CA Inter Taxation Important Questions For May 2019 | By CA Inter Toppers

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  1. Ownership itself is the criteria for assessment under the head income from house property. Discuss.

  2. Discuss the following issues relating to Income from house property:

  • Income earned by residents from house properties situated in foreign countries.
  • Properties which are used for agricultural purpose
  1. a) X let out his property to Y. Y sublets it. How is a sub-letting receipt to be assessed in the hands of Y?

b) Y has built a house on leasehold land. He has let out the property and claims that the income therefrom is chargeable under the head “Income from other sources”. He has deducted expenses on repairs, security charges, insurance and collection charges in all amounting to 40% of receipts. Is Mr Y’s claim valid?

c) Z uses his property for his own business. Would the annual value be subject to tax under the head “Income from house property”?

d) Ravan was an assessee who is engaged in the business of real estate, he lets out a building (stock in trade) to Ram for the period May 2018 to November 2018 due to his worst business conditions. He wants to claim avail a benefit under the head income from house properties. He needs your advice in this regard as an Income tax practitioner.

  1. Write about Taxability of recovery of unrealized rent & arrears of rent received U/S 25A?

  2. What do you understand by “Composite Rent”? What is the tax treatment of Composite Rent under the Income-tax Act, 1961?

PGBP

  1. What are intangible assets? Give four examples. What is the rate of depreciation on a block of intangible assets? Discuss the concept of “block of assets” under the Income-tax Act, 1961.
  2. List out the applicable depreciation rates as per sec. 32 of the Income Tax Act, 191.
  3. State whether the deduction under Sec 35 AD is applicable to an assessee who is engaged in the business of developing the infrastructural facilities and recommended his business on 14.05.2017 in pursuance to an agreement with A.P government.
  4. Would your answer be the same if the assessee pays a sum of Rs? 12,000 in a cheque in respect of the same business?
  5. Write a short note on Sec.35CCC, 35CCD.
  6. SBI ltd has claimed a provision of bad debts of Rs.17 crores under Sec.36(l) (viia). The bank submits you the following information. i) Gross total income is Rs.200 crores ii) No advances have been given by its rural branches. But the chairman seeks your advice that it can do so as far as the Income Tax Act is concerned.
  7. What are the conditions to be satisfied for the allowability of expenditure under section 37 of the Income-tax Act, 1961?
  8. State with reasons, for the following sub-divisions, whether the following statements are true or false having regard to the provisions of the Income-tax Act, 1961:
  • For a dealer in shares and securities, securities transaction tax paid in a recognized stock exchange is permissible business expenditure.
  • Where a person follows the mercantile system of accounting, an expenditure of Rs. 15,000 has been allowed on the accrual basis and in a later year, in respect of the said expenditure, assessee makes the payment of Rs. 15,000 through a cheque crossed. The disallowance of Rs. 15,000 under section 40A(3) can be attracted in the year of payment.
  • It is mandatory to provide for depreciation under section 32 of the Income-tax Act, 1961 while computing income under the head “Profits and Gains of Business or Profession”.
  • The medical premium paid to GIC by Mr Lomesh for his employees, by a draft, on 27.12.2018 is a deductible expenditure under section 36.
  • Under section 35DDA, amortization of expenditure incurred under eligible Voluntary Retirement Scheme at the time of retirement alone can be done.
  • An existing assessee engaged in trading activities can claim additional depreciation under Section 32(l)(iia) in respect of new plant acquired and installed in the trading concern, where the increase in the value of such plant as compared to the approved base year is more than 10%.
  1. Answer the following with reference to the provisions of the Income-tax Act, 1961:
  • Bad debt claim disallowed in an earlier assessment year, recovered subsequently. Is the sum recovered chargeable to tax?
  • Tax deducted at source on salary paid to employees not remitted till the ‘due date’ for filing the return prescribed in section 139. Is the expenditure to be disallowed under section 40(a)(ia)?
  • X Co. Ltd. paid Rs. 120 lakhs as compensation as per approved Voluntary Retirement Scheme (VRS) during the financial year 2018-19. How much is deductible under section 35DDA for the assessment year 2019-20?
  1. Write short notes on:
  • Restrictions on deductions allowable to the partnership firm in respect of salary and interest to its partners under section 40(b) of the Income-tax Act, 1961.
  • Carry forward and set off of unabsorbed depreciation.
  • Additional depreciation.
  1. X Ltd. follows the mercantile system of accounting. After negotiations with the bank, interest of Rs.4 lakhs (including interest of Rs.1.2 lakhs pertaining to the year ended 31.03.2019 has been converted into a loan. Can the interest of Rs.1.2 lakhs so capitalized be claimed as business expenditure?

  2. List items of expenses which otherwise are deductible shall be disallowed unless payments are actually made within the due date for furnishing the return of income under Section 139(1). When can the deduction be claimed, if paid after the said date?

  3. Raghav Industries Ltd. furnishes you the following information for the year ended 31-03-2019:

  • Scientific research expenditure related to its business of RS 2, 40, 000 fully revenue in nature.
  • Building acquired for scientific research (including cost of land Rs.5,00,000) in June 2018 for Rs.12,00,000. Amount paid to Indian Institute of Science, Bangalore of scientific research Rs. 50,000.
  • Demerger expenses incurred in financial year 2017-18 Rs.5,00,000.
  • Contribution to the account of employees per pension scheme referred to in section 80CCD amounted to Rs.30,00,000. The amount above 10%  of the salary of the employees is Rs.7,00,000.
  • Amount recovered from employees towards provident fund contribution Rs.12,00,000 of which amount remitted up to the end of the year was Rs.7,00,000 and the balance was remitted before the ‘due date’ for filing the return prescribed in Section 139(1).
  • Tax on non-monetary perquisites provided to the employees, borne by the employer Rs.4,50,000.
  • Gain due to change in the rate of exchange of foreign currency Rs.1,00,000 related to the import of machinery. The machinery was acquired two years ago and put to regular use since then.
  • Explain in brief how the above-said items would be dealt with for the A.Y. 2019-20.
  1. Explain the tax treatment of Limited Liability Partnership under the Income-tax Act, 1961?

  2. Write about Sec.44AD, 44ADA and 35ABA.

  3. State the validity of the below statement in accordance with the Income-tax Act, 1961:

“It is mandatory to get the books of accounts audited for an assessee who is paying tax under Sec.44AA and whose total income is Rs.1.98 crores”.

  1. Discuss, on the basis of the provisions of Income-tax Act, 1961 as amended by the Finance Act, 2018, the correctness or otherwise of the following statements.
  • Where new plant and machinery acquired during the P.Y. 2018-19 is put to use for less than 180 days in that year, additional depreciation allowable under section 32(1)(iia) for A.Y.2019-20 is restricted to 10% (i.e., 50% of 20%). The balance additional depreciation cannot be claimed in future.
  • New machinery has been purchased for Rs.3,00,000 which was paid in by way of a bearer cheque and the assessee can claim the depreciation on the same as the same was not in violation with Sec.43(l) to be termed as actual cost?
  • A manufacturing company set up in Vaishali, a notified backward area in the State of Bihar, acquires and installs new plant and machinery for Rs.30 crores in the P.Y. 2018-19. For A.Y.2019-20, it is entitled to deduction either under section 32AC or section 32AD, but not both.
  1. Discuss the deductibility or otherwise of the following expenditure incurred by Punit Agro Industries, while computing its business income for the year ended 31-03-2019:
  1. Revenue expenditure of Rs. 5,65,000 on scientific research related to its business.
  2. Land & Building acquired for scientific research (cost of land is Rs. 9,50,000) in September 2018 for Rs. 22,00,000.
  3. Contribution to the account of employees as per pension scheme referred to in section 80CCD amounted to Rs. 45,00,000. The amount above 10% of the salary of employees is Rs. 6,80,000.
  4. Tax on non-monetary perquisites provided to the employees, borne by the employer Rs. 5,50,000.
  5. Comment on the allowability of the following claim made by the assessee:
  1. Mr Achal, a hotelier, claimed expenditure on replacement of linen and carpets in his hotel as revenue expenditure.
  1. Which are the deductions allowable only on actual payment under section 43B?
  2. Write short notes on –
  • Enhanced depreciation
  • Set-off and carry forward of unabsorbed depreciation

CAPITAL GAINS

  1. State the validity of the following statements –
  • The provisions of capital gains will not attract denominated bonds held by him to another non-n
  • The provisions of capital gains will not attract^^Si case where a transfer has been made by way of conversion of preference shares of a company into equity shares of that company.
  • In case of non-resident assessees, any gains arising on account of rupee appreciation against a foreign currency at the time of redemption of the rupee-denominated bond of an Indian company held by him shall not be included in the computation of the full value of consideration.
  1. “The consideration shall be deemed to be the FMV in a case where unlisted shares were transferred at a consideration which is less than the FMV”. Is this statement valid?
  2. Discuss the provision under the Income-tax Act, 1961 for payment of advance tax in case of capital gains.
  3. What is the difference between 43CA and 50C?
  4. Write about Sec.45(5A), 54EE.
  5. Write a short note on the reverse mortgage.
  6. Abhishek a senior citizen pledged his residential house with a bank, under a notified reverse mortgage scheme. He was getting a loan from the bank in monthly instalments. Mr Abhishek did not repay the loan on maturity and hence gave possession of the house to the bank, to discharge his loan. How will the treatment of long-term capital gain be on such reverse mortgage transaction?
  7. How will you calculate the cost of acquisition in case of the following assets?
  • equity shares received at the time of conversion of preference shares  c) units acquired under the consolidated plan of   Mutual Fund
  • capital asset, being share in the project referred under section 45(5A)
  1. Discuss the tax implications arising consequent to the conversion of a capital asset into stock-in-trade of business and its subsequent sale.

  2. What is the cost of acquisition of self-generated assets, for the purpose of computation of capital gains?

`10. List ten transactions which are not regarded as transfer for the purpose of capital gains. Discuss the provisions relating to the same.

  1. Ms Vasudha contends that sale of a work of art held by her is not eligible to capital gains tax. Is she correct?

  2. State, with reasons, whether the following statements are True or False.

  • Alienation of a residential house in a transaction of the reverse mortgage under a scheme made and notified by the Central Government is treated as “transfer” for the purpose of capital gains.
  • Zero coupon bonds of the eligible corporation, held for more than 12 months, will be long-term capital assets.
  • In the case of a dealer in shares, income by way of dividend is taxable under the head “Profits and gains of business or profession”.
  • Where an urban agricultural land owned by an individual, continuously used by him for agricultural purposes for a period of two years prior to the date of transfer, is compulsorily acquired under the law and the compensation is fixed by the State Government, the resultant capital gain is exempt.
  • Zero Coupon Bond means a bond on which no payment and benefits are received or receivable before maturity or redemption.
  • Income from growing and manufacturing tea in India is treated as agricultural income wholly.
  1. How will you calculate the period of holding in case of the following assets?
  • Shares held in a company in liquidation
  • Bonus shares
  • Flat in a co-operative society
  • Transfer of a security by a depository (i.e., demat account)
  1. Write short notes on –
  • Provisions relating to Capital gains in the case of slump sale under section 50B
  • Provisions relating to Reference to Valuation Officer under section 55A

INCOME FROM OTHER SOURCES

  1. State with proper reasons whether the following statement is True/False with regard to provisions of Income-tax Act, 1961:
  • A receives rs 2 lakhs from his marriage on 22.04.2018 and Rs 1 lakh from his includible under “other sources” for the previous year 2018-19 would be Rs 3 lakh.
  • Dividend received (on which no Divide engaged in buying/selling of shares, or one engaged in buying/selling of shares is chargeable under the head ” income from the other sources
  • Any amount received by an individual^br his legal heir as compensation for natural disaster from the Government is taxable.
  1. When would the dividend income be taxed in the hands of a shareholder?

  2. Write short notes on –

  1. Bond washing transactions c) Deduction under 57
  2. Dividend stripping
  1. Write about Sec. 115BBDA.

  2. State the incomes which are chargeable only under the head “Income from other sources”.

  3. What are the deductions allowable under section 57 of the Income-tax Act, 1961 in respect of “Income from other sources”?

CLUBBING PROVISIONS

  1. Write about Sec.64(2).
  2. Discuss the tax implications of income arising from the revocable transfer of assets. Write about the implications of clubbing provisions with respect to the recoverable transfer of assets.
  3. Explain the provisions of the Income-tax Act, 1961, with regard to clubbing of income of spouse under section 6
  4.  Discuss the tax consequences arising on the conversion of the self-acquired property into a joint family property.
  5. Write short notes on the following in the context of clubbing of income:
  • Substantial interest
  • Transfer and revocable transfer.

SET OFF AND CARRY FORWARD OF LOSSES

  1. Write about Sec.78,79.
  2. Explain the provisions of carrying forward and set off of business losses under section 72 of the Income-tax Act, 1961.
  3. Write short notes on-
  • Inter-head adjustment
  • Inter-source adjustment.
  1. Write short notes on: “Loss can be carried forward only by the person who has incurred the loss”.

DEDUCTIONS

  1. Write about the following Sections.
  • 80C d) 80CCG
  • 80CCD e) Sec.80C – LIC premium treatment and repayment of
  • 80EE housing loan
  1. Explain how contributions to political parties are deductible in the hands of corporate and non-corporate assessees under the income-tax law.

  2. Write short notes on-

  • Deduction in respect of royalty income on patents
  • Deduction in respect of royalty income of authors of certain books.
  • Deduction in respect of royalty income on patents.
  • Deduction from Gross Total Income under section 80GG.
  • Sheela, the widow of Mr Satish (who was an employee of M/s. XYZ Ltd.), received Rs. 7 lakhs on 01.05.2018, being amount standing to the credit of Mr Satish in his NPS Account, in respect of which deduction has been allowed under section 80CCD to Mr Satish in the earlier previous years. Such amount received by her as a nominee on the closure of the account is deemed to be her income for A.Y.2019-20.
  1. State with proper reasons whether the following statements are True/False with regard to the provisions of the Income-tax Act, 1961:
  • Mr Leena, the widow of Mr Sahitya (who was an employee of M/s. ABC Ltd.), received Rs. 9 lakhs on 11.12.2018, being amount standing to the credit of Mr Sahitya in his NPS Account, in respect of which deduction has been allowed under section 80CCD to Mr Sahitya in the earlier previous years. Such amount received by her as a nominee on the closure of the account is deemed to be her income for A.Y.2019-20.
  • Gopal, a businessman, whose total income (before allowing deduction under section 80GG) for A.Y.2019-20 is Rs. 3,80,000, paid house rent at Rs. 8,000 p.m. in respect of residential accommodation occupied by him at Chennai. He is eligible to claim a flat deduction of Rs. 60,000 under section 80GG for A.Y.2019-20.
  • Anay purchased a residential house property for self-occupation at a cost of Rs. 40 lakh on 01.07.2018, in respect of which he took a housing loan of Rs. 32 lakh from Oriental Bank of Commerce @ 11% p.a. on the same date. He does not own any other house property. He is eligible to claim a deduction of Rs. 2 lakh under section 24(b) out of the total interest paid or payable by him during the previous year 2018-19. He is not eligible for a deduction of interest paid by him under any other provision of the Income-tax Act, 1961.

RETURN OF INCOME

Explain in brief about the following – a) Loss return under Sec. 139(3).      c)            Revised return under Sec. 139(5).

  1. b) Belated return under Sec. 139(4). ) Defective return under Sec. 139(9)

Write a short note on the following –

  • a) Sec.l40A b) Sec 234
  1. assessee was not required to quote the Aadhar under Sec.l39AA in the application of allotment of PAN and return of income. Comment.

  2. Who can sign on a return of income under Sec.140?

  3. Explain the term “return of loss” under the Income-tax Act, 1961. Can any loss be carried forward even if the return of loss has not been filed as required?

  4. Is a political party required to file the return of Income? State the provisions applicable under the Income-tax Act, 1961.

  5. Filing of return of income on or before the due date is necessary for carrying forward of losses – Discuss the correctness of this statement.

  6. List ten transactions for which quoting of the permanent account number is mandatory.

  7. Who are the persons authorised to verify the return of income in the case of –

a) Hindu Undivided Family b) Company                        c) Partnership firm

EXEMPTED INCOMES

  1. An entrepreneur who was willing to commence his business in the FY 2020-21 being a manufacturer to manufacture or produce articles or things or provides services in SEZ as defined under SEZ Act, 2005 can claim deduction under Sec l0AA. Comment.
  2. Can a political party claim exemption of its incomes under section 13A of the Income-tax Act, 1961?
  3. When can a charitable trust avail benefits under section 11 & 12 of the Income-tax Act, 1961?
  4. What are the conditions to be fulfilled by a charitable Trust under section 12A for applicability of exemption provisions contained in sections 11 and 12?
  5. Write a short note on the following –
  • Exemption to a political party under Sec l3A.
  • Exemption to an electoral Trust under Sec l3B.

TDS&TCS

  1. Certain concessions are granted to transport operators in the context of cash payments under section 40A(3) and deduction of tax at source under section 194-C. Elucidate.
  2. Write a short note on the following a) l94IB  b) Sec.l94I                                         c) Sec.l97A
  3. XYZ Ltd. Makes a payment of Rs.28,000 to Mr Ganesh on 02.08.2018 towards fees for professional services and another payment of Rs.25,000 to him on the same date towards fees for technical services. Discuss whether TDS provisions under section 194J are attracted. Would your answer be the same if Mr Ganesh is engaged only in the business of operation of the Call Centre?
  1. RS 2,50,500 paid as compensation to Mr Bansi on 05.05.2018 by State Government on compulsory acquisition of his urban land. State whether any liability of TDS attracts under Sec.l94LA. Would your answer be the same if the amount paid to Mr Bansi is on account of enhanced compensation?
  1. Who is the person liable to pay tax under Sec.204 in respect of a payment to a non-corporate nonresident, or to a foreign company irrespective of the taxability in India?
  2. What are the consequences of failure to deduct or pay the tax under section 201 of the Income-tax Act, 1961?

SECTION 112A

S.NoParticularsCase 1Case 2Case 3Case 4
1.Investment DateJanuary 2,2017January 2, 2017January 2,2017March 1, 2018
2.Sale DateMarch 1, 2018April 1, 2018March 31, 2019March 20, 2019
3.Cost of Acquisition (CoA)              (in Rs.)
a) Actual Cost of Acquisition7,50,0007,50,0007,50,0007,50,000
b) FMV as on January 31st 20188,50,0006,50,00010,50,000Actual Cost of Acquisition to be taken since, shares Acquired after 1st February 2018
c) Amount           of            Sale

Consideration

10,50,00010,00,0008,50,000
d) Lower of (b) and (C)8,50,0006,50,0008,50,000
Cost of Acquisition [Higher of (a) and (d)]8,50,0007,50,0008,50,000
Indexed Cost of Acquisition8,75,758 (8,50,000 x 272/264)7,95,455 (7,50,000 x 280/264)9,01,515 (8,50,000 x 280/264)7,72,059 (7,50,000 x 280/272)
4.Sale Value (in Rs.)10,50,00010,00,0008,50,00016,00,000
5.LTCG (in Rs.)1,74,2422,04,54508,27,941
6.LTCL (in Rs.)51,515
7.Exemption from Capital Gains (in Rs.)[Exemption u/s 10(38)]1,00,000 (u/s 112A)01,00,000 (u/s 112A)
1,04,5457,27,941
8.10% Tax u/s 112A (in Rs.)10,455072,794

SECTION 45[5A]

Mr X purchased a residential plot on 01.01.1998 for Rs.50,00, 000 FMV of a plot as on 01.04. 2001 is 65,00,000 Alpha builder enters into a Development Agreement with conditions:

  1. Mr X will hand over the possession of the plot to Alpha Builders on 01.05.2018.
  2. Alpha builders will pay a cheque of Rs.60,00,000 Mr X on 01.05.2018.
  3. Alpha builders will construct 10 residential units on the plot of land and will give 6 units to Mr X. The 10 units shall be completed by 30.06.2020 and on that units will be handed over to Mr X.
  4. The stamp duty value of the plot as on 01.05.2018 in Rs.2 Crores.
  5. The stamp duty value of each flat on 30.06.2020 is Rs.45 Lakhs

CASE I: The project completion certificate is issued by the competent authority on 30.06.20 19. 6 units are handed over to Mr X on 30.06.2020.

CASE II: The project completion certificate is issued by the competent authority on 30.04.2021 and on that date, the stamp Duty Value of each flat is Rs.50 Lakh. 6 units are handed over to Mr X on 30.04.2021.

Answer:

  1. There is a “Transfer” on 01.05.2018 in the hands of Mr X since he has given the possession of residential plot pursuant to the Development Agreement.
  2. However, as per section 45(5A) introduced by Finance Act, 2017, the capital gains shall not be taxable in Previous Year 31.03.2019 but shall be taxable in the Previous Year in which certificate of completion is issued by competent Authority. Thus, capital gains shall be taxable.
  3. Section 45(5A) is applicable since the assessee is an individual
  4. The holding period of the residential plot shall be taken from 01.01.1998 to 30.04.2018 i.e. long term.
  5. As per section 55, the COA of the plot is 50,00,000 or FMV as on 01.04.2001, whichever is higher. Therefore, the COA of the plot is 65,00,000.
  6. The sale consideration of plot shall be worked out as under as per section 45(5A):

Sale consideration = SDV on the date of issue of completion certificate of his share in the land/building in the project plus consideration received in cash.

  1. Capital Gains shall be worked out as under:

CASE I: In Previous Year 31.03.2021, when completion certificate is issued by Competent Authority.

The assessment Year 2021-22

Capital Gains

Period of holding                                                         

Sales Price

SDV of 6 Flats on 30.06.2020 + Cash received

Cost of Acquisition Less

Long term Capital Gain

CASE II: In Previous Year 31.03.2022, when completion certificate is issued by Competent Authority.

 

: 01.01.1998 to 30.04.2018                                                                                               

 

: 45 Lakh x 6 + Rs.60,00,000

 

 

 

65,00,000*280/100

Long term

 

Rs. 3,30,00,000

Rs. 65,00,000

Rs. 1.76.80.000

Rs. 1.53.20.000

 

The assessment Year 2022-23

Capital Gains:

Period of holding

Sales Price:

SDV of

6 Flats on 30.04.2021 + Cash received

Cost of Acquisition :

Less: Indexed Cost of Acquisition:

Long term Capital Gain

 

: 01.01.1998 to 30.04.2018

 

: 50 Lakh x 6 + Rs.60,00,000

 

65,00,000 X 280/ 100

(Long Term)

 

 

Rs. 3,60,00,000

Rs. 65,00,000

Rs.1.76,80.000

Rs.l.83.20.000

 

 

GOODS AND SERVICES TAX (GST)

INTRODUCTION TO GST

  1. Enumerate the deficiencies of the existing indirect I) Discuss how GST resolved the double taxation II) Discuss the dual GST model to introduce ^
  2. Write about the GST Council.
  3. Explain about Article 246A “Power to make laws with respect to Goods and Services Tax ‘
  4. Write about the benefits of GST.
  5. “State Government has exclusive power to notify a transaction to be the supply of goods or services.” Discuss the correctness of the statement.

SUPPLY

  1. What is the taxable event under GST?
  2. Define the following terms a) Goods b) Services.
  3. Write about the taxability of GST in respect of gifts given by an employer to his employee.
  4. Explain Section 7(1A) in addition to schedule II?
  5. What is the negative list under GST?
  6. What does “capital goods” mean under the CGST Act? Explain
  7. Explain the concept of “related persons” as given under the CGST Act?
  8. What is the tax treatment of composite supply and mixed supply under GST?
  9. Explain deemed supplies w.r.t Schedule I?
  10. Supply of all goods and/or services is taxable under GST. Discuss the validity of the statement.
  11. Whether transfer of title and/or possession is necessary for a transaction to constitute the supply of goods?
  12. State the necessary elements for a supply to be chargeable to GST.
  13. 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?
  14. Is Artworks sent by artists to galleries for the exhibition can treat as supply?

LEVY AND COLLECTION Of GST

  1. Who are the persons that are liable to pay GST under section9 (3), Reverse Charge mechanism?
  2. Write about Composition scheme.
  3. Define the term consideration.
  4. What are the items that are excluded from the levy of GST?
  5. Can any person other than the supplier or recipient be liable to pay tax under GST?

EXEMPTIONS

  1. Can a person liable to pay tax when an exemption has been granted absolutely from the whole of the tax collected by him on goods/ services/ both?
  2. Comment whether the following Services are exempt (or) taxable under CGST Act:

a) Services by an entity registered under section 12AA of the Income-tax Act, 1961 by way of charitable activities.

b) Services BY & TO Government

c) Services BY & TO RBI

d) Services by a hotel

e) Service of transportation of passengers

f) Service of transportation of Goods

g) Services provided by a goods transport agency.

h) Services by an acquiring bank, to any person in relation to settlement of an amount transacted through credit card, debit card, charge card or other payment card service.

i) Legal services.

j) Services relating to agricultural & allied activities.

k) Services provided BY & TO educational institution

l) Services by way of health care services

m) Services by an artist.

n) Services by way of right to admission to events.

o) Services provided to a recognized sports body.

  1. Comment whether the following services are exempt

a) Services received from a provider of service Located on non-taxable territory

b) Services provided by a tour operator to a foreign tourist in a relation to a tour conducted wholly outside India.

TIME & VALUE OF SUPPLY

  1. What is the time limit for issue of invoice under GST for goods & services?
  2. What is the time of supply of goods in case of Reverse Charge?
  3. What is the time limit for issuing “Vouchers”?
  4. What is the time of supply in case of interest, late fee, and penalty?
  5. Discount given after the supply is deducted from the value of taxable supply, if –
  6. Such discount is given as per the agreement entered into at/or before the supply
  7. Such discount is linked to the relevant invoices
  8. The proportionate input tax credit is reversed by the recipient of the supply

9.

  • P supplied goods for the value of Rs. 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 Rs. 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?
  • There are separate valuation provisions for CGST, SGST and IGST and for Goods and Services. Examine the correctness of the statement.
  • Whether post-supply discounts or incentives are allowed as an admissible deduction under section 15 of the CGST Act? If yes, what are the necessary conditions to be complied with for availing such deduction?
  • The time of liability to pay GST is independent of the time of supply of goods/ services. Discuss the correctness of the statement?

INPUT TAX CREDIT [ITC]

  1. Define the following-
  2. Input
  3. Input services
  4. Capital goods
  5. A registered person can claim ITC on Inward supplies. Explain.
  6. What are the conditions for availing and utilising the ITC?
  7. What are the Ineligible/ Restricted items for taking ITC?
  8. What is input tax?
  9. Can a person take ITC without payment of consideration for the supply along with tax to the supplier?
  10. What is the time limit for taking ITC and reasons therefor?
  11. What is the tax implication of the supply of capital goods by a registered person who had taken ITC on such capital goods?
  12. LMN & Co, an unregistered supplier under GST wants to claim the input tax credit and collect the tax. Can it do so?

REGISTRATION

  1. What are the advantages of taking registration in GST?
  2. Can a person without GST registration collect GST and claim ITC?
  3. Can the Department, through the proper officer, Suo-moto proceed to register of a person?
  4. Is it necessary for the UN bodies to get registration under GST?
  5. What is the responsibility of the taxable person making supplies to UN bodies?
  6. Answer the following with respect to the provisions for registration­al
  • What is the time limit for registration?
  • Is single registration sufficient for multiple locations?
  • Can a person be allowed to be registered (i.e. single registration) for his normal supplies and composite supplies as well?
  • Is any possibility exists for an unregistered person to be registered voluntarily?
  • PAN is mandatory for registration. Comment.
  • What do you mean by UIN (Unique Identification Number)? In which cases it was required?
  • Registration can be granted by a proper officer himself. Comment.
  • What is the procedure for registration?
  1. In case of a Casual taxable person (CTP) and Non-resident taxable person (NRTP), what is the time limit for registration and procedure to be followed for registration?

  2. Is there any provision for a person to get himself voluntarily registered though he may not be liable to pay GST?

  3. Is there an option to take centralized registration for services under GST Law?

  1. What will be the time of response by the applicant if any query is raised in the online application?
  2. Does cancellation of registration impose any tax obligations on the person whose registration is so cancelled?
  3. What is the difference between casual and non- resident taxable persons?
  4. Explain whether the Department, through the proper officer, suo-moto proceed to register of a person.
  5. Explain how long will the registration certificate issued to a casual taxable person and the non- resident taxable person be valid?
  6. State the time-period within which registration needs to be obtained in each of the following independent cases:
  • Casual taxable person
  • The person making an inter-State taxable supply.

TAX INVOICE. DEBIT & CREDIT NOTES

  1. Explain the benefits of E-way bill?
  2. When an e-way bill is required?
  3. Who causes movement of goods under e-way bill?
  4. What are the special situations where the e-way bill needs to be issued even if the value of the consignment is less than Rs 50,000?
  5. Explain the E-way bill in case of ‘Bill to Ship To’ Model?
  6. Define Consolidated e-way bill.
  7. Explain the cancellation of e-way bill?
  8. What is the validity period of the e-way bill?
  9. What are the situations where the e-way bill is not required?
  10. Discuss the provisions relating to the issuance of credit and debit notes under the CGST Act and rules thereunder.
  11. What is the time period within which invoice has to be issued for supply of services?
  12. Discuss the time-limit for issuance of an invoice in case of taxable supply of goods.
  13. Examiner whether the following statement is true or false giving brief reasons:

“It is mandatory to issue a tax invoice in case a registered person has opted for composition levy scheme.”

RETURNS

  1. Differentiate the first return and final return?
  2. Who is required to furnish details of outward supplies?
  3. What is the due date of submission of GSTR – 1?
  4. What kinds of details of outward supplies are required to be furnished in GSTR-1?
  5. How are the details of outward supply furnished (in GSTR-1) in prior periods amended?
  6. What kinds of details of inward supplies are required to be furnished in GSTR-2?
  7. If a return has been filed, how can it be revised if some changes are required to be made?
  8. Explain in brief about the contents GSTR-3,3B?
  9. What are the key features of the return mechanism in GST?
  10. Can a recipient feed information in his GSTR-2 which has been missed by the supplier?
  11. Examiner whether the following statement is true or false giving brief reasons:

“A composition taxpayer, who has not rendered any taxable supply during a quarter, is not required to file any return.”

GST ( Problems)

INTRODUCTION

  1. Ravan of Guntur supplies goods worth Rs.1,00,000 to Meghanath of Gudivada. Further, the same goods have been sold by Meghanath to Vibheeshana of Hyderabad for Rs.1,20,000. Is GST could be levied on these transactions? If so how?
  2. Rama of Guntur supplies goods worth Rs.l,00,000 to Meghanath of Chandigarh. Is GST could be levied? If so how?

SUPPLY

  1. Examine whether the following activities would amount to supply under section 7 of the CGST Act: A)Damodar Charitable Trust, a trust who gets the eye treatment of needy people done free of cost, donates clothes and toys to children living in slum area.B) Sulekha Manufacturers have a factory in Delhi and a depot in Mumbai. Both these establishments are registered in the respective States. Finished goods are sent from factory in Delhi to the Mumbai depot without consideration so that the same can be sold. C) Raman is an Electronic Commerce Operator in Chennai. His brother who is settled in London is a well- known lawyer. Raman has taken legal advice from him free of cost with regard to his family dispute.

Would your answer be different if in the above case, Raman has taken advice in respect of his business unit in Chennai?

  1. State whether the following supplies would be treated as supply of goods or supply of services as per Schedule II of the CGST Act:
  • Renting of immovable property
  • Goods forming part of business assets are transferred or disposed of by/under directions of the person carrying on the business, whether or not for consideration.
  • Transfer of right in goods without the transfer of title it
  • Transfer of title in goods under an agreement which stipulates that property shall pass at a future date.
  1. Determine whether the following supplies amount to composite supplies:
  • A hotel provides 4 days – 3 nights package wherein the facility of breakfast and dinner is provided along with the room accommodation.
  • A toothpaste company has offerd the scheme of a free toothbrush along with the toothpaste.
  1. Sahab Sales, an air-conditioner dealer KrJanakpuri, 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-conditioned to Sahab Sales for Rs. 5,000. Aakash had bought the said air-conditioner six months before, for his residence. Does sale of the air conditioner by Aakash to Sahab Sales amount to supply under section 7 of the CGST Act, 2017?

  1. Examine whether the following activities would amount to supply under section 7 of the CGST Act: A) Sudhakar Charitable Trust, a trust that gets the eye treatment of underprivileged children done free of cost, donates clothes and toys to children living in the slum area. B) Rooplekha Manufacturers have a factory in Delhi and a depot in Mumbai. Both these establishments are registered in the respective States. Finished goods are sent from the factory in Delhi to the Mumbai depot without consideration so that the same can be sold. C) Daman is an interior decorator in Chennai. His brother who is settled in London is a well-known lawyer. Daman has taken legal advice from him free of cost with regard to his family dispute.

LEVY AND COLLECTION OF TAX

  1. A person availing composition scheme in Haryana during a financial year crosses the turnover of Rs. 75 lakh during the course of the year i.e. he crosses the turnover of Rs. 75 lakh in December? Will he be allowed to pay tax under composition scheme for the remainder of the year, i.e. till 31st March?
  2. Mohan Enterprises has two registered business verticals in Delhi. It’s aggregate turnover for the preceding year for both the business verticals was Rs. 70 lakh. It wishes to pay tax under composition levy for one of the vertical in the current year while under normal levy for other vertical. You are required to advice Mohan Enterprises whether he can do so?
  3. State person liable to pay GST in the following independent cases provided recipient is located in the taxable territory:
  • Services provided by an arbitral tribunal to any business entity.
  • Sponsorship services provided by a company to an individual.
  • Renting of immovable property service provided by the Central Government to a business entity.

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

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

  1. Determine whether the supplier in the following cases are eligible for composition levy provided their turnover in the preceding year does not exceed Rs. 75 lakhs:

A) Mohan is engaged in providing legal services in Rajasthan and is registered in the same State.

B) Sugam Manufacturers has registered offices in Punjab and Haryana and supplies goods in neighbouring States. 6. Ramaswamy, a registered supplier, is an interior decorator. His registered office is located in Gujarat and he is not engaged in making any inter-State supply of services. His aggregate turnover in the FY 2017-18 is Rs.90 lakh. With reference to the provisions of the CGST Act, 2017, examine whether Ramaswamy can opt for the composition scheme in the FY 2018-19?

Will your answer be different if Ramaswamy is engaged in supplying restaurant services and procures food items required for his restaurant from neighbouring State of Maharashtra?

  1. Mr Zaid, registered in Himachal Pradesh is engaged in making inter-State outward supplies of apparels. The aggregate turnover of Mr Zaid in the financial year 2017-18 is 70 lakh. He opted for composition levy in the year 2018-19 and paid tax for the quarter ending June 2018 under composition levy. The proper officer has levied penalty on Mr Zaid in addition to the tax payable by him.

You are required to examine the validity of the action taken by the proper officer.

  1. Trend Footwear, a registered supplier in Jaipur dealing in the local supply of loafers and wedges, wants to opt for composition scheme with effect from 01 April, 20XX. It’s aggregate turnover in the preceding financial year is Rs. 78 lakh. Besides dealing in supply of loafers and wedges, he also has a rental income of Rs. 1,35,000 per month from the basement of a commercial building located in Jaipur.

You are required to discuss, whether Trend Footwear can opt for composition scheme?

EXEMPTIONS

  1. An individual acts as a referee in a footeafct^afch organized by Sports Authority of India. He has also acted as a referee in another charity football rh» MjfForganized by a local sports club, in lieu of a lump sum payment. Discuss whether he is required to pay any GST?
  2. RXL Pvt. Ltd. manufactures beauty soap with the brand name ‘Forever Young’. RXL Pvt. Ltd. has organized a concert to promote its brand. Ms Ahana Kapoor, it’s brand ambassador, who is a leading film actress, has given a classical dance performance in the said concert. The proceeds of the concert worth Rs. 1,20,000 will be donated to a charitable organization. Whether Ms Ahana Kapoor will be required to pay any GST?
3. Determine the taxable value of supply under GST law with respect to each of the following independent services provided by the registered persons:

ParticularsGross amount charged Rs.
Fees charged for yoga camp conducted by a charitable trust50,000
The amount charged by the business correspondent for the services provided to the rural branch of a bank with respect to Savings Bank Accounts1,00,000
The amount charged by cord blood bank for the preservation of stem cells5,00,000
Amount charged for service provided by the commentator to a recognized sports body5,20,000

 

4. Discuss whether GST is payable in respect of transportation services provided by Raghav Goods Transport Agency in each of the following independent cases:

CustomerNature of services providedAmount charged Rs.
ATransportation of milk20,000
BTransportation of books on a consignment transported in a single goods carriage3,000
CTransportation of chairs for a single consignee in the carriage of the goods600
  1. Examine whether GST is payable in the following independent cases: A) Ekta Charitable trust, registered under section 10(23C)(v) of the Income-tax Act manages a temple in Rohini, Delhi. It has given on rent a community hall, located within temple premises, to public for a celebration of Teej Mela. The rent charged is Rs. 9,500. B) Speed post services by Department of Post to Union Territory of Daman & Diu C) ST Ltd. has given on hire 5 trucks to Titu Transporters of Delhi (a goods transport agency) for transporting goods in Central and West Delhi. The hiring charges for the trucks are Rs.7,500 per truck per day.

  2. Wisdom Public School, a higher secondary school in Delhi, is of the view that no tax is payable on the education provided by it to its students as education plays a significant and remedial role in balancing the socio-economic fabric of the country. Examine whether GST law provides any scope of the exemption to supply of goods or services with particular reference to the contention raised by the school?

  3. Examine whether GST is payable in the following independent cases:-

  • Amar Jyoti Charitable trust, registered under section 10(23C)(v) of the Income-tax Act manages a temple in Shahdara, Delhi. It has given on rent a community hall, located within temple premises, to public for a celebration of new year evening. The rent charged is Rs. 9,500.
  • Speed post services by Department of Post to Union Territory of Lakshadweep.
  • XY Ltd. has given on hire 7 trucks to Jaggi Transporters of Delhi (a goods transport agency) for transporting goods in Central and West Delhi. The hiring charges for the trucks are Rs. 6,200 per truck per day.
  1. Kesar Maharaj, a registered supplier, gave a classical dance performance in an auditorium. The consideration charged for the said performance is Rs.1,48,500. Is Kesar Maharaj liable to pay GST on the consideration received for the said performance if such performance is not for the 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:

a) Kesar Maharaj is a brand ambassador of a food product and aforesaid performance is for the promotion of such food product. B) The dance performance given by Kesar Maharaj is not a classical dance performance, but a contemporary Bollywood style dance performance C) Consideration charged by Kesar IVIaMr^j for the classical dance performance is Rs.1,60,000?

Notes:

a)     Services provided by Kesar Maharaj are intra-State supplies.

b)    Wherever applicable, GST has been charged separately.

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

9. Ayushman Medical Centre, a clinical establishment, offers the following services:

S.No.ParticularsRs.
a)Reiki healing treatments. Such therapy is not a recognized system of medicine in terms of section 2(h) of the Clinical Establishments Act, 2010.10,00,000
b)Plastic surgeries.

[One such surgery was conducted to repair cleft lip of a new born baby. Consideration of Rs. 1,00,000 was charged for the same.]
20,00,000
c)Air ambulance services to transport critically ill patients from distant locations to Ayushman Medical Centre.1,00,000
d)Alternative medical treatments by way of Ayurveda. Such therapy is not a recognized system of medicine in terms of section 2(h) of Clinical Establishments Act, 20102,50,000

*excluding GST

 

Ayushman Medical Centre also operates a cord blood bank which provides services in relation to the 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,

TIME AND VALUE OF SUPPLY

A machine has to be supplied at site. It is done bws’c&hiing various components from vendors and assembling

17th SeptemberThe purchase order with ad\^ab^>of Rs. 50,000 is received for goods worth Rs. 12 lakh and entry duly made in the sel|ei/s^poks of account
20th OctoberThe machine is asset^t^d, tested at site, and accepted by the buyer
23rd OctoberInvoice raised
4th NovemberBalance payment of Rs. 11,50,000 received
Determine the time of supply(ies) in the above scenario for the purpose of payment of tax.

 

 

 

2. Determine the time of supply from the given information.

May 4Supplier invoices goods taxable on reverse charge basis to Bridge & Co. (30 days from the date of issuance of invoice elapse on June 3)
May 12Bridge & Co receives the goods
May 30Bridge & Co makes the payment

 

 

 

3. Determine the time of supply from the following particulars:

6th MayBooking of the convention hall, the sum agreed on Rs. 15,000, the advance of Rs. 3,000 received
15th SeptemberThe function held in the convention hall
27th OctoberInvoice issued for Rs. 15,000, indicating a balance of Rs. 12,000 payable
3rd NovemberBalance payment of Rs. 12,000 received

 

 

 

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

S. No.Date of receipt of goodsDate of payment by the recipient of goodsDate of issue of invoice by the supplier of goods
(1)(2)(3)
(i)July 1August 10June 29
(ii)July 1June 25June 29
(ill)July 1Part payment made on June 30 and balance amount paid on July 20June 29
  1. Determine the time of supply in the following cases assuming that GST is payable under reverse charge:
S. No.Date of payment by the recipient for the supply of servicesDate of issue of invoice by the supplier of services
(1)(2)
0)August 10June 29
(ii)August 10June 1
(iii)Part payment made on June 30 and balance amount paid on September 1June 29
(iv)Payment is entered in the books of account on June 28 and debited in recipient’s bank account on June 30June 1
(v)Payment is entered in the books of account on June 30 and debited in recipient’s bank account on June 26June 29
  1. An order is placed on Ram & Co. on 18th August for the supply of a consignment of customised shoes. Ram & Co. get the consignment ready and informs the customer and issues the invoice on 2nd December. The customer collects the consignment from the premises of Ram & Co. on 7th December and hands over the payment on the same date, which is entered in the accounts on the next day, 8th December.

What is the time of supply of the shoes?

  1. A firm of advocates issues invoices for services to ABC Ltd on 17th Feb. The payment is contested by ABC Ltd. on the ground that on account of the negligence of the firm of the company’s case was dismissed by the Court for non-appearance, which necessitated further appearance for which the firm is billing the company. The dispute drags on and finally, payment is made on 3rd November.

Identify the time of supply of the legal services.

  1. Black and White Pvt. Ltd. has provides following particulars relating to goods sold by it to Colourful Pvt. Ltd.
ParticularsRs.
The list price of the goods (exclusive of taxes and discounts)50,000
Tax levied by Municipal Authority on the sale of such goods5,000
CGST and SGST chargeable on the goods10,440
Packing charges (not included in the price above)1,000

Black and White Pvt. Ltd. received Rs. 2000 as a subsidy from an NGO on sale of such goods. The price of Rs. 50,000 of the goods is after considering such subsidy. Black and White Ltd. offers 2% discount on the list price of the goods which is recorded in the invoice for the goods.

Determine the value of taxable supply made by Black and White Pvt. Ltd.

  1. Samriddhi Advertisers conceptualised and designed the advertising campaign for a new product launched by New Moon Pvt Ltd. for a consideration of Rs. 5,00,000. Samriddhi Advertisers owed Rs. 20,000 to one of its vendors in relation to the advertising service provided by it to New Moon Pvt Ltd. Such liability of Samriddhi Advertisers was discharged by New Moon Pvt Ltd. New Moon Pvt Ltd. delayed the payment of consideration and thus, paid Rs. 15,000 as interest. Assume the rate of GST to be 18%. Determine the value of taxable supply made by Samriddhi Advertisers.
  2. AKJ Foods Pvt. Ltd. gets an order for the supply of processed food from a customer. The customer wants the consignment tested for gluten or specified chemical residues. AKJ Foods Pvt. Ltd. does the testing and charges a testing fee for the same from the customer. AKJ Foods Pvt. Ltd. argues that such testing fess should not form part of the consideration for the sale as it is a separate activity.
  1. Crunch Bakery Products Ltd sells biscuits and cakes through its dealers, to whom it charges the list price minus standard discount and pays GST accordingly. When goods remain unsold with the dealers, it offers additional discounts on the stock as an incentive to push the sales.

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

  1. Kabira Industries Ltd engaged the services of a transporter for road transport of a consignment on 17th June and made advance payment for the transport on the same date, i.e., 17th June. However, the consignment could not be sent immediately on account of a strike in the factory, and instead was sent on 20th July. The invoice was received from the transporter on 22nd July.

What is the time of supply of the transporter’s service?

Note: Transporter’s service is taxed on reverse charge basis.

  1. An income-tax and money laundering case against Mr XYZ, working in a multinational company, reveals a large volume of undisclosed assets, which he claims as service income. On this basis, the GST authorities investigate the GST liability. Dates of the provision of service, whether in the first half or the second half of the financial year being scrutinised by income-tax authorities, are not known. Mr XYZ voluntarily pays GST during the investigation.

What is the time of supply of the services?

  1. Raju Pvt Ltd. receives the order and advances payment on 5th January for carrying out an architectural design job. It delivers the designs on 23rd April. By oversight, no invoice is issued at that time, and it is issued much later, after the expiry of the prescribed period for issue of the invoice.

When is the time of the supply of service?

  1. Modern Security Co. provides service of testing of electronted^vices. In one case, it tested a batch of devices on 4th and 5th September but could not raise invoicextHT^jr” November because of some dispute about the condition of the devices on return. The payment wqs^Kw^ in December.

What is the method to fix the time of supply of tff^semce?

  1. Mehra Sons, a registered supplier, is a whol^te^upplier of ready-made garments located in Bandra, Mumbai. On 5th September, 20XX, Subhadra, owiw^oKAura Boutique located in Dadar, Mumbai, approached Mehra Sons for the supply of a consignment of customised dresses for ladies and kids.

Mehra Sons get the consignment reaoyTiy 2nd December, 20XX and inform Subhadra about the same. The invoice for the consignment was issued the next day, 3rd December, 20XX.

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

You are required to determine the time of supply of the readymade garments supplied by Mehra Sons to Subhadra elaborating the relevant provisions under the GST law.

  1. A philanthropic association makes a substantial donation each year to a reputed private management institution to subsidise the education of low-income group students who have gained admission there. The fee for these individuals is reduced thereby, coming to Rs. 3 lakh a year compared to Rs. 5 lakh a year for other students.

What would be the taxable value of the service of coaching and instruction provided by the institution?

  1. Singhal Brothers, registered in Uttrakhand has supplied 30 tons of a chemical @ Rs. 50,000 per ton (excluding taxes) to P of Uttrakhand on 8th September, 20XX. The invoice for the supply has also been issued on the same date. Further, the following additional amounts were also charged from P:
ParticularsRs.
Freight1,80,000
Packing charges1,10,000
Weighing charges20,000
Cost of instrument specially purchased by Singhal Brothers to manufacture the chemical3,10,000
As per the terms of the contract of supply, Singhal Brothers is required to get the chemical inspected by an independent testing agency before the delivery of the same to P. P has paid such inspection charges amounting

to Rs. 12,000 directly to the testing agency. Singhal Brothers have also received Rs. 50,00,000 as a subsidy from State Government for setting up a chemical manufacturing plant in Uttrakhand. P is required to make payment within 15 days of supply in terms of the contract. However, P delayed the payment of consideration and made payment in November, 20XX and thus paid Rs. 15,000 as interest. You are required to calculate the GST liability in this case and due date of deposit. Assume the rate of GST to be 18%.

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

  1. A manufacturer of machinery supplied a special machine to LM Furnishers. Following details are provided in relation to amounts charged:
S.No.ParticularsRs.
(i)Price of machinery excluding taxes (before cash discount)6,00,000
(ii)Transit insurance11,000
(iii)Packing charges9,000
(iv)Extra charges for designing the machine20,000
(v)Freight12,000
Charges mentioned in (ii) to (v) are not included in (i) above. Other information furnished is – • Cash discount @ 2% on the price of machinery has been allowed to the customer at the time of supply and also recorded in invoice.

 

has supplied goods to Sahil Traders and Jaggi rashtra) respectively. Raman Ltd. has furnished

GST rate -18%.

  • Calculate the value of supply of the special machine.
20. Raman Ltd., a registered supplier in Mumbai (Maharashtt Motors Ltd. located in Ahmedabad (Gujarat) and Pune< the following details for the current month:

S.No.ParticularsSahil Traders (Rs.)Jaggi Motors Ltd.(Rs.)
0)Price of the goods (excluding GST)^^^20,00015,000
(ii)Packing charges600
(iii)Commission400
(iv)Weighment charges1,000
(v)Discount for prompt payment (recorded in the invoice)500

Items given in points (ii) to (v) have not been considered while arriving at the price of the goods given in point (i) above.

Compute the GST liability [CGST & SGST or IGST, as the case may be] of Raman Ltd. for the given month. Assume the rates of taxes to be as under:

ParticularsRate of tax
Central tax (CGST)9%
State Tax (SGST)9%
Integrated tax (IGST)18%

Make suitable assumptions, wherever necessary.

Note: The supply made to Sahil Traders is an inter-State supply.

21. Shiv 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. Shiv Shankar Ltd. has furnished the following details for the current month:

S.No.ParticularsNarad Traders (Rs.)Nandi Motors Ltd. (Rs.)
(i)Price of the goods (excluding GST)10,00030,000
(ii)Packing charges500
(iii)Commission500
(iv)Weightment charges2,000
(v)Discount for prompt payment (recorded in the invoice)1,000

Items given in points (ii) to (v) have not been considered while arriving at the price of the goods given in point (i) above.

  1. Mr X supplied goods for the value of 50,000 to its customer Miss Diyana on 01.01.20XX on the condition that payment for the same will be made within a week. However, Miss Diyana made payment for the said goods on 02.02.20XX and thus paid interest amounting to Rs. 2,000. What is the time of supply with regard to addition in the value by way of interest in lieu of delayed payment of consideration?

INPUT CREDIT

ABC Co. Ltd. is engaged in the manufacture of heavy machinery. It procured the following items during the month of July.

ItemsGST paid Rs.
Electrical transformers to be used in the manufacturing process5,20,000
Trucks used for the transport of raw material1,00,000
Raw material2,00,000
Confectionery items for the consumption of employees working in the factory25,000
  1. XYZ Ltd. is engaged in the manufacture of taxable goods. Compute the ITC available with XYZ Ltd. for the month of October 2018 from the following particulars:
Inward suppliesGST Rs.Remarks
Inputs ‘A’1,00,000One invoice on which GST payable was Rs.10,000, is missing
Inputs ‘B’50,000Inputs are to be received in two instalments. The first instalment has been received in October 2018.
Capital goods1,20,000ABC Ltd. has capitalised the capital goods at full invoice value inclusive of GST as it will avail depreciation on the full invoice value.
Input services2,25,000One invoice dated 20.01.2018 on which GST payable was Rs.50,000 has been received in October 2018.

Note:

  1. All the conditions necessary for availing the ITC have been fulfilled.
  2. ABC Co. Ltd. is not eligible for any threshold exemption.
  3. The annual return for the financial year 2017-18 was filed on 15th September 2018.

3.

Mr X, a supplier of goods, pays GST under regular scheme. Mr X is not eligible for any threshold exemption. He has made the following outward taxable supplies in a tax period:

ParticularsRs.
Intra-State supply of goods8,00,000
Inter-State supply of goods3,00,000

He has also furnished the following informationTmre^pect of purchases made by him in that tax period:

^/Hti^liciJlarsRs.
Intra-State purchases of goods3,00,000
Inter-State purchases of goods50,000

Mr X has the following ITCs with him at the beginning of the tax period:

ParticularsRs.
CGST30,000
SGST30,000
IGST70,000

Compute the net GST payable by Mr X during the tax period. Make suitable assumptions as required.

Note:

  1. Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively.
  2. Both inward and outward supplies are exclusive of taxes, wherever applicable.
  3. All the conditions necessary for availing the ITC have been fulfilled.
  4. Z becomes liable to pay tax on 1st August and has obtained registration on 15th August. Can he claim ITC on Inputs held in stock, as part of semi-finished goods/ finished goods on 31st July? If so, what are the conditions to be fulfilled?
  5. A flying school imports an aircraft for use in its training activity, and takes ITC of the IGST paid on the import. The departmental audit raises an objection that aircraft fall within the definition of “conveyance” in section 2(34) of the Act and that ITC is not allowed on conveyances. Offer your comments.
  6. A garment factory receives a Government order for making uniforms for a commando unit. This supply is exempt from tax under a special notification. The fabric is separately procured for the supply, but thread and lining material for the collars are the ones which are used for other taxable products of the factory. The turnover of the other products of the factory and exempted uniforms in July is Rs. 4 crores and Rs. 1 Crore respectively, the ITC on thread and lining material procured in July is Rs. 5000 and Rs. 15000 respectively. Calculate the eligible ITC on thread and lining material.

REGISTRATION

  1. Determine the effective date of registration in the following cases:
  2. The aggregate turnover of Dhampur Industries of Delhi has exceeded Rs. 20 lakh on 1st September. It submits the application for registration on 20th Registration certificate is granted to it on 25th September.
  3. Mehta Teleservices is an internet service provider in Lucknow. It’s aggregate turnover exceeds Rs. 20 lakh on 25th October. It submits the application for registration on 27th November. The registration certificate is granted to it on 5th December.
  4. State which of the following suppliers are liable to be registered:
  5. Agent supplying goods on behalf of some other taxable person and its aggregate turnover does not exceed Rs. 20 lakh during the financial year.
  6. An agriculturist who is only engaged in the supply of produce out of cultivation of land.
  7. X of Mumbai often participates in the jewellery exhibition at Trade Fair in Delhi, which is organized every year in the month of February. Mr X applied for registration in January. The proper officer demanded an advance deposit of tax in an amount equivalent to the estimmgd tax liability of Mr X.

You are required to examine whether any advance tax isTeJ^^aid by Mr X at the time of obtaining registration?

  1. Tirupati Box Manufacturing Co. started manufacturmfexorrugated boxes in Andhra Pradesh on 25.01.20XX. On 06.05.20XX, it’s aggregate turnover exceeded RsjljEHalm and on 01.11.20XX, it’s aggregate turnover exceeded Rs.20 lakh. It applied for registration on 28lM>ij3XX and is granted registration certificate on 05.12.20XX. Determine the effective date of registratio(BSM>jdrating the relevant provisions.
  2. Neerav Kothari of Jaipur often partjdmt^Snn the jewellery exhibition at Trade Fair in Delhi, which is organised every year in the month of February. Nsmxleerav Kothari applied for registration in January. The proper officer demanded an advance deposit of tax in an amount equivalent to the estimated tax liability of Mr Neerav Kothari.

You are required to examine whether any advance tax is to be paid by Mr Neerav Kothari at the time of obtaining registration?

  1. 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: –
S.No.ParticularsRs.
(i)Supply of machine oils in Delhi2,00,000
(ii)Supply of high-speed diesel in Delhi4,00,000
(ill)Supply made through Fortis Lubricants – an agent of Pure Oils in Delhi3,75,000
(iv)Supply made by Pure Oils from its branch located in Punjab1,80,000
*excluding GST

Determine whether Pure Oils is liable for registration. Will your answer change, if Pure Oils supplies machine oils amounting to Rs.2,50,000 from its branch located in Himachal Pradesh in addition to the above-mentioned supplies?

 

Payment of tax

  1. ABC limited filed the return for GST under section 39(1) for the month of November on 20th, December showing self-assessed tax of Rs. 2,50,000 which was not paid. Explain what are the implications for ABC limited as per relevant provisions?
  2. ABC Consultancy, registered in Mumbai, supplies technical consultancy services to its clients. It has been providing technical services to XY Ltd., Mumbai since past two years. Consideration is settled by XY Ltd. assignment wise. XY Ltd. paid Rs. 45 lakh to ABC Consultancy on 10th January, 20XX on ABC consultancy agreeing to not provide similar technical services to any other business entity in India or abroad for a period of 8 years. ABC Consultancy is of the view that Rs. 45 lakh is not chargeable to GST.

You are required to examine whether the view taken by ABC Consultancy is valid in law.

  1. Blue Moon Ltd., obtains registration for paying taxes under section 9 of the CGST Act. He asked his tax manager to pay taxes on a quarterly basis. However, Blue Moon Ltd.’s ta^ynanager advised the Co.to pay taxes on a monthly basis. you are required to examine the validity of the advice given by tax manager.

RETURN 

  1. A, a regular taxpayer, files his GSTR-1, GSTR-2 and GSTR-3 for the month of August 2017 by the respective due dates. Mr A receives a communication from the GST common portal on 28th September 2017 that ITC of Rs. 15,000 claimed by him is in excess of the tax declared by Mr B (supplier concerned) in his valid tax return. Mr B has filed his Annual Return for the financial year 2017-18 on 10th November 2018. Answer the following questions:
  2. When is Mr B required to rectify the discrepancy? Is there any maximum time limit beyond which the discrepancy cannot be rectified?
  3. What will happen if Mr B does not rectify the discrepancy?

Y, a registered person, has filed its GSTR-3 for the month of September on 19th November. Determine the amount of late fee payable, if any, by Mr Y.

We hope with the help of this article, now you know the what are the important topics in CA Inter taxation for May 2019 (सीए इंटर टैक्स इम्पोर्टेन्ट प्रश्न) attempt. People who are searching for the CA Inter tax important questions for CA exam can utilize these questions for their exam preparation. Students should understand that it is not recommended to skip some topics and read only a few important ones. Try to cover entire CA Inter syllabus and that’s what ICAI expects from you and even CA Inter question papers are based on that. These important questions are for those students who don’t prepare well for the exam and try to get at least 40 marks. So don’t depend on these questions if you have so much time for the exams. If you have any doubts the comment below. We will try to help you. And don’t forget to share this article with your friends who are going to write CA Inter exams in May 2019.

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