electric machinery purchased to be used in the manufacturing process [Note-1] 25,000
Motor vehicle used for transportation of employee [Note-3] Nil
Payment made for material and to contractor for construction of staff quarter [Note-4] Nil
Total ITC 75,000
Notes:-
1. Every registered person is entitled to take credit of input tax charged on any supply of goods to him which
are used or intended to be used in the course or furtherance of his business.
2. ITC is not available on goods used for personal consumption.
3. ITC on motor vehicles used for transportation of the employee is blocked credit.
4. ITC is not available on goods or services or both received by a taxable person for construction of an
immovable property (other than plant or machinery) on his own account including when such goods or
services or both are used in the course or furtherance of business.

13. Examine the liability of compulsory registration under Section 24 of the CGST Act, 2017, in each
independent cases mentioned below:
(a) Meenu, a supplier in Maharashtra, (PDF NOTES – 8527230445) is engaged in supply of potatoes
within Maharashtra and also outside Maharashtra, whose turnover exceeds threshold limit under
GST Law.
(b) Jinu Oils, Gujarat, is engaged in supplying machine oil as well as petrol. Total turnover of machine
oil is `35 lakh and of petrol is ` 15 lakh.
(c) Tilu is working as an agent, he is supplying goods as an agent of Tiku (who is registered taxable
person) and its aggregate turnover does not exceed ` 20 lakh during the financial year.
Answer
(a) Section 24 of the CGST Act provides that persons making any inter-State taxable supply of goods are
required to obtain registration compulsorily under GST laws irrespective of the quantum of aggregate
turnover.
However, an agriculturist, to the extent of supply of produce out of cultivation of land, is not liable to
registration.
Assuming that Meenu is engaged in cultivation and supply of potatoes, she is not liable to registration of
the fact that she is engaged in making inter-State supply and her turnover exceeds the threshold limit.
Note: Any person engaged exclusively in the business of supplying exempted goods is not liable to
registration. Since potatoes are exempted goods, Meenu is not liable to obtain registration irrespective of
the fact that she is engaged in making inter-State supply and her turnover exceeds the threshold limit.
(b) Section 24 of the CGST Act specifies the categories of persons who are required to be mandatorily
registered under GST irrespective of the quantum of their aggregate turnover.
In the given case, Jinu Oils does not fall in any of the specified categories. Therefore, it is not required to
obtain registration compulsorily under GST.
However, as per section 22 of the CGST Act, 2017 read with Notification No. 10/2019 CT dated
07.03.2019, if the aggregate turnover of the person making exclusive intra - State taxable supplies of
goods in state Gujarat exceeds ` 40 lakhs in a financial year, is liable for registration.
Aggregate turnover includes exempted turnover of goods or services;
Accordingly, Jinu Oils is liable obtain registration on the basis of the turnover since its aggregate turnover
[` 50 lakh - including turnover of exempt supply of petrol] exceeds the threshold limit of ` 40 lakhs.
(c) Section 24 of the CGST Act provides that persons who make taxable supply of goods and/or services on
behalf of other taxable persons whether as an agent or otherwise are required to obtain registration
compulsorily under GST laws irrespective of the quantum of aggregate turnover.
Therefore, Tilu will be mandatorily required to obtain registration.
14. Jolla provides continuous supply of services regarding Annual Maintenance Contract (AMC) of Air
conditioner and all electronic items of Khotu Ltd. He provides following details regarding same:
They made contract for the AMC. As mentioned in contract, AMC will start from 01-10-2019 and will be
valid for a year. AMC ends on 30-09-2020. Jolla receives payment for the AMC on 31-10-2020.
Explain the time of issue of invoice in case of Continuous supply of Service (CSS) as per provisions
of CGST Act, 2017 and accordingly determine time of issue of invoice in following different
circumstances:
1. As mentioned in contract Khotu Ltd. have to make payment on 05-11-2020.
2. If terms of payment is not mentioned in AMC and also not agreed by both the parties.

Answer
In case of continuous supply of services
(i) Where due date of payment is ascertainable from the contract, the invoice shall be issued on or before
the due date of payment.
(ii) Where due date of payment is not ascertainable from the contract, the invoice shall be issued before or at
the time when the supplier of service receives the payment
(iii) Where payment is linked to the completion of an event, the invoice shall be issued on or before the date
of completion of that event.
In view of the aforesaid provisions, time of issue of invoice will be as follows in the given different
circumstances:
(a) If it is mentioned in contract that Khotu Ltd. has to make payment on 05.11.2020, the invoice shall be
issued on or before 05.11.2020.
(b) If terms of payment are not mentioned in AMC and are also not agreed by both the parties, the invoice
shall be issued on or before 31.10.2020.
Note: The question has been answered by considering the annual maintenance contract as continuous
supply of service. However, as per section 2(33) of the CGST Act, 2017 “continuous supply of services” inter
alia means a supply of services with periodic payment obligations.
15. Examine in relation to composition levy scheme u/s 10(1) under the CGST Act, 2017 and the rules
made there under in the following individual cases :
1. Ketu is a manufacturer of ice-cream and pan masala in State of Maharashtra. His turnover for the
year does not exceed ` 1.5 Crore. He wants to register for composition levy scheme. ls he eligible
for it ?
2. Jadhu of Gujarat opts for composition scheme during a financial year 2020-21. But on 10-02-2021
his turnover crosses ` 1.5 Crore, can he continue under composition levy scheme.
3. X Ltd. has 2 branches K & L in Delhi, having same PAN. Branch K opts for normal scheme. X Ltd.
want to continue composition levy in case of its branch L. Can X Ltd. continue composition levy
only for branch L?
Answer
1. A registered person who is engaged in manufacture of, inter alia, ice cream and pan masala, is not
eligible to opt for composition levy u/s 10(1) even if his aggregate turnover does not exceed ` 1.5 crore.
Therefore, in the given case, Ketu is not eligible to opt for composition levy.
2. The option to pay tax under composition levy availed of by a registered person lapses with effect from the
day on which his aggregate turnover during a financial year exceeds the threshold limit of ` 1.5 crore. He
needs to pay tax under normal scheme from that day.
Since in the given case, the turnover of Jadhu crosses ` 1.5 crore on 10.02.2021, he cannot continue
under composition scheme from that day.
3. Where person having the same Permanent Account Number, has more than one registration, the
registered person shall not be eligible to opt for composition scheme unless all such registered persons
opt to pay tax under composition scheme. In other words, all the registrations under the same PAN have
to opt for composition scheme.
In view of the same, in the given case, X Ltd. cannot continue with composition scheme only for branch L.

16. [Important] Explain the meaning of consignment note in relation to Goods Transport Agency and state
its contents as per provisions of the CGST Act, 2017.
Answer
Consignment note means a document, issued by a Goods Transport Agency (GTA) against the receipt of
goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered.
The contents of consignment note are as follows:-

(a) gross weight of the consignment
(b) the name of the consignor and consignee (any one),
(c) registration number of the goods carriage in which the goods are transported,
(d) details of the goods transported,
(e) details of the place of origin and destination,
(f) GSTIN of the person liable for paying tax
(g) other information as prescribed for a tax invoice, under rule 46 of CGST Rules, 2017
17. Important: Explain the services provided by way of tolerating non-performance of a contract and its
chargeability under the provisions of the CGST Act, 2017.
Answer
Non-performance of a contract is the failure to fulfill the obligations under a contract. It is generally one of the
conditions stipulated in any contract for supply of goods/services.
The agreement entered into between the parties stipulates that both the service provider and service recipient
abide by the terms and conditions of the contract. In case any of the parties breach the contract for any
reason including non-performance of the contract, then such person is liable to pay damages in the form of
fines or penalty to the other party.
Tolerating non-performance of a contract in lieu of damages or fines is a supply in terms of section 7 of the
CGST Act, 2017 as it is made for a consideration by a person in the course or furtherance of business.
Further, tolerating non-performance of a contract is treated as a supply of service in terms of section 7 read
with Schedule II of CGST Act, 2017.
However, in case of supplies to Government, non-performance of contract by the supplier of service for which
consideration in the form of fines or liquidated damages is payable is exempt from GST.
18. What are the E-ledgers? State the entries to be debited to electronic liability register under the CGST
Act, 2017 and the CGST Rules, 2017.
Answer
Electronic Ledgers or E-Ledgers, i.e., Electronic Cash Ledger and Electronic Credit Ledger, are statements
of cash and input tax credit in respect of each registered taxpayer. In addition, each taxpayer shall also have
an electronic tax liability register.
The entries to be debited to electronic liability register under the CGST Act, 2017 and the CGST Rules,
2017 are as follows: -
(i) all amounts payable towards tax, interest, late fee and any other amount as per return filed;
(ii) all amounts payable towards tax, interest, penalty and any other amount determined in a proceeding by
an Assessing authority or as ascertained by the taxable person;
(iii) the amount of tax and interest payable due to mismatch;
(iv) any amount of interest that may accrue from time to time.

GST By CA Suraj Agrawal SATC S.1
GST - PRACTICE TEST PAPER - SET ‘S’
1. M/s. Ramchandra Associates has received some taxable services from Mohan Dalal (P) Ltd. on
12.01.20XX by making a cash payment of ` 5,00,000 on same day. The payment was entered in the
books of account of M/s. Ramchandra Associates on 16.01.20XX and in the books of account of
Mohan Dalal (P) Ltd. on 20.01.20XX. The invoice was issued by Mohan Dalal (P) Ltd. on 18.01.20XX.
Determine the time of supply in the given case.
(a) 12.01.20XX
(b) 16.01.20XX
(c) 18.01.20XX
(d) 20.01.20XX
2. M.H. Husain, a famous painter, Delhi, sends his latest art work to Indian Classic gallery, Delhi, for
exhibition. However, no consideration has flown from Indian Classic gallery to M. H. Husain when the
art work is sent to the gallery for exhibition. M. H. Husain is in dilemma whether GST is payable on
said transfer of art work. What would be your advice on the same?
(a) GST is payable as the same amounts to taxable supply of goods.
(b) GST is payable as the same amounts to taxable supply of services.
(c) GST is not payable as the same is an exempt supply.
(d) GST is not payable as the same does not amount to supply at all.
3. Kidzee Ltd., a wholesaler of toys registered in Chandigarh, is renowned in the local market for the
varieties of toys and their reasonable prices. Kidzee Ltd. makes supply of 100 pieces of baby’s
learning laptops and chat learning phones to Nancy General Store on 25th September, 20XX by
issuing a tax invoice amounting to ` 1,00,000.
However, the said toys were returned by Nancy General Store on 30th September, 20XX. Which
document Kidzee Ltd. is required to issue in such a case?
(a) Debit Note
(b) Refund voucher
(c) Credit note
(d) Payment voucher
4. Which of the following services is exempt from GST?

a. Bollywood dance performance by a film actor in a film and consideration charged is ` 1,45,000.
b. Carnatic music performance by a classical singer to promote a brand of readymade garments and
consideration charged is ` 1,30,000.
c. Carnatic music performance by a classical singer in a music concert and consideration charged is
` 1,55,000.
d. Kathak dance performance by a classical dancer in a cultural programme and consideration
charged is ` 1,45,000.

5. [EXEMPTION] - Examine whether supply of food and drink in the following independent cases is
exempt from GST :-
a. “Smart Kids” is a Play School located in Delhi. Smart Kids has outsourced the catering services
for supply of food and drink in the canteen of Play School to BTV Caterers, Delhi for a
consideration of ` 8,00,000 per annum.
Solution:
Services provided to an educational institution providing services by way of pre-school education and
education up to higher secondary school or equivalent, by way of catering is exempt from GST vide
Notification No. 12/2017 CT (R) dated 28.06.2017 as amended. Thus, in the given case, services
provided by BTV Caterers to Smart Kids are exempt from GST.
b. Wellness Hospital, a clinical establishment located in Tirupati, is specialised in diabetic treatment.
The hospital has its own canteen – Tasty Foods. The canteen serves the food and drink to the in-
patients as advised by the doctors/nutritionists of the hospital. Apart from this, other patients
(who are not admitted) or attendants or visitors of the in-patients also take food and drink from
the canteen.
Solution:
Services by way of health care services provided by a clinical establishment, an authorised medical
practitioner or para-medics are exempt from GST vide Notification No. 12/2017 CT (R) dated 28.06.2017
as amended.
In this regard, CBIC has clarified that food supplied by the hospital canteen to the in-patients as advised
by the doctor/nutritionists is a part of composite supply of healthcare services and is not separately
taxable. Thus, it is exempt from GST. However, other supplies of food by a hospital to patients (not
admitted) or their attendants or visitors are taxable.
In view of the same, GST is exempt on the food supplied by Tasty Foods to the in-patients as advised by
doctors/nutritionists while other supplies of food by it to patients (not admitted) or
attendants/visitors of the in-patients is taxable.
6. [Payment of Tax] Sahil is a supplier of taxable goods in Karnataka. He got registered under GST in the
month of September, 20XX and wishes to pay his IGST liability for the month. Since he’s making the
GST payment for the first time, he is of the view that he needs to mandatorily have the online banking
facility to make payment of GST; offline payment is not permitted under GST.
You are required to apprise Sahil regarding the various modes of deposit in the electronic cash
ledger. Further, advise him with regard to following issues:
(a) Are manual challans allowed under GST?
(b) What is the validity period of the challan?
(c) Is cross utilization among Major and Minor heads of the electronic cash ledger permitted?
Solution:
Section 49(1) of CGST Act, 2017 read with rule 87 of CGST Rules, 2017 provides that the deposit in
electronic cash ledger can be made through any of the following modes, namely:-
(iii) National Electronic Fund Transfer or Real Time Gross Settlement from any bank; or
(iv) Over the Counter payment through authorised banks.
Thus, offline mode is also permitted under GST.
(a) Manual or physical Challans are not allowed under the GST regime. It is mandatory to generate Challans
online on the GST Portal.
(b) E-challan is valid for a period of 15 days.
(c) Amount entered under any Minor head (Tax, Interest, Penalty, etc.) and Major Head (CGST, IGST, SGST
/ UTGST) of the Electronic Cash Ledger can be utilized only for that liability. Cross-utilization among
Major and Minor heads is not possible.

7. [Value of Supply] Kamal Book Depot, a wholesaler of stationery items, registered in Mumbai, has
received order for supply of stationery items worth ` 2,00,000/- on 12th November, 20XX from another
local registered dealer, Mr. Mehta, Mumbai. Kamal Book Depot charged the following additional
expenses from Mr. Mehta:-

(i) Packing charges 5,000
(ii) Freight & Cartage 2,000
(iii) Transit insurance 1,500
(iv) Extra designing charges 6,000
(v) Taxes by Municipal Authority 500
The goods were delivered to Mr. Mehta on 14th November, 20XX. Since Mr. Mehta was satisfied with
the quality of the goods, he made the payment of goods the same day and simultaneously placed
another order on Kamal Book Depot of stationery items amounting to ` 10,00,000 to be delivered in
the month of December, 20XX**.
On receipt of second order, Kamal Book Depot allowed a discount of ` 20,000 on the first order
placed by Mr. Mehta.
Compute the GST liability of Kamal Book Depot for the month of November, 20XX assuming the rates
of GST on the goods supplied as under:
CGST 9%
SGST 9%
Would your answer be different if expenses (i) to (v) given in above table are already included in the
price of ` 2,00,000?
Note:-
(i) All the amounts given above are exclusive of GST.
(ii) Kamal Book Depot and Mr. Mehta are not related persons and price is the sole consideration of
the supply.
**Payment and invoice for the second order will also be made in the month of December, 20XX only.
Solution:
Computation of value of taxable supply and tax liability
Particulars Amount(`)
Price of the goods [Note-1] 2,00,000
(i) Packing charges [Note-2] 5,000
(ii) Freight & Cartage [Note-3] 2,000
(iii) Transit Insurance [Note-3] 1,500
(iv) Extra Designing charges [Note-4] 6,000
(v) Taxes by Municipal Authority [Note-5] 500
CGST @ 9% 19,350
SGST @ 9% 19,350
Notes:-
1. As per section 15(1) of the CGST Act, 2017, the value of a supply is the transaction value i.e. the price
actually paid or payable for the said supply.
2. All incidental expenses including packing charged by the supplier to the recipient are includible in the
value of supply in terms of section 15(2) of the CGST Act, 2017.
3. The given supply is a composite supply involving supply of goods (stationery items) and services (transit
insurance and freight) where the principal supply is the supply of goods.
As per section 8(a) of the CGST Act, 2017, a composite supply is treated as a supply of the principal
supply involved therein and charged to tax accordingly.

4. Any amount charged for anything done by the supplier in respect of the supply of goods or services or
both at the time of, or before delivery of goods or supply of services; is includible in the value of supply
vide section 15(2) of the CGST Act, 2017. Thus, extra designing charges are to be included in the value
of supply.
5. The taxes by Municipal Authorities are includible in the value of supply in terms of section 15(2) of the
CGST Act, 2017.
6. In the given case, Mr. Mehta is allowed a discount of ` 20,000 on the goods supplied to him in the
month of November, 20XX. Since the said goods have already been delivered by Kamal Book Depot,
this discount will be a post-supply discount.
Further, value of supply shall not include any discount which is given after the supply has been
effected, if—
(i) such discount is established in terms of an agreement entered into at or before the time of such supply
and specifically linked to relevant invoices; and
(ii) input tax credit as is attributable to the discount on the basis of document issued by the supplier has
been reversed by the recipient of the supply [Section 15(3) of the CGST Act, 2017].
However, in the given case, post-supply discount given to Mr. Mehta will not be allowed as a deduction from
the value of supply since the discount policy was not known before the time of such supply although the
discount can be specifically linked to relevant invoice (invoice pertaining to stationery items supplied to Mr.
Mehta in November, 20XX).
In case the expenses (i) to (v) given in above table are already included in the price of ` 2,00,000:
Since these expenses are includible in the value of supply by virtue of the reasons mentioned in explanatory
notes above, no further addition will be required. Resultantly, the value of taxable supply will be ` 2,00,000
and CGST and SGST will be ` 18,000 and ` 18,000 respectively.
8. [PAYMENT OF TAX] - Mr. Ekaant, a supplier registered in Delhi, is engaged in the business of sale and
purchase of plastic raincoats (SATC 8527230445). He furnishes the following information pertaining to
inward/outward supply made by him for the month of July, 20XX:
Amount
Particulars (` in lakh)
Value of inter-State outward supply to registered persons 30
Value of intra-State outward supply to registered persons 50
Value of intra-State outward supply to unregistered persons 15
Value of intra-State inward supply from registered persons 10
Value of inter-State inward supply from registered persons 5
Following additional information is also provided by Mr. Ekaant:-

Particulars Amount (` in lakh)
IGST credit on capital goods purchased in the month of July 1.5
CGST / SGST credit on other inward supplies [including credit of
` 5,000 (CGST and SGST each) on account of membership of a 0.5
club (CGST and SGST each)
Availed consultancy services from Mr. Sujit, lawyer located in
Delhi [Intra-State services] 1
The amount of ITC brought forward in the month of July, 20XX is as under:-
CGST : ` 2 lakh
SGST : ` 2 lakh
IGST : ` 5 lakh
Calculate the net GST liability (CGST and SGST or IGST, as the case may be) to be paid in cash for the
month of July, 20XX by assuming the rates of GST as under:
CGST 9% SGST 9% IGST 18%
Note:
(i) All the amounts given above are exclusive of taxes.
(ii) All the conditions necessary for availing the ITC have been fulfilled.

Solution:
Computation of net GST liability of Mr. Ekaant
CGST
Particulars Value (`) (`) SGST (`) IGST (`)
Total tax liability
Value of intra-State legal consultancy services
i.e. inward supplies liable to reverse charge
mechanism (to be paid in cash) (A) [Note-1]
1,00,000 9,000 9,000 -
Value of inter-State outward supplies (B1) 30,00,000 - - 5,40,000
Value of intra-State outward supplies to
registered as well as unregistered persons (B2)
(` 50,00,000+ ` 15,00,000) 65,00,000 5,85,000 5,85,000 -
Total (B) = (B1) +(B2) 5,85,000 5,85,000 5,40,000
Input tax Credit
Brought forward ITC 2,00,000 2,00,000 5,00,000
Value of intra-State inward supplies from registered
person [Note-2] 10,00,000 90,000 90,000
Value of inter-State inward supplies from registered
person [Note-2] 5,00,000 - - 90,000
IGST credit of capital goods [Note-2] 1,50,000
Credit on other inward supplies purchased in the
month of July less credit on membership of a club
[Note-2 & 4] 45,000 45,000 -
Credit of legal consultancy services [Note-2] 9,000 9,000 -
Total (C) 3,44,000 3,44,000 7,40,000
Net liability (B)-(C) 2,41,000 2,41,000 (2,00,000)
Less: Set off from IGST credit [Note-5] 2,00,000 - -
Liability after set off (D) 41,000 2,41,000 Nil
Net GST liability to be paid in cash (A) + (D) 50,000 2,50,000 Nil
Notes:-
1. Services supplied by an individual advocate to any business entity located in the taxable territory by way
of legal services, directly or indirectly are taxable under reverse charge mechanism. Thus, tax is payable
by the recipient (Mr. Ekaant) on said services to the Government.
Further, as per section 49(4) of the CGST Act, 2017, amount available in the electronic credit ledger [ITC
amount] may be used for making payment towards output tax. However, tax payable under reverse
charge is not an output tax in terms of section 2(82) of the CGST Act, 2017. Therefore, tax payable under
reverse charge cannot be set off against the input tax credit and thus, will have to be paid in cash.
2. Every registered person is entitled to take credit of input tax charged on any inward supply of goods
and/or services which are used or intended to be used in the course or furtherance of his business in
terms of section 16 of CGST Act, 2017.
Further “input tax” in relation to a registered person includes the tax payable under reverse charge
mechanism in terms of section 2(62) of the CGST Act, 2017.
3. Input tax credit is not allowed in respect of membership of a club in terms of section 17(5) of CGST Act,
2017.
4. Input tax credit of IGST has been used to pay IGST and CGST in that order. Alternatively, balance
IGST can also be used to pay SGST instead of CGST.

9. [Input Tax Credit] Le Marc Ltd. of Nashik, Maharashtra, a registered supplier, is engaged in
manufacturing taxable goods. It provides the following details of items purchased and services
availed by it from Gujarat, for the month of March, 20XX:
S. Particulars IGST (`)
No.
Motor vehicle purchased for employees to be used for personal as well as
1 business purposes 1,50,000
2 Motor vehicle purchased for transportation of goods within the factory 2,00,000
Food items for consumption of employees. These items were supplied free of
cost to the employees in lieu of services rendered by them to the
3 manufacturer in the course of employment. 2,000
Rent-a-cab facility availed for employees to fulfill a statutory obligation in

4 this regard. 36,000
Calculate the amount of eligible input tax credit for the month of March, 20XX.
Solution:
Computation of eligible input tax credit
Particulars Eligible ITC (`)

Motor vehicle purchased for employees to be used for personal as well as
business purposes [Note-1] -
Motor vehicle purchased for transportation of goods within the factory [Note-1] 2,00,000
Food items for consumption of employees [Note-2] -
Rent-a-cab facility given to employees [Note-3] 36,000
Total eligible input tax credit 2,36,000
Notes:-
As per Section 17(5) of the CGST Act, 2017:
1. ITC on Motor vehicles for transportation of persons with seating capacity ≤ 13 persons (including the
driver) is blocked, EXCEPT WHEN USED FOR
 making further taxable supply of such motor vehicles;
 making taxable supply of transportation of passengers;
 making taxable supply of imparting training on driving such motor vehicles
Thus, in the given case, ITC on motor vehicle purchased for transportation of goods within the factory will
only be allowed
2. ITC in respect of food and beverages is blocked unless the same is provided by an employer to its
employees under a statutory obligation or used for making outward taxable supply of the same category
or as an element of the taxable composite or mixed supply. Thus, in the given case, ITC of taxes paid on
food for employees is not allowed.
3. ITC on supply of rent-a cab services is not blocked where the Government notifies the services which are
obligatory for an employer to provide such service to its employees. Thus, ITC is available on said
service. (whatsapp 8527230445 for PDF Notes)

GST By CA Suraj Agrawal SATC T.1
GST - PRACTICE TEST PAPER - SET ‘T’
Source: CA Intermediate - Nov 2018 Exam (suggested)
1. IMPORTANT - Mr. Thiraj, a registered supplier of service in Bangalore (Karnataka State) has provided
the following information for the month of April 20XX:
Particulars Amount in `
(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
(recognized by law), being an inter-state transaction 16,000
Compute the net GST liability (CGST, SGST or IGST) of Mr. Thiraj for the month of April 20XX.
Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively.
All the amounts given above are exclusive of taxes.
Solution:
Computation of net GST liability by Mr. Thiraj for the month of April 20XX:
Particulars Value of CGST SGST IGST
supply @ 9% @ 9% @ 18%
Output supply
(i) Intra-State taxable supply of services 5,20,000 46,800 46,800
(iv) Services towards conduct of exams in Loveall
University, Pune [Note-1] 16,000 Exempt
Inward supply (Reverse Charge)
(ii) Legal fee paid to lawyer located within State
[Note-2] 20,000 1,800 1,800
(iii) Rent paid to State Government for Office Building
[Note-3] 30,000 2,700 2,700
Total tax liability 51,300 51,300
Less: Cash paid towards tax payable under reverse
charge [A] [Note-4] -4,500 -4,500
Output tax payable against which ITC can be set
off 46,800 46,800
Less: ITC of tax paid on legal fees and rent -4,500 -4,500
Output tax payable after set off of ITC [B] 42,300 42,300
Net GST liability [A] + [B] 46,800 46,800
1. Since Loveall University provides education recognized by law, it is an educational institution and services
provided to an educational institution, by way of conduct of examination by such institution are exempt
from GST.
2. In case of legal services provided by an advocate to any business entity GST is payable under reverse
charge by the recipient of service.
3. In case of services supplied by, inter alia, State Government by way of renting of immovable property to a
person registered under the CGST Act, GST is payable under reverse charge by the recipient of service

4. The amount available in the electronic credit ledger may be used for making payment towards output tax.
However, tax payable under reverse charge is not an output tax. Therefore, tax payable under reverse
2. CANWIN Ltd., a registered supplier, is engaged in the manufacture of Tanks. The company provides
the following information pertaining to GST paid on the purchases made/input services availed by it
during the month of January 20XX:
Particulars GST Paid (`)
(i) Purchase of Machinery where debit note is issued 1,15,000
(ii) Input purchased was directly delivered to Mr. Joe, a job 80,000
worker and a registered supplier
(iii) Computers purchased (Depreciation was claimed on the 50,000
said GST portion under the Income-Tax Act, 1961)
(iv) Works Contract services availed for construction of Staff 4,25,000
quarters within the company premises
Determine the amount of ITC available to M/s. CANWIN Ltd. for the month of January 20XX by giving
brief explanations for treatment of various items. Subject to the information given above, all the
conditions necessary for availing the ITC have been fulfilled.
Solution:
Computation of input tax credit (ITC) available with CANWIN Ltd.
for the month of January 20XX
Particulars GST (`)

Purchase of machinery where debit note is issued [Note-1] 1,15,000
Inputs directly delivered to a job worker supported by a valid document 80,000
Computers [Note-2] Nil
Works contract services availed for construction of staff quarters within the
company premises [Note-3] Nil
Total ITC 1,95,000
Notes:-
 Input tax credit on goods purchased on the basis of debit note which is a valid document is allowed.
 Where depreciation has been claimed on the tax component of the cost of capital goods and plant and
machinery under the provisions of the Income -tax Act, 1961, the input tax credit on the said tax
component is not allowed.
 Input tax credit on works contract services supplied for construction of an immovable property is
specifically disallowed except where it is an input service for further supply of works contract service.
3. Ms. Achintya, a registered supplier in Kochi (Kerala State) has provided the following details in
respect of her supplies made Intra-State for the month of Jan 20XX:
Particulars Amount in `
(i) List price of goods supplied intra-state (exclusive of items 3,30,000
given below from ii to v)
(ii) Swachh Bharat cess levied on sale of the goods 12,500
(iii) Packing expenses charged separately in the invoice 10,800
(iv) Discount of 1% on list price of goods was provided (recorded
in the invoice of goods)
(v) Subsidy received from State Govt. for encouraging women 5,000
entrepreneurs
Compute the value of taxable supply and the gross GST liability of Ms. Achintya for the month of Jan
20XX assuming rate of CGST to be 9% and SGST to be 9%. All the amounts given above are exclusive
of GST

Solution:
Computation of value of taxable supply and gross GST liability of
Ms. Achintya for the month of Jan 20XX
Particulars `
Add: Swachh Bharat Cess (SBC) levied on sale of goods [Note-1] 12,500
Add: Packing expenses [Note-2] 10,800
Less: Subsidy received from State Government [Note-3] (5,000)
Less: Discount @ 1% on list price [Note-4] (3,300)
CGST @ 9% 31,050
SGST @ 9% 31,050
Gross GST liability 62,100
Notes:-
As per section 15 of CGST Act, 2017,
1. Any taxes, duties and cesses levied under any law other than CGST, SGST is includible in the value.
2. Packing expenses being incidental expenses, are includible in the value.
3. Since subsidy is received from State Government, the same is not includible in the value. It has been
assumed that such subsidies are directly linked to the price of the goods. Further, since the same has not
been adjusted in the list price, the same is to be excluded from the list price.
4. Since discount is known at the time of supply, it is deductible from the value.
Note: In the above answer, the term “exclusive” mentioned in the question has been taken to be as “not
adjusted in the list price”, i.e. the list price given in the question is before adjusting the amount of discount and
subsidy. However, it is also possible to take a view that the list price “excludes” amount of discount
and subsidy. Therefore, the same need not be deducted again from the list price to arrive at the
taxable value.
4. Decide with reason whether the following independent services are exempt under CGST Act, 2017 :
(i) M/s Fast Trans, a goods transport agency, transported relief materials meant for victims of Kerala
floods being a natural disaster, by road from Delhi to Ernakulam, for a Limited Co.
(ii) Keyan Enterprises, an event organizer, provided services to Breathing Wall Ltd. By way of
organizing business exhibition at Pragati Maidan in New Delhi as part of Make in India initiative.
Solution:
Services provided by a goods transport agency, by way of transport in a goods carriage of, inter alia, relief
materials meant for victims of inter alia natural or man-made disasters are exempt from GST. Therefore,
services provided by M/s Fast Trans will be exempt from GST.
Services provided by an organiser to any person in respect of a business exhibition held outside India is
exempt from GST. Since in the given case, the exhibition is organized in India, the services of organization of
event by Keyan Enterprises will not be exempt from GST.
5. Decide which person is liable to pay GST in the following independent cases, where the recipient is
located in the taxable territory. Ignore the Aggregate Turnover and Exemption available.
 Mr. Raghu provided sponsorship services to WE-WIN Cricket Academy, an LLP.
 'Safe Trans', a Goods Transport Agency, transported goods of Kapil & Co., a partnership firm
which is not registered under GST.
Solution:
 In case of services provided by any person by way of sponsorship to any body corporate or partnership
firm / LLP, GST is liable to be paid under reverse charge by such body corporate or partnership firm / LLP
located in the taxable territory. Therefore, in the given case, WE-WIN Cricket Academy is liable to pay
GST under reverse charge.

 In case of services provided by Goods Transport Agency (GTA) in respect of transportation of goods by
road to, inter alia, any partnership firm whether registered or not under any law; GST is liable to be paid
by such partnership firm. Therefore, in the given case, Kapil & Co. is liable to pay GST under reverse
charge.
6. Determine with brief reasons, whether the following statements are True or False:
Registration under the CGST Act, 2017 can be cancelled by the proper officer, if the voluntarily
registered person has not commenced the business within three months from the date of registration.
Solution:
The said statement is False.
Registration under the CGST Act, 2017 can be cancelled by the proper officer, if the voluntarily registered
person has not commenced the business within six months from the date of registration.
7. Mr. Lakhan provides Continuous Supply of Services (CSS) to M/s. TNB Limited. He furnishes the
following further information:
(i) Date of commencement of providing CSS - 01-10-2020
(ii) Date of completion of providing CSS - 31-01-2021
(iii) Date of receipt of payment by Mr. Lakhan - 30-03-2021
Determine the time of issue of invoice as per provisions of CGST Act, 2017, in the following
circumstances:
(i) If no due date for payment is agreed upon by both under the contract of CSS.
(ii) If payment is linked to the completion of service.
(iii) If M/s. TNB Limited has to make payment on 25-03-2021 as per the contract between them
Solution:
(i) Where the due date of payment is not ascertainable from the contract, the invoice shall be issued before
or at the time when the supplier of service receives the payment.
Thus, in the given case, the invoice should be issued on or before 30.03.2021 (date of receipt of payment
by Mr. Lakhan).
(ii) If payment is linked to the completion of an event, the invoice should be issued on or before the date of
completion of that event.
Since in the given case payment is linked to the completion of service, invoice should be issued on or
before 31.01.2021 (date of completion of service).
(iii) Where the due date of payment is ascertainable from the contract, the invoice should be issued on or
before the due date of payment.
If M/s. TNB Limited has to make payment on 25.03.2021 as per the contract between them, the invoice
should be issued on or before 25.03.2021.
8. A tax payer can file GSTR-1 under CGST Act, 2017, only after the end of the current tax period. State
exceptions to this.
Solution:
A taxpayer can file GSTR-1 under CGST Act, 2017, only after the end of the current tax period. However,
following are the exceptions to this rule:
(i) Casual taxpayers, after the closure of their business
(ii) Cancellation of GSTIN of a normal taxpayer.

9. State the persons who are not liable for registration as per provisions of Section 23 of Central Goods
and Service Tax Act, 2017.
Solution:
As per provisions of Section 23 of CGST Act, 2017, the persons who are not liable for registration are as
under–
a) Person engaged exclusively in supplying goods/services/both that are wholly exempt from tax.
b) Person engaged exclusively in supplying goods/services/both that are not liable to tax.
c) Agriculturist to the extent of supply of produce out of cultivation of land.
d) Persons only engaged in making supplies of taxable goods or services or both liable to reverse charge.
e) Persons making inter-State supplies of taxable services up to an aggregate turnover of ` 20 lakh (` 10

lakh in case of notified special category States).
f) Casual Taxable Persons making taxable supplies of specified handicraft goods up to an aggregate
turnover of ` 20 lakh (` 10 lakh in case of notified special category States) subject to specified conditions.
g) Persons making inter-State supplies of specified handicraft goods up to an aggregate turnover of ` 20

lakh (` 10 lakh in case of notified special category States) subject to specified conditions.
h) Job workers making inter-State supply of services to a registered person up to an aggregate turnover of `
20 lakh (` 10 lakh in case of notified special category States) subject to specified conditions.
i) Persons making supplies of services through an electronic commerce operator (other than supplies
specified under section 9(5) of the CGST Act) up to an aggregate turnover of ` 20 lakh (` 10 lakh in case
of notified special category States).
10. Mr. Allan, a non-resident person, wishes to provide taxable supply of goods. He has no fixed place of
business or residence in India. He seeks your advise on the following aspects, relating to CGST Act,
2017:
(i) When shall he apply for registration?

(ii) Is PAN mandatory for his registration?
(iii) What is the period of validity of RC granted to him?
(iv) Will he be able to extend the validity of his registration? If yes, what will be the period of
extension?
Solution:
(i) Mr. Allan, being a non-resident person, should apply for registration, irrespective of the threshold limit, at
least 5 days prior to the commencement of business
(ii) No, PAN is not mandatory for his registration.
He has to submit a self-attested copy of his valid passport along with the application signed by his
authorized signatory who is an Indian Resident having valid PAN.
However, in case of a business entity incorporated or established outside India, the application for
registration shall be submitted along with its tax identification number or unique number on the basis of
which the entity is identified by the Government of that country or its PAN, if available.
(iii) Registration Certificate granted to Mr. Allan will be valid for:
a) Period specified in the registration application, or

(iv) Yes, Mr. Allan can get the validity of his registration extended. Registration can be extended further by a
period not exceeding 90 days.

11. Ms. Jimmy wants to adjust input tax credit for payment of interest, penalty and payment of tax under
reverse charge. Explain whether she can do so.
Solution:
The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic
credit ledger which may be used for making any payment towards output tax.
“Output tax” inter alia excludes tax payable on reverse charge basis.
Thus, Ms. Jimmy cannot adjust input tax credit for payment of interest, penalty as also for payment of tax
under reverse charge.
12. Worldwide Pvt. Ltd. (a registered taxable person) having the gross receipt of ` 80 lakh in the previous
financial year provides the following information relating to their services for the month of July, 20XX.
Sr. Particulars Amount
No. (`)
1 Running a boarding school 2,40,000
2 Fees from prospective employer for campus interview 1,70,000
Education services for obtaining the qualification recognised by law of foreign
3 country 3,10,000
Renting of furnished flats for temporary stay to different persons (Rent per day
4 is less than ` 1,000 per person) 1,20,000
Conducting Modular Employable Skill Course, approved by National Council
5 of Vocational Training 1,40,000
6 Conducting private tuitions amount 3,00,000
Compute the value of taxable supply and the amount of GST payable. The above receipts don't
include the GST amount. Rate of GST is 18%.
Solution:
(a)
S.No. Particulars `
1 Running a boarding school Nil
[Services provided by an educational institution to its students, faculty and staff
are exempt.]
[Not exempt.]
3 Education services for obtaining the qualification recognised by law of foreign 3,10,000
country
[An institution providing education services for obtaining qualification
recognized by a foreign country does not qualify as educational institution.
Thus, said services are not exempt.]
4 Renting of furnished flats for temporary stay of different persons Nil
5 Conducting Modular Employable Skill Course [An institution providing Modular Nil
Employable Skill Course qualifies as educational institution. Services provided
by an educational institution to its students, faculty and staff are exempt.]
6 Conducting private tuitions [Not exempt.] 3,00,000

GST payable @ 18% 1,40,400

13. M/s J & Co. Chartered Accountants, a partnership firm, having its registered and head office in
Mumbai and registered under the GST Act in the State of Maharashtra only. It does not have any
branches in other State. The gross receipts of the firm in the preceding Financial Year was ` 60 lakh.
Firm has submitted following information for the month of August, 20XX:
(excluding GST)
Professional services provided and bills raised during the month for
providing services of ITR filing and income tax consultancy 1,00,000
Internal Audit of X Pvt. Ltd. at their office in Mumbai
(registered in the State of Maharashtra) 50,000
Statutory audit services provided to M/s Tirupati Trading Pvt. Ltd. at
Ahmedabad (registered in the State of Gujarat) 70,000
Firm has also furnished following information in respect of input services availed from registered
dealers for providing output services during the month August, 20XX:
Amount (`)
(excluding
Particulars GST) CGST SGST IGST
Services availed from courier agency 5,000 450 450 Nil
Railway travelling expenses from Mumbai to
Ahmedabad and Return Ticket for conducting of
audit of M/s Tirupati Trading Pvt. Ltd. for 3 Tier AC 12,000 Nil Nil 600
Service availed from another professional firm at
Mumbai amount is paid without TDS u/s 194J of
Income Tax Act 20,000 Nil Nil 3,600
Notes:
(i) Rate of CGST, SGST and IGST to be 9%, 9% & 18% respectively, on outward supplies.
(ii) All the conditions necessary for availing the ITC have been fulfilled.
(iii) Opening balance of available input tax credit is Nil for CGST, SGST and IGST.
Compute the net gst payable by M/s J & Co. for the month August, 20XX after adjusting the GST
credit. Brief reasoning should form part of your answer.
Solution:
Computation of net GST payable by M/s J & Co. for the month of August, 20XX
S. Particulars CGST SGST IGST
No. (`) (`) (`)
(i) Professional services and services of ITR 9,000 9,000 -
filing and IT Consultancy [` 1,00,000]
(ii) Internal audit services [` 50,000] 4,500 4,500 -
(iii) Statutory audit services [` 70,000] - - 12,600
Total GST 13,500 13,500 12,600
Less: ITC (Refer working note) 450 450 4,200
Net GST payable 13,050 13,050 8,400
Working note: Computation of ITC available for set-off
S. Particulars CGST SGST IGST

No. (`) (`) (`)
(1) ITC on courier services [` 5,000] 450 450 -
(2) ITC on railway travelling expenses for conducting -- -- 600
of audit of M/s Tirupati Pvt. Ltd. [` 12,000]
(3) ITC on services availed from another professional 3,600
firm at Mumbai [` 20,000]
Total ITC 450 450 4,200
Note: Read amount of GST ` 3,600 given against services availed from another professional firm at Mumbai
as given against IGST. However, it is also possible to assume the said amount of ` 3,600 as entirely the
amount of IGST (as given in question) or as ` 1,800 - CGST and SGST each.

14. JP Charitable Institution, an entity registered under Section 12AA of Income Tax Act, 1961 and
registered in GST, has furnished you the following details with respect to the activities undertaken by
it during the month of January, 20XX. You are required to compute its taxable value of GST from the
information given below, assuming that the rate of GST is 18%. Brief reasoning should be part of your
answer.
Excluding GST
Membership fees received from members 10,00,000
Amount received for advancement of educational programs relating 4,00,000
to abandoned or orphaned or homeless children
Amount received for renting of commercial property owned by Trust 5,00,000
Amount received for counselling of terminally ill person 3,50,000
Fees charged for Yoga Camp conducted by Trust 2,00,000
Amount received relating to preservation of forest & wildlife 6,00,000
Solution:
Computation of value of taxable supply of J P Charitable Institution for the month of January, 20XX
Particulars `
(i) Membership fees received from members 10,00,000
(ii) Amount received for advancement of educational programs relating Nil
to abandoned/orphaned/homeless children
(iii) Amount received for renting of commercial property owned by Trust 5,00,000
(iv) Amount received for counselling of terminally ill person Nil
(v) Fee charged for Yoga Camp conducted by Trust Nil
(vi) Amount received relating to preservation of Forest & Wildlife Nil
Taxable Value 15,00,000
 Charitable activities provided by an entity registered under section 12AA of the Income-tax Act, 1961 are
exempt. Since JP Charitable Institution is registered under section 12AA of the Income-tax Act, 1961 and
activities mentioned at points (ii), (iv), (v) and (vi) are included in charitable activities, the same are
exempt.
 It has been logically assumed that the commercial property owned by the Charitable Trust is not within
the precincts of a religious place meant for general public.
15. Mr. XYZ & Co., a firm of Accountants, issued invoice for services rendered to Mr. A on 7th September,
20XX. Determine the time of supply in the following independent cases:
(1) The provision of service was completed on 1st August, 20XX.

(2) The provision of service was completed on 14th August, 20XX.
(3) Mr. A made the payment on 3rd August, 20XX where provision of service was remaining to be
completed.
(4) Mr. A made the payment on 15th September, 20XX where provision of service was remaining to be
completed.
Solution:
Time of supply will be:
(A) if the invoice is issued within 30 days of supply of service,

date of invoice
OR
date of receipt of payment,
whichever is earlier
(B) if the invoice is not issued within 30 days of supply of service,

date of provision of service
OR
date of receipt of payment,
whichever is earlier

In accordance with aforesaid provisions, time of supply is:
1. 01.08.20XX since the invoice is not issued within 30 days of supply of service.
2. 07.09.20XX since the invoice is issued within 30 days of supply of service.
3. 03.08.20XX viz. earlier of 07.09.20XX or 03.08.20XX
4. 07.09.20XX viz. earlier of 07.09.20XX or 15.09.20XX
16. M/s Maheshwari Corporation Pvt. Ltd. is a supplier of goods and services at Bangalore, registered in
the State of Karnataka, having turnover of ` 200 lakhs in the last financial year. It has furnished the
following information for the month of Dec, 20XX.
Sr. No. Particulars Amount (`)
Excluding GST
1 Services provide by way of labour contract for repairing a 1,30,000
single residential unit otherwise than as a part of
residential complex (It is an intra-State transaction.)
2 Intra-State sale of taxable goods including ` 50,000 2,50,000
received as advance in Oct, 20XX. The invoice for the
entire sale value is issued on 15th Dec, 20XX
3 Goods transport services received from GTA, GTA is 1,80,000
paying tax @ 12 % (It is an inter-State transaction.)
Compute net GST liability (CGST, SGST, IGST as the case may be) of M/s Maheshwari Corporation
Pvt. Ltd. for the month of Dec, 20XX assuming the rates of GST, unless otherwise specified, as under:
CGST – 9%, SGST – 9%, IGST – 18%
Solution:
Computation of net GST liability of M/s Maheshwari Corporation Pvt. Ltd.
Particulars Value of CGST SGST IGST

Supply
Services provided by way of labour contracts for 1,30,000 11,700 11,700 -
repairing a single residential unit otherwise than as a
part of residential complex
[Services by way of pure labour contracts of
construction, erection, commissioning, or installation of
original works pertaining to a single residential unit
otherwise than as a part of a residential complex are
exempt. Labour contracts for repairing are thus,
taxable.]
Intra State sale of taxable goods 2,50,000 22,500 22,500
[Time of supply of goods is the time of issue of invoice.
So, advance received in Oct, 20XX will also be taxed in
dec, 20XX]
Less: ITC of GST paid on GTA services received (21,600)
[Since GTA is paying tax @ 12%, tax is payable under
forward charge. Further, ITC of IGST (` 1,80,000× 12%
= 21,600) paid on the same is available]
Net GST liability 12,600 34,200 Nil
As per order of utilization of ITC, ITC of IGST can be used to pay CGST or SGST in any order as there
is no IGST liability.

17. Harshgeet Pvt. Ltd., a registered supplier, is engaged in the manufacture of taxable goods. The
company provides the following information pertaining to GST paid on the purchases made/input
services availed by it during the month of July, 20XX:
Sr. Particulars GST paid
No
(1) Raw Material (to be received in September, 20XX) 2,50,000
(2) Membership of a club availed for employees working in the factory 1,45,000
(3) Inputs to be received in 5 lots, out of which 3rd lot was received 80,000
during the month
(4) Trucks used for transport of raw material 40,000
(5) Capital goods (out of 3 items, invoice for 2 items is missing and 1,50,000
GST paid on that item is ` 80,000)
Determine the amount of tax credit available with Harshgeet Pvt. Ltd. for the month of July, 20XX by
giving the necessary explanation for treatment of various items. All the conditions necessary for
availing the ITC have been fulfilled.
Solution:
Computation of ITC available with Harshgeet Pvt. Ltd. for the month of July, 20XX
Particulars `
Raw Material Nil
[ITC not available as raw material is not received in July, 20XX]
Membership of a club availed for employees working in the factory Nil

[Blocked credit in terms of section 17(5) of the CGST Act, 2017]
Inputs to be received in 5 lots, out of which 3rd lot was received during the month Nil
[In case of goods received in lots, ITC can be taken only upon receipt of the last lot]
Trucks used for transport of raw material 40,000

[ITC of GST paid on motor vehicles is allowed only when used, inter alia, for
transportation of goods in terms of section 17(5) of the CGST Act, 2017]
Capital goods 70,000
[ITC of GST paid on items for which invoice is missing is not available. So,
ITC of ` 80,000 is not available]
Total ITC available 1,10,000
18.
i. There is a dairy farm selling milk and milk products in Delhi. The turnover of his dairy farm is as
below
Milk (Exempted) : ` 39,90,000
Butter (Taxable) : ` 50,000
What is the registration liability under GST for the above mentioned person assuming he has
same PAN?
ii. Amit, a taxable person, is operating in Tamilnadu, Punjab and West Bengal, with the same PAN.
Can he operate with a single registration in West Bengal?
Solution:
(i) As per section 22 of the CGST Act, 2017 read with Notification No. 10/2019 CT dated 07.03.2019, a
goods and/or services, if his aggregate turnover in a financial year exceeds the threshold limit.
The threshold limit for a person making exclusive intra - State taxable supplies of goods is as
under:-
(b) ` 20 lakh for the States of States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,

However, the higher threshold limit of ` 40 lakh is not available to persons engaged in making supplies of
ice cream and other edible ice, whether or not containing cocoa, Pan masala and Tobacco and
manufactured tobacco substitutes.
Further, aggregate turnover, inter alia, means the aggregate value of all taxable supplies as well as
exempt supplies.
Here Supplier is exclusively in supply of goods & located in Delhi. Hence, threshold limit of ` 40,00,000 is
applicable.
Aggregate Turnover is
= ` 39,90,000 + ` 50,000
= ` 40,40,000
Since aggregate turnover of the dairy farm in Delhi exceeds ` 40 lakh, it is liable to get registered.
(ii) No, Amit Cannot operate with a single registration in West Bengal if he is making taxable supplies from
Tamilnadu and Punjab also. Every person who is liable to take a registration will have to get registered
separately for each of the States where he has a business operation and is liable to pay GST.
However, if he is not making taxable supplies from Tamilnadu and Punjab, he can operate with a
single registration in West Bengal.
19. Can a person get himself voluntarily registered though he may not be liable to pay GST?
Solution:
Yes. a person, though not liable to be registered under sections 22 or 24 of CGST Act, 2017 may get himself
registered voluntarily. Once a person obtains voluntary registration, he has to pay tax even though his
aggregate turnover does not exceed threshold limits.
20. What kinds of invoice details of outward supplies are required to be furnished in GSTR-1 for outward
supplies?
Solution:
The invoice details of outward supplies required to be furnished in GSTR-1 are - name of Buyer, GSTN of
buyer, invoice no., date, value, taxable value, rate of tax, amount of tax, HSN code in respect of supply of
goods, accounting code in respect of supply of services and place of supply.
Further, following invoice details of outward supplies are required to be furnished invoice-wise in GSTR-1 –
(i) intra-State supplies made to the registered persons
(ii) inter-State supplies made to the registered persons;
(iii) inter-State supplies made to unregistered persons with invoice value exceeding ` 2,50,000
Note: The question may be answered either on the basis of invoice details of outward supplies required to be
furnished in GSTR-1 or on the basis of invoice details of outward supplies required to be furnished invoice-
wise in GSTR-1.
21. State whether the following supplies would be treated as supply of goods or supply of services as per
Schedule II of CGST Act:
i. Renting of immovable property
ii. Transfer of right in goods without transfer of title in goods.
iii. Works contract services
iv. Temporary transfer of permitting use or enjoyment of any intellectual property right
v. Sale of personal car to dealer.

Solution:
(i) Renting of immovable property would be treated as supply of services in terms of Schedule-II of CGST
Act, 2017.
(ii) As per Schedule-II of CGST Act, 2017, transfer of right in goods without transfer of title in goods would be
treated as supply of services.
(iii) As per Schedule-II of CGST Act, 2017, works contract services would be treated as supply of services.
(iv) As per Schedule-II of CGST Act, 2017, temporary transfer of permitting use or enjoyment of any
intellectual property right would be treated as supply of services.
(v) As per Schedule-II of CGST Act, 2017, sale of personal car to dealer would be treated as supply of goods
as any transfer of the title in goods is a supply of goods.
However, it is also possible to take view that sale of personal car to dealer is not a supply per se
as supply is not made by the individual in the course or furtherance of business.
Note: The question may be answered on the basis of either of the two views.

GST By CA Suraj Agrawal SATC U.1
GST - PRACTICE TEST PAPER - SET ‘U’
1. [Important] M/s. Shri Durga Corporation Pvt. Ltd. is a supplier of goods and services at Kolkata. It has
furnished the following information for the month of February, 20XX:
Particulars Amount
(i) Intra-State sale of taxable goods including ` 1,00,000 received as 4,00,000
advance in January, 20XX, the invoice for the entire sale value is
issued on 15th February, 20XX
(ii) Services provided by way of labour contracts for repairing a single 1,00,000
residential unit otherwise than as a part of residential complex (It is
an intra-State transaction)
(iii) Goods transport services received from a GTA. GTA is paying tax 2,00,000
@12% (It is an inter-State transaction)
Compute net GST liability (CGST, SGST or IGST, as the case may be) of M/s Shri Durga Corporation
Pvt. Ltd. For the month of February, 20XX.
Assume the rates of GST, unless otherwise specified, as under:
CGST 9%
SGST 9%
lGST 18%
Note:-
The turnover of M/s. Shri Durga Corporation Pvt. Ltd. was ` 2.5 crore in the previous financial year.
All the amounts given above are exclusive of taxes.
Solution:
Computation of GST liability of M/s. Shri Durga Corporation Pvt. Ltd. for the month of February, 20XX
Value of
Particulars Supply CGST SGST IGST
Intra -State sale of taxable goods [Note-1] 4,00,000 36,000 36,000
Services rendered by way of labour contracts for repairing a
single residential unit otherwise than as a part of residential
complex [Note-2] 1,00,000 9,000 9,000
Goods transport services received from GTA [Note-3] 2,00,000 Nil
Total GST liability for the month of February, 20XX 45,000 45,000 Nil
Less: Input tax credit available [Note-4](` 2,00,000 x12%) 24,000 -
Net GST liability for the month of February, 20XX 21,000 45,000 Nil

Notes:
1. Section 12 of CGST Act, 2017 read with Notification No. 66/2017 CT dated 15.11.2017 provides that
the time of supply for all suppliers of goods (excluding composition suppliers) is the time of issue of
invoice, without any turnover limit. [Time of Supply Chapter]
Thus, liability to pay tax on the advance received in January, 20XX will also arise in the month of
February, when the invoice for the supply is issued. [Any advance against Goods is not taxable in
the month of receipt]
2. Services by way of pure labour contracts of construction, erection, commissioning, or installation

of original works pertaining to a single residential unit otherwise than as a part of a residential complex
are exempt vide Notification No. 12/2017 CT(R) dated 28.06.2017. Labour contracts for repairing are
thus, taxable. [Exemption Chapter]
3. As per Notification No. 13/2017 CT(R) dated 28.06.2017, GST is payable by the recipient on reverse
charge basis on the receipt of services of transportation of goods by road from a goods transport agency
(GTA) provided such GTA has not paid GST @ 12%.
Since in the given case, services have been received from a GTA who has paid GST @ 12%,
reverse charge provisions will not be applicable. [Charge of Supply Chapter]
4. Input tax credit is available for the services received from GTA. The input tax credit of IGST can be used
against IGST then CGST and SGST in any order vide section 49(5) of CGST Act, 2017 read with
Rules 88A.
2. [ITC Chapter] Cloud Seven Private Limited, a registered supplier, is engaged in the manufacture of
taxable goods. The company provides the following information pertaining to GST paid on the
purchases made/input services availed by it during the month of February, 20XX :
GST
Particulars paid (`)
(i) Trucks used for the transport of raw material 1,20,000
Foods and beverages for consumption of employees lot was received during the
(ii) month 40,000
Inputs are to be received in five lots, out of which third lot was received during the
(iii) month 80,000
(iv) Membership of a club availed for employees working in the factory 1,50,000
Capital goods (out of five items, invoice for one item was missing and GST paid on
(v) that item was ` 50,000) 4,00,000
(vi) Raw material (to be received in March, 20XX) 1,50,000
Determine the amount of input tax credit available with Cloud Seven Private Limited for the month of
February, 20XX by giving necessary explanations for treatment of various items. All the conditions
necessary for availing the input tax credit have been fulfilled.
Solution:
Computation of input tax credit (ITC) available with Cloud Seven Private Limited for the month of
February, 20XX
Particulars `
Trucks used for the transport of raw material [Note-1] 1,20,000
Foods and beverages for consumption of employees working in the factory [Note-2] Nil
Inputs are to be received in five lots, out of which third lot was received during the month
[Note-3] Nil
Membership of a club availed for employees working in the factory [Note-4] Nil
Capital goods (out of five items, invoice for one item was missing and GST paid on that item
was ` 50,000) [Note-5] 3,50,000
Raw material to be received in March, 20XX [Note-6] Nil
Total ITC 4,70,000

Notes:-
1. ITC on motor vehicles used inter alia, for transportation of goods is not blocked in terms of Section
17(5) [Blocked Credit] of the CGST Act, 2017.
2. ITC on food or beverages is specifically disallowed unless the same is provide under a statutory
obligation or used for making outward taxable supply of the same category or as an element of the
taxable composite or mixed supply- [Section 17(5)].
3. When inputs are received in instalments, ITC can be availed only on receipt of last instalment- [Section
16(2)].
4. Membership of a club (except the same is provided under statutory obligation) is specifically
disallowed under section 17(5) of the CGST Act, 2017.
5. ITC cannot be taken on missing invoice. The registered person should have the invoice in its possession
to claim ITC [Section 16(2) of CGST Act, 2017].
6. Input tax credit is available only upon the receipt of goods in terms of section 16(2) of CGST Act, 2017.
3. IMPORTANT - [Registration & Tax Invoice Chapter] Luv & Kush Pvt. Ltd. of Telangana engaged in the
supply of gifts items provides you the following details:-
S.No. Particulars Date
Commencement of the business of supplying
1 goods 01.08.20XX
2 Turnover exceeds ` 10,00,000 on 15.08.20XX
3 Turnover exceeds ` 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.
Solution:
As per section 22 of the CGST Act, 2017 read with Notification No. 10/2019 CT dated 07.03.2019, a
and/or services, if his aggregate turnover in a financial year exceeds the threshold limit. The threshold limit for
a person making exclusive intra - State taxable supplies of goods is as under:-
(b) ` 20 lakh for the States of States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and
Uttarakhand.
(c) ` 40 lakh for rest of India. However, the higher threshold limit of ` 40 lakh is not available to persons
engaged in making supplies of ice cream and other edible ice, whether or not containing cocoa,
Pan masala and Tobacco and manufactured tobacco substitutes.
In the given case, Luv & Kush Pvt. Ltd is located in Telangana. Though Supplier of goods are exempt
from registration upto aggregate turnover of ` 40,00,000 but this exemption is not applicable for Supplier of
goods located in Telangana. Here Limit of ` 20,00,000 is applicable.
A supplier whose aggregate turnover in a financial year exceeds ` 20 lakh in Telangana State is liable to
apply for registration within 30 days from the date of becoming liable to registration (i.e., the date of crossing
the threshold limit of ` 20 lakh) vide section 22 of CGST Act, 2017.
Where the application is submitted within said period, the effective date of registration is the date on which the
person becomes liable to registration; otherwise it is the date of grant of registration.
Every registered person who has been granted registration with effect from a date earlier than the date of
issuance of registration certificate to him, may issue revised tax invoices in respect of taxable supplies
effected during this period within 1 month from the date of issuance of registration certificate [Section
31].

Here, Luv & Kush Pvt. Ltd. has made the application for registration within 30 days of becoming liable for
registration, the effective date of registration becomes the date on which the company becomes liable to
registration i.e. 05.09.20XX.
Thus, Luv & Kush Pvt. Ltd. may issue revised tax invoices against the invoices already issued during the
period between effective date of registration (05.09.20XX) and the date of issuance of registration certificate
(06.10.20XX), within 1 month from 06.10.20XX.
Further, Luv & Kush Pvt. Ltd may issue a consolidated revised tax invoice in respect of all taxable supplies
made to unregistered dealers during such period. However, in case of inter-State supplies made to
unregistered dealers, a consolidated revised tax invoice cannot be issued if the value of a supply
exceeds ` 2,50,000.
4. [Value of Supply] - Red Pepper Ltd., Delhi, a registered supplier, is manufacturing taxable goods. It
provides the following details of taxable inter-State supply made by it for the month of March, 20XX.
Particulars Amount in
List price of goods supplied inter-state (exclusive of taxes) 15,00,000
Subsidy received from Central Government for supply of taxable goods to
Government School. 2,10,000
Subsidy received from a NGO for supply of taxable goods to an old age home 50,000
Tax levied by Municipal Authority 20,000
Packing charges 15,000
Late fee paid by the recipient of supply for delayed payment of invoice 6,000
The list price of the goods takes into account the two subsidies received. However, the other
charges/taxes/fee are charged to the customers over and above the list price. Calculate the value of
taxable supply made by M/s Red Pepper Ltd. for the month of March, 20XX. Rate of IGST is 18%.
Solution:
Computation of value of taxable supply made by Red Pepper Ltd. for the month of March, 20XX
Particulars `
Add: Subsidy amounting to ` 2,10,000 received from Central Government
[Since subsidy is received from Government, the same is not includible in the value in
terms of section 15 of the CGST Act, 2017] NIL
Subsidy received from NGO
[Since subsidy is received from a non-Government body, the same is includible in the
value in terms of section 15 of the CGST Act, 2017] 50,000
Tax levied by the Municipal Authority
[Includible in the value as per section 15 of the CGST Act, 2017] 20,000
Packing charges
[Being incidental expenses, the same are includible in the value as per section 15 of the
CGST Act, 2017] 15,000
Late fees paid by recipient of supply for delayed payment
[Includible in the value as per section 15 of the CGST Act, 2017]
(assumed to be inclusive of taxes) [` 6,000 x 100/118] rounded off
(Note: As an alternative, Students may also assume amount exclusive of taxes) 5,085
5.
(i) Explain the meaning of the term “date of receipt of payment” as per section 13 of the CGST Act, 2017.
(ii) VERY IMP [SUPPLY] List any four activities which shall be neither treated as supply of goods nor a
supply of services under the GST law.

Solution:
(i) “Date of receipt of payment” in terms of section 13 of CGST Act, 2017 refers to the
(a) date on which the payment is recorded in the books of account of the entity (supplier of service) that
receives the payment, or
(b) the date on which the payment is credited to the entity’s bank account,
(ii) Section 7(2)(a) of CGST Act, 2017 read with Schedule III specifies the activities or transactions
which shall be treated neither as a supply of goods nor a supply of services:
1. Services by an employee to the employer in the course of or in relation to his employment.

2. Services by any court or Tribunal established under any law for the time being in force.
3.
(a) Functions performed by the Members of Parliament, Members of State Legislature, Members of
Panchayats, Members of Municipalities and Members of other local authorities;
(b) Duties performed by any person who holds any post in pursuance of the provisions of the
Constitution in that capacity; or
(c) Duties performed by any person as a Chairperson or a Member or a Director in a body

established by the Central Government or a State Government or local authority and who is not
deemed as an employee before the commencement of this clause.
4. Services of funeral, burial, crematorium or mortuary including transportation of the deceased.

5. Sale of land and, subject to paragraph 5(b) of Schedule II, sale of building.
6. Actionable claims, other than lottery, betting and gambling.
7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory
without such goods entering into India.
8. (a) Supply of warehoused goods to any person before clearance for home consumption;
(b) Supply of goods by the consignee to any other person, by endorsement of documents of title to
the goods, after the goods have been dispatched from the port of origin located outside India but
before clearance for home consumption.
6. [EXEMPTION] - Examine whether GST is payable in the following independent supply of services:
(i) Indiana Engineering College, a recognised educational institution, has conducted an entrance
test examination for various courses run by it and charged entrance fees from the applicants.
(ii) Ramfal Lalaji, an agriculturist, has stored sugarcane in a warehouse. He has taken fumigation
services in the said warehouse from Gupta Pest Control Co. for which he paid the consideration
of ` 6,000.
Solution:
(i) Services provided by an educational institution by way of conduct of entrance examination against
consideration in the form of entrance fee are exempt from GST vide Notification No. 12/2017 CT (R)
dated 28.06.2017 as amended.
Since in the given case, services provided by Indiana Engineering College, an educational institution are
by way of conduct of entrance examination against entrance fee, the same is exempt and thus, GST is
not payable in this case.
(ii) Services by way of fumigation in a warehouse of agricultural produce are exempt from GST vide
Notification No. 12/2017 CT (R) dated 28.06.2017 as amended. In the present case, since Gupta Pest
Control Co. provides services by way of fumigation in the warehouse of sugarcane [being an agricultural
produce], said services are exempt and GST is not payable on the same.

7.
(i) [REVERSE CHARGE] With reference to the provisions of GST law, briefly answer the following
questions:-
(a) VERY IMP Income is received by Maharashtra Government from renting of immovable property to
Ganpati Morya Pvt. Ltd., registered in Maharashtra (Turnover of the company was ` 18 lakh in the
preceding financial year). Is GST payable in the present case? If yes, who is liable to pay the
same?
(b) Mr. Vivek Goyal, director of A2Z Pvt. Ltd. Company has received sitting fee amounting to ` 1 lakh
from A2Z Pvt. Ltd for attending the Board meetings. (whatsapp for PDF at 8527230445)
(ii) Explain the meaning of the term “input tax” under section 2(62) of CGST Act, 2017.
Solution:
(i)
(a) VERY IMP Notification No. 12/2017 CT (R) dated 28.06.2017 has inter alia exempted the services provided
by the State Government to a business entity with an aggregate turnover of up to ` 20 lakh (` 10 lakh in case
of a Special Category States) in the preceding FY. However, the same shall not apply to services by way
of renting of immovable property.
In the given case, services by way of renting of immovable property is provided by Maharashtra Government
to Ganpati Morya Pvt. Ltd, registered in Maharashtra. Therefore, the above exemption will not apply in
this case even though the turnover of the company was less than ` 20 lakh in the preceding financial
year. Thus, GST is payable in the given case.
Notification No. 13/2017 CT (R) dated 28.06.2017 as amended inter alia provides that reverse charge is
applicable in case of services supplied by the State Government by way of renting of immovable property to a
person registered under the Central Goods and Services Tax Act, 2017.
Thus, GST is payable by Ganpati Morya Pvt. Ltd., being a registered person in the present case.
(b) Notification No. 13/2017 CT (R) dated 28.06.2017 inter alia provides that GST on supply of services by
director of a company to the said 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., A2Z Pvt. Ltd.
Company.
(ii) As per section 2(62) of CGST Act, 2017, “input tax” in relation to a registered person, means the
central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services
or both made to him and includes —
(a) the integrated goods and services tax charged on import of goods;
(b) the tax payable under the provisions of sub -sections (3) and (4) of section 9;
(c) the tax payable under the provisions of sub -section (3) and (4) of section 5 of the IGST Act;
(d) the tax payable under the provisions of sub -section (3) and sub-section (4) of section 9 of the respective
SGST Act; or
(e) the tax payable under the provisions of sub -section (3) and sub-section (4) of section 7 of the UTGST
Act, but does not include the tax paid under the composition levy.
8.
(i) IMPORTANT [Registration] Discuss the circumstances where registration is liable to be cancelled.
(ii) [Payment of Tax Chapter] Explain the order in which liability of taxable person has to be
discharged under GST laws.

Solution:
(i) IMPORTANT Section 29(1) of the CGST Act, 2017 provides that the proper officer may, either on his own
motion or on an application filed by the registered person or by his legal heirs, in case of death of such
person, cancel the registration, in such manner and within such period as may be prescribed, having regard to
the circumstances where:
(a) the business has been discontinued, transferred fully for any reason including death of the proprietor,
amalgamated with other legal entity, demerged or otherwise disposed of; or
(b) there is any change in the constitution of the business; or
(c) the taxable person, other than the person registered under sub -section (3) of section 25, is no longer
liable to be registered under section 22 or section 24
Further, section 29(2) of the CGST Act, 2017 provides that the proper officer may cancel the
registration of a person from such date, including any retrospective date, as he may deem fit, where,–
–
(a) a registered person has contravened such provisions of the Act or the rules made thereunder as may be
prescribed; or
(b) a person paying tax under section 10 has not furnished returns for three consecutive tax periods; or
(c) any registered person, other than a person specified in clause (b), has not furnished returns for a
continuous period of six months; or
(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not commenced
business within six months from the date of registration; or
(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts
Further, the proper officer shall not cancel the registration without giving the person an opportunity of
being heard.
(ii) Section 49(8) of CGST Act, 2017 prescribes the chronological order in which the liability of a taxable
person has to be discharged:
(a) self -assessed tax and other dues for the previous tax periods have to be discharged first.
(b) self -assessed tax and other dues for the current tax period have to be discharged next.
(c) Once these two steps are exhausted, thereafter any other amount payable including demand determined
under section 73 or section 74 is to be discharged. In other words, the liability if any, arising out of
demand notice and adjudication proceedings comes last.
This sequence has to be mandatorily followed.
The expression “other dues” referred above mean interest, penalty, fee or any other amount payable under
the Act or the rules made thereunder.
9. [SUPPLY CHAPTER] Examine whether the activity of import of service in the following independent
cases would amount to supply under section 7 of the CGST Act, 2017?
(i) Miss Shriniti Kaushik received vaastu consultancy services for her residence located at Bandra,
Mumbai from Mr. Racheal of Sydney (Australia). The amount paid for the said service is 5,000
Australian dollar.
(ii) Miss Shriniti Kaushik received vaastu consultancy services for her residence located at Bandra,
Mumbai from her brother, Mr. Varun residing in Sydney (Australia). Further, Miss Shriniti did not
pay any consideration for the said service.
(iii) Miss Shriniti Kaushik received vaastu consultancy services for her business premises located at
Bandra, Mumbai from her brother, Mr. Varun (dependent on Shriniti) residing in Sydney
(Australia). Further, Miss Shriniti did not pay any consideration for the said service.
Solution:
(i) Supply, under section 7 of the CGST Act, 2017, inter alia,
 includes import of services for a consideration

 even if it is not in the course or furtherance of business.
Thus, although the import of service for consideration by Miss. Shriniti Kaushik is not in course or
furtherance of business, as the vaastu consultancy service has been availed in respect of residence,
it would amount to supply.
[Taxability - Evenif it is treated as Supply, it is an exempted Supply as Per Notification No. 12/2017
CT (R) dated 28.06.2017 as amended as import of service is used by Individual for personal
purpose.]
(ii) Section 7 of the CGST Act, 2017 read with Schedule I provides that import of services by a person
from a related person located outside India, without consideration is treated as supply if it is provided in
the course or furtherance of business.
In the given case, import of service without consideration by Miss Shriniti from her brother – Mr. Varun
[brother, being member of the same family, is a related person] will not be treated as supply as it is not
in course or furtherance of business.
(iii) Section 7 of the CGST Act, 2017 read with Schedule I provides that import of services by a person from a
related person located outside India, without consideration is treated as supply if it is provided in the
course or furtherance of business.
Thus, import of service without consideration by Miss Shriniti from her brother – Mr. Varun (brother, being
member of the same family & dependent, is a related person) will be treated as supply as she receives
vaastu consultancy service for her business premises, i.e. in course or furtherance of business.
10. [Composition Scheme] - M/s. Handsome and Likemi Company, a partnership firm at Mumbai (contact
SATC 8527230445 for PDF Notes) is running a mobile phone showroom. Along with mobile phone
showroom, it is also engaged in providing health and fitness services.
Turnover of the mobile phone showroom was ` 120 lakh and receipts of the health and fitness service
was ` 8 lakh in the preceding financial year.
(i) With reference to the provisions of the CGST Act, 2017, examine whether the firm can opt for the
composition scheme under Section 10(1),
(ii) If M/s. Handsome and Likemi Company obtain separate registration for their mobile phone
showroom & for health fitness centre, can it opt for composition scheme only for mobile phone
showroom?
Solution:
As per section 10(1) of the CGST Act, 2017, the following registered persons, whose aggregate turnover in
the preceding financial year did not exceed ` 1.5 crore [` 75 lakh in Special Category States except
Assam, Himachal Pradesh and Jammu and Kashmir], may opt to pay tax under composition levy.
(a) Manufacturer,
(b) Persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II (restaurant
services), and
(c) Any other supplier eligible for composition levy.
Thus, essentially, the composition scheme can be availed in respect of goods and only one service namely,
restaurant service.
However, the scheme permits supply of other marginal services for a specified value along with the
supply of goods and restaurant service, as the case may be. Such marginal services can be supplied
for a value up to 10% of the turnover in the preceding year or ` 5 lakh, whichever is higher.

In view of the above-mentioned provisions, the answer to the given is as under:-
(i) Aggregate turnover in preceding financial year is 1.28 crores which does not exceeds 1.5 crores. M/s
Handsome and Likemi Company is eligible for composition scheme under Section 10(1) in current
financial year provided Value of health and fitness service does not exceeds 10% of the turnover in
the preceding year or ` 5 lakh, whichever is higher.
(ii) Where more than one registered persons are having the same Permanent Account Number, the
registered person shall not be eligible to opt for composition scheme unless all such registered
persons opt to pay tax under composition scheme.
Therefore, M/s. Handsome and Likemi Company will not be able to opt for composition scheme only for
mobile phone showroom as all the registrations under the same PAN have to opt for composition
scheme.

Class Notes

GST By CA Suraj Agrawal SATC V.1
GST - PRACTICE TEST PAPER - SET ‘V’
Source: CA Intermediate - May 2018 Exam (Suggested)
1. [VALUE] - Shri Krishna Pvt. Ltd., a registered dealer, furnishes the following information relating to
goods sold by it to Shri Balram Pvt. Ltd. in the course of Intra State.

(i) Price of the goods 1,00,000
(ii) Municipal Tax 2,000
(iii) Inspection charges 15,000
(iv) Subsidies received from Shri Ram Trust 50,000
(As the products is going to be used by blind association)
(v) Late fees for delayed payment.
(Though Shri Balram Pvt. Ltd. made late payment but these 1,000
charges are waived by Shri Krishna Pvt. Ltd.)
(vi) Shri Balram Pvt. Ltd. paid to Radhe Pvt. Ltd. (on behalf of Shri 2,000
Krishna Pvt. Ltd.) weightment charges.
According to GST Law, determine the value of taxable supply made by Shri Krishna Pvt. Ltd. Items
given in Point (ii) to (vi) are not considered while arriving at the price of the goods given in point no.
(i).
Solution:
Computation of value of taxable supply made by Shri Krishna Pvt. Ltd.
Particulars `
Price of the goods 1,00,000
Municipal tax 2,000
[Includible in the value as per section 15 of the CGST Act, 2017]
Inspection charges 15,000
[Being incidental expenses, the same are includible in the value as per
section 15 of the CGST Act, 2017]
Subsidy received from Shri Ram Trust 50,000
[Since subsidy is received from a non-Government body, the same is
includible in the value in terms of section 15 of the CGST Act, 2017]
Late fees for delayed payment [Not includible since waived off] Nil
Weighment charges paid to Radhe Pvt. Ltd. by Shri Balram Pvt. Ltd. on 2,000
behalf of Shri Krishna Pvt. Ltd.
[Liability of the supplier being discharged by the recipient, is includible
in the value in terms of section 15 of the CGST Act, 2017]

2. M/s. Pradyumn Corporation Pvt. Ltd., a registered dealer of Mumbai furnishes you following
information for the month of February, 20XX.
Particulars Amount
(i) Intra state sale of Taxable goods (out of above ` 50,000 was received as advance
in January, 20XX) 2,00,000
(ii) Received for services by way of labour contracts for repairing a single residential
unit otherwise than as a part of residential complex (It is Intra-State transaction) 50,000
(iii) Professional fees paid to Ms. Udadhi located in a non-taxable territory
(It amounts to Inter State transaction) 50,000
Compute GST liability (CGST, SGST or IGST, as the case may be) of M/s Pradyumn Corporation Pvt.
Ltd. for the month of Feb, 20XX.
Assume the rates of GST as under:
CGST 9%
SGST 9%
lGST 18%
Note: Turnover of M/s. Pradyumn Corporation Pvt. Ltd. was ` 2 crore in the previous financial year.
Solution:
Computation of GST liability of M/s. Pradyumn Corporation Pvt. Ltd. for the month of Feb, 20XX
Particulars Value of Supply CGST SGST IGST
Intra State sale of taxable goods [Note-1] 2,00,000 18,000 18,000
Receipt for services rendered by way of labour

contracts for repairing a single residential unit
otherwise than as a part of residential complex 50,000 4,500 4,500
[Note-3]
Professional fees paid to Ms. Udadhi located in

a non-taxable territory [Note-4] 50,000 9,000
Total GST liability for the month of Feb, 22,500 22,500 9,000
20XX
Notes:
1. Section 12 of CGST Act, 2017 read with Notification No. 66/2017 CT dated 15.11.2017 provides that
the time of supply for all suppliers of goods (excluding composition suppliers) is the time of issue of
invoice, without any turnover limit. [Time of Supply Chapter]
Thus, liability to pay tax on the advance received in January, 20XX will also arise in the month of
February, when the invoice for the supply is issued. [Any advance against Goods is not taxable in
the month of receipt]
2. Services by way of pure labour contracts of construction, erection, commissioning, or installation of

original works pertaining to a single residential unit otherwise than as a part of a residential complex are
exempt. Labour contracts for repairing are thus, taxable.
3. In case of service supplied by a person located in a non -taxable territory to a person other than non-
taxable online recipient, GST is payable under reverse charge by such recipient.

3. IMP: List the activities to be treated as supply under CGST Act, 2017 even if made without
consideration.
Solution:
Activities to be treated as supply even if made without consideration in terms of section 7 of CGST
Act, 2017 read with Schedule I:-
1. Permanent transfer or disposal of business assets where input tax credit has been availed on such
assets.
2. Supply of goods or services or both between related persons or between distinct persons as specified in
section 25 of the CGST Act, 2017, when made in the course or furtherance of business.
However, gifts not exceeding ` 50,000 in value in a financial year by an employer to an employee shall
not be treated as supply of goods or services or both.
3. Supply of goods —
(a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the
principal; or
(b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the
principal.
4. Import of services by a taxable person from a related person or from any of his other establishments
outside India, in the course or furtherance of business.
4. On 4th September, 20XX, V.R. Mehman a famous music composer, received ` 3 crore of on 4th
September, 20XX, V.R. Mehman a famous music composer, received ` 3 crore of consideration from
Zilmil Music Co. Ltd. for sale of copyright of his original music album. He finished his work & made
available the CD to the music company on 20th July, 20XX & raised the invoice on 24th July, 20XX.
What will be the time of supply as per CGST Act, 2017?
Note: Above service is taxable under reverse charge basis.
Solution:
As per section 13 of CGST Act, 2017, the time of supply of service on which GST is payable on reverse
charge basis is earlier of the following:
 Date of payment (04.09.20XX), or
 Date immediately following 60 days since issue of invoice by the supplier (23.09.20XX)
Thus, time of supply of services is 04.09.20XX
5. State, with reason, person liable to pay GST in each of following independent cases. Assume
recipient is located in taxable territory.
(i) Rental income received by Tamil Nadu State Government from renting an immovable property to
Mannappa Pvt. Ltd. (Turnover of the company was ` 22 lakhs in the preceding FY) registered
under CGST Act 2017.
(ii) Legal Fees received by Mr. Sushrut, a senior advocate, from M/s. Tatva Trading Company having
turnover of ` 50 lakhs in preceding F. Y.
Solution:
(i) Notification No. 12/2017 CT (R) dated 28.06.2017 has inter alia exempted the services provided by the
State Government to a business entity with an aggregate turnover of up to ` 20 lakh (` 10 lakh in case of
a notified Special Category States) in the preceding FY. However, the same shall not apply to services
by way of renting of immovable property.
In the given case, services by way of renting of immovable property is provided by Tamil Nadu
Government to Mannappa Pvt. Ltd.. Thus, GST is payable in the given case.

Notification No. 13/2017 CT (R) dated 28.06.2017 as amended inter alia provides that reverse charge is
applicable in case of services supplied by the State Government by way of renting of immovable property
to a person registered under the Central Goods and Services Tax Act, 2017.
Thus, GST is payable by Mannappa Pvt. Ltd., being a registered person in the present case.
(ii) GST on legal services supplied by a senior advocate [Mr. Sushrut] to any business entity [M/s. Tatva
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. Tatva Trading
Company.
6. Bharat Associates Pvt. Ltd. purchased machinery worth ` 9,00,000 (excluding GST) on 20-07-2020 on
which it paid GST @ 18% and availed the ITC. On 05-03-2021, it sold the machinery for ` 7,00,000
(excluding GST) to Hindustan Associates Pvt. Ltd. The GST rate on sale is 18%. What will be the
course of action for Bharat Associates Pvt. Ltd. to follow under CGST Act, 2017?
Solution:
If capital goods or plant and machinery on which input tax credit (ITC) has been taken are supplied
outward by a registered person, he must pay an amount that is higher of the following:
(a) ITC taken on such goods reduced by 5% per quarter of a year or part thereof from the date of issue of
invoice for such goods or
(b) tax on transaction value.
Accordingly, the amount payable on supply of machinery by Bharat Associates Pvt. Ltd. shall be
computed as follows:
Particulars `
ITC taken on the machinery (` 9,00,000 × 18%) 1,62,000
Less: ITC pertaining to the period of usage of the capital goods 24,300
= (` 1,62,000 × 5%) × 3 quarters
Amount of reduced ITC based on percentage points (A) 1,37,700
Duty leviable on transaction value (` 7,00,000 × 18%) (B) 1,26,000
Amount payable towards disposal of machinery is higher of (A) and (B) 1,37,700
Note (whatsapp for PDF at 8527230445):

In the above solution, amount of ITC to be paid (amount of reduced ITC based on percentage points)
has been computed on the basis of provisions of rule 40(2) of the CGST Rules, 2017 [ITC reduced by
5% for every quarter or part thereof from the date of the issue of invoice].
7. What is CIN?
Solution:
CIN is Challan Identification Number. It is generated by the banks indicating that the payment has been
realized and credited to the appropriate government account against a generated challan.
8. When is interest payable?
Solution:
Interest is payable in the following cases in terms of section 50 of CGST Act, 2017:-
 Delay / failure to pay tax, in full or in part within the prescribed period
 undue or excess claim of input tax credit
 undue or excess reduction in output tax liability.

9. How does the new payment system benefit the taxpayer & the Commercial Tax Department?
Solution:
The new payment system benefits the taxpayer and the commercial tax department in the
following ways:
Benefits to Taxpayer: -
 No more queues and waiting for making payments as payments can be made online 24 X 7.
 Electronically generated challan from GSTN common portal in all modes of payment and no use of
manually prepared challan. Paperless transactions.
 Instant online receipts for payments made online.
 Tax consultants can make payments on behalf of the clients.
 Single challan form to be created online, replacing the three or four copy Challan.
 Greater transparency.
 Online payments made after 8 pm will be credited to the taxpayer’s account on the same day.
Benefits to the Commercial Tax Department:-
 Revenue will come earlier into the Government Treasury as compared to the old system.
 Logical tax collection data in electronic format.
 Speedy accounting and reporting.
 Electronic reconciliation of all receipts.
 Warehousing of digital challan.
10. State with reason whether following statement is true or false:
"When the change in constitution of business results in change in PAN, the business entity can apply
for amendment of registration in prescribed manner within 15 days."
Solution:
The said statement is FALSE.
When a change in constitution of a business results in change of PAN of the registered person, the said
person shall apply for fresh registration. The reason for the same is that GSTIN is PAN based. Any
change in PAN would warrant a new registration.
11. [ITC] Fun Pharma Private Limited, a registered supplier is engaged in the manufacture of taxable
goods. The company provides the following information of GST paid on the purchases made/input
services availed by it during the month of June 20XX:
Particulars GST paid (`)
(i) Purchase of cabs (seating capacity – 4 person) used for the transportation
of its employees 3,30,000
(ii) Inputs consisting of three lots,out of which first lot was received during the month 1,25,000
(iii) Capital Goods (out of three items, invoice for one item was missing and GST
paid on that item was ` 25,000) 2,50,000
(iv) Outdoor catering service availed on Women's day 72,000
Determine the amount of input tax credit available with M/s Fun Pharma Private Limited for the month
of June 20XX by giving necessary explanations for treatment of various items. All the conditions
necessary for availing the input tax credit have been fulfilled
Solution:
Computation of input tax credit (ITC) available with Fun Pharma Private Limited for the month of June
20XX
Particulars `
Purchase of cabs used for the transportation of its employees [Note-1] Nil
Inputs consisting of three lots, out of which first lot was received during the month [Note-2] Nil
Capital goods [Note-3] 2,25,000
Outdoor catering service availed on Women’s day [Note-4] Nil
Total ITC 2,25,000
Notes:-
1. Section 17 of CGST Act, 2017 provides that ITC on motor vehicles can be availed, inter alia, when
they are used for making the taxable supply of transportation of passengers i.e., if the taxable person
is in the business of transport of passengers. In the given case, since the supplier is a manufacturer,
it cannot avail credit on cabs purchased for transportation of its employees.
2. When inputs are received in instalments, ITC can be availed only on receipt of last instalment in terms
of Section 16 of CGST Act, 2017.
3. ITC cannot be taken on missing invoice. The registered person should have the invoice in its
possession to claim ITC vide section 16 of CGST Act, 2017.
4. ITC on outdoor catering is specifically disallowed unless the same is provided under statutory
obligation or used for making outward taxable supply of the same category or as an element of the
taxable composite or mixed supply in terms of section 17 of CGST Act, 2017.
12. [VALUE] – Manager is available at 8527230445 for any kind of PDF Notes - Candy Blue Ltd., Mumbai,
a registered supplier, is manufacturing Chocolates and Biscuits. It provides the following details of
taxable inter -state supply made by it for the month of October, 20XX.
Particulars Amount in (`)
(i) List price of goods supplied inter-state 12,40,000
Items already adjusted in the price given in (i) above:
(1) Subsidy from Central Government for supply of biscuits to Government School. 1,20,000
(2) Subsidy from Trade Association for supply of quality biscuits. 30,000
Items not adjusted in the price given in (i) above:
(3) Tax levied by Municipal Authority 24,000
(4) Packing Charges 12,000
(5) Late fee paid by the recipient of supply for delayed payment of invoice 5,000
Calculate the value of taxable supply made by M/s Candy Blue Ltd. for the month of October, 20XX.
Solution:
Computation of value of taxable supply made by Candy Blue Ltd. for the month of October, 20XX
Particulars `
List Price of the goods 12,40,000
Add: Subsidy amounting to ` 1,20,000 received from Central Government NIL
[Since subsidy is received from Government, the same is not includible in the
value in terms of section 15 of the CGST Act, 2017.]
Subsidy received from Trade Association [Since subsidy is 30,000
received from a non-Government body, the same is includible in
the value in terms of section 15 of the CGST Act, 2017.]
Tax levied by the Municipal Authority [Includible in the value as 24,000
per section 15 of the CGST Act, 2017]
Packing charges [Being incidental expenses, the same are 12,000
includible in the value as per section 15 of the CGST Act, 2017]
Late fees paid by recipient of supply for delayed payment

[Includible in the value as per section 15 of the CGST Act, 2017] 5,000
Note: In the above solution, list price of the goods and late fee for delayed payment of invoice have
been assumed to be exclusive of taxes. UPDATED NOTES BY CA SURAJ AGRAWAL

13. Explain the meaning of the term "recipient of supply of goods and/or services" under the CGST Act,
2017.
Solution:
Recipient of supply of goods or services or both, means —
(a) where a consideration is payable for the supply of goods or services or both, the person who is liable to
pay that consideration;
(b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or
made available, or to whom possession or use of the goods is given or made available; and
(c) where no consideration is payable for the supply of a service, the person to whom the service is rendered,
and (i) any reference to a person to whom a supply is made shall be construed as a reference to the
recipient of the supply, and (ii) shall include an agent acting as such on behalf of the recipient in
relation to the goods or services or both supplied.
14. [TIME OF SUPPLY] - M/s Mansh & Vansh Trading Company, a registered supplier, is liable to pay GST
under forward charge. Determine the time of supply from the following information furnished by it:
(i) Goods were supplied on 03-1-20XX

(ii) Invoice was issued on 05-1-20XX
(iii) Payment received on 09-1-20XX
Solution:
Section 12 of CGST Act, 2017 read with Notification No. 66/2017 CT dated 15.11.2017 provides that the
time of supply for all suppliers of goods (excluding composition suppliers) is the time of issue of
invoice/Last date on which the invoice is required to be issued, without any turnover limit.
Further, a registered person is required to issue a tax invoice before or at the time of removal of goods for
supply to the recipient.
Thus, in the given case, the invoice for supply of goods should have been issued on or before the
removal of goods i.e., on 03-1-20XX.
However, since the invoice has not been issued within the prescribed time, the time of supply will be the last
date on which the invoice is required to be issued (03-1-20XX) or date of receipt of payment (09-1-20XX),
Thus, the time of supply of the goods will be 03-1-20XX.
15. [EXEMPTION] - Examine whether GST is exempted on the following independent supply of services:
(i) Teja & Co, a tour operator, provides services to a foreign tourist for tour conducted in Jammu &
Kashmir and receives a sum of ` 3,00,000.
(ii) Ms. Poorva acts as a Team Manager for Indian Sports League (ISL), a recognised sports body, for
a Tennis tournament organised by Multi brand retail company and received a remuneration of
` 2,00,000.
Solution:
(i) Services provided by a tour operator to a foreign tourist are exempt from GST provided such services are
in relation to a tour conducted wholly outside India. Thus, since in the given case, services provided by
Teja& Co. are in relation to a tour conducted within India, the same are not exempt from GST.
(ii) Services provided by a team manager to a recognised sports body for participation in a sporting event are
exempt from GST provided said sporting event is organised by a recognized sports body.
Thus, since in the given case, the sporting event is not organised by a recognised sports body,
the services provided by Ms. Poorva are not exempt from GST.

16. [Composition Scheme] - M/s Sai Trading Company, an eligible registered dealer in goods making
intra-state supplies within the state of Andhra Pradesh, has reported an aggregate turnover of ` 138
Lakhs in the preceding financial year.
(i) Determine whether Sai Trading Company will be eligible for composition levy u/s 10(1), as on 1-4-
20XX.
(ii) Will your answer be different, if in the above scenario, M/s Sai Trading Company is making intra
state supply within the state of Jammu and Kashmir?
Solution:
(i) Section 10(1) of CGST Act, 2017 provides that a registered person, whose aggregate turnover in the
preceding financial year did not exceed ` 1.5 crore may opt for composition scheme. The turnover limit is
` 75 lakh in case of Special Category States. However, for Assam, HP & Jammu and Kashmir, the
turnover limit is ` 1.5 crore only.
In the given case, the applicable turnover limit for composition scheme will be ` 1.5 crore as Andhra
Pradesh is not a Special Category State.
Further, since the aggregate turnover of the registered person in the given case does not exceed ` 1.5
crore and it satisfies other conditions of composition scheme namely, not making inter-State
supplies of goods, it is eligible for composition levy.
(ii) Since the turnover limit for determining the eligibility for composition scheme in the State of Jammu and
Kashmir is also ` 1.5 crore, Sai Trading Company will be eligible for composition levy with other condition
of not making inter-State supplies of goods being fulfilled.
17. [Tax Invoice] - Determine with reason whether the following statements are true or false:
(i) A registered person shall issue separate Invoices for taxable and exempted goods when
supplying both taxable as well as exempted goods to an unregistered person.
(ii) A Non-banking financial company can issue a consolidated tax invoice at the end of every month
for the supply made during that month.
Solution:
(i) The given statement is false.
Where a registered person is supplying taxable as well as exempted goods or services or both to an
unregistered person, a single “invoice -cum-bill of supply” may be issued for all such supplies.
(ii) The said statement is true.

By virtue of an amendment, a non-banking financial company has been allowed to issue a consolidated
tax invoice or any other document in lieu thereof for the supply of services made during a month at the
end of the month.

GST By CA Suraj Agrawal SATC W.1
GST - PRACTICE TEST PAPER - SET ‘W’
1. IMP: [Section 18(6) / ITC Chapter] - Granites Textiles Ltd. purchased a needle detecting machine on
8th July, 2019 from Makhija Engineering Works Ltd. for ` 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, 2020 for ` 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.
Solution:
Section 18 of the CGST Act, 2017 read with the CGST Rules, 2017 provides that if capital goods or plant and
machinery on which input tax credit has been taken are supplied outward by the registered person, he
must pay an amount that is the higher of the following:
(a) input tax credit taken on such goods reduced by 5% per quarter of a year or part thereof from the
date of issue of invoice for such goods (i.e., input tax credit pertaining to remaining useful life of the
capital goods), or
Accordingly, the amount payable on supply of needle detecting machine shall be computed as
follows:
Particulars ` `
Input tax credit taken on the machine (` 10,00,000 × 18%) 1,80,000
Less:
Input tax credit to be reversed @ 5% per quarter for
the period of use of machine (8th July 2019 to 22 Oct 2020)
[`1,80,000 × 5%) × 6 quarters] 54,000
Amount required to be paid (A) 1,26,000
Duty leviable on transaction value (` 7,50,000 × 18%) (B) 1,35,000
Amount payable towards disposal of machine is higher of (A) and (B) 1,35,000
2. [SUPPLY] - 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 ` 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?

Solution:
Section 7 of the CGST Act, 2017 stipulates that in order to qualify as supply:
(a) Supply should be of goods and/or services.
(b) Supply should be made for a consideration.
(c) Supply should be made in the course or furtherance of business.
Further, Schedule I of the CGST Act, 2017 illustrates the activities to be treated as supply even if made
without consideration. One such activity is permanent transfer or disposal of business assets where
input tax credit has been availed on such assets, i.e. said activity is to be treated as supply even if
made without consideration.
In view of said provisions, permanent transfer of air conditioners by Sahab Sales from its stock for personal
use at its residence, though without consideration, would amount to supply.
However, sale of air-conditioner by Aakash to Sahab Sales will not qualify as supply under section 7 of the
CGST Act, 2017 as although it is made for a consideration, but it’s not in the course or furtherance of
business.
3. IMPORTANT - [REGISTRATION] - Pure Oils, Delhi has started the supply of machine oils and high
speed diesel in the month of April, 20XX. The following details have been furnished by it for the said
month:-
Sl. No.Particulars `*
(ii) Supply of high speed diesel in Delhi 4,00,000
(iii) Supply made through Fortis Lubricants - an agent of Pure Oils in 3,75,000
Delhi
(iv) Supply made by Pure Oils from its branch located in Punjab 1,80,000
*excluding GST
Determine whether Pure Oils is liable for registration. Will your answer change, if Pure Oils
supplies machine oils amounting to ` 2,50,000 from its branch located in Tripura in addition to the
above-mentioned supplies?
Solution:
As per section 22 of the CGST Act, 2017 read with Notification No. 10/2019 CT dated 07.03.2019, a
and/or services, if his aggregate turnover in a financial year exceeds the threshold limit.
The threshold limit for a person making exclusive intra - State taxable supplies of goods is as under:-
(b) ` 20 lakh for the States of States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana
and Uttarakhand.
However, the higher threshold limit of ` 40 lakh is not available to persons engaged in making supplies of ice
cream and other edible ice, whether or not containing cocoa, Pan masala and Tobacco and manufactured
tobacco substitutes.
As per section 2(6) of the CGST Act, 2017, aggregate turnover includes the aggregate value of:
The above is computed on all India basis. Further, the aggregate turnover excludes central tax, State tax,
Union territory tax, integrated tax and cess. Moreover, the value of inward supplies on which tax is payable
under reverse charge is not taken into account for calculation of ‘aggregate turnover’.
Further, the explanation to section 22 provides that the expression “aggregate turnover” shall include all
supplies made by the taxable person, whether on his own account or made on behalf of all his
principals.

Section 9 of the CGST Act, 2017 provides that CGST is not leviable on five petroleum products i.e. petroleum
crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel.
As per section 2(47) of the CGST Act, 2017, exempt supply includes non-taxable supply. Thus, supply of
high speed diesel in Delhi, being a non-taxable supply, is an exempt supply and is, therefore,
includible while computing the aggregate turnover.
In the backdrop of the above-mentioned discussion, the aggregate turnover for the month of April,
20XX is computed as under:
No. (in `)
(ii) Add: Supply of high speed diesel in Delhi 4,00,000
(iii) Add: Supply made through Fortis Lubricants - an agent of Pure -
Oils in Delhi
(iv) Add: Supply made by Pure Oils from its branch located in Punjab 1,80,000
Aggregate Turnover 7,80,000
Since the aggregate turnover does not exceed ` 40 lakh (Pure Oils is located in Delhi), Pure Oils is not
liable to be registered.
If Pure Oils made supply of machine oils amounting to ` 2,50,000 from its branch in Tripura in addition to the
above supply, then threshold limit of registration will be reduced to ` 10 lakh as Tripura is one of the
specified Special Category States.
Aggregate Turnover in that case would be ` 7,80,000 + ` 2,50,000 = ` 10,30,000. So, if Pure Oils supplies
machine oils amounting to ` 2,50,000 from its branch in Tripura, then it is liable to be registered.
SATC NOTE: Turnover of agent is not required to be added in aggregate turnover of Principle for
determining “Aggregate Turnover”
4. [TAX INVOICE]- 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, 20XX. For
the occasion, it gets the makeover of its models done by Aura Beauty Services Ltd., Ashok Vihar, for
which a consideration is ` 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 ` 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?
Solution:
(i) As per section 31 of the CGST Act, 2017 read with the CGST Rules, 2017, in case of taxable supply of
services, invoices should be issued before or after the provision of service, but within a period of 30 days
[45 days in case of insurer/ banking company or financial institutions including NBFCs] from the date of
supply of service.
In view of said provisions, in the present case, the tax invoice should have been issued in the prescribed
time limit of 30 days from the date of supply of service i.e. upto 03.02.20XX. However, the invoice has
been issued on 10.02.20XX.
In such a case, the time of supply as per section 13 of the CGST Act, 2017 would be 04.01.20XX i.e.
earliest of the following:
(a) Date of provision of service (04.01.20XX)

(b) Date of receipt of payment (11.02.20XX)

(ii) Section 31 of the CGST Act, 2017 read with the CGST Rules, 2017, inter alia, provides that tax invoice
shall contain the following particulars-
(a) Total value of supply of goods or services or both;
(b) Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
(c) Amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax,
Union territory tax or cess);
The objection raised by the tax consultant of Royal Fashions 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., is valid in law.
In the present case, the tax amount has not been shown separately in the invoice.

GST By CA Suraj Agrawal SATC X.1
GST - PRACTICE TEST PAPER - SET ‘X’
1. Rama Ltd. has provided following information for the month of September:
(i) Intra-State outward supply ` 8,00,000/-
(ii) Inter-State exempt outward supply ` 5,00,000/-
(iii) Turnover of exported goods ` 10,00,000/-
(iv) Payment made for availing GTA services ` 80,000/-
Calculate the aggregate turnover of Rama Ltd.
(a) ` 8,00,000/-
(b) ` 23,80,000/-
(c) ` 23,00,000/-
(d) ` 18,00,000/-
2. Which of the following services received without consideration amount to supply?

(1) Import of services by a person in India from his son well-settled in USA
(2) Import of services by a person in India from his brother well-settled in Germany
(3) Import of services by a person in India from his brother (wholly dependent on such person in
India) in France
(4) Import of services by a person in India from his daughter (wholly dependent on such person
in India) in Russia
(a) 1), 3) and 4)
(b) 2), 3) and 4)
(c) 2) and 3)
(d) 1) and 2)
3. Services by way of admission to ................ are exempt from GST.

(a) Museum
(b) National park
(c) Tiger reserve
(d) All of the above
4. A supplier takes deduction of depreciation on the GST component of the cost of capital goods as per
Income- tax Act, 1961. The supplier can-
(a) avail only 50% of the said tax component as ITC
(b) not avail ITC on the said tax component
(c) avail 100% ITC of the said tax component
(d) avail only 25% of the said tax component as ITC
5. The time of supply of service in case of reverse charge mechanism is

(a) Date on which payment is made to the supplier
(b) Date immediately following 60 days from the date of issue of invoice
(c) Date of invoice
(d) Earlier of (a) and (b)

6. Which of the following services does not fall under reverse charge provisions as contained under
section 9(3) of the CGST Act?
(a) Services supplied by arbitral tribunal to business entity
(b) Sponsorship provided to any partnership firm
(c) Sponsorship provided to any body corporate
7. Transport of .............. by rail are exempt from GST:

(a) Milk
(b) Salt
(c) Defence equipments

(d) GST
9. Taxes subsumed in GST are

(a) Service tax
(b) Luxury tax
(c) VAT
(d) All of the Above
10. IMPORTANT - M/s. Comfortable (P) Ltd. is registered under GST in Chennai, Tamil Nadu. It is engaged
in the manufacture of iron and steel products. It has carried out following transactions in the financial
year 20XX-XY:-
(a) Purchased 1,000 Metric Ton (MT) iron @ 1,000 per MT (excluding GST) from M/s. Hard Ltd. of
Chennai. M/s. Hard Ltd. has fulfilled the order as follows:
Date Quantity (MT) Taxable Value
28-Feb-20XY 200 2,00,000/-
10-Mar-20XY 250 2,50,000/-
25-Mar-20XY 250 2,50,000/-
28-Mar-20XY 200 2,00,000/-
Balance order requirement has been fulfilled by Hard Ltd. on 5-Apr-20XY. However, Hard Ltd.
has raised the invoice for full order at the time of dispatch of first lot, i.e. on 28-Feb-20XY. M/s.
Comfortable (P) Ltd. has made the full payment on 28-Feb-20XY for the order.
(b) Company has received IT engineering service from M/s. Dynamic Infotech (P) Ltd. of Chennai
for ` 11,00,000/- (excluding GST ) on 28-Oct-20XX. Invoice for service rendered was issued on
5-Nov-20XX. M/s Comfortable (P) Ltd. made part-payment of ` 4,13,000/- on 31-Dec-20XX.
Being unhappy with service provided by M/s Dynamic Infotech (P) Ltd., it did not make the
balance payment. Deficiency in service rendered was made good by M/s Dynamic Infotech (P)
Ltd. by 15-Feb-20XY. M/s. Comfortable (P) Ltd. made payment of ` 2,95,000/- on 15-Feb-20XY
towards full and final settlement of the dues and did not pay the balance amount.
(c) Company has made the following intra State supplies (excluding GST) for the financial year
20XX-XY:-
S.No. Particulars Amount (` )
1. Value of intra-State supplies made to registered persons 10,00,000
2. Value of intra- State supplies made to unregistered persons 2,00,000

(i) Compute the GST liability (CGST, SGST or IGST, as the case may be) of M/s. Comfortable (P)
Ltd. for the financial year 20XX-XY:-
(ii) Compute the amount of input tax credit to be reversed in the FY 20XX-XY and/or in the next FY
20XY-YZ, if any.
Assume the rates of GST as under:

CGST 9%
SGST 9%
lGST 18%
Note
(i) All the conditions necessary for availing input tax credit have been fulfilled.
(ii) Ignore interest, if any
Solution:
(i) Computation of net GST payable for the financial year 20XX-XY
Particulars Value (` ) CGST (` ) SGST (` )
Tax liability
Intra-State supplies made to registered persons 10,00,000 90,000 90,000
Intra State supplies made to unregistered persons 2,00,000 18,000 18,000
Total (A) 1,08,000 1,08,000
Input Tax credit
Supply of iron in lots by M/s Hard Limited [Note-1] 10,00,000 - -
Supply of IT engineering service [Note-2] 11,00,000 99,000 99,000
Total (B) 99,000 99,000
Net GST payable (A)-(B) 9,000 9,000
Notes:-
1. Section 16 of CGST Act, 2017 provides that where the goods against an invoice are received in
lots or installments, the registered person shall be entitled to take credit upon receipt of the last lot
or installment. Although 900 tonnes of iron are received in financial year 20XX-XY, the last lot of
iron has been received after FY 20XX-XY only, i.e. on 5, April 20XY, thus no input tax credit is
available in FY 20XX-XY.
In view of above provisions, full input tax credit in respect of transaction (a) will be claimed in
financial year 20XY-20YZ i.e. on receipt of last installment.
2. Section 16 of CGST Act, 2017 inter alia provides that every registered person is entitled to take
credit of input tax charged on supply of services to him which are used in the course of business on
receipt of the said services.
Thus, in view of the above mentioned provisions full input tax credit of ` 1,98,000/- can be claimed
in financial year 20XX-XY.
(ii) Section 16 of CGST Act, 2017 provides that where a recipient fails to pay to the supplier of goods or
services or both, other than the supplies on which tax is payable on reverse charge basis, the amount
towards the value of supply along with tax payable thereon within a period of 180 days from the date of
issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be
added to his output tax liability, along with interest thereon, in the prescribed manner.
However, the recipient shall be entitled to avail of the credit of input tax on payment made by him of the
amount towards the value of supply of goods or services or both along with tax payable thereon.
Since the full amount of value alongwith tax payable thereon has not been paid by M/s Comfortable (P)
Ltd. to M/s Dynamic Infotech (P) Ltd within a period of 180 days from the date of issue of invoice, the
proportionate amount of input tax credit availed needs to be reversed. However, the reversal will
be done in the financial year 20XY-YZ during when the time period of 180 days expire.

Input tax credit to be reversed in financial year 20XY-YZ
Particulars Amount (` )
Total value of procurement of IT engineering service 11,00,000
Add: Total GST on the above value @ 18% [CGST + SGST] 1,98,000
Value including GST 12,98,000
Amount paid for the said service including GST [` 4,13,000 + ` 2,95,000] 7,08,000
Amount [value alongwith tax payable thereon] not paid for the said service 5,90,000
ITC to be reversed [` 5,90,000 x 18/118] 90,000
11. Determine taxable value of supply under GST law with respect to each of the following independent
services provided by the registered persons (Notes are compiled by SATC):
Particulars Gross amount
charged (` )
Amount charged for loading, unloading, packing and warehousing of potato 25,000
chips
Fees charged for yoga camp conducted by a charitable trust registered 50,000
under section 12AA of the Income-tax Act, 1961
Amount charged by business correspondent for the services provided to 1,00,000
the rural branch of a bank with respect to Savings Bank Accounts
Amount charged by cord blood bank for preservation of stem cells 5,00,000
Amount charged for service provided by commentator to a recognized 6,00,000
sports body
Amount charged for service provided by way of right to admission to circus 12,000
where consideration for the same is ` 750 per person.
Solution:
Particulars (` )
Amount charged for loading, unloading, packing and warehousing of potato chips 25,000
[Note-1]
Fees charged for yoga camp conducted by a charitable trust registered under section Nil
12AA of the Income-tax Act, 1961 [Note-2]
Amount charged by business correspondent for the services provided to the rural Nil
branch of a bank with respect to Savings Bank Accounts [Note-3]
Amount charged by cord blood bank for preservation of stem cells [Note-4] Nil
Service provided by commentator to a recognized sports body [Note-5] 6,00,000
Amount charged for service provided by way of right to admission to circus where 12,000
consideration for the same is ` 750 per person. [Note-6]
Notes:
1. Services by way of loading, unloading, packing, storage or warehousing of agricultural produce are
exempt from GST. Further, potato chips are manufactured through processes which alter the
essential characteristic of agricultural produce, thus is not covered under definition of agricultural
produce.
2. Services by an entity registered under section 12AA of the Income-tax Act, 1961 by way of
charitable activities are exempt from GST. The activities relating to advancement of yoga are
included in the definition of charitable activities. So, such activities are exempt from GST.
3. Services by business facilitator or a business correspondent to a banking company with respect to
accounts in its rural area branch have been exempted from GST.
4. Services provided by cord blood banks by way of preservation of stem cells or any other service in
relation to such preservation are exempt from GST.
5. Services provided to a recognized sports body only by an individual as a player, referee, umpire,
coach or team manager for participation in a sporting event organized by a recognized sports body
are exempt from GST. Thus, services provided by commentators are liable to GST.
6. Services provided by way of right to admission to circus where consideration for the same is upto
` 500 per person are exempt from GST. Since in the present case, the consideration is more than
` 500 per person, so the same is liable to GST.

12. Whether transfer of title and/or possession is necessary for a transaction to constitute supply of
goods?
Solution:
Title as well as possession both have to be transferred for a transaction to be considered as a supply of
goods. In case title is not transferred, the transaction would be treated as supply of service in terms of
Schedule II of the CGST Act.
In some cases, possession may be transferred immediately but title may be transferred at a future date like
in case of sale on approval basis or hire purchase arrangement. Such transactions will also be termed as
supply of goods.
13. Ayushman Medical Centre, a clinical establishment, offers the following services:
S.No. Particulars ` excluding GST

(i) Reiki healing treatments. Such therapy is not a recognized system of 10,00,000
medicine in terms of section 2(h) of Clinical Establishments Act, 2010.
(ii) Plastic surgeries. 20,00,000

[One such surgery was conducted to repair cleft lip of a new born baby.
Consideration of ` 1,00,000 was charged for the same.]
(iii) Air ambulance services to transport critically ill patients from distant 1,00,000
locations to Ayushman Medical Centre.
(iv) Alternative medical treatments by way of Ayurveda. Such therapy is 2,50,000

a recognized system of medicine in terms of section 2(h) of Clinical
Establishments Act, 2010
Ayushman Medical Centre also operates a cord blood bank which provides services in relation to
preservation of stem cells. You are required to compute the value of supply and GST liability [CGST &
SGST or IGST] of Ayushman Medical Centre, if any, in the light of relevant GST provisions.
Note – All the services provided by Ayushman Medical Centre are intra -State supplies. Assume the
rates of CGST, SGST and IGST to be 9%, 9% and 18% respectively.
Solution:
Health care services provided by, inter alia, a clinical establishment in India are exempt from GST vide
Notification No. 12/2017 CT (R) dated 28.06.2017 . The definition of ‘health care services’ stipulates that
such services must be provided in any recognized system of medicines.
As per section 2(h) of Clinical Establishments Act, 2010, recognised system of medicine means allopathy,
yoga, naturopathy, ayurveda, homeopathy, siddha and unani system of medicines or any other system of
medicines as may be recognised by the Central Government.
Accordingly, value of supply and GST liability of Ayushman Medical Centre will be computed as
follows:
S. No. Particulars `
(i) Reiki healing treatments 10,00,000

[Not a recognized system of medicines]
(ii) Plastic surgeries [` 20,00,000 - ` 1,00,000] 19,00,000

[‘Health care services’ specifically excludes, inter alia, cosmetic or plastic
surgery except when undertaken to restore/reconstruct anatomy/functions
of body affected due to congenital defects, developmental abnormalities,
injury or trauma]
(iii) Air ambulance services to transport critically ill patients from distant Nil
locations to the Medical Centre
[‘Health care services’ specifically includes services by way of
transportation of the patient to and from a clinical establishment ]

(iv) Alternative medical treatments by way of Ayurveda Nil
[Being a recognized system of medicines]
Value of supply 29,00,000
CGST @ 9% 2,61,000
SGST @ 9% 2,61,000
Note: Services provided by cord blood banks by way of preservation of stem cells or any other service in
relation to such preservation are exempt from GST. Therefore, services provided in relation to preservation of
stem cells by the cord blood bank operated by Ayushman Medical Centre will be exempt from GST.
14. Ramoplast Soap Factory, a registered supplier, is engaged in manufacturing beauty soaps – ‘Forever
Glow’ in Mumbai. It has provided the following information pertaining to purchases made/services
availed in the month of April, 20XX:
Particulars GST paid (`)

Soap making machine 50,000
Motor vehicles for transportation of inputs 70,000
Membership of ‘Fit and Fine’ health and fitness centre for its
employees 25,000
Inputs purchased, but stolen from the factory 40,000
You are required to compute the input tax credit (ITC) available with Ramoplast Soap Factory for the
month of April, 20XX assuming that all the other conditions for availing ITC, wherever applicable,
have been fulfilled.
Solution:
Computation of ITC available with Ramoplast Soap Factory
Soap making machine
[ITC in respect of goods used in course/furtherance of business is available in
terms of Section 16 of the CGST Act] 50,000
Motor vehicles for transportation of inputs

[ITC in respect of motor vehicles when used, inter alia, for transportation of goods, is
not blocked in terms of section 17(5) of the CGST Act] 70,000
Membership of ‘Fit and Fine’ health and fitness centre for its employees
[ITC in respect of membership of a club, health and fitness centre is blocked
in terms of section 17(5) of the CGST Act] Nil
Inputs stolen from the factory
[ITC in respect of goods stolen is blocked in terms of section 17(5) of the CGST Act] Nil
15. IMP: Kesar Maharaj, a registered supplier, gave a classical dance performance in an auditorium. The
consideration charged for the said performance is ` 1,48,500. Is Kesar Maharaj liable to pay GST on
the consideration received for the said performance if such performance is not for promotion of any
product/services? If yes, determine his GST liability (CGST and SGST or IGST, as the case may be).
Will your answer be different if:
(i) Kesar Maharaj is a brand ambassador of a food product and aforesaid performance is for the
promotion of such food product?
(ii) the dance performance given by Kesar Maharaj is not a classical dance performance, but a
contemporary Bollywood style dance performance?
(iii) consideration charged by Kesar Maharaj for the classical dance performance is ` 1,60,000?
Notes:
1. Services provided by Kesar Maharaj are intra-State supplies.
2. Wherever applicable, GST has been charged separately.
3. Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively.
Solution:
Notification No. 12/2017 CT (R) dated 28.06.2017 exempts services by an artist by way of a performance in
folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, if the consideration charged for such
performance is not more than ` 1,50,000. However, exemption will not apply to service provided by such
artist as a brand ambassador.
In view of the aforesaid provisions, services provided by Kesar Maharaj are exempt from GST as
consideration for the classical dance performance has not exceeded ` 1,50,000. Therefore, his GST liability
is nil.
(i) If Kesar Maharaj is a brand ambassador of a food product and aforesaid performance is for the
promotion of such food product, he will be liable to pay GST as aforesaid exemption is not applicable
to service provided by an artist as a brand ambassador. His CGST and SGST liability would, therefore,
be ` 13,365 (` 1,48,500 × 9%) and ` 13,365 (` 1,48,500 × 9%) respectively.
(ii) If Kesar Maharaj gives a contemporary Bollywood style dance performance, such performance will not
be eligible for aforesaid exemption. The reason for the same is that although the consideration
charged does not exceed ` 1,50,000, said performance is not in folk or classical art forms of
dance. Hence, GST would be payable on the same. His CGST and SGST liability would, therefore, be
` 13,365 (` 1,48,500 × 9%) and ` 13,365 (` 1,48,500 × 9%) respectively.
(iii) If the consideration charged for the classical dance performance by Kesar Maharaj is
` 1,60,000, he will be liable to pay GST on the same as although the performance is by way of
classical art form of dance, consideration charged for such performance has exceeded `
1,50,000. His CGST and SGST liability would, therefore, be ` 14,400 (` 1,60,000 × 9%) and ` 14,400
(` 1,60,000 × 9%) respectively. (Notes are compiled by SATC)
16. Discuss the time-limit for issuance of invoice in case of taxable supply of goods.
Solution:
In case of taxable supply of goods, invoice shall be issued before or at the time of—
(a) removal of goods for supply to the recipient, where the supply involves movement of goods; or
(b) delivery of goods or making available thereof to the recipient, in any other case.
In case of continuous supply of goods, where successive statements of accounts/ successive payments are
involved, the invoice shall be issued before/at the time each such statement is issued or each such
payment is received [Section 31 of the CGST Act].
17. What is an electronic cash ledger? Enumerate the modes of making deposit in the electronic cash
Solution:
Electronic cash ledger is maintained in prescribed form for each person, liable to pay tax, interest, penalty,
late fee or any other amount, on the common portal for crediting the amount deposited and debiting the
payment therefrom towards tax, interest, penalty, fee or any other amount.
The deposit can be made through any of the following modes, namely: -

(iii) NEFT or RTGS from any bank; or
(iv) Over the Counter payment through authorised banks for deposits up to ` 10,000/- per challan per tax
period, by cash, cheque or demand draft
[Section 49 of the CGST Act read with rule 87 of the CGST Rules]
18. Examiner whether the following statements are true or false giving brief reasons:
(1) It is mandatory to issue a tax invoice in case a registered person has opted for composition
levy scheme.
(2) A composition tax payer, who has not rendered any taxable supply during a year, is not
required to file any return.
Solution:
(1) The given statement is false. A registered person paying tax under the provisions of section 10
[composition levy] is required to issue, instead of a tax invoice, a bill of supply containing the
specified particulars in the prescribed manner [Section 31 read with rule 49 of the CGST Rules].

(2) The given statement is false. Composition tax payer is required to furnish return under section 39 for
every year even if no supplies have been effected during such period. In other words, filing of Nil
return is also mandatory.
19. Discuss any two significant benefits of GST.
Solution:
GST is a win-win situation for the entire country. It brings benefits to all the stakeholders of industry,
Government and the consumer. It will lower the cost of goods and services, give a boost to the economy
and make the products and services globally competitive.
The significant benefits of GST are discussed hereunder:
Creation of unified national market: GST aims to make India a common market with common tax rates
and procedures and remove the economic barriers thus paving the way for an integrated economy at the
national level.
Mitigation of ill effects of cascading: By subsuming most of the Central and State taxes into a single tax
and by allowing a set-off of prior-stage taxes for the transactions across the entire value chain, it would
mitigate the ill effects of cascading, improve competitiveness and improve liquidity of the businesses.
Elimination of multiple taxes and double taxation: GST has subsumed majority of existing indirect tax
levies both at Central and State level into one tax i.e., GST which is leviable uniformly on goods and
services. This will make doing business easier and will also tackle the highly-disputed issues relating to
double taxation of a transaction as both goods and services.
Boost to ‘Make in India' initiative: GST will give a major boost to the ‘Make in India' initiative of the
Government of India by making goods and services produced in India competitive in the national as well as
international market.
Buoyancy to the Government Revenue: GST is expected to bring buoyancy to the Government Revenue
by widening the tax base and improving the taxpayer compliance.

GST By CA Suraj Agrawal SATC Y.1
GST - PRACTICE TEST PAPER - SET ‘Y’
1. A person having ____Place of business in a State ____obtain a separate registration for each place of
business
a) Single, shall
b) Multiple, shall
c) Multiple, may
d) Single, may
2. Mr. Rahu is receiving legal services from a lawyer Mr. Ketu. The information regarding date of
payment, invoice etc. is as follows-
1. Invoice issued by Mr. Ketu on 15-Apr-20XX
2. Payment received by Mr. Ketu on 5-May-20XX
3. Date of payment entered in books of accounts of Rahu: 1-May-20XX
What is time of supply of goods?
(a) 1-May-20XX
(b) 5-May-20XX
(c) 14-Jun-20XX
(d) 15-Apr-20XX
3. Services by way of warehousing of _____is exempt from GST.

i. processed tea
ii. jiggery
iii. processed coffee
iv. rice
a. (i) & (ii)
b) (iii)
c) (iv)
d) all of the above
4. Discount given after the supply is deducted from the value of taxable supply, if –
a) such discount is given as per the agreement entered into at/or before the supply
b) such discount is linked to the relevant invoices
c) proportionate input tax credit is reversed by the recipient of supply
d) all of the above
5. Which of the following services are exempt from GST?

a) Services by an artist by way of a performance in folk or classical art forms of painting/sculpture
making etc. with consideration therefor not exceeding `. 1.5 lakh.
b) Services by an artist by way of a performance in modern art forms of music/ dance/ theatre with
consideration therefor not exceeding `. 1.5 lakh.
c) Services by an artist by way of a performance in folk or classical art forms of music/ dance/theatre
with consideration therefor exceeding `. 1.5 lakh.
d) Services by an artist by way of a performance in folk or classical art forms of music/ dance /
theatre with consideration therefor not exceeding `. 1.5 lakh.
6. Which of the following services does not fall under reverse charge provisions as contained under
section 9(3) of the CGST Act?
a) Services supplied by arbitral tribunal to business entity
b) Sponsorship provided to any partnership firm
c) Sponsorship provided to any body corporate
d) None of the above
7. Registration certificate granted to casual taxable person or non-resident taxable person will be valid
for:
a) Period specified in the registration application
c) Earlier of (a) or (b)
d) Later of (a) or (b)
8. Where the goods being sent or taken on approval for sale or return are removed before the supply
takes place, the invoice shall be issued:
a) before/at the time of supply.
b) 6 months from the date of removal.
c) Earlier of (a) or (b).
d) Later of (a) or (b).
9. Which of the following statements is true under GST?

a) Grand-parents are never considered as related persons to their grandson/granddaughter
b) Grand-parents are always considered as related persons to their grandson/granddaughter
c) Grand-parents are considered as related persons to their grandson/granddaughter only if they
are wholly dependent on their grandson/granddaughter
d) None of the above
10. Invoice shall be prepared in (i) ___________ in case of taxable supply of goods and in
(ii)_____________ in case of taxable supply of services.
a. (i) Triplicate, (ii) Duplicate
b. (i) Duplicate, (ii) Triplicate
c. (i) Duplicate, (ii) Duplicate
d. None of the above

11. Sungrow Pvt. Ltd. (a registered taxable person) having the gross receipt of ` 50 lakh in the previous
financial year provides the following information relating to their services for the month of July,
20XX.
S.no. Particulars Amount

1 Running a boarding school 2,40,000
3 Education services for obtaining the qualification recognised by law of 3,10,000
foreign country
4 Renting of furnished flats for temporary stay to different persons (Rent 1,20,000
per day is less than ` 1,000 per flat)
5 Conducting Modular Employable Skill Course, approved by National 1,40,000
Council of Vocational Training
6 Conducting private tuitions amount 3,00,000
7 Running martial arts academy for young children 55,000
8 Conducting career counselling session 1,65,000
Compute the value of taxable supply and the amount of GST payable. The above receipts don't
include the GST amount. Rate of GST is 18%.
Solution:
Computation of value of taxable supply and amount of GST payable

1 Running a boarding school NIL
[Services provided by an educational institution to its students, faculty and
staff are exempt.]
2 Fees from prospective employer for campus interview [Not exempt.] 1,70,000
3 Education services for obtaining the qualification recognised by law of 3,10,000
foreign country [An institution providing education services for obtaining
qualification recognized by a foreign country does not qualify as educational
institution. Thus, said services are not exempt.]
4 Renting of furnished flats for temporary stay of different persons NIL
[Services by a hotel, inn, guest house, club or campsite, by whatever name
called, for residential or lodging purposes, having Value of Supply of a unit of
accommodation below `. 1,000 per day or equivalent are exempt]
5 Conducting Modular Employable Skill Course [An institution providing NIL
Modular Employable Skill Course qualifies as educational institution. Services
provided by an educational institution to its students, faculty and staff are
exempt.]
6 Conducting private tuitions [Not exempt.] 3,00,000
7 Running martial arts academy for young children [Not exempt under GST 55,000
laws]
8 Conducting career counselling session [Not exempt under GST laws] 1,65,000
GST payable @ 18% 1,80,000

12. Laxmi Pvt. Ltd., a registered supplier, is engaged in the manufacture of taxable goods. The company
provides the following information pertaining to GST paid on the purchases made/input services
availed by it during the month of April 20XX:
S.No. Particulars Amount

1 Raw Material (to be received in May, 20XX) 2,50,000
2 Membership of a club availed for employees working in the factory 1,45,000
3 Inputs to be received in 5 lots, out of which 3rd lot was received during 80,000
the month
4 Trucks used for transport of raw material 40,000
5 Capital goods (out of 3 items, invoice for 2 items is missing and GST 150000
paid on that item is ` 80,000)
6 Confectionery items for consumption of employees working in the 75000
factory. These items were supplied free of cost to the employees in lieu
of services rendered by them to the manufacturer in the course of
employment.
Determine the amount of tax credit available with Laxmi Pvt. Ltd. for the month of April 20XX by
giving the necessary explanation for treatment of various items.
All the conditions necessary for availing the ITC have been fulfilled.
Solution:
Computation of ITC available with Laxmi Pvt. Ltd. for the month of April 20XX
S. No Particulars Amount
1 Raw Material NIL
[ITC not available as raw material is not received in April, 20XX]
2 Membership of a club availed for employees working in the factory NIL
[Blocked credit in terms of section 17(5) of the CGST Act, 2017]
3 Inputs to be received in 5 lots, out of which 3rd lot was received during NIL
the month
[In case of goods received in lots, ITC can be taken only upon receipt of the
last lot]
4 Trucks used for transport of raw material 40,000
[ITC of GST paid on motor vehicles is allowed only when used, inter alia, for
transportation of goods in terms of section 17(5) of the CGST Act, 2017]
5 Capital goods 70,000
[ITC of GST paid on items for which invoice is missing is not available. So, ITC
of `. 80,000 is not available]
6 Confectionery items for consumption of employees working in the NIL
factory
[ITC on food or beverages is specifically disallowed unless the same is
provided under statutory obligation or used for making outward taxable supply
of the same category or as an element of the taxable composite or mixed
supply-Section 17(5)(b)(i)]
13. The aggregate turnover of Priyank Services Ltd. exceeded ` 20 lakh on 12th August. He applied for
registration on 3rd September and was granted the registration certificate on 6th September. You are
required to advice Priyank Services Ltd. as to what is the effective date of registration in its case. It
has also sought your advice regarding period for issuance of Revised Tax Invoices.
Solution:
As per section 25 read with CGST Rules, 2017, where an applicant submits application for registration within
30 days from the date he becomes liable to registration, effective date of registration is the date on which he
becomes liable to registration. Since, Priyank Services Ltd.’s turnover exceeded ` 20 lakh on 12th August, it
became liable to registration on same day.
Further, it applied for registration within 30 days of so becoming liable to registration, the effective date of
registration is the date on which he becomes liable to registration, i.e. 12th August.

As per section 31 read with CGST Rules, 2017, every registered person who has been granted registration
with effect from a date earlier than the date of issuance of certificate of registration to him, may issue Revised
Tax Invoices. Revised Tax Invoices shall be issued within 1 month from the date of issuance of certificate of
registration. Revised Tax Invoices shall be issued within 1 month from the date of issuance of registration in
respect of taxable supplies effected during the period starting from the effective date of registration till the
date of issuance of certificate of registration.
Therefore, in the given case, Priyank Services Ltd. has to issue the Revised Tax Invoices in respect of
taxable supplies effected during the period starting from the effective date of registration (12th August) till the
date of issuance of certificate of registration (6th September) within 1 month from the date of issuance of
certificate of registration, i.e. on or before 6th October.
14. State whether the following supplies would be treated as supply of goods or supply of services as
per Schedule II of CGST Act:
i. Renting of immovable property
ii. Transfer of right in goods without transfer of title in goods.
iii. Works contract services
iv. Temporary transfer of permitting use or enjoyment of any intellectual property right
v. Transfer of title in goods under an agreement which stipulates that property shall pass at a
future date.
Solution:
i. Renting of immovable property would be treated as supply of services in terms of Schedule II of CGST
Act, 2017.
ii. As per Schedule-II of CGST Act, 2017, transfer of right in goods without transfer of title in goods would
be treated as supply of services.
iii. As per Schedule-II of CGST Act, 2017, works contract services would be treated as supply of services.
iv. As per Schedule-II of CGST Act, 2017, temporary transfer of permitting use or enjoyment of any
intellectual property right would be treated as supply of services.
v. As per Schedule-II of CGST Act, 2017, transfer of title in goods under an agreement which stipulates
that property shall pass at a future date would be treated as supply of goods.
15. “State Government has exclusive power to notify a transaction to be supply of goods or services.”
Discuss the correctness of the statement.
Solution:
The said statement is not correct. State Government can notify a transaction to be supply of goods or
services but only on the recommendations of the GST Council. Further, Central Government or State
Government, both on the recommendations of the GST Council, can notify an activity to be the supply of
goods and not supply of services or supply of services and not supply of goods or neither a supply of goods
nor a supply of services
16. M/s X & Sons, tax consultant of Zenson Ltd., have advised them that reverse charge mechanism is
applicable only to services. Examine the validity of the advice given by M/s X & Sons.
Solution:
The advice given by M/s X & Sons is not valid in law. The reverse charge mechanism applies to supplies of
both goods and services, as notified by the Government on the recommendations of the GST Council vide
section 9(3)/5(3) of CGST/IGST Act, 2017.
Reverse charge also applies to supplies received by a registered person from unregistered persons
under section 9(4)/5(4) of CGST/IGST Act, 2017, if notified.

17. What is the difference between casual and non- resident taxable persons?
Solution:
Casual and Non-resident taxable persons are separately defined in the CGST Act in Sections 2(20)
and 2(77) respectively. Some of the differences are outlined below:
Casual Taxable Person Non-Resident Taxable Person
Occasionally undertakes transactions involving Occasionally undertakes transactions involving

supply of goods or services or both in a State or supply of goods or services or both, but has no
Union territory where he has no fixed place of fixed place of business or residence in India.
business.
Has a PAN Number Do not have a PAN Number; A non- resident

person, if having PAN number may take
registration as a casual taxable person
Same application form for registration as for normal Separate application form for registration by
taxable persons. nonresident taxable person.
Has to undertake transactions in the course or Business test is absent in the definition.
furtherance of business
Can claim input tax credit of all inward supplies Can get input tax credit only in respect of
import of goods and /or services
18. State the necessary elements for a supply to be chargeable to GST.
Solution:
The following elements are required to be satisfied for a supply to be chargeable to GST, i.e.-
a) the activity involves supply of goods or services or both;
b) the supply is for a consideration unless otherwise specifically provided for;
c) the supply is made in the course or furtherance of business;
d) the supply is a taxable supply; and
e) the supply is made by a taxable person
19. [SUPPLY] - Modest Ltd., registered in Delhi dealing in supply of electronic items transferred some of
its stock to its another unit located in Haryana (inter-state transfer). Whether such self-supplies are
taxable under GST?
Solution:
Yes, transfer of stock made by Modest Ltd. are taxable under GST. The definition of supply given under
section 7 of CGST Act, 2017 is an inclusive one. It does not specify that supply is to be made by one
person to the another. So, self-supplies are to be treated as supply in terms of section 7 of CGST Act.
Further, section 25(5) provides that where a person who has obtained or is required to obtain registration in
a State or Union territory in respect of an establishment, has an establishment in another State or Union
territory, then such establishments shall be treated as establishments of distinct persons.
Schedule I of CGST Act, 2017 inter alia provides that supply of goods between distinct persons as specified
in section 25 made in the course or furtherance of business is to treated as supply even if made without
consideration. (Notes are compiled by SATC)
Inter-state self-supplies such as stock transfers, branch transfers or consignment sales shall be taxable
under IGST even though such transactions may not involve payment of consideration. Every supplier is
liable to register under the GST law in the State or Union territory from where he makes a taxable supply of
goods or services or both in terms of Section 22 of the CGST Act. However, intra-state self supplies are
not taxable subject to not opting for separate registration for each place of business

20. [TIME OF SUPPLY] - Mr. P supplied goods for the value of ` 10,000 to its customer Miss Prem on
01.01.20XX on the condition that payment for the same will be made within a week. However, Miss
Prem made payment for the said goods on 02.02.20XX and thus paid interest amounting to ` 500.
What is the time of supply with regard to addition in the value by way of interest in lieu of delayed
payment of consideration?
Solution:
As per section 12(6) of CGST Act, 2017, the time of supply with regard to an addition in value on account of
interest, late fee or penalty or delayed payment of consideration shall be the date on which the supplier
received such additional consideration.
Thus, time of supply in respect of interest would be the date on which the supplier has received such
additional consideration, i.e. 02.02.20XX.
21. There are separate valuation provisions for CGST, SGST and IGST and for Goods and Services.
Examine the correctness of the statement.
Solution:
No, the said statement is not correct. Section 15 of CGST Act determines the value of supply of goods
or services or both. Further, section 15 is applicable for determining value of taxable supply under IGST as
well vide section 20 of IGST Act. Section 20 of IGST Act inter alia provides that the provisions of CGST Act
relating to time and value of supply shall mutatis mutandis apply in relation to integrated tax as they apply in
relation to central tax. Thus, section 15 is common for all three taxes and also common for goods
and services
22. Whether post-supply discounts or incentives are allowed as admissible deduction under section 15 of
the CGST Act? If yes, what are the necessary conditions to be complied with for availing such
deduction?
Solution:
Yes, post-supply discounts or incentives are allowed as admissible deduction under section 15 of the CGST
Act. Where the post-supply discount is established as per the agreement which is known at or before the
time of supply and where such discount specifically linked to the relevant invoice and the recipient has
reversed input tax credit attributable to such discount, the discount is allowed as admissible deduction
under Section 15(3)(b) of the CGST Act.
23. The time of liability to pay GST is independent of the time of supply of goods/ services. Discuss the
correctness of the statement?
Solution:
The said statement is not correct. Liability to pay arises at the time of supply of goods as explained in
Section 12 and at the time of supply of services as explained in Section 13 of CGST Act.
The time is generally the earliest of one of the three events, namely receiving payment, issuance of invoice
or completion of supply. Different situations envisaged and different tax points have been explained in the
aforesaid sections

24. Mr. Guneet is running a consulting firm and also a readymade garment showroom in Kolkata
registered in same PAN. Turnover of the showroom is ` 120 lakh and receipt of consultancy firm is
` 15 lakh in the preceding financial year.
You are required to answer the following: (1) Is Mr. Guneet eligible for composition scheme under
Section 10(1)? (2) Is it possible for Mr. Guneet to opt for composition scheme only for showroom?
Solution:
Section 10(1) of the CGST Act, 2017 provides that a registered person, whose aggregate turnover in the
preceding financial year did not exceed ` 1.5 crore (` 75 lakh in Special Category States except Assam,
Himachal Pradesh and Jammu and Kashmir), may opt to pay, in lieu of the tax payable by him, an amount
calculated at the specified rates.
However, if, inter alia, such registered person is engaged in the supply of services other than restaurant
services, he shall not be eligible to opt for composition levy.
Further, the scheme permits supply of other marginal services for a specified value along with the
supply of goods and restaurant service, as the case may be. Such marginal services can be supplied
for a value up to 10% of the turnover in the preceding year or ` 5 lakh, whichever is higher.
(1) Aggregate turnover in preceding financial year is ` 1.35 crores which does not exceeds ` 1.5 crores. Mr.
guneet is eligible for composition scheme u/s 10(1) in current financial year provided Value of consultancy
services does not exceeds 10% of the turnover in the preceding year or ` 5 lakh, whichever is higher.
(2) No, it is not possible for Mr. Guneet to opt for composition scheme only for showroom as all the
registrations under the same PAN have to opt for composition scheme.

GST By CA Suraj Agrawal SATC Z.1
GST - PRACTICE TEST PAPER - SET ‘Z’
1. Pethalal has obtained registration in the current financial year in Uttar Pradesh. His turnover in the
preceding financial year was ` 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 (`)

(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 the 15,000
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
*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 (`)
(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.
Solution:
Computation of net GST payable by Pethalal
Particulars Amount CGST (`) SGST
(`) (`)
Supplies on which Pethalal is liable to pay GST under
forward charge
Funeral services [Note 1] 8,80,000
Services of warehousing of jaggery [Note 2] 50,000
Services by way of giving on hire electrically operated buses to 5,00,000
Municipality [Note 3]
Service provided to recognized sports body as commentator 2,00,000 = 2,00,000 = 2,00,000
[Note 4] × 9% × 9%
= 18,000 = 18,000
Commission received as an insurance agent from insurance 65,000

company [Note 5]

Commission received as business facilitator for the services 15,000
provided to the urban branch of a nationalised bank with
respect to savings bank accounts [Note 6]
Security services (supply of security personnel) provided to

DEC for the security of the college premises [Note 7] 28,000
Total tax liability on outward supplies (A) 18,000 18,000
Supplies on which Pethalal is liable to pay
GST under reverse charge
Services received from GTA [Note 8] 1,00,000 = 1,00,000 = 1,00,000
× 2.5% × 2.5%
= 2,500 = 2,500
Legal services received [Note 9] 50,000
Total tax liability on inward supplies under reverse charge 2,500 2,500
(B) - payable in cash [Note 10]
ITC available on input services [Note 8] Nil Nil
Net GST payable (A) + (B) 20,500 20,500
Notes:
(1) Funeral services being covered in Schedule III to the CGST Act, 2017 are not a supply and thus, are
outside the ambit of GST.
(2) Services by way of storage/ warehousing of, inter alia, jaggery are exempt from GST vide Exemption
Notification No. 12/2017 CT(R) dated 28.06.2017 (hereinafter referred to as exemption notification).
Thus, services of warehousing of jaggery are exempt.
(3) Services by way of giving on hire to a local authority, an Electrically operated vehicle (EOV) meant to
carry more than 12 passengers are exempt vide exemption notification. Buses are EOVs meant to carry
more than 12 passengers. Hence, services of giving electrically operated buses on hire to Municipal
Corporation are exempt from GST.
(4) Services provided to a recognized sports body by an individual only as a player, referee, umpire, coach
or team manager for participation in a sporting event organized by a recognized sports body are
exempt from GST vide exemption notification. Thus, service provided as commentator is liable to GST.
(5) Though commission for providing insurance agent’s services to any person carrying on insurance
business is liable to GST, the tax payable thereon is to be paid by the recipient of service i.e.,
insurance company, under reverse charge in terms of Notification No. 13/2017 CT(R) dated 28.06.2017
(hereinafter referred to as reverse charge notification). Thus, Pethalal will not be liable to pay GST on
such commission.
(6) Services provided by a business facilitator to a banking company with respect to accounts in its rural
area branch are exempt from GST vide exemption notification. Thus, services provided by him in
respect of urban area branch of the bank will be taxable.
However, the tax payable thereon is to be paid by the recipient of service i.e., banking company,
under reverse charge in terms of reverse charge notification. Hence, Pethalal will not liable to pay
GST on commission received for said services.
(7) Important: Services provided to an educational institution, by way of security services performed in
such educational institution are exempt from GST only when said services are provided to an institution
providing services by way of pre-school education and education up to higher secondary school or
equivalent, vide exemption notification. Thus, in the given case, security services provided to DEC
are not exempt.
Further, the tax on security services (supply of security personnel) provided by any person other than a
body corporate to a registered person is payable by the recipient of service under reverse charge
in terms of reverse charge notification. Hence, Pethalal will not be liable to pay GST in the given
case.
(8) GST on services provided by a GTA (not paying tax @ 12%) to, inter alia, a registered person is
payable by the recipient of service i.e., the registered person, under reverse charge in terms of reverse
charge notification. Since in the given case, GTA is unregistered, Pethalal is liable to pay tax under
reverse charge @ 5% (CGST @ 2.5% and SGST @ 2.5%). Further, since said input services are
being exclusively used for effecting non-taxable supplies [funeral services], input tax credit of
the GST paid on the same will not be available.
(9) Important: Legal services provided by a partnership firm of advocates to a business entity (with an
aggregate turnover up to such amount in the preceding FY as makes it eligible for exemption from
registration under the CGST Act, 2017) are exempt from GST vide exemption notification. Since the
aggregate turnover of Pethalal did not exceed ` 20 lakh [the applicable threshold limit for
registration for Pethalal being a supplier of services] in the preceding FY, legal services
received by him are exempt from GST.
(10) As per section 49(4) of the CGST Act, 2017, amount available in the electronic credit ledger may be
used for making payment towards output tax. However, tax payable under reverse charge is not an
output tax in terms of section 2(82) of the CGST Act, 2017. Therefore, tax payable under reverse
(11) Since all the transactions given hereunder are intra-State, CGST and SGST are payable in terms of
section 9(1) of the CGST Act, 2017
2. Dushyant rents out a commercial building owned by him to Bharat for the month of December, for
which he charges a rent of ` 19,50,000. Dushyant pays the maintenance charges of ` 1,00,000 (for
the December month) as charged by the local society. These charges have been reimbursed to him
by Bharat. Further, Bharat had given ` 2,50,000 to Dushyant as interest free refundable security
deposit. Further, Dushyant has paid the municipal taxes of ` 2,85,000 which he has not charged
from Bharat. You are required to determine the value of supply and the GST liability of Dushyant for
the month of December assuming CGST and SGST rates to be 9% each.
Note: All the amounts given above are exclusive of GST.
Solution:
Computation of the value of supply and the GST liability of Dushyant for the month of December:
Rent of the commercial building 19,50,000
Maintenance charges paid to the local society, reimbursed by Bharat 1,00,000
[Being reimbursed by the tenant - Bharat, such charges ultimately form part of the rent
paid by Bharat to Dushyant and thus, will form part of the value]
Interest free refundable security deposit Nil
[Being refundable, the security deposit does not constitute consideration in terms of
section 2(31) of the CGST Act, 2017 and thus, is not includible in the value]
Municipal taxes paid by Dushyant Nil
[Being an expenditure incurred by the supplier, the same is not includible in the value
since such taxes are not charged to the recipient.]
Value of Supply 20,50,000
CGST @ 9% 1,84,500
SGST @ 9% 1,84,500

3. VERY IMPORTANT - LMN Pvt. Ltd., Coimbatore exclusively manufactures and sells product ‘X’ which
is exempt from GST vide notifications issued under relevant GST legislations. The company sells ‘X’
only within Tamil Nadu. The turnover of the company in the previous year was ` 45 lakh. The
company expects the sales to grow by 30% in the current year.
The company purchased additional machinery for manufacturing ‘X’ on 01.07.20XX. The purchase
price of the capital goods was ` 30 lakh exclusive of GST @ 18%.
However, effective from 01.11.20XX, exemption available on ‘X’ was withdrawn by the Central
Government and GST @ 12% was imposed thereon. The turnover of the company for the half year
ended on 30.09.20XX was ` 45 lakh.
(a) Examine the above scenario and advise LMN Pvt Ltd. whether it needs to get registered under
GST.
(b) If the answer to the above question is in affirmative, advise LMN Pvt. Ltd. whether it can avail
input tax credit on the additional machinery purchased exclusively for manufacturing “X”?
Solution:
(a) Section 22(1) of the CGST Act, 2017 read with Notification No. 10/2019 CT dated 07.03.2019 inter alia
provides that every supplier who is engaged in intra-State exclusive supply of goods is liable to be
registered under GST in the State/ Union territory from where he makes the taxable supply of goods only
when aggregate turnover in a financial year exceeds ` 40,00,000.
However, the above provisions are not applicable to few specified States, i.e. States of Arunachal
Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura,
Uttarakhand.
Further, a person exclusively engaged in the business of supplying goods and/or services that are not
liable to tax or are wholly exempt from tax is not liable to registration in terms of section 23(1)(a) of CGST
Act, 2017.
In the given case, the turnover of the company for the half year ended on 30.09.20XX is ` 45 lakh which is
more than the applicable threshold limit of ` 40 lakh. Therefore, as per above mentioned provisions, the
company should be liable to registration. However, since LMN Pvt. Ltd. supplied exempted goods till
31.10.20XX, it was not required to be registered till that day; though voluntary registration was allowed
under section 25(3) of the CGST Act, 2017.
However, the position will change from 01.11.20XX as the supply of goods become taxable from that day
and the turnover of company is above ` 40 lakh. It is important to note here that in terms of section 2(6) of
the CGST Act, 2017, the aggregate turnover limit of ` 40 lakh includes exempt turnover also.
Therefore, turnover of ‘X’ will be considered for determining the limit of ` 40 lakh even though the same
was exempt from GST. Therefore, the company needs to register within 30 days from 01.11.20XX (the
date on which it becomes liable to registration) in terms of section 25(1) of the CGST Act, 2017.
(b) Section 18(1)(a) of the CGST Act, 2017 provides that a person who has applied for registration within 30
days from the date on which he becomes liable to registration and has been granted such registration
shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi -
finished or finished goods held in stock on the day immediately preceding the date from which he
becomes liable to pay tax under the provisions of this Act.
Thus, LMN Pvt. Ltd. cannot avail credit for additional machinery purchased exclusively for
manufacturing X as input tax credit of only inputs is allowed when a person gets registered for the first
time.

4. VERY IMPORTANT Mahadev Enterprises, a sole proprietorship firm, opened a shopping complex
dealing in supply of goods at multiple locations, i.e. in Himachal Pradesh, Uttarakhand and Tripura in
the month of June.
It has furnished the following details relating to the sale made at such multiple locations for the month
of June:-
(`)*
Particulars Himachal Uttarakhand Tripura
Pradesh
Intra- State sale of taxable goods 22,50,000 - 7,00,000
Intra-State sale of exempted goods - - 6,00,000
Interest received from banks on the fixed deposits - - 60,000
Intra-State sale of non-taxable goods - 21,00,000 40,000
* excluding GST
With the help of the above mentioned information, answer the following questions giving reasons:-
1. Determine whether Mahadev Enterprises is liable to be registered under GST law and what is the
threshold limit of taking registration in this case.
2. Explain with reasons whether your answer in (1) will change in the following independent cases:
(a) If Mahadev Enterprises is dealing in taxable supply of goods only from Himachal Pradesh;
(b) If Mahadev Enterprises is dealing in taxable supply of goods and services only from Himachal
Pradesh;
(c) If Mahadev Enterprises is dealing in taxable supply of goods only from Himachal Pradesh and
has also effected inter - State supplies of taxable goods amounting to ` 4,00,000.
Solution:
(i) ` 10 lakh for the States of Mizoram, Tripura, Manipur and Nagaland.
(ii) ` 20 lakh for the States of States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and
Uttarakhand.
(iii) ` 40 lakh for rest of India.
(i) ` 10 lakh for the States of Mizoram, Tripura, Manipur and Nagaland.
(ii) ` 20 lakh for the rest of India.
As per section 2(6) of the CGST Act, 2017, aggregate turnover includes the aggregate value of:

The above is computed on all India basis.
In the light of the afore-mentioned provisions, the aggregate turnover of Mahadev Enterprises is computed as
under:

Computation of State-wise aggregate turnover of Mahadev Enterprises
(`)*
Particulars Himachal Uttarakhand Tripura
Pradesh
Intra- State sale of taxable goods 22,50,000 - 7,00,000
Intra-State sale of exempted goods - - 6,00,000
Interest received from banks on the fixed deposits [Note-1] - - 60,000
Intra-State sale of non-taxable goods [Note-2] - 21,00,000 40,000
Aggregate Turnover (statewise) 22,50,000 21,00,000 14,00,000
Aggregate Turnover (all India basis) - ` 57,50,000
Notes:
1. Services by way of extending deposits, loans or advances in so far as the consideration is represented by
way of interest or discount (other than interest involved in credit card services) is exempt vide Notification
No. 12/2017 CT (R) dated 28.06.2017. Since aggregate turnover includes exempt supply, interest
received from banks on the fixed deposits, being exempt supply, is included in the aggregate turnover.
2. As per section 2(47) of the CGST Act, 2017, exempt supply includes non -taxable supply. Thus, intra -
State supply of non-taxable goods in Uttarakhand, being a non-taxable supply, is an exempt supply and
is, therefore, included in the aggregate turnover.
In the given case, Mahadev Enterprises is engaged in exclusive intra -State supply of goods from Himachal
Pradesh and Uttarakhand and in supply of both goods and exempted services from Tripura, the threshold
limit for registration will be ` 40 lakh, ` 20 lakh and ` 10 lakh respectively.
Further, since Mahadev Enterprises also makes taxable supply of goods from one of the specified
Special Category States (i.e. Tripura), the threshold limit for registration will be reduced to ` 10 lakh.
(1) Thus, in view of the above-mentioned provisions, Mahadev Enterprises is liable to be registered under
GST law with the aggregate turnover amounting to ` 57,50,000 (computed on all India basis). The
applicable threshold limit of registration in this case is ` 10 lakh.
(2) (a) If Mahadev Enterprises is dealing in supply of goods only from Himachal Pradesh, the applicable
threshold limit of registration would be ` 40 lakh. Thus, Mahadev Enterprises will not be liable for
registration as its aggregate turnover would be ` 22,50,000.
(b) If Mahadev Enterprises is dealing in taxable supply of goods and services only from Himachal Pradesh
then higher threshold limit of ` 40 lakh will not be applicable as the same applies only in case of exclusive
supply of goods. Therefore, in this case, the applicable threshold limit will be ` 20 lakh and hence,
Mahadev Enterprises will be liable to registration.
(c) In case of inter-State supplies of taxable goods, section 24 of the CGST Act, 2017 requires
compulsory registration irrespective of the quantum of aggregate turnover. Thus, Mahadev Enterprises
will be liable to registration.
5. “Diligent Force” a professional training institute gets its training material of “Aptitute Quotient”
printed from “Durga printing House” a printing press. The content of the material is provided by the
Diligent Force who owns the usage rights of the same while the physical inputs including paper used
for printing belong to the Durga Printing House.
Ascertain whether supply of training material by the Durga Printing House constitutes supply of
goods or supply of services.
Solution:
GST Circular has clarified that supply of books printed with contents supplied by the recipient of such printed
goods, is composite supply and the question, whether such supplies constitute supply of goods or services
would be determined on the basis of what constitutes the principal supply.
Principal supply has been defined in section 2(90) of the CGST Act as supply of goods or services which
constitutes the predominant element of a composite supply and to which any other supply forming part of that
composite supply is ancillary.
In the case of printing of books where content is supplied by the publisher or the person who owns the usage
rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer,
supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore,
such supplies would constitute supply of service.
Thus, in view of the above-mentioned provisions, the supply of training material by the Durga Printing House
would constitute supply of services.
6. With reference to the provisions of section 17 of the CGST Act, 2017, examine the availability of input
tax credit under the CGST Act, 2017 in the following independent cases:-
(i) MBF Ltd., an automobile company, has availed works contract service for construction of a
foundation on which a machinery (to be used in the production process) is to be mounted
permanently.
(ii) Shah & Constructions procured cement, paint, iron rods and services of architects and interior
designers for construction of a commercial complex for one of its clients.
(iii) ABC Ltd. availed maintenance & repair services from “Jaggi Motors” for a truck used for
transporting its finished goods.
Solution:
(i) Section 17(5) of the CGST Act, 2017 blocks input tax credit in respect of works contract services when
supplied for construction of an immovable property (other than plant and machinery) except where it is an
input service for further supply of works contract service.
Further, the term “plant and machinery” means apparatus, equipment and machinery fixed to earth by
foundation or structural support that are used for making outward supply of goods and/or services and
includes such foundation or structural support but excludes land, building or other civil structures,
telecommunication towers, and pipelines laid outside the factory premises.
Thus, in view of the above-mentioned provisions, ITC is available in respect of works contract service
availed by MBF Ltd. as the same is used for construction of plant and machinery which is not blocked
under section 17(5) of the CGST Act, 2017.
(ii) Section 17(5) of the CGST Act, 2017 blocks ITC on goods and/or services received by a taxable person
for construction of an immovable property (other than plant and machinery) on his own account even
though such goods and/or services are used in the course or furtherance of business. Thus, ITC on goods
and/or services used in the construction of an immovable property is blocked only in those cases where
the taxable person constructs the immovable property for his own use even if the immovable property
being constructed is used in the course or furtherance of his business.
In the given case, taxable person has used the goods and services for construction of immovable property
for some other person and not on its own account. Hence, ITC in this case will be allowed.
(iii) As per section 17(5) of the CGST Act, 2017, ITC is allowed on repair and maintenance services relating
to motor vehicles, which are eligible for input tax credit. Further, as per section 17(5)(a) ITC is allowed on
motor vehicles which are used for transportation of goods.
Thus, ITC on maintenance & repair services availed from “Jaggi Motors” for a truck used for transporting
its finished goods is allowed to ABC Ltd.
7. Jai, a registered supplier, runs a general store in Ludhiana, Punjab. Some of the goods sold by him
are exempt whereas some are taxable. You are required to advise him on the following issues:
(i) Whether Jai is required to issue a tax invoices in all cases, even if he is selling the goods to the
end consumers?
(ii) Jai sells some exempted as well as taxable goods valuing ` 5,000 to a school student. Is he
mandatorily required to issue two separate GST documents?
(iii) Jai wishes to know whether it’s necessary to show tax amount separately in the tax invoices
issued to the customers. You are required to advise him.
Solution:
(i) As per Section 31 of the CGST Act, 2017, every registered person supplying taxable goods is required
to issue a tax invoice. Further, Section 31 stipulates that every registered person supplying exempted
goods is required to issue a bill of supply instead of tax invoice.
Further, as per Section 31 of the CGST Act, 2017 read with rule 46 of the CGST Rules, 2017, a
registered person may not issue a tax invoice if:

(i) value of the goods supplied < ` 200,
(ii) the recipient is unregistered; and
(iii) the recipient does not require such invoice.
Instead such registered person shall issue a Consolidated Tax Invoice for such supplies at the close of
each day in respect of all such supplies.
(ii) As per rule 46A of the CGST Rules, 2017, where a registered person is supplying taxable as well as
exempted goods or services or both to an unregistered person, a single “invoice-cum-bill of supply”
may be issued for all such supplies. Thus, there is no need to issue a tax invoice and a bill of supply
separately to the school student in respect of supply of the taxable and exempted goods respectively.
(iii) As per Section 33 of the CGST Act, 2017, where any supply is made for a consideration, every person
who is liable to pay tax for such supply shall prominently indicate in all documents relating to
assessment, tax invoice and other like documents, the amount of tax which shall form part of the price
at which such supply is made.
Hence, Jai has to show the tax amount separately in the tax invoices issued to customers.
Contact through whatsapp for PDF notes at 8527230445
8. VERY IMP - With reference to the provisions relating to the electronic way bill (E-way bill) as
prescribed under the GST laws, answer the following questions:
(i) Sindhi Toys Manufacturers, registered in Punjab, sold electronic toys to a retail seller in
Gujarat, at a value of ` 48,000 (excluding GST leviable @ 18%). Now, it wants to send the
consignment of such toys to the retail seller in Gujarat.
You are required to advise Sindhi Toys Manufacturers on the following issues:
(a) Whether e-way bill is mandatorily required to be generated in respect of such movement of
goods?
(b) If yes, who is required to generate the e-way bill?
(ii) Power Electricals Ltd., a registered supplier of air-conditioners, is required to send from
Mumbai (Maharashtra), a consignment of parts of air-conditioner to be replaced under warranty
at various client locations in Gujarat. The value of consignment declared in delivery challan
accompanying the goods is ` 70,000. Power Electricals Ltd. claims that since movement of
goods to Gujarat is caused due to reasons other than supply, e-way bill is not mandatorily
required to be generated in this case.
You are required to examine the technical veracity of the claim made by Power Electricals Ltd.
(iii) Beauty Cosmetics Ltd. has multiple wholesale outlets of cosmetic products in Mumbai,
Maharashtra. It receives an order for cosmetics worth ` 1,20,000 (inclusive of GST leviable @
18%) from Prasannaa, owner of a retail cosmetic store in Delhi. While checking the stock, it is
found that order worth ` 55,000 can be fulfilled from the company's Dadar (Mumbai) store and
remaining goods worth ` 65,000 can be sent from its Malad (Mumbai) store. Both the stores are
instructed to issue separate invoices for the goods sent to Prasannaa. The goods are
transported to Prasanna in Delhi, in a single conveyance owned by Radhey Transporters.
You are required to advise Beauty Cosmetics Ltd. with regard to issuance of e-way bill(s).
Solution:
(i) Rule 138 of the CGST Rules, 2017 provides that e-way Bill is mandatorily required to be generated if
the goods are moved, inter alia, in relation to supply and the consignment value exceeds ` 50,000.
Further, explanation 2 to rule 138(1) stipulates that the consignment value of goods shall be the value,
determined in accordance with the provisions of section 15, declared in an invoice, a bill of supply or a
delivery challan, as the case may be, issued in respect of the said consignment and also includes
CGST, SGST/UTGST, IGST and cess charged, if any, in the document and shall exclude the value of
exempt supply of goods where the invoice is issued in respect of both exempt and taxable supply of
goods.
Accordingly, in the given case, the consignment value will be as follows:

= ` 48,000 x 118%
= ` 56,640.

Since the movement of goods is in relation to supply of goods and the consignment value
exceeds ` 50,000, e-way bill is mandatorily required to be issued in the given case.
(b) An e-way bill contains two parts namely, Part A to be furnished by the registered person who is
causing movement of goods of consignment value exceeding ` 50,000/- and part B (transport
details) is to be furnished by the person who is transporting the goods.
Where the goods are transported by the registered person as a consignor or the recipient of
supply as the consignee, whether in his own conveyance or a hired one or a public conveyance,
by road, the said person shall generate the e-way bill on the common portal after furnishing
information in Part B.
Where the goods are transported by railways or by air or vessel, the e-way bill shall be generated
by the registered person, being the supplier or the recipient, who shall, either before or after the
commencement of movement, furnish, on the common portal, the information in Part B.
Where the goods are handed over to a transporter for transportation by road, the registered
person shall furnish the information relating to the transporter on the common portal and the e-
way bill shall be generated by the transporter on the said portal on the basis of the information
furnished by the registered person in Part A.
Where the consignor or the consignee has not generated the e-way bill and the aggregate of the
consignment value of goods carried in the conveyance is more than ` 50,000/, the transporter,
except in case of transportation of goods by railways, air and vessel, shall, in respect of inter-
State supply, generate the e-way bill on the basis of invoice or bill of supply or delivery challan, as
the case may be, and may also generate a consolidated e-way bill on the common portal prior to
the movement of goods.
(ii) The goods to be moved to another State for replacement under warranty is not a ‘supply'. However,
rule 138(1) of the CGST Act, 2017, inter alia, stipulates that every registered person who causes
movement of goods of consignment value exceeding ` 50,000:
(i) in relation to a supply; or
(ii) for reasons other than supply; or
(iii) due to inward supply from an unregistered person,
shall, generate an electronic way bill (E-way Bill) before commencement of such movement.
CBIC has also clarified that even if the movement of goods is caused due to reasons others
than supply [including replacement of goods under warranty], e-way bill is required to be
issued.
Thus, in the given case, since the consignment value exceeds ` 50,000, e-way bill is required to be
mandatorily generated.
Therefore, the claim of Power Electricals Ltd. that e-way bill is not mandatorily required to be
generated as the movement of goods is caused due to reasons other than supply, is not
correct.
(iii) Beauty Cosmetics Ltd. would be required to prepare two separate e-way bills since each invoice value
exceeds ` 50,000 and each invoice is considered as one consignment for the purpose of generating e-
way bills.

9. BODMAS Ltd., providing educational services, furnishes you with the following information for the
various services provided by it for the month of March, 20XX:
Particulars `
30,00,000
Receipts from running a Boarding School (including receipts for providing residential
dwelling service of ` 14,00,000)
Receipts of 'Gyan Uday' - an Industrial Training Institute (ITI) affiliated to the 2,00,000
National Council for Vocational Training (NCVT)
Receipts of 'Lakshya', an institute, registered with Directorate General of 1,00,000

Employment and Training (DGET), Union Ministry of Labour and Employment,
running a Modular Employable Skill Course (MESC) approved by the National
Council for Vocational Training (NCVT)
Receipts of 'Wizard", a Commercial Coaching Institute providing commercial coaching 80,000

in the field of arts and science (no certificate was issued on completion of the training)
Fees from prospective employers for campus interview 4,00,000
Renting of furnished flats for temporary stay to different persons 5,00,000
Receipts of 'Concepts', a Commercial coaching institute providing coaching in the 1,40,000
field of commerce (a certificate was awarded to each trainee after completion of the
training)
Receipts of Gurukul School providing education upto higher secondary 5,00,000
Compute the value of taxable supply assuming that all the above receipts are exclusive of GST.
Answer
Services provided by an educational institution to its students, faculty and staff are exempt vide Notification
No. 12/2017 Central Tax (Rate) dated 28.06.2017. Further, an educational institution means, inter alia, an
institution providing services by way of-
(i) education up to higher secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in
force;
(iii) education as a part of an approved vocational education course.
In view of the aforesaid provisions, value of taxable supply of BODMAS Ltd. for the month of March,
20XX has been computed as follows:
Particulars Amount
(`)
Receipts from Boarding School including receipts for residential dwelling service Exempt
[Educational institution providing education up to higher secondary school or equivalent]
Receipts of Gyan Uday Exempt
[Educational institution running approved vocational education course (assuming that such
courses are run in designated trades)]
Receipts of Lakshya running Modular Employable Skill Course [Educational institution Exempt
running approved vocational education course]
Receipts of Wizard - a coaching institute 80,000

[Taxable since coaching institute is not an educational institution]
Fees from prospective employers for campus interview [Taxable since such services are not 4,00,000
specifically exempt]
Renting of furnished flats for temporary stay to different persons 5,00,000
[Not exempt since services by a hotel, inn, guest house, club or campsite, by whatever
name called, for residential or lodging purposes, are exempt only when the value of supply
of a unit of accommodation is below or equal to ` 1,000 per day.]
Receipts of Concepts – a coaching institute 1,40,000
[Taxable since coaching institute is not an educational institution]
Receipts of Gurukul School providing education upto higher secondary Exempt


10. Surya Agencies has agreed to supply goods to customer's premises. Goods valued ` 80,000 are
taxable @ 5% IGST as it is an inter-State supply. It also pays freight and transit insurance of ` 12,000.
GTA is a registered entity and has charged GST (6% CGST and 6% SGST) under forward charge.
(i) Compute the invoice value of supply including IGST.
(ii) What will be the invoice value of supply including IGST, if the supply was under ex-factory basis
instead of door-delivery basis?
Answer
Computation of invoice value of supply
(i) When supplier agrees to supply the goods at customer’s premises, i.e. freight and transit
insurance are paid by the supplier, invoice value of supply will be computed as follows:

Value of goods supplied 80,000
Add: Freight and transit insurance 12,000
[Since the supplier has agreed to deliver the goods at the customer’s premises and to
pay for freight and insurance, the contract of supply becomes a composite supply, the
principal supply being the supply of goods.]
Total 92,000
Add: IGST @ 5% 4,600
[Being a composite supply, GST at the rate applicable for principal supply will be
charged]
Invoice value of supply 96,600
(ii) When supplier agrees to supply the goods on ex-factory basis, i.e. the buyer pays the freight
and transit insurance, invoice value of supply will be computed as follows:

Value of goods supplied 80,000
Add: IGST @ 5% of ` 80,000 4,000
Invoice value of supply 84,000
Note: The above answer is based on the view that part (ii) of the question is an independent case and
thus, the information provided in the first paragraph of the question regarding payment of freight and
transit insurance by Surya Agencies does not apply to it. Moreover, when the contract is ex-factory, it
implies that the freight and insurance will be the buyer’s responsibility and seller will have no role,
whatsoever, in delivering the goods to the customer’s premises.
11. Enumerate any five matters on which the GST Council may make recommendations under Article
279A of the Constitution of India.
Answer
The matters on which the GST Council may make recommendations under Article 279A of the
Constitution of India are as under:-
(i) the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be
subsumed in GST;
(ii) the goods and services that may be subjected to, or exempted from GST;
(iii) model GST Laws, principles of levy, apportionment of GST levied on supplies in the course of inter-
State trade or commerce and the principles governing the place of supply;
(iv) the threshold limit of turnover below which goods and services may be exempted from GST;
(v) the rates including floor rates with bands of GST;
(vi) any special rate or rates for a specified period, to raise additional resources during any natural
calamity or disaster;
(vii) special provision with respect to Special Category States
(viii) the date on which the GST be levied on petroleum crude, high speed diesel, motor spirit (commonly
known as petrol), natural gas and aviation turbine fuel.
(ix) any other matter relating to the GST, as the Council may decide.

12. IMPORTANT Determine taxable value of supply under the GST law with respect to each of the
following independent services provided by the registered persons:
(i) Fees charged from office staff for in-house personality development course conducted by M.V.
College - ` 10,000.
(ii) Bus fees collected from students by M.V. College - ` 2,500 per month.
(iii) Housekeeping service provided by M/s. Clean well to Himavarsha Montessori school, a play
school - ` 25,000 per month.
(iv) Info link supplied ''Tracing Alphabets", an online educational journal, to students of UKG class of
Sydney Montessori School - ` 2,000.
Answer
i. As per Notification No. 12/2017 CT (R) dated 28.06.2017, services provided by an educational
institution to its students, faculty and staff are exempt from GST. Educational Institution has been
defined to mean, interalia, an institution providing services by way of education as a part of a
curriculum for obtaining a qualification recognized by any law for the time being in force.
Assuming that M. V. College provides education as a part of a curriculum for obtaining a qualification
recognised by a law, the services provided by it to its staff by way of conducting personality
development course would be exempt from GST.
ii. As assumed above that M. V. College provides education as a part of a curriculum for obtaining a
qualification recognised by a law, the transport services provided by it to its students would be exempt
from GST.
iii. As per Notification No. 12/2017 CT (R) dated 28.06.2017, services provided to an educational
institution, by way of, inter alia, house-keeping services performed in such educational institution are
exempt from GST. However, such an exemption is available only when the said services are
provided to a pre-school education and a higher secondary school or equivalent.
Therefore, house-keeping services provided to Himavarsha Montessori Play School would be exempt
from GST on the presumption that housekeeping services have been performed in such play school
itself.
iv. As per Notification No. 12/2017 CT (R) dated 28.06.2017, services provided to an educational
institution by way of supply of online educational journals or periodicals is exempt from GST.
However, such an exemption is available only when the said services are provided to an educational
institution providing education as a part of a curriculum for obtaining a qualification recognized by any
law for the time being in force.
Therefore, supply of online journal to students of UKG class of Sydney Montessori School will not be
exempt from GST. Hence, the taxable value in this case will be ` 2,000.
13. When is an e-way bill required to be generated?
Answer
As per rule 138 of the CGST Rules, 2017, whenever there is a movement of goods of consignment
value exceeding ` 50,000:
(a) in relation to a supply; or
(b) for reasons other than supply; or
(c) due to inward supply from an unregistered person,
e-way bill needs to be generated prior to the commencement of transport of goods.
Further, in the following situations, e-way bill needs to be issued even if the value of the consignment
is less than ` 50,000:
(i) Where goods are sent by a principal located in one State/Union territory to a job worker located in any
other State/Union territory, the e-way bill shall be generated either by the principal or the job worker, if
registered, irrespective of the value of the consignment.
(ii) Where specified handicraft goods are transported from one State/Union territory to another State/Union
territory by a person who has been exempted from the requirement of obtaining registration under section
24 of the CGST Act,2017, the e- way bill shall be generated by the said person irrespective of the value of
the consignment.

14. Siddhi Ltd. is a registered manufacturer engaged in taxable supply of goods. Siddhi Ltd. purchased
the following goods during the month of January, 20XX. The following particulars are provided:
S. Particulars Inputtax
No. (`)
1. Capital goods purchased on which depreciation has been taken on full value 15,000
including input tax thereon
2. Goods purchased from Ravi Traders (Invoice of Ravi Traders is received in month 20,000
of January, 20XX, but goods were received in month of March, 20XX)
3. Car purchased for making further supply of such car. Such car is destroyed in 30,000
accident while being used for test drive by potential customers
4. Goods used for setting up telecommunication towers being immovable property 50,000
5. Goods purchased from Pooja Ltd. (Full payment is made by Siddhi Ltd. to Pooja 10,000
Ltd. against such supply, but tax has not been deposited by Pooja Ltd.
6. Truck purchased for delivery of output goods 80,000
Determine the amount of input tax credit (ITC) available by giving necessary explanations for
treatment of various items as per the provisions of the CGST Act, 2017. You may assume that all the
necessary conditions for availing the ITC have been complied with by Siddhi Ltd.
Answer
Computation of ITC available with Siddhi Ltd.
S. Particulars Input tax
No. (`)
1. Capital goods Nil
[Since depreciation has been claimed on the tax component of the value of the
capital goods, ITC of such tax cannot be availed in terms of section 16 of the CGST
Act, 2017.]
2. Goods purchased from Ravi Traders Nil

[ITC in respect of goods not received cannot be availed (Section 16 of the CGST Act,
2017). Since the goods have been received in the month of March 20XX, ITC thereon
can be availed in March 20XX and not January 20XX even though the invoice for the
same has been received in January 20XX]
3. Cars purchased for making further supply Nil

[Though ITC on motor vehicles used for further supply of such vehicles is not blocked,
ITC on goods destroyed for whichever reason is blocked (Section 17(5) of the CGST
Act, 2017)]
4. Goods used for setting telecommunication towers Nil
[ITC on goods used by a taxable person for construction of immovable property on his
own account is blocked even when such goods are used in the course or furtherance
of business (Section 17 of the CGST Act, 2017).]
5. Goods purchased from Pooja Ltd. 10,000
[ITC can be claimed provisionally in January 20XX since all the conditions necessary
for availing the same have been complied with (Section 16 of the CGST Act, 2017).
However, the claim will get confirmed only when the tax charged in respect of such
supply has been actually paid to the Government.]
6. Trucks purchased for delivery of output goods 80,000

[ITC on motor vehicles used for transportation of goods is not blocked
(Section 17(5) of the CGST Act, 2017).]
Total ITC available with Siddhi Ltd. 90,000
Note: The above answer is based on the assumption that the ITC available is to be computed for the
month of January, 20XX. However, since the question does not specify the period for which ITC
available is to be computed, the question may also be answered without referring to any particular
period.

15. Happy Company is a registered supplier of electric goods. It has three stores for electric goods in
Jodhpur (Rajasthan) namely Ram Store, Shyam Store, Mohan Store. It receives an order for supply of
electric goods worth ` 1,40,000 (exclusive of GST @ 18%) from Kishan Sons of Bhopal (Madhya
Pradesh). Happy Company found that order worth ` 43,000 can be fulfilled from the company's Ram
Store, order worth ` 45,000canbe fulfilled from its Shyam Store and remaining goods worth ` 52,000
can be sent from its Mohan Store. All three stores are instructed to issue separate invoices for the
goods sent to Kishan Sons. The goods are transported to Kishan Sons in Bhopal in a single
conveyance owned by Shiv Transporters.
You are required to advise Happy Company with regard to issuance of e-way bills as per the
provisions of the CGST Act, 2017.
Answer
Rule 138 of the CGST Rules, 2018 stipulates that e-way Bill is mandatorily required to be generated if the
goods are moved, inter alia, in relation to a supply and the consignment value [including CGST,
SGST/UTGST, IGST and cess charged] exceeds ` 50,000.
Further, the CBIC has clarified that if multiple invoices are issued by the supplier to one recipient, multiple e-
way bills have to be generated - one e-way bill for each invoice. Each invoice is considered as separate
consignment for the purpose of generating e-way bills.
In the given case, consignment value of goods supplied against separate invoices from Ram Store, Shyam
Store and Mohan Store is ` 50,740 [` 43,000 × 118%], ` 53,100 [` 45,000 × 118%] and ` 61,360
[` 52,000 × 118%] respectively.
Thus, Happy Company is required to prepare 3 separate e-way bills since value of each invoice exceeds
` 50,000.
16. Chiku Traders is a registered supplier of plastic goods. On 10th April, 20XX, Chiku Traders received an
order from Neelu Traders for supply of a consignment of plastic goods. Chiku Traders gets the
consignment ready by 15th April, 20XX. The invoice for the consignment was issued the next day, 16th
April, 20XX. Neelu Traders collects the consignment from the godown of Chiku Traders on 25 th April,
20XX and hands over the cheque towards payment on the same date. The said payment is entered in
the books of accounts of Chiku Traders on 26 th April, 20XX and amount is credited in their bank
account on 27th April, 20XX.
Determine the time of supply of the plastic goods supplied by Chiku Traders to Neelu Traders as per
the provisions of CGST Act, 2017.
Answer
A registered person (excluding composition supplier) has to pay GST on the outward supply of goods at the
time of supply as specified in section 12(2)(a) of the CGST Act, 2017, i.e. date of issue of invoice or the last
date on which invoice ought to have been issued in terms of section 31(1).
As per section 31, the invoice in case of supply of goods needs to be issued either before or at the time of
removal/delivery of goods.
In this case, the invoice is issued before the removal of the goods and is thus, within the time limit prescribed
under section 31(1). Therefore, time of supply is the date of issue of invoice, which is 16 th April, 20XX.
17. M/s Heeralal and Sons registered in Karnataka has opted to avail the benefit of composition scheme.
It has furnished the following details for the tax period ended on 31-01-20XX.
S. No. Items `
(i) Taxable turnover of goods within the state 15,00,000
(ii) Exempted turnover of goods within the state 17,00,000
Total Turnover 32,00,000
Using the above information, calculate total GST (No need for bifurcation between CGST and SGST)
to be paid by the firm for the tax period ended on 31-01-20XX in following independent situations:
(i) M/s Heeralal and Sons is a Manufacturer
(ii) M/s Heeralal and Sons is a Trader

Answer
Computation of amount payable under composition scheme
(i) If M/s Heeralal and Sons is a manufacturer:
Tax is to be paid @ 1% (CGST+SGST) of the turnover in the State as under:
1% of ` 32,00,000 [` 15,00,000 + `17,00,000]
= ` 32,000
(ii) If M/s Heeralal and Sons is a trader:
Tax is to be paid @ 1% (CGST+SGST) of the turnover of taxable supplies of goods in the State as
under:
1% of ` 15,00,000 = ` 15,000
18. On 25th August, 2020, M/s Agarwal & Agarwal Ltd., a registered supplier of textile products located in
Bengaluru (Karnataka) purchased one machine for ` 12,39,000 including IGST, from one supplier of
Maharashtra who issued invoice on the same date. M/s Agarwal & Agarwal Ltd. put the machinery to
use on the same day and availed input tax credit for the eligible amount.
M/s Agarwal & Agarwal Ltd. sold this machine after using the machine in the process of
manufacture of taxable goods for ` 7,50,000 excluding IGST, to Mr. Suresh Kumar of Andhra
Pradesh on 20th August 2021.
During purchase as well as sale of the machinery, the IGST rate applicable was 18%.
Is M/s Agarwal & Agarwal Ltd., required to pay GST? If yes, calculate the amount of tax payable
under GST Laws at the time of sale of the machine. Also briefly state the relevant statutory
provisions.
Note: Assume that there was no change in legal position after August, 2021.
Answer
As per section 18 of the CGST Act, 2017, if capital goods/ plant and machinery on which input tax credit
(ITC) has been taken are supplied outward by a registered person, he must pay an amount that is higher of
the following:
(a) ITC taken on such goods reduced by 5% per quarter of a year or part thereof from the date of issue of
invoice for such goods or
Accordingly, the amount payable on supply of machinery by M/s Agarwal & Agarwal Ltd. shall be
computed as follows:
Particulars `
ITC taken on the machinery (` 12,39,000 x 18/118) 1,89,000
Less: Input tax credit to be reversed @ 5% per quarter for the period
of use of machine
(i) For the year 2020-21 = (` 1,89,000 x 5%) x 3 quarters 28,350
(ii) For the year 2021-22 = (` 1,89,000 x 5%) x 2 quarters 18,900
Amount required to be paid (A) ** 1,41,750
Duty leviable on transaction value (` 7,50,000 x 18%) (B) 1,35,000
Amount payable towards disposal of machine is higher of (A) and (B) 1,41,750
Thus, M/s Agarwal & Agarwal Ltd. is required to pay GST amounting to ` 1,41,750 at the time of sale of
machinery.
** In the above solution, amount payable towards disposal of machine has been computed on the basis of
provisions of section 18(6) of the CGST Act, 2017 read with rule 40(2) of the CGST Rules, 2017 [wherein
ITC to be reversed for the period of use of capital goods/machine has been computed @ 5% for every
quarter or part thereof from the date of the issue of invoice].

19. Happy Ltd. located at Alwar (Rajasthan), exclusively manufactures and sells the product "Shine &
Shine", which is exempt from GST. Happy Ltd. sells "Shine & Shine" only within Rajasthan. The
turnover of Happy Ltd. in the previous year was ` 60 lakhs. Happy Ltd. purchased additional
machinery (Capital Goods) for manufacturing "Shine & Shine" on 1 st April, 20XX. The invoice for
supply of machinery also was issued on 1 st April, 20XX. The purchase price of the machinery was
` 25 lakh exclusive of CGST and SGST @ 12% (6% + 6%). On 1 st December, 20XX exemption available
on the product "Shine & Shine" was withdrawn by the Central Government and CGST and SGST
@18% (9% + 9%) was imposed thereon. The turnover of Happy Ltd. on 30th September, 20XX was ` 45
lakh.
Examine the issue and provide the answers (with supporting explanatory note for each answer) to
the following:
(i) Does Happy Ltd. have to register under CGST Act, 2017?
(ii) Can Happy Ltd. take Credit of tax paid on the machinery purchased? If yes, what is the amount
of Input Tax Credit (ITC) that can be availed?
Answer
i. As per section 22 of the CGST Act, 2017 read with Notification No. 10/2019 CT dated 07.03.2019, a
goods and/or services, if his aggregate turnover in a financial year exceeds the threshold limit. The
threshold limit for a person making exclusive intra - State taxable supplies of goods is as under:-
(b) ` 20 lakh for the States of States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim,
(c) ` 40 lakh for rest of India. However, the higher threshold limit of ` 40 lakh is not available to
persons engaged in making supplies of ice cream and other edible ice, whether or not
containing cocoa, Pan masala and Tobacco and manufactured tobacco substitutes.
The term ‘aggregate turnover' includes exempt turnover also. However, a person exclusively engaged
in making exempt supplies is not liable to registration in terms of section 23(1) of CGST Act, 2017.
In view of combined reading of above provisions, although the ‘aggregate turnover' of Happy Ltd.
exceeds the applicable threshold limit of ` 40 lakh on 30.09.20XX [` 45 lakh], it was not required to be
registered till 30.11.20XX as it supplied only exempted goods till that day.
Therefore, Happy Ltd. needs to register within 30 days from 01.12.20XX (the date on which its
supplies became taxable) as its turnover had already exceeded the threshold limit of ` 40 lakh on
01.12.20XX.
ii. As per section 17 of the CGST Act, the input tax credit (ITC) on capital goods used or intended to be
used exclusively for effecting exempt supplies is disallowed. However, where an exempt supply by a
registered person becomes a taxable supply, such person gets entitled to take proportionate ITC on
such capital goods in terms of section 18(1)(d) of CGST Act, 2017. Thus, a non-registered person
cannot take ITC on capital goods under this provision.
Further, a person who has applied for registration within thirty days from the date on which he
becomes liable to registration and has been granted such registration is also not entitled to take ITC on
capital goods held with him on the day immediately preceding the date from which he becomes liable
to pay tax in terms of section 18(1)(a) of CGST Act, 2017.
In the given case, Happy Ltd. is not registered at the time when its exempt supply becomes taxable.
Thus, the company cannot take proportionate ITC on capital goods as mentioned above. Further, the
company will also not be entitled for credit on capital goods held with it when it applies for registration
in the prescribed manner.

20. Quanto Ltd. is not required to register under CGST Act, 2017, but it wishes to obtain voluntary
registration, so it applied for voluntary registration on 17 th September, 2020 and registration
certificate has been granted to it on 25th September, 2020. The CGST and SGST liability for the month
of September, 2020 is ` 24,000 each.
Quanto Ltd. provides the following information of inputs and capital goods held in stock on 24 th
September, 2020. It is not engaged in making inter-State outward taxable supplies.
Input procured on 02-09-2020 lying in stock
-CGST@6% 4,500
-SGST@6% 4,500
Input received- on 21-07-2020 contained in semi-finished goods
held in stock:
-CGST@6% 7,500
-SGST@6% 7,500
Value of inputs contained in finished goods held in stock ` 2,00,000
were procured on 19-09-2019
- IGST @ 18% 36,000
Inputs valued at ` 50,000 procured on 13-09-2020 lying in stock:
- IGST @ 18% 9,000
Capital goods procured on 12-09-2020
-CGST@6% 12,000
-SGST@6% 12,000
You are required to compute the amount of tax to be paid in cash by Quanto Ltd. for the month of
September, 2020.
You are also required to mention reasons for treatment of all above items.
Answer
Computation of net GST liability (to be paid in cash) by Quanto Ltd. for the month of Sept., 2020
Particulars CGST (`) SGST (`)
Output tax liability for the month 24,000 24,000
Less: Input tax credit (ITC) [Refer note-2 below] 12,000 12,000
9,000 (IGST)
Net GST payable (in cash) 3,000 12,000
Notes:
1. Credit of IGST shall be utilized towards payment of IGST first and then with CGST and SGST in
any order. Since Quanto Ltd. does not make any inter-State supply, credit of IGST has been utilized
towards payment of CGST [Section 49(5) of the CGST Act, 2017].
2. As per section 18(1)(b) of the CGST Act, 2017-
A person who takes voluntary registration is entitled to take credit of input tax in respect of:
• inputs held in stock and
• inputs contained in semi-finished/ finished goods held in stock on the day immediately
preceding the date of grant of registration.
However, he cannot take ITC in respect of capital goods held on the day immediately preceding the
date of grant of registration.
ITC on inputs needs to be availed within 1 year from the date of issue of the invoice by the supplier
[Section 18(2) of the CGST Act, 2017].
In this case, since Quanto Ltd. has been granted voluntary registration on 25.09.2020, it will be entitled to
ITC on inputs held in stock and inputs contained in semi-finished/ finished goods held in stock, on
24.09.2020. In view of the said provisions, eligible ITC for Quanto Ltd. is computed as follows:
Particulars CGST (`) SGST (`) IGST (`)
Inputs held in stock since 02.09.2020 4,500 4,500
Inputs received on 21.07.2020 contained in semi-finished 7,500 7,500
goods held in stock
Inputs contained in finished goods held in stock which Nil
were procured on 19.09.2019 [Procured prior to one
year, hence ITC cannot be availed]
Inputs held in stock since 13.09.2020 9,000
Capital goods procured on 12.09.2020 Nil Nil
Total ITC 12,000 12,000 9,000
21. Sharma Carriers is a Good Transport Agency engaged in transportation of goods by road. As per the
general business practice, Sharma carriers also provides intermediary and ancillary services like
loading /unloading, packing/unpacking, transhipment and temporary warehousing in relation to
transportation of goods by road.
With reference to the provisions of GST law, analyse whether such services are to be treated as part
of the GTA services, being a composite supply or as mixed supply.
Answer
Composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable
supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in
conjunction with each other in the ordinary course of business, one of which is a principal supply [Section
2(30) of the CGST Act, 2017].
Mixed supply means two or more individual supplies of goods or services, or any combination thereof, made
in conjunction with each other by a taxable person for a single price where such supply does not constitute a
composite supply [Section 2(74) of the CGST Act, 2017].
The various intermediary and ancillary services provided by GTA are not provided as independent services
but as ancillary to the principal service, namely, transportation of goods by road. The invoice issued by the
GTA for providing the said service includes the value of intermediary and ancillary services. In view of this, if
any intermediary and ancillary service is provided in relation to transportation of goods by road, and charges,
if any, for such services are included in the invoice issued by Sharma Carriers, such service would form part
of the GTA service, and thus will be composite supply, and not a mixed supply even though a single price is
charged for the supply.
Further, if such incidental services are provided as separate services and are billed separately, whether in the
same invoice or separate invoices, they will be treated as separate supply and not composite supply and
there being no single price, the supply will also not be treated as mixed supply.
22. A registered supplier of taxable goods supplied goods valued at ` 2,24,000 (inclusive of CGST ` 12,000
and SGST ` 12,000) to Mohan Ltd. under the forward charge on 15-08-20XX for which tax invoice was
also issued on the same date. The inputs were received by Mohan Ltd. on 15-08-20XX. Mohan Ltd.
availed credit of ` 24,000 on 18-08-20XX. But Mohan Ltd. did not make any payment towards such
supply along with tax thereon to the supplier. Is Mohan Ltd. eligible to avail input tax credit on such
supply? What are the consequences of such non-payment by Mohan Ltd.?
Discuss input tax credit provisions if Mohan Ltd. makes the payment of ` 2,24,000 to the supplier on
18-03-20XY.
Answer
As per section 16 of the CGST Act, 2017, Mohan Ltd. is eligible to avail input tax credit (ITC) of the tax paid
on inputs received by it on the basis of the invoice issued by the supplier provided other conditions for
availing ITC are fulfilled.
Payment of value of the goods along with the tax to the supplier is not a pre-requisite at the time of availing
credit, but Mohan Ltd. has to pay the said amount within 180 days from the date of issue of invoice.
If Mohan Ltd. did not make any payment towards such supply along with tax thereon to the supplier, it has
to report the fact of non-payment in the return for the month immediately following the period of 180 days
from the date of the issue of the invoice. When such report is made, ITC of ` 24,000 will be added to his
output tax liability. Mohan Ltd will be required discharge this liability with interest @ 18% p.a. from the date
of availing credit till the date when the amount added to the output tax liability [Second proviso to section
16(2) of the CGST Act, 2017 read with rule 37 of the CGST Rules, 2017].
If Mohan Ltd. makes the payment of ` 2,24,000 (Value + tax) to the supplier on 18.03.20XY i.e., after the
expiry of 180 days from date of issue of invoice, Mohan Ltd. will have to report the default in the monthly
report, add the amount of ITC to his output tax liability and when the payment is made to the supplier, take
the credit of ` 24,000. The output tax liability added will have to paid with interest @18% for the period from
the date of availment of credit till the date of addition of the amount to the output tax liability.

23. M/s. Ranveer Industries, registered in Himachal Pradesh, is engaged in making inter-State supplies of
readymade garments. The aggregate turnover of M/s. Ranveer Industries in the financial year 2019-20
is ` 70 lakh. It opted for composition levy in the year 2020-21 and paid tax for the quarter ending
September, 2020 under composition levy.
The proper officer has levied penalty for wrongly availing the scheme on M/s. Ranveer Industries in
addition to the tax payable by it. Examine the validity of the action taken by proper officer.
Answer
As per section 10(1) of the CGST Act, 2017, a registered person, whose aggregate turnover in the preceding
financial year did not exceed ` 1.5 crore in a State/UT [` 75 lakh in case of Special Category States except
Jammu and Kashmir, Assam & HP], may opt for composition scheme.
However, he shall not be eligible to opt for composition scheme if, inter alia, he is engaged in making any
inter-State outward supplies of goods.
In the given case, since M/s Ranveer Industries is engaged in making inter-State supplies of
readymade garments, it is not eligible to opt for composition scheme in FY 2020-21 irrespective of its
turnover in the preceding FY.
Further, if the proper officer has reasons to believe that a taxable person has paid tax under composition
scheme despite not being eligible, such person shall, in addition to any tax payable, be liable to a penalty.
Thus, the action taken by the proper officer of levying the penalty for wrongly availing the composition scheme
is valid in law.
24. Mr. Anand Kumar, a regular taxpayer, filed his return of outward supply (GSTR-1) for the month of
August, 2020 before the due date. Later on, in February, 2021 he discovered error in the GSTR-1
return of August 2020 already filed and wants to revise it. You are required to advise him as to the
future course of action to be taken by him according to statutory provisions.
Answer
The mechanism of filing revised return for any correction of errors/omission is not available under GST. The
rectification of errors/omission is allowed in the subsequent returns.
Therefore, Mr. Anand Kumar who discovered an error in GSTR-1 for August, 2020, cannot revise it. However,
he should rectify said error in the GSTR -1 filed for February, 2021 and should pay the tax and interest, if any,
in case there is short payment, in the return to be furnished for February, 2021.
The error can be rectified by furnishing appropriate particulars in the “Amendment Tables” contained
in GSTR -1.
However, as per section 37(3) of the CGST Act, 2017, no rectification of details furnished in GSTR-1
shall be allowed after:
(i) filing of monthly return/ GSTR-3B for the month of September following the end of the financial year to
which such details pertain, or
(ii) filing of the relevant annual return
25. Vayu Ltd. provides you the following particulars relating to goods supplied by it to Agni Ltd.:
Particulars `
List price of the goods (exclusive of Taxes and discounts). 76,000
Special packing at the request of customer to be charged to the customer. 5,000
Duty levied by local authority on the sale of such goods. 4,000
CGST and SGST charged in invoice. 14,400
Subsidy received from a NGO (The price of ` 76,000 given above is after 5,000
considering the subsidy)
Vayu Ltd. offers 3% discount of the list price of the goods which is recorded in the invoice for the
goods. Determine the value of taxable supplies made by Vayu Ltd.

Answer
Computation of value of taxable supplies by Vayu Ltd.
Particulars `
List price of the goods 76,000
Add: Special packing [Note 1] 5,000
Duty levied by local authority on sale of goods [Note 2] 4,000
CGST and SGST charged [Note 2] -
Subsidy received from a NGO [Note 3] 5,000
Less: Discount offered 2,280
= 3% of List price = ` 76,000 × 3% [Note-4]
Value of taxable supplies 87,720
Notes:
1. Being incidental expenses charged by the supplier to the recipient of supply, packing charges are
includible in the value as per section 15(2)(c) of the CGST Act, 2017.
2. Taxes, duties, etc. levied under any law for the time being in force other than CGST, SGST/UTGST,
IGST are includible in the value as per section 15(2)(a) of CGST Act, 2017. Duty levied by local
authority on sale of goods has been assumed to be recovered from Agni Ltd. and not included in the
list price of the goods.
3. Subsidy directly linked to the price received from a non -Government body is includible in the value in
terms of section 15(2)(e) of CGST Act, 2017.
4. Since discount is known at the time of supply, it is deductible from the value in terms of section
15(3)(a) of CGST Act, 2017
26. Sarva Sugam Charitable Trust, a trust registered under section 12AA of the Income Tax Act, 1961
provides the following information relating to supply of its services for the month of August 20XX:
`
Renting of residential dwelling for use as a residence 18,00,000
Renting of rooms for pilgrims (Charges per day ` 1,200) 8,00,000
Renting of rooms for devotees (Charges per day ` 750) 6,00,000
Renting of kalyanamandapam (Charges per day ` 15,000) 12,00,000
Renting of halls and open space (Charges per day ` 7,500) 10,75,000
Renting of shops for business (Charges per month ` 9,500) 4,75,000
Renting of shops for business (Charges per month ` 12,000) 7,50,000
Compute the total taxable value of supply for the month of August 20XX assuming that the above
amounts are exclusive of GST.
Answer
Notification No. 12/2017 CT (R) dated 28.06.2017 /Notification No. 9/2017 IT (R) dated 28.06.2017
[exemption notification] provides exemption to renting of precincts of a religious place meant for general
public, owned/managed by, inter alia, an entity registered as a charitable trust under section 12AA of the
Income -tax Act are exempt. However, exemption is not available if:
(i) charges for rented rooms are ` 1,000 per day or more;
(ii) charges for rented community halls, Kalyanmandapam, open area are ` 10,000 per day or more;
(iii) charges for rented shops are ` 10,000 per month or more.
In view of the aforesaid provisions, value of supply of Sarva Sugam Charitable Trust for August,
20XX has been computed as under:

Computation of value of supply of Sarva Sugam Charitable Trust for August, 20XX
Renting of residential dwelling for use as residence Nil
[Exempt vide exemption notification]
Renting of rooms for pilgrims 8,00,000

[Since charges per day are not below ` 1,000]
Renting of rooms for devotees Nil

[Since charges per day are below ` 1,000]
Renting of Kalyana Mandapam 12,00,000
[Since charges per day are not below ` 10,000]
Renting of halls and open spaces Nil
[Since charges per day are below ` 10,000]
Renting of shops for business Nil
[Since charges per month are below ` 10,000]
Renting of shops for business 7,50,000
[Since charges per month are not below ` 10,000]
Note: The question does not specify whether the rooms/Kalyan Mandapam/Halls/Open space/shops
owned by a trust registered under section 12AA of the Income -tax Act, 1961 are located within the
precincts of the religious place meant for general public or not. In the above answer, it has been
assumed that the immovable properties are situated inside the precincts of the religious place
meant for general public.
However, the question can also be answered by assuming the various immovable properties to be
situated outside the precincts of the religious place meant for general public.
27. [Tax Invoice] Discuss the provisions relating to issue of an invoice/document in the following
circumstances:
(i) Advance payment is received against a supply, but subsequently no supplies are made.
(ii) Goods are sent on approval for sale or return and are removed before the supply takes place.
(iii) Malcolm provides continuous supply of services to his client, where the due date of payment
for such services is not ascertainable. No advance has been received in this behalf.
Answer
(i) As per section 31 of CGST Act, 2017, where advance payment is received against a supply for which
receipt voucher has been issued, but subsequently no supplies are made and no tax invoice is issued
in pursuance thereof, a refund voucher has to be issued to the person who had made the
advance payment.
(ii) As per section 31 of CGST Act, 2017, where the goods are sent on approval for sale or return and are
removed before the supply takes place, the invoice shall be issued before or at the time of supply or 6
months from the date of removal, whichever is earlier.
(iii) As per section 31 of CGST Act, 2017, in case of continuous supply of services, where the due date
of payment is not ascertainable from the contract, the invoice shall be issued before or at the time
when the supplier of service receives the payment.
28. Rahul Agri Millers Ltd., located in Haryana, is engaged in customs milling of paddy into rice. It does
not pay GST on the same as it is of the view that the process of milling of paddy into rice is exempt
under GST since is an intermediate production process in relation to cultivation of plants. However,
Department demands tax on said activity contending that it is not eligible for said exemption. You are
required to determine the veracity of the Department's contention.

Solution:
Yes, the contention of the Department is correct. As per Notification NO. 12/2017 CT (R) dated 28.06.2017,
carrying out an intermediate production process as job work in relation to cultivation of plants and rearing of
all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar
products or agricultural produce is exempt under GST.
Milling of paddy is not an intermediate production process in relation to cultivation of plants. It is a

process carried out after the process of cultivation is over and paddy has been harvested. Further,
processing of paddy into rice is not usually carried out by cultivators, but by rice millers. Milling of paddy into
rice also changes its essential characteristics.
Therefore, milling of paddy into rice cannot be considered as an intermediate production process in relation
to cultivation of plants for food, fibre or other similar products or agricultural produce.
In view of the above, it is clarified by CBIC that milling of paddy into rice is not eligible for exemption
under said notification. Thus, GST is payable on the said activity.
29. Parikshit Ltd., engaged in providing a bouquet of services, is registered under GST law. It furnishes
the following information for the month of March in relation to various services provided by it:
Particulars ₹
Fees from prospective employers for campus interview in its college 5,20,000
Five buses each with seating capacity of 40 passengers given on hire to State 6,50,000
Transport Undertaking
Receipts of 'Shiny', a commercial coaching institute providing coaching in the field of 1,82,000
commerce (a certificate was awarded to each trainee after completion of the training)
Interest received on fixed deposits of the company with Dhanvarsha Bank 6,50,000
Receipts from running a Boarding School (including receipts for providing residential 39,00,000
dwelling service of ₹ 18,20,000)
Receipts of 'Sikshit Samudai' - an Industrial Training Institute (ITI) affiliated to the 2,60,000
National Council for Vocational Training (NCVT). Courses run by said ITI are in
designated trades
Receipts of 'Pratibha Institute', an institute registered with Directorate General of 1,30,000
Employment and Training (DGET), Union Ministry of Labour and Employment, running a
Modular Employable Skill Course (MESC) approved by the National Council for
Vocational Training (NCVT)
Professional services provided to foreign diplomatic mission located in India 1,04,000
Compute the GST payable by Parikshit Ltd. assuming that all the above receipts are exclusive of
GST wherever applicable and the rate of GST applicable on all the supplies is 18%.
Solution:
Computation of GST payable by Parikshit Ltd. for the month of March
Particulars Value GST @

(₹) 18% (₹)
Fees from prospective employers for campus interview in its college 5,20,000 93,600
[Taxable since such services are not specifically exempt]
Five buses each with seating capacity of 40 passengers given on hire to Nil Nil
State Transport Undertaking
[Services by way of giving on hire to a State transport undertaking (STU), a motor
vehicle meant to carry more than 12 passengers, are exempt vide Notification No.
12/2017 CT(R) dated 28.06.2017 (hereinafter referred to as exemption
notification).]

Receipts of Shiny– a coaching institute 1,82,000 32,760
are exempt vide exemption notification. However, coaching institute is not an
educational institution.]
Interest received on fixed deposits of the company with Dhanvarsha Bank Nil Nil
[Services by way of extending deposits, loans or advances in so far as the
consideration is represented by way of interest or discount (other than interest
involved in credit card services) are exempt vide exemption notification.]
Receipts from Boarding School including receipts for residential dwelling Nil Nil
service
are exempt vide exemption notification. Boarding School providing education up
to higher secondary school or equivalent is an educational institution since it
provides composite supply of education service coupled with other services like
providing dwelling units for residence and food wherein the principal supply is
supply of education service.]
Receipts of Sikshit Samudai Nil Nil

are exempt vide exemption notification. Sikshit Samudai is an educational
institution running approved vocational education course.]
Receipts of 'Pratibha Institute' running Modular Employable Skill Course Nil Nil
are exempt vide exemption notification. Pratibha Institute is an educational
institution running approved vocational education course.]
Professional services provided to foreign diplomatic mission located in 1,04,000 18,720

India
[While services provided by a foreign diplomatic mission located in India are
exempt from GST vide exemption notification, no such exemption is available to
the services provided to such mission.]
GST payable 8,06,000 1,45,080
30. Paridhi Ltd. is a registered manufacturer engaged in taxable supply of goods. Paridhi Ltd. purchased
the following goods during the month of January and provided the following information:
S. Particulars GST paid
No. (₹)
1. Capital goods purchased on which depreciation has been taken on full value 15,000
including input tax thereon
2. Goods purchased from Rupesh Enterprises 20,000

(Rupesh Enterprises sent the invoice in the month of January, but goods were
received in month of April)
3. Car purchased for making further supply of such car. Such car is destroyed in 30,000
accident while being used for test drive by potential customers
4. Goods used for setting up telecommunication towers being immovable property 50,000
5. Goods purchased from Sumo Ltd. 10,000

(Full payment has been made by Paridhi Ltd. to Sumo Ltd. against such supply,
but tax has been deposited by Sumo Ltd. in April)
6. Truck purchased for delivery of output goods 80,000
Determine the amount of input tax credit (ITC) available to Paridhi Ltd. while filing GSTR-3B for the
month of January by giving necessary explanations for treatment of various items as per the
provisions of the CGST Act, 2017. You may assume that all the necessary conditions for availing the
ITC have been complied with by Paridhi Ltd.
Solution:
Computation of ITC available with Paridhi Ltd. in January
No. (₹)
1. Capital goods Nil

[Since depreciation has been claimed on the tax component of the value of the capital
goods, ITC of such tax cannot be availed in terms of section 16 of the CGST Act, 2017.]
2. Goods purchased from Rupesh Enterprises Nil

[ITC in respect of goods not received cannot be availed (Section 16 of the CGST Act,
2017). Since the goods have been received in the month of April, ITC thereon can be
availed in April and not January even though the invoice for the same has been received
in January.]
3. Cars purchased for making further supply Nil

[Though ITC on motor vehicles used for further supply of such vehicles is not blocked,
ITC on goods destroyed for whichever reason is blocked (Section 17(5) of the CGST
Act, 2017).]
4. Goods used for setting telecommunication towers Nil

[ITC on goods used by a taxable person for construction of immovable property on his
own account is blocked even when such goods are used in the course or furtherance of
business (Section 17 of the CGST Act, 2017).]
5. Goods purchased from Sumo Ltd. 10,000
[ITC can be claimed provisionally in January since all the conditions necessary for
availing the same have been complied with (Section 16 of the CGST Act, 2017).
However, the claim will get confirmed only when the tax charged in respect of such supply
has been actually paid to the Government.]
6. Trucks purchased for delivery of output goods 80,000

[ITC on motor vehicles used for transportation of goods is not blocked (Section 17(5)
of the CGST Act, 2017).]
Total ITC available with Paridhi Ltd. 90,000

GST By CA Suraj Agrawal SATC MCQ A.1
GST MCQ – SET ‘A’

1. Mr. X, a registered supplier of Meghalaya wants to opt for composition levy under Section
10(1). The turnover limit for composition levy is-
a. ` 50 lakh
b. ` 75 lakh
c. ` 1 crore
d. none of the above
2. The persons making inter-State supplies from Madhya Pradesh is compulsorily required to
get registered under GST, _____
(a) if his all India based aggregate turnover exceeds ` 20 lakh in a financial year
(b) if his all India based aggregate turnover exceeds ` 10 lakh in a financial year
(c) irrespective of the amount of aggregate turnover in a financial year
(d) in case of making inter-State supply of taxable goods, irrespective of the amount of aggregate
turnover in a financial year
3. Which of the following services are exempt under GST?
(a) testing of agricultural produce
(b) supply of farm labour
(c) warehousing of agricultural produce
(d) all of the above
4. Mr. Suraj Agrawal has booked a room on rent in Sunshine Hotel for the purpose of lodging
on 10.08.20XX. GST is not payable by Mr. Suraj Agrawal in case value of supply for the same
is ____
(a) ` 800
(b) ` 6000
(c) ` 11000
(d) ` 1500
5. Input tax credit is not available in respect of _______.
(a) services on which tax has been paid under composition levy
(b) free samples
(c) goods used for personal consumption
6. Mr. Vansh, a registered person, deals in supply of taxable goods. He need not issue tax
invoice for the goods supplied on 16.04.20XX as the value of the goods is ___.
(a) ` 1,200
(b) ` 600
(c) ` 150
(d) ` 200

7. Transportation of goods by____are exempt from GST. (i) road (ii) inland waterways (iii)
goods transportation agency (iv) courier agency
(a) (i) & (ii)
(b) (iii) & (iv)
(c) (i) and (iv)
(d) (i) [except (iii) & (iv)] & (ii)
8. Transportation of ____by rail from Chennai to Gujarat are exempt from GST. (i) pulses (ii)
military equipments (iii) electric equipments (iv) biscuits
(a) (i) & (ii)
(b) (i) & (iii)
(c) (ii) & (iv)
9. Services by way of warehousing of _____is exempt from GST. (i) processed tea (ii) jaggery
(iii) processed coffee (iv) rice
(a) (i) & (ii)
(b) (iii)
(c) (iv)
10. GST is payable by recipient of services in the following cases:- (i) Services provided by way
of sponsorship to ABC Ltd. (ii) Services supplied by a director of Galaxy Ltd. to CA Suraj
Agrawal. (iii) Services by Department of Posts by way of speed post to MNO Ltd. (iv)
Services supplied by a recovering agent to SNSP Bank
(a) (i) & (iii)
(b) (i) & (iv)
(c) (ii) & (iii)
(d) (ii) & (iv)
11. Which of the following statement is true for Mr. X, a casual taxable person?
(a) Mr. X is not required to take registration under GST.
(b) Mr. X is required to get registration under GST, if the aggregate turnover in a financial year
exceeds ` 20 lakh.
(c) Mr. X can opt for voluntary registration under GST.
(d) Mr. X has to compulsorily get registered under GST irrespective of the threshold limit.
12. The registration certificate granted to Non resident taxable person is valid for _____days
from the effective date of registration or period specified in registration application,
whichever is ealier.
(a) 30
(b) 60
(c) 90
(d) 120

13. Which of the following activity shall be treated neither as a supply of goods nor a supply of
services?
i. Permanent transfer of business assets where input tax credit has been availed on such
assets
ii. temporary transfer of intellectual property right
iii. transportation of deceased
iv. services by an employee to the employer in the course of employment
(a) (i) & (iii)
(b) (ii) & (iv)
(c) (i) & (ii)
(d) (iii) & (iv)
14. Balance in electronic credit ledger can be utilized against which liability?
(a) Output tax payable
(b) Interest
(c) Penalty
15. What is the due date for payment of tax for a normal taxpayer?
(a) Last day of the month to which payment relates
(b) Within 10 days of the subsequent month
(c) Within 20 days of the subsequent month
(d) Within 15 days of the subsequent month
16. How the aggregate turnover is calculated for computing threshold limit of registration?
i. Aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is
payable by a person on reverse charge basis), exempt supplies, export of goods/services and
interstate supplies of a person having same PAN computed on all India basis.
ii. Aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is
interstate supplies of a person computed for each state separately.
iii. Aggregate value of all taxable intrastate supplies, export of goods/services and exempt
supplies of a person having same PAN computed for each state separately.
iv. Aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is
interstate supplies of a person having same PAN computed on all India basis and excluding
taxes if any charged under CGST Act, SGST Act and IGST Act.
(a) (i)
(b) (ii)
(c) (iii)
(d) (iv)
17. Within how many days a person should apply for registration?
(a) Within 60 days from the date he becomes liable for registration.
(b) Within 30 days from the date he becomes liable for registration.
(c) No Time Limit
(d) Within 90 days from the date he becomes liable for registration.

18. A person having ____place of business in a State ____obtain a separate registration for
each place of business.
(a) Single, shall
(b) Multiple, shall
(c) Multiple, may
(d) Single, May
19. What is the validity of the registration certificate?

(a) One year
(b) No validity
(c) Valid till it is cancelled.
(d) Five years.
20. Within how many days an application for revocation of cancellation of registration can be
made (Suraj Agrawal Tax Class – 8527230445)?
a. Within 7 days from the date of service of the cancellation order.
b. Within 15 days from the date of issue of the cancellation order.
c. Within 45 days from the date of issue of the cancellation order.
d. Within 30 days from the date of service of the cancellation order.
21. Can a registered person opting for composition scheme collect GST on his outward
supplies?
(a) Yes, in all cases
(b) Yes, only on such goods as may be notified by the Central Government
(c) Yes, only on such services as may be notified by the Central Government
(d) No
22. In case of Goods Transport Agency (GTA) services, tax is to be paid under forward charge
if:
(a) GST is payable @ 12%
(b) GST is payable @ 5% and a factory registered under the Factories Act, 1948 is the recipient of
GTA service.
(c) GST is payable @ 5% and an unregistered individual end customer is the recipient of GTA
service.
23. Which of the following services are not exempt from GST?
(a) Yoga camp conducted by a charitable trust registered under section 12AA of the Income-tax
Act, 1961.
(b) Services provided by business correspondent to the rural branch of a bank with respect to
Savings Bank Accounts
(c) Services provided by cord blood bank for preservation of stem cells.
(d) Service provided by commentator to a recognized sports body
24. The term ‘goods’, as defined under section 2(52) of the CGST Act, 2017, does not include-
(a) Grass
(b) Money and securities
(c) Actionable claims
(d) Growing crops
25. Jatin Ltd. has provided following information for the month of September:
i. Intra-State outward supply ` 8,00,000/-
ii. Inter-State exempt outward supply ` 5,00,000/-
iii. Turnover of exported goods ` 10,00,000/-
iv. Payment made for availing GTA services ` 80,000/-
Calculate the aggregate turnover of Jatin Ltd.

(a) ` 8,00,000/-
(b) ` 23,80,000/-
(c) ` 23,00,000/-
(d) ` 18,00,000/-
26. ‘P’ Ltd. has its registered office, under the Companies Act, 2013, in the State of Maharashtra
from where it ordinarily carries on its business of taxable goods. It also has a warehouse in
the State of Telangana for storing said goods. What will be the place of business of ‘P’ Ltd.
under the GST law?
(a) Telangana
(b) Maharashtra
27. An exempt supply includes-

(a) Supply of goods or services or both which attracts Nil rate of tax
(b) Non-taxable supply
(c) Supply of goods or services or both which are wholly exempt from tax under section 11 of the
CGST Act or under section 6 of IGST Act
28. Which of the following are services exempt from GST?

(a) Services by an artist by way of a performance in folk or classical art, forms of
painting/sculpture making etc. with consideration therefor not exceeding ` 1.5 lakh.
(b) Services by an artist by way of a performance in modern art forms of music/ dance/ theatre
with consideration therefor not exceeding ` 1.5 lakh.
(c) Services by an artist by way of a performance in folk or classical art forms of music/
dance/theatre with consideration therefor exceeding ` 1.5 lakh.
(d) Services by an artist by way of a performance in folk or classical art forms of music/ dance /
theatre with consideration therefor not exceeding ` 1.5 lakh.
29. Services by way of admission to ______________ are exempt from GST.

(a) Museum
(b) National park
(c) Tiger reserve (SATC)
30. Discount given after the supply is deducted from the value of taxable supply, if –
(a) such discount is given as per the agreement entered into at/or before the supply
(b) such discount is linked to the relevant invoices
(c) proportionate input tax credit is reversed by the recipient of supply

31. In which of the following situations, taxpayer needs to reverse the credit already taken?
(a) If payment is not made to the supplier within 45 days from the date of invoice
(b) If payment is not made to the supplier within 90 days from the date of invoice
(c) If payment is not made to the supplier within 180 days from the date of invoice
32. Which of the following statements are correct?

i. Revocation of cancellation of registration under CGST/SGST Act shall be deemed to be a
revocation of cancellation of registration under SGST/CGST Act.
ii. Cancellation of registration under CGST/SGST Act shall be deemed to be a cancellation of
registration under SGST/CGST Act.
iii. Revocation of cancellation of registration (suraj agrawal sir) under CGST/SGST Act shall not
be deemed to be a revocation of cancellation of registration under SGST/CGST Act.
iv. Cancellation of registration under CGST/SGST Act shall not be deemed to be a cancellation of
registration under SGST/CGST Act.
(a) (i) and (ii)
(b) (i) and (iv)
(c) (ii) and (iii)
(d) (iii) and (iv)
33. If the goods are received in lots/installment, ------------------------------

(a) 50% ITC can be taken on receipt of 1st installment and balance 50% on receipt of last
installment.
(b) ITC can be availed upon receipt of last installment.
(c) 100% ITC can be taken on receipt of 1st installment.
(d) Proportionate ITC can be availed on receipt of each lot/installment.
34. For banking companies using inputs and input services partly for taxable supplies and
partly for exempt supplies, which of the statement is true?
(a) ITC shall be compulsorily restricted to credit attributable to taxable supplies including zero
rated supplies
(b) 50% of eligible ITC on inputs, capital goods, and input service shall be mandatorily taken in a
month and the rest shall lapse.
(c) Banking company can choose to exercise either option (a) or option (b)
35. A supplier takes deduction of depreciation on the GST component of the cost of capital
goods as per Income- tax Act, 1961. The supplier can-
(a) avail only 50% of the said tax component as ITC
(b) not avail ITC on the said tax component
(c) avail 100% ITC of the said tax component
(d) avail only 25% of the said tax component as ITC
36. Warehousing of _____________ is exempt from GST.

1) Rice
2) Minor forest produce
3) Jaggery
4) Whole gram

(a) 1), 2) and 4)
(b) 1) and 3)
(c) 2), 3) and 4)
(d) 3)
37. Which of the following services received without consideration amount to supply?
1. Import of services by a person in India from his son well-settled in USA
2. Import of services by a person in India from his brother well-settled in Germany
3. Import of services by a person in India from his brother (wholly dependent on such person in
India) in France
4. Import of services by a person in India from his daughter (wholly dependent on such person in
India) in Russia
(a) 1), 3) and 4)
(b) 2), 3) and 4)
(c) 2) and 3)
(d) 1) and 2)
38. Which of the following persons is not eligible for composition scheme even though their
aggregate turnover does not exceed ` 1.5 crore in preceding FY, in Uttar Pradesh?
(a) A person supplying restaurant services
(b) A person supplying restaurant services and earning bank interest
(c) A person supplying restaurant services and warehousing of rice
(d) A person supplying restaurant services and manufacturing of Pan-masala
39. The time of supply of service in case of reverse charge mechanism is

(a) Date on which payment is made to the supplier
(b) Date immediately following 60 days from the date of issue of invoice
(c) Date of invoice
(d) Earlier of (a) and (b)
40. Which of the following services does not fall under reverse charge provisions as contained
under section 9(3) of the CGST Act?
(a) Services supplied by arbitral tribunal to business entity
(b) Sponsorship provided to any partnership firm
(c) Sponsorship provided to any body corporate
41. Transport of ______________ by rail are exempt from GST:

(a) Milk
(b) Salt
(c) Defence equipments
42. ITC of motor vehicles used for _________________ is allowed.

(a) Transportation of goods
(b) Transportation of passengers
(c) Imparting training on driving
43. Which of the following persons is required to obtain compulsory registration?
(a) Persons exclusively engaged in making supplies tax on which is to be paid by the recipient on
reverse charge basis under section 9(3) of the CGST Act, 2017.
(b) Persons making inter-State supplies of taxable services up to ` 20,00,000
(c) Persons making supplies of services through an ECO (other than supplies specified under
section 9(5) of the CGST Act) with aggregate turnover up to ` 20,00,000
(d) None of the above.
44. A non-resident taxable person is required to apply for registration:

(a) within 30 days from the date on which he becomes liable to registration
(b) within 60 days from the date on which he becomes liable to registration
(c) at least 5 days prior to the commencement of business
45. Registration certificate granted to casual taxable person or non-resident taxable person will
be valid for:
(a) Period specified in the registration application
(b) 90 days from the effective date of registration
(c) Earlier of (a) or (b)
(d) Later of (a) or (b)
46. In case of taxable supply of services by a non- banking financial company (NBFC), invoice
shall be issued within a period of __________ from the date of supply of service.
(a) 30 days
(b) 45 days
(c) 60 days
(d) 90 days
47. Where the goods being sent or taken on approval for sale or return are removed before the
supply takes place, the invoice shall be issued:
(a) before/at the time of supply.
(b) 6 months from the date of removal.
(c) Earlier of (a) or (b).
(d) Later of (a) or (b).
48. Invoice shall be prepared in (i) ___________ in case of taxable supply of goods and in
(ii)_____________ in case of taxable supply of services.
(a) (i) Triplicate, (ii) Duplicate
(b) (i) Duplicate, (ii) Triplicate
(c) (i) Duplicate, (ii) Duplicate
49. Which of the following shall be discharged first, while discharging liability of a taxable
person?
(a) All dues related to previous tax period
(b) All dues related to current tax period
(c) Demand raised under section 73 and 74
(d) No such condition is mandatory.

50. The due date of filing Final Return is ______.
(a) 20th of the next month
(b) 18th of the month succeeding the quarter
(c) Within 3 months of the date of cancellation or date of order of cancellation, whichever is later
(d) 31st December of next financial year
51. Which of the following statements is true under GST?

(a) Grand-parents are never considered as related persons to their grandson/granddaughter
(b) Grand-parents are always considered as related persons to their grandson/granddaughter
(c) Grand-parents are considered as related persons to their grandson/granddaughter only if they
are wholly dependent on their grandson/granddaughter

(d) GST
53. Input Tax Credit of IGST can be utilised in the following sequence:
(a) SGST/UTGST, CGST, IGST (SATC)
(b) IGST, CGST or SGST/UTGST in any order
(c) IGST, SGST/UTGST, CGST
(d) CGST, SGST/UTGST, IGST
54. Mr. A has a tax invoice [dated 20-1-2021] of services received by him. Its input tax credit is
lost if ITC is not availed on or before–
(a) 20-1-2022
(b) 31-12-2021
(c) 20-1-2021
(d) date of filing return of September, 2021 or date of filing of annual return for 2020-21, whichever
is earlier.
55. Input tax credit shall not be available in respect of:

(a) Goods used for personal consumption
(b) Membership of a club
(c) Travel benefits extended to employees on vacation such as leave or home travel concession
(d) All of the Above
56. Which of the following is not considered as ‘goods’ under the CGST Act, 2017?
(a) Sale of a ten-paisa coin having sale value of ` 100/-
(b) Sale of shares of unlisted company
(c) Sale of lottery tickets

57. Mr. Reyaan, a jeweller registered under GST in Mumbai, wants to sell his jewellery in a Trade
Expo held in Delhi. Which of the following statements is false in his case?
(a) He needs to get registration in Delhi as casual taxable person.
(b) He needs to pay advance tax on estimated tax liability.
(c) He needs to mandatorily have a place of business in Delhi.
(d) He needs to file GSTR-1 and GSTR-3B for Delhi GSTIN for the month when he is registered in
Delhi.
58. Which of the following is not a composite supply?

(a) Supply of charger and mobile phone
(b) Supply of battery and inverter
(c) Supply of cement under works contract services
59. Which of the following is treated as exempt supply under the CGST Act, 2017?
(a) Sale of liquor
(b) Supply of health care services
(c) Supply of electricity
60. Which of the following is a recognised system of medicine for the purpose of exemption for
health care services?
(a) Allopathy
(b) Unani
(c) Siddha
61. Which of the following services is exempt under health care services provided by clinical
establishments?
(a) Chemist shop in the hospital selling medicines to public at large
(b) Food supplied from an outsourced canteen to in-patients as per diet prescribed by the hospital
dietitian
(c) Advertisement services provided by the hospital to a pharmaceutical company for their asthma
pump by displaying it prominently in the hospital building
62. In case of supply of goods for ` 5,00,000, following information is provided-

i. Advance received on 1-Apr-20XX
ii. Invoice issued on 15-Apr-20XX
iii. Goods removed on 25-Apr-20XX
What is the time of supply of goods?

(a) 1-Apr-20XX
(b) 15-Apr-20XX
(c) 25-Apr-20XX
(d) 30-Apr-20XX

63. Mr. Sham is receiving legal services from a lawyer Mr. Gyan. The information regarding
date of payment, invoice etc. is as follows-
i. Invoice issued by Mr. Gyan on 15-Apr-20XX
ii. Payment received by Mr. Gyan on 5-May-20XX
iii. Date of payment entered in books of accounts of Sham: 1-May-20XX
What is time of supply of goods?

(a) 1-May-20XX
(b) 5-May-20XX
(c) 14-Jun-20XX
(d) 15-Apr-20XX
64. Which of the following is not eligible for opting composition scheme u/s 10(1) under GST?
(a) M/s ABC, a firm selling garments having annual turnover of ` 78 lakh.
(b) A startup company operating restaurant in Delhi having a annual turnover of ` 98 lakh.
(c) A courier service company operating solely in Mumbai having annual turnover of ` 90 lakh.
(d) A trader selling grocery items having an annual turnover of ` 95 lakh.
65. Which of the following is not a supply of services?

(a) Renting of Commercial Office Complex
(b) Payment of Non-Compete Fee by an ex-employee to his previous employer
(c) Repairing of Mobile Phone of Vansh Manager at SATC
(d) Permanent transfer of business assets on which ITC is availed
ANSWER KEY
1 B 11 D 21 D 31 C 41 D 51 C 61 B
2 D 12 C 22 A 32 A 42 D 52 C 62 B
3 D 13 D 23 D 33 B 43 D 53 B 63 A
4 A 14 A 24 B 34 C 44 C 54 D 64 C
5 D 15 C 25 C 35 B 45 C 55 D 65 D
6 C 16 D 26 C 36 A 46 B 56 B
7 D 17 B 27 D 37 A 47 C 57 C
8 A 18 C 28 D 38 D 48 A 58 B
9 C 19 C 29 D 39 D 49 A 59 D
10 B 20 D 30 D 40 D 50 C 60 D
THANK YOU
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2b CA Intermediate GST Question Bank 8th Edition Dec 2021 Exam

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CA INTERMEDIATE

SURAJ AGRAWAL TAX CLASS

This question Bank is based on GST Book issued to CA INTERMEDIATE Students

Email: [email protected]; Mobile: 85272 30445

I dedicate this book to my beloved late Grandparents & Papa.

“One more step towards success”

GST - PRACTICE TEST PAPER - SET ‘A’

GST - PRACTICE TEST PAPER - SET ‘B’

GST - PRACTICE TEST PAPER - SET ‘C’

GST – PRACTICE TEST PAPER – SET ‘D’

GST - PRACTICE TEST PAPER - SET ‘E’

GST - PRACTICE TEST PAPER - SET ‘F’

GST - PRACTICE TEST PAPER - SET ‘G’

GST - PRACTICE TEST PAPER - SET ‘H’

GST - PRACTICE TEST PAPER – SET ‘I’

GST - PRACTICE TEST PAPER - SET ‘J’

GST - PRACTICE TEST PAPER - SET ‘K’

GST - PRACTICE TEST PAPER - SET ‘L’

GST - PRACTICE TEST PAPER - SET ‘N’

GST - PRACTICE TEST PAPER - SET ‘O’

GST - PRACTICE TEST PAPER - SET ‘P’

GST - PRACTICE TEST PAPER - SET ‘Q’

GST - PRACTICE TEST PAPER - SET ‘R’

GST - PRACTICE TEST PAPER - SET ‘S’

GST - PRACTICE TEST PAPER - SET ‘T’

GST - PRACTICE TEST PAPER - SET ‘U’

GST - PRACTICE TEST PAPER - SET ‘V’

GST - PRACTICE TEST PAPER - SET ‘W’

24 GST - PRACTICE TEST PAPER - SET ‘X’ X.01 – X.08 19 Questions

25 GST - PRACTICE TEST PAPER - SET ‘Y’ Y.01 – Y.08 24 Questions

26 GST - PRACTICE TEST PAPER - SET ‘Z’ Z.01 – Z.24 30 Questions

MCQ GST MCQ - SET ‘A’ 12 Pages 65 MCQs

S. Particulars CGST @9% SGST @9% (₹) IGST @18% Total

Computation of total ITC

Particulars CGST SGST IGST

Computation of minimum GST payable from electronic cash ledger

Particulars CGST SGST IGST Total

(ii) Third party inspection charges 5,000

(iii) Freight charges for delivery of the machine 2,000

Note: Price of the machine is net of the subsidy received.

SURAJ AGRAWAL TAX CLASS | NEW DELHI | +91 85272 30445

Particulars Amount (₹)

Freight charges for delivery of the machine 2,000

Kartik & Co. asks you to answer the following:

(i) List - I (UNION LIST):

(ii) List - II (STATE LIST):

(iii) List - III (CONCURRENT LIST):

SURAJ AGRAWAL TAX CLASS | NEW DELHI | +91 85272 30445

SURAJ AGRAWAL TAX CLASS | NEW DELHI | +91 85272 30445

The trust received following donations during the month of September:-

A. Which of the following activities conducted by trust is exempt from GST?

SURAJ AGRAWAL TAX CLASS | NEW DELHI | +91 85272 30445

S. No. Particulars GST Paid

SURAJ AGRAWAL TAX CLASS | NEW DELHI | +91 85272 30445

1(A) (B) (C) (D) 2 3 4 5 6

7. [E-INVOICE] Determine in which of the following independent cases, e-invoicing is applicable?

Balance of ITC available at the beginning of the August:-

SURAJ AGRAWAL TAX CLASS | NEW DELHI | +91 85272 30445

S.No. Particulars (₹) GST (₹)