GST TEST

ABC Ltd. has its manufacturing unit in the State of Rajasthan. Further, it has ancillary units in the
State of Madhya Pradesh and Gujarat and is registered in each of these States. Moreover, ABC Ltd.
owns and operates a hotel in Udaipur, Rajasthan.

In addition to the aforesaid, ABC Ltd. owns a commercial space which is rented out to a registered
person at the monthly rent of ₹ 50,000. The maintenance of the premises is the responsibility of ABC
Ltd. In pursuance of the same, during the month of April, ABC Ltd. incurred certain expenses on the
purchase of maintenance related materials. The said expenses are recoverable from the tenant along
with the invoice issued for rent. The rate of tax applicable on the material used for maintenance was
5%.

During the year, ABC Ltd. agreed to provide the hotel to Mr. X for a business conference to be held at
Udaipur. Mr. X is an unregistered person residing in Maharashtra.

ABC Ltd. made a supply of machinery in the month of June, details of which are as follows-

 Basic price of the machinery before TCS under Income Tax Act, 1961– ₹ 45,000

 Tax collected at source under Income-tax Act, 1961 – ₹ 2,500

 It received a subsidy of ₹ 3,500 from Green Foundation Pvt. Ltd. for usage of green energy and
the subsidy was linked to the units of energy saved and not aforesaid machinery.

In addition to the aforesaid transactions, ABC Ltd. spent an amount of ₹ 5 lakh on the procurement of
certain goods which were distributed as part of the corporate social responsibility [CSR] expenditure
required under the provisions of the Companies Act, 2013.

During the scrutiny proceedings in the State of Gujarat, jurisdictional GST officer asked ABC Ltd to
submit the copy of audited financial statements for Gujarat and was of the view that ABC Ltd. is
required to get his accounts audited by a Chartered Accountant separately under GST Law for filing
annual return and reconciliation statement in each State.

All above amounts are exclusive of GST, wherever applicable. The rate of GST on all inward and
outward supplies is 18%, unless otherwise mentioned.

Assume that there is no other outward or inward transaction apart from aforesaid transactions.

Based on the facts of the case scenario given above, choose the most appropriate answer to Q. Nos. 1
to 5 below:-

1. For the transaction related to renting of commercial space, what should be the rate of tax
charged by ABC Ltd.?

(a) The rate of GST on rent and maintenance material related recovery shall be 18%.

(b) The rate of GST on rent shall be 18% and, on the material, shall be 5%

(c) No GST shall be charged on the recovery related to material used in maintenance. Rate of
GST on rent shall be 18%.

(d) The rate of GST on rent and maintenance material related recovery shall be 5%.

2. Compute the value of supply under section 15 of the CGST Act, 2017 made by ABC Ltd. in the
month of June?

(a) ₹ 45,000 (b) ₹ 47,500 (c) ₹ 48,500 (d) ₹ 51,000

3. With respect to the hotel accommodation service provided to Mr. X, GST payable by ABC Ltd. is
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(a) nil, GST on accommodation service is payable by the recipient, Mr. X, under reverse charge

(b) nil, GST on accommodation services provided to an unregistered person is exempt from GST

(c) in the nature of CGST and SGST

(d) in the nature of IGST

4. Which of the following options is correct with regard to the availability of ITC to ABC Ltd. in
respect of GST paid on the procurement of goods meant for the purpose of corporate social
responsibility activity?

(a) The amount of ITC related to such procurement of goods is not available to ABC Ltd.

(b) The amount of ITC related to such procurement of goods is available to ABC Ltd.

(c) The amount of ITC only to the extent of 50% of amount of such procurement of goods is
available to ABC Ltd.

(d) The amount of ITC shall be available to the registered person to whom such goods are
distributed under CSR activity.

5. Which of the following options is correct with regard to the advice given by GST officer in
respect of auditing of accounts?

(a) There is no requirement of separate audit of the financial statements from the perspective of
GST provisions.

(b) Only reconciliation statement shall be audited by a Chartered Accountant.

(c) The annual return as well as the reconciliation statement shall be audited by a Chartered
Accountant.

(d) Separate audit of financial statements at each State level is required by ABC Ltd. under the
GST law.

6. M/s Cute & Co., a partnership firm, registered supplier under GST in Bengaluru (Karnataka
State), has provided the following information for the month of October, 2023:

S.no Details of transactions Amount (₹)

(i) Intra-State taxable supply of Direct Selling Agent (DSA) service to 2,50,000
public sector Bank.
(ii) Services provided to a Governmental authority by way of 99,900
sanitation conservancy.
(iii) Rent paid to a residential dwelling taken for running an office for 25,000
providing DSA services; Owner of the residential property was not
registered under GST; This is an intra-State supply availed.
(iv) Purchased a car for the official use of managing partners of the 9,00,000
Firm for business use (Inter-State purchase).
(v) Availed Information Technology services for their business from Nil
Partner’s friend Mr Allan Waugh from Melbourne, Australia.
Mr. Waugh refused to take any consideration. Open Market value
of said service was ₹ 1,25,000. (Inter-State transactions).
(vi) Provided training and performance appraisal services in Bengaluru
to following persons:
(a) ABC Private Limited, a registered supplier in the State of 3,00,000
Kerala
(b) Babu Cones, a proprietorship concern of Rajasthan, which 1,00,000
was not registered under GST
Note:

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

(ii) All the amounts given above are exclusive of taxes.

(iii) All the conditions necessary for availing the ITC have been fulfilled.

(iv) There was no opening balance of any input tax credit.

(v) The turnover of M/s Cute & Co was ₹ 2 crore in the previous financial year.

Compute the net GST payable in cash, by M/s Cute & Co. for the month of October, 2023.
Correct legal provisions should form part of your answer.

7. From the following information provided by M/s Sasta Bazaar. Determine the time of supply for
the purpose of payment of GST:

(i) It issued coupon on 20.06.2023, worth ₹ 2,000 redeemable against purchase of specific
plastic items. This coupon was redeemed on 31.07.2023.

(ii) It issued coupon on 01.08.2023 worth ₹ 3,000 which is redeemable against purchase of
any item. This coupon was redeemed on 18.08.2023.

(iii) It received interest of ₹ 10,000 for late payment from a customer on 11.11.2023 for
supply of goods which was originally made on 24.06.2023.

8. With reference to GST law, Determine the place of supply with reasons in the following
independent circumstances:-

(i) Miss Kanika of Kolkata (West Bengal) visited to Jodhpur Law University (Rajasthan) and
paid her college fees by purchasing a demand draft from a bank located in the University
campus. Miss Kanika did not have any account with the bank.

(ii) Mizu Machine Ltd., registered in the State of Andhra Pradesh, supplied a machinery to
Keyan Wind Farms Ltd., registered in the State of Karnataka. However, this machinery
was assembled and installed at the wind mill of Keyan Wind Farms Ltd., which was
located in the State of Tamilnadu.

9. (a) Happy Constructions Ltd., a registered builder under GST in Bengaluru, Karnataka has got
permission to build five floors from the Municipal Projects for one of its projects at Suraj Nagar.
Aditya Constructions, a neighbouring housing project approached Happy Constructions Limited
to discuss regarding blockage of sun light issue arising out of construction of five floors and
asked it to build only three floors for which ₹ 20 lakh was offered as compensation. Happy
Constructions Limited agreed to the offer. It may be noted that Aditya Constructions is not
ready to pay any further amount to Happy Constructions Ltd. in addition to the amount already
agreed.

Briefly explain with correct legal provision whether the above amount received as compensation
is liable to GST or not? And if considered as taxable, then calculate the total GST payable by
Happy Constructions Ltd. Assume the applicable rate of CGST and SGST is 9% each.

Also state the conditions to be complied with.

(b) The aggregate turnover of M/s Mangal & Co., a registered person, for the financial year
2022-2023 was ₹ 8 Crores. It approaches you as GST Consultant for the issue of e-invoicing.

Advice whether it is mandatory to issue e-invoice?

Also list out the entities which are exempt from the mandatory requirement of e-invoicing.

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10. (a) Ramlala Enterprises, registered in Delhi, is engaged in supply of interior decoration
services to Andhra Bhawan located in Delhi. Service contract is entered into with the
Government of Andhra Pradesh (registered only in Andhra Pradesh). The total contract value
inclusive of GST is Rs 15,50,000 and payment for the same is due in October, 2023.

You are required to determine amount of tax, if any, to be deducted in the above case assuming
the rate of CGST, SGST and IGST as 9%, 9% and 18% respectively.

Will your answer be different, if Ramlala Enterprises is registered under composition scheme?

(b) Examine the implications of GST on supply of food and beverages at cinema halls.

11. Chill Ltd., Delhi, a registered supplier, manufacturing machineries has made a taxable supply of
machinery during the month of March. It furnished the following details for each such
machinery supplied: -

S.NO Particulars Amount (₹)

(i) List price of machinery (exclusive of taxes) 10,00,000
(ii) Subsidy received from the Central Government for supply 2,10,000
of machinery to Government School
(exclusively related to supply of machinery included at S.
No. 1)
(iii) Subsidy received from an NGO for supply of machinery to 2,00,000
an old age home
(exclusively related to supply of goods included at S. No. 1)
(iv) Tax levied by Municipal Authority 2,50,000
(v) Packing charges 1,25,000
Additional information:-

The list price of the machinery is after considering the two subsidies received. However, the
other charges/taxes/fee are charged to the customers over and above the list price.

Further, the company has provided the following information pertaining to purchases
made/services availed by it in respect of supply of said machinery during the month of March:

S.NO Particulars Amount (₹)

(1) Raw material (to be received in the month of April) 8,50,000
(2) Membership of a club availed for employees working in the 4,00,000
factory (not obligatory to be provided under any law)
(3) Inputs to be received in 6 lots, out of which 1st lot was 3,50,000
received during the month
(4) Trucks used for transport of raw material 1,50,000
(5) Capital goods (out of 3 items, invoice for 2 items is missing 3,50,000
and GST paid on those items is ₹ 2,82,000)
Note:

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

(ii) All inward and outward supplies are exclusive of taxes, wherever applicable.

(iii) All the conditions necessary for availing the ITC have been fulfilled, subject to the
information given above.

(iv) All inward and outward supplies are inter-State supplies.

Compute the net GST payable in cash, by Chill Ltd. for the month of March.

12.(a) Eden Ltd., registered under GST and dealing in educational toys, has an aggregate turnover
of ₹ 18 crore in the preceding financial year. The tax consultant of Eden Ltd. advised it to issue
e-invoices mandatorily in the current financial year. However, Eden Ltd. is of the view that

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since it’s aggregate turnover is less than the threshold limit applicable for e-invoicing, so it is
not required to issue e-invoices. You are required to comment upon the validity of the advice
given by Tax consultant.

(b) A Government Department is registered under GST. It’s aggregate turnover in the
preceding financial year is ₹ 22 crore. You are required to comment with the help of relevant
provisions whether the said Department is required to issue e-invoices in the current financial
year.

13. Batra Ltd., a normal taxpayer, is winding up its business in Rajkot. The Tax Consultant of
Batra Ltd. has suggested that Batra Ltd. will have to file either the annual return or the final
return at the time of voluntary cancellation of registration in the State of Rajkot.

Do you agree with the stand taken by Tax Consultant of Batra Ltd.? Offer your comments.
Ignore the aggregate turnover of Batra Ltd.

14. Mr. Shyam Nath, a registered person has caused movement of goods of consignment value
exceeding ₹ 50,000 in relation to a supply and thus, generated e-way bill. However, after
generation of e-way bill, he found a mistake in the e-way bill and wants to edit it. You are
required to advise Mr. Shyam Nath whether he can do so with the help of relevant provisions.

15.Examine the implications of GST on payment of honorarium to the Guest Anchors.

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