CS

EXECUTIVE
TLP
MARATHON

CMA Vipul Shah

Yes Academy 8888 235 235

 DT & GST PRACTICAL QUESTIONS & ANSWERS

DIRECT TAX

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GOODS & SERVICES TAX

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CUSTO DUTY

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DIRECT TAX

1. Illustration
Mr. DP, has earned gross salary of Rs. 655000 including HRA of Rs. 45000. He has paid Rs. 15000
p.m. as rent for his residential accommodation. Besides that, he earned Rs. 12000 from saving bank
deposit during the year 2023-24 and at the same time he has deposited to Rs. 65000 to PPF. You
are required to compute total income and tax payable by DP if
• He opts to pay tax as per regular scheme.
• He pays tax under Section 115BAC

2. Illustration
From the following profit and loss account of Vinay for the year ended 31st March 2024,
compute his total income and tax liability for the assessment year 2024-25:
Particulars Amount Rs. Particulars Amount Rs.
Interest on capital 12,000 Gross profit 5,10,000
Insurance 2,000 Brokerage 30,000
Bad debts 30,000 Bad debts recovered 15,000
(earlier allowed as deduction)
Depreciation 34,000 Sundry receipts 18,000
Advance tax 25,000 Interest on debentures (gross) 40,000
[TDS Rs. 4,000]
General expenses 12,000
Advertisement 5,000
Salary (including salary to Vinay
Rs.20,000) 85,000
Interest on loan 8,000
Net profit 4,00,000
Total 6,13,000 Total 6,13,000
Additional information:
(i) The amount of depreciation allowable as per income-tax rules is Rs. 42,000.
(ii) General expenses include Rs.5,000 given as Health insurance Premium.
(iii) Vinay pays Rs. 5,200 as premium on his own life insurance policy of Rs. 50,000 issued in 2016
17.
(iv) Loan was obtained for payment of income-tax.
Option 1: Assessee has opted to pay tax as per regular scheme
Option 2: Assessee is paying tax as per Section 115BAC

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3. Illustration
For the Assessment Year 2024-25, Mr. Ram, who is 58 years old, resident in India, furnishes the
following information:
Particular Amount (Rs.)
Basic salary Rs. 15000 pm
Dearness Allowance (20% forming part for retirement benefits) 40% of basic
salary
City Compensatory Allowance Rs. 300 pm
Children education allowance Rs. 200 pm per
child for 2 children

Transport allowance Rs. 2000 pm

House Rent Allowance Rs. 6000 pm
Actual rent paid for a house in Delhi Rs. 7000 pm
He travels via Delhi metro from his residence to office and back in which he Rs. 1500 pm
spends
Medical allowance Rs. 1000 pm
Lunch allowance Rs. 200 pm
He owns a house property in Mumbai whose construction is completed in 2005 and which is let out
for Rs. 40,000 pm. The standard rent as per Rent Control Act is Rs. 3,10,000. He pays Rs. 32,000
for municipal taxes and interest on capital borrowed for construction of house Rs. 75,000. Further,
he incurs Rs. 10,000 on repairs of the house.
Long-term capital gains Rs. 225,000
Short term capital gains for the year Rs.1,01,000 (STT not applicable). Dividend received from
Indian Company X Ltd. Rs. 12,000.
Interest received @10% on listed debentures of face value 14,00,000 Diwali Gift of gold coins
received from a friend. Market value Rs. 60,000 Share of profit from:
Firm 40,000
HUF 34,000
Income from Lotteries (gross) 50,000
Mr. Ram invested in PPF Rs.1,50,000 and also paid a life insurance premium of Rs. 21,000.
Donation to National Defence Fund Rs.10,000.
Compute the total income and Tax liability of Mr. Ram for the Assessment year 2024-25.
Option 1: Assessee has opted to pay tax as per the regular scheme
Option 2: Assessee is paying tax as per section 115BAC

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4. Illustration
Mr. X aged 62 years; resident individual furnishes the following particulars relevant for the
assessment year 2024-25:
Profit and Loss Account
Particulars Amount Rs. Particulars Amount Rs.
Salaries 30000 Gross profit 436000
General Expenses 45000 Commission 120000
Bad Debts 15000 Sundry Receipts 40000
Reserve for losses 3000 Short term capital gain 30000
Insurance 5200 Discount 2000
Advertisement 10000 Profit on sale of import license 100000
Add: outstanding 2000 12000
Interest on capital 4500
Interest on bank loan 12500
Expenditure on acquisition of patent 16000
and put to use on 30.06.23
Depreciation on Plant 24000
Depreciation on building 10000
Depreciation on Furniture 4000
Provision for outstanding GST liability 12000

Taxation reserve 12000

Loss by fire of a part of building
(Uninsured) 8000
Net profit 514800
Total 728000 Total 728000
Other information
1. Bank loan is used for business purposes.
2. The amount of depreciation as per tax rates, in respect of plant, building, furniture, amounts to
Rs. 20000, 12000, 7400 respectively.
3. Salary includes payment to a relative which is unreasonable to the extent of Rs. 5000.
4. Out of GST liability Rs. 2000 is paid on 04.07.24 and Rs. 6000 is paid on 03.10.24. The balance is
still outstanding. Due date of filling the return of income is 31.7.24.
5. Income of X from other sources is Rs. 24000.
6. X paid medical insurance premium Rs. 16000 for himself and Rs. 16000 for his mother
(dependent)
7. X repaid housing loan to the extent of Rs. 45000.
Determine the taxable income and tax liability of Mr. X for the assessment year 2024-25 assuming
STT is not applicable on STCG.
Assume Assessee has not opted for section 115BAC.

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5. Illustration
Ram, 66 years is the Karta of a HUF with his two sons Ramesh (39 years) and Somesh (25 years).
The family owns a house property, the rental income of the same is Rs. 3,10,000. Family business
profits Rs. 2,80,000. Long- term capital gains Rs. 25,000 and short-term capital gains for the year
Rs.11,000 (STT applicable). Dividend received from Indian Company X Ltd. Rs. 12,000. Interest
received on listed debentures Rs.8,000 (gross) Ram invested in PPF Rs. 1,50,000 out of family funds
and received share of profits from a firm in which he represented HUF being Karta. Ram gifts Rs.
1,00,000 to family. Salary income of Ramesh Rs. 6,00,000 Interest on Government Securities Rs.
10,000(gross) out of own funds of Ram.
Compute the total income and Tax liability of the family X (HUF) and Ram, Ramesh and Somesh for
the Assessment year 2024-25. Assume that assessees are opting to pay tax as per regular scheme.

6. Illustration
XL and Associates (A firm) having 3 partners sharing profit in the ratio of 2:2:1 provides you the
following details for the PY 2023-24.
Profit (Before) setting of b/f loss and depreciation 360000
B/F depreciation for AY 2023-24 (i.e. P.Y 2022-23) 150000
B/F loss of AY 2023-24 200000
You are requested to advice on Tax Treatment in case of change in constitution of firm when
one of the partners retired on 31.8.2023 from the firm.

7. Illustration
Mr. X, carrying on the business of operating a warehousing facility for storage of sugar, has a total
income of Rs. 80 lakhs. In computing the total income, he had claimed deduction under section
35AD to the tune of Rs. 70 lakhs on investment in building (on 1.4.2023) for operating the
warehousing facility for storage of sugar. Compute his tax liability for A.Y. 2024-25. Show the
calculations of Alternate Minimum Tax also.
Option 1: Assessee paying tax under normal tax regime
Option 2: Assessee paying tax under Section 115BAC

8. Illustration
Mr. A, 42 years, and Mr. B, 50 years, are equal partners in a partnership firm AB and Co. engaged
in furniture business. From the profit and loss account of the firm compute net income and tax
liability of the firm as well as the partner’s for the assessment year 2024-25.
Profit and Loss Account
For the year ending March 31, 2024
Particulars Rs. Particulars Rs.
Cost of goods sold 5,10,000 Sales 1,90,0000
Salary to staff 6,00,000 Long term capital gain 1,00,000

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Depreciation 1,20,000 Lottery prize 35,000

Fees for technical service 40,000 Other business receipts 1,47,000
Remuneration to partners 2,00,000
A. 140000
B. 60000
Other Expenses 2,10,000
Interest on capital @20%
A. 43000
B. 60000 10,3000
Provision for bad debts 10,000
Net profit 3,89,000
Total 2,18,2000 Total 2,18,2000
Other Information
1. Remuneration and interest to partners is paid as per partnership deed
2. Depreciation as per income tax rules Rs. 100000
3. Firm paid bonus to employees Rs. 20,400 relating to last year on 15-12-2023.
4. Other expenses include donation to approved charitable institution for the purpose of family
planning Rs. 45,000.
5. Fees for technical services are paid out of India wherein TDS rules apply. Tax has been
deducted at source on time on 31 July, 2023 but it is deposited to Government 21 days late
on 28 August, 2023.
6. The firm complies with conditions of section 184 and 40(b)
7. Income and investments of Mr. A and Mr. B are as follows:
Particulars Mr. A (Rs.) Mr. B (Rs.)
Interest on Government Securities 60,000 56,000
Interest on Bank Deposit (gross) 4,500 5,000
Dividend from Indian Company 20,000 22,000
Contribution to PPF 1,00,000 1,10,000
Interest on listed Debentures (net) 6,300 6,300
8. Mr. A received gift of Rs. 80,000 from a friend.
9. Assessee paying tax under normal tax regime

9. Illustration
The taxable income for the financial year 2023-24 of Mr. Jay (resident and age 35 years)
computed as per the provisions of Income-tax Act is Rs. 20,84,000. The taxable income has been
computed after deduction of Rs. 5,00,000 under section 80JJA. Will he be liable to AMT? What
will be his tax liability for the year? Assuming Mr. Jay does not opt to be taxed Under section
115BAC/BAD and paying tax under normal tax regime.

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10. Illustration
M, N and O are partners sharing profits and losses in the ratio of 2:1:1 respectively. Their summarized
Profit and Loss A/c for the year ending 31st March, 2024 is appended below:
Particulars Amount (Rs.) Particulars Amount (Rs.)
Office salaries 5,680 Gross Profit 60,570
Telephone and Telegram 2,000 Rent received 6,000
Interest on loan from M 2,000 Interest on securities 4,000
Local taxes (let out property) 1,000
Salary to N 3,000
Commission to partners
M 4,000
N 5,000
O 6,000
Collection charges of interest on securities 50
Bad debts reserve 1,000
Net Profit to partners:
M 20,420
N 10,210
O 10,210
Total 70,570 Total 70,570
Compute total income of the firm for the assessment year 2024-25 and tax liability thereon.
Interest paid to M has been calculated at the rate of 20% p.a.

11. Illustration
Mr. A (40 years) and Mr. B (49 years) are equal partners in a firm of Chartered Accountants, AB Co.
On April 1, 2023 they amended their partnership deed and provided for salary and interest to
partners as follows:
Particulars Amount (Rs.)
Salary to A 2,50,000 p.a.
Salary to B 3,00,000 p.a.
Interest to A and B 24 % p.a.
From the income and expenditure account of the firm compute net income and tax liability of the
firm as well as the partner’s for the assessment year 2024-25. Assessee has not opted for section
115BAC and paying tax under normal tax regime.
Income and Expenditure Account For the year ending March 31, 2024
Particulars Amount (Rs.) Particulars Amount (Rs.)
Office expenses 2,51,000 Receipts from clients 8,40,000

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Salary to staff 82,000 Interest on drawings 3,500

Income Tax 39,000
Salary to A 2,50,000
Salary to B 3,00,000
Interest on loan to minor son of X 6,000
@15%
Interest on capital@24%
A 17000
B 19000 36,000
Net profit 1,14,500
Total 843500 Total 8,43,500
Other Information
1) The firm does not comply with conditions of section 184 and 40(b)
2) The firm has received funds from minor son of X as loan.
3) Income and investments of Mr. A and Mr. B are as follows:
Particulars Mr. A (Rs.) Mr. B (Rs.)
Investment in 5% Government Loan 12,00,000 11,20,000
Interest from Post office savings bank 4,500 5,000
Medical Insurance Premium 12,000 15,000
Dividend from Foreign Companies 40,000 30,000

12. Illustration
Tax on total income as per normal provision of Income Tax Act is Rs. 205000 and AMT is Rs.
305000. Compute the tax liability and implications assuming Foreign Tax Credit (FTC) will be Rs.
45000 and Rs. 60000 attributable to Normal provision and AMT respectively.

13. Illustration
Determine the tax liability of Mr. Ratan, who is a handicapped, for the A.Y.2023-24:
Particulars Amount
Net salary 2,85,000
Annual value of let-out house property 60,000
Lottery income 50,000
Taxable business & profession income 50,000
He paid LIC premium 10,000
Mr. Sunil deposited in LIC annuity plan ₹ 12,000 & paid medical insurance premium ₹ 5,000.

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14. Illustration
Anil (aged 67 years) is an employee of a Government organisation at Burdwan. During the year ending
31.3.2023, he received the following income from his employer:
₹
Salary 20,000 p.m.
Dearness allowance 4,000 p.m.
Entertainment allowance 6,500 p.m.
Annual bonus 20,000
Rent-free unfurnished accommodation of which licence fee is ₹ 30,000 whereas fair rental value
is ₹ 1,00,000.
Find his taxable income and tax liability for the assessment year 2023-24 on the basis of the
following further information:
a. His own contribution to a Provident Fund is ₹ 30,000 and his employer’s contributed the same
amount.
b. He pays life insurance premium ₹ 30,000 p.a.

15. Illustration
P Co-operative Society furnishes following details of income, compute taxable income for the
purpose of A.Y. 2023-24:
Income from collective disposal of labour ₹ 25,000
Income from marketing of the agricultural produce grown by its member ₹ 30,000
Income from marketing of the agricultural produce grown by outsider ₹ 3,000
Dividend from another co-operative society ₹ 15,000
Income from processing of agricultural produce of its member with aid of power ₹ 50,000

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 DT & GST PRACTICAL QUESTIONS & ANSWERS

GOODS & SERVICES TAX

CHAPTER 1 - CONCEPT OF SUPPLY

1. Illustration
Mrs. Pragati received legal advice for her personal problems & paid 1,000 pounds as legal fees to
Miss Unnati of U.K. (London).
Explain whether the above activity of import of service would amount to supply u/s 7 of the CGST
Act, 2017?
If in above case, both of them are real sisters & no consideration is paid then will if change your
answer?
Further in the above case, if both of them are real sisters & Mrs. Pragati receives legal advice for
her business & she doesn’t pay any consideration then what will be your answer?
Note: It has been most logically assumed that miss Unnati is wholly/Mainly dependant on Miss
Pragati

2. Illustration
Mokshabhumi Industries has its manufacturing unit in the State of Maharashtra. It stores the
finished goods manufactured by it at a depot located in the State of Gujarat. The depot is owned
by Punyabhumi Ltd. a related person of Mokshabhumi Industries. Punyabhumi Ltd. has not charged
any consideration from Mokshabhumi industries for usage of depot for storage purpose. Whether
the storage of goods permitted Punyabhumi Ltd. to Mokshabhumi industries qualifies as supply
under GST?

3. Illustration
Satyamev Printers is a printing house registered under GST. It receives an order for printing 5000
copies of a book on yoga and meditation authored by a well-known yoga guru. The content of the
book is to be provided by the yoga guru to Satyamev Printers. It is agreed that Satyamev Printers
will use its own paper to print the said books.
You are required to determine the rate of GST applicable on supply of printed books by Satyamev
Printers assuming that rate of GST applicable on services is 18% whereas the rate of GST
applicable on supply of goods is 12%.

4. Illustration
X holds 25 per cent (or more) equity share capital in Y. Ltd. As well as Z. Ltd. Supplies a few goods
(Market Value Rs. 75,000/-) without consideration to Z. Ltd. discuss whether GST is applicable.

5. Illustration
B is a scientist. He gifts his BMW car to Mrs. B. Discuss whether GST is applicable.

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6. Illustration
X is marketing head of Y. Ltd., a car manufacturing company. As per employment contract, salary
of X is Rs. 3,50,000/- per month. Beside, he gets commission, bonus and allowances. On October 19,
2023, Y. Ltd. Transfer a new car to X as Diwali gift (this gift is not covered by the employment
agreement). Taxable value of the gift as per section 15 is Rs. 19,90,000/-
Besides, Y. Ltd. Provides tea, coffee, light snacks during tea break to all of its employees in the
office premises. Annual expenditure on this account is Rs. 4,10,000. Discuss whether GST is
applicable.

7. Illustration
X. Ltd. is a cement manufacturing company. Head office and manufacturing unit of the company
are situated in Mumbai. The company has two branches – Kolkata and Noida. The company has taken
3registration under GST (head office, Kolkata branch and Noida branch). On December 5, 2023,
500 bags of cement are dispatched by head office to is Noida branch for retail sale. No
consideration is charged. Discuss whether GST is applicable.

8. Illustration
x. Ltd., a fertilizer manufacturing company. I located in Chennai. Y. Ltd. of Maharashtra is one of
the selling agents of X. Ltd. on November 10, 2023, X. Ltd. sends 1,000 bags of fertilizer to Y. Ltd.
for sale on behalf X. Ltd. no consideration is charged. Discuss whether GST is applicable.

9. Illustration
X is businessman. Y, his younger brother, is an interior designer. Presently, he is employed by a
multinational company and posted in Hong Kong. (Y I not in practice). X wants to construct a
residential house in Pune. Interior designing service is provided by Y from Hong Kong. X does not
pay any consideration to Y. Discuss

10. Illustration
Y & Co., is a firm of advocates, Head office of the firm is in Hyderabad. One of its branches is
situated in Singapore. In the case of a multinational company pertaining to transfer pricing,
Hyderabad office obtains legal advice from Singapore branch. No consideration is paid. Discuss
whether GST is applicable.

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CHAPTER 2 - REVERSE CHARGE & ECO

1. Illustration
Reon operating radio taxi services in India. In the month of Nov 2022, the following services are
rendered by it:
a) Free services provided to new customers who travelled for the first time. However, payment
made to taxi drivers ` 10,00,000.
b) Hire charges collected from customers ` 12,25,500. Payment made to taxi drivers ` 11,00,000.
Reon appointed X Pvt. Ltd., as their representative in India. Person liable to pay GST is willing to
avail exemption if any.
You are required to find:
a. Who is liable to pay GST.
b. Taxable value of supply.
c. Net GST liability.

2. Illustration
From the following information determine the person liable to pay Goods & Service Tax if both
Supplier and Recipient are located in India:
1) Mr. Atul is an agent of Life Insurance Co. The insurance company pays commission [excluding
tax] Rs. 6 lakh to him. Mr. Atul claims that no GST is leviable on services provided by him as
his value of taxable service does not exceed Rs. 20 lakhs.
2) XYZ Ltd. availed services of Vimal Goods transport agency for transportation of goods by road
from factory located in New Delhi to its Jaipur depot and paid freight of Rs. 1,00,000.
3) Ranka Jewellers Ltd. paid Rs. 50 lakhs for sponsorship of Miss India beauty pageant for
sponsorship services.
4) Legal services provided by Takatak & Co., a partnership firm of New Delhi to Tata Motors Ltd.,
Mumbai, Rs.70,00,000.
5) Service provided by a director of a company [not in capacity of employee] to the company: Rs.
10 Lakh.
6) Infra structural support services provided by Government to a business entity: Rs. 14 Lakh.
7) Renting of immovable property services provided by Government to unregistered business
entity: Rs. 18 Lakh.

3. Illustration
State the person liable to pay tax under GST in the following independent cases where recipient
is located in the taxable territory:
a) Supply of service by an author to a Publisher.
b) Supply of service by an author who has taken registration under CGST Act & filed a declaration
to Publisher.

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c) Supply of service by a music composer, a photographer, artist or the like to a music company,
producer etc.
d) Would your answer differ in case music Composer, Photographer, Artist file a declaration to
Music company producer or the like located in taxable territory.

4. Illustration
M/s Radhika Ganga the promoter and builder registered under GST started new project “Star
House”. Total cost of project is 300 crores for that promoter purchase following input and input
services during the financial year 2018-19 as follow.
Particulars Amount
Input other than cement purchase from Joshi Pvt. Ltd. (Exclusive of GST) 2.52 Lakhs
Input purchase from Mr. Kishor (An Unregistered supplier) 1.2 Lakhs
Input services received from M/s Pathak & Co. (An Unregistered Supplier) 0.48 Lakhs
Total Inward supply 4.20 Lakhs
Determine the amount of GST and the person liable to pay GST assuming that all the transactions
are Intra-State and taxable at the rate of 18% (CGST 9% & SGST 9%).

5. Illustration
State, with reason, the person liable to pay GST in each of following independent cases: -
Assume recipient is located in taxable territory.
i) Rental income received by Tamil Nadu State Government from renting an immovable property
to Mannappa Pvt. Ltd. (Turnover of the company was ₹ 22 Lakhs in the preceding F.Y.).
ii) Legal Fees received by Mr. Sushrut, a senior advocate, from M/s. Tatva Trading Company
having turnover of ₹ 50 Lakhs in preceding financial year.
iii) Services supplied by a recovery agent to a car dealer.
iv) XYZ Ltd. availed services of Vimal Goods transport agency for transportation of goods by road
from factory located in New Delhi to its Jaipur depot and paid freight of ₹ 1,00,000 where
the GST is charged at the rate applicable. Vimal Goods transport agency is registered under
GST & has exercised the option to pay tax under forward charge.
What will be your answer if GTA has not exercised the option to pay tax under forward charge?
v) Sponsorship services provided by a company to an individual.

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CHAPTER 3 - COMPOSITION LEVY

1. Illustration
M/s Jethalal Ltd. a manufacturer having the only registered place of business in the state of
Maharashtra. Determine the eligibility to opt for composition scheme and also compute tax liability
of M/s Jethalal Pvt. Ltd. on the basis of following information assuming that value of service
provided by the company in Preceding Financial Year (PFY) is within the allowed limit of section
10(1) except interest and restaurant service.
S. No. Particulars PFY 2022-23 (₹) 1st Qtr 2023-24 (₹)
1. Value of taxable supply of goods 90.00 lakhs 20.00 lakhs
2. Value of exempt supply of goods 20.00 Lakhs 5.00 Lakhs
3. Value of taxable supply of service 5.00 Lakhs 1.00 Lakhs
4. Value of exempt supply of services 3.00 Lakhs 0.50 Lakh
5. Value of supply of restaurant service 15.00 Lakhs 1.50 Lakhs
6. Interest on loan/advances/deposits 4.00 Lakhs 1.20 Lakhs

Calculate GST payable under composition scheme for 1st quarter of CFY 2023-24

2. Illustration
Sameer Ltd is a manufacturing company located in Karnataka, has been registered under
composition scheme furnishes the following information for the financial year 2023-24. It requires
you to determine its composition tax liability and total tax liability. In financial year 2023-24 total
value of supplies including inward supplies taxed under reverse charge basis are ₹ 82,00,000. The
breakup of supplies is as follows-
i. Intra state supplies of auto spares ‘V’ units chargeable to 12% GST ₹ 24,00,000
ii. Intra state supplies of auto spares ‘X’ units chargeable to 5% GST ₹ 36,00,000
iii. Inward supplies on which tax payable under RCM (GST Rate 12%) ₹ 6,40,000
iv. Intra state supplies wholly exempt under section 11 of CGST Act- ₹ 15,60,000

3. Illustration
Mr. Raj a registered person at Delhi, is in the business of selling goods relating to interior
decoration under the firm name M/s. Raj & Sons. He has opted for composition scheme for the
financial year (FY) 2022-23.
His turnover for FY 2022-23 is `80 lakh and is expected to achieve `130 lakh in FY 2023-24.
Discuss whether M/s Raj & Sons can still enjoy the benefits of composition scheme in FY 2023-
24.
His son Karan wants to start business of providing services relating to interior decoration, after
completing post-graduation course in interior decoration under same firm name M/s Raj & Sons
with effect from 1.4.2023 and wants to enjoy the benefits of composition scheme under GST.

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Advise Mr. Raj and his son Karan.

4. Illustration
Bansal & Chandiok is a partnership firm of chartered Accountants in Jaipur (Rajasthan). The firm
specialise in bank audits providing services to banks across India. It has an annual turnover of Rs.
60 lakhs in the preceding financial year.
With reference to the provisions of the CGST Act, 2017, examine whether the firm can opt for
the composition scheme. Will your answer change, if
a) The turnover of the firm is Rs. 40 lakhs?
b) Bansal & Chandiok is not a partnership firm of Chartered Accountants but a partnership firm
providing support services to restaurants like booking tables, advertisement etc?

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CHAPTER 4 - EXEMPTION

1. Illustration
Discuss whether the following services are chargeable to GST –
X is an advocate (other than senior advocate) in Calcutta High Court. During December 2023, he
provides legal service to A & Co. (a firm of advocates in Kerala) for a fee of Rs. 1,45,000. Turnover
of A & Co. for the preceding financial yer is Rs. 28 Lakh.

2. Illustration
Discuss whether the following services are chargeable to GST –
X is a senior advocate in Calcutta High Court. During December 2023, he provides legal service to
A & Co. (a firm of advocates in Kerala) for a fee of Rs. 1,45,000. Turnover of A & Co. for the
preceding financial year is Rs. 18 Lakh.

3. Illustration
Discuss whether the following services are chargeable to GST –
1. A Charitable Trust (registered under section 12AA / 12AB of the Income-tax Act) provides
Yoga training service to residents of South Mumbai
2. Passenger Transport service by radio taxi.
3. Delhi edition of Hindustan Times is transported by rail from New Delhi to Kolkata.

4. Illustration
Discuss whether the following services are chargeable to GST –
1. Transport of passengers by auto-rickhaw / e-rickshaw.
2. Indian Railways Finance Corporation gic=ves wagons / coaches on lease to Indian Railways. Lease
rent is Rs. 47 Lakhs per month.
3. X is a senior advocate in the Bombay High Court. He provides legal service to a firm of advocates
(legal charges being Rs. 35 Lakhs).

5. Illustration
Discuss whether the following services are chargeable to GST –
1. X owns a plot of land of 600 square metre in Bengaluru. For construction of single resident unit,
labour contract for construction is given to A Ltd. A Ltd. will charge Rs. 45 Lakhs for providing
construction services. The entire construction material (icluding cement, wood, steel, stone,
bricks, pipes, electricity fitting, kitchen fitting, etc.) will be supplied by X.
2. In the above case, A Ltd. will provide not only labour but also construction material. For this
purpose, A Ltd. will change total consideration of Rs. 2.5 Crore (i.e. Rs. 45 Lakhs for labour and
Rs. 2.05 Crore for material).
3. X gives tractors on rent to A Ltd. (monthly rent being Rs. 23,000 per tractor). During December
2023, A Ltd. takes 20 Tractors on hire for the purpose of its farm land in Shimla.

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6. Illustration
Discuss whether the following services are chargeable to GST –
1. Renting of school building to a management school which provides management education
recognized by UGC.
2. A hockey player gets fees from Indian Hockey Federation for participating in an international
event.
3. A brand ambassador gets Rs. 4 Crore from Reliance for advertising a new fabric prepared by
Vimal Suitings.
4. Service provided from Jammu by a business house to a company located in Srinagar.

7. Illustration
Discuss whether the follwing services are chargeable to GST. Recipient of service in these cases
is Orange Public School, Cochin.
This school is not recognised by any Board in India. The school provides eduction up to higher
secondary which is recognised by a Board in the United Kingdom –
1. X Transporters provides buses on hire (monthly rent being Rs. 80,000). These buses are utilised
by the school for providing transport facility to students, faculty and staff.
2. Y Caterers provides mid-day meals for studeents and teachers (invoiccce value being Rs. 170
per meal).
3. Z security Services provides security service to the school (charges being Rs. 2,40,000 per
month).
4. AB Consultants provides service relating to conduct of examination (for annual examination,
amount charged being Rs. 2,85,000).

8. Illustration
Discuss whether the follwing services are chargeable to GST –
1. Services provided by Cordlife, a cord blood bank for preservation of stem cells (amount charged
being Rs. 7,50,000).
2. Transportation of passengers by Indian Railway by a first class (non-airconditioned coach) from
Mathura to Indore (fair being Rs. 1,900 per passenger).
3. Transportation of passengers by Indian Railway by an air conditioned coach from New Delhi to
Mumbai (fare being Rs. 1,100 per passenger).
4. Transportation of passengers bby Indore Metro (fare being Rs. 80 per 10 kilometre).

9. Illustration
ABC line is engaged in providing service of transport of goods by aircraft and vessels. It
collected the following sums (exclusive of taxes, if any) towards the service
i. Air freight to goods imported into India ₹ 16 Lakhs
ii. Freight relating to domestic transport of goods in India by Air ₹ 42 Lakhs

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iii. Air freight charges from M/s. ABC Ltd., for transport of goods from its ₹ 23 Lakhs
Indian branch to Sydney branch
iv. Vessels Freight relating to goods imported in to India ₹ 10 Lakhs
Compute value of Taxable Supply

10. Illustration
Department of Posts provided following services to general public during the month ended
30.09.20XX:
Services Rendered ₹ in Lakhs
Basic mail Services 100
Transfer of Money through money orders 500
Rural postal life insurance services 200
Distribution of mutual funds, bonds and pass port applications 500
Issuance of postal orders 300
Collection of telephone and electricity bills 100
Speed post services 500
Express parcel post services 200
Compute the value of taxable service of Department of Post for the month ended 30.09.20XX.
Notes
1. Time of supply for all the aforesaid cases fall during the month ended 30.09.20XX.
2. All the service charges stated above are exclusive of GST, wherever applicable.

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CHAPTER 5 – PLACE OF SUPPLY

1. Illustration
Recipient is Y Ltd., a private limited company registered in Mumbai. Supplier is A Ltd. of Nagpur.
A Ltd. provides following services to Y Ltd. -
• Installation of plant at Mumbai
• Installation of air-conditioner at Surat
• Installation of generator in Goa.
For these services, A Ltd. charges Rs. 24,89,000. Discuss whether these supplies are inter-State
supply or intra-State supply.

2. Illustration
X is marketing head of A Ltd. (a Delhi based leading software development company). On an official
visit, X goes to Mumbai during December 2023 and stays in ITC Maratha (a 5-star hotel owned by
ITC Ltd.). Invoice is prepared at the time of check-out (room tariff charged is Rs. 14,000 per day)
in the name of A Ltd. What is the place of supply?

3. Illustration
X Ltd. is a publishing house and located in Gurugram (Haryana). For the purpose of organizing a
book fair, it takes on rent Oditorium situated in the campus of IIT Delhi. It also engages an event
management company, an interior decorator and a caterer for this purpose. What is the place of
supply?

4. Illustration
X Ltd. is an event management service provider and located in Mumbai. It organises a fashion show
in Dubai for Raymond. For this purpose, it engages a beauty parlour in Dubai for giving beauty
treatment for its models in Dubai. What is the place of supply?

5. Illustration
Princeton Academy (P.) Ltd. is a leader in executive education and corporate training. It is located
in Mumbai. On December 17, 2023, it organises a corporate training programme on Transfer Pricing
at JW Marriott, Mumbai. From the list of participants, a few names are given below -
• Employees of A Ltd., Delhi [X and Y (from tax department) attended the training programme].
• Employees of B Airways Ltd., Bengaluru (Z, P. Q and R attended the training programme).
• C, an individual (he is a research scholar).
A Ltd. is registered GST dealer in Delhi. Likewise, B Airways Ltd. is a registered GST dealer in
Bengaluru. X, Y, Z, P, Q, R and C are not registered under GST. what is the place of supply?

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6. Illustration
X Ltd. is an Indian company based in Pune and engaged in fashion designing. It is not registered
under GST. To organize a fashion show in Dubai, X Ltd. engages Y & Co., an event organizer based
in Mumbai (having GST registration). To organize Dubai fashion show, it charges Rs. 4 lakhs from
X Ltd. What is the place of supply?

7. Illustration
Delhi University organises a seminar on pollution control in Gurugram (Haryana). It is sponsored by
Saraswati Inc. (a leading American manufacturer of air purifiers, not having any GST registration
in India but it wants to start marketing of its products in India). The entire cost of organizing
seminar of Rs. 4,50,000 is borne by Saraswati Inc. (product advertisement facility is provided to
Saraswati Inc. at the event). What is the place of supply?

8. Illustration
X Ltd. is Indore based GST registered company. It engages a courier company located in Nagpur
to send its samples by courier from Nagpur to different locations. What is the place of supply?

9. Illustration
X Ltd., an Indian company, provides a technical inspection and certification service to a Japanese
company for a newly developed bike (which has to meet emission standards in different States or
countries). As per service agreement, testing is carried out in Coimbatore (20 per cent) and
Colombo (80 per cent). What is the place of supply?

10. Illustration
Spice Jet issues two tickets to X, a foreign tourist, for Delhi-Dubai-London sector. First ticket
covers Delhi-Dubai (departure from Delhi on January 2, 2024 at 1:00 PM, arrival at Dubai at 4:00
PM). Second ticket covers Dubai-London (departure from Dubai on January 2, 2024 at 5:30 PM).
What is the place of supply?

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CHAPTER 6 - TIME OF SUPPLY & VALUE OF SUPPLY

1. Illustration
The following data is noted from the records of Y Ltd. (Supplier of paints through pipeline to Mar
Udyog Ltd. (a car manufacturer, recipient of goods) –
1. Y Ltd. supplies paints through a pipeline from its factory to Mar Udyog Ltd.
2. On November 30, 2023, Y Ltd. gets advance payment of Rs. 10,00,000 from Mar Udyog Ltd.
for three months period ending January 31,2024 (invoice not issued).
3. Similar payment of Rs. 10,00,000 is received on December 31, 2023 and January 31,2024 (no
invoice issued)
4. On February 3, 2024, Y Ltd. issues invoice for the three month period ending January 31, 2024
(total amount including GST: Rs. 40,50,000 minus advance of Rs. 30,00,000, balance due Rs.
10,50,000).
5. On February 10, 2024, Y Ltd. gets payment of Rs. 10,50,000.
Y Ltd. wants to know time of supply and due date of making payment of GST.

2. Illustration
Service of technical testing is provided on July 3, 2023. Invoice of Rs. 7,00,000 is issued on August
18, 2023. Payment of Rs. 5,00,000 is received on August 11, 2023 and the balance of Rs. 2,00,000
is received on August 19, 2023. What is the time of supply?

3. Illustration
Service of technical testing is provided on August 3, 2023. Invoice of Rs. 3,00,000 is issued on
August 4, 2023. Advance of Rs. 75,000 received on July 25, 2023. Balance of Rs. 2,25,000 is
received on August 7, 2023. What is the time of supply?

4. Illustration
The following data is noted from the records of X Ltd. (supplier of services) and Y Ltd. (recipient
of services covered by reverse charge mechanism) -
1) Date of completion of services by X Ltd. to Y Ltd.: November 20, 2023.
2) Date of issue of invoice by X Ltd.: October 15, 2023.
3) Date of payment by Y Ltd.: December 21, 2023 (as per books of account of Y Ltd.) (amount
debited by bank in current account of Y Ltd. on December 20, 2023).
What is the time of supply?

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VALUE OF SUPPLY

5. Illustration
M/s Jonty India Ltd. a manufacturer of heavy machines registered at Jaipur (Rajassthan) supplied
one machine to M/s. Dhamuka Ltd. of Udaipur (Rajasthan) on 05/02.20XX under an invoice of the
same date. Using the information given below, compute the value of the machine and the GST
payable (CGST & SGST or IGST as the case may be) in cah for the month of February, 20XX by
M/s Jonty India Ltd. with appropriate working notes.
Assume Rate of CGST, SGST and IGST on the machine to be 9%, 9% and 18% respectively.
S.N. Particulars Amount in (₹)
1. The basic price of the machine (exclusiv of taxes and discount). 28,50,000
2. Trade discount is allowed at 3% on the basic price and is shown in the 85,500
invoice.
3. Secondery packing (in iron sheets) charges for safe transportation of the 30,000
machine on the request of buyer.
4. Design and engineering charges of the machine 90,000
5. Tax levied by Municipal Authority on the sale of the machine 25,000
6. Subsidy received by the supplier from the State Government to 80,000
encourage manufacturer of the machine. (extra amount received in
addition to list price)
7. Pre-delivery inspection charges paid to an independent agency in terms of 22,000
the agreement for supply. The amount was paid by M/s. Dhanuka Ltd.
8. Interest amount paid by M/s. Dhanuka Ltd. for delay in payment for the 12,000
machine,
9. Inward Supplies
i. IGST paid on food items for consumption by employees working in 8,000
the factory.
ii. SGST and CGST (₹ 15,000 each) paid on electronic transformer 30,000
used in the manufacturing process.
Note
i) M/s Jonty India Ltd. has no input tax credit balance at the beginning of February, 20XX. All
the other conditions necessary for availling the eligible input tax credit have been fulfilled.
ii) There are no other transactions of supplies during the month of February, 20XX.
iii) M/s Jonty India Ltd. and M/s. Dhanuka Ltd. are not related persons.

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6. Illustration
Y Ltd., a retailer in New City Square, offers iPhone X for Rs. 89,000 (with exchange offer of any
old iPhone). It also offers iPhone ✗ without exchange for Rs. 98,000. Z purchases iPhone X under
exchange offer by exchanging an old iPhone 5. Value of old iPhone 5 is not available. What is the
value of taxable supply?

7. Illustration
X Ltd. manufactures laptop. Y Ltd. manufactures printer. X Ltd. sells a laptop to Y Ltd. For this
supply, Y Ltd. pays Rs. 90,000 and a printer (manufactured by it). Known value of printer is Rs.
3,000. However, value of laptop is not available. What is the value of taxable supply?

8. Illustration
A Ltd. sells a music system to B for Rs. 60,000. B provides free tax consultancy to A Ltd. (value of
such consultancy is Rs. 10,000). The same music system is normally sold by A Ltd. to unknown person
for Rs. 75,000. What is the value of taxable supply?

9. Illustration
Chirayu Life Insurance Company Limited (CLICL) has collected premium from policy subsribers. It
does not intimate the amount allocated for investment to subscribers of the policy at the time of
supply of insurance services. The company has provided the following details in relation to its
receipts.
S.No. Particulars Amount
1. Premium for only risk cover 25,00,000
2. Premium from new policy subscriber 40,00,000
3. Renewal premium 80,00,000
4. Single premium on annuity policy 1,00,00,000
All amounts are exclusive of tax. You are required to compute the value of supply by CLICL in terms
of rule 32(4).

10. Illustration
On January 2, 2023, X purchases 6,000 US $ from an authorised dealer in exchange of 5,400
Euros. Find out taxable value of supply on the assumption that RBI reference rate is as follows -
US $: Rs. 68, Euros: Rs. 76.

11. Illustration
During December 2023, X Ltd. (an entity authorised by the Kerala Government to issue Kerala
Government lottery tickets) issues following lottery tickets to the distributors -
1. Monsoon lottery (face value: Rs. 500, price as notified in the Official Gazette: Rs. 290).
2. Jackpot (face value: Rs. 1,000, price as notified in the Official Gazette: Rs. 640).
Monsoon lottery can be sold only in Kerala. Jackpot can be sold even in other States.

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 DT & GST PRACTICAL QUESTIONS & ANSWERS

On December 5, 2024, X Ltd. sells 2,000 Monsoon lottery to A Ltd. of Kerala and 1,800 Jackpot
to B Ltd. of Tamil Nadu. Determine the amount of GST in this transaction.

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CHAPTER 7 - INPUT TAX CREDIT

1. Illustration
On August 20, 2023, X Ltd. (of Chennai) supplies goods/services to Y Ltd. (of Vellore). Taxable
value of supply is Rs. 26,80,000. On August 26, 2023, X Ltd. supplies goods/services to Z Ltd. (of
Bengaluru). Taxable value of supply is Rs. 5,00,000. GST rate is 18 per cent. X Ltd. has the following
balance in his electronic credit ledger -
• IGST: Rs. 92,000.
• CGST: Rs. 5,000.
• SGST: Rs. 9,00,000.
On August 21, 2023, X Ltd. purchases Honda City (seating capacity as per RC: 5 persons) from a
dealer in Chennai for its officers/ auditors. The car will be used by these persons only for
performing official duties. GST paid for purchasing the car (which is not included in the above
figures) is as follows - CGST Rs. 1,68,000, SGST Rs. 1,68,000. There is no other transaction for
the month of August 2023. Find out GST on supply of goods to Y Ltd./Z Ltd. and prepare a
statement for availment of input tax credit.

2. Illustration
On May 1, 2023, X (of Maharashtra) supplies goods/services to A Ltd. (of Odisha). Taxable value
of supply is Rs. 28,30,000. On May 6, 2023, X supplies goods/services to B Ltd. (of Mumbai).
Taxable value of supply is Rs. 58,00,000. GST rate is 18 per cent.
X has the following balance of input tax credit available in his electronic credit ledger - IGST: Rs.
7,60,000, CGST: Rs. 3,40,000, SGST: Rs. 3,70,000. There is no other transaction for the month
of May 2023. Find out the amount of GST payable for May 2023.

3. Illustration
X deals in retail trading of readymade garments. He has opted for Composition Scheme and pays
GST at the rate of 1 per cent. However, his aggregate turnover exceeds the specified amount of
Rs 1.5 crore on December 8, 2023 (i.e., at the closing time on December 8, 2023). Consequently,
he ceases to pay GST under Composition Scheme (with effect from December 9, 2023). Can he
claim any input tax credit?

4. Illustration
Y, a registered person, has opted for Composition Scheme on July 1, 2021. He continues under the
Composition Scheme up to December 14, 2023 (on this day his annual turnover exceeds the
specified limit). With effect from December 15, 2023, he is liable to pay normal GST. He gives the
following information pertaining to inputs/capital goods held by him as on December 14, 2023-
• Stock of raw material purchased on November 1, 2022 (GST paid on raw material: Rs. 10,000).

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• Stock of semi-finished goods which contains raw material purchased on February 10, 2023
(amount of bill of raw material: Rs. 84,000, inclusive of GST @ 12%).
• A plant and machinery purchased on March 11, 2023 (GST paid @ 12%: Rs. 2 lakh).
Input tax credit was not taken as he was under Composition Scheme. Can Y claim any input tax
credit in respect of raw material, semi- finished goods and plant and machinery held by him on
December 14, 2023 ?

5. Illustration
X Ltd. is in the business of manufacture of freezing equipment for domestic market. It is located
in Jamshedpur (Jharkhand).
During December 2023, it has acquired the following -
Taxable Value of GST charrged
inward supply Rs. by supplier Rs.
Steel (to be used as raw material in factory) 2,00,000 36,000
Spray guns (to be used in factory) 90,000 16,200
Solar lamps (to be used in office) 1,90,000 5,000
Soft drink concentrates (to be used in office canteen) 10,000 1,800
Soya milk drinks (to be used in factory canteen) 20,000 2,400
Truck (for transportation of manufacture goods from factory 19,00,000 5,32,000
to godown)
Lift (installed in office premises and mainly used by office 17,50,000 3,15,000
employees of X Ltd.)
Calculate the amount of input tax credit available to X Ltd. for December 2023. Assume that
conditions for claiming input tax credit [including conditions imposed by rule 36(4)] are satisfied.
Annual turnover of X Ltd. is generally more than Rs. 40 crore.

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CUSTOM DUTY
1. Illustration
A material was imported by air at CIF price of 5,000 US $. Freight paid was 1,500 US$ and
insurance cost was 500 US$. The banker realized the payment from importer at the exchange rate
of Rs.45 per dollar. CBIC notified the exchange rate as Rs.44.50 per US$. Find the value of the
material for the purpose of levying duty.

2. Illustration
XYZ Industries Ltd., has imported certain equipment from Japan at an FOB cost of 2,00,000 Yen
(Japanese). The other expenses incurred by M/s XYZ Industries in this connection are as follows:
a. Freight from Japan to Indian port: 20,000 Yen
b. Insurance paid to Insurer in India: Rs.10,000
c. Designing charges paid to Consultancy firm in Japan: 30,000 yen
d. M/s XYZ Industries had expended Rs.1,00,000 in India for certain development activities with
respect to the imported equipment.
e. XYZ Industries Ltd. had incurred road transport cost from Mumbai port to their factory in
Karnataka: Rs.30,000.
The Central Board of Indirect tax and Customs had notified for purpose of Section 14 of the
Customs Act, 1962 exchange rate of 1 yen = Rs.0.3948.
The interbank exchange rate was 1 yen = Rs.0.40
M/s. XYZ Industries had effected payment to the Bank based on exchange rate 1 yen = Rs.0.4150.
The commission payable to the agent in India was 5% of FOB cost of the equipment in Indian
Rupees. Arrive at the assessable value for purpose of Customs duty under the Customs Act,
1962 providing brief notes wherever required with appropriate assumptions.

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