Payment of Tax – CA Inter Tax Study Material

Payment of Tax – CA Inter Taxation Study Material is designed strictly as per the latest syllabus and exam pattern.

Payment of Tax – CA Inter Taxation Study Material

Question 1.
Mr. Nimit, a supplier of goods, pays GST under regular scheme. He is not eligible for any threshold exemption. He has made the following outward taxable supplies in the month of August, 2020

Amount (₹)
Intra-state supplies of goods 6,00,000
Inter-state supplies of goods 2,00,000

He has also furnished following information in respect of purchases made by him from registered dealers during August, 2020

Amount (₹)
Intra-state purchase of goods 4,00,000
Inter-state purchase of goods 50,000

Balance of ITC available at the beginning of the August 2020 :

CGST 15,000
SGST 35,000
IGST 20,000

Note:

  1. Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively, on both inward and outward supplies.
  2. Both inward and outward supplies given above are exclusive of taxes, wherever applicable.
  3. All the conditions necessary for availing the ITC have been fulfilled. Compute the Net GST payable by Mr. Nimit for the month of August, 2020. [May 2018 Old Course, 6 Marks]

Answer:
Computation of GST payable on Outward supply

Particulars IGST CGST SGST
(1) Inter-state supply of goods (18% of ₹ 2,00,000) 36,000 —–
(2) Intra-state supply of goods
CGST @ 9% of ₹ 6,00,000 54,000
SGST @ 9% of ₹ 6,00,000 54,000
Total Tax Liability 36,000 54,000 54,000

Payment of Tax – CA Inter Tax Study Material

Computation of Total ITC Available

Particulars IGST CGST SGST
Opening brought forward ITC 20,000 15,000 35,000
Add: IGST in respect of Inter-state purchase of goods 9,000
Add: Intra-state inward supply of repair services 36,000 36,000
Total ITC available on 31st August, 2020 29,000 51,000 71,000

Computation of Net GST Payable

Particulars IGST CGST SGST
GST payable on Outward supplies (as computed above) 36,000 54,000 54,000
Less: Adjustment of ITC on account of IGST as per section 49(5)(a) read with section 49A: [Towards IGST] (29,000)
Balance 7,000 54,000 54,000
Less: Adjustment of ITC on account of CGST/ SGST as per section 49(5)(b)/(c)
(a) Adj. of ITC of CGST towards CGST (51,000)
(b) Adj. of ITC of SGST towards SGST (54,000)
Less: Adjustment of balance ITC of SGST towards IGST as per section 49(5)(c) (7,000)
Net GST Payable through Cash Ledger Nil 3,000 Nil
Balance available in Electronic Credit ledger after aforesaid adjustment Nil Nil 10,000

Notes:

(a) Supply of detergent and bucket together with a single price of ₹ 400 is a mixed supply. Being a mixed supply comprising of two supplies, it shall be treated as supply of that particular supply that attracts highest rate of tax (28%).

(b) Supply of online educational journal is exempt only when the same is provided to an educational institution which provides a qualification recognised by law. Since, the private coaching centre does not provide any recognised qualification, the supply of online educational journals to the same will be taxable.

(c) ITC can be taken only on the basis of a valid tax paying document. Thus, ITC will not be available on goods for which the invoice is miss-ing.

(d) ITC on motor vehicles for transportation of persons with seating capacity > 13 persons (including the driver) used for any purpose is allowed. Further, ITC is allowed on repair and maintenance services relating to motor vehicles, ITC on which is allowed.

Tutorial Note:

Under the amended position of law, the IGS T credit, after being set off against IGST liability, can be utilised against CGST and SGST liability in any order and in any proportion. Thus, there can be other answer abo, but the total GST payable after adjustment of ITC should not be more than ₹ 15,000, as calculated above.

Question 2.
M/s. Pradyumn Corporation Pvt. Ltd., a registered dealer of Mumbai furnishes you following information for the month of October, 2020.

Particulars Amount (₹)
(i) Intra-state sale of Taxable goods (out of above ₹ 50,000 was received as advance in September, 2020) 2,00,000
(ii) Goods purchased from unregistered dealer (purchased on 20th October, 2020) (10,000 in case of Inter-state & Balance Intra-state) 50,000
(iii) Received for services by way of labour contracts for repairing a single residential unit otherwise than as a part of residential complex (it is Intra-state transaction) 50,000
(iv) Professional fees paid to Ms. Udadhi located in a non-taxable territory (it amounts to Inter-state transaction) 50,000

Compute GST liability (CGST, SGST or IGST, as the case may be) of M/s. Pradyumn Corporation Pvt. Ltd. for the month of October, 2020. Assume the rates of GST as under:
CGST 9%
SGST 9%
IGST 18%
Note: Turnover of M/s. Pradyumn Corporation Pvt. Ltd. was ₹ 2 crores in the Previous Financial Year.
[May 2018 Old Course Modified, 5 Marks]
Answer:
Computation of GST payable on Outward supply

Particulars IGST CGST SGST
(1) Intra-state supply of taxable goods (9% of ₹ 2,00,000) 18,000 18,000
(2) Goods purchased from unregistered dealer Nil Nil
(3) services of labour contracts for repairing (9% of ₹ 50,000) 4,500 4,500
(4) Professional fees [IGST @ 18% of ₹ 50,000] 9,000
Total Tax Liability 9,000 22,500 22,500

Note:

(1) By virtue of Notification No. 66/2017, the date of advance is not con-sidered in case of forward supply of goods while determining the time of supply under section 12(2). It implies that the GST liability would not have arisen on advance of ₹ 50,000 received in September, 2020 in that month. Therefore, the same has been included in the GST liability of the company for the month of October, 2020.

(2) All intra-State and inter-State procurements made by a registered person from unregistered person have been exempted from reverse charge liability, without any upper limit for daily procurements.

(3) Services by way of pure labour contracts of construction, erection, commissioning, or installation of original works pertains to a single residential unit otherwise than as a part of a residential complex are exempt. Labour contracts for repairing are thus, taxable.

(4) In case of service supplied by a person located in a non-taxable territory to a person other than non-taxable online recipient, GST is payable under reverse charge by such recipient.

Payment of Tax – CA Inter Tax Study Material

Question 3.
With reference to GST Laws, when interest is payable? [May 2018 Old Course, 1 Marks]
Answer:
Interest is payable in the following cases in terms of section 50 of CGST Act, 2017:
(a) Delay/failure to pay tax, in full or in part within the prescribed period
(b) undue or excess claim of input tax credit
(c) undue or excess reduction in output tax liability.

Question 4.
M/s. J & Co. Chartered Accountants a partnership firm having its registered and head office in Mumbai and Registered under the GST Act in the State of Maharashtra only. It does not have any branches in other state. The Gross Receipts of the firm in the Financial Year 2017-18 was ₹ 60 Lakhs. Firm has submitted following information for the month of August, 2018 :

Particulars Amount (₹)
(Excluding GST)
Professional Services Provided and Bills Raised during the month for Providing of Services of ITR Filing and Income Tax Consultancy 1,00,000
Internal Audit of X Pvt. Ltd. at their office in Mumbai (Registered in the state of Maharashtra) 50,000
Statutory Audit Services provided to M/s. Tirupati Trading Pvt. Ltd. at Ahmedabad (Registered in the State of Gujarat) 70,000

Firm has also furnished following information in respect of input services availed from registered dealers for providing of output services during the month August, 2018:

Particulars Amount (₹) (Excluding GST) CGST SGST IGST
Services availed from Courier Agency 5,000 450 450 Nil
Railway Travelling Expenses from Mumbai to Ahmedabad and Return Ticket for conducting of Audit of M/s. Tirupati Trading Pvt. Ltd. for 3 Tier AC 12,000 Nil Nil 600
Service Availed from Another Professional Firm at Mumbai amount is paid without TOS U/s 194J of Income Tax Act 20,000 3,600 Nil Nil

Notes :

  1. Rate of CGST, SGST and IGST to be 9%, 9% & 18% respectively, on outward supplies.
  2. All the conditions necessary for availing the ITC have been fulfilled.
  3. Opening Balance of available input tax credit is Nil for CGST, SGST and IGST.

Compute the Net GST Payable by M/s. J & Co., for the month August, 2018 after adjusting the GST Credit. Brief reasoning should form part of your answer. [Nov. 2018 Old Course, 4 Marks]
Answer:
Computation of GST payable on Outward supply

Particulars IGST CGST SGST
(1) Intra-state supply [Professional services of ITR, Tax consultancy] (9% of ₹ 1,00,000) 54,000 54,000
(2) Intra-state supply [Internal Audit] (9% of ₹ 50,000)                 ‘ 4,500 4,500
(3) Inter-state supply [Statutory Audit Services provided to M/s. Tirupati Trading Pvt.] 12,600
Total Tax Liability 12,600 13,500 13,500

Computation of Total ITC Available

Particulars IGST CGST SGST
Opening brought forward ITC Nil Nil Nil
Add: Services from Courier Agency 450 45
Add: Railway Travelling from Mumbai to Ahmedabad 600
Add: Service from Another Professional Firm at Mumbai 1,800 1,800
Total ITC available on 31st August, 2018 600 2,250 2,250

Payment of Tax – CA Inter Tax Study Material

Computation of Net GST Payable

Particulars IGST CGST SGST
GST payable on Outward supplies (as computed above) 12,600 13,500 13,500
Less: Adjustment of ITC on account of IGST as per section 49(5)(a) read with section 49A: [Towards IGST] (600)
Balance 12,000 13,500 13,500
Less: Adjustment of ITC on account of CGST/SGST as per section 49(5)(b)/(c)
(a) Adj. of ITC of CGST towards CGST (2,250)
(b) Adj. of ITC of SGST towards SGST (2,250)
Net GST Payable through Cash Ledger 12,000 11,250 11,250

Question 5.
M/s. Maheshwari Corporation Pvt. Ltd. is a supplier of goods and services at Bangalore, registered in the State of Karnataka having Turnover of ₹ 200 lakhs in the last financial year. It has furnished the following information for the month of June, 2018.

Sr. No. Particulars Amount in ₹ Excluding GST
(1) Services provided by way of Labour Contract for repairing a single residential unit otherwise than as a part of residential complex (It is an intra-state transaction.) 1,30,000
(2) Intra-state Sale of Taxable Goods including ₹ 50,000 received as advance in April, 2018. The invoice for the entire sale value is issued on 15th June, 2018 2,50,000
(3) Goods Transport Services received from GTA, GTA is paying tax @ 12% (It is an inter-state transaction.) 1,80,000
(4) Goods Purchased from unregistered dealer on 20th June, 2018 (Inter-state purchases are worth ₹ 45,000 and balance purchases was intra-state). 80,000

Compute Net GST Liability (CGST, SGST, IGST as the case may be) of M/s. Maheshwari Corporation Pvt. Ltd. for the month of June, 2018 assume the rates of GST, unless otherwise specified, as under:
CGST – 9%, SGST – 9%, IGST – 18% [Nov. 2018 Old Course, 5 Marks]
Answer:
Computation of GST payable on Outward supply

Particulars Note CGST SGST
(1) Services provided by way of Labour Contract for repairing a single residential unit otherwise than as a part of residential complex (1) 11,700 11,700
(2) Intra-State Sale of Taxable Goods (2) 22,500 22,500
(3) Goods Purchased from unregistered dealer on 20th June, 2018 (3) Nil Nil
Total Tax Liability 34,200 34,200
Less: ITC of GST paid on GTA services received (4) 10,800 10,800
Net GST Liability 23,400 23,400

Notes:

  1. Services by way of pure labour contracts of construction, erection, commissioning, or installation of original works pertains to a single residential unit otherwise than as a part of a residential complex are exempt. Labour contracts for repairing are thus taxable.
  2. Time of supply of goods is the time of issue of invoice. So, advance received in April, 2018 will also be taxed in June, 2018.
  3. All intra-State and inter-State procurements made by a registered person from unregistered person have been exempted from reverse charge liability.
  4. Since GTA is paying tax @ 12%, tax is payable under forward charge. Further, ITC of IGST (12% of ₹ 1,80,000 i.e. ₹ 21,600) paid on the same is available.
  5. The ITC of IGST has been used to pay CGST and SGST equally as there is no IGST liability.

Payment of Tax – CA Inter Tax Study Material

Question 6.
Insight Ltd. is operating in West Bengal. The Tax liability for the month of August, 2017 is as follows:

S. No. Tax Liability Amount (₹)
(1) Output CGST Payable 24,000
(2) Output SGST Payable 9,000
(3) Output IGST Payable 3,000
(4) input 7,000
(5) Input SGST 14,000
(6) Input IGST 12,000

Calculate Tax payable and carry forward for the month of August, 2017 [Nov. 2018 OId Course, 4 Marks]
Answer:
Computation of Net GST Payable

Particulars IGST CGST SGST
GST payable on Outward supplies 3,000 24,000 9,000
Less: Adjustment of ITC on account of IGST as per section 49(5)(a) read with section 49A:
(a) Towards IGST (3,000)
(b) Towards CGST (9,000)
Balance Nil 15,000 9,000
Less: Adjustment of ITC on account of CGST/SGST as per section 49(5)(b)/(c)
(a) Adj. of ITC of CGST towards CGST (7,000)
(b) Adj. of ITC of SGST towards SGST (9,000)
Net GST Payable through Cash Ledger Nil 8,000 Nil
Balance available in Electronic Credit ledger after aforesaid adjustment Nil Nil 5,000

Question 7.
M/s. Software Limited, reduced the amount of ₹ 2,00,000 from the output tax liability in contravention of provisions of section 42(10) of the CGST Act, 2017 in the month of December 2017, which is ineligible credit. A show cause notice was issued by the Tax Department to pay Tax along with interest. M/s. Software Limited paid the tax and interest on 31st March, 2018. Calculate Interest liability (Ignore Penalty). [Nov. 2018 Old Course, 4 Marks]
Answer:
A taxable person who makes an undue or excess claim of input tax credit shall pay interest @ 24% p.a. on such undue or excess claim. The period of interest will be from the date following the due date of payment ; to the actual date of payment of tax.
Due date of payment is 20th January, 2018.
Period for which interest is due = 21st January, 2018 to 31st March, 2018 = 70 days
Thus, interest liability = ₹ 2,00,000 × 24% × 70/365 = ₹ 9,205.

Question 8.
Mr. Uttam Kumar a registered supplier of service in Kolkata, has provided following information for the month of

Amount in ₹
1 Intra-State taxable supply of service. 6,40,000
2 Amount received from Kapola Pvt. Ltd., for service provided to company. (He is a director in Kapola P. Ltd.), being Intra­State transaction. 5,00,000
3 Paid legal fee to senior advocate for one legal matter within State, being Intra-State transaction. 50,000
4 Amount received for service provided by him as a commentator to a local recognized sports body, being Intra-State transaction 1,20,000
5 Amount received for acting as a coach in recreational activities relating to sports, from one local charitable entity registered under section 12AA of the Income Tax Act, 1961, being Intra­State transaction. 30,000

Compute the net GST liability (CGST, SGST or IGST) of Mr. Uttam Kumar for the month of October, 2018.

Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively. All the amounts given are exclusive of CGST, SGST and IGST. [May 2019 Old Course, 8 Marks]
Answer:
Computation of Liability under RCM on Inward supply

Particulars CGST SGST
Legal fee paid to senior advocate for one legal matter (Intra-state)
CGST @ 9% of ₹ 50,000 4,500
SGST @ 9% of ₹ 50,000 4,500
GST Liability under RCM (A) 4,500 4,500

Computation of Liability under FORWARD on Outward Supply

Particulars CGST SGST
(1) Intra-state taxable supply of services
CGST @ 9% of ₹ 6,40,000 57,600
SGST @ 9% of ₹ 6,40,000 57,600
(2) Services supplied by director (Payable under RCM)
(3) Service provided as a commentator to a local recognized sports body [Intra state]
CGST @ 9% of ₹ 1,20,000 10,800
SGST @ 9% of ₹ 1,20,000 10,800
(4) Services provided as a coach (Exempt)
Total Tax Liability 68,400 68,400
Less: ITC of GST paid on legal fees paid to senior advocate (4,500) (4,500)
Output tax liability after set-off of ITC (B) 63,900 63,900

Payment of Tax – CA Inter Tax Study Material

Determination of Total Liability for October, 2018

Particulars CGST SGST
(1) GST Liability under Reverse Charge (As per ‘A’) 4,500 4,500
(2) GST Liability under Forward Charge (As per ‘B’) 63,900 63,900
Total GST Liability Payable in cash 68,400 68,400

Notes:

  1. Services supplied by a director of a company to the said company are taxable under reverse charge and thus, the tax leviable thereon will be paid by the company.
  2. Services provided by a senior advocate by way of legal services are taxable under reverse charge and thus, the tax leviable thereon will he paid by Mr. Uttam Kurnar.
  3. Services provided to a recognized sports body by an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized by a recognized sports body is exempt from GST vide exemption notification. However, services provided as a commentator to a local recognized sports body is taxable.
  4. Services by way of coaching in recreational activities relating to sports by charitable entities registered under section 12M of the Income-tax Act arc exempt from GST vide exemption notification.
  5. The amount available in the electronic credit ledger may be used for making payment towards output tax. However, tax payable under reverse charge is not an output tax. Therefore, tax payable under reverse charge cannot be set-off against the input tax credit and thus, will have to be paid in cash.

Question 9.
What are the E-ledgers? State the entries to be debited to electronic liability register, under the CGST Act, 2017 and the CGST Rules, 2017. [May 2019 Old Course, 5 Marks]
Answer:
Electronic Ledgers or E-Ledgers, i.e., Electronic Cash Ledger and Electronic Credit Ledger, are statements of cash and input tax credit in respect of each registered taxpayer. In addition, each taxpayer shall also have an electronic tax liability register.

The entries to he debited to electronic liability register under the CGST Act, 2017 and the CGST Rules, 2017 are as follows: –

  1. all amounts payable towards tax, interest, late ice and any other amount as per return filed;
  2. all amounts pay able towards tax, interest, penalty and any other amount determined in a proceeding by an assessing authority or as ascertained by the taxable person;
  3. the amount of tax and interest pay able due to mismatch;
  4. any amount of interest that may accrue from time to time.

Payment of Tax – CA Inter Tax Study Material

Question 10.
Mr. Ajay, a registered supplier of goods, pays GST under regular scheme and provides the following information for the month of August 2017 :

Particulars (₹)
(i) Inter-state taxable supply of goods 10,00,000
(ii) Intra-state taxable supply of goods 2,00,000
(iii) Intra-state purchase of taxable goods 5,00,000

He has the following Input tax credit at the beginning of August 2017 :

Nature ITC Amount in (₹)
CGST 20,000
SGST 30,000
IGST 25,000

Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively. Both inward and outward supplies are exclusive of taxes wherever applicable. All the conditions necessary for availing the ITC have been fulfilled. Compute the net GST payable by Mr. Ajay for the month of August 2017. [May 2018, 6 Marks]
Answer:
Computation of GST payable on outward supply

Particulars IGST CGST SGST
(1) Inter-state supply of goods (18% of ₹ 10,00,000) 1,80,000
(2) Intra-state supply of goods (9% of ₹ 2,00,000) 18,000 18,000
Tax on Outward Supply 1,80,000 18,000 18,000

Computation of Total ITC Available

Particulars IGST CGST SGST
Opening balance brought forward 25,000 20,000 30,000
Add: ITC in respect of inward supply during August 2018 @ 9% of ₹ 5,00,000 ——— 45,000 45,000
Total ITC 25,000 65,000 75,000

Payment of Tax – CA Inter Tax Study Material

Computation of GST payable through cash ledger

Particulars IGST CGST SGST
GST payable on outward supplies 1,80,000 18,000 18,000
Less: Adjustment of ITC on account of IGST as per section 49(5)(a) read with section 49A:
(a) Towards IGST (25,000)
Balance 1,55,000 18,000 18,000
Less: Adjustment of ITC on account of CGST/ SGST as per section 49(5)(b)/(c)
(a) Adj. of ITC of CGST towards CGST (18,000)
(b) Adj. of ITC of SGST towards SGST (18,000)
Balance 1,55,000 Nil Nil
Less: Adjustment of ITC on account of CGST as per section 49(5)(b) towards IGST (47,000)
Less: Adjustment of ITC on account of SGST as per section 49(5)(c) towards IGST (57,000)
Net GST Payable through Cash Ledger 51,000 Nil Nil

Note: Since section 49A is an overriding section to section 49, the ITC on account of IGST shall be utilized fully towards IGST, then CGST and balance for SGST/UTGST, is available.

Question 11.
In terms of provision of CGST Act, 2017, When interest shall be payable by a registered person and what is the maximum rate of interest chargeable for the same? [May 2018, 5 Marks]
Answer:
Interest is payable in the following cases:-

  • failure to pay tax, in full or in part within the prescribed period,
  • undue or excess claim of input tax credit,
  • undue or excess reduction in output tax liability.

The maximum rate of interest chargeable for the same is as under-

(a) 18% p.a. in case of failure to pay full/part tax within the prescribed period
(b) 24% p.a. in case of undue or excess claim of input tax credit or undue I or excess reduction in output tax liability

Question 12.
Mr. Thiraj, a registered supplier of service in Bangalore (Karnataka State) has provided the following information for the month of February 2018:

Particulars Amount in (₹)
(i) Intra-state taxable supply of service 5,20,000
(ii) Legal fee paid to a Lawyer located within the state 20,000
(iii) Rent paid to the State Govt, for his office building 30,000
(iv) Received for services towards conduct of exams to Love all University, Pune (Recognized by law), being an inter­state transaction. 16,000

Compute the net GST liability (CGST, SGST or IGST) of Mr. Thiraj for the month of February 2018.
Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively.
All the amounts given above are exclusive of taxes.[Nov. 2018, 6 Marks]
Answer:
Computation of Liability under RCM on Inward supply

Particulars CGST SGST
Legal fee paid to Lawyer (Intra-state)
CGST @ 9% of ₹ 20,000 1,800
SGST @ 9% of ₹ 20,000 1,800
Rent paid to Karnataka Govt. (Intra-state)
CGST @ 9% of ₹ 30,000 2,700
SGST @ 9% of ₹ 30,000 2,700
GST Liability under RCM (A) 4,500 4,500

Computation of Liability under Forward on Outward Supply

Particulars CGST SGST
Intra-slate taxable supply of services
CGST @ 9% of ₹ 5,20,000 46,800
SGST @ 9% of ₹ 5,20,000 46,800
Total Tax Liability 46,800 46,800
Less: ITC under RCM (as computed above) (4,500) (4,500)
Output tax liability under Forward Charge after set-off of ITC (B) 42,300 42,300

Determination of Total Liability for February,2018

Particulars CGST SGST
(1) GST Liability under Reverse Charge (As per ‘A’) 4,500 4,500
(2) GST Liability under Forward Charge (As per ‘B’) 42,300 42,300
Total GST Liability Payable in cash 46,800 46,800

Notes:-

  1. Since Love all University provides education recognized by law, it is an educational institution and services provided to an educational institution, by way of conduct of examination by such institution are exempt from GST.
  2. In case of legal services provided by an advocate to any business entity GST is payable under reverse charge by the recipient of service.
  3. In case of services supplied by, inter alia, State Government by way of renting of immovable property to a person registered under the CGST Act, GST is payable under reverse charge by the recipient of service.
  4. The amount available in the electronic credit ledger may be used for making payment towards output tax. How ever, tax payable under reverse charge is not an output tax. Therefore, tax payable under reverse charge cannot be set off against the input tax credit and thus, will have to be paid in cash.

Payment of Tax – CA Inter Tax Study Material

Question 13.
From the following information, compute the NET GST payable for the month of March 2018:

(Amount in ₹)
Output GST Opening ITC as per credit ledger
CGST 2,000 NIL
SGST 15,000 1,000
IGST 24,000 37,000

[Nov. 2018, 4 Marks]
Answer:
Computation of Net GST Payable

Particulars IGST CGST SGST
GST payable on Outward supplies 24,000 2,000 15,000
Less: Adjustment of ITC on account of IGST as per section 49(5)(a) read with section 49A:
(a) Towards IGST (24,000)
(b) Towards CGST (2,000)
(c) Towards SGST (11,000)
Balance Nil Nil 4,000
Less: Adjustment of ITC on account of SGST as per section 49(5)(c) [Towards SGST] (1,000)
Net GST Payable through Cash Ledger Nil Nil 3,000

Tutorial Note: The GST on outward supply towards CGST and SGST can-not be different. However, the question has been solved on the basis of the data as given in the question.

Question 14.
Determine with brief reasons, whether the following statements are True or False:
Electronic cash ledger balance of ₹ 5,000 under the major head of IGST : can be utilized for discharging the liability of major head of CGST. [Nov. 2018, 1.5 Marks]
Answer:
The said statement is False.

The amount available under one major head cannot be utilised for dis-charging the liability under any other major head.

Payment of Tax – CA Inter Tax Study Material

Question 15.
Ms. Jimmy wants to adjust input tax credit for payment of interest, penalty and payment of tax under reverse charge. Explain whether she can do so. [Nov. 2018, 3 Marks]
Answer:
The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger which may be used for making any payment towards output tax.
“Output tax” inter alia excludes tax payable on reverse charge basis.
Thus, Ms. Jimmy cannot adjust input tax credit for payment of interest, penalty as also for payment of tax under reverse charge.

Question 16.
Mr. Himanshu, a registered supplier of chemicals, pays GST under regular scheme. He is not eligible for any threshold exemption. He has made the following outward taxable supplies for the month of September 2018 :

Intra-State supply of goods ₹ 25,00,000
Inter-State supply of goods ₹ 5,00,000

He has also made the following inward supply:

(₹)
Intra-State purchase of goods from Registered Dealer 14,00,000
Intra-State purchase of goods from Unregistered Dealer 2,00,000
Inter-State purchase of goods from Registered Dealer 4,00,000

Balance of ITC at the beginning of September 2018:

(₹)
CGST 95,000
SGST 60,000
IGST 50,000

Additional Information:

  • He purchased a car (Intra-State supply) used for business purpose at a price of ₹ 6,72,000 (including CGST of ₹ 36,000 & SGST of ₹ 36,000) on September 15, 2018. He capitalized the full value Including GST in the books on the same date to claim depreciation.
  • Out of Inter-State purchase from registered dealer, goods worth ₹ 1,00,000 were received on October 3,2018 due to road traffic jams.

Note:

  1. Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively.
  2. Both inward and outward supplies given above are exclusive of taxes, wherever applicable.
  3. All the conditions necessary for availing the ITC have been fulfilled except mentioned above.

Compute the net CGST, SGST and IGST payable in cash by Mr. Himanshu for the month of September 2018. [May. 2019, 8 Marks]
Answer:
Computation of GST payable on outward supply

Particulars IGST CGST SGST
(1) Inter-state supply of goods (18% of ₹ 5,00,000) 90,000 ———
(2) Intra-state supply of goods
CGST @ 9% of ₹ 25,00,000 2,25,000
SGST @ 9% of ₹ 25,00,000 2,25,000
Total Tax Liability 90,000 2,25,000 2,25,000

Computation of Total ITC Available

Particulars IGST CGST SGST
Opening brought forward ITC 50,000 95,000 60,000
Add: IGST in respect of Inter-state purchase of goods from registered dealer during September, 2018
(4,00,000 – 1,00,000) × 18% 54,000
Add: Intra-state purchase of goods from regis­tered dealer
CGST @ 996 of ₹ 14,00,000 1,26,000
SGST @ 996 of ₹ 14,00,000 1,26,000
Add: Intra-state purchase of goods from Un-reg­istered Dealer Nil Nil
Total ITC available on 30th September 1,04,000 2,21,000 1,86,000

Computation of Net GST Payable

                       Particulars IGST CGST SGST
GST payable on Outward supplies (as computed above) 90,000 2,25,000 2,25,000
Less: Adjustment of ITC on account of IGST as per section 49(5)(a) read with section 49A:
(a) Towards IGST (90,000)
(b) Towards CGST (4,000)
(c) Towards SGST (10,000)
Balance Nil 2,21,000 2,15,000
Less: Adjustment of ITC on account of CGST/ SGST as per section 49(5)(b)/(c)
(a) Adj. of ITC of CGST towards CGST (2,21,000)
(b) Adj. of ITC of SGST towards SGST (1,86,000)
Net GST Payable through Cash Ledger Nil Nil 29,000

Notes:

  1. Every registered person is entitled to take credit of input tax charged on any inward supply of goods used/intended to be used in the course/ furtherance of his business.
  2. Intra-State supplies received by a registered person from any unregis-tered supplier, are exempt from the whole of the tax leviable thereon under reverse charge till 30.09.2019. Since no tax has been paid, so no credit is available.
  3. Input tax paid on capital goods cannot be availed as ITC if depreciation has been claimed on such tax component. Moreover, ITC on motor vehicle (car) is blocked under section 17(5) of CGST Act, 2017.
  4. A registered person is entitled to avail input tax in respect of any supply of goods to him only if he has actually received the said goods. Since goods worth ₹ 1,00,000 have not been received by Mr. Himanshu in the month of September 2018, credit in respect of same cannot be claimed in the said month.
  5. Input tax credit of IGST has been used to pay IGST, CGST and SGST in that order.

Payment of Tax – CA Inter Tax Study Material

Question 17.
M/s. Daksha Enterprises has made a cash deposit of ₹ 10,000 under minor head ‘tax’ of major head SGST. It has a liability of ₹ 2,000 for minor head “Interest” under the major head “SGST”. State whether M/s. Daksha Enterprises can utilise the amount available for payment of interest. [May 2019, 2 Marks]
Answer:
The cash available in any minor head of a major head cannot be Jutilised for any other minor head of the same major head.

Therefore, in the given case, amount of ₹ 10,000 available under minor head ‘tax’ of major head ‘SGST’ cannot be utilised for payment of liability of ₹ 2,000 under minor head ‘interest’ of the same major head.

Question 18.
M/s. Grey, a registered taxable person under regular scheme provides following information in respect of supplies made by it during the month of April 2019:

(Amount in ₹)
(i) Inter-state supply of goods 1,00,000
(ii) Intra-state supply of 500 packets of detergent @ ₹ 400 each along with a plastic bucket worth ₹ 100 each with each packet, being a mixed supply. (Rate of GST on detergent is 18% and on plastic bucket is 28%)
(iii) Supply of online educational journals to M/s. Pinnacle, a private coaching centre providing tuitions to students of Class X-XII, being intra-state supply. 50,000

M/s. Grey has also received the following inward supplies:

(iv) Inter-state supply of goods (out of which invoice for goods worth ₹ 20,000 is missing and no other tax paying document is available) 70,000
(v) Repairing of bus with seating capacity of 20 passengers used to transport its employees from their residence, being intra-state supply. 50,000

Details of opening balances of ITC follows as on 1-4-2019 are as follows:

CGST 5,000
SGST 5,000
IGST 40,000

Following additional information is provided:

(a) Rate of GST in respect of all inward and outward supplies except item (ii) above is 18%. i.e. CGST and SGST @ 9% and IGST @ 18%.
(b) All figures mentioned above are exclusive of taxes.
(c) All the conditions for availing the ITC have been fulfilled except specifically given and M/s. Grey is not eligible for any threshold exemption.
Compute the minimum net GST payable in cash by M/s. Grey for the month of April 2019. [Nov. 2019, 8 Marks]
Answer:
Computation of GST payable on outward supply

Particulars IGST CGST SGST
(1) Inter-state supply of goods (18% of ₹ 1,00,000) 18,000 ————
(2) Intra-state supply of 500 packets of deter­gents @ ₹ 400
CGST @ 14% of ₹ 2,00,000 28,000
SGST @ 14% of ₹ 2,00,000 28,000
(3) Supply of online educational journal to pvt. Coaching centre
CGST @ 9% of ₹ 50,000 4,500
SGST @ 99„ of ₹ 50,000 4,500
Total Tax Liability 18,000 32,500 32,500

Payment of Tax – CA Inter Tax Study Material

Computation of Total ITC Available

Particulars IGST CGST SGST
Opening brought forward ITC 40,000 5,000 5,000
Add: IGST in respect of Inter-state purchase of goods
(70,000 – 20,000) X 18% 9,000
Add: Intra-state inward supply of repair services
CGST @ 9% of ₹ 50,000 4,500
SGST @ 9% of ₹ 50,000 4,500
Total ITC available on 30th April 49,000 9,500 9,500
Particulars IGST CGST SGST
GST payable on Outward supplies (as computed above) 18,000 32,500 32,500
Less: Adjustment of ITC on account of IGST as per section 49(5)(a) read with section 49A:
(a) Towards IGST (18,000)
(h) Towards CGST (23,000)
(c) Towards SGST (8,000)
Balance Nil 9,500 24,500
Less: Adjustment of ITC on account of CGST/ SGST as per section 49(5)(b)/(c)
(a) Adj. of ITC of CGST towards CGST (9,500)
(b) Adj. of ITC of SGST towards SGST (9,500)
Net GST Payable through Cash Ledger Nil Nil 15,000

Note:

(a) Supply of detergent and bucket together with a single price of ₹ 400 is a mixed supply. Being a mixed supply comprising of two supplies, it shall be treated as supply of that particular supply that attracts highest rate of tax (28%).

(b) Supply of online educational journal is exempt only when the same is provided to an educational institution w hich provides a qualification recognised by law. Since, the private coaching centre does not provide any recognised qualification, the supply of online educational journals to the same will be taxable.

(c) ITC can be taken only on the basis of a valid tax paying document. Thus, ITC will not be available on goods for which the invoice is missing.

(d) ITC on motor vehicles for transportation of persons with seating capacity > 13 persons (including the driver) used for any purpose is allowed. Further, ITC is allowed on repair and maintenance services relating to motor vehicles, ITC on wdiich is allowed.

Tutorial Note:

Under the amended position of law, the IGST credit, after being set-off against IGST liability, can be utilised against CGST and SGST liability in any order and in any proportion. Thus, there can be other answer also, but the total GST payable after adjustment of ITC should not be more than ₹ 15,000, as calculated above.

Question 19.
State the items which are to be debited to Electronic liability register of the taxable person under the CGST Act, 2017 and rules thereunder. [Nov. 2019, 3 Marks]
Answer:
The items to be debited to electronic liability register of the taxable person are as under:-

  1. all amounts payable towards tax, interest, late fee and any other amount as per return filed ;
  2. all amounts payable towards tax, interest, penalty and any other amount determined in a proceeding by an Assessing authority or as ascertained by the taxable person;
  3. the amount of tax and interest as a result of mismatch.
  4. any interest amount that may accrue from time to time.

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