Accounts and Records; E-way Bill – CA Final IDT Study Material is designed strictly as per the latest syllabus and exam pattern.
Accounts and Records; E-way Bill – CA Final IDT Study Material
Question 1.
When is an e-way bill required to be generated? [May 2019, 5 Marks]
Answer:
As per Rule 138 of the CGST Rules, 2017 E-Way bill will be generated when there is a movement of goods of value more than ₹ 50,000 under following circumstances:
- In Relation to Supply (Sale, sales return, purchase, purchases return, stock transfer, import, export)
- For reason other than supply (Stock transfer, Sale on approval basis, goods sent on job work, Exhibition/fairs, own use)
- Inward Supply from an unregistered person.
E-way bill needs to be generated prior to the commencement of transport of goods.
Exception To General Rule 138 of CGST Rules, 2017
Generation of E-way bill is compulsory even if value is less than or equal to ₹ 50,000 in the following cases:
- Inter-state movement of goods by the Principal to the Job-worker.
- Inter-state transport of handicraft goods by a dealer exempted from GST registration under section 24 of the CGST Act, 2017
Question 2.
Happy Company is a registered supplier of electric goods. It has three stores for electric goods in Jodhpur (Rajasthan) namely Ram Store, Shyam Store, Mohan Store. It receives an order for supply of electric goods worth ₹ 1,40,000 (exclusive of GST @ 18%) from Kishan Sons of Bhopal (Madhya Pradesh).
Happy Company found that order worth ₹ 43,000 can be fulfilled from the company’s Ram Store, order worth ₹ 45,000 can be fulfilled from its Shyam Store and remaining goods worth ₹ 52,000 can be sent from its Mohan Store. AH three stores are instructed to issue separate invoices for the goods sent to Kishan Sons. The goods are transported to Kishan Sons in Bhopal in a single conveyance owned by Shiv Transporters.
You are required to advise Happy Company with regard to issuance of e-way bills as per the provisions of the CGST Act, 2017. [May 2019 (Old), 4 Marks]
Answer:
Statutory Provision:
Rule 138 of the CGST Rules, 2018
This rule stipulates that e-way Bill is mandatorily required to be generated:
- If the goods are moved, inter alia, in relation to a supply and
- the consignment value [including CGST, SGST/UTGST, IGST and cess charged] exceeds ₹ 50,000.
FAQs on E-way Bill issued by CBIC
- These clarify that if multiple invoices are issued by the supplier to one recipient, multiple e-way bills have to be generated – one e-way bill for each invoice.
- Each invoice is considered as separate consignment for the purpose of generating e-way bills.
In the given case:
- The consignment value of goods supplied against separate invoices from Ram Store, Shyam Store and Mohan Store is ₹ 50,740 [₹ 43,000 × 11896], ₹ 53,100 [₹ 45,000 × 118%] and ₹ 61,360 [₹ 52,000 × 118%] respectively.
- Thus, Happy Company is required to prepare 3 separate e-way bills since value of each invoice exceeds ₹ 50,000.
Question 3.
With reference to the provisions relating to the electronic way bill (E-way bill) as prescribed under the GST laws, answer the following questions:
(i) Sindhi Toys Manufacturers, registered in Punjab, sold electronic toys to a retail seller in
Gujarat, at a value of ₹ 48,000 (excluding GST leviable @ 18%). Now, it wants to send the consignment of such toys to the retail seller in Gujarat.
You are required to advise Sindhi Toys Manufacturers on the following issues:
(a) Whether e-way bill is mandatorily required to be generated in respect of such movement of goods?
(b) If yes, who is required to generate the e-way bill?
(c) What will be the consequences for non-issuance of e-way bill?
(ii) Power Electricals Ltd., a registered supplier of air-conditioners, is required to send from Mumbai (Maharashtra), a consignment of parts of air-conditioner to be replaced under warranty at various client locations in Gujarat. The value of consignment declared in delivery chailan accompanying the goods is ₹ 70,000. Power Electricals Ltd. claims that since movement of goods to Gujarat is caused due to reasons other than supply, e-way bill is not mandatorily required to be generated in this case.
You are required to examine the technical veracity of the claim made by Power Electricals Ltd.
(iii) Beauty Cosmetics Ltd. has multiple wholesale outlets of cosmetic products in Mumbai, Maharashtra. It receives an order for cosmetics worth ₹ 1,20,000 (inclusive of GST leviable @18%) from Prasannaa, owner of a retail cosmetic store in Delhi.
While checking the stock, it is found that order worth ₹ 55,000 can be fulfilled from the company’s Dadar (Mumbai) store and remaining goods worth ₹ 65,000 can be sent from its Malad (Mumbai) store. Both the stores are instructed to issue separate invoices for the goods sent to Prasannaa. The goods are transported to Prasannaa in Delhi, in a single conveyance owned by Radhey Transporters.
You are required to advise Beauty Cosmetics Ltd. with regard to issuance of e-way bill(s). [RTP, May 2019]
Answer:
(i) (a) Statutory Provision:
Rule 138(1) of the CGST Rules, 2017:
Provides that e-way Bill is mandatorily required to be generated if the goods are moved, inter alia, in relation to supply and the consignment value exceeds ₹ 50,000.
Consignment value means, value determined as per Section 15, & also includes GST and Cess (If any). The value of exempted supply of goods will be exclude from the value (If the invoice is issued in respect of both exempt and taxable supply of goods)
In the given case:
The consignment value will be inclusive of GST to be calculated as follows: Consignment value = ₹ 48,000 × 118% = ₹ 56,640.
Since the movement of goods is in relation to supply of goods and the consignment value exceeds ₹ 50,000, e-way bill is mandatorily required to be issued in the given case.
(b) An e-way bill contains two parts namely, Part A to be furnished by the registered person who is causing movement of goods of consignment value exceeding ₹ 50,000 and part B (transport details) is to be furnished by the person who is transporting the goods.
| Where the goods are transported by railways or by air or vessel | The e-way bill shall be generated by the registered person, being the supplier or the recipient, who shall, either before or after the commencement of movement, furnish, on the common portal, the information in Part B [Rule 138(2A)] |
| Where the goods are transported by the registered person as a consignor | Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or a public conveyance, by road, the said person shall generate the e-way bill on the common portal after furnishing information in Part B [Rule 138(2)]. |
| Where the goods are handed over to a transporter for transportation by road | The registered person shall furnish the information relating to the transporter on the common portal and the e-way bill shall be generated by the transporter on the said portal on the basis of the information furnished by the registered person in Part A [Rule 138(3)]. |
| Where the consignor or the consignee has not generated the e-way bill | Where the consignor or the consignee has not generated the e-way bill and the aggregate of the consignment value of goods carried in the conveyance is more than ₹ 50,000, the transporter, except in case of transportation of goods by railways, air and vessel, shall, in respect of inter-State supply, generate the e-way bill on the basis of invoice or bill of supply or delivery challan, as the case may be, and may also generate a consolidated e-way bill on the common portal prior to the movement of goods [Rule 138(7)]. |
(c) if e-way bills, wherever required, are not issued in accordance with the provisions contained in rule 138, the same will be considered as contravention of rules.
As per section 122(1)(xiv) of CGST Act, 2017, a taxable person who transports any taxable goods without the cover of specified documents (e-way bill is one of the specified documents) shall be liable to a penalty of ₹ 10,000/- or tax sought to be evaded (wherever applicable) whichever is greater.
Moreover, as per section 129(1) of CGST Act, 2017, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the Rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure.
| (ii) As per Rule 138(1) of the CGST Act, 2017 Every registered person who causes move-ment of goods of consignment value exceeding ₹ 50,000: (i) in relation to a supply; or (ii) for reasons other than supply; or (iii) due to inward supply from an unregistered person, shall, generate an electronic way bill (E-way Bill) before commencement of such movement. |
♦ In the given case, since the consignment value exceeds ₹ 50,000, e-way bill is required to be mandatorily generated.
♦ Therefore, the claim of Power Electricals Ltd., is not correct. |
| (iii) If multiple invoices are issued by the supplier to one recipient, that is, for movement of goods of more than one invoice of same consignor and consignee, multiple e-way bills have to be generated. In other words, for each invoice, one e-way bill has to be generated, irrespective of the fact whether same or different consignors or consignees are involved. Multiple invoices cannot be clubbed to generate one e-way bill. However, after generating all these e-way bills, one consolidated e-way bill can be prepared for transportation purpose, if goods are going in one vehicle. | ♦ Beauty Cosmetics Ltd. would be required to prepare two separate e-waybills since each invoice value exceeds ₹ 50,000 and
♦ Each invoice is considered as one consignment for the purpose of generating e-way bills. |
Question 4.
Briefly explain provisions related to e-way bill as per CGST Act, 2017 relating to:
(i) What is e-way bill and wrhen it is being required?
(ii) What is its validity period? [CS-Professional, June 2018, 2 Marks]
Answer:
(i) E-way bill is an electronic way bill for movement of goods which is generated on the GSTN portal. It is required when a “movement” of goods is of more than 50,000 in value. A registered person cannot move goods without an e-way bill.
(ii) RULE 138(10): Validity Period of e-way Bill/Consolidated e-way Bill
| DISTANCE WITHIN COUNTRY | VALIDITY PERIOD FROM RELEVANT DATE |
| 1. Upto 100 km. | One day in cases other than Over Dimensional Cargo |
| 2. For every 100 km. or part thereof thereafter | One additional day in cases other than Over Dimensional Cargo |
| 3. Upto 20 km. | One day in case of Over Dimensional Cargo |
| 4. For every 20 km. or part thereof thereafter | One additional day in case of Over Dimensional Cargo |
’Relevant date means the date on which the e-way bill has been generated and the period of .validity shall be counted from the time at which the e-way bill has been generated and each day shall be counted as the period expiring at midnight of the day immediately following the date of generation of e-way bill.
Question 5.
The supplier opting for composition levy need not maintain certain records as per rule 56(2) and 56(4) of the CGST Rules, 2017. Explain the same. [May 2019, 5 Marks]
Answer:
As per rule 56(2) and 56(4) of the CGST Rules, 2017, the supplier opting for composition levy need not maintain the following records:
RULE 56(2): ITEM WISE STOCK ACCOUNT
- Accounts of stock in respect of goods received and supplied b him, and
- such accounts shall contain particulars of the
- opening balance
- receipt, supply, goods lost, stolen, destroyed
- written off or disposed of by way of gift or free sample and
- the balance of stock including raw materials, finished goods, scrap and wastage thereof.
RULE 56(4): DETAILS OF ITC CLAIMED 1
Account, containing the details of
- tax payable (including tax payable in accordance with the provisions of section 9(3) & (4))
- tax collected and paid
- input tax, input tax credit claimed
- together with a register of
- tax invoice
- credit flotes
- debit flotes
- delivery challan issued or received during any tax period.
Question 6.
Mr. Bala, a registered person at Chennai wants to maintain proper accounts and records relating to GST. Advise him about the accounts and other records to be maintained under section 35(1) of the CGST Act, 2017. [May 2018, Old, 4 Marks]
Answer:
As per Section 35(1) of the CGST Act, 2017 Mr. Bala, is required to maintain a true and correct account of
(a) production or manufacture of goods;
(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) other prescribed particulars
The records may be maintained electronically. Where more than one place of business is specified in the certificate of registration, the accounts relating to each place of business should be kept at such places of business.
Question 7.
What are the provisions relating to maintenance of accounts and other records under GST law?
Answer:
| Section | * | |
| 35(1) | List of Records and Place of Maintenance of Records | Every registered person shall keep and maintain, at his PRINCIPAL PLACE OF BUSINESS, as mentioned in the certificate of registration, a true and correct account of: (a) production or manufacture of goods; (b) inward and outward supply of goods or services or both; (c) stock of goods; (d) input tax credit availed; (e) output tax payable and paid; and (f) such other particulars as may be prescribed. |
| 35(1) | List of Records and Place of Maintenance of Records | (a) The above records and accounts shall be maintained at the principal place of business, as mentioned in the Registration Certificate; |
| (b) where more than one place of business is specified in the certificate of registration, the accounts relating to each place of business shall be kept at such places of business; | ||
| Proviso to 35(1) | Mode of maintaining books of account | The registered person may keep and maintain such accounts and other particulars in electronic form in such manner as may be prescribed |
| 35(2) | Record by Owner or Operator of Warehouse or Godown | Every owner or operator of warehouse or godown or any other place used for storage of goods and every transporter, irrespective of whether he is a registered person or not, shall maintain records of the consigner, consignee and other relevant details of the goods in such manner as may be prescribed. |
Question 8.
Sindhu Enterprises is a supplier of goods. Its turnover has exceeded ₹ 2 crores in current financial year. Discuss whether Sindhu Enterprises is required to get its accounts audited by the Chartered Accountant or Cost Accountant under GST law.
Answer:
Section 35(5) of the CGST Act read with rule 80 of the CGST Rules, 2017 provides that every registered person must get his accounts audited by a Chartered Accountant or a Cost Accountant if his aggregate turnover during a
FY exceeds ₹ 2 crores.
Since the turnover of Sindhu Enterprises has exceeded ₹ 2 crore in current financial rear, it has to get its accounts audited by a Chartered Accountant/Cost Accountant.
Question 9.
ABC Manufacturers Ltd. engages Raghav & Sons as an agent to sell goods on its behalf. For the purpose, ABC Manufacturers Ltd. has supplied the goods to Raghav & Sons located in Haryana. Enumerate the accounts required to maintained by Raghav & Sons as per rule 56( 11) of the CGST Rules, 2017
Answer:
Rule 56(11) of the CGST Rules, 2017 provides that every agent shall maintain accounts depicting the
(a) particulars of authorisation received by him from each principal to receive or supply goods or services on behalf of such principal separately;
(b) particulars including description, value and quantity (wherever applicable) of goods or . services received on behalf of every principal;
(c) particulars including description, value and quantity (wherever applicable) of goods or services supplied on behalf of every principal;
(d) details of accounts furnished to every principal; and
(e) tax paid on receipts or on supply of goods or services effected on behalf of every principal.
Question 10.
Pooja Ltd. Is a supplier of tax consultancy services? It has approach you to ascertain the period for which the books of account or other records need to be maintained?
Answer:
As per Section 36 of CGST Act, 2017 Every registered person required to keep and maintain books of account or other records in accordance with the provisions of section 35(1) shall retain them until the expiry of seventy-two months from the due date of furnishing of annual return for the year pertaining to such accounts and records:
Provided that a registered person, who is a party to an appeal or revision or any other proceedings before any Appellate Authority or Revisional Authority or Appellate Tribunal or court, whether filed by him or by the Commissioner, or is under investigation for an offence under Chapter XIX, shall retain the books of account and other records pertaining to the subject matter of such appeal or revision or proceedings or investigation for a period of one year after final disposal of such appeal or revision or proceedings or investigation, or for the period specified above, whichever is later.