Division A - Multiple Choice Questions (MCQs)

Write the most appropriate answer to each of the following multiple choice questions by choosing
one of the four options given. All questions are compulsory.
Total Marks: 12 Marks
Poorva Logistics, a Goods Transport Agency, is registered under GST. It did not exercise the option to itself
pay GST on the services supplied by it in the preceding financial year. It provided goods transport services
(taxable @ 5%) to the following persons in February of preceding financial year-
(a) Kunal Traders, an unregistered partnership firm
(b) Mr. Amar, who is not registered under GST
(c) Small Traders Co-Operative Society registered under Societies Registration Act
In a particular consignment in March of preceding financial year, Poorva Logistics transported the following-
(a) Defence Equipments
(b) Railway Equipments
(c) Organic Manure
Poorva Logistics exercises the option to itself pay GST on services supplied by it @ 12% from April, of the
current financial year. It provided goods transport services to Bama Steels Pvt. Ltd. on 1 st April and issued
an invoice dated 5 th May. Payment was received on 6 th May.
Based on the information provided above, choose the most appropriate answer for the following questions -
1. Which of the following persons are liable to pay GST under reverse charge in respect of the GTA
services provided by Poorva Logistics in February of the preceding financial year?
(i) Kunal Traders
(ii) Mr. Amar
(iii) Small Traders Co-operative society
(a) i & ii
(b) ii & iii
(c) i & iii
(d) i, ii & iii
2. Transportation of _________ by Poorva Logistics is exempt from GST.
(i) Defence Equipments
(ii) Railway Equipments

(iii) Organic Manure

(a) i
(b) i & ii
(c) i & iii
(d) i , ii & iii
3. What will be the time of supply in respect of the services provided by Poorva Logistics to Bama Steels
Pvt. Ltd.?
(a) 6th May
(b) 5th May
(c) 30th May
(d) 1st April (3 x 2 Marks = 6 Marks)
4. Determine which of the following independent transactions even if made without consideration in terms
of Schedule I of the CGST Act, 2017, will be deemed as supply?
(i) AB & Associates transfers stock of goods from its Mumbai branch to Kolkata depot for sale of such
goods at the depot.
(ii) Mr. Raghuveer, a dealer of air-conditioners permanently transfers the motor vehicle free of cost.
ITC on said motor vehicle was blocked and therefore, was not availed.
(iii) Mrs. Riddhi, an employee of Sun Ltd., received gift from her employer on the occasion of Diwali
worth ` 21,000.
(a) (i)
(b) (ii)
(c) (iii)
(d) Both (i) and (ii) (2 Marks)
5. PZY Ltd. is engaged in manufacturing of motor car. The company paid following amount of GST to its
suppliers against the invoices raised to it. Compute the amount of ineligible input tax credit under GST
law:-
S. No. Particulars GST Paid (`)
1. General insurance taken on cars manufactured by PZY Ltd. 1,00,00,000
2. Buses purchased for transportation of employees (Seating capacity 23) 25,00,000
3. Life and health insurance for employees under statutory obligation 6,00,000
4. Outdoor catering in Diwali Mela organized for employees 3,50,000
(a) ` 9,50,000
(b) ` 3,50,000
(c) ` 1,31,00,000
(d) ` 28,50,000 (2 Marks)
6. Ms. Pearl is a classical singer. She wants to organize a classical singing function, so she booked an
auditorium on 10th August for a total amount of ` 20,000. She paid ` 5,000 as advance on that day.
The classical singing function was organized on 10th October. The auditorium owner issued invoice to
 Ms. Pearl on 25th November amounting to ` 20,000. Pearl made balance payment of ` 15,000 on 30th
November. Determine the time of supply in this case.
(a) Time of supply is 25th November for ` 20,000.
(b) Time of supply is 25th November for ` 5,000 & 30th November for ` 15,000.
(c) Time of supply is 10th August for ` 5,000 & 10th October for ` 15,000.
(d) Time of supply is 10th October for ` 20,000. (2 Marks)

Division B - Descriptive Questions

1. M/s. Flow Pro, a registered supplier, is engaged in manufacturing heavy steel fabrication machine. The
details pertaining to pricing of each such machine is as follows:
S. No. Particulars Amount (`)
(i) Price of the machine [excluding taxes and other charges mentioned at 25,00,000
S. Nos. (ii) and (iii)]
(ii) Third party inspection charges 5,00,000
[Such charges were payable by M/s Flow Pro but the same have been
directly paid by BP Ltd. to the inspection agency. These charges were
not recorded in the invoice issued by M/s Flo Pro.]
(iii) Freight charges for delivery of the machine 2,00,000
[M/s Flow Pro has agreed to deliver the goods at BP Ltd.’s premises]
(iv) Subsidy received from the State Government on sale of machine under 5,00,000
Skill Development Programme
[Subsidy is directly linked to the price]
(v) Discount of 2% is offered to BP Ltd. on the price mentioned at S. No. (i)
above and recorded in the invoice
Note: Price of the machine is net of the subsidy received.
M/s. Flow Pro has supplied one such machine in the month of October. It also provided the following
details pertaining to the purchases made/services availed during said month:
S. No. Inward IGST (`) Remarks
supplies
(i) Inputs ‘A’ 1,00,000 One invoice on which IGST payable was ` 10,000, is
missing
(ii) Inputs ‘B’ 50,000 Inputs are to be received in two lots. First lot has been
received in October
(iii) Capital goods 1,20,000 M/s. Flow Pro has capitalised the capital goods at full
invoice value inclusive of GST as it will avail depreciation
on the full invoice value.
(iv) Input services 2,25,000 One invoice dated 20 th January of preceding financial year
on which GST payable was ` 50,000 was missing and has
been found in October
 Compute the net GST payable in cash by M/s. Flow Pro for October assuming that all the inward supplies
are inter-State supplies and all outward supplies are intra-State supplies. Assume the rates of taxes to
be as under:
Particulars Rates of tax
Central tax (CGST) 9%
State Tax (SGST) 9%
Integrated tax (IGST) 18%

Make suitable assumptions, wherever necessary. All the conditions necessary for availing the ITC have
been fulfilled. Opening balance of the input tax credit for the relevant period is Nil. The annual return
for the previous financial year was filed on 15 th September of the current year. (8 Marks)
2. (a) State with reasons, whether GST is payable in the following independent cases: -
(i) Food supplied by the canteen run by a hospital to the in-patients as advised by the doctors.
(ii) An RWA in a housing society, registered under GST, collects the maintenance charges of
` 6,500 per month per member. (2 x 2 Marks = 4 Marks)
(b) M/s United Electronics, a registered dealer, is supplying all types of electronic appliances in the
State of Karnataka. Its aggregate turnover in the preceding financial year by way of supply of
appliances is ` 120 lakh.
The firm also expects to provide repair and maintenance service of such appliances from the
current financial year.
With reference to the provisions of the CGST Act, 2017, examine:
(i) Whether the firm can opt for the composition scheme, under section 10(1) and 10(2), for the
current financial year, as the turnover may include supply of both goods and services?
(ii) If yes, up to what amount, the services can be supplied? (6 Marks)
3. (a) Determine the effective date of registration in following cases:
(i) The aggregate turnover of Dhampur Footwear Industries of Delhi has exceeded the applicable
threshold limit of ` 40 lakh on 1 st September. It submits the application for registration on
20th September. Registration certificate is granted to it on 25 th September.
(ii) Mehta Teleservices is an architect in Lucknow. Its aggregate turnover exceeds ` 20 lakh on
25th October. It submits the application for registration on 27 th November. Registration
certificate is granted to it on 5 th December. (2 x 3 Marks = 6 Marks)
(b) Udai Singh, a registered supplier, has received advance payment with respect to services to be
supplied to Sujamal. His accountant asked him to issue the receipt voucher with respect to such
services to be supplied. However, he is apprehensive as to what would happen in case a receipt
voucher is issued, but subsequently no services are supplied. You are required to advise Udai
Singh regarding the same. (4 Marks)
4. (a) A registered person must pay to the supplier, the value of the goods and/or services along with the
tax within 180 days from the date of issue of invoice. State the exceptions to said rule. (3 Marks)
(b) The goods supplied on hire purchase basis will be treated as supply of services. Examine the
validity of the statement. (2 Marks)
(c) Briefly elaborate the provisions relating to nil GSTR-3B. (5 Marks)