Case scenario - I

Shreyans Ltd. (hereinafter referred as “company”) is a conglomerate having diversified

businesses including hotels, FMCG (Fast-Moving Consumer Goods), information technology
etc. It has its corporate office in Delhi and operations across multiple States in India. As an
internal policy, the company has obtained single GST registration in each State
irrespective of the diversified business operations being undertaken in the State. During
the month of April, the company undertook the following transactions:
(a) The FMCG division of the company in Jaipur, Rajasthan agreed to use the vacant
godown within the premises of Hotel Division in Udaipur, Rajasthan for storage of its
goods. The value of such an arrangement was agreed at ` 5 lakh per month. Said
amount was agreed to be adjusted by way of intra-division book adjustment on a
monthly basis.
(b) The Hotel Division of the company in Maharashtra used the IT platform owned and
managed by the IT Division of the company in Delhi. The value of such services was
determined as ` 12 lakh per month. The IT division treated the same as deemed
supply liable to GST as per Schedule I of the CGST Act, 2017 and charged GST on
such deemed supply in the invoice issued to Hotel Division on 25 th April. The Hotel
Division availed the input tax credit of such deemed supplies from its Maharashtra
Office in April itself. However, no payment was made for such services by the Hotel
Division to the IT Division.
(c) The Executive Director, as part of his salary and perquisites under the employment
agreement, was eligible for a voucher worth ` 5 lakh, redeemable at any hotel
property of the company in India. The voucher was used by the Executive Director
for the stay of his family in a company owned hotel in Udaipur, Rajasthan. The total
amount charged from the Executive Director was ` 25 lakh. The voucher value of ` 5
lakh was deducted from such amount at the time of payment.
(d) The Hotel Division provided accommodation services to a US citizen and resident for a
wedding ceremony organized at its hotel in Udaipur, Rajasthan. The total amount of
` 2 crores for such services was paid by an Indian individual residing in Delhi on
behalf of the US resident in Indian currency. The amount was received by the
Mumbai, Maharashtra Office of Hotel Division.
(e) The company received long term lease of an industrial plot from Maharashtra
Industrial Development Corporation (MIDC) in auction against payment of an upfront
amount as lease premium of ` 20 crores for a period of 50 years. The company paid
location charges of ` 5 crores in addition to the said premium.
The rate of GST in case of intra-State supplies, unless otherwise provided shall be 9%
CGST and 9% SGST) and for inter-State supplies shall be 18% IGST. All
the divisions of the Company are eligible for 100% input tax credit unless otherwise
specified.
Based on the facts of the case scenario given above, choose the most appropriate
answer to Q. Nos. 1 to 5 below:-
1. Which of the following statements is correct in respect of the services related to usage
of vacant godown?
(a) The Hotel Division shall charge CGST and SGST amounting to
` 45,000 each in the tax invoice issued to FMCG Division.
(b) No GST is chargeable on usage of vacant godown of Hotel Division.
(c) The Hotel Division shall charge IGST amounting to ` 90,000 in the tax invoice
issued to FMCG Division.
(d) The Hotel Division, Rajasthan shall charge IGST amounting to
` 90,000 in the tax invoice issued to Corporate Office in Delhi.
2. Assuming that the payment for utilization of IT platform has not been made by the
Hotel Division to the IT Division till the end of October month of the current financial
 year, the Hotel Division:
(a) should reverse the input tax credit so availed while filing Form GSTR-3B of the
October month.
(b) need not reverse the input tax credit so availed in Form GSTR-3B of the
October month.
(c) should have availed the input tax credit only after the end of the current financial
year and not in April.
(d) should not have availed the input tax credit in respect of said transaction as the
same is deemed supply under Schedule I of the CGST Act, 2017.
3. In relation to the stay of Executive Director’s family in the company owned hotel in
Udaipur, Rajasthan, value of supply of accommodation services provided by the Hotel
Division is:
(a) ` 25 lakh
(b) ` 20 lakh
(c) Supply of services by employer to employee is not a taxable supply under GST.
(d) ` 5 lakh
4. For the accommodation services provided to the US resident and citizen, the place
of supply shall be:
(a) Udaipur
(b) Delhi
(c) Mumbai
(d) USA
5. In respect of the long-term lease of the industrial plot received from Maharashtra
Industrial Development Corporation (MIDC),
(a) upfront lease premium of ` 20 crores is exempt. However, the location
charges of ` 5 crore are liable to GST.
(b) GST is payable on the upfront lease premium of ` 20 crores. No GST is
payable on the location charges.
(c) GST is exempt on the entire premium of ` 25 crores including location charges.
(d) GST is payable on the entire upfront premium of ` 25 crores including location
charges.
Vlook Smart Ltd. (hereinafter referred as “company”) is a leading retail chain of India.
It has retail stores in multiple States with its corporate office located in Mumbai,
Maharashtra. The company has GST registrations across all States from where it operates
its retail stores. The company undertook following transactions during the month of April:
(a) Supplied goods worth ` 100 crores through its retail store in Jaipur, Rajasthan and
offered a cash discount of ` 2 crores to the customers in the State of Rajasthan
during the month.
(b) Ghanshyam Das, a retailer in Gujarat, purchased goods worth ` 5 lakh in the month
of January of the preceding financial year. Subsequently, the company offered an
incentive on such purchases to Ghanshyam Das by issuing a commercial credit note
of ` 50,000 in the month of April.
(c) The company also charges slotting fee from the manufacturers of goods to keep
their products on the shelf for sale. The company received ` 5 crores from a
manufacturer located in West Bengal for keeping its products on shelf of its store for
sale in the State of Haryana. The payment for the same was received at Mumbai
Head Office of the company. The invoice for the same was issued by the Haryana
registration of the company.
(d) The company received an amount of ` 2 crores in April as penalty for delayed receipt
of consideration from its customers for sale of goods made in the month of January of
the preceding financial year in the retail store of Jaipur, Rajasthan.
(e) The company entered into a rental agreement with a registered person for an
upcoming retail store (a commercial property) in Ahmedabad, Gujarat. The said store
location is outside the municipal limits of Ahmedabad. The rental per month payable
from April is ` 50 lakh which is paid to the owner registered in Ahmedabad, Gujarat,
by the Mumbai Head Office of the company as the company follows a centralized
rental agreement policy for all stores. The invoice for the same is issued to the
respective registered office in Gujarat.
(f) The company incurred an expense of ` 50 lakh in transportation of empty cargo
containers to its centralized warehouse in Mumbai from all the States through a
Goods Transport Agency.
The rates of GST, unless otherwise specified, shall be 9% CGST, 9% SGST and 18% IGST.
All the divisions of the company are eligible for 100% input tax credit unless otherwise
specified.
Based on the facts of the case scenario given above, choose the most appropriate answer
to Q. Nos. 6 to 11 below:-
6. The value of supply on which GST is payable for the month of April for the
Rajasthan State is:
(a) ` 96 crores
(b) ` 100 crores
(c) ` 98 crores
(d) ` 102 crores
7. In relation to the incentive paid to Ghanshyam Das in Gujarat,
(a) the company shall reverse proportionate input tax credit.
(b) there is no GST implication on the company and Ghanshyam Das.
(c) Ghanshyam Das shall reverse the input tax credit availed on the purchase.
(d) the company shall reduce the tax liability and Ghanshyam Das shall increase
the tax liability for the month of April.
8. In relation to the slotting fee charged,
(a) tax is payable by the company in Haryana.
(b) tax is payable by the manufacturer in West Bengal.
(c) tax is payable by the company in Maharashtra.
(d) slotting fee is exempted from GST.
9. The tax on penalty received on account of delayed payment of consideration is
payable at the time of filing return of .
(a) April
(b) January
(c) Either April or January at the option of the company
(d) No tax is payable on the penalty received on account of delayed payment of
consideration.
10. The GST on rental amount of upcoming store near Ahmedabad shall be:
(a) ` 4.5 lakh CGST and ` 4.5 lakh SGST, payable by owner in Gujarat.
(b) ` 9 lakh IGST, payable by owner in Gujarat.
(c) nil since store is located outside the municipal limits.
 (d) ` 9 lakh IGST, payable under reverse charge mechanism by Mumbai Head
Office, Maharashtra.
11. For the empty cargo containers transported to Mumbai warehouse,:
(a) e-way bill shall be issued by respective dispatch locations of the company.
(b) e-way bill shall be issued by the warehouse location in Mumbai.
(c) no e-way bill is required to be issued.
(d) e-way bill shall be issued by the Goods Transport Agency.
12. Mr. Mota Lal is engaged in the wholesale business of dry fruits. He imported 5,150 kg
of almonds from California. Post importation, he did not clear them for home
consumption but kept the imported almonds in a customs warehouse due to the
renovation work going on in his retail store. Mr. Bansi Lal, the warehouse keeper, is of
the view that titular rights of the almonds vest with him and Mr. Mota Lal has no
access to them. However, Mr. Mota Lal wishes to inspect the goods and ensure
that goods do not deteriorate during storage in the warehouse and thereafter, show
them for sale to Mr. Manohar Lal.
Which of the following statement(s) is correct in the given case as per the
provisions of the Customs Act, 1962?
(a) The view taken by Mr. Bansi Lal is correct.
(b) The view taken by Mr. Bansi Lal is incorrect. However, Mr. Mota Lal can only
inspect the goods.
(c) The view taken by Mr. Bansi Lal is incorrect. However, Mr. Mota Lal can only
inspect the goods and ensure that goods do not deteriorate during storage in
the warehouse but thereafter he cannot show them in warehouse for sale to
Mr. Manohar Lal.
(d) The view taken by Mr. Bansi Lal is incorrect. Further, Mr. Mota Lal can inspect
the goods and ensure that goods do not deteriorate during storage in the
warehouse and also thereafter, he can show them in warehouse for sale to Mr.
Manohar Lal.
13. Mr. Dinkar is the owner of Dinkar Associates which is registered in Ahmedabad,
Gujarat. He is engaged in supply of various goods and services in the domestic
market and exporting the same outside India. During the month of February, he has
undertaken the following transactions:
Outward Supplies
(i) Transferred the tenancy rights of a commercial complex (taken on rent) located
in Vadodra for a tenancy premium of ` 8,00,000 to DB Morgan Ltd. of
Ahmedabad, Gujarat. Stamp duty and registration fee have already been paid
on the tenancy premium.
(ii) Hired out excavators and dumpers alongwith operators to mining lease holders of
Kuchchh, Gujarat for extracting and transporting minerals within the mining area
for a period of 5 years. The excavators/dumpers are invariably hired out along
with operators. Similarly, operators are supplied only when the
excavators/dumpers are hired out. Hire charges for excavators and dumpers are
` 10,00,000 and service charges for supply of manpower for operation of the
excavators/dumpers - ` 2,00,000.
(iii) Supplied goods of value of ` 35,00,000 to Choksi Ltd. Jamnagar, Gujarat
(including goods worth `·10,00,000 supplied to SEZ unit of Choksi Ltd. in
Gujarat).
(iv) Agreed to provide consultancy services to Mr. Krishna of Surat, Gujarat who is an
unregistered person in connection with his newly commenced business for a
consideration of ` 6,80,000. An advance of ` 1,50,000 has been received for
the same on 10th February.
 (v) Exported the goods to George Inc. of the USA. FOB value of the goods is `
8,40,000.
(vi) Sold a heavy printing machinery purchased from Japan for ` 5,10,000 in high
sea to Dhoomketu Printers, Mumbai, Maharashtra on 10th February.
(vii) Supplied goods to Timahi Corporation, China for ` 12,00,0000 on 15th February.
These goods were purchased for ` 10,00,000 from Jamsam Corporation, Japan on
5th February and were supplied in China without bringing them to India.
Inward Supplies
(i) The goods exported to George Inc., USA, were purchased by Mr. Dinkar as a
merchant exporter for ` 7,00,000 from Shravan Ltd., a manufacturer registered
in Bengaluru, Karnataka.
(ii) The heavy printing machinery sold in high sea to Dhoomketu Printers was
originally imported by Mr. Dinkar from Japan on 2 nd February, with CIF value of `
5,00,000 and FOB value of ` 4,50,000.
(iii) Mr. Dinkar paid a sales commission of ` 5,00,000 to Mr. Kenzo of Japan, his agent
in connection with all the imports from Japan.
(iv) Imported raw materials from Italy under a CIF contract. CIF value of the
goods for the purpose of customs included ` 2,00,000 as ocean freight paid by
the exporter on transport of goods through vessel from port of shipment to port
of import. The value for the purpose of levy of IGST worked out by the customs
was ` 9,00,000.
(v) Purchased raw cotton for manufacture of garments for ` 12,00,000 from Mr.
Poonawala, an agriculturist of Kuchch, Gujarat.
(vi) Monthly rent of ` 35,00,000 payable to Dharam Ltd., Gujarat, for the retail
outlet (a commercial property) in Ahmedabad, Gujarat (one third of total space
available is used by Mr. Dinkar for personal residential purposes).
Compute the net GST payable in cash [CGST and SGST or IGST, as the case may
be], by Mr. Dinkar for February.
Notes:
A. Rates of CGST, SGST and IGST for hiring out of excavators and dumpers are 6%,
6% and 12%. As regards the supply received as a merchant exporter, Mr. Dinkar
paid GST at the concessional rates by fulfilling all requisite conditions thereof.
Rates of CGST, SGST and IGST for all the other supplies of goods and services
including supply of manpower services are 9%, 9% and 18%. Ignore GST
compensation cess.
B. Mr. Dinkar had an opening balance of ITC of CGST of ` 35,000 and SGST of `
35,000 for the relevant period. In respect of all the inward supplies, suppliers
have uploaded their invoices in
respective Form GSTR-1 and the supplies are reflected in Form GSTR 2B.
C. All the figures given above are exclusive of GST, wherever applicable. The
amounts given in respect of import and export transactions in rupees have been
arrived after conversion thereof, though transactions were undertaken in
convertible foreign currency.
D. Mr. Dinkar always makes zero-rated supplies under a bond or letter of
undertaking (LUT).
Provide supporting explanatory notes for your conclusion wherever required.
14. Mr. Jignesh of Delhi books accommodation, though an e-commerce operator - Plan My
Trip Ltd. (PMTL), registered under GST in Uttarakhand, in a newly established
budget hotel – Paras Resorts Ltd. (PRL) located in Nainital, Uttarakhand. The
turnover of PRL in the current financial year is ` 18 lakh.
 PRL raises an invoice for ` 1,00,000 to Mr. Jignesh. PMTL collects the payment from Mr.
Jignesh and after deducting its fees and other charges from the same, remits the
balance amount to PRL.
Advise PRL as to whether it is required to obtain GST registration. Also, whether tax is
required to be collected at source by PMTL under section 52 on the services provided
by PRL to Mr. Jignesh through electronic commerce operator – PMTL. If yes, determine
the amount of tax to be collected at source.
Suppose in the above case, other facts remaining same, if PRL, supplying
accommodation services, is also an e-commerce operator (registered in Uttarakhand
as TCS collector as well as a regular tax payer since its aggregate turnover exceeds
the threshold limit) and PMTL has an agreement with PRL for booking the
accommodation at the time when Mr. Jignesh booked the accommodation, ascertain
whether tax is required to be collected at source under section 52 on the services
provided by PRL to Mr. Jignesh through electronic commerce operator – PMTL. If yes,
determine the amount of tax to be collected at source and since two e-commerce
operators are involved in the said transaction, who is required to collect the tax at
source under section 52?
Note – Amounts given above are exclusive of GST. Assume applicable rate of CGST
and SGST to be 9% each and IGST to be 18%.
15. A notice for audit under section 65 is served by the proper officer on the basis of risk
assessment to Ghoomghoom Pvt. Ltd. on 02.12.2023 for audit of financial years
2021-22 and 2022-23. The tax authorities visited its place of business on 20.12.2023
and requested for certain records, documents and books of accounts, from the
company. The required records, documents and books of accounts are provided by
Ghoomghoom Pvt. Ltd. on 30.12.2023. After in-depth checking of records,
documents and books made available by Ghoomghoom Pvt. Ltd. during audit, the
audit was completed on 25.03.2024 and audit findings were communicated to the
taxpayer in prescribed form by said date. However, the accountant of Ghoomghoom
Pvt. Ltd. is of the view that-
(i) the tax authorities have completed the audit of Ghoomghoom Pvt. Ltd. after the
lapse of the maximum time-period permitted by the GST law and
(ii) the tax authorities cannot conduct the audit of two financial years at a time.
Ghoomghoom Pvt. Ltd. has approached you to advise you on the said issues. You are
required to determine the technical veracity of the above views of the accountant
of Ghoomghoom Private Ltd. on the same with reference to the relevant provisions
of the GST law.
16. Agora Ltd. exported certain goods to its customer located in Germany against which a
refund of IGST amounting to ` 50 lakh was claimed and received by Agora Ltd. The
sale proceeds covering 50% of the value of exports were immediately received by
Agora Ltd. However, due to financial constraints, the customer failed to pay the
balance amount of sale proceeds within the permissible time limits under regulatory
provisions prevailing in India.
In view of the aforesaid scenario:
(a) Determine the amount of refund, if any, which Agora Ltd. is required to deposit
back. Also, discuss the time limit which is permissible under law within which the
sale proceeds in respect of exported goods should have been realized by Agora
Ltd.
(b) Will your answer to sub-part (a) differ if the Reserve Bank of India writes off the
requirement of realisation of sale proceeds on merits?
(c) Whether Agora Ltd. can claim the refund back in case sale proceeds are
realised at a later date?
17. Discuss the cases where a registered person is not allowed to furnish the details of
outward supplies under section 37 in Form GSTR-1 or using invoice furnishing facility,
as enumerated in rule 59.
18. Paramjit Ltd. imported a machine from Oliver Equipments, UK. The FOB price of the
machine was settled at 6,000 UK Pound. The machine was shipped on 01.10.2023.
Meanwhile, Paramjit Ltd. re-negotiated the price of the machine with Oliver
Equipments which agrees on the reduced price of 5000 UK pound on 10.10.2023.
The machine arrived in India on 18.10.2023. Other details pertaining to machine are
as under:
(i) License fee that the buyer was required to pay in UK as a condition of sale was
500 UK Pound
(ii) Buying commission paid in India was ` 20,000
(iii) Cost of transport from UK port to Indian port is ` 40,000. Apart from this, due
to deep draught at the port, machine was not taken to the jetty in the port but
was unloaded at the outer anchorage. The additional charges incurred for
such unloading and transport of machine from outer anchorage to the jetty in
barges (small boats) were ` 10,000.
(iv) Date of presentation of bill of entry was 15.10.2023 and the rate of exchange
notified by CBIC on this date was ` 100 per pound. Rate of basic customs duty
was 10%.
(v) Date of entry inwards was 18.10.2023 and the rate of exchange notified by CBIC
on this date was ` 105 per pound. Rate of basic customs duty was 15%.
(vi) Insurance premium details were not ascertainable.
Compute the assessable value and basic customs duty payable (rounded off to
nearest one rupee) by Paramjit Ltd.
19. Aayaat Enterprises imported goods vide a bill of entry presented before the proper
officer on 15th April. The proper officer decided that the goods should be subject to
a chemical test and therefore, the same were to be provisionally assessed. You are
required to advise Aayaat Enterprises regarding the conditions which are to be
complied with before payment of duty is made for the purpose of provisional
assessment.
Subsequently, the goods imported by Aayaat Enterprises were provisionally assessed
at a value of ` 24,00,000 on 16th April and Aayaat Enterprises paid the provisional duty
of ` 2,40,000 on the same date after fulfilling the requirements for provisional
assessment. Further, the chemical test report was received on 5 th May. Advise Aayaat
Enterprises regarding the maximum time limit upto which its provisional assessment
should be finalized.
Determine the amount of interest payable, if any, under section 18 of the Customs
Act, 1962 (considering a year of 365 days) assuming that the provisional
assessment was finalized on 30th June finally assessing the customs duty at `
2,80,000 and the differential duty was paid on the same day.
20. With reference to the Foreign Trade Policy 2023, explain in brief the objectives and
salient features of Remission of Duties and Taxes on Exported Products (RoDTEP)
scheme.

SUGGESTED ANSWERS
Sr. Answer

1 (b) No GST is chargeable on usage of vacant godown of Hotel Division

2 (b) need not reverse the input tax credit so availed in GSTR-3B of the
October month.
3 (a) ` 25 lakh
4 (a) Udaipur
 5 (c) GST is exempt on the entire premium of ` 25 crores including location
charges.

6 (b) ` 100 crores

7 (b) there is no GST implication on the company and Ghanshyam Das.

8 (a) tax is payable by the company in Haryana.

9 (a) April
10 (a) ` 4.5 lakh CGST and ` 4.5 lakh SGST, payable by owner in Gujarat

11 (c) no e-way bill is required to be issued.

12 (d) The view taken by Mr. Bansi Lal is incorrect. Further, Mr. Mota Lal can
inspect the goods and ensure that goods do not deteriorate during
storage in the warehouse and also thereafter, he can show them for sale
to Mr. Manohar Lal.

13. Computation of net GST payable in cash, by Mr. Dinkar

Particulars Value CGST (`) SGST (`) IGST
(`) (`)
GST payable on outward supplies
Transfer of 8,00,000 72,000 72,000
tenancy (8,00,00 (8,00,00
rights 0 0
[Transfer of x 9%) x 9%)
tenancy
rights to a new
tenant
against consideration
in
the form of
tenancy
premium is taxable
even
though stamp duty
and
registration fee have
been paid on the
same
(Circular No. 44/2018
CT
dated 02.05.2018).
It is
an intra-State supply
since place of supply
is location of
immovable property

being Ahmedabad,
Gujarat.]
Hiring out 12,00,0 72,00 72,00
excavators 00 0 0
and dumpers [10,00,00 (12,00,00 (12,00,00
including operators 0 0 0
+ x 6%) x 6%)
[Taxable since 2,00,000
renting ]
of trucks and other
freight vehicles with
driver for a period
of
time is a service of
renting of transport
vehicles (with
operator)
and not service of
transportation of
goods
by road. Further,
since
the excavators and
dumpers are
invariably
hired out along with
operators and the
operators are
supplied
only when the
excavators/ dumpers
are hired out, it is a
case
of composite supply
under section 2(30)
wherein the principal
supply is the hiring
out
of the excavators
and
dumpers.
As per section 8(a),
the
composite supply is
treated as the supply
of
the principal supply.
Therefore, the supply
of manpower for
operation of the
excavators/ dumpers
will also be taxed at
the rate applicable for
hiring out of the
excavator and
dumpers

(principal supply).
Further, it is a taxable
intra-State supply
since place of supply
is location of recipient
being Kuchchh,
the consultancy [1,50,00 [1,50,00
services to be 0 0
provided to Mr. × 9%] × 9%]
KrishnaGujarat.]
[Tax onGoods
the supplied
services to 10,00,00 Nil
to beSEZprovided
unit of Choksi
is 0
payable at[Supply
Ltd. the timetoofSEZ
receiptunitofis advance.
a zero-rated
Since the placesupplyof
supply is locationin of
recipient,
terms i.e. Gujarat,
of section
it is an
16(1)(b) ofState
intra- the IGST
supply.]
Act, 2017. No
Export of goods IGSTtois 8,40,000 Nil
USA under
payable LUT/bond
since Mr.
[ExportDinkar
of makes
goods all
outsidezero-Indiarated is supplies
a
zero- under
rated LUT/bond.]
supply in
terms Supply
of section of 16(1)
goods to 25,00,00 2,25,000 2,25,000
(b) ofChoksi
the IGST Ltd., Act,
Gujarat 0 [25,00,00 [25,00,00
2017. [It
NoisIGSTa taxable intra- [35,00,00 0 0
is payable since
State supply sinceMr. 0 × 9%] × 9%]
Dinkarplace makes all
of supply is -
zero- location
rated supplies of goods 10,00,00
under when
LUT/bond.] movement of 0]
such goods
High terminates,
sea sales of Nil -- -- --
heavy printing
viz., Jamnagar,
machinery
Gujarat.imported
from Japan
Advance received for 1,50,000 13,50 13,50
[High sea sales is 0 0
neither treated as
supply of goods nor
as supply of services
in terms of para 8(b)
of Schedule III of the
CGST Act, 2017.]
Goods purchased Nil -- -- --
from Japan sold in
China without
bringing them
into India
[Third country
shipments or
triangular trade is
neither treated as
supply for goods nor
as supply of services
in terms of para 7 of
Schedule III of the
CGST Act, 2017.]
Total output tax 3,82,500 3,82,500 Nil
Less: ITC [Refer 81,35 81,35
working note below]
0 0
[IGST credit has been
utilized for payment (IGS (IGS
of CGST and SGST T) T)
liability in equal 3,01,1
proportion.
50
Thereafter, CGST
credit and SGST (CGS
credit have been T)
 Working Note - Computation of admissible ITC for February
Particulars Value CGS SGS IGS
(`) T T T
(`) (`) (`)
Opening balance 35,000 35,000
Goods purchased as 7,00,00 -- -- 700
merchant exporter 0
[It is an inter-State
supply since the place
of supply is Gujarat,
i.e. location where the
movement of goods
terminates. Shravan
Ltd. would have
supplied the goods to
merchant exporter –
Mr. Dinkar - at
concessional rate of
IGST of 0.1%
prescribed under
Notification Nos.
41/2017 IT(R) dated
23.10.2017.
Further, the
merchant

exporter is eligible to
take ITC of
concessional IGST so
paid1.]
Heavy printing Nil -- -- --
machinery imported
from Japan
[No ITC is available
since tax is not
payable by Mr. Dinkar
on the same since in
case of high sea sales,
IGST is paid by the
last high sea sales
buyer who clears the
goods for home
consumption by filing
the bill of entry.]
Goods purchased Nil -- -- --
from Jamsam

Corporation,
Japan
[No ITC is available
since tax is not
 payable by Mr. Dinkar
on the same as goods
do not become part of
the landmass of the
country.]
Sales commission paid 5,00,000 -- -- --
to agent - Mr. Kenzo
[Since service provider
- Mr. Kenzo - is an
intermediary in the
given transaction,
place of supply is
location of supplier -
Mr. Kenzo, i.e.
outside India (Japan),
of the IGST Act, 2017.
Since in terms
locationof of section
13(8)(b)
supplier and place of
supply are outside
India,
1
Circulartax is not
No. 125/44/2019 GST dated 18.11.2019
payable on said
transaction under
reverse charge on said
services.]
Imported raw material 9,00,000 1,62,00
from Italy 0
[Input tax, inter alia, [9,00,00
includes IGST 0
charged on import of ×
goods, in terms of 18%]
section 2(62). No
separate levy of IGST
will be there on the
component of ocean
freight paid by the
foreign exporter to the
foreign shipping line in
the CIF contract by
virtue of Union of
India vs. Mohit
Minerals Pvt. Ltd.
2022 (61) G.S.T.L.
257 (SC) since the
Indian importer is
liable to pay IGST on
the ‘composite
supply’, comprising
of supply of
goods
and supply of
services
of
transportation,
insurance, etc. in a
CIF contract.
Raw cotton 12,00,00 1,08,000 1,08,000
purchased from 0 [12,00,00 [12,00,00
Mr. 0 0
Poonawala, × 9%] × 9%]
Gujarat
[It is an intra-
State
 supply since the place 3,53,00 3,53,00 1,62,70
of supply is location 0 0 0
where movement of
goods terminates, i.e.
Gujarat, in terms of
section 10(1)(a) of the
IGST Act, 2017. ITC
on goods used in
course or furtherance
of business is
allowed in terms of
section 16.]

GST paid on monthly 35,00,00 2,10,000 2,10,000 --

rent [In case of 0 [35,00,00 [35,00,00
services used partly 0 0
for the business × ×
purpose and partly 9%×2/ 9%×2/
for 3] 3]
other purposes, ITC is
restricted to so much
of ITC as is
attributable to the
purposes of business.
Thus, ITC for GST paid
on only 2/3rd of
monthly rent is
available since GST
paid on monthly

rent
attributable to
personal purposes
(one-third) is not
allowed. Further, it is
an intra-State supply
since the place of
supply of services
provided in relation to
an immovable
property is location of
immovable property,
i.e. Gujarat in terms
of section 12(3) of the
IGST Act, 2017.]

Total ITC available

Note – Since as per section 49(5) read with rule 88A, ITC of IGST can be utilised
towards payment of CGST and SGST in any proportion and in any order, the ITC of
IGST of ` 1,62,700 can be set off against the CGST and SGST liability in any
proportion and in any order. In above answer, ITC of IGST has been set off in
equal proportion against the payment of CGST and SGST liability. However, multiple
answers are possible to given question owing to multiple ways of utilizing the ITC
of IGST for payment of CGST and SGST liability.
14. As per section 22, every supplier of goods or services or both is required to obtain
registration in the State/ Union territory from where he makes the taxable supply if
his aggregate turnover exceeds threshold limit in a financial year. However, section
24, inter alia, provides that persons who supply goods or services or both through an
 electronic commerce operator (hereinafter referred as ECO), who is required to collect
tax at source under section 52, are required to obtain registration mandatorily.
However, said mandatory registration is not applicable, inter alia, to the suppliers of
the services which are notified under section 9(5) or section 5(5) of the IGST Act,
2017; such suppliers are entitled for threshold exemption.
In case where services are notified under section 5(5) of the IGST Act, 2017, the ECO
is liable to pay the entire tax on behalf of the suppliers of services. Notification No.
14/2017 IT (R) dated 28.06.2017 issued under said section notifies services by way of
providing accommodation in hotels, provided the person supplying such service
through ECO is not liable for registration under section 22(1), as one such service
where the ECO is liable to pay tax on behalf of the suppliers.
In the given case, PRL provides services by way of providing accommodation in hotel
through an ECO. Services by way of providing accommodation in hotels provided by a
supplier - PRL - which is not liable for registration under section 22(1) as its turnover
is less than the threshold limit for registration, [viz. ` 20 lakh], is a service notified
under section 5(5). Thus, PRL will be entitled for threshold exemption for registration
and will not be required to obtain registration even though it supplies services
through ECO.
As per section 52, ECO is not required to collect tax at source (TCS) in cases
where the service is notified under section 9(5) of the CGST Act, 2017/section 5(5) of
the IGST Act, 2017. The applicable tax on such services is to be paid by the ECO as
if he is the supplier liable to pay tax on the supply of such services.
Thus, in the given case, no tax is required to be collected at source under section
52. Further, the supply of accommodation services by PRL to Mr. Jignesh is an intra-
State supply liable to CGST and SGST since the place of supply of services by way of
lodging accommodation by a hotel is the location at which the immovable property is
located in terms of section 12(3) of the IGST Act, 2017. Accordingly, in the given
case, place of supply is Uttarakhand and location of supplier – PRL - is also
Uttarakhand.
As discussed above, entire tax of ` 9,000 (each under CGST and SGST) on `
1,00,000 will be paid by the ECO – PMTL.
In case where PRL is registered under GST, service by way of providing
accommodation in hotels provided by it through ECO will no longer be a service
notified under section 5(5). The reason for the same is that services by way of
providing accommodation in hotels are notified under section 5(5) only where the
person supplying such service through ECO is not liable for registration under section
22(1). Consequently, said services shall be subject to the TCS provisions under
section 52.
Further, in a situation where multiple ECOs are involved in a single transaction of
supply of goods or services or both through ECO platform and the supplier-side ECO is
himself the supplier of the said supply, Circular No. 194/06/2023 GST dated
17.07.2023 clarifies that the buyer- side ECO will be required to collect TCS, as
applicable, pay the same to the Government in accordance with section 52 and also
make other compliances under said section.
As discussed above, the supply of accommodation services by PRL to Mr. Jignesh is
an intra-State supply liable to CGST and SGST.
Accordingly, in the given case, buyer side ECO – PMTL - is required to collect TCS on `
1,00,000 @ 0.5% each under CGST and SGST as follows:
= ` 1,00,000 × 0.5%
=` 500 each under CGST and SGST
15. As per section 65, audit of any registered person may be undertaken by:
 the Commissioner; or
  any officer authorized by him, by way of a general or a specific order.
The audit shall be completed within a period of 3 months from the date of
commencement of the audit. However, where the Commissioner is satisfied that audit
in respect of such registered person cannot be completed within 3 months, he may,
for the reasons to be recorded in writing, extend the period by a further period not
exceeding six months.
For the purposes of this sub-section, the expression "commencement of audit" shall
mean:
(a) the date on which the records and other documents, called for by the tax
authorities, are made available by the registered person
or
(b) the actual institution of audit at the place of business, whichever is
later.
In the given case, the date of commencement of audit shall be determined as
follows:
(a) The date on which requisite information is made available by Ghoomghoom
Private Ltd., i.e., on 30.12.2023.
(b) The date of the actual institution of audit at the place of business, i.e., on
20.12.2023
whichever is later.
Therefore, the date of commencement of the audit shall be 30.12.2023
Accordingly, the audit has to be completed within 3 months from the date of
commencement of the audit, i.e., by 30.03.2024. Thus, in the given case, the audit was
completed by the tax authorities within 3 months from the date of commencement of
the audit, i.e., before 30.03.2024. Resultantly, the view of the accountant of
Ghoomghoom Pvt. Ltd. that the audit by the tax authorities was completed after the
maximum time period prescribed by law for the same, is not correct.
Further, as per section 65 read with rule 101(1), the period of audit to be conducted
under said section shall be a financial year or part thereof or multiples thereof. Thus,
the view of the accountant that audit cannot be conducted for two financial years is
also not correct.
16. (a) As per proviso to section 16(3) of the IGST Act, 2017 read with rule 96B(1) of the
CGST Rules, 2017, in the given case, Agora Ltd. shall deposit the amount of
refund proportionate to the sale proceeds not realized i.e. 50% of the value of
exports. The amount of such refund is ` 25 lakh alongwith applicable interest
under section 50. Further, such amount is required to be deposited by Agora
Ltd. within 30 days of the expiry of the time period allowed under Foreign
Exchange Management Act, 1999, including any extension of such time period
permitted.
(b) As per proviso to rule 96B, where sale proceeds, or any part thereof, in
respect of such export goods are not realised by the applicant within the time
period allowed under the Foreign Exchange Management Act, 1999, but the
Reserve Bank of India writes off the requirement of realisation of sale
proceeds on merits, the refund paid to the applicant shall not be recovered.
Thus, if the RBI writes off the requirement of realisation of sale proceeds by
Agora Ltd., the refund amount received by Agora Ltd. is not liable to be
recovered.
(c) As per rule 96B(2), where the sale proceeds are realised by the
applicant, in full or part, after the amount of refund has been recovered from him
under rule 96B(1) and the applicant produces evidence about such realisation
within a period of 3 months from the date of realisation of sale proceeds, the
amount so recovered shall be refunded by the proper officer, to the applicant to
 the extent of realisation of sale proceeds, provided the sale proceeds have
been realised within such extended period as permitted by the Reserve Bank
of India.
In case the refund amount is deposited by Agora Ltd. alongwith interest as per
rule 96B(1) on account of non-realization of sale proceeds from the customer,
which is realized on a later date, Agora Ltd. can claim the refund within 3
months from the date of realization of sale proceeds in proportion of the sale
proceeds recovered. However, in order to claim such refund, the sale proceeds
should have been realized within such extended period as may be permitted
by the RBI.
17. Rule 59(6) provides that:
(i) a registered person shall not be allowed to furnish the details of outward supplies
in Form GSTR-1, if he has not furnished the return in Form GSTR-3B for the
preceding month.
(ii) a registered person, opting for QRMP scheme, shall not be allowed to furnish
the details of outward supplies in Form GSTR-1 or using Invoice Furnishing
Facility (IFF), if he has not furnished the return in Form GSTR-3B for
preceding tax period.
(iii) a registered person, to whom an intimation has been issued on the common
portal under the provisions of rule 88C(1) in respect of a tax period, shall not
be allowed to furnish the details of outward supplies in Form GSTR-1 or using IFF
for a subsequent tax period, unless he has either deposited the amount specified
in the said intimation or has furnished a reply explaining the reasons for any
amount remaining unpaid, as required under the provisions of rule 88C(2).
(iv) a registered person, to whom an intimation has been issued on the common
portal under the provisions of rule 88D(1) in respect of a tax period/periods,
shall not be allowed to furnish Form GSTR- 1/IFF for a subsequent tax period,
unless he has either paid the amount equal to the excess ITC as specified in
the said intimation or has furnished a reply explaining the reasons in respect of
the amount of excess ITC that still remains to be paid, as required under the
provisions of rule 88D(2);
(v) a registered person shall not be allowed to furnish Form GSTR- 1/IFF, if he has
not furnished the details of the bank account as per the provisions of rule 10A.
18. As per section 14 of the Customs Act, 1962, the value of the imported goods is the
transaction value, which means the price actually paid or payable for the goods at the
time and place of importation. Further, the Supreme Court in case of Garden Silk
Mills v. UOI 1999 (113) E.L.T. 358 held that importation gets complete only when
the goods become part of mass of goods within the country.
Since in the instant case, the price of the goods was reduced when the goods were in
transit, i.e. before the goods arrived in India, the goods should be valued as per the
revised reduced price of 5,000 UK pound, which was the price payable at the time of
importation.
Computation of assessable value and basic customs duty payable
by Paramjit Ltd
Particulars Amount
FOB value of machine 5,000 UK
Pound
Add: License fee required to pay in UK 500 UK Pound
(Licence fee relating to imported goods payable by the buyer as a
condition of sale is includible in the assessable value)

Customs FOB 5,500 UK

Pound
 Amount (`)
Value in rupees (5500 x ` 100) 5,50,000
Rate of exchange as notified by CBIC on the date on which bill of
entry is presented under section 46 of
the Customs Act, 1962 is to be considered [Explanation to
section 14 of the Customs Act, 1962].

Add: Buying commission Nil

(Buying commission is not included in the assessable value)

Add: Cost of transport including barge charges 50,000

(In case where the big mother vessels cannot enter
the harbour for any reason and goods are brought to the docks
by smaller vessels like barges, small boats, etc., the cost incurred
by the importer for bringing the goods to the landmass, such as
lighterage charges, barge charges will be included in the cost of
transportation. In other words, the cost of transport of the imported
goods includes ship demurrage charges on chartered vessels,
lighterage charges or
barge charges.)
Add: Insurance 6187.50
[If insurance cost is not ascertainable, the same shall be added @
1.125% of FOB value of the goods.]
CIF value / Assessable value 6,06,187.50
Basic customs duty @ 15% (` 6,06,187.50X 15%) (Rounded off) 90,928
[Section 15 of the Customs Act, 1962 provides that rate of duty shall
be the rate in force on the date of presentation of bill of entry or on
the date of entry
inwards, whichever is later.]

19. As per section 18 of the Customs Act, 1962 read alongwith Circular No. 38/2016 Cus.
dated 22.08.2016, wherever, duty is to be assessed provisionally, the importer shall:
(a) execute a bond in the prescribed form, for the purposes of undertaking to pay on
demand the deficiency, if any, between the duty as may be finally assessed and
the duty provisionally assessed; and
(b) furnish prescribed amount of security for the payment of the duty deficiency. The
security to be obtained shall be in the form of a bank guarantee or a cash
deposit, as convenient to the importer.
As per the Customs (Finalisation of Provisional Assessment) Regulations, 2018, the
proper officer has to finalise the provisional assessment within
2 months of receipt of a chemical or other test report, where the provisional
assessment was ordered for that reason.
The proper officer can finalize the provisional assessment within 2 months of
receipt of a chemical or other test report, where the provisional assessment is
ordered for that reason. The Commissioner of Customs may allow a further time
period of 3 months in case the proper officer is not able to finalize the provisional
assessment within the period of 2 months.
Thus, in the given case, provisional assessment will be finalized by 5th July [within 2
months of receipt of test report (5th May)]. However, if the proper officer is not able to
finalize the provisional assessment by 5th July, the Commissioner may allow a
further period of 3 months, i.e., till 5th October to the proper officer to finalize the
provisional assessment.
Had provisional assessment been finalized on 30th June and differential duty been
paid on same day, as per section 18(3) of the Customs Act, 1962, the importer
 would have been liable to pay interest, on any amount payable consequent to the
final assessment order @ 15% p.a. from the first day of the month in which the
duty is provisionally assessed till the date of payment thereof.
Accordingly, amount of interest payable will be:
= ` 40,000 x 15% x 91/365
= ` 1,496 (rounded off)
20. Remission of Duties and Taxes on Exported Products (RoDTEP) scheme is based on the
globally accepted principle that taxes and duties should not be exported, and taxes
and levies borne on the exported products should be either exempted or remitted to
exporters. RoDTEP scheme aims to refund such duties and taxes on exported
products, as are otherwise not being refunded under other provisions of law. The
rebate under the Scheme shall not be available in respect of duties and taxes already
exempted or remitted or credited.
The objective of the scheme is to refund, currently unrefunded:-
(i) Duties/taxes/levies, at the Central, State & local level, borne on the exported
product, including prior stage cumulative indirect taxes on goods & services
used in production of the exported product, and
(ii) Such indirect duties/taxes/levies in respect of distribution of exported products.
Salient features of the scheme: -
(i) Rebate amount is issued in the form of a transferable duty credit/electronic scrip
(e-scrip), which will be maintained in an electronic ledger by the CBIC.
(ii) Such duty credit shall be used only to pay basic customs duty on imported
goods.
(iii) The duty credit scrips are freely transferable, i.e. credits can be transferred to
other importers.
(iv) The rebate under the scheme shall not be available in respect of duties and
taxes already exempted or remitted or credited.