CA Inter Taxation GST Case Studies – CA Inter Taxation Study Material is designed strictly as per the latest syllabus and exam pattern.
CA Inter Taxation GST Case Studies – CA Inter Taxation Study Material
Question 1.
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. He furnishes the following information:
(a) Happy Company is filling GSTR 1 every month. During the month of February, 2020 the company did not do any transaction. As there is no transaction, the Company did not file GSTR-I for the month of February, 2020 but it wants to file GSTR-I for the month of March, 2020, as there was transaction mentioned in point (c) given below.
(b) The company 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. All 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.
From the information given above, choose the most appropriate answer for the following questions:
(i) During the month of February, 2020 the company did not do any transaction. For this month, the Happy Company:
(a) Is required to file GSTR 1
(b) Is not required to file GSTR
(c) At its own discretion, it may file.
(d) The fact may be mentioned 2 in March 2020 return.
Answer:
(a) Is required to file GSTR 1
(ii) The Company did not file GSTR-I for the month of February, 2020 j but it wants to file GSTR-I for the month of March, 2020. In this regard:
(a) Company cannot file return for March, 2020.
(b) There is no specific bar under the law, so the company can file GSTR 1 for current period March, 2020.
(c) Company has to file combined return of two months.
(d) None of these
Answer:
(b) There is no specific bar under the law, so the company can file GSTR 1 for current period March, 2020.
(iii) What is the consignment value of goods supplied by Ram Store, Shyam Store and Mohan Store for the purpose of issuance of E-Way Bill?
(a) ₹ 43,000; ₹ 45,000 and ₹ 52,000
(b) ₹ 43,000; ₹ 53,100 and ₹ 52,000
(c) ₹ 43,000; ₹ 53,100 and ₹ 61,360
(d) ₹ 50,740; ₹ 53,100 and ₹ 61,360
Answer:
(d) ₹ 50,740; ₹ 53,100 and ₹ 61,360
(iv) As regards supply of goods to Kishan Sons of Bhopal, how many e-way bills are required to be gen-erated?
(a) None
(b) One
(c) Two
(d) Three
Answer:
(d) Three
Question 2.
PTL Pvt. Ltd. is a retail store of merchandise located in 25 States and/ or UTs in the country. For the purpose J of clearance of stock of merchandise and to attract consumers, PTL Pvt. Ltd. launched scheme of “Buy One Get One Free” for the same type of merchandise, for instance, one shirt to be given free with purchase of one shirt. For saving cost, PTL Pvt. Ltd. directly purchases merchandise from the manufacturers. In the month of May, in order to save j employee cost, PTL Pvt. Ltd. purchased a tempo traveller worth ₹ 12,00,000 with seating capacity of 25 persons (including driver) for transportation of its employees. Further, for ensuring the well-being of its employees, PTL Pvt. Ltd. voluntarily obtained the health insurance cover of ₹ 2,00,000 for each employee in the same month. The premium of ₹ 1,500 per employee has been paid by the company for 100 employees.
In the month of July, Mr. Raghav, a customer of the company, filed a law suit in the Court, against the company for not supplying goods of the value of ₹ 1,00,000. PTL Pvt Ltd. engaged Mr. Ram, an advocate, to represent it in Court for an agreed consideration of ₹ 25,000. As per the terms of the contract, Mr. Ram issued an invoice on 5th July. However, consideration was not paid till February next year.
Note – All the amounts given above are excluding taxes and all transactions are intra-State transactions. Rates of tax are CGST – 9% and SGST – 9%. However, for tempo traveller, the rates of taxes are CGST – 14% and SGST – 14%.
In relation to the above, answer the following questions: [RTP Nov. 2020]
(i) With respect to “Buy One, Get One” offer, which of the following statements is true:
(a) It will not be considered as supply at all since no consideration is involved in one of the items.
(b) Supply of item for which consideration is charged is a supply under section 7 of the CGST Act, 2017 while supply of the other item supplied free of cost is not a supply.
(c) These are two individual supplies where a single price is charged for the entire supply. Since a single price is charged, the same will always be taxed as a mixed supply.
(d) These are two individual supplies where a single price is charged for the entire supply. Their taxability will depend upon as to whether the supply is a composite supply or a mixed supply.
Answer:
(d) These are two individual supplies where a single price is charged for the entire supply. Their taxability will depend upon as to whether the supply is a composite supply or a mixed supply.
(ii) Eligible input tax credit for the month of May
(i) on the purchase of tempo traveller and
(ii) on health insurance premium paid (assuming that all other conditions, for availing input tax credit have been complied with) is:
(a) (i) CGST – Nil, SGST – Nil and (ii) CGST – Nil, SGST – Nil
(b) (i) CGST – ₹ 1,68,000, SGST – ₹ 1,68,000 and (ii) CGST – Nil, SGST – Nil
(c) (i) CGST – Nil, SGST – Nil and (ii) CGST – ₹ 18,000, SGST – ₹ 18,000
(d) (i) CGST – ₹ 1,68,000, SGST – ₹ 1,68,000 and (ii) CGST – ₹ 18,000, SGST – ₹ 18,000
Answer:
(b) (i) CGST – ₹ 1,68,000, SGST – ₹ 1,68,000 and (ii) CGST – Nil, SGST – Nil
(iii) Which of the following statements is true in respect of the services of advocate availed by the company?
(a) CGST- ₹ 2,250 and SGST- ₹ 2,250 on advocate services are payable by PTL Pvt. Ltd. ITC availed thereon is to be added to its output tax liability with interest as consideration along with tax is not paid within 180 days of the issuance of invoice.
(b) CGST- ₹ 2,250 and SGST- ₹ 2,250 on advocate services are payable by Mr. Ram. ITC availed thereon is to be added to output tax liability of PTL Pvt Ltd. with interest as consideration along with tax is not paid within 180 days of the issuance of invoice.
(c) CGST- ₹ 2,250 and SGST- ₹ 2,250 on advocate services are payable by PTL Pvt. Ltd. The condition of payment of consideration along with tax within 180 days of the issuance of invoice does not apply in the given case.
(d) CGST- ₹ 2,250 and SGST- ₹ 2,250 on advocate services are payable by Mr. Ram. The condition of payment of consideration along with tax within 180 days of the issuance of invoice does not apply in the given case.
Answer:
(c) CGST- ₹ 2,250 and SGST- ₹ 2,250 on advocate services are payable by PTL Pvt. Ltd. The condition of payment of consideration along with tax within 180 days of the issuance of invoice does not apply in the given case.
Question 3.
Mr. Vikas was employed in an export house during 2019-2020 up to February 2020. On 15th May, 2020, Vikas decided to start a business in the name of Mahadev Enterprises, a sole proprietorship firm. He has a vast experience of garment business as the firm in which he was employed earlier was export house dealing in garments only. He opened a shopping complex dealing in supply of variety of garments at multiple locations, i. e. in Himachal Pradesh, Uttarakhand and Tripura. In the month of June 2020, the aggregate turnover from the three locations are ₹ 2,50,000 (Himachal Pradesh), ₹ 11,00,000 (Uttarakhand) and ₹ 7,00,000 (Tripura). The turnover of Tripura includes ₹ 1,00,000 inward supplies under RCM. The accountant of the firm is in dilemma as to the due date of payment of GST.
From the information given above, choose the most appropriate answer for the following questions:
(i) What is the threshold limit of registration for Mahadev Enterprise, if they deal exclusively in goods?
(a) ₹ 1.5 Lakhs
(b) ₹ 40,00,000
(c) ₹ 20,00,000
(d) ₹ 10,00,000
Answer:
(d) ₹ 10,00,000
(ii) What is the aggregate turnover and state whether the entity is required to take registration mandatory?
(a) ₹ 20,50,000; Not liable for registration
(b) ₹ 20,50,000; Liable for registration
(c) ₹ 19,50,000; Not liable for registration
(d) ₹ 19,50,000; Liable for regis-tration
Answer:
(d) ₹ 19,50,000; Liable for regis-tration
(iii) What will be the threshold limit of registration if Mahadev Enterprises is dealing in taxable goods only from Himachal Pradesh?
(a) ₹ 1.5 Lakhs
(b) ₹ 40,00,000
(c) ₹ 20,00,000
(d) ₹ 10,00,000
Answer:
(b) ₹ 40,00,000
(iv) If the supplies by Mahadev are supply of goods instead of supply of goods, which of the following can be adopted by the entity?
(a) Composition scheme under section 10
(b) Registration as a casual taxable person
(c) Registration under normal levy as per section 9(1)
(d) Any of the above, as per its own discretion.
Answer:
(c) Registration under normal levy as per section 9(1)
(v) What is the due date of payment of tax by the firm?
(a) Last date of each month
(b) 10th of the following month
(c) 20th of the following month
(d) 31st March of the relevant year.
Answer:
(c) 20th of the following month
Question 4.
Mr. Kumar started interior designing practice from the month of January. His turnover up to the month of March was ₹ 12,50,000. On 30th June, his turnover exceeded ₹ 20,00,000 & reached to ₹ 20,05,000. Mr. Kumar applied for GST registration (as regular taxpayer) on 15th July and registration was granted to him on 25th July.
On 16th July, he entered into a contract for designing the flat of Mr. Shyam. The service was completed on 22nd July and Mr. Kumar issued invoice on the same day for ₹ 6,00,000. On 5th July, Mr. Kumar purchased capital goods amounting to ₹ 4,50,000 and from 25th July to 31st July, he availed services amounting to ₹ 1,75,000 for the purpose of completing the service.
On 1st August, Mr. Kumar got another contract for interior designing from Mr. Ram, which he accepted on 2nd August. The service was completed on 6th August and invoice was issued on 7th August for X 5,00,000. Payment was received on 29th August.
Note: All values are excluding taxes, unless specifically mentioned. Mr. Kumar makes only intra-State outward supplies and all purchases are also intrastate. Rates of tax are CGST – 9% and SGST – 9%.
In relation to the above, answer the following questions: [RTP Nov. 2020]
(i) The effective date of registration for Mr. Kumar is:
(a) 30th June
(b) 15th July
(c) 25th July
(d) 16th July
Answer:
(a) 30th June
(ii) Mr. Shyam can issue a revised tax invoice till:
(a) 23rd October
(b) 8th September
(c) 25th September
(d) 25th August
Answer:
(d) 25th August
(iii) Eligible input tax credit available with Mr. Kumar for the month of July is
(a) CGST ₹ 40,500 & SGST ₹ 40,500
(b) CGST ₹ 15,750 & SGST ₹ 15,750
(c) CGST ₹ 56,250 & SGST ₹ 56,250
(d) CGST ₹ 36,000 & SGST ₹ 36,000
Answer:
(c) CGST ₹ 56,250 & SGST ₹ 56,250
(iv) The time of supply of services pro-vided by Mr. Kumar to Mr. Ram is
(a) 7th August
(b) 1st August
(c) 29th August
(d) 6th August
Answer:
(a) 7th August
(v) If instead of opting for regular scheme, Mr. Kumar opts to pay tax under section 10(2A) of the CGST Act, 2017, the tax liability for the month of July will be:
(a) Nil
(b) CGST ₹ 54,000 & SGST ₹ 54,000
(c) CGST ₹ 18,000 & SGST ₹ 18,000
(d) CGST ₹ 78,150 & SGST ₹ 78,150
Answer:
(c) CGST ₹ 18,000 & SGST ₹ 18,000
Question 5.
Mr. Mandeep, a registered dealer, is doing building material business in the State of Assam. He availed architect services for his business from his friend in London free of cost. He also availed designing services from his brother in London for ₹ 5 Lakhs for his personal purposes.
He availed services which are liable to tax under reverse charge for which date of invoice was 01.09.20XX, payment date as per his books of account and as per his bank account was 15.11.20XX and 18.11.20XX respectively.
His turnover for the current financial year is as follows:
Taxable supply of goods – ₹ 55 Lakhs
Exempt supply of goods – ₹ 16 Lakhs
Inward supply liable to tax under reverse charge – ₹ 8 Lakh
He intends to start providing services also from the next financial year and also to avail composition scheme. He also wishes to make supplies to the Government.
Based on the information given above, choose the most appropriate answer for the following questions: [RTPMay 2020]
(i) In respect of services imported by Mr. Mandeep, which of the following is a correct Statement?
i. Architect services for his business from his friend in London free of cost is con-sidered as a supply
ii. Designing services from his brother in London for ₹ 5 Lakh for his personal purposes is considered as a supply.
iii. Architect services for his business from his friend in London free of cost is not considered as a supply
iv. Designing services from his brother in London for ₹ 5 Lakh for his personal purposes is not considered as a supply.
(a) i & ii
(b) i & iv
(c) ii & iii
(d) iii & iv
Answer:
(c) ii & iii
(ii) The time of supply of services, received by him and taxable under reverse charge, is
(a) 01.09.20XX
(b) 01.11.20XX
(c) 15.11.20XX
(d) 18.11.20XX
Answer:
(b) 01.11.20XX
(iii) Aggregate turnover of Mr. Mandeep for the given financial year will be,
(a) 63 Lakhs
(b) 79 Lakhs
(c) 71 Lakhs
(d) 47 Lakhs
Answer:
(c) 71 Lakhs
(iv) Mr. Mandeep will be eligible for composition scheme in the next financial year, but he can supply services only up to:
(a) 5.00 Lakhs
(b) 6.3 Lakhs
(c) 7.90 Lakhs
(d) 10 Lakhs
Answer:
(d) 10 Lakhs
(v) In case he supplies services to State Government by way of any activity in relation to any function entrusted to a Municipality under Article 243W of the Constitution, in the next financial year, which of the following will be exempt?
i. Pure Services
ii. Composite supply of goods and services in which value of supply of goods constitutes not more than 25% of value of said composite supply
iii. Composite supply of goods and services in which value of supply of service constitutes not more than 25% of value of said composite supply
(a) i & iii
(b) ii & iii
(c) i, ii & iii
(d) i & ii
Answer:
(d) i & ii
Question 6.
Maahi Ltd. of Bhopal (Madhya Pradesh) is a supplier of machinery. Maahi Ltd. has supplied machinery to ABC Enterprises in Indore (Madhya Pradesh) on 1st October, 2017. Maahi Ltd. and ABC Enterprises are not related
and price is the sole consideration for the supply.
Basic price of machinery excluding all taxes is ₹ 20,00,000. In addition to the basic price, Maahi Ltd. has collected the design and engineering charges of ₹ 10,000 and loading charges of ₹ 20,000 for the machinery. The commission of 110,000 has also been charged by Maahi Ltd. from ABC Enterprises.
Maahi Ltd. provides 1 year mandatory warranty for the machinery on payment of additional charges of ₹ 1,00,000. Maahi Ltd. has collected consultancy charges in relation to pre-installation planning of ₹ 10,000 and freight and insurance charges from place of removal to buyer’s premises of ₹ 20,000.
Maahi Ltd. received subsidy of ₹ 50,000 from Central Government for supplying the machinery to backward region since receiver was located in a backward region. Maahi Ltd. also received ₹ 50,000 from the joint venture partner of ABC Enterprises for making timely supply of machinery to the recipient.
A cash discount of 1% on the basic price of the machinery is offered at the time of supply, if ABC Enterprises agrees to make the payment within 30 days of the receipt of the machinery at his premises. Discount @ 1% was given to ABC Enterprises as it agreed to make the payment within 30 days.
(i) Which of the following section of CGST Act, 2017 is applicable on the transaction as regards the Value of Supply?
(a) Section 15(1)
(b) Section 15(4)
(c) Section 15(5)
(d) Section 15(1) with Rule 27
Answer:
(a) Section 15(1)
(ii) Which of the following is not in-cludible in value of supply?
(a) Design and engineering charges
(b) Loading charges
(c) Subsidy from Central Government
(d) Consultancy charges in relation to pre-installation planning
Answer:
(c) Subsidy from Central Government
(iii) The Invoice for supply shall be issued by company (as per section 31):
(a) On 1st October, 2017
(b) On or before 1st October, 2017
(c) Within 30 days of delivery
(d) Within 45 days of delivery
Answer:
(b) On or before 1st October, 2017
(iv) The value of supply is
(a) ₹ 18,00,000
(b) ₹ 20,00,000
(c) ₹ 22,00,000
(d) None of these
Answer:
(c) ₹ 22,00,000
Question 7.
Ms. Riya is a multi-faceted business personality. She is registered under GST from April, 2OXX.
She supplied a package consisting of stapler, calculator and charger at a single price of 300. Rate of GST for stapler, calculator and charger is 5%, 12% and 18% respectively.
She wants to opt for composition levy. She received following payments during the month of May, 2OXX:
- earned ₹ 160,000 by performing in western music in a cultural event at a Resort
- earned ₹ 50,000 by providing services by way of renting of residential dwelling for use as boutique.
- received ₹ 70,000 by way of rent for letting of agro machinery
Ms. Riya made a suppiy during June, 2OXX, details of which are as follows:
- Basic price of the product – ₹ 45,000
- Tax collected at source under In-come-tax Act, 1961 – ₹ 2,500
- She received a subsidy of ₹ 3,500 from Green Foundation Pvt. Ltd for usage of green energy and the subsidy was linked to saving energy
Ms. Riya provides the following information regarding receipt of inward supply during July, 20XX:
- received invoice for goods having GST Component of ₹ 30,000. Goods were to be delivered in 5 lots, out of which three lots were received in the current month.
- purchased a car having GST com-ponent of ₹ 1,50,000 for the usage in a driving school owned by her
- availed health insurance service for her employees on her own and paid GST of ₹ 7,000 thereon
Transactions referred above are intraState only. Conditions necessary for claiming input tax credit (ITC) have been fulfilled subject to the information given above.
From the information given above, choose the most appropriate answer for the following questions:
[Mock Test Paper – May 2020 Series]
(i) What would be the nature of supply and the applicable rate of GST for the supply of package made by Ms. Riya (when not registered under composition scheme) :
(a) composite Supply & applicable rate 12%
(b) mixed Supply & applicable rate 18%
(c) composite Supply & applicable rate 18%
(d) mixed Supply & applicable rate 12%
Answer:
(b) mixed Supply & applicable rate 18%
(ii) Ms. Riya can opt for composition scheme if she does not undertake the supply of
(i) Aerated water
(ii) Tobacco
(iii) Pan masala
(iv) Milk
(a) i & ii
(b) iii & iv
(c) i, ii &iii
(d) ii, iii & iv
Answer:
(c) i, ii &iii
(iii) Out of payments received by Ms.
Riya in month of May 20XX, exempt Supply amounts to ……….
(a) ₹ 50,000
(b) ₹ 70,000
(c) ₹ 1,20,000
(d) ₹ 1,60,000
Answer:
(b) ₹ 70,000
(iv) In respect of supply made by Ms. Riya, the value of supply under section 15 of CGST Act, 2017 is
(a) ₹ 45,000
(b) ₹ 47,500
(c) ₹ 48,500
(d) ₹ 51,000
Answer:
(a) ₹ 45,000
(v) Eligible amount of input tax credit that can be claimed by Ms. Riya in the month of July 20XX is ………….
(a) ₹ 30,000
(b) ₹ 37,000
(c) ₹ 1,50,000
(d) ₹ 1,57,000
Answer:
(c) ₹ 1,50,000
Question 8.
M/s. Shanky Consultants, a partnership firm registered in Delhi, renders following services during the year:
(i) Security services: ₹ 200 Lakhs to registered business entities.
(ii) Manpower services (Accountants): ₹ 5 Lakh
(iii) Auditing services: ₹ 100 Lakhs
OTHER INFORMATION:
(i) Shanky Consultants also paid spon-sorship fees of ₹ 70,000 at seminar organized by a private NGO (a partnership firm) in Delhi.
(ii) Shanky Consultant pays rent amounting to ₹ 6,00,000 for a building owned by MCD.
(iii) Assume all services are taxable at 18% and all transactions to be intra-State supplies.
Based on the above information, answer the following questions: [Mock TestPaper-October2020Series]
(i) What is the aggregate turnover of Shanky Consultants?
(a) ₹ 3,05,00,000
(b) ₹ 3,05,70,000
(c) ₹ 1,05,00,000
(d) ₹ 1,05,70,000
Answer:
(a) ₹ 3,05,00,000
(ii) GST liability paid under reverse charge by Shanky Consultants is?
(a) CGST: ₹ 60,300, SGST: ₹ 60,300
(b) CGST: ₹ 6,300, SGST: ₹ 6,300
(c) CGST: ₹ 54,000, SGST: ₹ 54,000
(d) None of the above
Answer:
(a) CGST: ₹ 60,300, SGST: ₹ 60,300
(iii) State which of the following statement is true in respect of security services provided by Shanky Consultants to registered business entities:
(a) Shanky Consultants shall issue GST compliant tax invoice.
(b) Shanky Consultants shall issue bill of supply stating “Tax to be paid by service recipient under reverse charge”.
(c) Shanky Consultants can issue any document in lieu of tax invoice.
(d) Shanky Consultants shall issue receipt voucher every time Shanky Consultants receives payment.
Answer:
(a) Shanky Consultants shall issue GST compliant tax invoice.