It - All - Notes & Mcqs Merged - Final Exam
It - All - Notes & Mcqs Merged - Final Exam
It - All - Notes & Mcqs Merged - Final Exam
The definition of goods under section 2(52) of the CGST Act does not include-
a) Grass
c) Actionable claims
d) Growing crops
d) Tax @ 28%
a) CGST
b) SGS
d) IGS
4. Who will notify the rate of tax to be levied under CGST Act?
c) Tax @ 28%
a) CGST
b) SGST
c) IGST
9. Which of the following is not an exception to the rule:"Supply should be made for a consideration".
10. Which is an exception to the rule that "Supplies in the course of business qualify as supply inder
GST"
a) Spouse and children of the person-parents,grand-parents, brothers and sister of the person
whether or not wholly or mainly dependent on the person
c) Parents,grand-parents,brothers and sister of the person if they are wholly or mainly dependent on
the person
d) Spouse and children of the person-parents,grand-parents,brothers and sister of the person if they
are wholly or mainly dependent on the person
12. ------------------supply consists of two or more taxable supplies of goods or services or both, or any
combination thereof which are naturally bundled supplied in conjunction with each other, in the
ordinary course of business, one of which is a principal supply
a) Composite
b) Mixed
d) Individual
a) Supply of goods
b) Supply of services
a) Supply of goods
b) Supply of services
a)CGST
b) SGST
d) IGST
16. Which state has threshold limit of 20 lakh Rs. for both goods and services
a) Assam
b) Himachal Pradesh
c) Uttarakhand
b) Liquor
c) Drugs
d) Opium
18. The chain for utilization of Input tax credit for making
a) IGST-CGST-SGST
b) IGST-SGST-CGST
C) IGST-SGST
d) IGST-CGS
a) ITC of CGST is first utilized for payment of CGST and the balance is utilized for payment of
SGST/UTGST
b) ITC of CGST is first utilized for payment of CGST and the balance is utilized for payment of IGST
c) ITC of SGST is first utilized for payment of SGST and the balance is utilized for payment of CGST
d) ITC of SGST is first utilized for payment of SGST and the balance is utilized for payment of SGST
20. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 10% and sells these goods to Rohini of Tamil Nadu.
Then Rohini of Tamil Nadu does value addition of 15% and sells them to Naina of Tamil
Nadu.Assume GST rate to be 18%. Find the IGST payable by Rita on the first level sale.
a) 594000
b) 270000
c) 540000
d) 297000
21. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 10% and sells these goods to Rohini of Tamil Nadu.
Then Rohini of Tamil Nadu does value addition of 15% and sells them to Naina of Tamil
Nadu.Assume GST rate to be 18%. Find the IGST payable by Sita on the second level sale after ITC
adjustment.
3) 540000
b) 594000
c) 300000
d) 54000
22. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 10% and sells these goods to Rohini of Tamil Nadu
Then Rohini of Tamil Nadu does value addition of 15% and sells them to Naina of Tamil
Nadu.Assume GST rate to be 18%. Find the value of goods sold Sita to Rohini (inclusive of GST).
a) 3300000
b) 3894000
c) 594000
d) 3000000
23. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 10% and sells these goods to Rohini of Tamil Nadu.
Then Rohini of Tamil Nadu does value addition of 15% and sells them to Naina of Tamil Nadu.
Assume GST rate to be 18%. Find the CGST payable by on the third level sale after ITC
a) 0
b) 341550
c) 683100
d) 252450
24. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 10% and sells these goods to Rohini of Tamil Nadu.
Then Rohini of Tamil Nadu does value addition of 15% and sells them to Naina of Tamil
Nadu.Assume GST rate to be 18%. Find the IGST credit available for
a) 0
b) b) 341550
c) c) 89100
d) d) 252450
25. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 109% and sells these goods to Rohini of Tamil Nadu.
Then Rohini on the tamil Nadu does value addition of 15% and sells them to Naina of Tamil Nadu.
Assume GST rate to be 18%Find the SGST payable by Rohini on the third level sale after ITC
adjustment.
a) 89100
b) 341550
c) 252450
d) 0
Module 1 – Indirect Taxes
Module 1 – Indirect Taxes
Module 1 – Indirect Taxes
Module 1 – Indirect Taxes
STATUS OF TAX LEVIED:
IGST Integrated goods and service tax Charged on Inter state sales - Sale of goods and services
from one state to another
CGST Central goods and service tax Charged on Intra state sales - Sale of goods and services
within the same state
SGST State goods and service tax Charged on Intra state sales - Sale of goods and services
within the same state
UTGST Union territory goods and service Charged on sale within union territory without
tax legislature
GST RATES
0% Essential items like food
5% Common use items
12% Standard rate
18% Maximum goods and all services
28% Luxury items, tobacco, aerated drinks and other
demerit items
You are required to compute the statement of revenue earned by Central Government and State
Government.
STAGE 1:Value of goods supplied by Mr.P to Mr.Q (interstate)
Value of goods supplied by Mr.P to Mr.Q 20,00,000
Add:IGST 12% 2,40,000
Price charged by Mr.P to Mr.Q 22,40,000
STAGE 2: Value of goods supplied by Mr.Q to Mr.R (interstate)
Value of goods supplied by Mr.Q to Mr.R (20 lacs+10% of 20lacs) 22,00,000
Add:IGST 12% 2,64,000
Price charged by Mr.Q to Mr.R 24,64,000
COMPUTATION OF IGST PAYABLE TO CG:
IGST PAYABLE 2,64,000
Less: IGST cr available -2,40,000
Balance IGST payable 24,000
STAGE 3: Value of goods supplied by Mr.R to Mr.Z (intrastate)
Value of goods supplied by Mr.R to Mr.Z (22 lacs+15% of 22lacs) 25,30,000
Add:
CGST 6% 1,51,800
SGST 6% 1,51,800
Price charged by Mr.R to Mr.Z 28,33,600
COMPUTATION OF CGST & SGST PAYABLE TO GOVT.:
CGST PAYABLE 1,51,800 SGST PAYABLE 1,51,800
Less: IGST cr of 1,51,800 Less:IGST cr -1,12,200
2,64,000 (2,64000-1,51,800)
0 39,600
STATEMENT OF REVENUE EARNED BY CG & SG
TRANSACTION CG GUJARAT KARNATAKA
REVENUE GOVT.REVENUE GOVT.REVENUE
IGST/CGST SGST SGST
SUPPLY OF GOODS BY
Mr.P to Mr.Q 2,40,000 - -
STAGE 1 – TOTAL 2,40,000 - -
Mr.Q to Mr.R 24,000
STAGE 2 – TOTAL 2,64,000 - -
Mr.R to Mr.Z - - 39,600
Transfer of gst (1,12,200) - 1,12,200
STAGE 3 – TOTAL 1,51,800 - 1,51,800
The meaning and scope of supply taxable under GST can be understood in terms of
following parameters, which can be adopted to characterize a transaction as
supply:
1. Supply should be of goods or services. Supply of anything other than
goods or services like money, securities etc. does not attract GST.
2. Supply should be made for a consideration.
3. Supply should be made in the course or furtherance of business.
4. Supply should be made by a taxable person.
5. Supply should be a taxable supply.
Note:
• A transaction is deemed to be a supply even without consideration.
[Exception to 2nd parameter]
• Import of services for a consideration, whether or not in the course or
furtherance of business is treated as supply. [Exception to 3 rd parameter]
Suvarna Manufacturers entered into a contract with XYZ Ltd. for supply of
readymade shirts packed in designer boxes at XYZ Ltd.’s outlet. Further, Suvarna
Manufacturers would also get them insured during transit. In this case, supply of
goods, packing materials, transport & insurance is a composite supply wherein
supply of goods is principal supply.
When a consumer buys a television set and he also gets warranty and a maintenance
contract with the TV, this supply is a composite supply. In this example, supply of
TV is the principal supply, warranty and maintenance services are ancillary.
Works contract and restaurant services are classic examples of composite supplies.
However, the GST law identifies both as supply of services and such services are
chargeable to specific rate of tax mentioned against such services (works contract
and restaurants).
How to determine whether the services are bundled in the ordinary course of
business?
Whether the services are bundled in the ordinary course of business, would depend
upon the normal or frequent practices followed in the area of business to which
services relate. Such normal and frequent practices adopted in a business can be
ascertained from several indicators some of which are listed below:
The perception of the consumer or the service receiver - If large number of service
receivers of such bundle of services reasonably expect such services to be provided
as a package, then such a package could be treated as naturally bundled in the
ordinary course of business.
The nature of the various services in a bundle of services will also help in
determining whether the services are bundled in the ordinary course of business. If
the nature of services is such that one of the services is the main service and the
other services combined with such service are in the nature of incidental or ancillary
services which help in better enjoyment of a main service.
For example, service of stay in a hotel is often combined with a service or laundering
of 3- 4 items of clothing free of cost per day. Such service is an ancillary service to the
provision of hotel accommodation and the resultant package would be treated as
services naturally bundled in the ordinary course of business.
(b) Sulekha Manufacturers have a factory in Delhi and a depot in Mumbai. Both these
establishments are registered in respective States. Finished goods are sent from
factory in Delhi to the Mumbai depot without consideration so that the same can
be sold.
(c) Raman is an Electronic Commerce Operator in Chennai. His brother who is settled
in London is a well--known lawyer. Raman has taken legal advice from him free of cost
with regard to his family dispute.
(d)Would your answer be different if in the above case, Raman has taken advice in
respect of his business unit in Chennai?
Required:
Examine whether the above activities would amount to supply under section 7 of
the CGST Act
Ans:
(a) It will not amount to supply under CGST Act as it is without consideration and
not for furtherance of business
(b) Supply of goods or services between related or distinct persons is supply even
without consideration provided it is made in the course or furtherance of business.
The person who has obtained more than one registration shall in respect of each
such registration be treated as a distinct person.
(c ) As per Schedule 1 of CGST Act import of services by a taxable person from a related
person located outside India, without consideration is treated as supply if it is provided
in the course or furtherance of business.
In the given case Raman and his brother are not related as the brother is not
dependent on Raman. Also the advice is taken for a personal matter and not for
furtherance of business. So it will not be treated as a supply.
(d) Even if the advice is taken for business unit in Chennai by Raman, though is is for
furtherance of business, it will not be treated as a supply as it is not from a related
person. The brother of Raman is not dependent on him.
Levy of CGST
A tax called the Central Goods and Services Tax (CGST) shall be levied on all intra-State supplies of goods
or services or both.
Sec 9(1): Forward Charge: The tax shall be collected in such manner as may be prescribed and shall be
paid by the taxable person. However, intra-State supply of alcoholic liquor for human consumption is
outside the purview of CGST.
Value for levy: Transaction value under section 15 of the CGST Act.
Rates of CGST: As may be notified by the Government on the recommendations of the GST Council [Rates
notified are 0%, 0.125%, 1.5%, 2.5%, 6%, 9% and 14%]. Maximum rate of CGST will be 20%.
Sec 9(2): However, CGST on supply of the following items has not been levied immediately. It shall be
levied with effect from such date as may be notified by the Government on the recommendations of the
Council:
Petroleum crude, high speed diesel, motor spirit (i.e., petrol), natural gas & aviation turbine fuel
Reverse Charge: Generally, the supplier of goods or services is liable to pay GST. However, in specified
cases like imports and other notified supplies, the liability may be cast on the recipient under the
reverse charge mechanism.
Reverse Charge means [RCM] the liability to pay tax is on the recipient of supply of goods or services
instead of the supplier of such goods or services in respect of notified categories of supply. There are
two type of reverse charge scenarios provided in law.
(1) Scenario 1: Dependent on the nature of supply and/or nature of supplier. This scenario is covered u/s
9 (3) of the CGST/ SGST (UTGST) Act & u/s 5 (3) of the IGST Act. The government upon the
recommendation of GST council notifies it from time to time. As of now, the notified ones are:
(a) Notified Goods: Goods like cashew nuts [not shelled/peeled], bidi wrapper leaves, tobacco leaves,
supply of lottery, silk yarn, etc. are taxable under reverse charge, i.e. recipient is liable to pay tax.
(b) Notified Services: Following categories of supply of services wherein whole of the CGST shall be paid
on reverse charge basis by the recipient of services:
Category of supply of service for Supplier of
S. No. Recipient of Service
Reverse Charge service
Goods Transport Agency (GTA) in (a) Any factory registered
respect of transported of goods by road under the Factories Act,
(a) any factory registered under the 1948; or (b) Society under
Factories Act, 1948; or (b) Society under Societies Registration Act,
Societies Reg Act, 1860 (c) Co- operative GTA who has not 1860 (c) Co-operative Society
1 Society (d) any person registered under paid CGST @ 6% (d) any person registered
the CGST/IGST/ SGST/UTGST Act (e) any under the CGST/IGST/
body corporate SGST/UTGST Act
(f) PShip firm registered or not (e) any body corporate (f)
including AOPs (g) any casual taxable PShip firm reg or not
person including AOPs (g) any casual
Sec 5 (3) & 5 (4): Reverse charge Tax payable by recipient of supply of goods or services or both: IGST
shall be paid by the recipient of goods or services or both, on reverse charge basis, in the following cases:
(1) Supply of goods/services/both, notified by the Govt on the recommendations of the GST Council. All
the services which have been notified for reverse charge purposes under CGST Act (as given in para 7 of
this Chapter) have also been notified for reverse charge under IGST Act. Further, following two services
are additionally included for IGST purposes:
(2) Supply of taxable goods or services or both by an unregistered supplier to a registered person.
All the provisions of the IGST Act shall apply to the recipient in the aforesaid cases as if he is the person
liable for paying the tax in relation to the supply of such goods or services or both.
(2) Scenario 2: Second scenario is covered u/s 9 (4) of the CGST/SGST (UTGST) Act & u/s 5 (4) of the IGST
Act where taxable supplies by any unregistered person to a registered person is covered.
Note: intra-State supply of taxable goods or services or both by an unregistered supplier to a registered
person are exempt from CGST provided the aggregate value of such supplies of goods and/or services
received by a registered person from any or all the unregistered suppliers does not exceed Rs. 5,000 in
a day.
Ex: Mr A, a registered supplier, engaged in the profession of architect, buys stationery worth Rs. 100 for
his office from a nearby shop which is not registered under GST. In such case, Mr. A would not be required
to pay GST on such purchase of stationery provided his total supplies received from all unregistered
persons do not exceed Rs. 5,000 on that day.
Note: It is important to note that GST being an indirect tax, burden of the tax has to be ultimately passed
on to the recipient. Under reverse charge also, the burden to pay GST is on the recipient, but the
compliance requirements, i.e. to obtain registration under GST, deposit tax, filing returns with the
Government, etc. has been shifted from supplier to recipient.
Sec 9(5) E Commerce Operator [ECO]: Tax payable by the ECO on notified [on the recommendations of
the GST Council] services on intra-State supplies if such services are supplied through it.
Categories of services supplied through ECO for this purpose
(a) services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor
cycle;
Aggregate Turnover (AT) ≤ Rs. 1.5cr during the FY. In Special Category States (Arunachal Pradesh,
Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura & Himachal Pradesh), AT ≤ Rs. 75
lakh except Uttarakhand & J&K (≤ Rs. 1.5 cr). Tax is not collected from recipient of supply.
Composition Scheme if availed shall include all registered persons having same PAN. If one such
registered person opts for normal scheme, others become ineligible for composition scheme.
AT Incudes Value of all outward supplies Taxable supplies, Exempt supplies, Exports, Inter- State
supplies of persons having the same PAN be computed on all India basis.
Excludes GST, Cess, Value of inward supplies on which tax is payable under reverse charge.
A dealer ‘X’ has two offices in Delhi. In order to determine whether ‘X’ is eligible to avail benefit of the
composition scheme, turnover of both the offices would be taken into account and if the same does not
exceed Rs. 75 lakh, X can opt to avail the composition levy scheme.
Registered persons making inter-State supplies or making supplies through e-commerce operators who
are required to collect tax at source shall not be eligible for composition scheme.
Composition scheme supplier cannot enter into credit chain [Section 10(4)]
Taxable person opting for the composition scheme is not entitled to any credit of input tax.
Who are not eligible to opt for composition scheme? [Section 10(2)]
• Supplier of services other than supplier of food articles.
• Supplier of goods which are not taxable under the CGST Act/SGST Act/ UTGST Act.
• Supplier of inter- State outward supplies of goods
Note: There is no restriction on Composition Supplier to procure goods from inter-State suppliers.
• Person supplying goods through an electronic commerce operator
• Manufacturer of icecream, panmasala and tobacco
2. Vivek Goyal, director of A2Z Pvt. Ltd., has received sitting fee
amounting to
` 1 lakh from A2Z Pvt. Ltd for attending the Board
meetings. Who is the person liable to pay tax in this
case?
Sol:
(i) Since Mohan enterprises is engaged in trading (and
not manufacturing) of pan masala and also
turnover is below 1.5 cr, it is eligible for the
composition scheme
(ii) Since there is inter state supply of goods, not eligible
for composition scheme
10. Subramanian Enterprises has two registered places of
business in Delhi. Its aggregate turnover for the
preceding year for both the places of business was
` 120 lakh. It wishes to pay tax under composition
levy, under section 10(1) & 10(2) of the CGST Act, 2017,
for one of the places of business in the current year while
under normal levy for other. You are required to advice
Subramanian Enterprises whether he can do so?
Sol:
(i) Since he is provider of services and his turnover
does not cross 50 lacs, he is eligible for composition
scheme u/s 10(2A)
(ii) Tax rate applicable will be 6% of turnover 35
lacs=2.1 lacs
(iii) It does not matter if Mr.Ajay procures items from
other states. To be eligible for composition
scheme, inter state supply is not permitted but we
can buy from another state.
MODULE 3 – INDIRECT TAXES
12. M/s United Electronics, a registered dealer, is supplying
all types of electronic appliances in the State of
Karnataka. Their aggregate turnover in the preceding
financial year by way of supply of appliances was ` 120
Lakh.
The firm also expects to provide repair and maintenance
service of such appliances from the current financial
year.
With reference to the provisions of the CGST Act, 2017, examine:
(i) Whether the firm can opt for the composition
scheme, under section 10(1) and 10(2) of the CGST
Act, 2017, for the current financial year, as the
turnover may include supply of both goods and
services?
(ii) If yes, up to what amount, the services can be supplied?
Sol:
(i) Sec 10(1) and 10(2) covers for turnover up to 1.5 cr.
Intra state supplier of goods and restaurant service
providers are eligible. In this case since he is supplier of
electronic appliances, his turnover is below 1.5 cr and
he is involved in intra state supply, he is eligible for
composition scheme.
(ii) Also he can provide services upto a limit along with
supply of goods. The limit is 10% of turnover or 5 lac
whichever is higher.
So in this case 10% of 120 lacs ie 12 lacs or 5 lacs whichever
is higher
So he can provide services up to 12 lac Rs.
GST IN INDIA – AN
INTRODUCTION
Examples/illustrations/Questions and Answers given in the Chapter are based on the
position of GST law existing as on 31.10.2020
LEARNING OUTCOMES
After studying this Chapter, you will be able to:
explain the concept of tax and the objective for its levy
describe the concept of direct and indirect tax and the
differences between the two types of taxes
enumerate the basic features of indirect taxes and the
principal indirect taxes in India
explain the concept of GST and the need for GST in India.
discuss the framework of GST as introduced in India and
understand the various benefits to be accrued from
implementation of GST.
explain the constitutional provisions pertaining to levy of
various taxes
appreciate the need for constitutional amendment paving
way for GST.
discuss the significant amendments made by the
Constitution (101st Amendment) Act, 2016.
CHAPTER OVERVIEW
Concept of GST
Benefits of GST
Constitutional provisions
1. BACKGROUND
In any Welfare State, it is the prime responsibility of the Government to fulfill the
increasing developmental needs of the country and its people by way of public
expenditure. India, being a developing economy, has been striving to fulfill the
obligations of a Welfare State with its limited resources; the primary source of
revenue being the levy of taxes. Though the collection of tax is to augment as
much revenue as possible to the Government to provide public services, over the
years it has been used as an instrument of fiscal policy to stimulate economic
growth. Thus, taxes are collected to fulfill the socio-economic objectives of the
Government.
TAX
INDIRECT TAX
DIRECT TAX
* The person paying the tax to the
* The person paying the tax to
Government collects the same
the Government directly
from the ultimate consumer.
bears the incidence of
Thus, incidence of the tax is
the tax.
shifted to the other person.
* Progressive in nature - high
* Regressive in nature - All the
rate of taxes for people
consumers equally bear the
having higher ability to
burden, irrespective of their
pay.
ability to pay.
Goods and
Major direct and
Services Tax
indirect taxes
Indirect taxes
Customs Duty
ones to pass their respective State GST laws. By 30th June, 2017, all States and
Union Territories had passed their respective SGST and UTGST Acts except Jammu
and Kashmir. With effect from 1st July, 2017, the historic indirect tax reform - GST
was introduced. GST law was extended to Jammu and Kashmir on
8 July, 2017.
th
GST is a path breaking indirect tax reform which attempts to create a common
national market. GST has subsumed multiple indirect taxes like excise duty,
service tax, VAT, CST, luxury tax, entertainment tax,
entry tax, etc.
VAT and GST are often used inter-changeably as the
latter denotes comprehensiveness of VAT by
coverage of goods and services. France was the first
country to implement VAT/GST in 1954. Presently,
more than 160 countries have implemented
VAT/GST in some form or the other because this tax has the capacity to raise
revenue in the most transparent and neutral manner. Most of the countries follow
unified GST i.e., a single tax applicable throughout the country. However, in
federal polities like Brazil and Canada, a dual GST system is prevalent. Under dual
system, GST is levied by both the federal and the State Governments. India has
adopted dual GST model because of its unique federal nature.
5. CONCEPT OF GST
What is GST?
Before we proceed with the finer nuances of Indian GST, let us first understand
the basic concept of GST.
GST is a value added tax levied on supply i.e.,
manufacture or sale of goods and provision of
services.
GST offers comprehensive and continuous chain of tax credits from the
producer's point/service provider's point upto the retailer's level/consumer’s
level thereby taxing only the value added
at each stage of supply chain.
The supplier at each stage is permitted to avail credit of GST paid on the
purchase of goods and/or services and can
set off this credit against the GST payable on
the supply of goods and services to be made by him. Thus, only the final
consumer bears the GST charged by the last supplier in the supply chain, with
set-off benefits at all the previous stages.
Since, only the value added at each stage is
taxed under GST, there is no tax on tax or
cascading of taxes under GST system. The
same can be understood better with the help of the following example:
Input Tax Credit= Input Tax Credit= Input Tax Credit= Input Tax Credit=
NIL 18,000 Rs. 20,016 NIL
Under the earlier indirect tax regime, despite the introduction of the principle of
taxation of value added in India – at the Central level in the form of CENVAT
(Central Excise) and at the State level in the form of State VAT - its application
always remained piecemeal and fragmented on account of the following reasons:
Certain transactions were subject to double taxation and were taxed as both
goods and services, since under the earlier regime, distinction between
goods and services was often blurred.
(1) Under earlier tax regime, software was subject to both service
tax and VAT. This was so because both sale of goods and
provision of service were involved and therefore taxable event
under both the Statutes i.e. respective VAT law and service tax law got
triggered. This aspect has been taken care of under GST law.
CENVAT did not include chain of value addition in the distributive trade
after the stage of production. Similarly, in the State-level VAT, CENVAT load
on the goods was not removed leading to the cascading of taxes. Below
mentioned example illustrates that under earlier indirect tax regime, when
the goods were manufactured and sold, both central excise duty (CENVAT)
and State-Level VAT were levied.
(2) Under earlier tax regime, if goods were manufactured for
` 1000/- and excise duty was payable @ 12.5% and VAT was payable
@ 14.30%, the billing was being done as under:
Assessable value of goods under excise law ` 1,000
Excise duty @ 12.5% ` 125
Taxable value for VAT ` 1,125
VAT @ 14.30% ` 160.88
Total invoice value ` 1,285.88
Though CENVAT and State-Level VAT were essentially value added taxes, set
off of one against the credit of another was not possible as CENVAT was a
central levy and State-Level VAT was a State levy.
There were several taxes in the States, such as, Luxury Tax, Entertainment
Tax, etc. which were not subsumed in the VAT. Hence for a single
transaction, multiple taxes in multiple forms were required to be paid.
VAT on goods was not integrated with tax on services, at the State level, to
remove the cascading effect of service tax. With service sector being the
fastest growing sector in the economy, the exclusion of services from the
tax base of the States potentially eroded their tax- buoyancy.
CST was another source of distortion in terms of its cascading nature since
it was non-VATABLE. Being an origin based tax, CST was also against one of
the basic principles of consumption taxes that tax should accrue to the
jurisdiction where consumption takes place.
(3) Under earlier tax regime, if a dealer in Delhi purchases goods
from a manufacturer in Punjab for ` 1000 + ` 20 (2% CST)
= ` 1020/- and sells such goods within Delhi for ` 1200/-. The tax
rate on sales is 12.5% and hence output tax liability is ` 150/-. Credit of
` 20/- is not allowed while making payment of ` 150/- and hence the dealer
has to pay ` 150 as VAT.
II. CGST/SGST/UTGST/IGST
GST is a destination- based tax
applicable on all transactions involving
supply of goods and services for a
consideration subject to exceptions thereof. GST in India comprises of
Central Goods and Services Tax (CGST) - levied and collected by Central
Government, State Goods and Services Tax (SGST) - levied and collected by
State Governments/Union Territories with Legislatures and Union Territory
Goods and Services Tax (UTGST) - levied and collected by Union Territories
without Legislatures, on intra-State supplies of taxable goods and/or
services. As a general rule, where the location of the supplier and the place
of supply of goods or services are in the same State/Union territory, it is
treated as intra-State supply of goods or services respectively.
Further, where the location of the supplier and the place of supply of goods
or services are in (i) two different States or (ii) two different Union
Territories or (iii) a State and a Union territory, it is treated as inter-State
supply of goods or services respectively. Inter-State supplies of taxable
goods and/or services are subject to Integrated Goods and Services Tax
(IGST). IGST is the sum total of CGST and SGST/UTGST and is levied by
Centre on all inter-State supplies.
Intra-State Supply
ILLUSTRATION 1
In case of local supply of goods/ services, the supplier would charge dual
GST i.e., CGST and SGST at specified rates on the supply.
I. Supply of goods/ services by A to B
Amount (in `)
Amount
(in `)
Amount (in `)
Note: Rates of CGST and SGST have been assumed to be 9% each for
the sake of simplicity.
Statement of revenue earned by Central and State Government
Inter-State Supply
ILLUSTRATION 2
Amount (in `)
Amount
(in `)
Amount (in `)
Amount (in `)
Value charged for supply of goods/ services 14,400
(` 12,000 x 120%)
Add: CGST @ 9% 1,296
Add: SGST @ 9% 1,296
Total price charged by B from C for local supply of 16,992
goods/services
Amount (in `)
CGST payable 1,296
Less: Credit of IGST 1,296
CGST payable to Central Government Nil
SGST payable 1,296
Less: Credit of IGST (` 2,160 - ` 1,296) 864
SGST payable to State Government 432
Centre
The various central, state and local levies were examined to identify their
possibility of being subsumed under GST. While identifying, the following
principles were kept in mind:
(i) Taxes or levies to be subsumed should be primarily in the nature of indirect
taxes, either on the supply of goods or on the supply of services.
(ii) Taxes or levies to be subsumed should be part of the transaction chain
which commences with import/ manufacture/ production of goods or
provision of services at one end and the consumption of goods and services
at the other.
(iii) The subsuming of taxes should result in free flow of tax credit in intra and
inter-State levels. The taxes, levies and fees that were not specifically related
to supply of goods & services would not be subsumed under GST.
(iv) Revenue fairness for both the Union and the States individually would need
to be attempted.
Taking the above principles into account, following taxes were subsumed in the
GST:
Central Taxes State Taxes
Central Excise Duty & Additional State surcharges and cesses in so far
Excise Duties as they relate to supply of goods &
Service Tax services
Entertainment Tax (except those
Excise Duty under Medicinal & Toilet
levied by local bodies)
Preparation Act
Tax on lottery, betting and gambling
CVD & Special CVD
Entry Tax (All Forms) & Purchase Tax
Central Sales Tax VAT/ Sales tax
Central surcharges & Cesses in so far Luxury Tax
as they relate to supply of goods & Taxes on advertisements
services
GST
8. BENEFITS OF GST
GST is a win-win situation for the entire country. It brings benefits to all the
stakeholders of industry, Government and the consumer. The significant benefits
of GST are discussed hereunder:
Benefits to economy
Creation of unified national market: GST aims to make India a common
market with common tax rates and procedures and
remove the economic barriers thus paving the way for
an integrated economy at the national level.
Boost to ‘Make in India' initiative: GST gives a major boost to the ‘Make
in India' initiative of the Government of India by
making goods and services produced in India
competitive in the national as well as international
market. This will create India as a ― Manufacturing
hub.
Automated procedures with greater use of IT: There are simplified and
automated procedures for various
processes such as registration, returns,
refunds, tax payments. All interaction
is through the common GSTN portal,
therefore, less public interface between the taxpayer and the tax
administration.
records. The uniformity in laws, procedures and tax rates across the country
goes a long way in reducing the compliance cost.
Benefits to industry: GST has given more relief to trade and industry
through a more comprehensive and wider
coverage of input tax set-off and service tax
set-off, subsuming of several Central and State
taxes in the GST and phasing out of CST. The
transparent and complete chain of set-offs
which results in widening of tax base and better
tax compliance also leads to lowering of tax
burden on an average dealer in trade and
industry.
9. CONSTITUTIONAL PROVISIONS
India has a three-tier federal structure, comprising the Union Government, the
State Governments and the Local Government.
The power to levy taxes and duties is distributed among the three tiers of
Governments, in accordance with the provisions of the Indian Constitution.
The Constitution of India is the supreme law of India. It consists of a Preamble,
25 parts containing 448 Articles and 12 Schedules.
Power to levy and collect taxes whether, direct or indirect emerges from the
Constitution of India. In case any tax law, be it an act, rule, notification or order is
not in conformity with the Constitution, it is called ultra vires the Constitution and
is illegal and void.
Thus, a study of the basic provisions of the Constitution is essential for
understanding the genesis of the various taxes being imposed in India.
25 Parts
Preamble (containing
448 articles)
12
Schedules
Constitution of India
The significant provisions of the Constitution relating to taxation are:
I. Article 265: Article 265 of the Constitution of India prohibits arbitrary
collection of tax. It states that “no tax shall be levied or collected except
by authority of law”. The term “authority of law” means that tax proposed
to be levied must be within the legislative competence of the Legislature
imposing the tax.
II. Article 245: Part XI of the Constitution deals with relationship between the
Union and States. The power for enacting the laws is conferred on the
Parliament and on the Legislature of a State by Article 245 of the
Constitution. The said Article provides as under:
Subject to the provisions of this Constitution, Parliament may make
laws for the whole or any part of the territory of India, and the
legislature of a State may make laws for the whole or any part of the
State.
No law made by the Parliament shall be deemed to be invalid on the
ground that it would have extra-territorial operation.
III. Article 246: It gives the respective authority to Union and State
Governments for levying tax. Whereas Parliament may make laws for the
whole of India or any part of the territory of India, the State Legislature may
make laws for whole or part of the State.
IV. Seventh Schedule to Article 246: It contains three lists which enumerate
the matters under which the Union and the State Governments have the
authority to make laws.
It contains It contains
the matters It contains the
the matters matters in
in respect in respect of
of which the respect of
which the which both
Parliament State
(Central the Central &
Government State
Government) has the
has the Governments
exclusive have power to
exclusive right to
right to make laws.
make laws .
make laws.
motor
high spirit aviation
petroleum natural
speed ((commonly turbine
crude gas
diesel known as fuel
petrol)
5 Discuss the deficiencies in the existing indirect taxes which led to the need for
ushering into GST regime.
6. Discuss the dual GST model as introduced in India.
7. List the Central and State levies which have been subsumed in GST in India.
8. Discuss the need and functions of the common GST portal.
9. Briefly explain the leviability of GST or otherwise on petroleum crude, diesel,
petrol, Aviation Turbine Fuel (ATF) and natural gas.
10. Elaborate the principles that were borne in mind while subsuming various
central, state and local levies, under GST.
11. GST is a simplified tax structure. Justify the statement.
12. List the advantages that GST accrues to the trade and industry.
13. List the special category States as prescribed in Article 279A of the
Constitution of India.
14. Discuss the leviabilty of GST or otherwise on tobacco.
11. ANSWERS/HINTS
1. Difference between direct taxes and indirect taxes:
The person paying the tax The person paying the tax to the
to the Government directly Government collects the same from the
bears the incidence of the ultimate consumer. Thus, incidence of the tax
tax. is shifted to the other person.
2. Major indirect taxes are goods and services tax & customs duty and direct
tax is income tax.
3. Salient features of indirect taxes are:
(i) An important source of revenue: Indirect taxes are a major source of
tax revenues for Governments worldwide and continue to grow as
(i) List -I (UNION LIST): It contains the matters in respect of which the
Parliament (Central Government) has the exclusive right to make laws.
(ii) List -II (STATE LIST): It contains the matters in respect of which the
State Government has the exclusive right to make laws.
(iii) List -II (CONCURRENT LIST): It contains the matters in respect of which
both the Central & State Governments have power to make laws.
5. Deficiencies in the erstwhile indirect tax regime:
(a) Certain transactions were subject to double taxation and were taxed
as both goods and services, since under the earlier regime, distinction
between goods and services was often blurred.
(b) CENVAT did not include chain of value addition in the distributive
trade after the stage of production. Similarly, in the State-level VAT,
CENVAT load on the goods was not removed leading to the cascading
of taxes.
(c) Though CENVAT and State-Level VAT were essentially value added
taxes, set off of one against the credit of another was not possible as
CENVAT was a central levy and State-Level VAT was a State levy.
(d) There were several taxes in the States, such as, Luxury Tax,
Entertainment Tax, etc. which were not subsumed in the VAT. Hence
for a single transaction, multiple taxes in multiple forms were required
to be paid.
(e) VAT on goods was not integrated with tax on services, at the State
level, to remove the cascading effect of service tax. With service
sector being the fastest growing sector in the economy, the exclusion
of services from the tax base of the States potentially eroded their tax-
buoyancy.
(f) CST was another source of distortion in terms of its cascading nature
since it was non-VATABLE. Being an origin based tax, CST was also
against one of the basic principles of consumption taxes that tax
should accrue to the jurisdiction where consumption takes place.
6. India has adopted a Dual GST model in view of the federal structure of the
country. Consequently, Centre and States simultaneously levy GST on
taxable supply of goods or services or both, which takes place within a State
or Union Territory. Thus, tax is imposed concurrently by the Centre and
States, i.e. Centre and States simultaneously tax goods and services. Now,
the Centre also has the power to tax intra-State sales & States are also
empowered to tax services. GST extends to whole of India including the
State of Jammu and Kashmir.
7. Central levies that are subsumed in GST are as follows:
Central Excise Duty & Additional Excise Duties
Service Tax
Excise Duty under Medicinal & Toilet Preparation Act
CVD & Special CVD
Central Sales Tax
Central surcharges & Cesses in so far as they relate to supply of goods
& services
State levies that are subsumed in GST are as follows:
State surcharges and cesses in so far as they relate to supply of goods
& services
Entertainment Tax (except those levied by local bodies)
Tax on lottery, betting and gambling
Entry Tax (All Forms) & Purchase Tax
VAT/ Sales tax
Luxury Tax
Taxes on advertisements
8. GST being a destination-based tax, the inter-State trade of goods and
services (IGST) needed a robust settlement mechanism amongst the States
and the Centre. A Common Portal was needed which could act as a clearing
house and verify the claims and inform the respective Governments to
transfer the funds. This was possible only with the help of a strong IT
Infrastructure.
Resultantly, Common GST Electronic Portal – www.gst.gov.in – a website
managed by Goods and Services Network (GSTN) [a company incorporated
under the provisions of section 8 of the Companies Act, 2013] is set by the
CHAPTER 2
LEARNING OUTCOMES
CHAPTER OVERVIEW
Meaning of supply - Supply with consideration in course/
furtherance of business
1. INTRODUCTION
A taxable event is any transaction or occurrence
that results in a tax consequence. Before levying
any tax, taxable event needs to be ascertained. It
is the foundation stone of any taxation system; it
determines the point at which tax would be
levied.
Under the earlier indirect tax regime, the
framework of taxable event in various statutes
was prone to catena of interpretations resulting
in litigation since decades. The controversies largely related to issues like whether
a particular process amounted to manufacture or not, whether the sale was pre-
determined sale, whether a particular transaction was a sale of goods or rendering
of services etc.
The GST laws resolve these issues by laying down one
comprehensive taxable event i.e. “Supply” - Supply of goods or
services or both. Various taxable events namely manufacture, sale,
rendering of service, purchase, entry into a territory of State etc. have been done
away with in favour of just one event i.e. Supply.
GST Law, by levying tax on the ‘supply’ of goods and/or services, departs from the
historically understood concepts of ‘taxable event’ under the State VAT Laws, Excise
Laws and Service Tax Law i.e. sale, manufacture and service respectively.
In the GST regime, the entire value of supply of goods and/or services is taxed
in an integrated manner, unlike the earlier indirect taxes, which were charged
independently either on the manufacture or sale of goods, or on the provisions
of services.
2. RELEVANT DEFINITIONS
Goods: means every kind of movable property other than money and
securities but includes actionable claim, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed
before supply or under a contract of supply. [Sec. 2(52) of CGST Act].
Principal: means a person on whose behalf an agent carries on the
business of supply or receipt of goods or services or both [Section 2(88)
of CGST Act].
Competent authority: means such authority as may be notified by the
Government [Section 2(29) of the CGST Act].
Family: means, —
(i) the spouse and children of the person, and
(ii) the parents, grand-parents, brothers and sisters of the person if they
are wholly or mainly dependent on the said person [Section 2(49) of
the CGST Act].
Business: includes –
(c) any activity or transaction in the nature of (a) above, whether or not
there is volume, frequency, continuity or regularity of such transaction;
An association of persons or
A Limited Liability a body of individuals,
A firm
Partnership whether incorporated or not,
in India or outside India
Society as defined
Central Government/ under the Societies
A local authority
State Government Registration Act,
1860
Our discussion in this Study Material will principally be confined to the provisions
of CGST and IGST laws as the specific State GST laws 1 are outside the scope of
syllabus.
STATUTORY PROVISIONS
1
It may be noted that GST laws of all the States and Union Territories are largely based on
the CGST Act, 2017.
(3) Subject to sub-sections (1), (1A) & (2), the Government may, on the
recommendations of the Council, specify, by notification, the
transactions that are to be treated as —
ANALYSIS
The definition of ‘supply’ as contained in section 7 of the CGST Act is an inclusive
definition and does not define the term exhaustively. It defines the scope of supply
in an inclusive manner. Clause (a) of sub-section (1) illustrates the forms of supply,
but the list is not exhaustive. This is substantiated by the use of words ‘such as’ in
the definition.
Provisions of scope of supply under CGST Act have also been made applicable
to IGST Act vide section 20 of the IGST Act.
The meaning and scope of supply in terms of section 7 can be understood in terms
of following parameters:
1. Supply should be of goods or services. Supply of anything other than goods
or services like money, securities etc. does not attract GST.
Money
Anything 💸💸
which is Securities
neither
Goods goods nor
Supply
NOT Supply
services
Services
in the of goods
course or and
furtherance services
of business
Parameters for
consideration
of supply
Supply should be
Aforesaid parameters describe the concept of supply. However, there are a few
exceptions to 2nd and 3rd parameters [the requirement of supply being made for a
consideration and in the course or furtherance of business] in the GST law. Few
+ Schedule I]
Goods Services
means means
excludes
includes includes
The first part of section 7 [Clause (a) of sub-section (1)] includes all forms of supply
of goods or services or both such as sale, transfer, barter, exchange, license, rental,
lease or disposal made or agreed to be made for consideration in the course or
furtherance of business.
Supply includes
sale, transfer, in the course or
barter, exchange, for consideration furtherance of
licence, rental, business
lease, disposal
Thus, the forms of supply as contemplated in this first part have two pre-requisites:
2
www.merriam-webster.com
Further, the term ‘transfer’ has been defined in the Black’s Law dictionary as
to convey or remove from one place, person, etc., to another; pass or hand
over from one to another; specifically, to make over the possession or control
of.
(1) A shopkeeper sells a pen for ` 100 to the buyer. After the sale,
the pen belongs to the buyer and shopkeeper does not have any
right on the pen. This is a transaction of sale.
(2) A company transfers goods from its factory to the depot for
sale purposes. This is ‘transfer’ of goods where the sale has not
taken place.
II. Barter and Exchange: The dictionary meaning of term ‘barter’ is to exchange
goods or services for other goods or services instead of using money 3. Black’s
Law dictionary defines the term ‘exchange’ as an act of giving or taking one
thing for another.
While barter deals with a transaction which only includes an exchange of
goods/services, exchange may cover a situation where the goods are paid for
partly in goods and partly in money. When there is a barter of goods or
services, same activity constitutes supply as well as consideration.
(3) When a new car worth ` 5,00,000 is purchased in exchange of
an old car alongwith the monetary consideration of ` 4,00,000
paid for the said purchase.
(4) A doctor got his hair cut from a barber and provides him
medical consultancy in return. In this transaction, the doctor
provided the medical consultancy services to the barber for which
consideration was in the form of hair cutting services provided by the barber.
Similarly, the barber provided hair cutting services to the doctor for which
consideration was in the form of medical consultancy services provided by
the doctor.
III. Licence, lease, rental and disposal: The dictionary meaning of the term
‘licence’ is a permission granted by competent authority to engage in a
business or occupation or in an activity otherwise unlawful 4. Black’s law
3
www.macmillandictionary.com
4
www.merriam-webster.com
dictionary defines disposal as the sale, pledge, giving away, use, consumption
or any other disposition of a thing.
The dictionary meaning of ‘rental’ is an arrangement to rent something, or
the amount of money that you pay to rent something 5 and that of ‘lease’ is
to make a legal agreement by which money is paid in order to use land, a
building, a vehicle, or a piece of equipment for an agreed period of time 6.
Under GST, such licenses, leases and rentals of goods with or without transfer
of right to use are covered under the supply of service because there is no
transfer of title in such supplies. Such transactions are specifically treated as
supply of service in Schedule-II of CGST Act [Schedule-II has been discussed
in detail in the subsequent paras].
A deposit given in respect of the supply of goods or services or both shall not be
considered as payment made for such supply unless the supplier applies such
deposit as consideration for the said supply.
The term consideration is defined under section 2(31) of the CGST Act [Refer
heading ‘Relevant Definitions].
5
www.dictionary.cambridge.org
6
www.dictionary.cambridge.org
The said definition has been depicted in the form of a diagram as follows:
CONSIDERATION
By recipient or any
Deposit to be other person
considered as
payment
ONLY
Excluding subsidy given
by Central/ State
when the supplier Governments
applies such deposit
as consideration for
the said supply
Thus, GST is not leviable where all the following three conditions are
satisfied namely:
Purpose is
Gift or donation
Payment has the philanthropic (i.e., it
is made to a
character of gift leads to no
charitable
or donation commercial gain) and
organization
not advertisement
**Provisions of Schedule I of the CGST Act have been discussed in detail later in this chapter.
shall also be construed as business. For any trade, commerce, or any other similar
activity to qualify as business, frequency, volume, continuity or regularity of
such transaction is not a pre-requisite.
Some of the examples of supply made/not made ‘in the course or furtherance of
business’ are as follows:
(7) Rishabh buys a car for his personal use and after a year sells it to a
car dealer. Sale of car by Rishabh to car dealer is not a supply under CGST
Act because said supply is not made by Rishabh in the course or
furtherance of business 7.
(8) Manikarnika sold her old gold bangles and earrings to ‘Aabhushan
Jewellers’. Sale of old gold jewellery by an individual to a jeweller will not
constitute supply as the same cannot be said to be in the course or
furtherance of business of the individual 8.
The view taken in above two examples is based on the view taken in the Departmental
FAQs/ press release. 9
Since ‘business’ includes vocation, therefore, sale of goods or service as a vocation
is also a supply under GST.
(9) Sundaram Acharya, a famous actor, paints some paintings and sells
them. The consideration from such sale is to be donated to a Charitable
Trust – ‘Kind Human’. The sale of paintings by the actor qualifies as
supply.
7
Clarified vide GST FAQs issued by CBIC
8
Clarified by CBIC vide press release dated 13.07.2017
9
There is another school of thought according to which since the definition of business
includes trade, commerce, or any other similar activity, whether or not there is frequency,
volume, continuity or regularity of such transaction, the transactions in the above
examples can be considered to be made in the course or furtherance of business and thus,
will constitute supply. The taxability of such transactions, however, will have to be examined
under the provisions of section 9 [Discussed in detail in Chapter 3 – Charge of GST]. This
view is based on literal interpretation of the law. However, since this view may not always
lead to logical conclusions, it is more prudent to take a purposive approach as followed in
Departmental FAQs/press release given above.
10
Totalisor is a computerised device that pools the wagers/bets (after deduction of charges
and statutory taxes) of various persons placing the bet and also divides the total wager
amount to be distributed to the winning persons.
In the subsequent paras, we have discussed the exceptions to the two parameters
of supply, namely, (i) supply made for consideration, but not in course or
furtherance of business and (ii) supply made without consideration.
STATUTORY PROVISIONS
S. No. Particulars
3. Supply of goods —
(a) by a principal to his agent where the agent undertakes to
supply such goods on behalf of the principal; or
(b) by an agent to his principal where the agent undertakes to
receive such goods on behalf of the principal.
ANALYSIS
There are instances where an activity or transaction
is treated as supply, even if the same is made
without consideration. These are specifically
Section 7(1)(c)
mentioned in Schedule I appended to the CGST read with
Act. The same has been discussed in the Schedule I
subsequent paras:
In the past regime, in every tax statute,
“consideration” played the most important role for levying taxes. For instance, if
any service was provided for free to a person, such service was not subject to service
tax. However, under GST, the importance of consideration has been diluted in
certain cases – this is an important departure from the earlier indirect tax regime.
As per Schedule I, in the following four cases, activities made without consideration
will be treated as supply under section 7 of the CGST Act:
I. Permanent Transfer/Disposal of Business Assets [Para 1. of
Schedule I]: Any kind of disposal or transfer of business assets made by an
entity on permanent basis even though without consideration qualifies as
supply. However, it is important to note that this provision would apply only
if input tax credit has been availed on such assets.
Therefore, in order to qualify as supply under this para, following conditions
need to be satisfied:
There must be a disposal or transfer of business assets**.
Transfer/disposal must be permanent.
11
List of the goods in respect of which ITC is blocked has been elaborated in Chapter 6 – Input
Tax Credit.
(16) Ms. Priya holds 30% shares of ABC Ltd. and 35% shares of
XYZ Ltd. ABC Ltd. and XYZ Ltd. are related.
(17) Q Ltd. has a deciding role in corporate policy, operations
management and quality control of R Ltd. It can be said that Q Ltd. controls
R Ltd. Thus, Q Ltd. and R Ltd. are related.
A person who has obtained/is required to obtain more than one registration,
whether in one State/Union territory or more than one State/Union territory
shall, in respect of each such registration, be treated as distinct persons
[Section 25(4) of the CGST Act].
(18) Mohan, a Chartered Accountant, has a registered head office in Delhi.
He has also obtained registration in the State of West Bengal in respect of
his newly opened branch office. Mohan shall be treated as distinct persons in
respect of registrations in West Bengal and Delhi.
Distinct persons
Single registration in UP
are not treated as supply [Schedule III of CGST Act (discussed subsequently in
this chapter)].
Gifts by employer to employee
Further, proviso to Para 2. of Schedule I provides that gifts upto ` 50,000 in
value in a financial year by an employer to an employee shall not be treated
as supply of goods or services or both. However, gifts of value more than
` 50,000 made without consideration are supply and are subject to GST, when
made in the course or furtherance of business.
What
constitutes
a ‘gift’?
The term ‘gift’ has not been defined in the GST law. In common parlance, gift
is made without consideration, is voluntary in nature and is made
occasionally. It cannot be demanded as a matter of right by the employee
and the employee cannot move a court of law for obtaining a gift.
Perquisites by employer to employee
As already discussed, services by an employee to the employer in the course
of or in relation to his employment is outside the scope of GST (neither supply
of goods or supply of services).
It follows therefrom that payment made by the employer to the employee in
terms of contractual agreement entered into between the employer and the
employee, will not be subjected to GST.
Ministry of Finance has clarified in a Press Release on 10.07.2017 that if
services such as membership of a club, health and fitness centre etc. are
provided free of charge to all the employees by the employer, the same will
not be subjected to GST. The same would hold true for free housing to the
employees, when the same is provided in terms of the contract between the
employer and employee and is part and parcel of the cost-to company
(C2C) 12.
III. Principal– Agent [Para 3. of Schedule I]: Supply of goods by a principal
to his agent, without consideration, where
the agent undertakes to supply such goods
on behalf of the principal is considered as
supply.
Similarly, supply of goods by an agent to his
principal, without consideration, where the
agent undertakes to receive such goods on
behalf of the principal is considered as
supply.
Points which merit consideration, in this regard, are as follows:
• Only supply of goods and not supply of services is covered here.
• Supply of goods between principal and agent without consideration
is also supply.
Thus, the supply of services between the principal and the agent and vice
versa would therefore require “consideration” to be considered as supply and
thus, to be liable to GST.
In order to determine whether a particular principal-
agent relationship falls within the ambit of the
Para 3. of Schedule I as discussed above or not, the
deciding factor is whether the invoice for the further
supply of goods on behalf of the principal is being
issued by the agent or not? In other words, the crucial
12
It is possible to take an alternative view in this regard. This scenario, i.e. the employer
providing services (free of charge) to the employee in lieu of the services provided by the
employee to the employer in the course of employment, is an exchange transaction. In an
exchange transaction, both the parties independently assess their transaction status. Thus,
while service provided by employee to the employer being covered under Schedule III to the
CGST Act is not a supply, service provided by employer to employee may constitute a supply
in terms of section 7(1)(c) read with para 2 of the Schedule I since employer and employee
are related persons as per explanation to section 15. Provisions of section 15 have been
discussed in detail in Unit 2 of Chapter 5 – Time and Value of Supply.
point is whether or not the agent has the authority to pass or receive the title
of the goods on behalf of the principal.
Where the invoice for further supply is being
issued by the agent in his name then, any Invoice for further
provision of goods from the principal to the supply to customer
agent would fall within the fold of Para 3. above. be issued in the
agent’s name.
However, where the invoice is issued by the
agent to the customer in the name of the principal, such agent shall
not fall within the ambit of Para 3. above.
Similarly, where the goods being
procured by the agent on behalf of Goods procured on behalf
the principal are invoiced in the of principal are invoiced
name of the agent then further in the agent’s name.
provision of the said goods by the
agent to the principal would be covered by Para 3. above [Circular No.
57/31/2018 GST dated 04.09.2018].
The above clarification can be understood with the help of following scenario
based examples:
(22) Anmol appoints Bholu to procure certain goods from the
market. Bholu identifies various suppliers who can provide the
goods as desired by Anmol and asks the supplier (Golu) to send
the goods and to issue the invoice directly to Anmol.
In this scenario, Bholu is only acting as the procurement agent, and has in no
way involved himself in the supply or receipt of the goods. Hence, in
accordance with the provisions of this Act, Bholu is not an agent of Anmol for
supply of goods in terms of Para 3. of Schedule I.
not an agent of M/s Tintin for the supply of goods in terms of Para 3. of Schedule
I.
13
It is important to note that services provided by the commission agent for sale or purchase
of agricultural produce are exempt from GST.
14
Services by way of extending deposits, loans or advances in so far as the consideration is
represented by way of interest or discount (other than interest involved in credit card services)
are exempt vide Entry 27 of Notification No. 12/2017 CT(R) dated 28.06.2017 [Discussed in
detail in Chapter 4 – Exemptions under GST].
15
Section 15 of the CGST Act, 2017 has been discussed in detail in Chapter 5 – Time and
Value of Supply.
of the CGST Act. In view of the same, few sales promotion schemes have
been examined as under:
16
ITC on inputs, input services and capital goods to the extent they are used in relation to
the gifts/free samples shall be available to the supplier only where the activity of distribution
of gifts/free samples falls within the scope of supply - Discussed in detail in Chapter 6 – Input
Tax Credit.
17
Refer Circular No.44/18/2018 CGST dated 02.05.2018 discussed subsequently.
Business is carried on by a
personal representative who is
deemed to be a taxable person.
18
Services by way of transfer of a going concern, as a whole or an independent part thereof
are exempt from GST [Discussed in detail in Chapter 4 – Exemptions from GST].
Although stamp duty and registration charges have been levied on such transfer of
tenancy rights, it shall be still subject to GST. Merely because a
transaction/supply involves execution of documents which may
require registration and payment of registration fee and stamp
duty, would not preclude them from the ‘scope of supply’ and
from payment of GST.
The transfer of tenancy rights cannot be treated as sale of land/ building in para 5.
of Schedule III. Thus, it is not a negative list activity [this concept is discussed under
next heading] and consequently, a consideration for the said activity shall attract
levy of GST.
To sum up, the activity of transfer of ‘tenancy rights’ is squarely covered under the
scope of supply and taxable per-se. Transfer of tenancy rights to a new tenant
against consideration in the form of tenancy premium is taxable.
However, renting of residential dwelling for use as a residence is exempt [Entry 12
of Notification No. 12/2017 CT (R) dated 28.06.2017 – Discussed in Chapter 4 –
Exemptions from GST]. Hence, grant of tenancy rights in a residential dwelling for
use as residence dwelling against tenancy premium or periodic rent or both is
exempt. As regards services provided by outgoing tenant by way of surrendering
the tenancy rights against consideration in the form of a portion of tenancy
premium is liable to GST [Circular No. 44/2018 CT dated 02.05.2018].
Hence, our discussion under this heading will revolve around the following:
19
Discussion based on Service Tax Education Guide issued under erstwhile under service tax
law.
20
Schedule III has two more entries - Entry 7 and 8 [as enumerated below]. These entries are
covered in the syllabus of Paper 8: Indirect Tax Laws at Final Level.
7. Supply of goods from a place in the non-taxable territory to another place in the non-
taxable territory without such goods entering into India.
8. (a) Supply of warehoused goods to any person before clearance for home consumption.
(b) Supply of goods by the consignee to any other person, by endorsement of
documents of title to the goods, after the goods have been dispatched from the port
of origin located outside India but before clearance for home consumption.
21
notified vide Notification No. 14/2017 CT (R) dated 28.06.2017/ Notification No. 11/2017
IT (R) dated 28.06.2017 as amended
22
notified vide Notification No. 25/2019 CT (R) dated 30.09.2019/ Notification No. 24/2019
IT (R) dated 30.09.2019
other licenses and privileges for a fee in other situations, where GST
is payable.
It may be noted that services provided by the Government to
business entities including by way of grant of privileges, licences,
mining rights, natural resources such as spectrum etc. against
payment of consideration in the form of fee, royalty etc. are taxable
under GST. Tax is required to be paid by the business entities on
such services under reverse charge 23.
(ii) Inter-State movement of various modes of conveyance
Inter-State movement of various modes of conveyance, between
distinct persons including-
• Trains,
• Buses,
• Trucks,
• Tankers,
• Trailers,
• Vessels,
• Containers,
• Aircrafts,
(a) carrying goods or passengers or both; or
(b) for repairs and maintenance,
[except in cases where such movement is for further supply of the same
conveyance] was discussed in GST Council’s meeting held on 11th June,
2017 and the Council recommended that such inter-State movement
shall be treated ‘neither as a supply of goods or supply of service’ and
therefore not be leviable to IGST.
Thus, above activity may not be treated as supply and consequently
IGST will not be payable on such supply. However, applicable
CGST/SGST/IGST, as the case may be, shall be leviable on repairs and
maintenance done for such conveyance [Circular No. 1/1/2017 IGST
dated 07.07.2017**].
23
Circular No. 121/40/2019 GST dated 11.10.2019
(iii) Inter-State movement of rigs, tools and spares, and all goods on
wheels [like cranes]
**Above circular shall mutatis mutandis apply to inter-
State movement of rigs, tools and spares, and all
goods on wheels [like cranes], [except in cases
where movement of such goods is for further supply
of the same goods], such inter-State movement
shall be treated ‘neither as a supply of goods or supply of service,’ and
consequently no IGST would be applicable on such movements. In this
context, it is also reiterated that applicable CGST/SGST/IGST, as the case
maybe, is leviable on repairs and maintenance done for such goods [Circular
No. 21/21/2017-GST dated 22.11.2017].
In the preceding paras, we have discussed, how to determine whether a given
activity or transaction constitutes a supply. Once an activity or transaction qualifies
as supply, one needs to determine whether the same is leviable to GST or not.
Though the provisions relating to levy and collection of GST have been discussed
at length in Chapter 3 – Charge of GST, a brief idea of the same is provided
hereunder.
For a supply to attract GST, primarily two additional conditions need to be satisfied.
These are – (i) supply must be made by a taxable person and (ii) supply must be a
taxable supply. These two additional conditions have been discussed hereunder:
(i) Supply by a taxable person
A supply to attract GST should be made by a taxable person. Hence, a
supply between two non-taxable persons does not constitute taxable supply
under GST.
The restriction of being a taxable person is only on the supplier whereas the
recipient can be either taxable or non-taxable.
STATUTORY PROVISIONS
ANALYSIS
GST is payable on individual goods or services or both at the notified rates. The
application of rates poses no problem if the supply is of individual goods or
individual services, which is clearly identifiable and such goods or services are
subject to a particular rate of tax.
However, in certain cases, supplies are not such simple and clearly identifiable
supplies. Some of the supplies are a combination of goods or combination of
services or combination of goods and services both and each individual component
of such supplies may attract a different rate of tax.
In such a case, the rate of tax to be levied on such supplies may be a challenge. It
is for this reason, that the GST Law identifies composite supplies and mixed supplies
and provides certainty in respect of tax treatment under GST for such supplies.
In order to determine whether the supplies are ‘composite supplies’ or ‘mixed
supplies’, one needs to determine whether the supplies are naturally bundled or
not naturally bundled in ordinary course of business. The concept of ‘naturally
bundled’ supplies is emanating from the definition of ‘composite supply’.
Principal supply means the supply of goods or services which constitutes the
predominant element of a composite supply and to which any other supply
forming part of that composite supply is ancillary. [Section 2(90) of CGST Act]
(57) Works contract and restaurant services are classic examples of
composite supplies.
How to determine whether the services are bundled in the ordinary course
of business?
Whether the services are bundled in the ordinary course of business, would depend
upon the normal or frequent practices followed in the area of business to which
services relate. Such normal and frequent practices adopted in a business can be
ascertained from several indicators some of which are listed below:
The perception of the consumer or the service recipient - If large number
of service recipient of such bundle of services reasonably expect such services
to be provided as a package, then such a package could be treated as
naturally bundled in the ordinary course of business.
(58) Mobile phone is always sold with battery.
(62) When a consumer buys a television set and he also gets mandatory
warranty and a maintenance contract with the TV, this supply is a
composite supply. In this example, supply of TV is the principal supply,
warranty and maintenance services are ancillary.
(63) A travel ticket from Mumbai to Delhi may include service of food
being served on board, free insurance, and the use of airport lounge. In
this case, the transportation of passenger, constitutes the pre-dominant
element of the composite supply, and is treated as the principal supply and all other
supplies are ancillary.
Supplies given in the below mentioned table are the composite supplies. CBIC has
clarified as to what constitutes the principal supply in the given composite supplies:
Activity of bus The principal supply may be determined on the basis of facts
body building and circumstances of each case [Circular No. 34/8/2018-GST
dated 01.03.2018].
(67) A house is given on rent through a single rent deed - one floor of
which is to be used as residence and the other for housing a printing press,
at a lump sum rent amount. Such renting for two different purposes is not naturally
bundled in the ordinary course of business. Said supplies are mixed supply.
How to determine the tax liability on mixed supplies?: A mixed supply
comprising of two or more supplies shall be treated as supply of that particular
supply that attracts highest rate of tax.
5. LET US RECAPITULATE
The taxable event under GST is supply. The scope of supply under GST can
be understood in terms of following parameters:
Supply should be of goods Supply should be made for a Supply should be made in the
or services consideration course or furtherance of business
Consideration
Supply
in course or
furtherance of
business
Consideration
Importation of
Supply
services
in course or furtherance
of business
Deemed Supply
Assets
Permanently
transferred/disposed
Related/Distinct Related/Distinct
Deemed
Supply
Person 1 Person 2
Supply of goods or services
in course or furtherance of business
Employer Employee
Gifts ≤ ` 50,000 in a FY
Not supply
Deemed Supply
supplies goods
Principal Agent
Supplier Agent
Deemed Supply
Agent receives goods on behalf of
principal and receives invoice in supplies
his own name goods to
principal
Principal
Related
persons
Deemed Supply
Person out Person in India
of India supplies services
Import of services
Yes
No Is it an activity No
Is it for a
consideration? specified under
Schedule I?
Yes Yes
Is it in course No
or furtherance
of business?
Is it
No
Is it in course
or furtherance import of
of business? No service?
Yes
Yes Yes
Is it an activity specified No
in Schedule III or section Activity is
Activity is
7(2)(b)? Supply NOT
Supply
Yes
Chocolates 18%
Toy balloons 5%
16. Sarvanna & Sons wishes to start supplying liquor in the State of Tamil Nadu.
Therefore, it applies for license for selling liquor to the Tamil Nadu Government
for it has charged specified fee from it. Examine whether the grant of alcoholic
liquor license by the Tamil Nadu Government to Sarvanna & Sons qualifies as
supply.
7. ANSWERS/HINTS
1. Taxable event under GST is supply of goods or services or both. CGST and
SGST/ UTGST will be levied on intra-State supplies. IGST will be levied on
inter-State supplies.
2. As per Schedule I of the CGST Act, supply of goods or services or both
between related persons or between distinct persons as specified in section
25, when made in the course or furtherance of business, is deemed as supply
even if made without consideration. In the given case, since the Damodar
Private Ltd. and its branch located in another State are distinct persons,
supply of goods between them qualifies as supply.
3. Section 7 stipulates that the supply should be for a consideration and should
be in the course or furtherance of business. However, Schedule I of the CGST
Act enumerates the cases where an activity is treated as supply, even if the
same is without consideration. These are as follows:
(i) Permanent transfer or disposal of business assets where input tax credit
has been availed on such assets.
(ii) Supply of goods or services or both between related persons or between
distinct persons as specified in section 25, when made in the course or
furtherance of business.
However, gifts not exceeding fifty thousand rupees in value in a financial
year by an employer to an employee shall not be treated as supply of
goods or services or both.
(iii) Supply of goods —
(a) by a principal to his agent where the agent undertakes to supply
such goods on behalf of the principal; or
(b) by an agent to his principal where the agent undertakes to receive
such goods on behalf of the principal.
(iv) Import of services by a person from a related person or from any of his
other establishments outside India, in the course or furtherance of
business.
4. The statement is not correct. Composite supply is treated as supply of the
principal supply. It is the mixed supply that is treated as supply of that
particular goods or services which attracts the highest rate of tax.
5. Title as well as possession both have to be transferred for a transaction to be
considered as a supply of goods. In case title is not transferred, the
transaction would be treated as supply of service in terms of Schedule II(1)(b)
of the CGST Act. In some cases, possession may be transferred immediately,
but title may be transferred at a future date like in case of sale on approval
basis or hire purchase arrangement. Such transactions will also be termed as
supply of goods.
6. (a) Schedule I of CGST Act, inter alia, stipulates that supply of goods or
services or both between related persons or between distinct persons
as specified in section 25, is supply even without consideration provided
it is made in the course or furtherance of business. Further, a person
who has obtained more than one registration, whether in one
State/Union territory or more than one State/Union territory shall, in
respect of each such registration, be treated as distinct persons
[Section 25(4) of the CGST Act].
In view of the same, factory and depot of Sulekha Manufacturers are
distinct persons. Therefore, supply of goods from Delhi factory of
Sulekha Manufacturers to Mumbai Depot without consideration, but in
course/furtherance of business, is supply under section 7 read with
Schedule I of the CGST Act.
(b) Schedule I of CGST Act, inter alia, stipulates that import of services by
a taxable person from a related person located outside India, without
consideration is treated as supply if it is provided in the course or
furtherance of business. Explanation to section 15, inter alia, provides
that persons shall be deemed to be “related persons” if they are
members of the same family. Further, as per section 2(49) of the CGST
Act, 2017, family means, —
(i) the spouse and children of the person, and
(ii) the parents, grand-parents, brothers and sisters of the person if
they are wholly or mainly dependent on the said person.
In the given case, Raman has received free of cost legal services from
his brother. However, in view of section 2(49)(ii) above, Raman and his
brother cannot be considered to be related as Raman’s brother is a well-
known lawyer and is not wholly/mainly dependent on Raman. Further,
Raman has taken legal advice from him in personal matter and not in
course or furtherance of business. Consequently, services provided by
Raman’s brother to him would not be treated as supply under section
7 read with Schedule I of the CGST Act.
(c) In the above case, if Raman has taken advice with regard to his business
unit, services provided by Raman’s brother to him would still not be
treated as supply under section 7 of the CGST Act read with Schedule I
as although the same are provided in course or furtherance of business,
such services have not been received from a related person.
7. (a) Supply of services
(b) Supply of goods
(c) Supply of services
(d) Supply of goods
8. (a) Supply of services
(b) Supply of goods
(c) Supply of services
(d) Supply of goods
9. The statement is not correct. Supply of goods on hire purchase shall be
treated as supply of goods as there is transfer of title, albeit at a future date.
10. (i) Supply, under section 7 of the CGST Act, 2017, inter alia,
includes import of services for a consideration
even if it is not in the course or furtherance of business.
Thus, although the import of service for consideration by Miss. Shriniti
Kaushik is not in course or furtherance of business [as the interior
decoration services have been availed in respect of residence], it would
amount to supply.
(ii) Schedule I of CGST Act, inter alia, stipulates that import of services by
a taxable person from a related person located outside India, without
Supply of these goods is, therefore, supply of individual items which are
taxable at the respective rates applicable to them.
13. As per section 2(74) of the CGST Act, 2017, mixed supply means two or more
individual supplies of goods or services, or any combination thereof, made in
conjunction with each other by a taxable person for a single price where such
supply does not constitute a composite supply.
Supply of a package containing chocolates, fruit juice bottles and a packet of
toy balloons is a mixed supply as each of these items can be supplied
separately and is not dependent on any other. Further, as per section 8(b) of
the CGST Act, 2017, the mixed supply is treated as a supply of that particular
supply which attracts the highest rate of tax. Thus, in the given case, supply
of packages is treated as supply of chocolates [since it attracts the highest
rate of tax] and the rate of GST applicable on the package of ` 6,00,000
(20,000 × ` 30) is 18%
14. As per section 25(4) 24, a person who has obtained more than one registration,
whether in one State or Union territory or more than one State or Union
territory shall, in respect of each such registration, be treated as ‘distinct
persons’.
Schedule I to the CGST Act specifies situations where activities are to be
treated as supply even if made without consideration. Supply of goods and/or
services between ‘distinct persons’ as specified in section 25, when made in
the course or furtherance of business is one such activity included in
Schedule I under para 2.
However, in view of the GST Council’s recommendation, it has been clarified
that the inter-State movement of various modes of conveyance between
‘distinct persons’ as specified in section 25(4), not involving further supply of
such conveyance, including trucks carrying goods or passengers or both; or
for repairs and maintenance, may be treated ‘neither as a supply of goods
nor supply of service’ and therefore, will not be leviable to IGST [Circular No.
1/1/2017 IGST dated 07.07.2017].
24
Provisions of section 25(4) of the CGST Act have been discussed in detail in Chapter 7 –
Registration
Thus, in the given case, inter-State movement of trucks from the workshop of
Gagan Engineering Pvt. Ltd. located in Haryana to its repair centres located
in other States is ‘neither a supply of goods nor supply of service’.
15. As per section 7(1)(a), the goods or services which are supplied free of cost
(without any consideration) are not treated as “supply” except in case of
activities mentioned in Schedule I of the CGST Act. Under “Buy One Get One
Free” scheme, it may appear at first glance that in case of offers like “Buy One,
Get One Free”, one item is being “supplied free of cost” without any
consideration. However, it is not an individual supply of free goods, but a
case of two or more individual supplies where a single price is being charged
for the entire supply. It can at best be treated as supplying two goods for the
price of one.
Taxability of such supply will be dependent upon as to whether the supply is
a composite supply or a mixed supply and the rate of tax shall be determined
accordingly.
16. Services by way of grant of alcoholic liquor license by the State Governments
have been notified to be treated neither as a supply of goods nor as a supply
of service. Such licence is granted against consideration in the form of licence
fee or application fee or by whatever name it is called. This special
dispensation is applicable only to supply of service by way of grant of liquor
licenses by the State Governments as an agreement between the Centre and
States and is not applicable/has no precedence value in relation to grant of
other licenses and privileges for a fee in other situations, where GST is
payable.
Thus, in the given case, the grant of alcoholic liquor license by the Tamil Nadu
Government to Sarvanna & Sons is neither a supply of goods nor a supply of
service.
CHARGE OF GST
Examples/illustrations/Questions and Answers given in the Chapter are based on
the position of GST law existing as on 31.10.2020
LEARNING OUTCOMES
After studying this Chapter, you will be able to –
explain the extent and commencement of CGST Act, IGST
Act, SGST Act & UTGST Act.
describe the provisions pertaining to levy and collection of
CGST & IGST.
identify and analyse the services on which tax is payable
under reverse charge mechanism.
understand and analyse the composition levy- eligibility for
the same and conditions to be fulfilled.
CHAPTER OVERVIEW
collection of GST
in India
Composition levy
1. INTRODUCTION
Power to levy tax is drawn from the Constitution of India. To pave way for the
introduction of Goods and Services Tax (“GST”), 101st Constitutional Amendment
Act, 2016 was passed. By virtue of this Act, enabling provision was made to levy
GST on supply of goods or services or both in India. Central excise duty, State
VAT and certain State specific taxes and service tax were subsumed into a
comprehensive GST [Discussed in detail in Chapter-1: GST in India – An
Introduction].
The very basis for the charge of tax in any taxing statute is the taxable event i.e
the occurrence of the event which triggers levy of tax. As discussed earlier, the
taxable event under GST is SUPPLY. CGST and SGST/UTGST are levied on all
intra-State supplies of goods and/or services while IGST is levied on all inter-
State supplies of goods and/ or services.
The provisions relating to levy and collection of CGST and IGST are contained in
section 9 of the CGST Act, 2017 and section 5 of the IGST Act, 2017, respectively.
Let us now have a fundamental idea of intra-State supply and inter-State supply.
As a general rule, where the location of the supplier and the place of supply of
goods or services are in the same State/Union territory, it is treated as intra-State
supply of goods or services respectively.
Similarly, where the location of the supplier and the place of supply of goods or
services are in (i) two different States or (ii) two different Union Territories or (iii) a
State and a Union territory, it is treated as inter-State supply of goods or
services respectively.
2. RELEVANT DEFINITIONS
Central tax: means the central goods and services tax levied under
section 9 of the CGST Act [Section 2(21) of the CGST Act].
Integrated tax: means the integrated goods and services tax levied under
the Integrated Goods and Services Tax Act [Section 2(58) of the CGST Act].
State tax: means the tax levied under any State Goods and Services Tax Act
[Section 2(104) of the CGST Act].
Goods: means every kind of movable property other than money and
securities but includes actionable claim, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed
before supply or under a contract of supply. [Sec. 2(52) of CGST Act].
Exempt supply: means supply of any goods or services or both which
attracts nil rate of tax or which may be wholly exempt from tax under
section 11, or under section 6 of the Integrated Goods and Services Tax
Act, and includes non-taxable supply [Section 2(47) of CGST Act].
Aggregate turnover: means the aggregate value of all taxable supplies
(excluding the value of inward supplies on which tax is payable by a person
on reverse charge basis), exempt supplies, exports of goods or services or
both and inter-State supplies of persons having the same Permanent
Account be computed on all India basis but excludes central tax, State tax,
Union territory tax, integrated tax and cess [Section 2(6) of CGST Act].
Business: includes –
(c) any activity or transaction in the nature of (a) above, whether or not there is
volume, frequency, continuity or regularity of such transaction;
(e) provision by a club, association, society, or any such body (for a subscription or any
other consideration) of the facilities or benefits to its members, as the case may be;
(g) services supplied by a person as the holder of an office which has been accepted
by him in the course or furtherance of his trade, profession or vocation;
but shall not include any subsidy given by the Central Government
or a State Government.
However, a deposit given in respect of the supply of goods or services or
both shall not be considered as payment made for such supply unless
the supplier applies such deposit as consideration for the said supply.
[Section 2(31) of CGST Act].
Person: includes [Section 2(84) of CGST Act]-
An association of persons
or a body of individuals,
A Limited Liability
A firm whether incorporated or
Partnership
not, in India or outside
India
Society as defined
Central
under the Societies
A local authority Government/State
Government Registration Act,
1860
12 24 200
NM NM NM
Territorial
Waters
(TWI) Contiguous High Sea
Zone
Continental Shelf
(ii) State GST law of the respective State/Union Territory with Legislature
[Delhi, Puducherry and Jammu & Kashmir]* extends to whole of that
State/Union Territory.
(1) Maharashtra GST Act, 2017 extends to whole of the State of the
Maharashtra.
*State: includes a Union territory with Legislature [Section 2(103) of the CGST
Act].
(iii) Integrated Goods and Services Tax Act, 2017 extends to the whole of
India [Section 1 of the IGST Act].
(iv) Union Territory Goods and Services Tax Act, 2017 extends to the Union
territories** of the Andaman and Nicobar Islands, Lakshadweep, Dadra and
Nagar Haveli and Daman and Diu, Ladakh 1, Chandigarh and other
1
Students may note that the erstwhile State of Jammu and Kashmir has been reorganised
into the Union territory of Jammu and Kashmir (with Legislature) and Union territory of
Ladakh vide the Jammu and Kashmir Reorganisation Act, 2019. Further, the erstwhile
Union territories of Dadra and Nagar Haveli and Daman and Diu have been merged into a
new Union territory of Dadra and Nagar Haveli and Daman and Diu vide the Dadra and
Nagar Haveli and Daman and Diu (Merger of Union Territories) Act, 2019.
4. L
LEVY & COLLECTION OF CGST & IGST [SECTION 9
OF THE CGST ACT & SECTION 5 OF THE IGST ACT]
STATUTORY PROVISIONS
Sub-section Particulars
(2) The central tax on the supply of petroleum crude, high speed
diesel, motor spirit (commonly known as petrol), natural gas
and aviation turbine fuel shall be levied with effect from such
date as may be notified by the Government on the
recommendations of the Council.
ANALYSIS
Central Goods and Services Tax (CGST) shall be levied on all intra-State supplies
of goods or services or both.
The tax shall be collected in such manner as may be prescribed and shall be paid
by the taxable person. However, intra-State supply of alcoholic liquor for human
consumption is outside the purview of CGST.
Value for levy: Transaction value under section 15 of the CGST Act – Discussed in
detail in Chapter 5 – Time and Value of supply.
Rates of CGST: Rates for CGST are rates as may be notified by the Government
on the recommendations of the GST Council [Rates presently notified are 0%,
0.125%, 1.5%, 2.5%, 6%, 9% and 14%]. Maximum rate of CGST can be 20%.
💡💡On inter-State supplies of goods and/or services, Integrated Goods and Services
Tax (IGST) is levied on the transaction value under section 15 of the CGST Act 2.
Since alcoholic liquor for human consumption is outside the purview of GST law, IGST
is also not leviable on the same. IGST is the sum total of CGST and SGST/UTGST.
Maximum rate of IGST can be 40%.
However, CGST/IGST on supply of the following items has not yet been levied. It
shall be levied with effect from such date as may be notified by the Government
on the recommendations of the Council:
2
Goods imported into India: For the goods imported into India, the IGST shall be levied and
collected as per the section 3 of the Custom Tariff Act, 1975 i.e. the additional duty shall be
as per the Custom Tariff Act, 1975 and the value shall also be determined as per the said
Act. This aspect will be discussed in detail at the Final Level.
petroleum crude
high speed diesel
motor spirit (commonly known as petrol)
natural gas and
aviation turbine fuel
Tax payable on supply of goods or services or both under Reverse charge
CGST/IGST shall be paid by the recipient of goods or services or both, on reverse
charge basis, in the following cases:
Supply of such goods or services or both, as notified by the Government on
the recommendations of the GST Council.
Supply of specified categories of goods or services or both by an
unregistered supplier to specified class of registered persons, as notified by
the Government on recommendation of GST Council.
All the provisions of the CGST/IGST Act shall apply to the recipient in the
aforesaid cases as if he is the person liable for paying the tax in relation to the
supply of such goods or services or both. Let us first understand the concept
of reverse charge mechanism:
Generally, the supplier of goods or services is liable to pay GST. However, under
the reverse charge mechanism, the liability to pay GST is cast on the recipient of
the goods or services.
Reverse charge means the liability to pay tax is on the recipient of supply of
goods or services instead of the supplier of such goods or services in respect of
notified categories of supply.
It may be noted that the underlying principle of an indirect tax is that burden of
tax has to be ultimately passed on to the recipient. GST being an indirect tax, this
principle holds good for GST. Under normal circumstances, the statutory liability
to deposit GST and undertake compliances [i.e. to obtain registration under GST,
deposit the tax with the Government, filing returns, etc.] is on the supplier while he may
recover the same from its recipient. However, under reverse charge mechanism,
the statutory liability to deposit GST and undertaking compliance requirements,
[i.e. to obtain registration under GST, deposit the tax with the Government, filing returns,
etc.] shifts from supplier to recipient.
3
Examples of goods on which tax is payable by the recipient under reverse charge have
been given hereunder only for the knowledge of the students. These are not relevant for
examination purposes.
association of
persons; or
(g) any casual
taxable person;
located in the
taxable territory.
[Hereinafter referred
as Specified
recipients]
4
Provisions relating to tax deducted at source contained in section 51 shall be discussed at
the Final Level.
5
These services have been simultaneously exempted from payment of GST. Thus, there will
be no tax liability in this case. [Refer Chapter 4: Exemptions from GST for discussion on this
exemption]
consultancy or assistance
in any branch of law, in
any manner and includes
representational services
before any court, tribunal
or authority.
3. Services supplied by an An arbitral Any business
arbitral tribunal to a tribunal. entity located in
business entity. taxable territory.
4. Services provided by way Any person Any body
of sponsorship to any corporate or
body corporate or partnership firm
partnership firm. located in the
taxable territory.
5. Services supplied by Central Any business
the Central Government, entity located in
Government, State State the taxable
Government, Union Government, territory.
territory or local Union territory or
authority to a business local authority
entity excluding, -
(1) renting of
immovable property,
and
(2) services specified
below-
(i) services by
the Department of
Posts by way of
speed post, express
parcel post, life
insurance, and
agency services
provided to a person
other than Central
Government, State
Government or
Union territory or
local authority;
(ii) services in
relation to an aircraft
or a vessel, inside or
outside the precincts
of a port or an
airport;
(iii) transport of
goods or
passengers.
5A. Services supplied by Central Any person
Central Government, Government, registered under
State Government, Union State the CGST Act,
territory or local Government, 2017
authority by way of Union territory or
renting of immovable local authority
property to a person
registered under CGST
Act, 2017
5B. Services supplied by any Any person Promoter
person by way of transfer
of development rights
(TDR) or Floor Space
Index (FSI) (including
additional FSI) for
construction of a project
by a promoter.
5C. Long term lease of land Any person Promoter
(30 years or more) by any
person against
consideration in form of
upfront amount (called
as premium, salami, cost,
price, development
6
Supply of TDR, FSI, long term lease (premium) of land by a landowner to a developer are
exempt subject to the condition that the constructed flats are sold before issuance of
completion certificate and tax is paid on them.
Exemption of TDR, FSI, long term lease (premium) is withdrawn in case of flats sold after
issue of completion certificate, but such withdrawal shall be limited to 1% of value in case
of affordable houses and 5% of value in case of other than affordable houses. In such
cases, the liability to pay tax on TDR, FSI, long term lease (premium) has been shifted from
land owner to builder under the reverse charge mechanism (RCM) – as illustrated in table
above.
behalf with an
approved
intermediary for
the purpose of
lending under
Scheme of SEBI
🔔🔔 All the above services have also been notified for reverse charge under IGST
Act. In addition to them, two additional services are also notified for reverse
charge under IGST law. These services will be discussed at the Final level.
For purpose of this above services, following explanations shall apply-
(a) The person who pays or is liable to pay freight for the transportation of
goods by road in goods carriage, located in the taxable territory shall be
treated as the person who receives the service for the purpose of this
notification.
(b) Body Corporate: has the same meaning as assigned to it in clause (11) of
section 2 of the Companies Act, 2013.
As per section 2(11) of the Companies Act, 2013, body corporate or
corporation includes a company incorporated outside India, but does not
include—
(i) a co-operative society registered under any law relating to co-
operative societies; and
(ii) any other body corporate (not being a company as defined in this
Act), which the Central Government may, by notification, specify in
this behalf.
(c) the business entity located in the taxable territory who is litigant,
applicant or petitioner, as the case may be, shall be treated as the person
who receives the legal services for the purpose of this notification.
(d) the words and expressions used and not defined in this notification but
defined in the Central Goods and Services Tax Act, the Integrated Goods
and Services Tax Act, and the Union Territory Goods and Services Tax Act
shall have the same meanings as assigned to them in those Acts.
(e) Limited Liability Partnership formed and registered under the provisions
of the Limited Liability Partnership Act, 2008 shall also be considered as a
partnership firm or a firm.
(f) Insurance agent means an insurance agent licensed under section 42 of
the Insurance Act, 1938 who receives agrees to receive payment by way
** Recipient of GTA service is the person who pays/is liable to pay freight
for transportation of goods by road in goods carriage, located in the
taxable territory.
**
Person liable to pay GST is Recipient
7
Entry 15 of Notification No. 13/2017 CT (R) dated 28.06.2017 read with Circular No.
130/49/2019 GST dated 31.12.2019
**
It is important to note here that when any service is placed under RCM, the
supplier shall not charge any tax from the service recipient as this is the settled
procedure under RCM. RCM shall be applicable here only when the supplier does not
issue an invoice charging GST @12% (6% CGST+6% SGST/UTGST or 12% IGST) from the
service recipient.
8
The definition of “independent directors” under section 149(6) of the
Companies Act, 2013 read with rule 12 of Companies (Share Capital and Debentures) Rules,
2014 makes it amply clear that the independent director should not have been an employee
of the company.
9
As per Para I. of Schedule III of the CGST Act, services by an employee to the employer in
the course of or in relation to his employment are non-supplies, i.e. they are neither supply
of goods nor supply of services. The provisions of Schedule III of the CGST Act have been
discussed in detail in Chapter 2 – Supply under GST.
10
as clarified vide Circular No: 140/10/2020 GST dated 10.06.2020
11
Detailed provisions relating to Electronic Commerce Operator shall be discussed at Final
level.
notified in six Schedules of rate notification for goods, viz., 0.25%, 3%, 5%, 12%,
18% and 28% 12. Certain specified goods have been exempted from tax.
Sections
Chapter
Heading
Sub-heading
heading
Tariff item
Chapter, heading, sub-heading and tariff item are referred in the Schedules of
rate notification for goods under GST are the Chapter, heading, sub-heading and
tariff item of the First Schedule to the Customs Tariff Act, 1975. Indian Customs
Tariff is based on HSN. HSN stands for Harmonized System of Nomenclature. It
is a multipurpose international product nomenclature developed by the World
Customs Organization (WCO) for the purpose of classifying goods across the
World in a systematic manner. It comprises of about 5,000 commodity groups;
each identified by a 6 digit code [code can be extended], arranged in a legal and
logical structure and is supported by well-defined rules to achieve uniform
classification. India has extended the HSN codes upto 8-digits.
Along the lines of HSN, the Indian Customs Tariff has a set of Rules of
Interpretation of the First Schedule and General Explanatory notes. These rules
and the general explanatory notes give clear direction as to how the
12
Students may refer the CBIC website for the complete Schedule of GST Rates for goods for
knowledge purposes.
13
The provisions relating to Customs Act and Customs Tariff Act will be discussed at Final
Level.
14
Sections: A group of Chapters representing a particular class of goods.
Chapters: Each section is divided into various chapters and sub-chapters. Each chapter
contains goods of one class.
Chapter notes: They are mentioned at the beginning of each chapter. These notes are part
of the statute and hence have the legal authority in determining the classification of goods.
Heading: Each chapter and sub-chapter is further divided into various headings.
Sub-heading: Each heading is further divided into various sub-headings.
Each section is divided into various headings which is further divided into Groups. Its
further division is made in the form of ‘Tariff item’/ Service Codes.
Chapter
Section
Heading
Group
Rate of tax is determined in accordance with the Service Code in which the service
is classified.
15
notified vide Notification No. 11/2017 CT (R) dated 28.06.2017
16
notified vide Notification No. 8/2017 IT (R) dated 28.06.2017.
17
Students may refer the CBIC website for the complete Schedule of GST Rates for services
for knowledge purposes.
The effective rate of GST on real estate sector for the new projects by promoters
are as follows:
(i) 1% without ITC on construction of affordable houses (area 60 sqm in
metros/ 90 sqm in non-metros and value upto ` 45 lakh).
(ii) 5% without ITC is applicable on construction of:
(a) all houses other than affordable houses, and
(b) commercial apartments such as shops, offices etc. in a residential real
estate project (RREP) in which the carpet area of commercial apartments is not
more than 15% of total carpet area of all apartments.
Conditions:
Above tax rates shall be available subject to following conditions:
(a) ITC shall not be available.
(b) 80% of inputs and input services [other than services by way of grant of
development rights, long term lease of land (against upfront payment in
the form of premium, salami, development charges etc.) or FSI (including
additional FSI), electricity, high speed diesel, motor spirit, natural gas], used
in supplying the service shall be purchased from registered persons 18.
However, if value of inputs and input services purchased from registered
supplier is less than 80%, promoter has to pay GST on reverse charge basis,
under section 9(4) of the CGST Act [discussed
earlier], at the rate of 18% on all such inward Supply of services
supplies (to the extent short of 80% of the inward notified under
supplies from registered supplier). section 9(4)
STATUTORY PROVISIONS
Section 10 Composition levy
Sub-section Particulars
(1) Notwithstanding anything to the contrary contained in this Act
but subject to the provisions of sub-sections (3) and (4) of
section 9, a registered person, whose aggregate turnover in the
preceding financial year did not exceed fifty lakh rupees, may
opt to pay, in lieu of the tax payable by him under sub-section
(1) of section 9, an amount of tax calculated at such rate as
may be prescribed, but not exceeding,––
18
Discussion in above paras highlighted in green is solely for the purpose of knowledge of
the students and is not meant for examination purposes.
19
Rate of tax prescribed in case of a manufacturer is half percent of the turnover in
State/UT. The same has been discussed in detail in subsequent paras.
20
The turnover limit for composition levy has been increased from ` 50 lakh to ` 1.5
crore vide Notification No. 14/2019 CT dated 07.03.2019.
ANALYSIS
(1) Overview of the Scheme
The composition levy is an alternative method of levy
of tax designed for small taxpayers whose turnover is
Voluntary and
up to a prescribed limit. The objective of composition
optional scheme
scheme is to bring simplicity and to reduce the
compliance cost for the small taxpayers.
Initially, the scheme was
designed to benefit the
small traders,
manufacturers and
restaurant service providers. So, the scheme
was fundamentally for the suppliers of
goods and only for restaurant service
providers. However, subsequently, suppliers availing composition scheme were
permitted to supply other services also, though only upto a small specified
simply need to issue a Bill of Supply 21 wherein no tax will be charged from the
recipient.
An eligible person opting to pay tax under the
Simple annual
composition scheme shall, instead of paying tax on
return
every invoice at the specified rate, pay tax at the
Quarterly
prescribed percentage of his turnover every quarter.
payment of tax
At the end of a quarter, he would pay the tax,
without availing the benefit of input tax credit. Return is to be filed
annually by a composition supplier. Registration under GST law is
compulsory for opting for the composition scheme.
The provisions relating to composition levy are contained in section 10 of
CGST Act, 2017 and Chapter-II [Composition Levy] of Central Goods and
Services Tax (CGST) Rules, 2017. The said rules have been incorporated in
the discussion in the following paras at the relevant places.
As seen above, section 10 stipulates two types of composition schemes –
section 10
21
Discussed in detail in Chapter-8: Tax Invoice, Credit and Debit Notes; E-way Bill
However, the said notification further stipulates that the turnover limit
for composition levy for goods shall be ` 75 lakh in respect of 8 of the
Special Category States namely:
Uttarakhand Nagaland
Manipur Sikkim
Meghalaya Tripura
Arunachal Pradesh
Uttarakhand
Manipur
Meghalaya
` 75 lakh
Mizoram
composition levy for
Turnover Limit for
Nagaland
goods
Sikkim
Tripura
(3) A hair stylist ‘Billoo Barber’ has his salon in Delhi and Haryana,
making intra-State supplies.
From the above discussion, it is apparent that the term aggregate turnover
is of utmost importance. So, let us understand this term in detail.
(3) Aggregate turnover under composition levy [Section 2(6) read with
explanation 1 to section 10]
The aggregate turnover is the sum of value of all outward supplies falling in
the following four categories:
Taxable supplies
Exempt supplies
Inter-state supplies
It excludes:
Includes Excludes
Value of all outward --CGST/ SGST/ UTGST/ IGST/ Cess
supplies
--Taxable supplies --Value of inward supplies on which tax
--Exempt supplies is payable under reverse charge.
--Exports* --Value of exempt supply of services
--Inter-State supplies* provided by way of extending deposits,
of persons having the same PAN
loans or advances in so far as the
be computed on all India basis.
consideration is represented by way of
These also include interest or discount
*Note: The value of exports and inter-State supplies might be relevant only while
determining the aggregate turnover of the preceding FY. These values are not
relevant for determining the aggregate turnover of the current FY in which the
composition supplier has opted for composition levy as he is not permitted to
make inter-State supplies and exports in the said FY.
(4) Rates of tax under the composition levy scheme [Section 10(1) and
section 10(2A) read with rule 7]
Rule 7 of the CGST Rules, 2017 prescribes the rates at which tax is payable
by a registered person opting for composition levy – composition levy for
goods and composition levy for services.
Rates of tax in case of composition levy for goods
A registered person opting for composition levy for goods shall pay tax
calculated at the prescribed rates [mentioned in table below] during the
current FY, in lieu of the tax payable by him under regular scheme:
22
Effective rate 1% (CGST+ SGST/UTGST)
23
Effective rate 5% (CGST+ SGST/UTGST)
24
Effective rate 1% (CGST+ SGST/UTGST)
ANSWER
ILLUSTRATION 2
Taxpayer ‘Bholaram’ is a trader, who has opted for composition levy for
goods, of both taxable and exempted goods. It has one retail showroom – A1
in Punjab and another retail showroom – A2 in Rajasthan, both selling
taxable as well as exempted goods. Total turnover (including taxable and
exempted goods) of the two showrooms in last FY was ` 115 lakh (` 85 lakh +
` 30 lakh). Turnover of showrooms A1 and A2 in the first quarter of current
financial year is ` 35 lakh [A1 - ` 15 lakh (` 5 lakh from sale of taxable goods
and ` 10 lakh from sale of exempted goods) and A2 - ` 20 lakh (` 10 lakh
from sale of taxable goods and ` 10 lakh from sale of exempted goods)].
Compute the amount payable under composition levy under section 10(1) &
10(2) of the CGST Act, 2017 by ‘Bholaram’.
ANSWER
Note: A supplier, other than manufacturer and restaurant service provider, eligible for
composition levy under section 10(1) & 10(2) has to pay tax @ 1% (CGST+ SGST) of
the turnover of only taxable supplies of goods and services in the State.
As seen above, since the tax under composition scheme has to computed as a
specified % of the turnover in State or turnover in Union territory, it is pertinent
to understand what is turnover in State or turnover in Union territory.
(5) Turnover in State or turnover in Union territory under composition
levy [Section 2(112) read with explanation 2 to section 10]
by the said taxable person but excludes central tax, State tax, Union territory
tax, integrated tax and cess.
Further, explanation 2 to section 10 clarifies that for the purposes of
determining the tax payable by a person under this section, the
expression turnover in State or turnover in Union territory shall not
include the value of following supplies, namely:
(i) supplies from the first day of April of a FY up to the date when
such person becomes liable for registration under this Act; and
(ii) exempt supply of services provided by way of extending deposits,
loans or advances in so far as the consideration is represented by
way of interest or discount.
On combined reading of the aforesaid provisions, the method of computing
the turnover in a State/UT for paying tax under the composition
scheme can be depicted in a diagram as follows:
Excludes
Includes --CGST/ SGST/ UTGST/ IGST/ Cess
All taxable supplies and
--Value of inward supplies on which tax
exempt supplies made within the
is payable under reverse charge.
State/UT
(While computing turnover in a --Value of supplies from the first day of
State/UT of a supplier, other than April of a FY up to the date when such
manufacturer and restaurant service person becomes liable for registration
provider, eligible for composition under this Act
levy for goods [eg-trader], the
exempt supplies will not be taken --Value of exempt supply of services
into consideration) provided by way of extending deposits,
loans or advances in so far as the
consideration is represented by way of
interest or discount
April-June ` 20 lakh
July-Sept ` 30 lakh
Oct-Dec ` 20 lakh
In the given case, since Champak has started the supply of services in the
current financial year, his aggregate turnover in the preceding FY is Nil.
Consequently, in the current FY, he is eligible for composition scheme for
services. He becomes eligible for the registration when his aggregate
turnover exceeds ` 20 lakh.
While registering under GST, he opts for composition scheme for services.
For determining his turnover of the State for payment of tax under
composition scheme for services, turnover of April-June quarter [` 20 lakh]
shall be excluded as the value of supplies from the first day of April of a
financial year up to the date when such person becomes liable for
registration under this Act are to be excluded for this purpose.
(6) Who are NOT eligible to opt for composition scheme? [Section 10(2)
and (2A)]
Registered person who is not eligible Registered person who is not eligible
for composition scheme for goods for composition scheme for services
*Section 52 relating to tax collected at source has been discussed in detail at the Final
level.
There is no restriction on
composition supplier to receive
inter-State inward supplies of
goods or services.
or
(b) ` 5 lakh,
whichever is higher.
Thus, it can be inferred that where the turnover of a registered person
opting for composition scheme for goods is upto ` 50 lakh in the
preceding financial year, he can supply services [other than restaurant
services] upto a maximum value of ` 5 lakh in the current financial year.
or
(b) ` 5 lakh,
whichever is higher.
Thus, he can supply services upto a value of ` 6 lakh in current FY. If the
value of services supplied exceeds ` 6 lakh, he becomes ineligible for the
composition scheme for goods and has to opt out of the same.
Interest income to be excluded for determining the value of turnover
in a State or Union territory under second proviso to section 10(1)
[Explanation to second proviso to section 10(1)]
Generally, businesses tend to save and invest money in the form of
deposits, loans or advances. However, this way they get engaged in
supply of service by way of extending deposits, loans or advances 25 – a
service other than restaurant service. And where the income from such
services cause the value of services 26 supplied to exceed the value
referred in second proviso to section 10(1) 27 [10% of the turnover in the
25
It is, however, pertinent to note that services by way of extending deposits, loans or
advances in so far as the consideration is represented by way of interest or discount are
exempt from GST – Discussed in detail in Chapter 4 – Exemptions from GST.
26
other than restaurant services
27
as discussed in preceding paras
28
wherever applicable
29
This condition applies in case where a builder/promoter opting for composition scheme
has the stock of the goods on which he is required to pay GST on reverse charge basis under
section 9(4) in one or more of the following cases:
(i) Builder/promoter must purchase at least 80% of inputs and input services used in
supplying the service, from registered persons. In case of shortfall, he’s required to
pay tax under reverse charge on all such inward supplies (to the extent short of 80%
of the inward supplies from registered supplier).
(ii) Where cement is received from an unregistered person, promoter/builder has to pay
tax on supply of such cement under reverse charge and
(iii) GST on capital goods is payable by the promoter on reverse charge basis.
composition levy
can opt for shall be effective
composition levy from
composition levy
can opt for shall be effective
composition levy from
Registered
person
30
Circular No. 77/51/2018 GST dated 31.12.2018
31
Circular No. 77/51/2018 GST dated 31.12.2018
All registered persons having the same Permanent Account Number (PAN)
have to opt for composition scheme. If one such registered person opts for
normal scheme, others become ineligible for composition scheme.
(7) A dealer ‘Kishorilal’ has two offices in Delhi and is eligible
for composition levy for goods. If ‘Kishorilal’ opts for the
composition scheme for goods, both the offices would pay
taxes under composition scheme and abide by all the
conditions as may be prescribed for the said composition scheme.
32
Circular No. 77/51/2018 GST dated 31.12.2018
Taxable person opting for the composition scheme shall not collect tax from
the recipient on supplies made by him. It implies that a composition scheme
supplier cannot issue a tax invoice.
(12) Composition scheme supplier cannot enter into credit chain [Section
10(4)]
Taxable person opting for the composition scheme is not entitled to any
credit of input tax.
If a taxable person has paid tax under the composition scheme though he
was not eligible for the scheme, the person would be liable to penalty and
the provisions of section 73 or 74 of the CGST Act shall be applicable for
determination of tax and penalty.
6. LET US RECAPITULATE
1. Extent & Commencement of CGST Act/ SGST Act/ UTGST Act/ IGST Act
States of India
Union Territories
without Legislature
Value for levy Transaction value under section 15 of the CGST Act
• ` 1.5 crore
For remaining States
Rates of tax
shall mention the words “composition taxable person, not eligible to collect tax
on supplies” at the top of the bill of supply issued by him
shall mention the words “composition taxable person” at a prominent place at his
place of business
**A registered person opting for composition scheme for goods is allowed to supply services
[other than restaurant services] alongwith supply of goods or supply of restaurant services of
value not exceeding 10% of the turnover in the preceding financial year in a State/Union
territory or ` 5 lakh, whichever is higher. Here, while computing turnover in a State/UT,
interest on loans/deposit/advances will not be taken into account.
Other points
With reference to the provisions of the CGST Act, 2017, examine whether Mr.
Ajay can opt for the composition scheme under section 10(1) &10(2) of the
CGST Act, 2017 in the current financial year? Or whether he is eligible to avail
benefit of composition scheme under section 10(2A)? Considering the option
of payment of tax available to Mr. Ajay, compute the amount of tax payable
by him assuming that his aggregate turnover in the current financial year is
` 35 lakh.
Will your answer be different if Mr. Ajay procures few items required for
providing repair services from neighbouring State of Madhya Pradesh?
12. M/s United Electronics, a registered dealer, is supplying all types of electronic
appliances in the State of Karnataka. Their aggregate turnover in the
preceding financial year by way of supply of appliances was ` 120 Lakh.
The firm also expects to provide repair and maintenance service of such
appliances from the current financial year.
With reference to the provisions of the CGST Act, 2017, examine:
(i) Whether the firm can opt for the composition scheme, under section
10(1) and 10(2) of the CGST Act, 2017, for the current financial year, as
the turnover may include supply of both goods and services?
(ii) If yes, up to what amount, the services can be supplied?
8. ANSWERS/HINTS
1. (a) Since GST on services provided or agreed to be provided by an
arbitral tribunal to any business entity located in the taxable territory
is payable under reverse charge, in the given case, GST is payable by
the recipient - business entity.
(b) GST on sponsorship services provided by any person to any body
corporate or partnership firm located in the taxable territory is
payable under reverse charge. Since in the given case, services
have been provided to an individual, reverse charge provisions will
not be attracted. GST is payable under forward charge by the
supplier – company.
(c) GST on services supplied by Central Government, State
Government, Union territory or local authority by way of renting of
immovable property to a person registered under CGST Act, 2017
is payable under reverse charge. Therefore, in the given case, GST
and his turnover does not exceed ` 1.5 crore, he is eligible for
composition scheme subject to fulfilment of specified conditions.
(ii) Since supplier of inter-State outward supplies of goods is not
eligible for composition levy, Sugam Manufacturers is not eligible
for composition levy.
10. A registered person with an aggregate turnover in a preceding financial year
up to ` 1.5 crore is eligible for composition levy, under section 10(1) &
10(2), in Delhi. Since the aggregate turnover of Subramanian Enterprises
does not exceed ` 1.5 crore, it is eligible for composition levy in the current
year. However, all registered persons having the same Permanent Account
Number (PAN) have to opt for composition scheme. If one such registered
person opts for normal scheme, others become ineligible for composition
scheme. Thus, Subramanian Enterprises either have to opt for composition
levy for both the places of business or under normal levy for both the places
of business.
11. Section 10(1) provides that a registered person, whose aggregate turnover
in the preceding financial year did not exceed ` 1.5 crore (` 75 lakh in
Special Category States except Assam, Himachal Pradesh and Jammu and
Kashmir), may opt to pay, in lieu of the tax payable by him, an amount
calculated at the specified rates. However, as per proviso to section 10(1),
person who opts to pay tax under composition scheme may supply services
other than restaurant services, of value not exceeding 10% of the turnover
in a State or Union territory in the preceding financial year or ` 5 lakh,
whichever is higher.
In the given case, since Mr. Ajay is an exclusive supplier of services other
than restaurant services [viz. repair services], he is not eligible for
composition scheme under section 10(1) & 10(2).
However, section 10(2A) provides an option to a registered person
(subject to certain conditions) whose aggregate turnover in the
preceding financial year is upto ` 50 lakh and who is not eligible to pay
tax under composition scheme under section 10(1) & 10(2), to pay tax @
3% [Effective rate 6% (CGST+ SGST/UTGST)] of the turnover of supplies
of goods and services in the State or Union territory.
Thus, in view of the above-mentioned provisions, Mr. Ajay is eligible to
avail the composition scheme under section 10(2A) as his aggregate
33
Provisions existing as on the date when the Study Material was released for printing
LEARNING OUTCOMES
After studying this Chapter, you will be able to –
describe the power of the Government to grant exemption
from CGST/IGST.
provide an overview of the goods exempt from GST.
identify and analyse various services exempt from GST.
CHAPTER OVERVIEW
Exemption from GST
1. INTRODUCTION
When a supply of goods and/or services falls within the purview of charging
section, such supply is chargeable to GST. However, for determining the liability
to pay the tax, one needs to further check whether such supply of goods and/or
services are exempt from tax.
Exempt supply has been
defined as supply of any goods
or services or both which
attracts nil rate of tax or which
may be wholly exempt from tax
and includes non-taxable
supply [Section 2(47) of the
CGST Act, 2017]. Non-taxable
supply means a supply of
goods or services or both which
is not leviable to tax under
CGST Act or under the IGST Act
[Section 2(78) of the CGST Act,
2017]. Thus, under GST, a
supply not leviable to tax is also
included within the purview of
‘exempt supply’.
(1) Examples of supply not leviable to tax are alcoholic liquor for human
consumption, specified petroleum products namely Petroleum Crude, High
Speed Diesel, Motor spirit (commonly known Petrol), Natural Gas and
Aviation Turbine Fuel.
Power to grant exemption from GST has been granted vide section 11 of the
CGST Act and vide section 6 of the IGST Act. State GST laws also contain identical
provisions granting power to exempt SGST. Under GST, essential goods/services,
i.e. public consumption products/services, have been exempted. Items such as
unbranded atta/maida/besan, unpacked food grains, milk, eggs, curd, lassi and
fresh vegetables are among the items exempted from GST. Further, essential
services like health care services, education services, etc. have also been
exempted.
It is important to note that exemption under GST may be provided in any of the
following manner:
In this chapter, we shall discuss the power to grant exemption from tax under
CGST Act/IGST Act, list of services exempt from GST in detail and an overview of
the goods exempt from tax.
2. P
POWER TO GRANT EXEMPTION FROM TAX [SECTION
11 OF THE CGST ACT/SECTION 6 OF IGST ACT]
STATUTORY PROVISIONS
ANALYSIS
(i) Exemption from payment of tax: GST law empowers the Central Government
or State Government, as the case may be, to grant
exemption from tax. The exemption is granted on
Exemption can be
recommendation of the GST Council.
from whole of tax
Exemption can be from whole of the tax or part of the or part of tax
tax. It should be granted in public interest.
Exemption can be granted to goods or services or both of
Exemption can be any specified description, by way of issuance of
granted by a notification, either absolutely [i.e. unconditional
notification or by exemption; exemption is not subject to any condition(s)] or
a special order conditionally [i.e. exemption is subject to specified
condition(s)]. Exemption may be granted by a special
order in case of the circumstances of an exceptional nature.
The absolute/ unconditional exemption is mandatory in
nature. Where the supply of the goods or services or Unconditional
both are unconditionally exempted from whole of exemption is
the tax, the registered person mandatory
doesn’t have option to collect and
Conditional
pay tax on such supply of goods or services or both.
exemption is
Where the supply of the goods or services or both are
optional
unconditionally exempted from part of the tax, the
registered person doesn’t have option to collect and pay the tax, in excess
of the effective rate, on such supply of goods or services or both.
(ii) Explanation inserted within 1 year, for the purpose of clarifying the
scope or applicability of any notification/order, to have retrospective
effect: Wherever the Government feels that there is a need to clarify the
scope or applicability of any notification/order issued under this section,
it can issue an explanation within 1 year of issue of said notification/
order. Such explanation shall have effect as if it was there when first such
notification/ order was issued, i.e. explanation so inserted would be
effective retrospectively.
It is hereby clarified that the explanation so inserted for a particular
entry in the notification, is effective from the inception of the entry in
notification and not from the date from which the notification (that
inserted said explanation) becomes effective.
1
This notification notifies the rate of tax on services.
2
Students may go through the complete list of goods exempt from GST on CBIC website –
www.cbic.gov.in, for knowledge purposes.
3
Exemption from IGST has been granted to various services vide Notification No. 9/2017
Integrated Tax (Rate) dated 28.06.2017. All the services exempted from CGST &
SGST/UTGST have also been exempted from IGST. Apart from these, there are few
additional services which have been exempted only under IGST law. Such services will be
discussed at the Final Level.
4
Entry Nos. mentioned herein correspond to entries in Notification No. 12/2017 Central Tax
(Rate) dated 28.06.2017. However, these entry numbers have been given only for reference
purposes and are not relevant for examination purpose.
ANALYSIS
A. SERVICES PROVIDED BY CHARITABLE/RELIGIOUS TRUST
Entry 1 of the Notification exempts services supplied by an entity registered
under section 12AA of the Income-tax Act, 1961 by way of charitable activities.
Thus, in order to claim exemption under Entry 1 of the Notification, following two
conditions must be satisfied:-
(i) The entity should be registered under section 12AA of the Income-tax
Act, 1961, and
(ii) The entity must carry out one or more of the specified charitable activities.
Before proceeding further, let us first understand the meaning of term ‘charitable
activities’. The term ‘charitable activities’ mean activities relating to-
(i) PUBLIC HEALTH by way of-
(A) care or counseling of
(I) terminally ill persons or persons with severe physical or mental
disability;
(II) persons afflicted with HIV or AIDS;
(III) persons addicted to a dependence-forming substance such as
narcotics drugs or alcohol; or
(B) public awareness of preventive health, family planning or prevention
of HIV infection;
(ii) ADVANCEMENT OF RELIGION, spirituality or yoga;
(iii) ADVANCEMENT OF EDUCATIONAL PROGRAMMES/SKILL
DEVELOPMENT relating to,-
(A) abandoned, orphaned or homeless children;
(B) physically or mentally abused and traumatized persons;
(C) prisoners; or
(D) persons over the age of 65 years residing in a rural area;
(iv) PRESERVATION OF ENVIRONMENT including watershed, forests & wildlife.
Thus, only those services provided by a charitable and religious trusts [registered
under section 12AA of the Income-tax Act] which fall within the above definition
of charitable activities, are eligible for exemption from GST. There could be many
other services provided by such charitable and religious trusts which are not
covered by the definition of charitable activities and hence, such services would
attract GST.
For instance, grant of advertising rights to a person on the premises of the
charitable/religious trust or on publications of the trust, or granting admission to
events, functions, celebrations, shows against admission tickets or fee etc. would
attract GST.
In the following paras, we have examined some of the services supplied by the
entities registered under section 12AA of the Income-tax Act:
5
Entry 14 has been amended after issuance of this circular. Discussion hereunder has been
suitably adapted to take into consideration the amended entry
6
Circular No. 66/40/2018 GST dated 26.09.2018
said services are provided by a charitable entity registered under section 12AA of
Income-tax Act 7.
Let us now analyse the term ‘recreational
activities’. The term recreational activities is very
wide. However, under this entry, the scope of
training or coaching in recreational activities is
restricted to the area of arts, culture and sports.
Hence, the training or coaching in recreational
activities in the areas other than arts, culture
or sports is outside the purview of this entry.
Further, training or coaching relating to all forms
of arts, culture or sports is covered under this
entry, namely, dance, music, painting, sculpture
making, literary activities, theatre, etc. of any
school, tradition or language or any of the sports.
(14) Manavtaa Sansthaan, a charitable trust registered under section
12AA of the Income-tax Act, 1961, has organized a ‘Basketball Training
Camp’ for teenagers. GST would be exempt on the same as services
provided by entity registered under section 12AA of the Income-tax Act, 1961 by
way of training or coaching in sports are exempt.
GST on services provided TO charitable trusts
Services provided to charitable or religious trusts are not outside the ambit of
GST. Unless specifically exempted, all goods and services supplied to charitable or
religious trusts are leviable to GST.
B. CONDUCT OF ANY RELIGIOUS CEREMONY
Going through Entry 13(a) of the Notification, it can be inferred that the
amount charged, by whatever name called, for the conduct of any religious
ceremony is exempt from GST. Religious ceremonies are life-cycle rituals
including special religious poojas conducted in terms of religious texts by a
7
In this regard, CBIC GST Flyer – Chapter 39 - GST on Charitable and Religious Trusts has
stipulated that the services provided by way of training or coaching in recreational activities
relating to arts or culture or sports such as dance, music, painting, literary activities, drama
etc. of any school, tradition or language or any of the sports, by a charitable entity are
exempt from GST.
person so authorized by such religious texts. Occasions like birth, marriage, and
death involve elaborate religious ceremonies.
(15) Raamanand Joshi, a priest, charges ` 12,000 for conducting a
religious ceremony on the birthday of Ghanshyam’s son. The amount
charged for the conduct of any religious ceremony is exempt from GST.
C. RENTING OF PRECINCTS OF RELIGIOUS PLACE MEANT FOR GENERAL
PUBLIC
Entry 13(b) of the Notification exempts renting of precincts of a religious
place meant for general public owned by an entity registered under any of the
specified sections of the Income Tax Act provided the consideration charged for
such renting does not exceed the prescribed ceiling limits as given in said entry.
Thus, this exemption is determined on the basis of amount of consideration
charged for such renting. Let us understand the meaning of the terms ‘religious
place’, ‘general public’ and ‘precincts’ referred herein.
Religious place means a place which is primarily meant for
conduct of prayers or worship pertaining to a religion,
meditation, or spirituality.
General public means the body of people at large sufficiently defined by
some common quality of public or impersonal nature.
The word 'precincts' is not to be interpreted in a restricted manner and all
immovable property of the religious place located within the outer
boundary walls of the complex (of buildings and facilities) in which the
religious place is located, is to be considered as being located in the
precincts of the religious place. The immovable property located in the
immediate vicinity and surrounding of the religious place and owned by the
religious place or under the same management as the religious place, may
be considered as being located in the precincts of the religious place and
extended the benefit of above exemption.
Activities other than - conduct of religious ceremony and renting of precincts of
religious place - will be taxable irrespective of the manner or the name in which
the consideration is received. For example, if donation is received with specific
instructions/mutual understanding between the donor and the receiver that
religious place will host an advertisement promoting business of the donor, such
donation will be subject to GST. However, if donation is received without such
instructions or without a quid pro quo in the form of supply of any goods or
services or both by the receiver to the donor, it shall not be subject to GST 8.
(16) Durgadevi Trust, a religious trust registered under section 12AA of
the Income-tax Act, owns and manages a temple in their locality. It rents
the commercial shops located in the precincts of the temple for a rent of
` 10,000 per month per shop. The consideration so received is liable to GST as
such services are exempt only when the consideration is less than ` 10,000 per
month.
8
Discussion herein is primarily based on CBIC GST Flyer – Chapter 39 - GST on Charitable
and Religious Trusts and other clarifications
ANALYSIS
ENTRY 54
9
Storage/ warehousing of coffee and tea are nevertheless exempted by entry 24B.
Jaggery
Similarly, processing of sugarcane into jaggery
changes its essential characteristics. Thus,
jaggery is also not an agricultural produce 10.
Pulses
Pulses commonly known as dal are obtained after
dehusking or splitting or both. The process of
dehusking or splitting is usually not carried out by
farmers or at farm level but by the pulse millers.
Therefore pulses (dehusked or split) are also not
agricultural produce. However, whole pulse grains
such as whole gram, rajma etc. are covered in the definition of agricultural
produce.
In view of the above, it is inferred that processed products such as tea (i.e. black
tea, white tea etc.), processed coffee beans or powder, pulses (dehusked or split),
jaggery, processed spices, processed dry fruits, processed cashew nuts etc. fall
outside the definition of agricultural produce and therefore do not fall within item
(e) of entry 54 [Circular No. 16/16/2017 GST dated 15.11.2017].
ENTRY 55
10
Storage/ warehousing of jaggery is nevertheless exempted by entry 24B.
3. Education services
66 Services provided -
(a) by an educational institution to its students, faculty and staff;
(aa) by an educational institution by way of conduct of entrance
examination against consideration in the form of entrance fee;
(b) to an educational institution, by way of,-
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored
by the Central Government, State Government or Union
territory;
(iii) security or cleaning or house-keeping services performed
in such educational institution;
(iv) services relating to admission to, or conduct of examination
by, such institution;
(v) supply of online educational journals or periodicals.
However, nothing contained in sub-items (i), (ii) and (iii) of item (b)
shall apply to an educational institution other than an institution
providing services by way of pre-school education and education up to
higher secondary school or equivalent.
Further, nothing contained in sub-item (v) of item (b) shall apply to an
institution providing services by way of,-
(i) pre-school education and education up to higher secondary
school or equivalent; or
(ii) education as a part of an approved vocational education course.
ANALYSIS
11
Industrial Training Institute/ Industrial Training Centre
It is important to note that the Central and State Educational Boards shall
be treated as ‘Educational Institution’ for the limited purpose of providing
services by way of conduct of examination to the students.
Unrecognized educational institutions
Private coaching centres or other unrecognized institutions, though self-
styled as educational institutions, would not be treated as educational
12
Some of the designated trades notified under the Apprentices Act, 1961 are electrician,
wireman, carpenter, plumber, mason, mechanic, tool and die maker, baker and confectioner,
weaver, tailor, footwear maker, photographer, beautician, painter, desk top publishing operator,
gardener, cable television operator, library assistant, etc.
13
The view taken in the preceding paras, that education coupled with other incidental services is
a composite supply and is exempt since the principal supply [education service] is exempt, is
based on the CBIC Flyer - Chapter 40 – ‘GST on Education Services’. However, it is also possible
to take a different view since as per the definition of composite supply under section 2(30) of the
CGST Act, composite supply consists of two or more taxable supplies.
IIMs
Indian Institutes of Management Act, 2017 (IIM
Act, 2017) empowers IIMs to (i) grant degrees,
diplomas, and other academic distinctions or
titles, (ii) specify the criteria and process for
admission to courses or programmes of study,
and (iii) specify the academic content of programmes.
Resultantly, all the IIMs fall under purview of “educational institutions” as
they provide education as a part of a curriculum for obtaining a
qualification recognized by law for the time being in force.
IIMs provide various long duration programs (1 year or more) for which they
award diploma/ degree certificate duly recommended by Board of
Governors as per the power vested in them under the IIM Act, 2017.
Services provided by IIMs to their students- in all such long duration
programs (one year or more) are exempt from levy of GST.
IIMs also provide various short duration/ short term programs (less than 1
year) for which they award participation certificate to the executives/
professionals as they are considered as “participants” of the said
programmes. These participation certificates are not any qualification
recognized by law.
Such participants are also not considered as students of IIM. Services
provided by IIMs as an educational institution to such participants is not
exempt from GST and GST is payable on the same [Circular No. 82/01/2019
GST dated 01.01.2019].
Supply of food in a mess or canteen
Educational institutions generally have mess facility for
providing food to their students and staff. Such facility
is (i) either run by the institution/ students themselves
or (ii) is outsourced to a third person.
If the catering services is one of the services provided
by an educational institution to its students, faculty and staff and the said
educational institution is covered by the definition of ‘educational
institution’ as given above, then the same is exempt [covered under item (a)
of entry 66 of the Notification].
(25) Shiksha College, offering degree courses, has to conduct its half
yearly examination in November. For this purpose, it has paid the
honorarium to paper setters and examiners (not on the rolls of Shiksha
College) for their services. Further, it availed the printing services for printing the
question papers (paper and content are provided by Shiksha College) for
conducting examination. Services provided to an educational institution relating
to admission to, or conduct of examination by, such institution are exempt.
Therefore, services of paper setters and examiners and printing services availed
by Shiksha College are exempt.
14
The discussion in the foregoing paras is primarily based on CBIC Flyer - Chapter 40 – ‘GST on
Education Services’ unless otherwise specified.
house-keeping services
performed in such
educational institution;
(iv) services relating to
admission to, or conduct
of examination by, such
institution
ANALYSIS
15
Section 2(h) of the Clinical Establishments Act, 2010
16
The view taken in the preceding paras, that health care services coupled with other incidental
services is a composite supply and is exempt since the principal supply [health care service] is
exempt, is based on Circular No. 32/06/2018 GST dated 12.02.2018. However, it is also
possible to take a different view since as per the definition of composite supply under section
2(30) of the CGST Act, composite supply consists of two or more taxable supplies.
17
As clarified by the CBIC GST Flyer – Chapter 39 - GST on Charitable and Religious Trusts
(i) Not Exempt. Since reiki healing is not a recognized system of medicine in
terms of section 2(h) of Clinical Establishments Act, 2010, it would not be
exempt and thus, GST would be payable thereon.
(ii) Exempt. Health care service does not include, inter alia, cosmetic or plastic
surgery, except when undertaken to restore or to reconstruct anatomy or
functions of body affected due to congenital defects, developmental
abnormalities, injury or trauma.
Therefore, plastic surgeries will not be entitled to the said exemption and
thus, GST would be payable thereon. However, plastic surgery conducted to
repair a cleft lip will be eligible for exemption as it reconstructs anatomy or
functions of body affected due to congenital defects (cleft lip).
(iii) Exempt. Health care service includes services by way of transportation of
the patient to and from a clinical establishment. Thus, air ambulance service
to transport critically ill patients to Good Health Medical Centre would be
eligible for exemption under the said notification.
(iv) Exempt. Health care service means any service by way of diagnosis or
treatment or care for illness, injury, deformity, abnormality or pregnancy in
any recognized system of medicines in India. It is immaterial whether such
service is provided at the clinical establishment or at the home of the
patient or at any other place. Thus, palliative care for terminally ill patients
is exempt.
(v) Exempt. Since Yoga is a recognized system of medicine in terms of section
2(h) of Clinical Establishments Act, 2010, the same would be eligible for
exemption under the said notification.
Further, services provided by cord blood banks by way of preservation of stem
cells or any other service in relation to such preservation are exempt from GST
under Entry 73. Therefore, services provided in relation to preservation of stem
cells by the cord blood bank operated by Good Health Medical Centre will be
exempt from GST.
It is important to note that Entry 74 of the exemption notification grants
exemption to health care services provided BY a clinical establishment and not to
services provided TO a clinical establishment. Therefore, Good Health Medical
Centre’s contention that since it is a clinical establishment, all the services
provided to it are also exempt from GST is not correct in law.
9D Services by:
an old age home
run by:
Central Government, State Government or
an entity registered under section 12AA of the Income-tax Act,
1961
to its residents (aged 60 years or more)
against consideration upto ` 25,000 per month per member,
provided that the consideration charged is inclusive of charges for
boarding, lodging and maintenance.
ANALYSIS
18
The functions entrusted to municipality under the Twelfth Schedule to Article 243W of the
constitution include urban planning including town planning, roads and bridges, public health,
sanitation conservancy and solid waste management, fire services, slum improvement and
upgradation, promotion of cultural, educational and aesthetic aspects, provision of urban
amenities and facilities such as parks, gardens, playgrounds, public amenities including street
lighting, parking lots, bus stops and public conveniences, etc.
19
The functions entrusted to Panchayat under the Eleventh Schedule to Article 243G of the
constitution include Agriculture, including agricultural extension, Animal husbandry, dairying
and poultry, Fisheries, Small scale industries, including food processing industries, Drinking
water, Fuel and fodder, Rural electrification, including distribution of electricity, Health and
sanitation, including hospitals, primary health centres and dispensaries, Women and child
development, Public distribution system, etc.
6. Construction services
41A Supply of TDR, FSI, long term lease (premium) of land by a landowner
and to a developer are exempted subject to the condition that the
41B constructed flats are sold before issuance of completion certificate and
tax is paid on them.
Exemption of TDR, FSI, long term lease (premium) shall be withdrawn
in case of flats sold after issue of completion certificate, but such
withdrawal shall be limited to 1% of value in case of affordable houses
and 5% of value in case of other than affordable houses 20.
ANALYSIS
20
These entries have been stated in simplified form.
Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana (hereinafter
referred to as PMAY) is a programme launched by the Ministry of Housing and
Urban Poverty Alleviation (MoHUPA) which envisions provision of Housing for All
by 2022 when the nation completes 75 years of its independence.
The mission seeks to address the housing requirement of urban poor including
slum dwellers through following, inter alia, programme verticals:
Slum rehabilitation of Slum Dwellers with participation of private developers
using land as a resource.
Promotion of Affordable Housing for weaker section through credit linked
subsidy.
Affordable Housing in Partnership with Public & Private sectors.
Subsidy for beneficiary-led individual house construction/enhancement.
Last component of the mission is assistance to individual eligible families
belonging to Economically Weaker Section (EWS) categories to either construct
new houses or enhance existing houses on their own to cover the beneficiaries
who are not able to take advantage of other components of the mission. Such
families may avail specified amount of central assistance for construction of new
houses or for enhancement of existing users under the mission.
Entry 10 of the Notification exempts the services provided by way of pure
labour contracts of construction, erection, commissioning, installation,
completion, fitting out, repair, maintenance, renovation, or alteration of a civil
structure or any other original works pertaining to the beneficiary-led individual
house construction or enhancement under the PMAY from GST.
The term ‘original works’ means-
all new constructions;
all types of additions and alterations to
abandoned or damaged structures on land that
are required to make them workable;
erection, commissioning or installation of plant,
machinery or equipment or structures, whether pre-fabricated or
otherwise.
Entry 11 of the Notification exempts the services by way of pure labour
contracts of construction, erection, commissioning, or installation of original
ANALYSIS
Services of transportation of passengers are usually chargeable to GST. Entry 6
[Services provided by Government - discussed earlier] specifically excludes the
transport of passengers’ services provided by the Government or local authority
from its purview, which implies that said services are liable to GST.
However, services of transportation of passengers specified in Entries 15, 16 and
17 mentioned above are exempt from GST (whether provided by Government or
otherwise) with or without accompanied belongings.
As regards transportation of passengers by vessels in item (d) of Entry 17 [See the
table given above], the words ‘other than predominantly for tourism purpose’
qualify the preceding words “public transport”. This implies that to qualify for
exemption under this entry, the public transport by a vessel between places
located in India should not be predominantly for tourism purposes.
Normal public ships or other vessels that sail between places located in India
would be covered in this entry even if some of the passengers on board are using
the service for tourism because predominantly, such service is not for tourism
purpose. However, services provided by leisure/charter vessels/a cruise ship,
predominant purpose of which is tourism, would not be covered in here even if
some of the passengers in such vessels are not tourists.
(30) Services by way of transportation of passengers [not
predominantly for tourism purpose] on a vessel, from Kolkata to Port
Blair (mainland to island) or Port Blair to Rose Island (inter island) is
covered in item (d) of Entry 17 since such transportation is between two places
located in India.
Relevant definitions of these entries are as follows:
Contract carriage: means a motor vehicle which carries a passenger or
passengers for hire or reward and is engaged under a contract, whether
expressed or implied, for the use of such vehicle as a whole for the carriage
of passengers mentioned therein and entered into by a person with a holder
of a permit in relation to such vehicle or any person authorised by him in
this behalf on a fixed or an agreed rate or sum-
(a) on a time basis, whether or not with reference to any route or
distance; or
(b) from one point to another, and in either case, without stopping to
pick up or set down passengers not included in the contract anywhere
during the journey, and includes--
(i) a maxicab; and
(ii) a motor cab notwithstanding that separate fares are charged for
its passengers [Section 2(7) of Motor Vehicles Act, 1988].
Metered cab: means any contract carriage on which an automatic device, of
the type and make approved under the relevant rules by the State Transport
Authority, is fitted which indicates reading of the fare chargeable at any
moment and that is charged accordingly under the conditions of its permit
issued under the Motor Vehicles Act, 1988 and the rules made thereunder
(but does not include radio taxi).
Radio taxi: means a taxi including a radio cab, by whatever name called, which is
in two-way radio communication with a central control office and is enabled for
tracking using the Global Positioning System or General Packet Radio Service;
Stage carriage: means a motor vehicle constructed or adapted to carry
more than 6 passengers excluding the driver for hire or reward at separate
fares paid by or for individual passengers, either for the whole journey or
for stages of the journey [Section 2(40) of the Motor Vehicles Act, 1988].
State Transport Undertaking: means any undertaking providing road
transport service, where such undertaking is carried on by-
i. the Central Government or a State Government;
ii. any Road Transport Corporation established under section 3 of the
Road Transport Corporations Act, 1950.
iii. any municipality or any corporation or company owned or controlled
by the Central Government or one or more State Governments, or by
the Central Government and one or more State Governments.
(f) any casual taxable person registered under the Central Goods
and Services Tax Act or the Integrated Goods and Services Tax
Act or the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act.
ANALYSIS
The services of transportation of goods by road are exempt from GST under
Entry 18. Services of GTA and courier services are an exception to this
exemption. However, GTA services provided to an unregistered person
[including unregistered casual taxable person 21] are exempt from GST by
virtue of Entry 21A.
Further, GTA services provided to registered casual taxable person and
following persons, even if unregistered under GST law, are liable to tax:
(i) a factory registered under Factories Act,
(ii) society registered under Societies Act,
(iii) Co-operative society,
(iv) body corporate and
(v) partnership firm including AOP.
21
The concept of ‘casual taxable person’ has been discussed in detail in Chapter 7 - Registration
Who is a
GTA?
22
Meaning of GTA and consignment note elaborated in foregoing paras is primarily based on
CBIC GST flyer - Chapter 38 – Goods Transport Agency in GST.
These services are not provided as independent services but as ancillary to the
principal service, namely, transportation of goods by road. The invoice issued by
the GTA for providing the said service includes the value of intermediary and
ancillary services.
In view of this, if any intermediary and ancillary service is provided in relation to
transportation of goods by road, and charges, if any, for such services are
included in the invoice issued by the GTA, such service would form part of the
GTA service, being a composite supply, and would not be treated as a separate
supply.
However, if such incidental services are provided as separate services and charged
separately, whether in the same invoice or separate invoices, they shall be treated
as separate supplies 23.
What is courier agency?
Courier agency has been defined in the Notification to mean any person engaged
in the door-to-door transportation of time-sensitive documents, goods or articles
utilising the services of a person, either directly or indirectly, to carry or
accompany such documents, goods or articles.
Express cargo service: Some transporters undertake door-to-door transportation
of goods or articles and they have made special arrangements for speedy
transportation and timely delivery of such goods or articles.
Such services are known as ‘Express Cargo Service’ with assurance of timely
delivery. The nature of service provided by ‘Express Cargo Service’ falls within the
scope and definition of the courier agency. Hence, the said service relating to
transportation of goods by road is not exempt.
23
As clarified in answer to question no. 6 of CBIC FAQs on Transport & Logistics.
**Goods carriage means any motor vehicle constructed or adapted for use
solely for the carriage of goods, or any motor vehicle not so constructed or
adapted when used for the carriage of goods.
ILLUSTRATION 3
Discuss whether GST is payable in respect of transportation services provided by
Raghav Goods Transport Agency in each of the following independent cases:
ANSWER
ANALYSIS
Banks and financial institutions provide a bouquet of financial
services relating to lending or borrowing of money or
investments in money.
All services provided by the Reserve Bank of India are covered
under Entry 26 and are thus, exempt from GST. However, services provided to
the Reserve Bank of India are not covered under said entry and would be taxable
unless otherwise covered in any other entry of the Notification.
Specified banking services exempt from GST vide Entry 27 have been discussed
below:
(A) Services by way of extending deposits, loans or advances in so far as
the consideration is represented by way of interest or discount: This
entry covers any such service wherein moneys due are allowed to be used or
retained on payment of interest or on a discount. The words used are
‘deposits, loans or advances’ and have to be taken in the generic sense.
They would cover any facility by which an amount of money
is lent or allowed to be used or retained on payment of
what is commonly called the time value of money which
could be in the form of an interest or a discount. This entry
would not cover investments by way of equity or any other manner
where the investor is entitled to a share of profit.
Interest: means interest payable in any manner in respect of any
moneys borrowed or debt incurred (including a deposit, claim or
other similar right or obligation) but does not include any
service fee or other charge in respect of the moneys borrowed or debt
incurred or in respect of any credit facility which has not been utilized.
Illustrations of services exempt under Entry 27 are -
Fixed deposits or saving deposits or any other
such deposits in a bank or a financial institution
24
As clarified vide FAQs on Banking, Insurance and Stock Brokers Sector issued by CBIC.
25
An Equated Monthly Instalments (EMI) is a fixed amount paid by a borrower to a lender
at a specified date every calendar month. EMIs are used to pay off both interest and
principal every month, so that over a specified period, the loan is fully paid off along with
interest.
26
Here, the amount of penal interest is to be included in the value of supply in terms of the
provisions of section 15(2)(d) of the CGST Act. Section 15(2)(d) provides that the value of supply
shall include interest or late fee or penalty for delayed payment of any consideration for any
supply. The provisions of section 15 have been discussed in detail in Unit-II: Value of Supply of
Chapter 5: Time and Value of Supply.
27
Schedule II of the CGST Act, 2017 has been discussed in detail in Chapter 2 – Supply under GST.
ILLUSTRATION 4
M/s. Apna Bank Limited, a scheduled commercial bank, has furnished the
following details for the month of August:
Particulars Amount [` in
crores]
(excluding GST)
Extended housing loan to its customers 100
Processing fees collected from its customers on 20
sanction of loan
Commission collected from its customers on bank 30
guarantee
Interest income on credit card issued by the bank 40
Interest received on housing loan extended by the 25
bank
Minimum balance charges collected from current 01
account and saving account holder
ANSWER
Particulars Amount
in crores
(` )
28
earlier known as Integrated Rural Development Programme
ANALYSIS
It is still a big challenge for India to make the financial services accessible in rural
areas. In many rural areas, either there are no banks or number of banks is
insufficient. In order to counter this problem and ensure greater financial
inclusion, the Reserve Bank of India (RBI) introduced the Business Correspondents
and Business Facilitator Model through guidelines in 2006 allowing banks to
employ two categories of intermediaries – known as Business facilitators (BFs) and
Business correspondents (BCs).
BCs/BFs help villagers to open bank accounts and provide other banking services
to them. They act as an intermediary between the bank and its customers. Banks,
in turn, pay commission/ fee to the BCs/BFs.
According to the RBI guidelines, while the BCs are permitted to carry out
transactions on behalf of the bank as agents, the BFs can refer clients, pursue the
clients’ proposal and facilitate the bank to carry out its transactions, but cannot
transact on behalf of the bank 29.
29
BFs provide a wide range of services including identification of borrowers and fitment of
activities, collection and preliminary processing of loan applications, processing and
submission of applications to banks, follow-up for recovery, etc. BCs, in addition to these
activities, also undertake disbursal of small value credit, recovery of principal / collection of
interest, collection of small value deposits, sale of micro insurance/ mutual fund products/
pension products/ other third party products, receipt and delivery of small value
remittances/ other payment instruments, etc.
ANALYSIS
Entry 3 exempts the supply of ‘pure services’ to Government. Supply of ‘pure
services’ means supply of services without involving any supply of goods.
30
As clarified vide question 25 of CBIC FAQs on Government Services
31
As clarified vide Circular No. 101/20/2019-GST, dated 30.04.2019
ANALYSIS
Relevant definitions are as under:
Legal service: means any service provided in relation to advice, consultancy
or assistance in any branch of law, in any manner and includes
representational services before any court, tribunal or authority.
provided to
ILLUSTRATION 5
Determine the GST payable, if any, in each of the following independent cases,
assuming that the rate of GST is 18% and that the service providers are registered:
(a) Bollywood dance performance by a film actor in a film and consideration
charged is ` 1,45,000.
(b) Carnatic music performance by a classical singer to promote a brand of
readymade garments and consideration charged is ` 1,30,000.
(c) Carnatic music performance by a classical singer in a music concert and
consideration charged is ` 1,55,000.
(d) Kathak dance performance by a classical dancer in a cultural programme and
consideration charged is ` 1,45,000.
ANSWER
(a) Bollywood Dance performance by a film actor in a film is not exempt from
GST even though the consideration charged is less than threshold limit of
` 1,50,000. The reason for the same is that the dance performance by an
artist is exempt only if it is a performance in folk or classical art forms of
dance.
(b) Carnatic music performance by a classical singer to promote a brand of
readymade garments is not exempt from GST even though, the
consideration charged is less than threshold limit of ` 1,50,000 and it is a
performance in classical art forms of music. The reason for the same is that
the said exemption is not applicable to service provided by such artist as a
brand ambassador.
(c) Carnatic music performance by a classical singer in a music concert is not
exempt from GST even though it is a performance in classical art forms of
music. The reason for the same is the consideration charged for the service
exceeds ` 1,50,000. Consequently, entire consideration charged is subject
to GST as follows:
= ` 1,55,000 × 18% = ` 27,900
(d) Kathak dance performance by a classical dancer in a cultural programme is
exempt from GST as it is a performance in classical art forms of dance and
consideration charged does not exceed ` 1,50,000 [i.e. ` 1,45,000].
ANALYSIS
Co-operative Housing Society
Cooperative
Housing supplies services
Society
Members
32
Threshold limit is ` 10 lakh for specified Special Category States, namely, Manipur, Mizoram,
Nagaland and Tripura and ` 20 lakh for all other States.
services being exempt). Further, the society is providing no other taxable service
to its members or outsiders. In this case, the society (essentially exclusively
providing wholly exempt services) need not take registration under GST.
(39) The turnover of RWA of Bulbul Housing Society located in New
Delhi in a financial year is ` 15 lakh. It has collected the maintenance
charges of ` 6,000 per month per member. RWA is not providing any
other taxable service to its members. In this case, RWA is not required to take
registration under GST since its aggregate turnover is less than the applicable
threshold limit of ` 20 lakh.
However, an RWA is not required to obtain registration even though the amount
of maintenance charges exceeds ` 7500/- per month per member but the
aggregate turnover of the RWA in a financial year does not exceed the threshold
limit for registration.
(40) In the above example, other things remaining the same, if the
maintenance charges collected by the RWA are ` 8,000 per month per
member, RWA is still not required to take registration under GST since
its aggregate turnover is less than the applicable threshold limit of ` 20 lakh.
The above discussion has been summarized as under:
RWA/Housing society
Yes
Yes
Are monthly
No
maintenance charges Tax not
> ` 7,500 per
member? payable
Yes
Tax payable
* ` 10 lakh in case of Special Category States of Manipur, Mizoram, Nagaland and Tripura
other sanitary/hardware fillings etc.) and input services such as repair and
maintenance services, used by it for making supplies to its members and use such
ITC for discharge of GST liability on such supplies where the amount charged for
such supplies is more than ` 7,500 per month per member.
(42) RWA of Tintin Housing Society, registered under GST, has
collected the maintenance charges of ` 9,000 per month per member
from 1,000 members of the society in the month of May. For paying
the GST of ` 16,20,000 [payable @ 18% on the amount of ` 90,00,000], RWA can
utilise the ITC of GST of ` 1,00,000 paid by it on purchase of swings for garden,
ITC of ` 20,000 on electric cables and ITC of ` 15,000 on plumbing services.
✪ Statutory dues such as property tax, electricity charges etc. forming part of the
monthly maintenance bill raised by the society on its members would be excluded
while computing the aforesaid monthly limit of ` 7,500 33.
23. Other exempt services
33
Discussion under this entry in forgoing paras is primarily based on Circular No. 109/28/2019
GST dated 22.07.2019, CBIC GST Flyer ‘GST on Co-Operative Housing Societies’ and CBIC FAQs
on levy of GST on Supply of Services to Co-operative Society.
34
As clarified vide question 26 of CBIC FAQs on Government Services
65A Services by way of providing information under the RTI Act (Right
to Information Act, 2005).
Students may note that some of the entries granting exemption from GST are
similar to the negative list entry/entry granting exemption under the erstwhile
service tax law.
Therefore, clarification pertaining to said negative list entry/exemption provided
in the ‘Service Tax Education Guide’ – an educational aid released for facilitating
the stakeholders to obtain preliminary understanding of the provisions, wherever
it seems relevant under the GST law, have been incorporated at relevant places.
5. LET US RECAPITULATE
1. Power to exempt from tax [Section 11 of the CGST Act/ section 6 of
IGST Act]
Power to exempt from tax
by way of issuance of
referred as ‘ specified
(a) to (c) hereinafter
speed post, express parcel post, life
insurance, & agency services provided to a
person other than CG, SG, UT; services’
(b) services in relation to an aircraft/a vessel,
inside/outside precincts of a port/airport;
(c) transport of goods/passengers; or
(d) any service, other than ‘specified services’
above, provided to business entities.
Services provided by CG/SG/UT/LA to a business entity
(BE) with an aggregate turnover of up to such amount in
the preceding FY as makes it eligible for exemption from
registration under the CGST Act, 2017. This exemption is
not applicable to specified services and renting of
immovable property service.
Services provided by CG/SG/UT/LA to another CG/SG/UT/LA.
This exemption is not applicable to specified services.
35
earlier known as Integrated Rural Development Programme
India initiative. Keyan Enterprises claims that it is not required to pay GST as
the services provided by way of organizing business exhibition are exempt
from GST. Examine the technical veracity of the claim of Keyan Enterprises, in
the given case.
14. Ekta Charitable trust, registered under section 10(23C)(v) of the Income-tax
Act, 1961, manages a temple in Rohini, Delhi. It has given on rent a
community hall, located within temple premises, to public for celebration of
Teej Mela. Rent charged is ` 9,500. You are required to determine whether
the services provided by Ekta Charitable trust are liable to GST.
15. ST Ltd. has given on hire 5 trucks to Titu Transporters of Delhi (a goods
transport agency) for transporting goods in Central and West Delhi. The
hiring charges for the trucks are ` 7,500 per truck per day. Examine whether
GST is payable in the given case.
8. ANSWERS/HINTS
1. The statement is not fully valid in law. Exempt supply has been defined as
supply of any goods or services or both which attracts nil rate of tax or
which may be wholly exempt from tax and includes non-taxable supply.
2. The term ‘charitable activities’ mean activities relating to-
(i) public health by way of-
(A) care or counseling of
(I) terminally ill persons or persons with severe physical or mental
disability;
(II) persons afflicted with HIV or AIDS;
(III) persons addicted to a dependence-forming substance such
as narcotics drugs or alcohol; or
(B) public awareness of preventive health, family planning or
prevention of HIV infection;
(ii) advancement of religion, spirituality or yoga;
(iii) advancement of educational programmes/skill development relating
to,-
(A) abandoned, orphaned or homeless children;
(B) physically or mentally abused and traumatized persons;
(C) prisoners; or
(D) persons over the age of 65 years residing in a rural area;
(iv) preservation of environment including watershed, forests & wildlife.
3. (a) Services by way of health care services by a clinical establishment, an
authorised medical practitioner or para-medics are exempt from GST.
Food supplied to the in-patients by a canteen run by the hospital, as
advised by the doctor/nutritionists, is a part of composite supply of
healthcare and not separately taxable.
(b) Supply of service by a RWA (unincorporated body or a non- profit
entity registered under any law) to its own members by way of
reimbursement of charges or share of contribution up to an amount of
` 7500 per month per member for providing services and goods for
the common use of its members in a housing society/a residential
complex are exempt from GST. Hence, in the given case, services
provided by the RWA are exempt from GST since the maintenance
charges collected per month per member do not exceed ` 7500.
4. Services provided to a recognized sports body by an individual, inter alia, as
a referee in a sporting event organized by a recognized sports body is
exempt from GST.
Since in the first case, the football match is organized by Sports Authority of
India, which is a recognized sports body, services provided by the individual
as a referee in such football match will be exempt.
However, when he acts as a referee in a charity football match organized by
a local sports club, he would not be entitled to afore-mentioned exemption
as a local sports club is not a recognized sports body and thus, GST will be
payable in this case.
5. Services by an artist by way of a performance in folk or classical art forms of
(i) music, or (ii) dance, or (iii) theatre are exempt from GST, if the
consideration charged for such performance is not more than ` 1,50,000.
However, such exemption is not available in respect of service provided by
such artist as a brand ambassador.
Since Ms. Ahana Kapoor is the brand ambassador of ‘Forever Young’ soap
manufactured by RXL Pvt. Ltd., the services rendered by her by way of a
classical dance performance in the concert organized by RXL Pvt. Ltd. to
promote its brand will not be eligible for the above-mentioned exemption
and thus, be liable to GST. The fact that the proceeds of the concert will be
donated to a charitable organization will not have any bearing on the
eligibility or otherwise to the above-mentioned exemption.
6. Computation of value of taxable supply
Particulars (` )
Fees charged for yoga camp conducted by a charitable trust Nil
registered under section 12AA of the Income-tax Act, 1961
[Note-1]
Amount charged by business correspondent for the services Nil
provided to the rural branch of a bank with respect to
Savings Bank Accounts [Note-2]
Amount charged by cord blood bank for preservation of Nil
stem cells [Note-3]
Service provided by selectors to a recognized sports 5,20,000
body [Note-4]
Notes:
1. Services by an entity registered under section 12AA of the Income-tax
Act, 1961 by way of charitable activities are exempt from GST. The
activities relating to advancement of yoga are included in the
definition of charitable activities. So, such activities are exempt from
GST.
2. Services by business facilitator or a business correspondent to a
banking company with respect to accounts in its rural area branch
have been exempted from GST.
3. Services provided by cord blood banks by way of preservation of stem
cells or any other service in relation to such preservation are exempt
from GST.
4. Services provided to a recognized sports body only by an individual as
a player, referee, umpire, coach or team manager for participation in a
sporting event organized by a recognized sports body are exempt
from GST. Thus, services provided by selectors are liable to GST.
13. No, the claim made by Keyan Enterprises that it is not required to pay GST is
not correct. Services provided by an organiser to any person in respect of a
business exhibition are exempt from GST only when such business
exhibition is held outside India. However, since in the given case, the
exhibition is being organized in India, the services of organization of event
by Keyan Enterprises will not be exempt from GST.
14. Services by a person by way of renting of precincts of a religious place
meant for general public, owned or managed by an entity registered as a
trust or an institution under section 10(23C)(v) of the Income-tax Act are
exempt provided renting charges of premises, community halls,
kalyanmandapam or open area are not ` 10,000 or more per day. Thus, in
the given case, renting of community hall by Ekta Charitable Trust is exempt
from GST, as rent is less than ` 10,000 per day.
15. GST is not payable in case of hiring of trucks to Titu Transporters. Services
by way of giving on hire, inter alia, to a goods transport agency, a means of
transportation of goods are exempt.
3. In India, the GST is based on the dual model GST adopted in:
A) UK
B) Canada
C) USA
D) Japan
CGST
SGST
IGST
Both CGST & SGST
4. what is the maximum rate of cgst prescribed under cgst act 2017?
28%
20%
12%
18%
Dividend
Duration
Destination
None of the above
8. The concept of Goods and Services Tax (GST) originated from which
country?
Canada
Germany
Britain
United States
Corporation tax
Income tax
Service tax
Wealth Tax
10. Which of the following tax rates is not applicable under GST?
5
12
25
18
Creator
Retailer
Consumers
All of the above
Shashikant Das
Arun Jaitley
Nirmala Sitharaman
None of the above
13. Which constitutional amendment has been done to pass the GST bill?
115th
122nd
120th
101st
14. What does “I” in IGST stands stand for?
Internal
Integrated
Internal
Intra
80th
101st
122nd
None of the above
Consumption based
Both supply and consumption based
Supply based
None of the above
B. UK
C. Canadian
D. China
E. Japan
B. Destination
C. Dividend
D. Development
E. Destiny
B. 4
C. 5
D. 6
6. What does “I” stands for in IGST?
A. International
B. Internal
C. Integrated
D. Intra
B. 3
C. 4
D. 5
E. 6
B. 2004
C. 2006
D. 2008
E. 2010
C. Entry Tax
D. Entertainment Tax
B. SGST
D. IGST
B. 20%
C. 28%
D. 18%
B. SGST
C. IGST
D. Exempt
Maximum rate prescribed under UTGST/SGST?
A. 14%
B. 20%
C. 28%
D. 30%
B. HSN Code
C. SAC Code
D. GST Code
E. None of above
B. Yes
B. 18%
C. 28%
D. 40%
C. Place where the goods are delivered after clearance from customs port
B. Rs.1 crore
C. Rs.1.5 crore
B. 0.5%
C. 2.5%
C. Not required for an agriculturist or person exclusively engaged in supplying exempt goods
or services
D. No, only if specified threshold exceeds in a financial year then only need to obtain
B. Registered person not liable to collect tax till his aggregate turnover exceeds threshold
limit
C. A person can collect the tax during the period of his provisional registration
B. Form GSTR – 2
PAN issued under the Income Tax Act is mandatory for grant
of registration.
A. It is one of the document listed.
B. Yes, but non-resident taxable person may be granted registration on the basis of any other
document.
C. No, for persons who are required to deduct tax at source u/s 51 shall have TAN in lieu of
PAN.
B. Rs.50 lacs
C. Rs.75 lacs
D. None of above
B. Ten years
C. No validity
B. Filing FORM GST REG-01 electronically in the common portal and uploading the
required documents along with the application.
C. Uploading necessary documents electronically in the common portal and also submitting
manually to the jurisdictional proper officer.
B. If additional information for registration asked by the proper officer is not submitted
within specified time.
D. If photograph of the business premise is not uploaded in the common portal within
specified time.
B. Shall obtain separate registration in each state from where it is making taxable supplies.
B. No
B. No
C. On receipt of payment
B. MRP
C. Market Value
D. None of above
B. When the buyer and seller are related or price is not the sole consideration
B. No
B. on receipt of documents
C. Both
In case supplier has deposited the taxes but the receiver has
not received the goods, is receiver entitled to avail credit?
A. Yes, it will be automatically show in recipient monthly returns.
C. Yes if the receiver can prove later that goods are received subsequently
B. In twelve installments
C. In one installment
D. In six installments
B. 6 months
C. 180 days
D. 365 dyas
B. No
D. Can be availed only after transfer of document of title after movement of goods
B. No
Any input tax paid on purchase of goods or services by an
assessee for employees is eligible for ITC?
A. No
B. Yes
C. Yes, on the services notified which are obligatory for an employer to provide to its
employees under any law for the time being in force
D. Not applicable
B. No
B. No
The time limit beyond which if goods are not returned, the
input sent for job work shall be treated as supply
A. One year
B. Three years
C. Six months
D. Five years
The time limit beyond which if goods are not returned, the
capital goods sent for job work shall be treated as supply
A. One year
B. Three Years
C. Six months
D. Five years
B. Provisional basis
D. Fine
B. Payment of penalty
C. Payment of Fine
D. Payment of Taxes
C. The goods or services received notified for tax on reverse charge basis
B. while sending the goods but the recipient can take credit only when the goods are accepted
by him;
C. when the recipient accepts the goods or six months from the date of supply whichever
isearlier.
D. when the recipient accepts the goods or three months from the date of supply whichever is
earlier.
Q1. M/s Utkal Auto, Bhubaneswar registered under GST in Odisha is authorised dealer of
Hero motors. It has a policy to gift a Hero motorcycle to its employee at the end of the
financial year in terms of the employment contract. During the month of March 2019, the
company gifted 35 motor cycles among its employees whose open market value comes
to Rs.18.41 lakhs (excluding GST). GST rate 28%. Compute GST liability in the hands of
M/s Utkal Auto.
a) 5,15,480
b) Rs.16,380
c) Nil
d) Taxable in the hands of employee
Q2. M/s Craft Emporium, an un-registered person in the state of Rajasthan deals in
handicraft goods. He carried Handicraft goods worth Rs.45,000/-through his own vehicle
for supply to a shop keeper of Delhi. The proper office intercepted the vehicle enroute to
Delhi & asked for E-Way bill. The driver of vehicle argued that E Way bill not required,
since the value of consignment is less than Rs.50,000/-. Which one of the following
statement is true.
a) E-Way bill is required in case of interstate supply, only if the value consignment is more than
Rs.50,000/-.
b) E Way is required is required only for supply of taxable goods
c) E Way bill not required when supplied by an unregistered person
d) E way is mandatory in case of interstate supply of Handicraft goods irrespective of value of
consignment.
Q3.In which of the following supply of goods & services to Govt department/local
authorities, TDS is required to be deducted by the recipient U/s 51 of the CGST Act,2017
?
a) Municipal Corporation of Delhi purchased street lights & paid Rs. 1.5 lakhs (including GST) to
M/s Bajaj Electrical, Noida against a supply order of Rs.8 lakhs during the month of March 2019.
b) A Government school of Bhubaneswar, paid Rs.3.8 lakhs to a local supplier for supply of
cooked foods as mid-day meals under a scheme sponsored by Odisha Government.
c) Health Department of West Bengal executed a contract with a supplier of Kolkata to supply
“Medical grade oxygen” and paid Rs.2.6 lakhs (including GST).
d) Ministry of finance, Govt of India paid Rs.2.5 lakhs (including GST) to a supplier for supply of
printing of stationery.
e) Govt of Madhya Pradesh paid Rs.50 lakhs (including GST) to M/s BHEL (a Central PSU)
against supply of a Transformer.
Q4.Which of the following is a taxable supply under GST Act ?
a) Transportation of deceased person through a hired vehicle
b) Gift of office laptop by an employer to its employee on which ITC availed
c) A new laptop worth Rs.45,000/- gifted by an employer to its employee
d) Fines/penalty/LD paid by a contractor to govt for delay/non performance of contract
e) Gift of merchandise goods given by a registered person to its customers
Q5.Which of the following service is taxable under RCM in the hands of recipient of said
service?
a) Transportation of goods by a GTA to un-registered person
b) Legal service provided by an Advocate to an NGO registered under GST
c) Renting of shops by Municipality to a registered person
d) Security services provided by an unregistered entity to registered business entity
Q6.In which of the following cases, Advance ruling under GST can not be sought ?
a) Determination of time and value of supply of goods or services or both
b) Determination of whether a particular transaction is supply of goods or services or both
c) Applicability of a notification issued under CGST Act
d) Determination of place of supply
Q7. Mr X dispatched goods costing 8 lakhs to Mr Y through a hired vehicle with a tax
invoice. The Market value of said goods are Rs.10 lakhs & GST payable thereon is @18%.
The goods are confiscated by the proper officer, since it was supplied in contravention of
the provision of CGST Act,2017 with an intent to evade tax. Determine the maximum
amount of fine that can be imposed in lieu of confiscation U/s 130(2) of CGST Act?
a) 25,000
b) 36,000
c) 1,80,000
d) 8,20,000
Q8. Mr Rao, a registered person has made following supply during the month of Feb
2019.
(b) USA
(c) Britain
(d) Germany
(b) GST will abolish all the direct tax levied in India
Ans.b
3. Which of the following tax will be abolished by the GST?
(a) Service Tax
4. Which of the following tax rate is not applicable under the GST?
(a) 5
(b) 12
(c) 18
(d) 25
(b) Retailers
(c) Consumers
(b) 120th
(c) 122nd
(d)115th
9. Which of the following good will not be covered under the GST bill?
(a) Cooking gas
(b) Liquor
(c) Petrol
10. Which of the following is the main motive of the government behind
the introduction of the Goods and Services Tax
(a) To bring tax uniformity in the country
(Expected in Exam)
41. Under which Schedule, power to declare certain activity/ transaction as neither supply
of goods nor of services
a) Schedule I c) Schedule III
b) Schedule II d) Schedule IV
42. When was GST Council constituted?
a) 12th September 2016 c) 13th September 2016
b) 20th September 2016 d) 16th September 2016
43. What is address for delivery?
a) Recipient address mentioned in the invoice
b) Recipient address mentioned in delivery challan
c) Not necessarily recipient address
d) Recipient address mentioned in the gate pass
44. Who is an agriculturist?
a) Individual or HUF c) Individual and HUF
b) Partnership d) All of the above
45. An Associated Enterprise is mentioned in?
a) Income Tax Act, 1961 c) Central GST Law, 2017
b) State GST Law, 2017 d) Companies Act, 2013
46. Appointed day is __________________
a) date on which the provisions of the act shall come into force
b) date on which President gave assent
c) date on which both houses passed the act
d) date on which it is sent to Finance Ministry
47. What is conveyance?
a) vessel c) vehicle
b) aircraft d) all of the above
48. Which section mentions about inter-state supply of service?
a) section 8 c) section 18
b) section 14 d) section 12
49. Place of supply referred in Integrated Goods and Service Tax Act is mentioned in
which Chapter?
a) Chapter II c) Chapter V
b) Chapter III d) Chapter VIII
50. Deemed Export is mentioned in which section?
c) section 137 c) section 147
d) section 142 d) section 145
51. When does Quarter end?
5
Page
a) March c) September
IGP-CS GST MCQs CA Vivek Gaba
d) value of inward supplies on which tax has been paid under reverse charge
85. Which of the following is subsumed under Central GST?
a) Central Sales Tax c) Customs Duty
b) Service Tax d) all of the above
86. Which of the following true in respect of Goods and Service Tax
a) It is destination based tax c) it is a consumption tax
b) It is levied on supply of goods or services d) All of the above
87. What is the threshold limit for composition levy?
a) ` 40 lakh c) ` 1 crore
b) ` 30 lakh d) ` 70 lakh
88. Which of the following require themselves to be registered compulsory, irrespective of
threshold limit?
a) Casual taxable person c) non-resident taxable person
b) Input service distributor d) all of the above
89. The time of supply of voucher in respect of goods and services shall be
a) date of issue of voucher, in case of identifiable supply
b) date of redemption of voucher
c) both a) and b)
d) none of the above
90. Which article of constitution of India empowers the Parliament to impose IGST in India?
a) 69A c) 279A
b) 265A d) none of the above
91. What does the conditions for supply includes?
a) Supply is a taxable service
b) Supply is made in the taxable territory
c) Supply is made by taxable person
d) All of the above
92. Which form has to be filed for withdrawal from composition levy?
a) GST CMP 04 c) GST CMP 03
b) GST PCT 2 d) GST MIS 1
93. When the taxable turnover is above ` 1.5 crore, it is under the control of
a) State c) Centre
b) Both Centre and State d) exempt from the purview of GST
94. Which of the following statement is correct:-
I. GST is a broad-based tax
II. GST is a destination based tax
III. GST is collected through a staged process i.e. a tax on the value added to goods
9
Page
IV. GST is a tax on the consumption of products from business sources, and not on
personal or hobby activities
a) Only I b) I & II Both
b) I, II & III d) I, II, III & IV all statement is correct
95. Which of the following State Taxes have not been subsumed under GST?
i. Road & passenger tax
ii. Central Sales Tax
iii. Toll tax
iv. Luxury Tax
v. Property tax
vi. Electricity duty.
a) i, iii, v & vi c) Only iii, iv & v.
b) Only vi d) None of the above
96. Over the Counter Payment can be made in branches of Banks Authorized (for deposits
up to ____________ per challan per tax period, by cash, cheque or demand draft) to
accept deposit of GST –
a) ten thousand rupees c) One thousand rupees
b) Two thousand rupees d) None of the above
97. The audit needs to be completed within a period of _____ months from the date of
commencement of the audit, but a further extension for a period of ____ months may
be provided by the Commissioner for the reasons recorded in writing –
a) Three, Six c) Six, Six
b) Nine, Three d) Four, Three
98. Where the amount of tax evaded or the amount of input tax credit wrongly availed or
utilised or the amount of refund wrongly taken exceeds 200 lakhs upto 500 lakhs then –
a) imprisonment for a term which may extend to 5 years and with fine
b) imprisonment for a term which may extend to 7 years and with fine
c) imprisonment for a term which may extend to 5 years and without fine
d) imprisonment for a term which may extend to 3 years and with fine
99. What is the threshold limit of Registration under GST?
a) 10 lakhs (for special category States) and Rs. 20 lakhs for other states and Union
territories
b) 20 lakhs (for special category States) and Rs. 10 lakhs for other states and Union
territories
c) 5 lakhs (for special category States) and Rs. 10 lakhs for other states and Union
territories
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100. Where Goods or services or both are used partly for taxable supplies including zero
rated supplies under IGST or under CGST Act, and partly for exempted supplies –
a) only that amount of input tax which is attributable to the taxable supplies including
zero rated supplies will be allowed as credit and not for exempted supplies
b) 100% ITC Allowed irrespective of the usage of Goods/Services
c) Fix 50% ITC allowed in this cases
d) None of the above
101. Proper officer shall pass an order (Provisional assessment request), within a period not
later than _______ from the date of receipt of such request –
a) 90 days c) 30 days
b) 100 days d) 120 days
102. The time duration for retention of accounts and records under GST is until expiry of
________ from the due date of furnishing of annual return for the year pertaining to
such accounts and records–
a) Seventy-two months c) seventy months
b) seventy-one months d) none of the above
103. Tax rate applicable in hands of Restaurant under composition scheme –
a) 2% (CGST + SGST) c) 5% (CSGT + SGST)
b) 18% (CGST + SGST) d) 2.5% (CGST + SGST)
104. To be eligible for registration under Composition scheme it is required that the
aggregate turnover of a registered tax payer should not exceed _______ in the
preceding financial year & the limit is ______ for North Eastern & Special Category
States)
a) ` 75,00,000/-, ` 50,00,000/- c) ` 50,00,000/-, ` 25,00,000/-
b) ` 100,00,000/-, ` 50,00,000/- d) ` 75,00,000/-, ` 20,00,000/-
105. ________ is excluded from the definition of goods as well as services
a) securities and money c) Only Securities
b) Only Money d) None of the above
106. What is the correct procedure of file return under GST?
i. Submission of return
ii. Rectification of discrepancies in ITC
iii. Matching of claim in reduction in output tax liability
iv. Final acceptance of ITC
v. Matching of ITC
a) i, ii, iii, iv & v c) i, v, iv, ii & iii
b) v, ii, iii, iv & vi d) none of the above
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b) the date of payment as entered in the books of account or payment is debited in his
bank account, whichever is earlier
c) the date immediately following thirty days from the date of issue of invoice or any
other document
d) earlier of the above
108. Which of the following states covered North Eastern and Special Category States –
i. Assam, Arunachal Pradesh,
ii. Manipur, Meghalaya,
iii. Mizoram, Nagaland,
iv. Tripura, Sikkim,
v. Delhi, Bihar
vi. Jammu & Kashmir
vii. Himachal Pradesh
a) i, ii, iii, iv & vi c) i, ii, iii, iv & vii
b) Only vi d) Only i, ii & iii
109. Which of the following Bills passed by parliament?
i. Central Goods and Services Tax (CGST)Bill
ii. Integrated Goods and Services Tax(IGST) Bill
iii. Union Territory Goods and Services Tax (UTGST)Bill
iv. Goods and Services Tax (Compensation to States) Bill
v. State Goods and Services Tax (CGST)Bill
a) i, ii, iii & iv c) Only i
b) Only i, ii & iii d) None of the above
110. The time duration for retention of accounts and records under GST is until expiry of
________ from the due date of furnishing of annual return for the year pertaining to
such accounts and records–
a) Seventy-two months c) seventy months
b) seventy-one months d) none of the above
111. Taxable Person whose registration has been cancelled or surrendered file final return
on ________
a) within three months of the date of cancellation of date of order of cancellation
whichever is later
b) within Six months of the date of cancellation of date of order of cancellation
whichever is later
c) within three months of the date of cancellation of date of order of cancellation
whichever is Earlier
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112. Section 56 of the CGST Act, 2017 states that if any tax ordered to be refunded under
section 54 is not refunded within sixty days from the date of receipt of application
interest at such rate __________
a) not exceeding six per cent c) not exceeding nine per cent
b) not exceeding eighteen per cent d) none of the above
113. A report of Special audit signed and certified by the appointed Chartered Accountant
or Cost Accountant is required to be submitted within _____ days although this period
can be further extended to _____ days –
a) 90, 90 c) 90, 30
b) 30, 90 d) 60, 60
114. ________ with respect to goods lost, stolen, destroyed or written off as well as on
goods given as gifts or free samples ________?
a) Input tax credit is not allowed, will also be not allowed
b) Input Tax credit will be allowed, will not be allowed
c) 100% Allowed in both cases
d) None of the above
115. if a recipient fails to pay the amount of supply along with tax payable thereon
_________ from the date of issue of invoice, the recipient will be liable to pay along
with the output tax liability an amount equal to the input tax credit availed by the
recipient along with interest thereon –
a) within 3 months c) within 6 months
b) within 90 days d) none of the above
116. Which of the following activity deemed as Supply under Schedule I even if no
consideration exists –
a) sale of business assets (goods) on which ITC has been availed
b) supply of goods and/or services between related person, except gift upto Rs. 50,000
to employees.
c) agent to principal of vice-versa, if agent supplies / receives goods on behalf of
principal
d) All of the above
117. What is cut off turnover limit for compulsory registration under GST?
a) ` 9 lacs c) exceeds ` 20 lacs
b) ` 50 lacs d) No limit for registration
118. Which of the followings goods are kept out from GST whether Temporarily of
permanent?
a) alcoholic liquor for human consumption
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b) petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation
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c) Electricity
d) All of the above
119. Import of services for a consideration __________ is deemed as Supply?
a) whether or not in the course or furtherance of business
b) Transaction in the course or furtherance of business
c) Not a Supply
d) none of the above
120. Which of the following taxes leviable on Imports?
a) CGST c) SGST
b) IGST d) all of the above
121. Which of the following subjects will be omitted from the Seventh Schedule?
i. Entry 54 from State List
ii. Entry 55 from State List
iii. Entry 92 and 92C from Union List
iv. Entry 97 of Union List
a) i) & ii) c) ii) & iii)
b) iii) & iv) d) all of the above
122. ________ is payable on all intra-state supply of goods and/or services and _______ is
payable on all inter- State supply of goods and/or services.
a) CGST + SGST/UTGST, IGST c) IGST, CGST
b) IGST, SGST d) None of the above
123. Gift upto value of ` 50,000 in a year to an employee __________ & Gifts in value in
excess of ` 50,000 _______
a) shall not be treated as “Supply”, shall be taxable as ‘Supply’
b) shall be taxable as ‘Supply’, shall not be treated as “Supply”
c) Both activity not covered under supply
d) None of the above
124. Which of the following persons are not eligible of composition scheme?
a) The scheme is not available for services sector, except restaurants.
b) Supplier of goods which are not taxable under the CGST Act/SGST Act/UTGST Act is
not eligible to register under this scheme
c) Tax payers making inter- state supplies is not eligible for composition scheme
d) All of the above
125. Every taxable person shall discharge his tax and other dues under this Act or the
rules made thereunder in the following order, namely:–
i. self-assessed tax, and other dues related to the return of the current tax period
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ii. self-assessed tax, and other dues related to returns of previous tax periods
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IGP-CS GST MCQs CA Vivek Gaba
iii. any other amount payable under this Act or the rules made thereunder including the
demand determined under section 73 or section 74
a) i, ii & iii c) ii, i & iii
b) iii, ii & I d) iii, i & ii
126. What shall be Time of Supply in case of reverse charge?
a) the date of the receipt of goods
b) the date of payment as entered in the books of account or payment is debited in his
bank account, whichever is earlier
c) the date immediately following thirty days from the date of issue of invoice or any
other document
d) earlier of the above
127. Which of the followings Activities which are neither supply of goods nor supply of
services:
a) Services by employee to employer
b) Services by any court or tribunal
c) Functions performed by the Members of Parliament etc
d) All of the above
128. Which of the following person is not liable for registration?
a) Person supplying exempted goods or services or goods or services which are not
liable for tax under GST
b) An agriculturist, to the extent of supply of produce out of cultivation of land
c) Both a) & b)
d) None of the above
129. Vice Chairperson of GST Council will be from Member from ______?
a) State Government
b) Central government
c) Any member nominated by central government
d) Any of the above
130. The details of outward supplies of goods or services shall be submitted by
a) 10th of the succeeding month
b) 18th of the succeeding month
c) 15th of the succeeding month
d) 20th of the succeeding month
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1 b) 23 c) 45 a) 67 b) 89 c) 111 a)
2 d) 24 a) 46 a) 68 d) 90 d) 112 a)
3 c) 25 d) 47 d) 69 c) 91 d) 113 a)
4 c) 26 a) 48 a) 70 a) 92 a) 114 a)
5 c) 27 b) 49 71 b) 93 b) 115 a)
6 a) 28 b) 50 c) 72 a) 94 d) 116 d)
7 c) 29 a) 51 d) 73 b) 95 a) 117 c)
8 a) 30 b) 52 a) 74 b) 96 a) 118 d)
9 c) 31 d) 53 c) 75 b) 97 a) 119 a)
10 d) 32 d) 54 c) 76 a) 98 d) 120 b)
11 b) 33 d) 55 d) 77 c) 99 d) 121 c)
12 c) 34 a) 56 a) 78 c) 100 a) 122 a)
13 c) 35 d) 57 d) 79 e) 101 a) 123 a)
14 b) 36 c) 58 c) 80 d) 102 a) 124 d)
15 b) 37 c) 59 a) 81 d) 103 c) 125 c)
16 b) 38 c) 60 d) 82 c) 104 a) 126 d)
17 c) 39 c) 61 a) 83 a) 105 a) 127 d)
18 a) 40 b) 62 a) 84 d) 106 c) 128 c)
19 c) 41 c) 63 a) 85 d) 107 d) 129 a)
20 d) 42 a) 64 c) 86 d) 108 c) 130 a)
21 c) 43 a) 65 d) 87 c) 109 a)
22 c) 44 a) 66 c) 88 d) 110 a)
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Indirect Taxation
BBA SEM – 6
MCQ
1. What of the following taxes is applicable in the case of supply of goods from Gujarat
to Assam?
a) CGST
b) SGST
c) UTGST
d) IGST
2. which of the following taxes is applicable in the case of supply of services from Bihar
to Rajsasthan?
a) CGST
b) SGST
c) UTGST
d) IGST
3. Which of the following commodities is not kept outside the perview of GST?
a) High speed Diesel
b) Natural Gas
c) Supply of liquor for human consumption
d) Aviation turbine fuel
4. which of the following taxes have been subsumed in GST?
a. Central Sales Tax
b. Central Excise Duty and Service Tax
c. Value Added Tax
e) All of Above
5. GST is levied on supply of all goods and serices except?
f) Alcoholic liquor for human consumption
a) Tobacco
b) Legal sevices
c) All of the above
6. who shall be empowered to levy and collect GST on supplies in the course of Inter
state Transactions of trade or commerce?
a) Central Government
a) State Governments
b) Union Territories
c) All of the above
7. Any job work carried out by a labour contractor on another person‘s goods shall be
treated as
a) supply of goods
b) supply of services
c) supply of services provided job work is carried out without any material
d) supply of services whether the job work is carried out with or without
any material.
8. What is the threshold limit of aggregate turnover (after 13-20-2017) for opting to pay
tax under ‗composition scheme‘?
a) Rs. 50 Lakhs
b) Rs. 75 Lakhs
c) Rs. 1 Crore
d) Rs. 75 Lakhs in case of special category states and Rs. 1 crore for any
other State.
9. means the aggregate value of
a) taxable supplies
b) exempted supplies
c) Inter-state supplies and export of goods or services or both
d) All of the above
10. Can person who opts for composition scheme‘ collect any tax from the recipient of
goods or services or both?
a) Yes
b) No
c) Yes, provided the recipient is a registered person
d) Yes, provided the recipient of goods or services is an unregistered person.
11. Who among the following is included in definition of ―Agriculturist‖ as defined in
Section 2(7) of the CGSTAct, 2017?
I. Individual
II. HUF
III. Partnership Firm
IV. Company
State the correct answer from the options given below-
a) I
b) I & II
c) I, II & III
d) I, II, III & IV
12. As per CGST act, 2017 means a distinguishable component of an enterprise that
is engaged in the supply of individual goods or services or a group of related goods or
services which is subject to risks and returns that are different from those of the other
business verticals-
a) Business
b) Business vertical
c) Organization
d) Continuous business
13. Registered person may issue a consolidated tax invoice for such supplies at the close
of each day in respect of all such supplies provided
a) The recipient is not a registered person
b) The recipient does not require such invoice
c) The value of goods and services or both per invoice is less than INR 200
d) All the above conditions are satisfied
14. The registered person who has received a credit note shall declare the details of such
credit note in the return for the month during which such credit note has been issued
but not later than
a) September following the end of the financial year in which such supply was
made
b) The date of furnishing of the relevant annual return
c) September following the end of the financial year in which such supply was
made or the date of furnishing of the relevant annual return; whichever is
earlier
d) 9 months from the date of issue of credit note
15. The registered person who has supplied such goods or services or both shall issue to
the recipient a debit note where a tax invoice has been issued for any goods or
services or both and the taxable value or tax charged in that tax invoice is found to be
a) Less than the taxable value or tax payable in respect of such supply
b) More than the taxable value or tax payable in respect of such supply
c) Less or more than the taxable value or tax payable in respect of such supply
d) Less than the taxable value or tax payable in respect of such supply by INR
100
16. Which of the following category of suppliers is allowed to issue documents in lieu of
tax invoice?
59. XYZ Ltd. is engaged in sale of product X. all the sales are made outside the state.
Particulars INR
Value of receipts of goods & services (SGST & CGST 10%) 7,00,000
Value of product X sold (IGST 20%) 8,40,000
Select the correct answer from the options given below:
111. Where a supply is received at a place of business for which the registration has
been obtained, ‗location of the recipient of services‘ is
a) location of place of business of recipient
b) location of service provider
c) Place where payment is received
d) None of the above
112. Where a supply is received at more than one place ‗location of the recipient of
services‘ is
a) Location of the establishment most directly concerned with the receipt of
the supply
b) Location of service provider
c) Place where payment is received
d) None of the above
113. The maximum limit of IGST rate fixed in the Act is
a) 18%
b) 28%
c) 40%
d) 100%
114. Where an E- commerce operator does not have physical presence in the
taxable territory
a) Tax need not be paid
b) Agent of the E- commerce operator shall be liable to pay tax
c) Tax must be paid in advance
d) IGST is not applicable
115. Where the location of the supplier and the place of supply are in two different
States –
a) IGST is applicable
b) CGST is applicable
c) SGST plus CGST is applicable
d) CGST plus IGST is applicable
116. Where location of the supplier and the place of supply are in two different
Union territories
a) CGST plus UTGST is applicable
b) IGST is applicable
c) SGST plus UTGST is applicable
d) CGST plus IGST is applicable
117. Where location of the supplier and place of supply are in a State and a Union
territory
a) CGST plus UTGST is applicable
b) CGST plus IGST is applicable
c) SGST plus UTGST is applicable
d) IGST is applicable
118. Supply of goods where the location of the supplier and the place of supply of
goods are in the same State or same Union territory shall be treated as
a) Inter state
b) Intra-state supply
c) Taxable supply
d) None of these
119. Supply of goods to or by a Special Economic Zone
a) CGST plus UTGST
b) CGST plus IGST
c) IGST
d) None of these
120. Half share of IGST moves always to
a) Selling state
b) Buying state
c) Equally to selling state and buying state
d) None of these
121. Gifts not exceeding --- in a year by an employer to employee shall not be
treated as supply.
a) Rs. 5,000
b) Rs. 10,000
c) Rs. 50,000
d) Rs. 1,00,000
122. Lease, tenancy, easement or licence to occupy land is a supply of
a) Goods
b) Services
c) Both goods and services
d) None
123. Letting out of the building orresidential complex is a supply of
a) Goods
b) Services
c) Both goods and services
d) None
124. Transfer of the title in goods is a supply of
a) Goods
b) Services
c) Both goods and services
d) None
125. Transfer of right in goods or of undivided share in goods ‗without the transfer
of title‘ is
a) supply of Goods
b) supply of Services
c) supply of Both goods and services
d) None
126. Transfer of title in goods under an agreement which stipulates that property in
goods shall pass at a future date upon payment of full consideration, is a supply of –
a) Both goods and services
b) Services
c) Goods
d) None
127. Any treatment or process which is applied to another person‘s goods is a
supply of
a) Goods
b) Services
c) Both goods and services
d) None
128. Goods held or used for the purposes of the business are put to any private use
or made available to any person for use, is a supply of
a) Goods
b) Services
c) Both goods and services
d) None
129. Construction of a complex, building, civil structure intended for sale to a
buyer, wholly or partly is supply of –
a) Goods
b) Services
c) Both goods and services
d) None
130. Where the entire consideration has been received after issuance of completion
certificate or after its first occupation is
a) Transfer of Goods
b) Transfer of immovable property
c) Transfer fo services
d) None of these
131. Mr. A an architect, agrees to design and construct a building for Mr. Bj, for a
sum of Rs. 1Crore. The construction completed and the amount received by Mr. A.
This is supply of
a) Goods
b) Services
c) Both goods and services
d) None
132. Transfer of the ‗right to use any goods‘ for any purpose for consideration is
supply of
a) Goods
b) Services
c) Both goods and services
d) None
133. Works contract is a supply of
a) Goods
b) Services
c) Both goods and services
d) None
134. Services by an employee to the employer in the course of or in relation to his
employment is
a) Supply of Goods
b) Supply of Services
c) Supply of Both goods and services
d) Not supply
135. Services by any court or Tribunal established under any law is
a)Supply of Goods
b) Supply of Services
c) Supply of Both goods and services
d) Not supply
136. The functions performed by the Members of Parliament, Members of State
Legislature are
a) Supply of Goods
b) Supply of Services
c) Supply of Both goods and services
d) Not supply
137. Duties performed by any person in the Constitutional capacity are
a) Supply of Goods
b) Supply of Services
c) Supply of Both goods and services
d) Not supply
138. On Services provided by E-commerce operator
a) GST applicable
b) GST not applicable
c) Reverse charge applicable
d) IGST applicable
139. The rate of composition tax for trading firms is
a) 1%
b) 2%
c) 3%
d) 12%
140. A Composite taxpayer is required to file summarised details of transactions
a) Annually
b) Half yearly
c) Quarterly
d) Monthly
141. Input tax credit is allowed to
a) Any one who has paid tax
b) Any registered person
c) Any Composite dealers
d) Any dealer under GST
142. Input tax credit shall be allowed only on the support of
a) Delivery note
b) Payment slip
c) Credit note
d) Tax invoice
143. Input tax credit shall be allowed only against
a) Any tax payable
b) Output tax
c) Composite tax
d) Refund
144. Where the goods are received in lots or instalments input tax credit can be
claimed
a) upon reciept of first lot
b) upon receipt of the last lot
c) Any time at the option of the supplier
d) after full payment of price
145. Where a recipient fails to pay the price within 180 days from the date of issue
of invoice, he shall be liable to pay input tax credit to the Government with --- %
interest
a) 10%
b) 12%
c) 18%
d) None of these
146. Input tax credit of an invoice can be availed within a period of -- or the 30th
September following the year of invoice whichever is earlier.
a) 2 years
b) 1 year
c) 6 months
d ) 3 Months
147. If goods or services are partly used for business purposes and partly for other
purposes, input tax credit
a) can be fully claimed
b) can be partly claimed
c) cannot be claimed
d) Not applicable
148. Input tax credit is not available for
a) services
b) zero rated supplies
c) taxable supplies
d) exempt supplies
149. Input tax credit is not available for supplies to
a) SEZ
b) Exports
c) Provide non taxable services
d) Produce taxable goods
150. Input tax for personal vehicles
a) can be claimed by any dealer
b) Blocked credit
c) can be claimed by GST dealers
d) Can be claimed by any person.
T. Y. B. COM. SEMESTER VI DIRECT & INDIRECT TAXES (GST)
SAMPLE MULTIPLE CHOICE QUESTIONS SEPT 2020
2. Which of the following activity is outside the scope of supply and not taxable under
GST ?
i. Services by an employee to the employer In the course of or in relation to
this employment.
ii. Services of funeral
iii. Actionable claims, other than lottery, betting and gambling.
iv. All of the above.
7. Which of the following is – the supply in which possession of the goods are
transferred but the title on the same will be transferred at the future date ?
a) Rent a car b) Hire Purchase
c) Normal sale of goods d) None of the above.
8. What would be the tax rate applicable in case of composite supply ?
i. Tax rate as applicable on principal supply
ii. Tax rate as applicable on ancillary supply
iii. Tax rate as applicable on respective supply
iv. None of the above
10. What is the threshold limit of turnover in the preceding financial year for opting to
pay tax under composition scheme for states other than special category states ?
a) Rs. 20 lacs b) Rs. 10 lacs
c) Rs. 50 lacs d) Rs. 1.5 crore.
11. Can composition scheme be availed if the registered person effects inter-state
supplies ?
i. Yes
ii. No
iii. Yes, subject to prior approval of the Central Government.
iv. Yes, subject to prior approval of the concerned State Government.
12. Which of the following will be excluded from the computation of aggregate
turnover?
i. Value of taxable supplies
ii. Value of exempt supplies
iii. Non taxable supplies
iv. Value of inward supplies on which tax is paid on revere charge basis.
13. Which of the following persons can opt for composition scheme?
i. Person making any supply of goods which are not leviable to tax under this
act.
ii. Person making any inter-state outward supplies of goods.
iii. Person effecting supply of goods through an e-cxommerce operator iable to
collect tax at source.
iv. None of the above
18. Mr. A sold goods to Mr. B. Determine the TOS in accordance with the provisions of
section 12 of the CGST Act, 2017 in case supply involves movement of goods.
i. Date of removal – 1st Oct 2019
ii. Date of invoice – 2nd Oct 2019
iii. Date when goods made available to the recipient – 3rd Oct 2019
iv. Date of receipt of payment – 15th Nov., 2019
a) 1st Oct, 2019 b) 2nd Oct 2019
c) 3rd Oct 2019 d) 15th Nov 2019
20. Where the goods being sent or taken on approval for sale or return are removed
before the supply takes place, the invoice shall be issued
a) before/at the time of supply b) 6 months from the date of removal
c) earlier of (a) & (b) d) none of the above.
21. What is time of supply of goods liable to tax under reversed charge mechanism ?
a. Date of receipt of goods
b. Date on which the payment is made
c. Date immediately following 30 days from the date of issue of invoice by the
supplier.
d. Earlier of (a) or (b) or (c)
24. In case of taxable supply of services, invoice shall be issued within a period of
______ from the date of supply of serice.
a) 30 days b) 45 days
c) 60 days d) 90 days.
25. Continuous supply of services means a supply of services who provided, or agreed
to be provided, continuously or on recurrent basis, under a contract, for a period
exceeding ______ Months, with periodic payment obligations and includes supply of
such services as the Government may subject to such conditions, as I may, by
notification, specify
a) Three b) Four
c) Six d) Twelve
26. What is the time of supply of service in case of reverse charge mechanism ?
a. Date of payment as entered in the books of account of the recipient
b. Date of immediately following 60 days from the date of issue of invoice
c. Date of invoice
d. Earlier of (a) or (b).
27. There was increase in tax rate from 20% to 24% w.e.f. 01.09.2019. which of the
following rate is applicable when services are provided after change in rate of tax in
September, 2019 but invoice issued and payment received, both in August, 2019 :
a. 20% as it is lower of the two
b. 24% as it is higher of the two
c. 20% as invoice and payment were received prior to rate change.
d. 24% as the supply was completed after rate change.
e.
31. Place of supply of goods, other than supply of goods imported into, or exported
from India, when supply involves movement of goods, is the
a. Location of the goods at the time at which the movement terminates for
delivery.
b. Location of the goods at the time at which the movement starts for delivery
c. Location of the principal place or business of the recipient
d. Location of the principal place of business of the supplier.
32. Where will be the place of supply when the goods are supplied on the direction of
the third party ?
a) Location of the supplier b) Location of the recipient
c) Location of the tghird party d) Any of the above.
33. Where will be the place of supply of goods supplied in a train which is heading
towards Delhi from Chennai, if the goods are tken on board at Coimbatore ?
a) Delhi b) Chennai
c) Coimbatore d) None of the above.
34. Real estate agent in Delhi charges brokerage fee to Company A located in
Chandigarh for assistance in getting a commercial property in Kolkata. Which is the
place of supply in this case ?
a) Delhi b) Chandigarh
c) Kolkata d) None of the above.
35. The default rule of place of supply of services made to a registered person shall be
the
a) Location of the registered person b) Location of the service provider
c) Location of the recipient d) Any of the above
41. The time limit to pay the value of supply with taxes to avail the input tax credit ?
a) Three months b) Six months
c) One hundred and eighty days d)Till the date of filling of Annual Return
42. Whether depreciation on tax component of capital goods and plant and Machinery
And whether input tax credit is permissible ?
a) Yes
b) No
c) Input tax credit is eligible if on tax component is not availed.
d) None of the above
43. Can unutilized input tax credit be transferred in case of change in constitution of
business?
a. Not possible
b. No, it will be exhausted
c. Yes, it will be transferred only if there is provision for transfer of liabilities
d. It will be transferred only if it is shown in books of accounts of transferor
44. ITC can be claimed by a registered person for
a. Taxable supplies for business purpose
b. Exempted supplies
c. Non-taxable supplies
d. All of above
48. Mr. A has started supply of goods and services in Delhi, He is required to obtain
registration of his aggregate turnover exceeds ______ during a financial year.
a) Rs. 10 lakh b) Rs. 20 lakh
c) Rs. 30 lakh d) Rs. 50 lakh
51. Balance in electronic credit ledger can be utilized against which liability ?
a) Output tax payable b) Interest
c) Penalty d) All of them
52. Balance in electronic credit ledger under IGST can be used against which liability ?
a) IGST liability only b) IGST and CGST liability
c) IGST, CGST and SGST liability d) None of them
Q3. Mr. X of Delhi is participating in Hitex Furniture Expo in Haryana where he has no fixed
place of business and exhibiting his products. During the expo, the said products will be
sold to the people attending and intending to purchase such products. In such scenario,
Mr. X shall obtain which of the following registration under the CGST Act, 2017:
(a) Non–resident taxable person registration
(b) Casual taxable person registration
(c) Regular taxpayer registration
Q4. A person who occasionally undertakes transactions involving supply of goods or
services or both, whether as principal or agent or in any other capacity, but who has no
fixed place of business or residence in India is:
(i) Non–resident taxable person
(ii) Composition dealer
(iii) Registered person
(iv) Casual taxable person
Q5. Output tax in relation to a taxable person under the CGST Act, 2017 includes:
(i) Tax chargeable on taxable supplies made by him
(ii) Tax chargeable on taxable supplies made by his agent
(iii) Tax payable by him under reverse charge
(iv) Both (a) and (b)
Classification and Exemption 3
Q6. The term “place of business” includes:
i) Place from where business is ordinarily carried out including godown,
warehouse, etc.
ii) Place where a taxable person maintains his books of account
iii) Place where taxable person is engaged in business through an agent
iv) All the above
Ans. (d) All the above
Q7. ‘P’ Ltd. has its registered office under the Companies Act, 2013 in the State of
Maharashtra. It also has a corporate office in the State of Telangana. What will be the
place of business of ‘P’ Ltd. under the CGST Act, 2017?
(a) Telangana
(b) Maharashtra
(c) Both (a) and (b)
(d) None of the above
Ans. (c) Both (a) and (b)
Q8. P Ltd. has a contract with X Ltd. to provide book keeping services to Q Ltd. Q Ltd. is a
subsidiary of P Ltd. The liability to discharge consideration for such book keeping
service is of P Ltd. As per the CGST Act, 2017, who will be the recipient of the above
service?
(a) P Ltd.
(b) Q Ltd.
(c) X Ltd.
(d) Both (a) and (b)
Ans. (a) P Ltd.
Q9. Which of the following is a non–taxable supply under the CGST Act, 2017:
(a) Supply of goods not leviable to tax under the CGST Act, 2017
(b) Supply of services not leviable to tax under the CGST Act, 2017
(c) Supply which is neither a supply of good nor a supply of service.
(d) Both (a) and (b)
Ans. (d) Both (a) and (b)
Q14. The definition of goods under section 2(52) of the CGST Act does not include-
1. Grass
2. Money and securities
Classification and Exemption 5
3. Actionable claims
4. Growing crops
Ans. (b) Money and securities
Q16. If Mr. A, having his registered office at Andhra Pradesh, and his operating office at
Telangana which is also registered, but providing advisory services to his client who is
placed at Karnataka. What would be the location of supplier of services in this case?
(i) Telangana
(ii) Andhra Pradesh
(iii) Karnataka
(iv) All of the above
Ans. (a) Telangana
Q17. As per the CGST Act, 2017, the term “works contract” includes:
(a) Construction, fabrication, completion, erection, installation, etc. of movable
property
Q22. The Commissioner may, subject to such conditions and limitations as may be specified
in this behalf by him, delegate his powers to:
(a) Any other officer who is sub-ordinate to him
(b) Any other officer who is senior to him
(c) Both (a) and (b)
(d) None of the above
Classification and Exemption 7
Ans. (a) Any other officer who is sub-ordinate to him.
MCQ’s
Q1. What are different types of supplies covered under the scope of supply?
(a) Supplies made with consideration
(b) Supplies made without consideration
(c) Both of the above
(d) None of the above
Ans. (c) Both of the above
Q2. What are the factors differentiating composite supply & mixed supply?
(a) Nature of bundling i.e. artificial or natural
(b) Existence of principal supply
(c) Both of the above
(d) None of the above
Ans. (c) Both of the above
Q3. What would be the tax rate applicable in case of composite supply?
(a) Tax rate as applicable on principal supply
(b) Tax rate as applicable on ancillary supply
(c) Tax rate as applicable on respective supply
(d) None of the above
Ans. (a) Tax rate as applicable on principal supply
Q4. What would be the tax rate applicable in case of mixed supply?
(a) Tax rate as applicable on supply attracting the lowest rate of
tax
(b)
Tax rate as applicable on supply attracting the highest rate of
tax
(c) Tax @ 28%
(d) None of the above
Ans. (b) Tax rate as applicable on supply attracting the highest rate of tax
Ans. (d) ` 1 crore [Notification No. 46/2017-Central Tax dated 13.10.2017 read with
Notification No. 08/2017-Central Tax dated 27.06.2017]
Q32. What is the threshold limit of turnover in the preceding financial year for opting to pay
tax under composition scheme for special category states?
(a) ` 25 lacs
(b) ` 50 lacs
(c) ` 75 lacs
(d) ` 1 crore
Ans. (c) ` 75 lacs [Notification No. 46/2017-Central Tax dated 13.10.2017 read with
Notification No. 08/2017-Central Tax dated 27.06.2017]
Q33. What is the rate applicable under CGST to a registered person being a manufacturer
opting to pay taxes under composition scheme?
(a) 2.5%
(b) 1%
(c) 0.5%
(d) No composition for manufacturer
Ans. (c) 0.5% [Notification No. 01/2018-Central Tax dated 01.01.2018]
Q34. What is the rate applicable under CGST to a registered person being a hotelier
Indirect Taxes Committee
(providing restaurant and accommodation services ) opting to pay taxes under
composition scheme?
(a) 1%
(b) 0.5%
(c) 2.5%
(d) Not eligible for composition scheme thus liable to pay normal tax
Ans. (d) Not eligible for composition scheme thus liable to pay normal tax [Composition
scheme is available to restaurant only. Even composition scheme is not extended
to any other service provider]
Q35. Mr. Richard, a trader in Delhi has opted for composition scheme of taxation under GST.
Determine the rate of total GST payable by him under composition scheme:
(a) 0.5% CGST & 0.5% SGST
(b) 2.5% CGST & 2.5% UTGST
(c) 5% IGST
(d) 5% UTGST
Ans. (a) 0.5% CGST & 0.5% SGST
Q36. Can a registered person opt for composition scheme only for one out of his 3 business
verticals having same Permanent Account Number?
(a) Yes
(b) No
(c) Yes, subject to prior approval of the Central Government
(d) Yes, subject to prior approval of the concerned State Government
Ans. (b) No
Q37. Can composition scheme be availed if the registered person effects inter-State
supplies?
1. Yes
2. No
3. Yes, subject to prior approval of the Central Government
4. Yes, subject to prior approval of the concerned State Government
Ans. (b) No
Q38. Can a registered person under composition scheme claim input tax credit?
(a) Yes
(b) No
Classification and Exemption 15
(c) Input tax credit on inward supply of goods only can be claimed
(d) Input tax credit on inward supply of services only can be claimed
Ans. (b) No
Q39. Can a registered person opting for composition scheme collect tax on his outward
supplies?
1. Yes
2. No
3. Yes, if the amount of tax is prominently indicated in the invoice issued by him
4. Yes, only on such goods as may be notified by the Central Government
Ans. (b) No
Q40. Which of the following will be excluded from the computation of ‘aggregate turnover’?
(a) Value of taxable supplies
(b) Value of exempt Supplies
(c) Non-taxable supplies
(d) Value of inward supplies on which tax is paid on reverse charge basis
Ans. (d) Value of inward supplies on which tax is paid on reverse charge basis
Q41. What will happen if the turnover of a registered person opting to pay taxes under
composition scheme during the year 2017-18 crosses threshold limit?
(a) He can continue under composition scheme till the end of the financial year
(b) He will be liable to pay tax at normal rates of GST on the entire turnover for the
financial year 2017-18
(c) He will cease to remain under the composition scheme with immediate effect
(d) He will cease to remain under the composition scheme from the quarter following
the quarter in which the aggregate turnover exceeds threshold limit
Ans. (c) He will cease to remain under the composition scheme with immediate effect.
MCQ’s
Q Which one of the following is true?
1.
(a) Entire income of any trust is exempted from GST
(b) Entire income of a registered trust is exempted from GST
(c) Incomes from specified/defined charitable activities of a trust are exempted
fromGST
MCQ’s
Q 1. What is time of supply of goods, in case of forward charge?
(a) Date of issue of invoice
(b) Due date of issue of invoice
(c) Date of receipt of consideration by the supplier
(d) Earlier of (a) & (b)
Ans. (d) Earlier of (a) & (b)
Q 2. What is time of supply of goods, in case of supplier opting for composition levy under
Section 10 of the CGST Act, 2017?
(1) Date of issue of invoice
(2) Date of receipt of consideration by the supplier
(3) Latter of (a) & (b)
(4) Earlier of (a) & (b)
Ans. (d) Earlier of (a) & (b)
Q 3. What is time of supply of goods liable to tax under reverse charge mechanism?
(i) Date of receipt of goods
(ii) Date on which the payment is made
(iii) Date immediately following 30 days from the date of issue of invoice by the
supplier
(iv) Earlier of (a) or (b) or (c)
Ans. (d) Earlier of (a) or (b) or (c)
Q 4. What is the time of supply of vouchers when the supply with respect to the voucher is
identifiable?
(a) Date of issue of voucher
(b) Date of redemption of voucher
(c) Earlier of (a) & (b)
(d) (a) & (b) whichever is later
Ans. (a) Date of issue of voucher
Q 5. What is the time of supply of vouchers when the supply with respect to the voucher is
not identifiable?
Q 16. There was increase in tax rate from 20% to 24% w.e.f.1.09.2018. Which of the following
rate is applicable when services are provided after change in rate of tax in
September 2018, but invoice issued and payment received, both in August, 2018:
(a) 20% as it is lower of the two
(b) 24% as it is higher of the two
(c) 20% as invoice and payment were received prior to rate change
(d) 24% as the supply was completed after rate change
Ans. (c) 20% as invoice and payment were received prior to rate change
Q 17. There was increase in tax rate from 20% to 24% w.e.f. 1.09.2018. Which of the
following rate is applicable when services provided, and invoice raised after change in
rate of tax in September,2018, but payment received in August 2018:
1. 20% as it is lower of the two
2. 24% as it is higher of the two
3. 20% as payment (being one of the factors) was prior to rate change
4. 24% as invoice was issued in the period during which supply is completed
Ans. (d) 24% as invoice was issued in the period during which supply is completed
Q 18. There was increase in tax rate from 20% to 24% w.e.f. 1.9.2018. Which of the following
rate is applicable if the supplier has opted for composition levy and invoice was issued
after change in rate of tax in September,2018 but payment received, and goods
The Institute of Chartered Accountants of India
Input Tax Credit (ITC) 25
supplied in August,2018:
1. 20% as it is lower of the two
2. 24% as it is higher of the two
3. 20% as payment was received in the period during which the supply was effected
4. 24% as invoice being one of the factors was issued after rate change
Ans. (c) 20% as payment was received in the period during which the supply was effected
Q 19. There was increase in tax rate from 20% to 24% w.e.f.1.9.2018. Which of the following
rate is applicable if the supplier has not opted for composition levy say Sita
Manufacturers, Delhi supplies goods to Aakash Electronics, Dehradun. Further, Goods
were removed from its factory in Delhi on 31.08.2018; invoice is issued on 31.08.2018
and payment is received on 4.09.2018.
(a) 20% as it is lower of the two
(b) 24% as it is higher of the two
(c) 20% as date of invoice and dispatch of goods from factory, has happened before
change of rate
(d) 24% as both, payment and completion of supply, has happened after change of
rate
Ans. (c) 20% as date of invoice and dispatch of goods from factory, has happened before
change of rate
Q 20. There was decrease in tax rate from 24% to 20% w.e.f. 1.09.2018. Which of the
following rate is applicable if the supplier has not opted for composition levy say Sita
Manufacturers, Delhi supplies goods to Aakash Electronics, Dehradun. Further, Goods
were removed from its factory in Delhi on 31.08.2018; delivered at Aakash Electronics,
Dehradun on 2.02.2018; invoice is issued on 31.08.2018 and payment is received on
4.09.2018.
1. 20% as it is lower of the two
2. 24% as date of invoice and dispatch of goods from factory, has happened before
change of rate
3. 20% as both, payment and completion of supply, has happened after change of
rate
Ans. (b) 24% as date of invoice and dispatch of goods from factory, has happened before
change of rate
Q 21. The value of supply of goods and services shall be the
(a) Transaction value
(b) MRP
Q 27. As per Rule 31 of the CGST Rules, residual method for determination of value of supply
of goods or services or both will apply when:
1. Value of supply cannot be determined under Rules 27 to 30
2. Value of supply determined is more than the open market value of goods
3. Value of supply determined is more than the Value of supply of like kind and
quality
4. All of the above
Ans. (a) Value of supply cannot be determined under Rules 27 to 30
Q 28. In the case of supply of services, the supplier may opt for Rule 31 ignoring Rule 30 of
the CGST Rules?
1. True
2. False
Ans. (a) True
Q 29. In terms of Rule 32(7) of the CGST Rules, the value of taxable services provided by
such class of service providers as may be notified by the Government, on the
recommendations of the Council, as referred to in paragraph 2 of Schedule I of the
CGST Act between distinct persons as referred to in section 25, where ITC is available,
shall be deemed to be ………………..
(a) ` 10,000/-
1. Arm’s length price as required under the Income Tax law
2. NIL
3. As per the contract between the supplier and recipient
Ans. (c) NIL
MCQ’s
Q 1. Whether definition of Inputs includes capital goods.
(a) Yes
(b) No
(c) Certain capital goods only
(d) None of the above
Ans. (a) No
Q 2. Is it mandatory to capitalize the capital goods in books of Accounts?
(iv) Yes
(v) No
Q 3. Whether credit on capital goods can be taken immediately on receipt of the goods?
(i) Yes
(ii) No
Q 15. What is the maximum time limit to claim the Input tax credit?
(a) Till the date of filing annual return
(b) Due date of September month which is following the financial year
(c) Earliest of (a) or (b)
(d) Later of (a) or (b)
Ans. (c) Earliest of (a) or (b)
Q 16. Proportionate credit for capital goods is allowed
(a) For business and non-business purpose
(b) For business or non- business purpose
(c) Both of the above
(d) None of the above
Indirect Taxes Committee
32 FAQ’s and MCQ’s on GST
Ans. (a) For business and non-business purpose
Q 17. Exempt supplies under Section 17 (apportionment of credit) includes
A. Only exempted supplies
B. Reverse charge supplies and sale of land
C. Exempted supplies, reverse charge supplies, Transaction in securities, sale of
land, sale of building
D. None of the above
Ans. (c) Exempted supplies, reverse charge supplies, Transaction in securities, sale of
land, sale of building
Q 18. Banking company or Financial Institution have an option of claiming:
(i) Eligible Credit or 50% credit
(ii) Only 50% Credit
(iii) Only Eligible credit
(iv) Eligible credit and 50% credit
Ans. (a) Eligible Credit or 50% credit
Q 19. Can Banking Company or Financial Institution withdraw the option of availing actual
credit or 50% credit anytime in the financial year?
(a) Yes
(b) No
(c) Yes, with permission of Authorized officer
(d) Not applicable
Ans. (b) No
Q 20. Where a supplier of goods or services pays tax under sections 74,129 and 130 (fraud,
willful misstatement etc.), then receiver of goods can avail its credit:
(d) Yes
(e) No
(f) Yes, after receipt of goods or services
(g) Yes, after receipt of invoice for goods or services
Ans. (b) No
Q 21. An assessee obtains new registration, voluntary registration, change of scheme from
composition to regular scheme and from exempted goods/ services to taxable
goods/services. It can avail credit on inputs lying in stock. What is the time limit for
taking said credit?
(a) 1 year from the date of invoice
The Institute of Chartered Accountants of India
Input Tax Credit (ITC) 33
(b) 3 years from the date of invoice
(c) 5 years from the date of invoice
(d) None of the above
Ans. (a) 1 year from the date of invoice
Q 22. Credit on Input services or capital goods held in stock can be availed in case of new
Registration/Voluntary Registration
(a) Yes
(b) No
(c) Yes, on Input services only
(d) Yes, on capital goods only
Ans. (b) No
Q 23. In case of Compulsory registration, input tax credit can be availed on
(a) stocks held on the day immediately preceding the date from which he becomes
liable to pay tax under the provisions of this Act, provided application for
registration is filed within 30 days from the due date
(b) stocks held on the day immediately preceding the date of grant of registration
under the provisions of this Act.
(c) stocks held on the day immediately preceding the date of application of
registration under the provisions of this Act.
(d) None of the above
Ans. (a) stocks held on the day immediately preceding the date from which he becomes
liable to pay tax under the provisions of this Act, provided application for
registration is filed within 30 days from the due date
Q 24. In case of Voluntary registration input tax credit can be availed
(a) on stocks held on the day immediately preceding the date from which he
becomes liable to pay tax under the provisions of this Act
(b) on stocks held on the day immediately preceding the date of grant of registration
under the provisions of this Act.
(c) on stocks held on the day immediately preceding the date of application of
registration under the provisions of this Act.
(d) None of the above
Ans. (b) on stocks held on the day immediately preceding the date of grant of registration
under the provisions of this Act.
Q 25. Eligibility of credit on capital goods in case of change of scheme from Composition
scheme to Regular scheme
Indirect Taxes Committee
34 FAQ’s and MCQ’s on GST
(a) Eligible during application for Regular scheme
(b) Not eligible
(c) Yes, immediately before the date from which he becomes liable to pay tax under
the Regular scheme
(d) None of the above
Ans. (c) Yes, immediately before the date from which he becomes liable to pay tax under
the Regular scheme
Q 26. Can the unutilized input tax credit be transferred in case of change in constitution of
business?
(a) Not possible
(b) No, it will be exhausted
(c) Yes, it will be transferred only if there is provision for transfer of liabilities
(d) It will be transferred only if it is shown in books of Accounts of transferor
Ans. (c) Yes, it will be transferred only if there is provision for transfer of liabilities
Q 27. Is Input tax fully restricted in case of switchover from taxable to exempt supplies
(a) Yes
(b) No
(c) Proportionately restricted
(d) Not restricted
Ans. (a) Yes
Q 28. Is Input tax to be paid in case of switchover from taxable to exempt supplies
(a) Yes, equivalent to the credit in respect of inputs held in stock (including semi-
finished and finished goods) and on capital goods held in stock
(b) No
(c) Yes, full credit
(d) No, should be debited to electronic credit ledger
Ans. (a) Yes, equivalent to the credit in respect of inputs held in stock (including semi-
finished and finished) and on capital goods held in stock
Q 29. Is Input tax to be reversed in case of supply of capital goods
(a) Yes fully
(b) No
(c) Yes, to extent of credit taken as reduced by prescribed percentage or tax on
transaction value whichever is higher
MCQ’s
Q1. How the aggregate turnover of ` 20 Lakh is calculated?
(a) Aggregate value of all taxable supplies (excluding the value of inward supplies on
which tax is payable by a person on reverse charge basis), exempt supplies,
export of goods/services and interstate supplies of a person having same PAN
computed on all India basis.
(b) Aggregate value of all taxable supplies(excluding the value of inward supplies on
which tax is payable by a person on reverse charge basis), exempt supplies,
export of goods/services and interstate supplies of a person computed for each
state separately.
(c) Aggregate value of all taxable intrastate supplies, export of goods/services and
exempt supplies of a person having same PAN computed for each state
separately.
MCQ’s
Tax Invoice, Credit and Debit Note (Section 31 – Section 34)
Q1. Tax invoice must be issued by________
(a) Every supplier
(b) Every taxable person
(c) Registered persons not paying tax under composition scheme
(d) All the above
Ans. (c) Registered persons not paying tax under composition scheme
Q2. Law permits collection of tax on supplies effected prior to registration, but after applying
for registration:
(a) Yes, but only on intra-State supplies, if the revised invoice is raised within one
month
(b) Yes, but only on intra-State supplies effected to unregistered persons, if the
Indirect Taxes Committee
revised invoice is raised within one month
(c) Yes, on all supplies, if the revised invoice is raised within one month
(d) No, tax can be collected only on supplies effected after registration is granted.
Ans. (c) Yes, on all supplies, if the revised invoice is raised within one month
Q3. A bill of supply can be issued in case of inter-State and intra-State:
(a) Exempted supplies
(b) Supplies to unregistered persons
(c) Both of above
(d) None of the above.
Ans. (a) Exempted supplies
Q4. An invoice must be issued:
(a) At the time of removal of goods
(b) On transfer of risks and rewards of the goods to the
recipient
(c) On receipt of payment for the supply
(d) Earliest of the above dates.
Ans. (a) At the time of removal of goods.
Q5. An acknowledgement must be given on receipt of advance payment in respect of supply
of goods or services:
(a) Yes, in the form of a proforma invoice
(b) Yes, as a receipt voucher
(c) Yes, the invoice must be raised to that extent
(d) None of the above
Ans. (b) Yes, as a receipt voucher.
Q6. A continuous supply of goods requires one of the following as a must:
(a) The goods must be notified by the Commissioner in this behalf
(b) The contract for supply lasts for a minimum period of 3 months
(c) The supply is made by means of a wire, cable, pipeline or other conduit
(d) Supplier invoices the recipient on a regular or periodic basis
Ans. (d) Supplier invoices the recipient on a regular or periodic basis
Q7. The recipient must issue an invoice in the following cases:
(a) The supplier fails to issue an invoice
(b) The supplier is unregistered
Tax Invoice, Credit and Debit Notes 51
(c) The goods or services received are notified for tax on reverse charge basis
MCQ’s
Q1. The books and other records u/s 35 are to be maintained at
(a) Place where the books and accounts are maintained
(b) Place of address of the Proprietor/ Partner/Director/Principal Officer
Accounts and Records 55
(c) Principal place of business mentioned in the Certificate of Registration
(d) Any of the above
Ans. (c) Principal place of business mentioned in the Certificate of Registration
Q2. In case, more than one place of business situated within a state specified in the
Registration Certificate, the books and Accounts shall be maintained at
(a) Each place of business pertaining to such place
(b) Place where the books of accounts are maintained for all places situated within a
state
(c) At principal place of business covered mentioned in the Registration Certificate
for all places of business in each State
(d) Any of the above
Ans. (a) Each place of business pertaining to such place
Q8. The time period prescribed for maintenance of accounts and records, if the taxable
person is a party to an appeal or revision shall be-
(a) Two year after final disposal of such appeal or revision or proceeding, or until the
expiry of thirty-six months from the last date of filing of Annual Return for the year
pertaining to such accounts and records, whichever is later
(b) Two year after final disposal of such appeal or revision or proceeding, or until the
expiry of sixty months from the last date of filing of Annual Return for the year
pertaining to such accounts and records, whichever is later
(c) One year after final disposal of such appeal or revision or proceeding, or until the
expiry of seventy-two months from the last date of filing of Annual Return for the
year pertaining to such accounts and records, whichever is later
(d) One year after final disposal of such appeal or revision or proceeding, or until the
expiry of forty months from the last date of filing of Annual Return for the year
pertaining to such accounts and records, whichever is later
Ans. (c) One year after final disposal of such appeal or revision or proceeding, or until the
expiry of seventy-two months from the last date of filing of Annual Return for the
year pertaining to such accounts and records, whichever is later
Q9. Taxable person has to maintain his records for a period of:
(a) expiry of 72 months from the due date of filing of Annual Return for the year
(b) expiry of 40 months from the due date of filing of Annual Return for the year
(c) expiry of 30 months from the due date of filing of Annual Return for the year
(d) expiry of 90 months from the due date of filing of Annual Return for the year
Ans. (a) expiry of 72 months from the due date of filing of Annual Return for the year.
(a) GSTR 4A
(b) GSTR 5A
(c) GSTR 2A
(d) GSTR 6A
Ans. (d) GSTR 6A
Q6. Which of the following is true?
(a) The Commissioner may extend the time limit for furnishing the details of outward
supplies by notification for valid reasons
(b) The details of outward supplies shall include details of debit notes, credit notes
and revised invoices issued in relation to outward supplies
(c) The details of outward supplies shall be submitted in Form GSTR-1 by all the
registered taxable person other than ISD, non-resident tax payer and a person
paying tax under section 10, section 51 and section 52
(d) All the above
Ans. (d) All the above
Q7. The details submitted by the supplier in Form GSTR 1 are communicated to the
registered taxable person in
(a) Form GSTR 1A on 17th of the succeeding month
(b) Form GSTR 2A after the data entry in Form GSTR 1
(c) Form GSTR 2A after the due date of filing Form GSTR 1
(d) Form GSTR 1A on 15th of the succeeding month
Ans. (c) Form GSTR 2A after the data entry in Form GSTR 1
Q8. Which of the following is a correct statement?
(a) Every registered taxable person other than ISD, non-resident tax payer & a
person paying tax under section 10, 51 or 52 shall verify, validate, modify or
delete the details communicated in Form GSTR 2A
(b) The details of outward supplies communicated in Form GSTR 2A cannot be
modified or altered
(c) The registered taxable person should accept the details communicated in
Form GSTR 2A by 12th of the succeeding month
Ans. (c) 31st of December following the end of the financial year
Q29. Every registered taxable person who is required to get his accounts audited under
section 35(5) shall furnish electronically
1. Annual return
2. Audited copy of annual accounts
3. Reconciliation statement reconciling the value of supplies declared in the return
and the financial statement
4. All of the above
Ans. (d) All of the above
Q30. The annual return shall be filed by the registered taxable person (other than dealers
paying tax under section 10) in form
1. GSTR 7
2. GSTR 9
3. GSTR 9A
4. GSTR 10
Ans. (b) GSRT 9
Q31. Find the correct match of annual returns to be filed
1. Registered taxable person – Form GSTR 8
2. Input service distributor – Form GSTR 9
3. Non Resident taxable person – Form GSTR 9B
4. Compounding taxable person – Form GSTR 9A
Ans. (d) Compounding taxable person – Form GSTR 9A
Q32. Notice to non-filers of return shall be sent in Form
(a) GSTR 5
(b) GSTR 3
(c) GSTR 3A
(d) GSTR 10
Ans. (c) GSRT 3A
Q33. The final return shall be filed by the registered taxable person within
1. 3 months of the date of cancellation
MCQ’s
Q1. Which of these registers/ledgers are maintained online?
(a) Tax liability register
(b) Credit ledger
(c) Cash ledger
(d) All of them
Ans. (d) All of them
Q2. Payment made through challan will be credited to which registers/ledgers?
(a) Electronic Tax liability register
Q3. What is deemed to be the date of deposit in the electronic cash ledger?
(a) Date on which amount gets debited in the account of the taxable person
(b) Date on which payment is initiated and approved by the taxable person
(c) Date of credit to the account of the appropriate Government
(d) Earliest of the above three dates
Ans. (c) Date of credit to the account of the appropriate Government
Q4. What gets debited to the electronic credit ledger?
(a) Matched input tax credit
(b) Provisionally input tax credit
(c) Unmatched input tax credit
(d) All of them
Ans. (d) All of them
Q5. Balance in electronic credit ledger can be utilized against which liability?
(a) Output tax payable
(b) Interest
(c) Penalty
(d) All of them
Ans. (d) Output tax payable
Q6. Balance in electronic credit ledger under IGST can be used against which liability?
(a) IGST Liability only
(b) IGST and CGST liability
(c) IGST, CGST and SGST liability
(d) None of them
Ans. (c) IGST, CGST and SGST liability
Q7. Balance in electronic credit ledger under CGST can be used against which liability?
(a) CGST Liability only
(b) CGST and IGST liability
Q15. A taxable person failed to pay tax and/or file returns on time. He should pay interest
on?
(a) Gross tax payable
(b) Gross tax payable & input credit claimed
(c) Net tax payable
(d) No interest payable, if reasonable cause is shown
Ans. (a) Gross tax payable
Q16. From which date interest is liable in case of excess input tax credit claimed?
(a) From the late date of the month in which credit is claimed
(b) From the due date for filing GSTR-02 of the month in which credit is claimed
(c) From the due date for filing GSTR-03 of the month in which credit is claimed
(d) From the date of utilization of credit.
Ans. (c) From the due date for filing GSTR-03 of the month in which credit is claimed
Q17. 1For payment of IGST input tax credit can be utilised in the following manner only :
Q31. Is every supplier on e-commerce platform covered under Section 52 required to charge
GST from Re. 1?
1. Yes, since he is the registered taxable person.
2. No
Ans. (a) Yes, since he is the registered taxable person
Q32. When should the e-commerce operator collect tax at source?
(i) When he collects the consideration on behalf of the supplier in respect of such
supply
(ii) On the date when the other supplier makes supplies through operator
(iii) Day on which the operator remits the consideration to the supplier
(iv) Option (a) or (b) whichever is earlier
(v) Option (a) or (b) whichever is later
Ans. (a) When he collects the consideration on behalf of the supplier in respect of such
supply
Q33. When should the e-commerce operator remit the amount of TCS to government and file
the necessary returns with the government?
1. Within 10 days after the end of the month in which such amount was collected
2. Within 10 days after the end of the month in which such amount was collected,
Indirect Taxes Committee
74 FAQ’s and MCQ’s on GST
but no time limit for filing the return
3. Within 10 days after the end of the month in which such amount was collected,
but no time limit for paying the money
4. No time limit for both
Ans. (a) Within 10 days after the end of the month in which such amount was collected
Q34. Can a supplier take credit of the TCS?
5. Yes
6. No
7. Yes, on the basis of the valid return filed
8. Yes, on the basis of a valid return filed by the e-commerce operator and there is
no discrepancy in the returns
Ans. (d) Yes, on the basis of a valid return filed by the e-commerce operator and there is
no discrepancy in the returns
Q35. Is there any matching to be done with the returns filed by supplier and operator?
(a) Yes, return of e-commerce operator should be matched with every return of
supplier
(b) No, no such requirement mandated
(c) Yes, return of e-commerce operator should be matched with every return of
supplier but no consequences if the returns do not match
(d) Yes, return of e-commerce operator should be matched with every return of
supplier and if the returns do not match then the amount of discrepancy will be
added to the outward tax liability of the concerned supplier, where the value of
outward supplies furnished by the operator is more than the value of outward
supplies furnished by the supplier, in his return for the month succeeding the
month in which the discrepancy is communicated.
Q36. Every electronic commerce operator required to collect tax at source under section 52
shall furnish a statement in ……………………., containing details of supplies effected
through such operator and the amount of tax collected as required under section 52(1)
of the CGST Act.
(a) Form GSTR-5
(b) Form GSTR-6
(c) Form GSTR-7
(d) Form GSTR-8
Ans. (d) Form GSTR-8
Q14. Interest on refund amount is required to be paid after expiry of ............... from the date of
receipt of the application
(a) 60 days
(b) 90 days
(c) 180 days
(d) 240 days
Ans. (a) 60 days
Q15. What is the rate of interest to be payable in case of delay in sanctioning the refund
claimed?
(a) Not exceeding 6%
(b) Not exceeding 8%
(c) Not exceeding 10%
(d) Not exceeding 12%
Ans. (a) Not exceeding 6%
Q16. Whether a manufacture of fabrics will be eligible for refund of unutilized input tax credit
of GST paid on inputs [other than the input tax credit of GST paid on capital good] in
respect of fabrics manufactured and exported by him [i.e., exporter of fabric].
(e) Yes
(f) No
Ans. (a) Yes [in Circular No. 18/18 /2017 – GST dated 16.11.2017]
Q9. Whether all the returns submitted under Section 39 will be scrutinised?
(a) No, 50% of the returns submitted under Section 39 will be scrutinised.
(b) Yes, all the returns submitted under Section 39 will be scrutinised.
(c) No, Returns submitted under Section 39 will be self-assessed and proper officer
may select any return for scrutiny under this Section.
(d) No, 35% of the returns submitted under Section 39 will be scrutinised.
Ans. (c) No, Returns submitted under Section 39 will be self-assessed and proper officer
may select any return for scrutiny under this Section
Q10. Whether any time limit has been specified to issue notice for scrutiny?
(a) Six months from the end of the respective financial year.
(b) No time limit has been prescribed as of now, however same may be prescribed in
the rules.
(c) One Year from the end of the respective financial year.
(d) 3 Years from the end of the respective financial year.
Q11. In case no satisfactory explanation is furnished for the discrepancies within a period of
thirty days of being informed by the proper officer or such further period as may be
permitted proper officer may initiate appropriate action:
(a) Under Section 65 (Audit)
(b) Section 66 (Special Audit)
(c) Section 67, (Inspection, Search Seizure)
(d) Proceed to determine the tax and other dues under Section 73 or Section 74.
(e) Any of the above.
Ans. (e) Any of the above
Q12. Is there any time limit specified to furnish the return after serving of assessment order?
(a) Yes, Return has to be filed by registered person who has failed to submit return
Assessment 83
under Section 39 or Section 45 within 15 days from service the assessment
order.
(b) Yes, Return has to be filed by registered person who has failed to submit return
under Section 39 or Section 45 within 30 days from service the assessment
order.
(c) Yes, Return has to be filed by registered person who has failed to submit return
under Section 39 or Section 45 within 45 days from service the assessment
order.
(d) No time limit has been specified.
Ans. (b) Yes, Return has to be filed by registered person who has failed to submit return
under Section 39 or Section 45 within 30 days from service the assessment order
Q13. What are the consequences, where a registered person fails to furnish the return
required under Section 39 or Section 45, even after the service of a notice under
Section 46?
(a) The proper officer may proceed to assess the tax liability of the said person to the
best of his judgement.
(b) issue an assessment order within a period of five years from the date specified
under Section 44
(c) (a) or (b)
(d) (a) and (b)
Ans. (d) (a) and (b)
Q14 What is the time limit for issuing order under section 62?
(a) 9 months from the end of financial year.
(b) 3 years for cases covered U/s 73 or 5 years for cases covered under 74
(i) Period selected for assessment has to be within 5 years from the end of due date
for filing annual return of relevant period.
(ii) Show cause notice has to be issued before passing assessment order.
(iii) Opportunity of being heard has to be given before passing assessment order.
(iv) All of the above.
Ans. (d) All of the above
Q19. Whether proper officer can proceed Suo-moto in assessing the tax liability of a taxable
person on possession of relevant evidence?
(i) No, the proper officer has to obtain prior permission of [Additional/Joint
Commissioner] to proceed to assess the tax liability.
(ii) No, the proper officer has to obtain prior permission of Chief Commissioner to
proceed to assess the tax liability.
(iii) No, the proper officer has to obtain prior permission of Principle Chief
Commissioner to proceed to assess the tax liability.
(iv) Yes, the proper officer can proceed Suo-moto in assessing the tax liability of a
taxable person on possession of relevant evidence.
Ans. (a) No, the proper officer has to obtain prior permission of [Additional/Joint
Commissioner] to proceed to assess the tax liability.
Q20. The order u/s 64 may be withdrawn:
On an application made by taxable person,
If the Additional/Joint Commissioner considers that such order is erroneous.
(a) or (b)
The order passed u/s 64 cannot be withdrawn.
Ans. (c) (a) or (b)
Q6. When can the proper officer issue summons to call upon a person?
(a) To give evidence
(b) Produce a document
(c) Produce any other thing in an enquiry
(d) All of the above
Ans. (d) All of the above
Q7. What can be the consequences of non-appearance to summons?
(a) Prosecution under section 172, 174, 175 and 193 of the Indian Penal Code as the
case may be
(e) Arrest under Code of Criminal Procedure, 1973
(a) Arrest under Foreign Exchange Management Act
(b) None of the above
Ans. (a) Prosecution under section 172, 174, 175 and 193 of the Indian Penal Code as the
case may be
MCQ’s
Q1. What is the time limit for issue of order in case of fraud, misstatement or suppression?
(a) 30 months
(b) 18 months
(c) 5 years
(d) 3 years
Ans. (c) 5 years
Q2. What is the time limit for issue of order in case of other than fraud, misstatement or
suppression?
(a) 30 months
(b) 18 months
(c) 5 years
(d) 3 years
Ans. (d) 3 years
Q3. Is it obligatory on the part of the Department to take on record the assessee’s
representation during adjudication and issue of order?
(a) Yes
(b) No
(c) At proper officer’s discretion
(d) If requested by notice
Ans. (a) Yes
Q4. What is the maximum amount of demand for which the officer can issue an order under
section 73 in case of other than fraud, misstatement or suppression?
(a) Amount of tax + interest + penalty of 10% of tax
(b) Amount of tax + interest + penalty of 10% of tax or ` 10,000/- whichever is higher
(c) ` 10,000/-
(d) Amount of tax + interest + 25% penalty
Ans. (b) Amount of tax + interest + penalty of 10% of tax or ` 10,000/- whichever is higher
Q5. What is the maximum amount of demand for which the officer can issue an order under
section 74 in case fraud, misstatement or suppression?
Demands and Recovery 93
1. Amount of tax + interest + penalty of 15% of tax
2. Amount of tax + interest + penalty of 25% of tax
3. Amount of tax + interest + penalty of 50% of tax
4. Amount of tax + interest + penalty of 100% of tax
Ans. (d) Amount of tax + interest + penalty of 100% of tax
Q6. What is the prescribed monetary limit of Central Tax for Superintendent of Central Tax
for issuance of show cause notices and orders under Section 73 and 74?
1. Not exceeding Rupees 10 lakhs
Q18. Any amount of tax collected shall be deposited to the credit of the Central or State
Government:
(a) Only when the supplies are taxable
(b) Regardless of whether the supplies in respect of which such amount was
collected are taxable or not
(c) Only when the supplies are not taxable
(d) None of the above
Demands and Recovery 97
Q19. Is there any time limit for issue of notice under section 76 in cases where tax collected
but not paid?
(a) No time limit
(b) 1 year
(c) 3 years
(d) 5 years
Ans. (a) No time limit
Q20. Within how many years should the proper officer issue an order from the date of issue
of notice?
(a) 1 year
(b) 2 years
(c) 3 years
(d) 4 years
Ans. (a) 1 year
Q21. Whether the person who has borne the incidence of amount apply for refund of surplus
left after adjustment towards tax collected but not paid under section 76?
(a) Yes
(b) No
(c) At proper officer’s discretion
(d) None of the above
Ans. (a) Yes
Q22. In case the person does not deposit tax collected in contravention of Section 76, is the
same recoverable with interest?
(a) Yes
(b) No
(c) At proper officer’s discretion
(d) None of the above
Ans. (a) Yes
Q34. Which of the following acts by a person are treated as void when it is done after any
amount has become due from him?
Demands and Recovery 101
(a) Creates charge on property
(b) Parts with the property belonging to him
(c) Parts with the property in his possession
(d) All of the above
Ans. (d) All of the above
Q35. What all modes of transfers covered under section 81
(a) Sale
(b) Mortgage
(c) Any other mode of transfer
(d) All of the above
Ans. (d) All of the above
Q36. When transfer of property would be considered void?
(a) Transaction is done to defraud the Government revenue
(b) Transaction is done without the intention to defraud the Government revenue
(c) Any of the above
Ans. (a) Transaction is done to defraud the Government revenue
Q37. When transfer of property would not be considered void?
(a) Transaction is done for adequate consideration and without the notice of the
pendency of proceedings under the Act
(b) Transaction is done without the notice of such tax or other sum payable
(c) With previous permission of the proper officer
(d) All of the above
Ans. (d) All of the above
Q40. Whether property of a taxable person be provisionally attached to protect the revenue?
(a) Yes
(b) No
(c) None of the above
Ans. (a) Yes
Q41. Who is competent authority for passing an order for provisional attachment?
(a) The Deputy Commissioner
(b) The Commissioner
(c) The GST Council
(d) The Assistant Commissioner
Ans. (b) The Commissioner
Q42. Till what period does the order passed for provisional attachment is valid?
(a) Infinite period
(b) Ten years
(c) One year
(d) Till the end of such proceedings
Ans. (c) One year
Demands and Recovery 103
Q43. Provisional attachment can be done under section 83:
(a) Before completion of proceedings
(b) After completion of proceedings
(c) After 3 attempts to recover dues
(d) Only if there is risk of delinquency in payment of dues
Ans. (a) Before completion of proceedings
Q44. The Commissioner shall issue a fresh notice to recover the Government dues, if:
(a) Demand amount is enhanced
(b) Demand amount is reduced
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Ans. (a) Demand amount is enhanced
Q45. When Commissioner is not required to serve fresh notice to recover the Government
dues?
(a) Demand amount is reduced
(b) Already proceedings of recovery of Government dues is served before disposal of
appeal, revision of application or other proceedings
(c) Demand amount is enhanced
(d) Both (a) and (b)
Ans. (d) Both (a) and (b)
Q46. Who can issue fresh notice for enhanced demand by appeal, revision of application or
other proceedings:
(a) Commissioner
(b) Assistant Commissioner
(c) Joint Commissioner
MCQ’s
Q1. Who is liable to pay the tax in case of Principal and Agent?
(a) Principal
(b) Agent
(c) Both jointly and severally
(d) Jointly
Ans. (c) Both jointly and severally
Q2. When two or more companies are amalgamated, the liability to pay tax on supplies
between the effective date of amalgamation order and date of amalgamation order
would be on -
(a) Transferee;
(b) Respective companies;
(c) Any one of the companies;
(d) None of the above. Ans.
Q3. In case of amalgamation between two companies, such companies shall be treated as
two distinct companies till –
(a) Till the date of the Court order
(b) Till the effective date of merger
(c) Till the date of cancellation of registration
(d) None of the above
Ans. (a) Till the date of the Court order
Liability to pay in certain cases 105
Q4. Intimation regarding appointment of liquidator should be given to the Commissioner
within 30 days of
(i) Liquidation
(ii) Cancellation of registration
(iii) Appointment of Liquidator
(iv) Order of Court
Ans. (c) Appointment of Liquidator
Q5. Commissioner will notify the amount of liability within how many days of intimation
(a) 3 months
(b) 30 days
(c) 60 days
MCQ’s
Q1. What is the meaning of applicant?
(a) Person registered under the Act.
(b) Person desirous of obtaining registration under the Act.
(c) Tourist as defined under section 15 of IGST Act, 2017.
(d) (a) or (b).
Ans. (d) (a) or (b)
Q2. Where shall the Advance Ruling Authority be located?
(a) The Authority shall be located in each State / Union Territory.
(b) The Authority shall be located in Centre.
(c) The Authority shall be located in both Centre & State.
(d) None of the above.
Ans. (a) The Authority shall be located in each State / Union Territory.
Q3. The AAR shall comprise of:
(a) One member from amongst the officers of Central tax and one member
from amongst the officers of State tax/Union Territory tax.
(b) One sitting High Court Judge.
(c) (a) & (b)
(d) (a) and (b)
Ans. (a) One member from amongst the officers of Central tax and one member from
amongst the officers of State tax/Union Territory tax.
Q4. The Appellant Authority for Advance Ruling shall comprise of:
(a) Chief Commissioner of Central tax as designated by the Board and
Commissioner of State tax/ Union Territory tax, having jurisdiction over the
applicant.
(b) Principal Chief Commissioner of Central tax and Commissioner of State tax/ union
Territory tax, having jurisdiction over the applicant.
(c ) Two sitting High Court Judges.
(d) None of the above.
Ans. (a) Chief Commissioner of Central tax as designated by the Board and
Commissioner of State tax/ Union Territory tax, having jurisdiction over the
applicant.
Q6. What procedure should be followed if, the members of the Authority differ on any
question on which the Advance Ruling is sought?
(a) The members of the authority shall state the point or points on which they differ
and make a reference to the Appellate Authority for hearing and decision on such
question
(b) The Authority will not take any decision and reject the application
(c) The Authority will remand the case to jurisdictional officer
(d) None of the above
Q7. Within how many days the Authority shall pronounce its decision on Advance Ruling
from the date of receipt of application?
(a) 30 days
(b) 60 days
(c) 90 days
(d) 120 days
Ans. (c) 90 days
Q8. Who can appeal to the AAAR?
(a) Jurisdictional CGST/SGST officer or the applicant
(b) Any Taxable Person
(c) Any citizen concerned about the ruling passed
(d) All of the above
Ans. (a) Jurisdictional CGST/SGST officer or the applicant
Q9. Appeal before AAAR can be filed within how many days?
(a) 30 days
(b) 60 days
(c) 90 days
Indirect Taxes Committee
112 FAQ’s and MCQ’s on GST
(d) 120 days
Ans. (a) 30 days
Q11. Under what circumstances, the members of the Appellate Authority deem that no
advance ruling can be issued in respect of the questions covered under the appeal
(a) If the members of the AAAR differ on any point or points referred to in appeal
(b) If the members of the AAR differ on any point or points referred to in appeal
(c) Applicant wants to withdraw the application
(d) Both (a) and (c)
Ans. (a) If the members of the AAAR differ on any point or points referred to in appeal
Q12. Who has the power to amend the order issued under section 98 or 101, to rectify any
error apparent from record?
(a) Advance Ruling Authority
(b) Appellate Authority for the Advance Ruling
(c) Authority or, as the case may be, the Appellate Authority.
(d) None of the above.
Ans. (c) Authority or, as the case may be, the Appellate Authority
Q13. Who can apply for rectification of error on record?
(a) Applicant
(b) Concerned officer or Jurisdictional Officer
(c) Advance Ruling Authority or the Appellate Authority on its own accord can rectify
the error
(d) All of the above
Ans. (d) All of the above
Q14. When should the opportunity of hearing be given to applicant or the appellant for
rectification of advance ruling?
(a) If the rectification has the effect of enhancing the tax liability.
(b) If the rectification has the effect of reducing the amount of admissible input tax
credit.
(c) (a) or (b)
(d) None of the above
Ans. (c) (a) or (b)
Q15. The Advance Ruling pronounced by the AAAR shall be binding on:
(a) The applicant who sought the advance ruling.
The Institute of Chartered Accountants of India
Advance Ruling 113
Q20. An applicant may seek Advance Ruling in relation to supply of goods and/or services-
(a) being undertaken by him
(b) proposed to be undertaken by him
(c) already undertaken by him
(d) all of the above
Ans. (d) all of the above
Q21. AAR or AAAR shall be constituted
(a) Under respective State GST Act
(b) Under Central GST Act
(c) Both under Central GST and State GST Act
Ans. (c) Under respective State GST Act
Q22. An Advance Ruling can be sought by:
(a) Only by a registered person
(b) By a person desirous of obtaining registration
(c) Both (a) and (b)
(d) None of the above
Ans. (c) Both (a) and (b)
Q23. A member of AAR shall not be below the rank of:
(a) Deputy Commissioner
(b) Assistant Commissioner
(c) Joint Commissioner
(d) Commissioner
Ans. (c) Joint Commissioner
Q24. The fee for filing an application for Advance Ruling is:
(a) ` 5000/- under CGST Act
(b) ` 5000/- under SGST Act
(c) ` 5000/- each under CGST and SGST Act
(d) ` 10000/- under any of the above Act
Ans. (c) ` 5000/- each under CGST and SGST Act
Q25. The fee for filing an appeal before AAAR by the applicant is:
(a) ` 25000/- under CGST Act
(b) ` 25000/- under SGST Act
(c) ` 10000/- each under CGST and SGST Act
(d) ` 25000/- under any of the above Act
Ans. (c) `10000/- each under CGST and SGST Act
Q26. The fee for filing an appeal before AAAR by the Department is
(a) ` 5000/- under CGST Act
(b) ` 5000/- under SGST Act
(c) ` 10000/- each under CGST and SGST Act
(d) None of the above
Ans. (d) None of the above
Q27. The AAR after examining the application and relevant records shall:
(a) pass an order admitting the application
(b) pass an order rejecting the application
(c) pass an order admitting or rejecting the application
(d) allow the applicant to amend the application
Ans. (c) pass an order admitting or rejecting the application
Q28. A copy of Advance Ruling has to be certified to be a true copy of its original:
(a) by all members of the AAR
(b) by any member of the AAR
(c) certification is not required
(d) certification is optional
Ans. (b) by any member of the AAR
Q29. Within how many days of filing of appeal or reference, the Appellate order shall be
pronounced
(a) 30 days
(b) 60 days
MCQ’s
Q1. Should the principal referred to in Section 143 be registered?
(a) Yes
(b) No
Ans. (a) Yes
Q2. Who is a principal as per Section 143?
(a) A person who sends inputs and/or capital goods for job-work
(b) A registered taxable person who sends inputs and/or capital goods for job-work
(c) A registered taxable person who supplies inputs and/or capital goods for job-work
(d) A registered person
Ans. (d) A registered person
Q3. When will the inputs and/or capital goods sent to job-work become a supply?
(a) When the inputs and/or capital goods sent to job-worker are not received within
1 year or 3 years respectively
(b) When the inputs and/or capital goods sent to job-worker are not supplied, with or
without payment of tax, from the job-workers place within 1 year or 3 years
respectively
(c) Both under (a) or (b)
(d) None of the above
Ans. (c) Both under (a) or (b)
Miscellaneous 117
Q4. From when will the period of one or three years be calculated under Section 143?
(a) The day when such inputs and/or capital goods sent to job-worker
(b) The day when the job-worker receives the said goods, in case the job-worker
receives the goods directly
(c) Both (a) and (b)
(d) None of the above
Ans. (c) Both (a) and (b)
Q5. Will a principal who sends moulds, dies, jigs, tools and fixtures to job worker’s place
liable to pay GST on such removal?
(a) No, it is not a supply
(b) Yes, if not received within time limit
(c) No, as capital goods as referred in section 143 excludes moulds, dies, jigs, tools
and fixtures.
(d) None of the above
Ans. (c) No, as capital goods as referred in section 143 excludes moulds, dies, jigs, tools
and fixtures
Q6. GST is applicable on__
(a) Inputs and/or capital goods sent to job-worker (Satisfying conditions u/s 143)
(b) The job-worker charges and additional material added by the job-worker on the
inputs sent by the principal
(c) Both of the above
(d) None of the above
Ans. (b) The job-worker charges and additional material added by the job-worker on the
inputs sent by the principal
Q7. When should a job-worker take registration?
(a) Always
(b) Only if his aggregate turnover exceeds the threshold limits specified under
Section 22 of the Act.
(c) Never
(d) None of the above
Ans. (b) Only if his aggregate turnover exceeds the threshold limits specified under
Section 22 of the Act
(a) 1 year
(b) 3 years
(c) 5 years
(d) No time limit specified under GST
Ans. (d) No time limit specified under GST
Q13. Will the inputs and/or capital goods supplied from the job-worker’s premises be
considered for calculating the aggregate turnover of the job-worker?
(a) Yes
(b) No
Q14. Which section specifies the conditions to be fulfilled for claiming ITC on inputs and/or
capital goods sent to job-worker?
(a) 19
(b) 55
(c) 143
(d) 177
Ans. (a) 19
Q15. Can principal take input tax credit on the inputs and/or capital goods sent directly to job-
worker?
(a) Yes
(b) No
(c) Yes subject to section 143
(d) ITC on capital goods sent directly to job-worker’s premise is not eligible unless
the same is received in the premises of the principal
Ans. (c) Yes subject to section 143
Q16. If the job-worker is eligible to claim ITC on the goods received from the principal, is
there a time limit within which such ITC shall be availed/claimed by the job-worker?
(a) Within September 30 of following year
(b) Filing the annual return for the period
Q28. What special procedures can be notified for certain class of persons u/s 148?
(a) Registration
(b) Furnishing of Return
(c) Payment of Tax
(d) Administration of such persons
(e) All of the above
Ans. (e) All of the above
Miscellaneous 123
Q29. GST compliance rating would be given to whom
(a) Input Service Distributor
(b) Supplier of Goods and/ or Services whose value of taxable turnover is greater
than 20 lakhs
(c) Composition Dealer
(d) Person who is liable to deduct TDS/ collect TCS
(e) All of the above
Ans. (e) All of the above
Q30. Whether GST compliance rating would be placed in public domain?
(a) Yes – rating would be available to general public
(b) No – rating would not be available to general public
(c) Rating disclosed only at the time of entering into transaction
(d) Rating disclosed only to person to whom the compliance rating belongs
Ans. (a) Yes – rating available to general public.
Q43. What is the effect if the parliament annuls the rules/ notifications issued by
government?
(a) It is as good as no rules/ notifications were issued by the government
(b) The rules/ notifications issued by the government would be effective for the
period from the date of issue till the date they were annulled by the parliament
(c) There would be no sanctity for the action taken by the department/ assessee on
the basis of rules/ notification for the period from the date of issue till the date of
annulment.
(d) The action taken by the department/ assessee on the basis of such rules would
be void from the date of annulling the rules/ notification.
(e) (a) and (c)
(f) (b) and (d)
Ans. (b) and (c)
Q44. What are the methods to serve notice/ order/ documents under GST Act?
(a) Only by registered post acknowledgement due
(b) By speed post (acknowledgement due not necessary)
(c) By courier with acknowledgement due
(d) Common portal
(e) E-mail provided at the time of registration
(f) Publication in newspaper circulating in the locality
(g) All of the above except (c)
(h) All of the above except (b)
Ans. (g) All of the above except (b)
Q45. Would notice/ order/ documents be ‘deemed as served’, though registered post/ speed
post is not received by intended person?
(i) No. Actual service is necessary. There is no concept of deemed service.
(ii) Yes it is deemed to have been received by the addressee at the expiry of the
period normally taken by such post, unless the contrary is proved.
Ans. (b) Yes it is deemed to have been received by the addressee at the expiry of the
period normally taken by such post, unless the contrary is proved.
MCQ’s
Q1. In case of inter-State movement of goods, every registered person who causes
movement of goods of consignment value exceeding ........................................ in relation to
a supply or for reasons other than supply or due to inward supply from an unregistered
person shall, before commencement of such movement, file FORM GST EWB-01.
(a) ` 50,000/-
(b) ` 1,00,000/-
(c) ` 70,000/-
(d) None of the above
Ans. (a) ` 50,000/-
Q2. When the movement of goods is caused by an unregistered person the e-way bill shall
be generated by:
(a) Unregistered person himself
(b) The Transporter
(c) Either of them
(d) Neither of them
Ans. (c) Either of them
E-Way Bill 129
(c) One additional day in cases other than Over Dimensional Cargo
(d) One day in case of Over Dimensional Cargo
Ans. (a) One day in cases other than Over Dimensional Cargo.
MCQ’s
Q 1. ____________ Supply shall attract IGST?
(a) Intra-State
(b) Inter-State
(c) Both
MCQ’s
Supply of goods and / or service in the course of inter-state, intra-
state trade or commerce (Section 7 to 9)
Q 1. Which of the following is an inter-State supply?
(a) Supplier of goods located in Delhi and place of supply of goods is to an SEZ
located in Delhi
(b) Supplier of goods located in Delhi and place of supply of goods in Jaipur
(c) Supplier of goods located in Delhi and place of supply of goods is to an SEZ
located in Chandigarh
(d) All the above
Ans. (d) All the above
MCQ’s
Q 1. Which of the following supply involving movement of goods is an intra-State supply?
(a) Location of supplier in Kerala and place of supply in Tamil Nadu
(b) Location of supplier in Karnataka and place of supply in Karnataka
(c) Location of supplier in Kerala and place of supply on Andhra Pradesh
(d) None of the above
Ans. (b) Location of supplier in Karnataka and place of supply in Karnataka.
Q 2. Place of supply in case of installation of elevator is
(a) Where the movement of elevator commences from the supplier’s place
(b) Where the delivery of elevator is taken
(c) Where the installation of elevator is made
(d) Where address of the recipient is mentioned in the invoice
Ans. (c) Where the installation of elevator is made.
Q 3. Place of supply of food taken on board at Delhi for an aircraft departing from Delhi to
Bangalore via Hyderabad is
(a) Address of the aircraft carrier mentioned on the invoice of the supplier
(b) Delhi
Q 8. Place of supply of service for DTH by ABC Pvt. Ltd. located in Mumbai to customer in
Patna is:
1. Mumbai
Refund of Integrated Tax to International Tourist 485
2. Patna
Ans. (b) Patna
Q 9. Mr. X of Hyderabad not having bank account takes a demand draft in Kolkata from ABC
Bank for his visa purpose. The place of supply is
(a) Hyderabad
(b) Kolkata
Ans. (b) Kolkata
Q 10. The provider of AMC service outside India has entered into an agreement for an aircraft
company PQR located in India AMC. The service provider provides repair service to the
aircraft when it was in India. The place of service in this case is:
(a) Outside India
(b) India
Ans. (b) India; since the aircraft is in India when the service is provided
Q 11. If XYZ Ltd a company based out of Bangalore, awards online maintenance contract of
its servers located in Mumbai office to Y INC, a company based out of USA, and as per
the terms of the online maintenance Y INC shall be required to perform regular
maintenance from USA using Internet, then the place of supply is
1. Bangalore
2. Mumbai
3. USA
Ans. (b) Mumbai
Q 12. Mr. Y residing in Ahmedabad appoints an architect in Delhi to provide Indian traditional
home design for his proposed construction at Los Angeles, the place of supply of
service is:
1. Los Angeles
2. Ahmedabad
3. Delhi
Ans. (a) Los Angeles
Q 13. If NM shipping Co. located in Chennai charges ocean freight charges for transport of
goods to California for a customer located in Bangalore, the place of supply of service
will be:
1. Chennai
MCQ’s
Zero Rated Supply (Section 16)
Q 1. Zero rated supply includes:
• Export of goods and services.
• Supply of goods and services to a SEZ developer or SEZ Unit
• Supply of goods and services by a SEZ developer or SEZ Unit
• Both (a) and (b)
Ans. (d) Both (a) and (b)
Q 2. Is the SEZ developer or SEZ unit receiving zero rated supply eligible to claim refund of
IGST paid by the registered taxable person on such supply?
1. Yes
2. No
3. Partially yes
Ans. (b) No
Q 3. A registered taxable person is eligible to claim refund in respect of export of goods and
services in the following cases:
1. Under bond, without payment of IGST and claim refund of unutilized input tax
credit.
2. On payment of IGST and claim refund of IGST paid on such goods and services.
3. None of the above
4. Both (a) and (b)
Ans. (d) Both (a) and (b)
Q 4. The supply of goods to SEZ unit is treated as____________ in the hands of the supplier:
1. Exempt Supply – Reversal of credit
2. Deemed Taxable Supply – No reversal of credit
3. Export of Supplies
4. Non-Taxable Supply – Outside the Scope of GST
Ans. (c) Export of Supplies
Q 5. Governments has notified, Supplies of goods in respect of which no refund of unutilised
input tax credit shall be allowed vide …………………….
MCQ’s
Q 1. Out of IGST paid to the Central Government, which of the following must be
apportioned based on tax rate equivalent to the CGST on similar intra-state supply?
(a) Interstate supply of goods and services to an unregistered person.
(b) Interstate supply of goods and services to a taxable person paying tax under
sec.10 of the CGST Act, 2017.
(c) Interstate supply of good and services to taxable person not eligible for input tax
credit.
(d) All of the above.
Ans. (d) All of the above
Q 2. Can IGST amount apportioned to a State, if subsequently found refundable to any
person and refunded to such person, be reduced from the amount apportioned to such
State?
(a) Yes
(b) No
(c) Partially
(d) None of the above
Ans. (a) Yes
Q 3. Out of the IGST paid to the Central Government in respect of import of goods or
services, if the registered taxable person does not avail the said credit within the
specified period and so remains in the IGST account, what is the treatment?
(a) Refund it back to the taxable person.
(b) Can be claimed after the expiry of the specified period.
(c) Apportion to the Central Government based on rate equivalent to CGST on
similar intra-State supply and Apportion to the state where such supply takes
place.
(d) None of the above.
Ans. (c) Apportion to the Central Government based on rate equivalent to CGST on
Miscellaneous 489
similar intra-State supply and Apportion to the State where such supply takes
place
Q 4. The provisions of apportionment of tax also apply to
(a) Apportionment of interest
(b) Apportionment of penalty
(c) Compounding amount realized in connection with tax so apportioned.
(d) All of the above
Ans. (d) All of the above
Q 5. The registered person has paid IGST by treating an intra-State supply as inter-State
supply. The officer has levied CGST and SGST as the same is intra-State supply. What
is the remedy?
(a) Pay CGST and SGST along with applicable interest
(b) Pay CGST and SGST and Claim refund of IGST
(c) Forgo IGST paid
(d) None of the above
Ans. (b) Pay CGST and SGST and Claim refund of IGST
MCQ’s
Q 1. What provisions of CGST have been made applicable to IGST?
(i) All the provisions
(ii) Only a few provisions
(iii) The provisions of CGST Act as would be applicable to IGST has not been
mentioned
(iv) The exact provisions of CGST Act as would be applicable to IGST have not been
enumerated. However, a list of items have been mentioned, whose corresponding
provisions under CGST would apply to IGST Act.
Q 2. What would the TDS and TCS rates be under IGST?
(a) TDS and TCS provisions not applicable to IGST since no such provisions have
been incorporated under IGST Act
(b) TDS and TCS @ 1% each
(c) TDS @2% and TCS @ not exceeding 2%
(d) TDS @1% and TCS not exceeding 2%
Ans. (c) TDS @2% and TCS @ not exceeding 2%
Q 7. What is the effect, if the parliament annuls the rules/ notifications issued by
government?
The Institute of Chartered Accountants of India
Goods and Service Tax (Compensation to States) Act, 2017 491
(a) It is as good as no rules/ notifications were issued by the government
(b) The rules/ notifications issued by the government would be effective for the
period from the date of issue till the date they were annulled by the parliament
(c) There would be no sanctity for the action taken by the department/ assessee on
the basis of rules/ notification for the period from the date of issue till the date of
annulment.
(d) The action taken by the department /assesses on the basis of such rules would
be void from the date of annulling the rules/notification.
(e) (a) and (c)
(f) (b) and (d)
Ans. (f) - (b) and (d)
Q 8. What is the maximum period for exercising this power of issuing general or a special
order for removal of difficulties?
(a) 4 years
(b) 3 years
(c) 2 years
(d) 1 year
Ans: (b) 3 years
MCQ’S
Short title, extent and commencement (Section 1)
Q1. Whether the Goods and Services Tax (Compensation to States) Act, 2017 is extended
to whole of India?
(a) Yes
(b) No
(c) Whole of India except state of Jammu & Kashmir
(d) None of the above
Ans. (a) Yes
Q6. What is the projected nominal growth rate of revenue considered during transition
period under the GST Compensation Act?
(a) 10%
(b) 14%
(c) 12%
(d) 8%
Ans. (b) 14%
The Institute of Chartered Accountants of India
Goods and Service Tax (Compensation to States) Act, 2017 493
Q7. Which financial year has been considered as the base year for calculating the
compensation amount payable in any financial year during the transition period, under
the GST Compensation Act?
(i) Financial Year ending 31st March, 2015
(ii) Financial Year ending 31st March, 2016
(iii) Financial Year ending 31st March, 2017
(iv) Financial Year ending 31st March, 2018
Ans. (b) Financial Year ending 31st March, 2016
Q8. When the compensation payable to a State shall be provisionally calculated and
released?
(a) at the end of every three months period
(b) at the end of every four months period
(c) at the end of every two months period
(d) at the end of every one months period
Ans. (c) at the end of every two months period
Q9. When the compensation payable to a State shall be finally calculated for every financial
year?
(a) At the end of the financial year
(b) after the receipt of final revenue figures, as audited by the Comptroller andAuditor-
General of India
(c) on the date of finalization of financial statement
(d) None of the above
Q10. What shall be the actual revenue collected by a State in any financial year during the
transition period?
(a) the actual revenue from State tax collected by the State, net of refunds given by
the said State under Chapters XI and XX of the SGST Act.
(b) the integrated goods and services tax apportioned to that State.
(c) any collection of taxes on account of the taxes levied by the respective State
under the Acts specified in sub-section (4) of section 5, net of refunds of such
taxes.
All of the above.
Q11. What shall be done in case of any difference between the final compensation amount
payable to a State calculated in accordance with the provisions of section 7(3) upon
receipt of the audited revenue figures from the Comptroller and Auditor-General of
Q17. Which Act need to be referred for compliances under this Act by taxable person in
relation to Returns, payments and refunds.
(a) Central Goods & Service Tax and rules made thereunder
(b) State Goods & Service Tax and rules made thereunder
(c) Integrated Goods & Service Tax and rules made thereunder
(d) None of above
Ans. (a) Central Goods & Service Tax and rules made thereunder
Q18. Which of the following statement is true?
(a) All amounts payable to the States under section 7 shall be paid out of the Goods
and Services Tax Compensation Fund
(b) Fifty per cent. of the amount remaining unutilised in the Fund at the end of the
transition period shall be transferred to the Consolidated Fund of India as the
share of Centre
(c) The balance fifty per cent. of the amount remaining unutilised in the Fund at the
end of the transition period shall be distributed amongst the States in the ratio of
their total revenues from the State tax or the Union territory goods and services
tax, as the case may be.
(d) All of the above
Ans. (d) All of the above
Q19. Before whom the accounts of the Goods and Services Tax Compensation Fund, as
certified by the Comptroller and Auditor-General of India or any other person appointed
by him in this behalf together with the audit report thereon shall be laid?
(a) Before each House of Parliament
Indirect Taxes Committee
496 FAQ’s and MCQ’s on GST
(b) Before President of India
(c) Before Lok Sabha
(d) All of the above
Ans. (a) Before each House of Parliament
4. As a result of constitution amendment for GST a Separate List --- has been inserted in the
constitution.
a) Article 246A b) Article 146B c) Article 122 C d) Article 101B
20. GST dealers with annual turnover of --- are not required to use HSN code
a) Less than Rs. 1.5 crore b) less than Rs. 20 lakh
c) less than Rs. 1 crore d) less than Rs. 75 lakh
21. Dealers whose annual turnover between Rs. 1.5 crore and Rs. 5 crore need to use
a) Two-digit HSN code b) Four digit HSN Codes
c) Four digit HSN Codes d) Eight digit HSN codes
22. Dealers with annual turnover of Rs. 5 crore and above must use -- for their invoices.
a) Two-digit HSN code b) Four digit HSN Codes
c) Four digit HSN Codes d) Eight digit HSN codes
27. Base metals, gold, silver, articles of jewellery are taxable in India at the rate of
a) 0.25% b) 1% c) 3% d) 5%
29. Tax Deducted at Source at the rate of 1% is applicable in the case of supplies received by
a) Any GST dealer b) Government Departments
c) Ecommerce operators d) Composite dealers
33. Goods which get input tax credit without being liable to collect output tax is called
a) Exempt goods b) White goods c) Sin goods d) Zero rated goods
35. -- confers powers to Government of India to collect tax on intra-state supply of goods or
services or both.
a) UTGST Act b) IGST Act c) CGST Act d) SGST Act
40. Goods which are used or intended to be used in the course or furtherance of business are
a) Demerit goods b) Business goods c) Capital goods d) None of these
41. A person who occasionally undertakes transactions involving supply of goods or services or
both in the course or furtherance of business is
a) Business person b) Casual taxable person c) composite dealer d) Non resident dealer
42. Supply of two or more taxable supplies naturally bundled and supplied is called
a) Mixed supply b) Composite supply c) Common supply d) Continous supply
43. Goods are packed and transported with insurance, packing materials, transport and insurance.
This is a case of
a) Mixed supply b) Composite supply c) Common supply d) Continous supply
45. Indian Oil Corporation Ltd. sends 10,000 litres of petrol every day to a petrol pump and
invoices the same every week. This is a case of
a) Mixed supply b) Composite supply c) Common supply d) Continous supply
46. Any goods other than capital goods used or intended to be used by a supplier in the course or
furtherance of business is
a) Input b) Output c) Merit goods d) White goods
47. --- refers to receipt of goods or services or both whether by purchase, acquisition or any
other means with or without consideration.
a) Outward supply b) Inward supply c) Taxable supply d) None of these
48. Two or more individual supplies of goods or services, or any combination thereof, made in
conjunction with each other
a) Mixed supply b) Composite supply c) Common supply d) Continous supply
49. A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits,
aerated drinks and fruit juices when supplied for a single price is
a) Common supply b) Composite supply c) Mixed supply d) Continous supply
50. Any person who occasionally undertakes transactions involving supply of goods or services
or both, but who has no fixed place of business or residence in India is
a) Business person b) Casual taxable person c) composite dealer d) Non resident dealer
52. Supply of goods or services which constitutes the predominant element of a composite
supply is called
a) Common supply b) Principal supply c) Mixed supply d) Continous supply
53. Liability to pay tax by the recipient of supply of goods or services is called
a) Output tax b) Reverse charge c) Input tax d) None of these
55. In the GST council meetings , the vote of the Central Government shall have a weightage of
a) 1/3 of votes cast b) 1/2 of votes cast c) 2/3 of votes cast d) None of these
56. In the GST council meetings votes of all the State Governments taken together shall have a
weightage of
a) 1/3 of votes cast b) 1/2 of votes cast c) 2/3 of votes cast d) None of these
62. Where a supply is received at a place of business for which the registration has
been obtained, ‘location of the recipient of services’ is
a) location of place of business of recipient b) location of service provider
c) Place where payment is received d) None of the above
63. Where a supply is received at more than one place ‘location of the recipient of services’ is
a) Location of the establishment most directly concerned with the receipt of the supply
b) Location of service provider c) Place where payment is received d) None of the above
65. Where an E- commerce operator does not have physical presence in the taxable territory
a) Tax need not be paid b) Agent of the E- commerce operator shall be liable to pay tax
c) Tax must be paid in advance d) IGST is not applicable
66. Where the location of the supplier and the place of supply are in two different States –
a) IGST is applicable b) CGST is applicable
c) SGST plus CGST is applicable d) CGST plus IGST is applicable
67. Where location of the supplier and the place of supply are in two different Union territories
a) CGST plus UTGST is applicable b) IGST is applicable
c) SGST plus UTGST is applicable d) CGST plus IGST is applicable
68. Where location of the supplier and place of supply are in a State and a Union territory
a) CGST plus UTGST is applicable b) CGST plus IGST is applicable
c) SGST plus UTGST is applicable d) IGST is applicable
69. Supply of goods where the location of the supplier and the place of supply of goods are in the
same State or same Union territory shall be treated as
a) Inter state b) Intra-state supply c) Taxable supply d) None of these
71. 1,000 bags of sugar are supplied by a sugar mill in Chennai to a wholesaler in Ernakulam.
The sugar bags are sent by the mill to Ernakulam. Payment made by cheque payable at SBI
Madurai. The place of supply is
a) Ernakulam b) Chennai c) Madurai d) Any of these
72. A wholesaler in Ernakulam sends an agent to procure 1,000 bags of sugar from a factory in
Chennai. The invoice and other documents are handed over to the agent in Theni as directed by
the wholesaler. Later the sugar bags are brought to Ernakulam. Amount paid online from SBI
branch Calicut. The place of supply is
a) Ernakulam b) Chennai c) Theni d) Calicut
c) State in which exported goods reaches first d) Place of supply not applicable.
75. The managers of ITC Ltd., Kolkata (GST registered) are given one week training in Munnar,
by Infosys Ltd. Bangalore, for a sum of Rs. 10 Lakhs. Payment given at Mumbai. The place of
supply of service is
a) Mumbai b) Kolkata c) Munnar d) Bangalore
76 The managers of ITC Ltd., Kolkata (not registered under GST) are given one week training
in Munnar, by Infosys Ltd. Bangalore, for a sum of Rs. 10 Lakhs. Payment given at Mumbai.
The place of supply of service is
a) Mumbai b) Kolkata c) Munnar d) Bangalore
77. The place of supply of services to a registered person by way of transportation of goods,
including by mail or courier, shall be
a) The location of such person b) Location of transporting agency
c) Place of payment d) None of these.
79. In case of mobile connection for telecommunication and internet services provided on post-
paid basis, the location of supply is
a) Place of office of the service provider b) Place of payment
c) Billing address of the recipient of services d) Place of supply not relevant
84. Gifts not exceeding --- in a year by an employer to employee shall not be treated as supply.
a) Rs. 5,000 b) Rs. 10,000 c) Rs. 50,000, d) Rs. 1,00,000
88. Transfer of right in goods or of undivided share in goods ‘without the transfer of title’ is
a) supply of Goods b) supply of Services c) supply of Both goods and services d) None
89. Transfer of title in goods under an agreement which stipulates that property in goods shall
pass at a future date upon payment of full consideration, is a supply of -
a) Both goods and services b) Services c) Goods d) None
90. Any treatment or process which is applied to another person’s goods is a supply of
a) Goods b) Services c) Both goods and services d) None
91. Goods held or used for the purposes of the business are put to any private
use or made available to any person for use, is a supply of
a) Goods b) Services c) Both goods and services d) None
92. Construction of a complex, building, civil structure intended for sale to a buyer, wholly or
partly is supply of –
a) Goods b) Services c) Both goods and services d) None
93. Where the entire consideration has been received after issuance of completion certificate
or after its first occupation is
a) Transfer of Goods b) Transfer of immovable property
c) Transfer fo services d) None of these
94. Mr. A an architect, agrees to design and construct a building for Mr. Bj, for a sum of Rs.
1Crore. The construction completed and the amount received by Mr. A. This is supply of
a) Goods b) Services c) Both goods and services d) None
95. Transfer of the ‘right to use any goods’ for any purpose for consideration is supply of
a) Goods b) Services c) Both goods and services d) None
97. Services by an employee to the employer in the course of or in relation to his employment is
a) Supply of Goods b) Supply of Services
c) Supply of Both goods and services d) Not supply
99. The functions performed by the Members of Parliament, Members of State Legislature are
102. Actionable claims, other than lottery, betting and gambling are
a)Supply of Goods b) Supply of Services
c) Supply of Both goods and services d) Not supply
103. Activities undertaken by the Government, or any local authority in which they are
engaged as public authorities are
a)Supply of Goods b) Supply of Services
c) Supply of Both goods and services d) Not supply
105 A DTH company supplies a dish, set-top box, 3 year repairing and subscription of 500
channels for five years services as a package to the customers for Rs. 25,000. This is a
a) Mixed supply b) Composite supply c) Joint Supply d) Not supply
106. One tooth paste and tooth brush and a toilet soap sold in a packet for Rs. 50, is
a) Mixed supply b) Composite supply c) Joint Supply d) Not supply
110. When locally made food products or industrial components or raw materials supplied by
unregistered persons are purchased by a registered persons –
a) GST is applicable b) GST is not applicable c) Reverse charge is applicable d) Not taxable
113. Mr. X, a jewellery owner received the services of a local interior designer (unregistered)
and made a payment of Rs. 1,00,000. Here if the rate of tax on interior designing service is 18%.
a) GST applicable b) Tax not applicable
c) Reverse charge applicable d) IGST applicable
117. The notified limit for payment of composition levy in the case of special category states is
a) Rs. 1 Crore b) Rs. 20Lakh c) Rs. 50 Lakh d) Rs. 75 lakh
124. In order to adopt composition scheme by more than one registered persons having the same
Permanent Account Number, turnover of
a) All must be less than Rs. 1 crore b) At least one must be below Rs. 1 crore
c) All must be more than Rs. 20 lakh b) At least one must be less Rs. 20 lakh.
126. Hotels eligible for composition scheme shall be liable to pay tax at the rate of
a) 5% b) 1% c) 18% d) 12%
128. Time of supply means the date of issue of invoice or date of payment
a) Whichever is earlier b) whichever is later
c) any of the two or d) none of the above
129. In respect of the additional payment for value of supply like interest, late fee etc., the time
of supply is
a) Date additional payment b) Date of original payment
c) date on which supply was received d) Any date at the option of the supplier
130. Mr. C sold goods worth Rs. 30000 to Mr. Dr on 5.8.2017, which were sent on 6.8.2017,
the invoice date being 15.8.2017 and the goods were received by Mr. D on 5.9.2017. Time of
supply is
a) 5.8.2017 b) 6.8.2017 c) 15.8.2017 d) 5.9.2017
131. Mr. Kumar sold goods worth Rs. 40,000 to Mr. Lalu on 2.8.2017, but the payment was
received from Mr. Lalu on 2.10.2017. Time of supply is -
a) 2.8.2017 b) 2.10.2017 c) either 2.8.2017 or 2.10.2017 d) None of these
132. If it is not possible to determine the time of supply, the time of supply shall be
a) decided by the supplier b) decided by the recipient
c) date of entry in the books of recipient d) date of entry in the books of supplier
135. Interest, late fee or penalty for delayed payment of any consideration is
a) Included in value of supply b) Not included in value of supply
c) Included if the recipient requests d) Included at the option of the supplier
136. When the supply of goods or services is for a consideration not wholly in money, the value
of the supply shall be
a) Value declared by the supplier b) value declared by the recipient
c) Open market value of such supply d) None of these
137. A new mobile handset is supplied for Rs.10,000 exchanging an old phone. Without
exchange offer the price of handset is Rs 25,000. Market Value of similar phones is Rs.20,000.
What is the value of supply?
a) Rs 10,000 b) Rs 20,000 c) Rs 25,000 d) Either Rs 25,000 or Rs 20,000
138. A laptop is supplied receiving Rs. 30,000 and a mobile phone worth Rs. 20,000. Value of
supply –
a) Rs 20,000 b) Rs 30,000 c) Rs 50,000 d) Rs 10,000
144. Where the goods are received in lots or instalments input tax credit can be claimed
a) upon reciept of first lot b) upon receipt of the last lot
c) Any time at the option of the supplier d) after full payment of price
145. Where a recipient fails to pay the price within 180 days from the date of issue of invoice,
he shall be liable to pay input tax credit to the Government with --- % interest
a) 10% b) 12% c) 18% d) None of these
146. Input tax credit of an invoice can be availed within a period of -- or the 30th September
following the year of invoice whichever is earlier.
a) 2 years b) 1 year c) 6 months d ) 3 Months
147. If goods or services are partly used for business purposes and partly for other purposes,
input tax credit
a) can be fully claimed b) can be partly claimed c) cannot be claimed d) Not applicable
151. Input tax credit in respect of food and beverages, outdoor catering, beauty treatment, health
services, cosmetic and plastic surgery belong to
a) Exempt category b) Composite tax category c) Blocked credit category d) None of these.
152. Input tax credit in respect of food membership of a club, health and fitness centre belong to
a) Exempt category b) Blocked credit category c) Composite tax category d) None of these.
153. Input tax credit in respect of rent-a-cab, life insurance and health insurance belong to
a) Blocked credit category b) Exempt category c) Composite tax category d) None of these
154. Input tax credit in respect of goods lost, stolen, destroyed, written off or disposed of by
way of gift or free samples; belong to
a) Exempt category b) Composite tax category c) Blocked credit category d) None of these
155. Goods or services or both on which tax has been paid under section 10 belong to
a) Exempt category b) Composite tax category c) Blocked credit category d) None of these
158. In the case of reversal of input tax credit, interest at the rate of --- % is applicable
a) 8% b) 12% c) 18% d) 24%
159. Reversal of Input tax credit happens when a person fails to pay the amount of price
including tax to the supplier within a period of
a) 180 days b) 30days c) 60days d) 90 days
162. When an exempt supply in the hands of registered person becomes a taxable supply, such
person a) can take credit of input tax b) is not entitled to take credit of input tax
c) liable to pay tax on stock d) liable to pay reverse charge
163. A registered person, after availing input tax credit, opts for composition levy,
a) shall be liable to pay the input tax on stock or capital goods b) shall not be liable to pay tax
c) liable to pay reverse charge d) None of these
164. In case of transfer of capital goods or plant and machinery the registered person shall
a) not be liable to pay input tax credit claimed b) be liable to pay the input tax credit claimed
c) liable to pay reverse charge d) None of these
165. Tax credit in respect of goods or inputs sent for job work can be claimed by
a) Job worker b) Principal c) Either by Jobworker or Principal d) Not eligible for input credit
166. A registered person shall not be entitled to take input tax credit after
a) Three months of issuing tax invoice b) Six months of issuing tax invoice
c) One year from the date of issue of tax invoice d) Two years of issuing tax invoice
167. A registered person need not issue a tax invoice if the value of supply less than
a) 100 b) Rs. 200 c) 500 d) 1000
168. A registered person supplying exempted goods or services or paying composition tax under
section 10 shall issue
a) GST Bill b) Bill of supply c) Delivery chalan d) Debit note
169. A registered person shall, on receipt of advance payment for goods or services, issue
a) GST Bill b) Bill of supply c) Receipt voucher d) Debit note
170. After issuing a receipt voucher for advance payment, if no supply is made --- may be
issued against such payment.
a) Refund voucher b) Debit note c) Tax invoice d) Bill of supply
171. In a tax invoice of supply of Rs. 50,000 or more to an unregistered person, the name
and address of the recipient and the address of delivery are
a) Optional b) Compulsory in all cases
c) compulsory to avail input tax credit d) compulsory if the recipient insists
172. In a tax invoice of supply of less than Rs. 50,000 to an unregistered person, the name
and address of the recipient and the address of delivery are
a) Optional b) Compulsory in all cases
c) compulsory to avail input tax credit d) compulsory if the recipient insists
174. A consolidated invoice at the end of a month for supplies on which reverse charge is
applicable is required when the aggregate value of such supplies exceeds
a) Rs. 1,000 in a day b) Rs. 5,000 in a day c) Rs. 10,000 in a day d) Rs. 50,000 in a day
175. In the case of sale to an unregistered person, a registered person may not issue a tax
invoice, if the value of supply is
a) less than Rs. 100 b) less than Rs. 200 c) less than Rs. 500 d) less than Rs. 1,000
176. In the case of the taxable supply of services the invoice shall be issued within a period of
a) 15days b) 30 days c) 45 days d) 90days
182. Mr. P supplied goods of Rs. 1,00,000, to Mr. Q, who returned goods of Rs 10,000 due to
inferior quality. Mr. P will later issue
a) Credit note b) Debit note c) Tax invoice d) Delivery challan
183. A credit note is issued to the recipient of goods in the following cases
1) When the taxable value of goods found to be less 2) Tax charged found to be less
3) When the recipient refuces to make payment 4) None of these
184. Mr. X supplied goods to Mr. Y the cost was Rs. 1,00,000 but wrongly billed as Rs. 10,000.
Mr. X will later issue
a) Debit note to Mr.Y a) Credit note to Mr.Y
c) Tax invoice to Mr.Y d) Delivery chalan to Mr.Y
185. In the case of supply of liquid gas where the quantity at the time of removal from the place
of business of the supplier is not known
a) Delivery challan is not required b) Tax invoice is not required
c) Debit note is required d) credit note is required
189. The input tax credit as self-assessed in the return of a registered person shall be
credited to his electronic
a) Cash Ledger c) Liability register c) Credit Ledger d) Debit ledger
190. IGST credit shall first be utilised towards payment of
a) CGST b) SGST c) IGST d) UTGST
191. The balance of IGST credit after set off IGST can be used towards the payment of
a) CGST b) SGST c) IGST d) UTGST
192. The balance of CGST credit after set off of CGST can be used towards the payment of
a) SGST b) UTGST c) either SGST or UTGST d) IGST
196. Balance of Input credit of SGST after output tax liability of SGST can be utilised to set off
a) CGST b) UTGST c) IGST d) None of these
197. Every person who fails to pay tax shall be liable to pay interest not exceeding
a) 10% b) 12% c) 18% d) 24%
198. A taxable person who makes an undue or excess claim of input tax credit shall be liable to
pay interest not exceeding
a) 10% b) 12% c) 18% d) 24%
200. TDS provision applicable only when the total value of supply, under a contract, exceeds
a) Rs. 1,00,000 b) Rs. 1,50,000 c) Rs. 2,00,000 d) Rs. 2,50,000
201. For the purpose of TDS, the value of supply shall be taken as the amount in the invoice
a) Excluding tax b) Including tax c) Before discount d) None of these
202. After making TDS if the deductor fails to furnish the certificate within five days of
crediting the amount so deducted to the Government, the deductor shall pay a late fee of
a) Rs.100 per day b) Rs.150 per day c) Rs.200 per day d) Rs.250 per day
207. A situation where the rate of tax on input is more than rate of tax on output is
a) Inverted duty structure b) excess input tax credit c) Compensation Cess d) Refund
209. GST registration is mandatory if the aggregate turnover in a financial year exceeds
a) Rs. 20 lakh b) Rs. 50 lakh c) Rs. 75 lakh d) Rs. 1 Crore
210. In specified category states GST registration is mandatory if the aggregate turnover in a
financial year exceeds
a) Rs. 1 Crore b) Rs. 10 lakh c) Rs. 20 Lakh d) Rs. 75 lakh
213. A person who is liable to be registered shall apply for registration within --- from the date
on which he becomes liable to registration
a) 10 b) 15 days b) 30 days c) 90 days
214. If a person liable to be registered has operation in more than one State, he should
a) Obtain registration in all states b) obtain registration in any one state
c) registration is optional d) Registration not mandatory
215. A casual taxable person or a non-resident taxable person shall apply for registration
at least --- prior to the commencement of business
a) 3 days b) 5 days c) 10 days d) 15days
216. Every person who makes a supply from the territorial waters of India
a) shall obtain registration in the coastal State/ union territory b) Any state in India
c) registration not required d) Registration is optional
219. If the proper officer does not take any action within a period of three working days from the
date of submission of the application for GST registration -
a) Fresh application shall be submitted b) Implies Rejection of registration
c) Deemed registration d) implies registration not required.
223. The certificate of registration issued to a casual taxable person or a non-resident taxable
person shall be valid for a period of
a) 30 days b) 90 days c) 6 months d) one year
224. As a result of any surve or search if the proper officer finds that a person liable to
registration, he will be given
a) Deemed registration b) Suomoto registration
c) Cancelled registration d) suspected registration
227. Whcih of the following is not a reason for cancellation of registration by proper officer?
a) contravened the provisions of the Act or the rules b) Not furnished returns in time
c) has not paid tax in time d) Registration has been obtained by means of fraud
229. Which among the following is not compulsory among he accounts and records maintained
by the GST dealers
a) Inward and outward supplies b) Stock of goods
c) Input tax credit availed d) Sundry Debtors
230. Every registered person should keep and maintain the prescribed books of accounts and
records a) At all the offices b) at principal place of business
c) wherever requested by the GST officers d) electronically
232. When turnover during a financial year exceeds --- the accounts and other records must be
audited by a chartered accountant or a cost accountant
a) 1 crore b) 2 crore 3) 5 crore 4) 10 crore
233. Every registered person required to keep and maintain books of account or other records
a) for a period of 2 years b) for a period of 3 years
c) for a period of 5 years d) for a period of 6 years
238. ---- gives the details of goods or services received by the recipients. It is auto populated
out of the GSTR -1 submitted by different suppliers
a) GSTR 3 b) GSTR 3B c) GSTR - 2A d) GSTR 9
240. GSTR - 2A is made available on the 11th of the next month for the
a) Recipients of supplies b) Suppliers c) GST officers d) Customers
241. GSTR-3 is auto-populated by 20th of the next month containing the details of
a) Outward supplies b) inward supplies
c) all outward as well as inward supplies d) None of these
247. GSTR-8 shall contain the details of all the supplies made by the
a) Input service distributors b) E-Commerce seller c) GST dealers d) Composition dealers
250. GST dealers whose annual turnover exceeds Rs. 1 crore, should file a reconciliation
statement in ---- within 31st December of the next fiscal year
a) GSTR 5 b) GSTR 6 c) GSTR 9A d) Form GSTR-9B
254. Government body or a United Nations Body, then a monthly Form GSTR-11 has to file
a) GSTR 11 b) GSTR8A c) GSTR 9A d) GSTR 5
255. A registered person under GST can file quarterly return if the turnover is
a) 2lakh or less b) 75 lakh or less c) One crore of less d) 1.5 crore or less
256. Adding or correcting the details of an outward supply in valid return so as to match the
details of corresponding inward supply is called
a) Rectification of return b) reversal of return c) reconciliation of return d) acceptance of
return
259. The proper officer shall pass an order, allowing payment of tax at such rate or on such
value as may be specified by him. This is called
a) Best judgement assessment b) Provisional assessment c) Self assessment d) Protective
assessment
260. The proper officer may assess the tax liability on the basis of available information,
evidences which is called
a) Best judgement assessment b) Provisional assessment c) Self assessment d) Protective
assessment
268. Where a vehicle has been intercepted and detained for a period exceeding thirty minutes,
the transporter may upload the said information on the common portal in
a) FORM GST INS - 0 4 b) FORM GST INS - 0 10
c) FORM GST INS - 0 9 d) FORM GST INS - 0 6
270. Input credit available without being liable for output tax in the case of
a) Exempt goods b) Non taxable goods c) Zero rated goods d) Demerit goods
272. Goods which are harmful but widely consumed are collective called
a) demerit goods b) merit goods c) inferior goods d) white goods
LEARNING OUTCOMES
After studying this Chapter, you will be able to –
describe the power of the Government to grant exemption
from CGST/IGST.
provide an overview of the goods exempt from GST.
identify and analyse various services exempt from GST.
CHAPTER OVERVIEW
Exemption from GST
1. INTRODUCTION
When a supply of goods and/or services falls within the purview of charging
section, such supply is chargeable to GST. However, for determining the liability
to pay the tax, one needs to further check whether such supply of goods and/or
services are exempt from tax.
Exempt supply has been
defined as supply of any goods
or services or both which
attracts nil rate of tax or which
may be wholly exempt from tax
and includes non-taxable
supply [Section 2(47) of the
CGST Act, 2017]. Non-taxable
supply means a supply of
goods or services or both which
is not leviable to tax under
CGST Act or under the IGST Act
[Section 2(78) of the CGST Act,
2017]. Thus, under GST, a
supply not leviable to tax is also
included within the purview of
‘exempt supply’.
(1) Examples of supply not leviable to tax are alcoholic liquor for human
consumption, specified petroleum products namely Petroleum Crude, High
Speed Diesel, Motor spirit (commonly known Petrol), Natural Gas and
Aviation Turbine Fuel.
Power to grant exemption from GST has been granted vide section 11 of the
CGST Act and vide section 6 of the IGST Act. State GST laws also contain identical
provisions granting power to exempt SGST. Under GST, essential goods/services,
i.e. public consumption products/services, have been exempted. Items such as
unbranded atta/maida/besan, unpacked food grains, milk, eggs, curd, lassi and
fresh vegetables are among the items exempted from GST. Further, essential
services like health care services, education services, etc. have also been
exempted.
It is important to note that exemption under GST may be provided in any of the
following manner:
In this chapter, we shall discuss the power to grant exemption from tax under
CGST Act/IGST Act, list of services exempt from GST in detail and an overview of
the goods exempt from tax.
2. P
POWER TO GRANT EXEMPTION FROM TAX [SECTION
11 OF THE CGST ACT/SECTION 6 OF IGST ACT]
STATUTORY PROVISIONS
ANALYSIS
(i) Exemption from payment of tax: GST law empowers the Central Government
or State Government, as the case may be, to grant
exemption from tax. The exemption is granted on
Exemption can be
recommendation of the GST Council.
from whole of tax
Exemption can be from whole of the tax or part of the or part of tax
tax. It should be granted in public interest.
Exemption can be granted to goods or services or both of
Exemption can be any specified description, by way of issuance of
granted by a notification, either absolutely [i.e. unconditional
notification or by exemption; exemption is not subject to any condition(s)] or
a special order conditionally [i.e. exemption is subject to specified
condition(s)]. Exemption may be granted by a special
order in case of the circumstances of an exceptional nature.
The absolute/ unconditional exemption is mandatory in
nature. Where the supply of the goods or services or Unconditional
both are unconditionally exempted from whole of exemption is
the tax, the registered person mandatory
doesn’t have option to collect and
Conditional
pay tax on such supply of goods or services or both.
exemption is
Where the supply of the goods or services or both are
optional
unconditionally exempted from part of the tax, the
registered person doesn’t have option to collect and pay the tax, in excess
of the effective rate, on such supply of goods or services or both.
(ii) Explanation inserted within 1 year, for the purpose of clarifying the
scope or applicability of any notification/order, to have retrospective
effect: Wherever the Government feels that there is a need to clarify the
scope or applicability of any notification/order issued under this section,
it can issue an explanation within 1 year of issue of said notification/
order. Such explanation shall have effect as if it was there when first such
notification/ order was issued, i.e. explanation so inserted would be
effective retrospectively.
It is hereby clarified that the explanation so inserted for a particular
entry in the notification, is effective from the inception of the entry in
notification and not from the date from which the notification (that
inserted said explanation) becomes effective.
1
This notification notifies the rate of tax on services.
2
Students may go through the complete list of goods exempt from GST on CBIC website –
www.cbic.gov.in, for knowledge purposes.
3
Exemption from IGST has been granted to various services vide Notification No. 9/2017
Integrated Tax (Rate) dated 28.06.2017. All the services exempted from CGST &
SGST/UTGST have also been exempted from IGST. Apart from these, there are few
additional services which have been exempted only under IGST law. Such services will be
discussed at the Final Level.
4
Entry Nos. mentioned herein correspond to entries in Notification No. 12/2017 Central Tax
(Rate) dated 28.06.2017. However, these entry numbers have been given only for reference
purposes and are not relevant for examination purpose.
ANALYSIS
A. SERVICES PROVIDED BY CHARITABLE/RELIGIOUS TRUST
Entry 1 of the Notification exempts services supplied by an entity registered
under section 12AA of the Income-tax Act, 1961 by way of charitable activities.
Thus, in order to claim exemption under Entry 1 of the Notification, following two
conditions must be satisfied:-
(i) The entity should be registered under section 12AA of the Income-tax
Act, 1961, and
(ii) The entity must carry out one or more of the specified charitable activities.
Before proceeding further, let us first understand the meaning of term ‘charitable
activities’. The term ‘charitable activities’ mean activities relating to-
(i) PUBLIC HEALTH by way of-
(A) care or counseling of
(I) terminally ill persons or persons with severe physical or mental
disability;
(II) persons afflicted with HIV or AIDS;
(III) persons addicted to a dependence-forming substance such as
narcotics drugs or alcohol; or
(B) public awareness of preventive health, family planning or prevention
of HIV infection;
(ii) ADVANCEMENT OF RELIGION, spirituality or yoga;
(iii) ADVANCEMENT OF EDUCATIONAL PROGRAMMES/SKILL
DEVELOPMENT relating to,-
(A) abandoned, orphaned or homeless children;
(B) physically or mentally abused and traumatized persons;
(C) prisoners; or
(D) persons over the age of 65 years residing in a rural area;
(iv) PRESERVATION OF ENVIRONMENT including watershed, forests & wildlife.
Thus, only those services provided by a charitable and religious trusts [registered
under section 12AA of the Income-tax Act] which fall within the above definition
of charitable activities, are eligible for exemption from GST. There could be many
other services provided by such charitable and religious trusts which are not
covered by the definition of charitable activities and hence, such services would
attract GST.
For instance, grant of advertising rights to a person on the premises of the
charitable/religious trust or on publications of the trust, or granting admission to
events, functions, celebrations, shows against admission tickets or fee etc. would
attract GST.
In the following paras, we have examined some of the services supplied by the
entities registered under section 12AA of the Income-tax Act:
5
Entry 14 has been amended after issuance of this circular. Discussion hereunder has been
suitably adapted to take into consideration the amended entry
6
Circular No. 66/40/2018 GST dated 26.09.2018
said services are provided by a charitable entity registered under section 12AA of
Income-tax Act 7.
Let us now analyse the term ‘recreational
activities’. The term recreational activities is very
wide. However, under this entry, the scope of
training or coaching in recreational activities is
restricted to the area of arts, culture and sports.
Hence, the training or coaching in recreational
activities in the areas other than arts, culture
or sports is outside the purview of this entry.
Further, training or coaching relating to all forms
of arts, culture or sports is covered under this
entry, namely, dance, music, painting, sculpture
making, literary activities, theatre, etc. of any
school, tradition or language or any of the sports.
(14) Manavtaa Sansthaan, a charitable trust registered under section
12AA of the Income-tax Act, 1961, has organized a ‘Basketball Training
Camp’ for teenagers. GST would be exempt on the same as services
provided by entity registered under section 12AA of the Income-tax Act, 1961 by
way of training or coaching in sports are exempt.
GST on services provided TO charitable trusts
Services provided to charitable or religious trusts are not outside the ambit of
GST. Unless specifically exempted, all goods and services supplied to charitable or
religious trusts are leviable to GST.
B. CONDUCT OF ANY RELIGIOUS CEREMONY
Going through Entry 13(a) of the Notification, it can be inferred that the
amount charged, by whatever name called, for the conduct of any religious
ceremony is exempt from GST. Religious ceremonies are life-cycle rituals
including special religious poojas conducted in terms of religious texts by a
7
In this regard, CBIC GST Flyer – Chapter 39 - GST on Charitable and Religious Trusts has
stipulated that the services provided by way of training or coaching in recreational activities
relating to arts or culture or sports such as dance, music, painting, literary activities, drama
etc. of any school, tradition or language or any of the sports, by a charitable entity are
exempt from GST.
person so authorized by such religious texts. Occasions like birth, marriage, and
death involve elaborate religious ceremonies.
(15) Raamanand Joshi, a priest, charges ` 12,000 for conducting a
religious ceremony on the birthday of Ghanshyam’s son. The amount
charged for the conduct of any religious ceremony is exempt from GST.
C. RENTING OF PRECINCTS OF RELIGIOUS PLACE MEANT FOR GENERAL
PUBLIC
Entry 13(b) of the Notification exempts renting of precincts of a religious
place meant for general public owned by an entity registered under any of the
specified sections of the Income Tax Act provided the consideration charged for
such renting does not exceed the prescribed ceiling limits as given in said entry.
Thus, this exemption is determined on the basis of amount of consideration
charged for such renting. Let us understand the meaning of the terms ‘religious
place’, ‘general public’ and ‘precincts’ referred herein.
Religious place means a place which is primarily meant for
conduct of prayers or worship pertaining to a religion,
meditation, or spirituality.
General public means the body of people at large sufficiently defined by
some common quality of public or impersonal nature.
The word 'precincts' is not to be interpreted in a restricted manner and all
immovable property of the religious place located within the outer
boundary walls of the complex (of buildings and facilities) in which the
religious place is located, is to be considered as being located in the
precincts of the religious place. The immovable property located in the
immediate vicinity and surrounding of the religious place and owned by the
religious place or under the same management as the religious place, may
be considered as being located in the precincts of the religious place and
extended the benefit of above exemption.
Activities other than - conduct of religious ceremony and renting of precincts of
religious place - will be taxable irrespective of the manner or the name in which
the consideration is received. For example, if donation is received with specific
instructions/mutual understanding between the donor and the receiver that
religious place will host an advertisement promoting business of the donor, such
donation will be subject to GST. However, if donation is received without such
instructions or without a quid pro quo in the form of supply of any goods or
services or both by the receiver to the donor, it shall not be subject to GST 8.
(16) Durgadevi Trust, a religious trust registered under section 12AA of
the Income-tax Act, owns and manages a temple in their locality. It rents
the commercial shops located in the precincts of the temple for a rent of
` 10,000 per month per shop. The consideration so received is liable to GST as
such services are exempt only when the consideration is less than ` 10,000 per
month.
8
Discussion herein is primarily based on CBIC GST Flyer – Chapter 39 - GST on Charitable
and Religious Trusts and other clarifications
ANALYSIS
ENTRY 54
9
Storage/ warehousing of coffee and tea are nevertheless exempted by entry 24B.
Jaggery
Similarly, processing of sugarcane into jaggery
changes its essential characteristics. Thus,
jaggery is also not an agricultural produce 10.
Pulses
Pulses commonly known as dal are obtained after
dehusking or splitting or both. The process of
dehusking or splitting is usually not carried out by
farmers or at farm level but by the pulse millers.
Therefore pulses (dehusked or split) are also not
agricultural produce. However, whole pulse grains
such as whole gram, rajma etc. are covered in the definition of agricultural
produce.
In view of the above, it is inferred that processed products such as tea (i.e. black
tea, white tea etc.), processed coffee beans or powder, pulses (dehusked or split),
jaggery, processed spices, processed dry fruits, processed cashew nuts etc. fall
outside the definition of agricultural produce and therefore do not fall within item
(e) of entry 54 [Circular No. 16/16/2017 GST dated 15.11.2017].
ENTRY 55
10
Storage/ warehousing of jaggery is nevertheless exempted by entry 24B.
3. Education services
66 Services provided -
(a) by an educational institution to its students, faculty and staff;
(aa) by an educational institution by way of conduct of entrance
examination against consideration in the form of entrance fee;
(b) to an educational institution, by way of,-
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored
by the Central Government, State Government or Union
territory;
(iii) security or cleaning or house-keeping services performed
in such educational institution;
(iv) services relating to admission to, or conduct of examination
by, such institution;
(v) supply of online educational journals or periodicals.
However, nothing contained in sub-items (i), (ii) and (iii) of item (b)
shall apply to an educational institution other than an institution
providing services by way of pre-school education and education up to
higher secondary school or equivalent.
Further, nothing contained in sub-item (v) of item (b) shall apply to an
institution providing services by way of,-
(i) pre-school education and education up to higher secondary
school or equivalent; or
(ii) education as a part of an approved vocational education course.
ANALYSIS
11
Industrial Training Institute/ Industrial Training Centre
It is important to note that the Central and State Educational Boards shall
be treated as ‘Educational Institution’ for the limited purpose of providing
services by way of conduct of examination to the students.
Unrecognized educational institutions
Private coaching centres or other unrecognized institutions, though self-
styled as educational institutions, would not be treated as educational
12
Some of the designated trades notified under the Apprentices Act, 1961 are electrician,
wireman, carpenter, plumber, mason, mechanic, tool and die maker, baker and confectioner,
weaver, tailor, footwear maker, photographer, beautician, painter, desk top publishing operator,
gardener, cable television operator, library assistant, etc.
13
The view taken in the preceding paras, that education coupled with other incidental services is
a composite supply and is exempt since the principal supply [education service] is exempt, is
based on the CBIC Flyer - Chapter 40 – ‘GST on Education Services’. However, it is also possible
to take a different view since as per the definition of composite supply under section 2(30) of the
CGST Act, composite supply consists of two or more taxable supplies.
IIMs
Indian Institutes of Management Act, 2017 (IIM
Act, 2017) empowers IIMs to (i) grant degrees,
diplomas, and other academic distinctions or
titles, (ii) specify the criteria and process for
admission to courses or programmes of study,
and (iii) specify the academic content of programmes.
Resultantly, all the IIMs fall under purview of “educational institutions” as
they provide education as a part of a curriculum for obtaining a
qualification recognized by law for the time being in force.
IIMs provide various long duration programs (1 year or more) for which they
award diploma/ degree certificate duly recommended by Board of
Governors as per the power vested in them under the IIM Act, 2017.
Services provided by IIMs to their students- in all such long duration
programs (one year or more) are exempt from levy of GST.
IIMs also provide various short duration/ short term programs (less than 1
year) for which they award participation certificate to the executives/
professionals as they are considered as “participants” of the said
programmes. These participation certificates are not any qualification
recognized by law.
Such participants are also not considered as students of IIM. Services
provided by IIMs as an educational institution to such participants is not
exempt from GST and GST is payable on the same [Circular No. 82/01/2019
GST dated 01.01.2019].
Supply of food in a mess or canteen
Educational institutions generally have mess facility for
providing food to their students and staff. Such facility
is (i) either run by the institution/ students themselves
or (ii) is outsourced to a third person.
If the catering services is one of the services provided
by an educational institution to its students, faculty and staff and the said
educational institution is covered by the definition of ‘educational
institution’ as given above, then the same is exempt [covered under item (a)
of entry 66 of the Notification].
(25) Shiksha College, offering degree courses, has to conduct its half
yearly examination in November. For this purpose, it has paid the
honorarium to paper setters and examiners (not on the rolls of Shiksha
College) for their services. Further, it availed the printing services for printing the
question papers (paper and content are provided by Shiksha College) for
conducting examination. Services provided to an educational institution relating
to admission to, or conduct of examination by, such institution are exempt.
Therefore, services of paper setters and examiners and printing services availed
by Shiksha College are exempt.
14
The discussion in the foregoing paras is primarily based on CBIC Flyer - Chapter 40 – ‘GST on
Education Services’ unless otherwise specified.
house-keeping services
performed in such
educational institution;
(iv) services relating to
admission to, or conduct
of examination by, such
institution
ANALYSIS
15
Section 2(h) of the Clinical Establishments Act, 2010
16
The view taken in the preceding paras, that health care services coupled with other incidental
services is a composite supply and is exempt since the principal supply [health care service] is
exempt, is based on Circular No. 32/06/2018 GST dated 12.02.2018. However, it is also
possible to take a different view since as per the definition of composite supply under section
2(30) of the CGST Act, composite supply consists of two or more taxable supplies.
17
As clarified by the CBIC GST Flyer – Chapter 39 - GST on Charitable and Religious Trusts
(i) Not Exempt. Since reiki healing is not a recognized system of medicine in
terms of section 2(h) of Clinical Establishments Act, 2010, it would not be
exempt and thus, GST would be payable thereon.
(ii) Exempt. Health care service does not include, inter alia, cosmetic or plastic
surgery, except when undertaken to restore or to reconstruct anatomy or
functions of body affected due to congenital defects, developmental
abnormalities, injury or trauma.
Therefore, plastic surgeries will not be entitled to the said exemption and
thus, GST would be payable thereon. However, plastic surgery conducted to
repair a cleft lip will be eligible for exemption as it reconstructs anatomy or
functions of body affected due to congenital defects (cleft lip).
(iii) Exempt. Health care service includes services by way of transportation of
the patient to and from a clinical establishment. Thus, air ambulance service
to transport critically ill patients to Good Health Medical Centre would be
eligible for exemption under the said notification.
(iv) Exempt. Health care service means any service by way of diagnosis or
treatment or care for illness, injury, deformity, abnormality or pregnancy in
any recognized system of medicines in India. It is immaterial whether such
service is provided at the clinical establishment or at the home of the
patient or at any other place. Thus, palliative care for terminally ill patients
is exempt.
(v) Exempt. Since Yoga is a recognized system of medicine in terms of section
2(h) of Clinical Establishments Act, 2010, the same would be eligible for
exemption under the said notification.
Further, services provided by cord blood banks by way of preservation of stem
cells or any other service in relation to such preservation are exempt from GST
under Entry 73. Therefore, services provided in relation to preservation of stem
cells by the cord blood bank operated by Good Health Medical Centre will be
exempt from GST.
It is important to note that Entry 74 of the exemption notification grants
exemption to health care services provided BY a clinical establishment and not to
services provided TO a clinical establishment. Therefore, Good Health Medical
Centre’s contention that since it is a clinical establishment, all the services
provided to it are also exempt from GST is not correct in law.
9D Services by:
an old age home
run by:
Central Government, State Government or
an entity registered under section 12AA of the Income-tax Act,
1961
to its residents (aged 60 years or more)
against consideration upto ` 25,000 per month per member,
provided that the consideration charged is inclusive of charges for
boarding, lodging and maintenance.
ANALYSIS
18
The functions entrusted to municipality under the Twelfth Schedule to Article 243W of the
constitution include urban planning including town planning, roads and bridges, public health,
sanitation conservancy and solid waste management, fire services, slum improvement and
upgradation, promotion of cultural, educational and aesthetic aspects, provision of urban
amenities and facilities such as parks, gardens, playgrounds, public amenities including street
lighting, parking lots, bus stops and public conveniences, etc.
19
The functions entrusted to Panchayat under the Eleventh Schedule to Article 243G of the
constitution include Agriculture, including agricultural extension, Animal husbandry, dairying
and poultry, Fisheries, Small scale industries, including food processing industries, Drinking
water, Fuel and fodder, Rural electrification, including distribution of electricity, Health and
sanitation, including hospitals, primary health centres and dispensaries, Women and child
development, Public distribution system, etc.
6. Construction services
41A Supply of TDR, FSI, long term lease (premium) of land by a landowner
and to a developer are exempted subject to the condition that the
41B constructed flats are sold before issuance of completion certificate and
tax is paid on them.
Exemption of TDR, FSI, long term lease (premium) shall be withdrawn
in case of flats sold after issue of completion certificate, but such
withdrawal shall be limited to 1% of value in case of affordable houses
and 5% of value in case of other than affordable houses 20.
ANALYSIS
20
These entries have been stated in simplified form.
Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana (hereinafter
referred to as PMAY) is a programme launched by the Ministry of Housing and
Urban Poverty Alleviation (MoHUPA) which envisions provision of Housing for All
by 2022 when the nation completes 75 years of its independence.
The mission seeks to address the housing requirement of urban poor including
slum dwellers through following, inter alia, programme verticals:
Slum rehabilitation of Slum Dwellers with participation of private developers
using land as a resource.
Promotion of Affordable Housing for weaker section through credit linked
subsidy.
Affordable Housing in Partnership with Public & Private sectors.
Subsidy for beneficiary-led individual house construction/enhancement.
Last component of the mission is assistance to individual eligible families
belonging to Economically Weaker Section (EWS) categories to either construct
new houses or enhance existing houses on their own to cover the beneficiaries
who are not able to take advantage of other components of the mission. Such
families may avail specified amount of central assistance for construction of new
houses or for enhancement of existing users under the mission.
Entry 10 of the Notification exempts the services provided by way of pure
labour contracts of construction, erection, commissioning, installation,
completion, fitting out, repair, maintenance, renovation, or alteration of a civil
structure or any other original works pertaining to the beneficiary-led individual
house construction or enhancement under the PMAY from GST.
The term ‘original works’ means-
all new constructions;
all types of additions and alterations to
abandoned or damaged structures on land that
are required to make them workable;
erection, commissioning or installation of plant,
machinery or equipment or structures, whether pre-fabricated or
otherwise.
Entry 11 of the Notification exempts the services by way of pure labour
contracts of construction, erection, commissioning, or installation of original
ANALYSIS
Services of transportation of passengers are usually chargeable to GST. Entry 6
[Services provided by Government - discussed earlier] specifically excludes the
transport of passengers’ services provided by the Government or local authority
from its purview, which implies that said services are liable to GST.
However, services of transportation of passengers specified in Entries 15, 16 and
17 mentioned above are exempt from GST (whether provided by Government or
otherwise) with or without accompanied belongings.
As regards transportation of passengers by vessels in item (d) of Entry 17 [See the
table given above], the words ‘other than predominantly for tourism purpose’
qualify the preceding words “public transport”. This implies that to qualify for
exemption under this entry, the public transport by a vessel between places
located in India should not be predominantly for tourism purposes.
Normal public ships or other vessels that sail between places located in India
would be covered in this entry even if some of the passengers on board are using
the service for tourism because predominantly, such service is not for tourism
purpose. However, services provided by leisure/charter vessels/a cruise ship,
predominant purpose of which is tourism, would not be covered in here even if
some of the passengers in such vessels are not tourists.
(30) Services by way of transportation of passengers [not
predominantly for tourism purpose] on a vessel, from Kolkata to Port
Blair (mainland to island) or Port Blair to Rose Island (inter island) is
covered in item (d) of Entry 17 since such transportation is between two places
located in India.
Relevant definitions of these entries are as follows:
Contract carriage: means a motor vehicle which carries a passenger or
passengers for hire or reward and is engaged under a contract, whether
expressed or implied, for the use of such vehicle as a whole for the carriage
of passengers mentioned therein and entered into by a person with a holder
of a permit in relation to such vehicle or any person authorised by him in
this behalf on a fixed or an agreed rate or sum-
(a) on a time basis, whether or not with reference to any route or
distance; or
(b) from one point to another, and in either case, without stopping to
pick up or set down passengers not included in the contract anywhere
during the journey, and includes--
(i) a maxicab; and
(ii) a motor cab notwithstanding that separate fares are charged for
its passengers [Section 2(7) of Motor Vehicles Act, 1988].
Metered cab: means any contract carriage on which an automatic device, of
the type and make approved under the relevant rules by the State Transport
Authority, is fitted which indicates reading of the fare chargeable at any
moment and that is charged accordingly under the conditions of its permit
issued under the Motor Vehicles Act, 1988 and the rules made thereunder
(but does not include radio taxi).
Radio taxi: means a taxi including a radio cab, by whatever name called, which is
in two-way radio communication with a central control office and is enabled for
tracking using the Global Positioning System or General Packet Radio Service;
Stage carriage: means a motor vehicle constructed or adapted to carry
more than 6 passengers excluding the driver for hire or reward at separate
fares paid by or for individual passengers, either for the whole journey or
for stages of the journey [Section 2(40) of the Motor Vehicles Act, 1988].
State Transport Undertaking: means any undertaking providing road
transport service, where such undertaking is carried on by-
i. the Central Government or a State Government;
ii. any Road Transport Corporation established under section 3 of the
Road Transport Corporations Act, 1950.
iii. any municipality or any corporation or company owned or controlled
by the Central Government or one or more State Governments, or by
the Central Government and one or more State Governments.
(f) any casual taxable person registered under the Central Goods
and Services Tax Act or the Integrated Goods and Services Tax
Act or the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act.
ANALYSIS
The services of transportation of goods by road are exempt from GST under
Entry 18. Services of GTA and courier services are an exception to this
exemption. However, GTA services provided to an unregistered person
[including unregistered casual taxable person 21] are exempt from GST by
virtue of Entry 21A.
Further, GTA services provided to registered casual taxable person and
following persons, even if unregistered under GST law, are liable to tax:
(i) a factory registered under Factories Act,
(ii) society registered under Societies Act,
(iii) Co-operative society,
(iv) body corporate and
(v) partnership firm including AOP.
21
The concept of ‘casual taxable person’ has been discussed in detail in Chapter 7 - Registration
Who is a
GTA?
22
Meaning of GTA and consignment note elaborated in foregoing paras is primarily based on
CBIC GST flyer - Chapter 38 – Goods Transport Agency in GST.
These services are not provided as independent services but as ancillary to the
principal service, namely, transportation of goods by road. The invoice issued by
the GTA for providing the said service includes the value of intermediary and
ancillary services.
In view of this, if any intermediary and ancillary service is provided in relation to
transportation of goods by road, and charges, if any, for such services are
included in the invoice issued by the GTA, such service would form part of the
GTA service, being a composite supply, and would not be treated as a separate
supply.
However, if such incidental services are provided as separate services and charged
separately, whether in the same invoice or separate invoices, they shall be treated
as separate supplies 23.
What is courier agency?
Courier agency has been defined in the Notification to mean any person engaged
in the door-to-door transportation of time-sensitive documents, goods or articles
utilising the services of a person, either directly or indirectly, to carry or
accompany such documents, goods or articles.
Express cargo service: Some transporters undertake door-to-door transportation
of goods or articles and they have made special arrangements for speedy
transportation and timely delivery of such goods or articles.
Such services are known as ‘Express Cargo Service’ with assurance of timely
delivery. The nature of service provided by ‘Express Cargo Service’ falls within the
scope and definition of the courier agency. Hence, the said service relating to
transportation of goods by road is not exempt.
23
As clarified in answer to question no. 6 of CBIC FAQs on Transport & Logistics.
**Goods carriage means any motor vehicle constructed or adapted for use
solely for the carriage of goods, or any motor vehicle not so constructed or
adapted when used for the carriage of goods.
ILLUSTRATION 3
Discuss whether GST is payable in respect of transportation services provided by
Raghav Goods Transport Agency in each of the following independent cases:
ANSWER
ANALYSIS
Banks and financial institutions provide a bouquet of financial
services relating to lending or borrowing of money or
investments in money.
All services provided by the Reserve Bank of India are covered
under Entry 26 and are thus, exempt from GST. However, services provided to
the Reserve Bank of India are not covered under said entry and would be taxable
unless otherwise covered in any other entry of the Notification.
Specified banking services exempt from GST vide Entry 27 have been discussed
below:
(A) Services by way of extending deposits, loans or advances in so far as
the consideration is represented by way of interest or discount: This
entry covers any such service wherein moneys due are allowed to be used or
retained on payment of interest or on a discount. The words used are
‘deposits, loans or advances’ and have to be taken in the generic sense.
They would cover any facility by which an amount of money
is lent or allowed to be used or retained on payment of
what is commonly called the time value of money which
could be in the form of an interest or a discount. This entry
would not cover investments by way of equity or any other manner
where the investor is entitled to a share of profit.
Interest: means interest payable in any manner in respect of any
moneys borrowed or debt incurred (including a deposit, claim or
other similar right or obligation) but does not include any
service fee or other charge in respect of the moneys borrowed or debt
incurred or in respect of any credit facility which has not been utilized.
Illustrations of services exempt under Entry 27 are -
Fixed deposits or saving deposits or any other
such deposits in a bank or a financial institution
24
As clarified vide FAQs on Banking, Insurance and Stock Brokers Sector issued by CBIC.
25
An Equated Monthly Instalments (EMI) is a fixed amount paid by a borrower to a lender
at a specified date every calendar month. EMIs are used to pay off both interest and
principal every month, so that over a specified period, the loan is fully paid off along with
interest.
26
Here, the amount of penal interest is to be included in the value of supply in terms of the
provisions of section 15(2)(d) of the CGST Act. Section 15(2)(d) provides that the value of supply
shall include interest or late fee or penalty for delayed payment of any consideration for any
supply. The provisions of section 15 have been discussed in detail in Unit-II: Value of Supply of
Chapter 5: Time and Value of Supply.
27
Schedule II of the CGST Act, 2017 has been discussed in detail in Chapter 2 – Supply under GST.
ILLUSTRATION 4
M/s. Apna Bank Limited, a scheduled commercial bank, has furnished the
following details for the month of August:
Particulars Amount [` in
crores]
(excluding GST)
Extended housing loan to its customers 100
Processing fees collected from its customers on 20
sanction of loan
Commission collected from its customers on bank 30
guarantee
Interest income on credit card issued by the bank 40
Interest received on housing loan extended by the 25
bank
Minimum balance charges collected from current 01
account and saving account holder
ANSWER
Particulars Amount
in crores
(` )
28
earlier known as Integrated Rural Development Programme
ANALYSIS
It is still a big challenge for India to make the financial services accessible in rural
areas. In many rural areas, either there are no banks or number of banks is
insufficient. In order to counter this problem and ensure greater financial
inclusion, the Reserve Bank of India (RBI) introduced the Business Correspondents
and Business Facilitator Model through guidelines in 2006 allowing banks to
employ two categories of intermediaries – known as Business facilitators (BFs) and
Business correspondents (BCs).
BCs/BFs help villagers to open bank accounts and provide other banking services
to them. They act as an intermediary between the bank and its customers. Banks,
in turn, pay commission/ fee to the BCs/BFs.
According to the RBI guidelines, while the BCs are permitted to carry out
transactions on behalf of the bank as agents, the BFs can refer clients, pursue the
clients’ proposal and facilitate the bank to carry out its transactions, but cannot
transact on behalf of the bank 29.
29
BFs provide a wide range of services including identification of borrowers and fitment of
activities, collection and preliminary processing of loan applications, processing and
submission of applications to banks, follow-up for recovery, etc. BCs, in addition to these
activities, also undertake disbursal of small value credit, recovery of principal / collection of
interest, collection of small value deposits, sale of micro insurance/ mutual fund products/
pension products/ other third party products, receipt and delivery of small value
remittances/ other payment instruments, etc.
ANALYSIS
Entry 3 exempts the supply of ‘pure services’ to Government. Supply of ‘pure
services’ means supply of services without involving any supply of goods.
30
As clarified vide question 25 of CBIC FAQs on Government Services
31
As clarified vide Circular No. 101/20/2019-GST, dated 30.04.2019
ANALYSIS
Relevant definitions are as under:
Legal service: means any service provided in relation to advice, consultancy
or assistance in any branch of law, in any manner and includes
representational services before any court, tribunal or authority.
provided to
ILLUSTRATION 5
Determine the GST payable, if any, in each of the following independent cases,
assuming that the rate of GST is 18% and that the service providers are registered:
(a) Bollywood dance performance by a film actor in a film and consideration
charged is ` 1,45,000.
(b) Carnatic music performance by a classical singer to promote a brand of
readymade garments and consideration charged is ` 1,30,000.
(c) Carnatic music performance by a classical singer in a music concert and
consideration charged is ` 1,55,000.
(d) Kathak dance performance by a classical dancer in a cultural programme and
consideration charged is ` 1,45,000.
ANSWER
(a) Bollywood Dance performance by a film actor in a film is not exempt from
GST even though the consideration charged is less than threshold limit of
` 1,50,000. The reason for the same is that the dance performance by an
artist is exempt only if it is a performance in folk or classical art forms of
dance.
(b) Carnatic music performance by a classical singer to promote a brand of
readymade garments is not exempt from GST even though, the
consideration charged is less than threshold limit of ` 1,50,000 and it is a
performance in classical art forms of music. The reason for the same is that
the said exemption is not applicable to service provided by such artist as a
brand ambassador.
(c) Carnatic music performance by a classical singer in a music concert is not
exempt from GST even though it is a performance in classical art forms of
music. The reason for the same is the consideration charged for the service
exceeds ` 1,50,000. Consequently, entire consideration charged is subject
to GST as follows:
= ` 1,55,000 × 18% = ` 27,900
(d) Kathak dance performance by a classical dancer in a cultural programme is
exempt from GST as it is a performance in classical art forms of dance and
consideration charged does not exceed ` 1,50,000 [i.e. ` 1,45,000].
ANALYSIS
Co-operative Housing Society
Cooperative
Housing supplies services
Society
Members
32
Threshold limit is ` 10 lakh for specified Special Category States, namely, Manipur, Mizoram,
Nagaland and Tripura and ` 20 lakh for all other States.
services being exempt). Further, the society is providing no other taxable service
to its members or outsiders. In this case, the society (essentially exclusively
providing wholly exempt services) need not take registration under GST.
(39) The turnover of RWA of Bulbul Housing Society located in New
Delhi in a financial year is ` 15 lakh. It has collected the maintenance
charges of ` 6,000 per month per member. RWA is not providing any
other taxable service to its members. In this case, RWA is not required to take
registration under GST since its aggregate turnover is less than the applicable
threshold limit of ` 20 lakh.
However, an RWA is not required to obtain registration even though the amount
of maintenance charges exceeds ` 7500/- per month per member but the
aggregate turnover of the RWA in a financial year does not exceed the threshold
limit for registration.
(40) In the above example, other things remaining the same, if the
maintenance charges collected by the RWA are ` 8,000 per month per
member, RWA is still not required to take registration under GST since
its aggregate turnover is less than the applicable threshold limit of ` 20 lakh.
The above discussion has been summarized as under:
RWA/Housing society
Yes
Yes
Are monthly
No
maintenance charges Tax not
> ` 7,500 per
member? payable
Yes
Tax payable
* ` 10 lakh in case of Special Category States of Manipur, Mizoram, Nagaland and Tripura
other sanitary/hardware fillings etc.) and input services such as repair and
maintenance services, used by it for making supplies to its members and use such
ITC for discharge of GST liability on such supplies where the amount charged for
such supplies is more than ` 7,500 per month per member.
(42) RWA of Tintin Housing Society, registered under GST, has
collected the maintenance charges of ` 9,000 per month per member
from 1,000 members of the society in the month of May. For paying
the GST of ` 16,20,000 [payable @ 18% on the amount of ` 90,00,000], RWA can
utilise the ITC of GST of ` 1,00,000 paid by it on purchase of swings for garden,
ITC of ` 20,000 on electric cables and ITC of ` 15,000 on plumbing services.
✪ Statutory dues such as property tax, electricity charges etc. forming part of the
monthly maintenance bill raised by the society on its members would be excluded
while computing the aforesaid monthly limit of ` 7,500 33.
23. Other exempt services
33
Discussion under this entry in forgoing paras is primarily based on Circular No. 109/28/2019
GST dated 22.07.2019, CBIC GST Flyer ‘GST on Co-Operative Housing Societies’ and CBIC FAQs
on levy of GST on Supply of Services to Co-operative Society.
34
As clarified vide question 26 of CBIC FAQs on Government Services
65A Services by way of providing information under the RTI Act (Right
to Information Act, 2005).
Students may note that some of the entries granting exemption from GST are
similar to the negative list entry/entry granting exemption under the erstwhile
service tax law.
Therefore, clarification pertaining to said negative list entry/exemption provided
in the ‘Service Tax Education Guide’ – an educational aid released for facilitating
the stakeholders to obtain preliminary understanding of the provisions, wherever
it seems relevant under the GST law, have been incorporated at relevant places.
5. LET US RECAPITULATE
1. Power to exempt from tax [Section 11 of the CGST Act/ section 6 of
IGST Act]
Power to exempt from tax
by way of issuance of
referred as ‘ specified
(a) to (c) hereinafter
speed post, express parcel post, life
insurance, & agency services provided to a
person other than CG, SG, UT; services’
(b) services in relation to an aircraft/a vessel,
inside/outside precincts of a port/airport;
(c) transport of goods/passengers; or
(d) any service, other than ‘specified services’
above, provided to business entities.
Services provided by CG/SG/UT/LA to a business entity
(BE) with an aggregate turnover of up to such amount in
the preceding FY as makes it eligible for exemption from
registration under the CGST Act, 2017. This exemption is
not applicable to specified services and renting of
immovable property service.
Services provided by CG/SG/UT/LA to another CG/SG/UT/LA.
This exemption is not applicable to specified services.
35
earlier known as Integrated Rural Development Programme
India initiative. Keyan Enterprises claims that it is not required to pay GST as
the services provided by way of organizing business exhibition are exempt
from GST. Examine the technical veracity of the claim of Keyan Enterprises, in
the given case.
14. Ekta Charitable trust, registered under section 10(23C)(v) of the Income-tax
Act, 1961, manages a temple in Rohini, Delhi. It has given on rent a
community hall, located within temple premises, to public for celebration of
Teej Mela. Rent charged is ` 9,500. You are required to determine whether
the services provided by Ekta Charitable trust are liable to GST.
15. ST Ltd. has given on hire 5 trucks to Titu Transporters of Delhi (a goods
transport agency) for transporting goods in Central and West Delhi. The
hiring charges for the trucks are ` 7,500 per truck per day. Examine whether
GST is payable in the given case.
8. ANSWERS/HINTS
1. The statement is not fully valid in law. Exempt supply has been defined as
supply of any goods or services or both which attracts nil rate of tax or
which may be wholly exempt from tax and includes non-taxable supply.
2. The term ‘charitable activities’ mean activities relating to-
(i) public health by way of-
(A) care or counseling of
(I) terminally ill persons or persons with severe physical or mental
disability;
(II) persons afflicted with HIV or AIDS;
(III) persons addicted to a dependence-forming substance such
as narcotics drugs or alcohol; or
(B) public awareness of preventive health, family planning or
prevention of HIV infection;
(ii) advancement of religion, spirituality or yoga;
(iii) advancement of educational programmes/skill development relating
to,-
(A) abandoned, orphaned or homeless children;
(B) physically or mentally abused and traumatized persons;
(C) prisoners; or
(D) persons over the age of 65 years residing in a rural area;
(iv) preservation of environment including watershed, forests & wildlife.
3. (a) Services by way of health care services by a clinical establishment, an
authorised medical practitioner or para-medics are exempt from GST.
Food supplied to the in-patients by a canteen run by the hospital, as
advised by the doctor/nutritionists, is a part of composite supply of
healthcare and not separately taxable.
(b) Supply of service by a RWA (unincorporated body or a non- profit
entity registered under any law) to its own members by way of
reimbursement of charges or share of contribution up to an amount of
` 7500 per month per member for providing services and goods for
the common use of its members in a housing society/a residential
complex are exempt from GST. Hence, in the given case, services
provided by the RWA are exempt from GST since the maintenance
charges collected per month per member do not exceed ` 7500.
4. Services provided to a recognized sports body by an individual, inter alia, as
a referee in a sporting event organized by a recognized sports body is
exempt from GST.
Since in the first case, the football match is organized by Sports Authority of
India, which is a recognized sports body, services provided by the individual
as a referee in such football match will be exempt.
However, when he acts as a referee in a charity football match organized by
a local sports club, he would not be entitled to afore-mentioned exemption
as a local sports club is not a recognized sports body and thus, GST will be
payable in this case.
5. Services by an artist by way of a performance in folk or classical art forms of
(i) music, or (ii) dance, or (iii) theatre are exempt from GST, if the
consideration charged for such performance is not more than ` 1,50,000.
However, such exemption is not available in respect of service provided by
such artist as a brand ambassador.
Since Ms. Ahana Kapoor is the brand ambassador of ‘Forever Young’ soap
manufactured by RXL Pvt. Ltd., the services rendered by her by way of a
classical dance performance in the concert organized by RXL Pvt. Ltd. to
promote its brand will not be eligible for the above-mentioned exemption
and thus, be liable to GST. The fact that the proceeds of the concert will be
donated to a charitable organization will not have any bearing on the
eligibility or otherwise to the above-mentioned exemption.
6. Computation of value of taxable supply
Particulars (` )
Fees charged for yoga camp conducted by a charitable trust Nil
registered under section 12AA of the Income-tax Act, 1961
[Note-1]
Amount charged by business correspondent for the services Nil
provided to the rural branch of a bank with respect to
Savings Bank Accounts [Note-2]
Amount charged by cord blood bank for preservation of Nil
stem cells [Note-3]
Service provided by selectors to a recognized sports 5,20,000
body [Note-4]
Notes:
1. Services by an entity registered under section 12AA of the Income-tax
Act, 1961 by way of charitable activities are exempt from GST. The
activities relating to advancement of yoga are included in the
definition of charitable activities. So, such activities are exempt from
GST.
2. Services by business facilitator or a business correspondent to a
banking company with respect to accounts in its rural area branch
have been exempted from GST.
3. Services provided by cord blood banks by way of preservation of stem
cells or any other service in relation to such preservation are exempt
from GST.
4. Services provided to a recognized sports body only by an individual as
a player, referee, umpire, coach or team manager for participation in a
sporting event organized by a recognized sports body are exempt
from GST. Thus, services provided by selectors are liable to GST.
13. No, the claim made by Keyan Enterprises that it is not required to pay GST is
not correct. Services provided by an organiser to any person in respect of a
business exhibition are exempt from GST only when such business
exhibition is held outside India. However, since in the given case, the
exhibition is being organized in India, the services of organization of event
by Keyan Enterprises will not be exempt from GST.
14. Services by a person by way of renting of precincts of a religious place
meant for general public, owned or managed by an entity registered as a
trust or an institution under section 10(23C)(v) of the Income-tax Act are
exempt provided renting charges of premises, community halls,
kalyanmandapam or open area are not ` 10,000 or more per day. Thus, in
the given case, renting of community hall by Ekta Charitable Trust is exempt
from GST, as rent is less than ` 10,000 per day.
15. GST is not payable in case of hiring of trucks to Titu Transporters. Services
by way of giving on hire, inter alia, to a goods transport agency, a means of
transportation of goods are exempt.
LEARNING OUTCOMES
1. INTRODUCTION
GST is payable on supply of goods or services. A supply consists of elements that
can be separated in time, like purchase order / agreement, despatch (of goods),
delivery (of goods) or provision or performance of service, entry in the records,
payment, and entry of the payment in the records or deposit in the bank.
1
Provisions relating to due date for payment of tax have been discussed in Chapter 9: Payment
of Tax in Module 2 of this Study Material.
2
Provisions of section 14 relating to determination of time of supply in case of change in rate of
tax in respect of supply of goods or services will be discussed at the Final level.
In the subsequent pages of this Unit, sections 12 and 13 are extracted, followed by
their analysis, to understand how to determine the time of supply of goods and
services respectively. When studying the statutory provisions, the definitions
(extracted first) must also be referred to simultaneously, so as to understand the
precise meaning of the terms used.
Provisions of time of supply under CGST Act have also been made
applicable to IGST Act vide section 20 of the IGST Act.
2. RELEVANT DEFINITIONS
Associated enterprises shall have the same meaning as assigned to it in
section 92A of the Income-tax Act, 1961 [Section 2(12)].
Broadly, an associated enterprise in relation to another enterprise, means an
enterprise which participates, directly or indirectly, or through one or more
intermediaries, in the management or control or capital of the other
enterprise.
Document includes written or printed record of any sort and electronic
record as defined in clause (t) of section 2 of the Information Technology Act,
2000 [Section 2(41)].
Invoice or tax invoice means the tax invoice referred to in section 31 [Section
2(66)].
Goods means every kind of movable property other than money and
securities but includes actionable claim, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed before
supply or under a contract of supply [Section 2(52)].
GOODS
MEANS
INCLUDES
SERVICES
MEANS
Activities
relating to use
Anything INCLUDING of money or its
conversion for a
consideration
EXCLUDING Activities
facilitating or
arranging
transactions in
Goods Money Securities securities
Recipient
If consideration is
Person liable to pay the
payable for supply of
consideration
goods and/or services
Supplier in relation to any goods or services or both, shall mean the person
supplying the said goods or services or both and shall include an agent acting
as such on behalf of such supplier in relation to the goods or services or both
supplied [Section 2(105)].
and includes
an agent
means the acting on
person behalf of such
Supplier in supplying the supplier in
relation to any said goods relation to the
goods and/or and/or goods and/or
services services services
STATUTORY PROVISIONS
3
Practically, in case of goods, the date of receipt of payment by the supplier is no longer a
criterion for determination of time of supply for payment of tax. Refer the ‘Analysis’ of section
12 given in the ensuing pages for detailed discussion in this regard.
ANALYSIS
Section 12 provides for the determination of time of supply in the following situations:
Supply of goods under forward charge;
Supply of goods under reverse charge;
Supply of vouchers that can be used to pay for goods;
Residual cases;
4
Provisions of section 148 will be discussed at the Final level. Section 148 provides that the
Government may, on the recommendations of the Council, and subject to such conditions and
safeguards as may be prescribed, notify certain classes of registered persons, and the special
procedures to be followed by such persons including those with regard to registration, furnishing
of return, payment of tax and administration of such persons.
(1) A Ltd. enters into an agreement with B Ltd. to supply 100 kg of raw
material. However, A Ltd. supplies only 80 kg of raw material and issues
the invoice for the same. Here, the supply would be deemed to have
been made in respect of 80 kg of raw material, i.e. to the extent covered by the
invoice. Therefore, the provisions relating to time of supply will also be applicable
to supply of 80 kg of raw material and not for entire 100 kg of raw material.
Section 12(2) refers to the last date on which a supplier is required to issue
the invoice under section 31. Following are the relevant provisions of section
31 in this regard.
(2) Sphinx Pvt. Ltd. enters into a contract for supply of 100 office
chairs @ ` 15,000 with Joy Sales on 21st August. Chairs are removed
from the warehouse of Sphinx Pvt. Ltd. on 5th September along with
the invoice of even date. Joy Sales has paid 30% of the total contract value on
21st August; balance 70% is paid after delivery of chairs on 10th September. Since
the invoice is issued on the date of removal of goods, it is issued within the
prescribed time limit and hence, time of supply for payment of tax on entire
contract value of ` 15,00,000 is the date of issue of invoice, i.e. 5th September.
No GST will be payable on advance of ` 4,50,000 received on 21st August.
The provisions relating to time of supply of goods as contained in section 12
in case of forward charge read with Notification No. 66/2017 CT dated
15.11.2017, have been depicted by way of a diagram given at next page.
Whichever is earlier
Date on which the payment
is recorded in the books of
account of the supplier –
presently irrelevant for the
purpose of payment of tax
Date on which the payment
BANK
is credited to the supplier’s
bank account - presently
irrelevant for the purpose
of payment of tax
ILLUSTRATION 1
A machine has to be supplied at site. It is done by sourcing various components
from vendors and assembling the machine at site. The details of the various
events are:
of invoice or the last date on which invoice ought to have been issued in
terms of section 31. As per section 31(4), in case of continuous supply of
goods, where successive statements of accounts or successive payments are
involved, the invoice is issued before or at the time of each such statement is
issued or, as the case may be, each such payment is received. Therefore,
invoices should be issued for ` 2 lakh each on or before July 5, August 5 and
September 5, when monthly payments of ` 2 lakh are received.
Thus, assuming that the invoice is issued on July 5, August 5 and September
5, the time of supply for the purpose of payment of tax will be July 5, August
5 and September 5 respectively for goods valued at ` 2 lakh each.
Excess payment upto ` 1000: Option of taking invoice date as time of
supply
In terms of the proviso to sub-section (2) of section 12, for a payment of up
to ` 1,000 received in excess of the value of the goods invoiced, the supplier
can choose to take the date of invoice issued with respect to such excess
amount as the time of supply of goods for such excess value.
Since, w.e.f. 15.11.2017, GST on supply of goods is payable only on the basis
of issuance of invoice, this provision is practically irrelevant for supply of
goods.
If neither the date of invoice nor the date of payment is available, the
time of supply is determined in terms of the residual provisions under sub-
section (5) of section 12 [discussed under point (iv)].
The provisions relating to time of supply of goods in case of reverse charge are
depicted by way of a diagram given at next page.
ILLUSTRATION 3
Determine the time of supply from the given information.
May 4 Supplier invoices goods taxable on reverse charge basis to Bridge &
Co. (30 days from the date of issuance of invoice elapse on June 3)
ANSWER
Here, May 12 will be the time of supply, being the earliest of the three stipulated
dates namely, receipt of goods, date of payment and date immediately following
30 days of issuance of invoice [Section 12(3)]. (Here, date of invoice is relevant
only for calculating thirty days from that date.)
ILLUSTRATION 4
Determine the time of supply from the given information.
May 4 Supplier invoices goods taxable on reverse charge basis to Pillar &
Co. (30 days from the date of issuance of invoice elapse on June 3)
June 12 Pillar & Co receives the goods, which were held up in transit
Whichever is earlier
of the recipient of
goods
ANSWER
Here, June 4, 31st day from the date of supplier’s invoice, will be the time of
supply, being the earliest of the three stipulated dates namely, receipt of
goods, date of payment and date immediately following 30 days of issuance
of invoice [Section 12(3)].
(iii) Time of supply of vouchers exchangeable for goods [Section 12(4)]
As commonly understood, vouchers are instruments that can be exchanged
as payment for goods or services of the designated value. As per the
definition, they are instruments, that certain persons (potential suppliers) are
obliged to accept as consideration, part or full, for goods and/or services.
The instrument or its related documentation sets out the terms and
conditions of use, the goods and/or services covered, and the identity of the
potential suppliers of such goods and/or services.
As per section 12(4), the time of supply of vouchers exchangeable for goods
is-
Date of issue of the voucher, if the supply that it covers is identifiable
at that point, or
Date of redemption of the voucher in other cases.
The provisions relating to time of supply of vouchers exchangeable for goods
are depicted by way of diagram given at next page.
(3) Acmesales Limited sells food coupons to a company. The
company gives these coupons to its employees as part of the
agreed perquisites. The coupons can be redeemed for purchase of
any item of food /provisions in the outlets that are part of the program.
As the supply against which the coupon will be redeemed is not known on
the date of the sale of the coupon, the time of supply of the coupon will be
the date on which the employee redeems it against food / provision items of
his choice.
(4) With each purchase of a large pizza during the Christmas week from
Perfect Pizza, one can buy a voucher for ` 20 which will be redeemable till 5th
Jan for a small pizza. As the supply against which the voucher will be
redeemed is known on the date of issue of the vouchers, the time of supply
is the date of issue of the voucher.
Supply is
not
Any food
identifiab DATE OF
item can be
le at the REDEMPT-
purchased
time of ION OF
from the
issue of VOUCHER
food pass
the
voucher
Supply is
Only a shirt
identifiab
can be DATE OF
le at the
purchased ISSUE OF
time of
from the VOUCHER
issue of
shirt coupon
voucher
whichever is earlier
STATUTORY PROVISIONS
(1) The liability to pay tax on services shall arise at the time of supply, as
determined in terms of the provisions of this section.
(2) The time of supply of services shall be the earliest of the following
dates, namely:-
(c) the date on which the recipient shows the receipt of services
in his books of account, in a case where the provisions of
clause (a) or clause (b) do not apply:
(i) the supply shall be deemed to have been made to the extent
it is covered by the invoice or, as the case may be, the
payment.
(b) the date immediately following sixty days from the date of
issue of invoice or any other document, by whatever name
called, in lieu thereof by the supplier:
(4) In case of supply of vouchers by a supplier, the time of supply shall be-
(b) in any other case, be the date on which the tax is paid.
(6) The time of supply to the extent it relates to an addition in the value
of supply by way of interest, late fee or penalty for delayed payment
of any consideration shall be the date on which the supplier receives
such addition in value.
Section 31 Tax invoice (to the extent relevant to time of supply of services)
(6) In a case where the supply of services ceases under a contract before
the completion of the supply, the invoice shall be issued at the time
when the supply ceases and such invoice shall be issued to the extent
of the supply made before such cessation.
Chapter VI: Tax Invoice, Credit and Debit Notes of CGST Rules
Time limit for issuing tax invoice
The invoice referred to in rule 46, in case of taxable supply of services,
shall be issued within a period of thirty days from the date of supply
of service:
Provided that where the supplier of services is an insurer or a banking
company or a financial institution, including a non-banking financial
company, the period within which the invoice or any document in lieu
thereof is to be issued shall be forty five days from the date of supply
Rule 47 of service:
Provided further that an insurer or a banking company or a financial
institution, including a non- banking financial company, or a telecom
operator, or any other class of supplier of services as may be notified
by the Government on the recommendations of the Council, making
taxable supplies of services between distinct persons as specified in
section 25, may issue the invoice before or at the time such supplier
records the same in his books of account or before the expiry of the
quarter during which the supply was made.
ANALYSIS
Section 13 provides for the determination of the time of supply in the following situations:
Supply of service under forward charge,
Supply of service taxable under reverse charge,
Supply of vouchers that can be used to pay for services,
Residual cases,
Addition to value of supply of services by way of interest or late fee or penalty
for delayed payment.
As per section 31(2) read with rule 47 of CGST Rules, the tax invoice needs
to be issued either before the provision of service or within 30 days (45
days in case of insurance companies/ banking companies/ financial
institutions including NBFCs) from the date of supply of service.
In case of insurance companies/ banking companies/ financial
institutions including NBFCs/ telecom companies/ notified supplier of
services making taxable supplies between distinct persons as specified
in section 25 5, invoice may be issued before or at the time of recording
such supply in the books of account or before the expiry of the quarter
during which the supply was made [Second proviso to rule 47].
In case of continuous supply of services, the invoice should be issued
either (i) on/ before the due date of payment or (ii) before/ at the time
when the supplier of service receives the payment, if the due date of
payment is not known (iii) on/ before the date of completion of the
milestone event when the payment is linked to completion of an event
[Section 31(5)].
Continuous supply of services are provided, or agreed to be provided,
continuously or on recurrent basis, under a contract, for a period
exceeding 3 months with periodic payment obligations and includes
supply of such services as the Government may notify [Section 2(33)].
The said term has been discussed in Chapter 8: Tax Invoice; Credit and
Debit Notes; E-Way Bill in Module-2 of this Study Material.
In case of cessation of supply of services before completion of supply,
the invoice (to the extent of the supply made before such cessation)
should be issued at the time when the supply ceases [Section 31(6)].
(6) Mohit Khanna & Sons is a firm of management consultants.
The firm enters into a contract with Spark Pvt. Ltd. on 1st September
for providing consultancy services. Provision of service gets
completed on 15th September. Invoice for the service is issued on 20th
September and payment is received on 10th October. Since invoice is issued
within 30 days from the date of supply of service, time of supply is the date
of issue of invoice, i.e. 20th September being earlier than the date of receipt
of payment.
5
Concept of distinct persons has been discussed in Chapter 7: Registration
27th October Invoice issued for ` 15000, indicating balance of ` 12000 payable
ANSWER
As per section 31(2) read with rule 47 of CGST Rules, the tax invoice is to be
issued within 30 days of supply of service. In the given case, the invoice is
not issued within the prescribed time limit. As per section 13(2)(b), in a case
where the invoice is not issued within the prescribed time, the time of supply
of service is the date of provision of service or receipt of payment, whichever
is earlier.
Therefore, the time of supply of service to the extent of ` 3,000 is 6th May as
the date of payment of ` 3000 is earlier than the date of provision of service.
The time of supply of service to the extent of the balance ` 12,000 is
15th September which is the date of provision of service.
ILLUSTRATION 6
Investigation shows that ABC & Co carried out service of cleaning and repairs
of tanks in an apartment complex, for which the Apartment Owners’
Association showed a payment in cash on 4th April to them against work of this
description. The dates of the work are not clear from the records of ABC & Co.
ABC & Co have not issued invoice or entered the payment in their books of
account.
Is invoice
YES Time of
issued within Date of issue of
Supply
the time invoice
specified u/s
31? Date on which the
Whichever is earlier
NO payment is
recorded in the
Time of
Supply books of account of
the supplier
BANK
Date on which the
payment is credited
to the supplier’s
bank account
Whichever is earlier
If time of supply
cannot be Date of receipt of services in
determined by the books of account of the
both the above recipient
methods, then
ANSWER
The time of supply cannot be determined vide the provisions of clauses (a)
and (b) of section 13(2) as neither the invoice has been issued nor the date
of provision of service is available as also the date of receipt of payment in
the books of the supplier is also not available. Therefore, the time of supply
will be determined vide clause (c) of section 13(2) i.e., the date on which the
recipient of service shows receipt of the service in his books of account.
Thus, time of supply will be 4th April, the date on which the Apartment
Owners’ Association records the receipt of service in its books of account.
The time of supply of service on which GST is payable on reverse charge basis
(except on services received from associated enterprises located outside
India) under sub-sections (3) and (4) of section 9 is determined in terms of
section 13(3)(a) and (b) as follows:
The time of supply for such service will be the earlier of the following:
Date of payment, or
Date immediately following 60 days since issue of invoice (or any other
document in lieu of invoice) by the supplier.
“Date of payment” in the above situation refers to the date on which the
payment is recorded in the books of account of the entity that receives the
service (recipient of service), or the date on which the payment is debited
from the entity’s bank account, whichever is earlier.
Whichever is earlier
the books of account of
the recipient of services
ILLUSTRATION 7
Determine the time of supply from the given information. (Assume that service
being supplied is taxable under reverse charge)
ANSWER
Here, July 4 will be the time of supply, being the earliest of the two stipulated
dates namely, date of payment and date immediately following 60 days since
issue of invoice.
ILLUSTRATION 8
July 2 ABC Ltd transfers the amount to the account of the German company
ANSWER
As there is no prior entry of the amount in the books of account of ABC Ltd.,
July 2 will be the time of supply, being the date of payment in terms of second
proviso to section 13(3).
(iii) Time of supply of vouchers exchangeable for services [Section 13(4)]
The term voucher has already been explained under the Heading “Time of
Supply of Goods”. The time of supply of vouchers that are exchangeable for
services is stipulated as the date of issue of the voucher if the supply is
identifiable at that point, or the date of redemption of the voucher in other cases.
As the supply against which the voucher will be redeemed is identifiable, the
time of supply of the voucher will be its date of issue.
Date on which payment is Date on which payment is 61st day from supplier’s
credited in the bank credited in the bank invoice
account of the supplier account of the supplier
5. LET US RECAPITULATE
The provisions relating to time of supply of goods and services can be better
understood if the same are studied simultaneously appreciating the similarities and
differences between the two. Therefore, such provisions have been summarised by
way of a comparison table to help students remember and retain the provisions in
a better and effective manner:
Where the above events are not ascertainable, the time of supply shall be the
date of entry in the books of account of the recipient of supply
Supply of vouchers exchangeable for goods and services [Sections 12(4) and
13(4)]
Supply of goods and services in residual cases [Sections 12(5) and 13(5)]
4. Determine the time of supply in the following cases assuming that GST is
payable under reverse charge:
5. Kabira Industries Ltd engaged the services of a transporter for road transport
of a consignment on 17th June and made advance payment for the transport
on the same date, i.e. 17th June. However, the consignment could not be sent
immediately on account of a strike in the factory, and instead was sent on
20th July. Invoice was received from the transporter on 22nd July.
What is the time of supply of the transporter’s service?
6. Raju Pvt Ltd. receives the order and advance payment on 5th January for
carrying out an architectural design job. It delivers the designs on 23rd April.
By oversight, no invoice is issued at that time, and it is issued much later, after
the expiry of prescribed period for issue of invoice.
When is the time of supply of service?
7. Investigation shows that 150 cartons of ceramic capacitors were dispatched on
2nd August but no invoice was raised and the transaction (dispatch of cartons)
were not entered in the accounts. There was no evidence of receipt of payment.
What is the time of supply of 150 cartons for the purpose of payment of tax?
8. An order is placed on Ram & Co. on 18th August for supply of a consignment of
customized shoes. Ram & Co. gets the consignment ready and informs the
customer and issues the invoice on 2nd December. The customer collects the
consignment from the premises of Ram & Co. on 7th December and
electronically transfers the payment on the same date, which is entered in the
accounts on the next day, 8th December.
What is the time of supply of the shoes for the purpose of payment of tax?
9. Meal coupons are sold to a company on 9 th August for being distributed to the
employees of the said company. The coupons are valid for six months and can
be used against purchase of food items. The employees use them in various
stores for purchases of various edible items on different dates throughout the
six months.
What is the date of supply of the coupons?
10. A firm of advocates issues invoice for services to ABC Ltd. on 17th Feb. The
payment is contested by ABC Ltd. on the ground that on account of negligence
of the firm, the company’s case was dismissed by the Court for non-appearance,
which necessitated further appearance for which the firm is billing the
company. The dispute drags on and finally payment is made on 3 rd November.
Identify the time of supply of the legal services.
11. Modern Security Co. provides service of testing of electronic devices. In one
case, it tested a batch of devices on 4th and 5th September but could not raise
invoice till 19th November because of some dispute about the condition of the
devices on return. The payment was made in December.
What is the method to fix the time of supply of the service?
12. M/s XYZ & Co., a firm of Chartered Accountants, issued invoice for services
rendered to Mr. A on 7th September. Determine the time of supply in the
following independent cases:
(1) The provision of service was completed on 1 st August and payment was
received on 28th September.
(2) The provision of service was completed on 14th August and payment was
received on 28th September.
(3) Mr. A made the payment on 3rd August. However, provision of service
was remaining to be completed at that time.
(4) Mr. A made the payment on 15th September. However, provision of
service was remaining to be completed at that time.
13. M/s Pranav Associates, a partnership firm, provided recovery agent services to
Newtron Credits Ltd., a non-banking financial company and a registered
supplier, on 15th January. Invoice for the same was issued on 7th February and
the payment was made on 18 th April by Newtron Credits Ltd. Bank account of
the company was debited on 20 th April.
Determine the following:
(i) Person liable to pay GST
(ii) Time of supply of service
14. Mr. X supplied goods for ` 50,000 to its customer Miss Diyana on 1st January
on the condition that payment for the same will be made within a week.
However, Miss Diyana made payment for the said goods on 2nd February and
thus, paid interest amounting to ` 2,000.
What is the time of supply with regard to addition in the value by way of
interest in lieu of delayed payment of consideration?
15. M/s Mansh & Vansh Trading Company, a registered supplier, is liable to pay
GST under forward charge. It has furnished the following information:
(i) Goods were supplied on 3rd October
(ii) Invoice was issued on 5th October
(iii) Payment received on 9th October
Determine the time of supply of goods for the purpose of payment of tax.
7. ANSWERS/HINTS
1. GST is payable on supply of goods or services. Time of supply indicates the
point in time when the liability to pay tax arises. However, it is important to
note that though the liability to pay tax arises at the time of supply, the
same can be paid to the Government by the due date prescribed with
reference to the said ‘time of supply’. The CGST Act provides separate
provisions for time of supply for goods and services vide sections 12 and 13.
2. The statement is not correct. While GST is payable on advance received for
supply of services taxable under forward charge, the same is not payable in
case of advance received for supply of goods taxable under forward charge.
As per section 13, the time of supply of services taxable under forward charge
is –
Date of issue of invoice or date of receipt of payment, whichever is
earlier, if the same is issued within 30 days from the date of supply of
service;
OR
Date of provision of service or date of receipt of payment, whichever is
earlier, if the invoice is not issued within 30 days from the date of supply
of service.
Thus, in case of services, if the supplier receives any payment before the
provision of service or before the issuance of invoice for such service, the time
of supply gets fixed at that point in time and the liability to pay tax on such
payment arises. However, the tax can be paid by the due date prescribed with
reference to such time of supply.
3.
recipient’s
bank account
on June 26
(vi) August August 10 June 29 July 30 July 30 (i.e.,
1 31st day from
issuance of
invoice)
4.
5. Time of supply of service taxable under reverse charge is the earlier of the
following two dates in terms of section 13(3):
• Date of payment
• 61st day from the date of issue of invoice
In this case, the date of payment precedes 61st day from the date of issue of
invoice by the supplier of service. Hence, the date of payment, i.e. 17th June,
will be treated as the time of supply of service [Section 13(3)(a)].
6. Since the invoice has not been issued within the prescribed time period, time
of supply of service will be the earlier of the following two dates in terms of
section 13(2)(b):
• Date of provision of service
• Date of receipt of payment
The payment was received on 5th January and the service was provided on
23rd April. Therefore, the date of payment, i.e. 5th January is the time of supply
of the service in this case.
7. As per Notification No. 66/2017 CT dated 15.11.2017, a registered person
(excluding composition supplier) has to pay GST on the outward supply of
goods at the time of supply as specified in section 12(2)(a), i.e. date of issue
of invoice or the last date on which invoice ought to have been issued in
terms of section 31.
In this case since the invoice has not been issued, the time of supply for the
purpose of payment of tax will be the last date on which the invoice is
required to be issued.
The invoice for supply of goods must be issued on or before the dispatch of
goods, i.e. on 2nd August. Therefore, the time of supply for the purpose of
payment of tax for the goods will be 2nd August, the date when the invoice
should have been issued.
8. As per Notification No. 66/2017 CT dated 15.11.2017, a registered person
(excluding composition supplier) has to pay GST on the outward supply of
goods at the time of supply as specified in section 12(2)(a), i.e. date of issue
of invoice or the last date on which invoice ought to have been issued in
terms of section 31.
In this case, the invoice is issued before the removal of the goods and is thus,
within the time limit prescribed under section 31(1). Therefore, the time of
supply for the purpose of payment of tax is the date of issue of invoice, which
is 2nd December.
9. As the coupons can be used for a variety of food items, which are taxed at
different rates, the supply cannot be identified at the time of purchase of the
coupons. Therefore, the time of supply of the coupons is the date of their
redemption in terms of section 12(4).
10. Tax on services supply by a firm of advocates by way of legal services to any
business entity is payable under reverse charge by such firm of advocates.
Time of supply of services that are taxable under reverse charge is earliest of
the following two dates in terms of section 13(3):
• Date of payment [3rd November]
• 61st day from the date of issue of invoice [19th April]
The date of payment comes subsequent to the 61st day from the issue of
invoice by the supplier of service. Therefore, the 61st day from the date of
supplier’s invoice has to be taken as the time of supply. This fixes 19th April
as the time of supply.
11. The time of supply of services, if the invoice is not issued in time, is the date
of payment or the date of provision of service, whichever is earlier [Section
13(2)(b)]. In this case, the service is provided on 5th September but not
invoiced within the prescribed time limit. Therefore, 5th September, the date
of provision of service, being earlier than the date of payment, will be the
time of supply.
12. The time of supply of services is the date of issue of invoice if the same is
issued within 30 days from the date of supply of service OR the date of receipt
of payment, whichever is earlier [Section 13(2)(a)].
In case the invoice is not issued within 30 days from the date of supply of
service, time of supply is the date of provision of service OR the date of
receipt of payment, whichever is earlier [Section 13(2)(b)].
In accordance with the aforesaid provisions, the time of supply in the four
independent cases will be:
(1) 1st August since the invoice is not issued within 30 days of supply of
service.
(2) 7th September since the invoice is issued within 30 days of supply of
service and the payment is received after the issuance of invoice.
(3) 3rd August viz., earlier of date of issuance of invoice (7th September) or
date of receipt of payment (3rd August)
(4) 7th September viz., earlier of date of issuance of invoice (7th September)
or date of receipt of payment (15th September)
13. (i) Tax on services supplied by a recovery agent to, inter alia, a non-
banking financial company (NBFC) is payable under reverse charge by
such non-banking financial company.
Therefore, in the given case, person liable to pay GST is the NBFC -
Newton Credits Ltd.
(ii) As per section 13(3), the time of supply of service on which GST is
payable under reverse charge is earlier of the following:-
• Date of payment as entered in the books of account of the
recipient (18th April) or the date on which the payment is debited
in his bank account (20th April), whichever is earlier;
• Date immediately following 60 days since issue of invoice by the
supplier, i.e. 9th April.
Thus, time of supply of service is 9th April.
14. As per section 12(6), the time of supply with regard to an addition in value
on account of interest, late fee or penalty or delayed payment of
LEARNING OUTCOMES
After studying this Unit, you will be able to-
understand what constitutes the value of a taxable supply of
goods / services when the supply is made to an unrelated
person and price is the sole consideration for the supply
identify the various inclusions in/exclusions from the value of
supply
pinpoint the situations when discount will be included /not
included in the value of supply
ascertain who are related persons
compute the value of taxable supply when price is the sole
consideration for the supply and the supplier and recipient are
not related
VALUE OF SUPPLY
1. INTRODUCTION
GST is payable (i) on supply of goods and / or services for a consideration in the
course of or furtherance of business; (ii) on certain supplies made without a
consideration as specified in Schedule I to the CGST Act.
As GST is an ad valorem levy, i.e. it is levied as a
percentage of the value of supply of goods
and/or services, it becomes important to know
how to arrive at the value on which tax is to be
paid. Provisions relating to ‘value of supply’ set
out the mechanism to compute such value basis
which CGST and SGST/UTGST (intra-State supply)
and IGST (inter-State supply) should be paid.
Section 15 of the CGST Act supplemented with rules under Chapter IV:
Determination of Value of Supply of CGST Rules 1 prescribes the provisions for
determining the value of supply of goods and services.
Section 15 of the CGST Act provides common provisions for determining the
value of supply of goods and services. It provides the mechanism for determining
the value of a supply which is made between unrelated persons and when price
and only the price is the sole consideration for the supply. When value cannot be
determined under section 15 as also in certain specific cases, the same is
determined using Chapter IV: Determination of Value of Supply of CGST Rules.
Provisions of value of supply under CGST Act have also been made applicable
to IGST Act vide section 20 of the IGST Act.
2. RELEVANT DEFINITIONS
Agent means a person, including a factor, broker, commission agent, arhatia,
del credere agent, an auctioneer or any other mercantile agent, by whatever
name called, who carries on the business of supply or receipt of goods or
services or both on behalf of another [Section 2(5)].
1
Chapter IV: Determination of Value of Supply of CGST Rules will be discussed at the Final level.
Factor Who
carries on
business of
Broker
supply of
goods and
Commission agent /or
services
AGENT
Arhatia
On behalf
Auctioneer of another
Mercantile agent
Cess shall have the same meaning as assigned to it in the Goods and
Services Tax (Compensation to States) Act [Section 2(22)].
Consideration in relation to the supply of goods or services or both includes –
(a) any payment made or to be made, whether in money or otherwise, in
respect of, in response to, or for the inducement of, the supply of
goods or services or both, whether by the recipient or by any other
person but shall not include any subsidy given by the Central
Government or a State Government;
(b) the monetary value of any act or forbearance, in respect of, in
response to, or for the inducement of, the supply of goods or services
or both, whether by the recipient or by any other person but shall not
include any subsidy given by the Central Government or a State
Government;
Provided that a deposit given in respect of the supply of goods or services
or both shall not be considered as payment made for such supply unless the
supplier applies such deposit as consideration for the said supply [Section
2(31)].
CONSIDERATION
Person includes-
(a) an individual;
(b) a Hindu Undivided Family;
(c) a company;
(d) a firm;
(e) a Limited Liability Partnership;
(f) an association of persons or a body of individuals, whether
incorporated or not, in India or outside India;
(g) any corporation established by or under any Central Act, State Act or
Provincial Act or a Government company as defined in section 2(45) of
the Companies Act, 2013;
(h) any body corporate incorporated by or under the laws of a country
outside India;
(i) a co-operative society registered under any law relating to
cooperative societies;
(j) a local authority;
(k) Central Government or a State Government;
Foreign Currency
Cheque
Promissory note
Traveller Cheque
Money Order
Postal or electronic
remittance
Other relevant definitions like that of recipient, supplier etc. may be referred from
the definitions given in Unit-I of this chapter.
STATUTORY PROVISIONS
(a) any taxes, duties, cesses, fees and charges levied under any law
for the time being in force other than this Act, the State Goods
and Services Tax Act, the Union Territory Goods and Services
Tax Act and the Goods and Services Tax (Compensation to
States) Act, if charged separately by the supplier;
(3) The value of the supply shall not include any discount which is given
(a) before or at the time of the supply if such discount has been
duly recorded in the invoice issued in respect of such supply; and
(4) Where the value of the supply of goods or services or both cannot be
determined under sub-section (1), the same shall be determined in
such manner as may be prescribed.
(c) persons who are associated in the business of one another in that one is
the sole agent or sole distributor or sole concessionaire, howsoever
described, of the other, shall be deemed to be related
ANALYSIS
The CGST law has different provisions for determining the value of a supply of
goods / services in the following situations:
Supplies made solely for a price in money (monetary consideration), to
unrelated persons Sub-section (1) of section 15;
Supplies made solely for non-monetary consideration, or for part monetary
consideration and part non-monetary consideration, or involving additional
consideration, or to related persons, or for specific classes of supply Sub-
sections (4) and (5) of section 15 read with the Chapter IV: Determination of
Value of Supply of CGST Rules.
The definition of ‘related person’ under the explanation to section 15 covers
various situations of control, including sole agent, sole distributor and sole
the price actually paid or payable for the said supply of goods or
services or both.
This is the price for the specific supply that is being valued. It includes the
amount already paid at the time the supply is being valued for tax, as well
as the amount payable and not yet paid at that time. The word ‘payable’
refers to price that is agreed to be paid for the goods / services.
(1) Wholesale price for 1 MT of cement sold by X Ltd. in the
ordinary course of business : ` 7,000. Price of 1 MT of cement
sold by X Ltd. to unrelated customer Y: ` 6,700.
Value of supply made by X Ltd. to Y is ` 6,700 which is the price actually
paid or payable and not the wholesale price.
effect, all the taxes, duties etc. which are not subsumed in GST form part of
the taxable value for the purpose of levying GST.
For instance, if a supplier of goods pays municipal tax in relation to the
goods being supplied and charges the same separately, such tax will form
part of the value of supply.
TCS under Income-Tax Act, 1961 not includible in the taxable value for
the purpose of GST: The CBIC vide Circular No. 76/50/2018 GST dated
31.12.2018 (amended vide corrigendum dated 7.03.2019) has clarified that
for the purpose of determination of value of supply under GST, tax collected
at source (TCS) under the provisions of the Income Tax Act, 1961 would not
be includible as it is an interim levy not having the character of tax.
2,000 for one month after the free credit period of one month, is ` 20. Such
interest will be added to the value and thus, the value of supply will work
out to be ` 2,020, assuming the interest to be exclusive of GST.
the value. The essence of the conditions prescribed in section 15(3) is that
the price as established at the time of supply should form the basis of value.
The discounts which do not fulfill the conditions specified in section 15(3)
are not deductible from the value, i.e. GST in such a case is levied on the
gross value of the supply without considering the discount.
Discounts that are allowed as deduction from the value are as follows:
(a) Discounts given before or at the time of supply and shown in the
invoice – Example for such discount can be discounts that are offered
for making the payment at the time of supply itself. Such discounts
are thus, recoded in the invoice and thus, GST is charged on the gross
value less discount recorded in the invoice.
(b) Post supply discounts- It is not always commercially feasible to
determine all discounts before or at the time of supply or record them
in the invoice. For instance, cash discount given for making the
payment within a stipulated time. Even though the discount is
established before/at the time of supply, the supplier cannot record
such discount in the invoice as he does not know if the buyer will
make the payment within the stipulated time. Likewise, in case of
quantity/volume/performance discount also, the supplier is not aware
before/at the time of supply as to whether the buyer would purchase
the requisite quantity within the stipulated time. Therefore, in this
case also, the discount cannot be recorded in the invoice. In such
cases, initially the GST is paid on the gross value indicated in the
invoice without considering the discount. The supplier, however,
passes the discount to the buyers subsequently by issuing credit
notes.
Post supply discounts, i.e. the discounts that are given after supply is
made, are allowed as a deduction from the value of supply if the
following two conditions are satisfied:
Discount is in terms of an agreement that existed at the time of
supply and can be worked out invoice-wise; and
Proportionate input tax credit is reversed by the recipient - The
buyer would have availed input tax credit (ITC) of GST payable
on the gross value specified in the invoice. Thus, when a credit
note 2 is issued to him by the supplier for the discount, the buyer
will reverse the proportionate credit; consequent to which, the
supplier’s output tax liability will be reduced by the same
amount.
If the any of the above conditions are not satisfied, the GST liability of
supplier cannot be reduced. The supplier, however, can issue a
commercial credit note 3 for the value of discount. In such a scenario,
the buyer will not be required to reverse any input tax credit.
The provisions relating to allowability of discount as a deduction from the
value have been depicted by way of a diagram given below.
Can be linked
to invoices Discounts
+
included in
the value of
Proportionate supply
ITC reversed
by recipient
No
Yes
2
Credit notes governed under GST law are issued under section 34. Provisions of section 34 are
discussed in Chapter 8: Tax Invoice; Credit & Debit Notes; E-Way Bill
3
A commercial credit note is not governed under GST law and is issued only for the value of
discount/reduction in value of the supply, without any GST.
ILLUSTRATION 1
Black and White Pvt. Ltd. has provided the following particulars relating to goods
sold by it to Colourful Pvt. Ltd.
Particulars `
Black and White Pvt. Ltd. received ` 2000 as a subsidy from a NGO on sale of such
goods. The price of ` 50,000 of the goods is after considering such subsidy. Black
and White Ltd. offers 2% discount on the list price of the goods which is recorded in
the invoice for the goods.
Determine the value of taxable supply made by Black and White Pvt. Ltd.
ANSWER
Computation of value of taxable supply
Particulars `
Total 58,000
ILLUSTRATION 2
Samriddhi Advertisers conceptualised and designed the advertising campaign for a
new product launched by New Moon Pvt Ltd. for a consideration of ` 5,00,000.
Samriddhi Advertisers owed ` 20,000 to one of its vendors in relation to the
advertising service provided by it to New Moon Pvt Ltd. Such liability of Samriddhi
Advertisers was discharged by New Moon Pvt Ltd. New Moon Pvt Ltd. delayed the
payment of consideration and thus, paid ` 15,000 as interest. Assume the rate of
GST to be 18%.
ANSWER
Computation of value of taxable supply
Particulars `
Note: The interest for delay in payment of consideration will be includible in the
value of supply but the time of supply of such interest will be the date when such
interest is received in terms of section 13(6). Such interest has been assumed to be
inclusive of GST and thus, the value has been computed by making back
Interest
calculations × 100 . It is also possible to assume the interest to be
100 + tax rate
exclusive of GST. In that case, the value of supply will work out to be ` 5,35,000.
Supply to be valued as
No per Chapter IV:
Whether price is the sole
Determination of Value of
consideration for supply?
Supply of CGST Rules
Yes
No
Yes
Whether the supply is a
notified supply u/s 15(5)?
No
Value of supply =
Transaction value u/s 15(1)
4. LET US RECAPITULATE
VALUE OF SUPPLY
Supply made to
Supply where price Supply is a
unrelated person Supply made to
is not the sole notified supply
where price is the related person
consideration u/s 15(5)
sole consideration
Value of supply
=
Transaction value u/s 15(1) Value to be determined under Chapter IV:
Determination of Value of Supply of CGST
Rules
specified chemical residues. AKJ Foods Pvt. Ltd. does the testing before the
supply and charges a testing fee for the same from the customer. AKJ Foods
Pvt. Ltd. argues that such testing fess should not form part of the
consideration for the sale as it is a separate activity.
Is the company’s argument correct in the light of section 15?
6. A philanthropic association makes a substantial donation each year to a
reputed private management institution to subsidize the education of low-
income group students who have gained admission there. The fee for these
individuals is reduced thereby coming to ` 3 lakh a year compared to ` 5 lakh
a year for other students.
What would be the value of the service of coaching and instruction provided
by the institution to the low-income group students?
7. Mezda Banners, an advertising firm, gives its customers an interest-free credit
period of 30 days for payment. Its customer ABC paid for the supply 32 days
after the supply of service. Mezda Banners waived the interest payable for
delay of two days.
The Department wants to add interest for two days to the value of supply.
Should notional interest be added to the value?
8. Crunch Bakery Products Ltd sells biscuits and cakes through its dealers, to
whom it charges the list price minus standard discount and pays GST
accordingly. When goods remain unsold with the dealers, it offered
additional discounts on the stock as an incentive to push the sales.
Can this additional discount be reduced from the price at which the goods
were sold, and concomitant tax adjustments made?
9. Red Pepper Ltd., Delhi, a registered supplier, is manufacturing taxable goods.
It provides the following details of taxable inter-State supply made by it
during the month of March.
S. Particulars Amount
No. (` )
(ii) Subsidy received from the Central Government for supply 2,10,000
of taxable goods to Government School (exclusively
related to supply of goods included at S. No. 1)
(vi) Late fee paid by the recipient of supply for delayed 6,000
payment of consideration (Recipient has agreed to pay
` 6,000 in lump sum and no additional amount is
payable by him)
The list price of the goods is net of the two subsidies received. However, the
other charges/taxes/fee are charged to the customers over and above the list
price.
Calculate the total value of taxable supplies made by Red Pepper Ltd. during
the month of March. Rate of IGST is 18%.
10. M/s. Flow Pro, a registered supplier, sold a machine to BP Ltd. It provides the
following information in this regard: -
S. Particulars Amount
No. (` )
(i) Price of the machine [excluding taxes and other charges 25,000
mentioned at S. Nos. (ii) and (iii)]
S. Particulars Amount
No. (` )
(i) Price of the goods [excluding taxes and other charges 1,00,000
mentioned at S. Nos. (iii), (v) and (vi)]
S. Particulars Amount
No. (` )
Determine the value of taxable supply made by Koli Ltd. to Ghisa Ltd.
6. ANSWERS/HINTS
1. No, the post-supply discounts are not eligible for deduction from the value
of supplies in all situations. Such discounts are allowed as a deduction from
the value of supply only in the situations where the following two
conditions are satisfied:
same should not be added to the value. Hence, the value of supply will be
` 2,00,000.
However, the answer will change in the second case when the showroom
will charge ` 300 for freight [(50km – 20 km) x ` 10] from Ms. Leena. In this
case, the supply will be a composite supply (principle supply being the
supply of furniture) and value thereof will be ` 2,00,300.
5. Section 15(2) mandates addition of certain elements in the value of supply.
Clause (c) of section 15(2) specifies that amount charged for anything done
by the supplier in respect of the supply at the time of or before delivery of
goods or supply of services shall be included in the value of supply.
Since AKJ Foods Pvt. Ltd. does the testing before the delivery of goods, the
charges therefor will be included in the value of the consignment.
Therefore, AKJ Foods Pvt. Ltd.’s argument is not correct. The testing fee
should be added to the price to arrive at value of the consignment.
6. As per section 15(2)(e), the value of a supply includes subsidies directly
linked to the price, excluding State Government and Central Government
subsidies. In this case, the subsidy is not received from the Government but
from a philanthropic association. Therefore, the subsidy is to be added
back to the price to arrive at the value, which comes to ` 5 lakh a year.
7. This is a supply that is valued as per transaction value under section 15(1) as
the price is the sole consideration for the supply and the supply is made to
unrelated person. The value of a supply includes certain elements like
interest which are actually payable. Once waived, the interest is not payable
and is therefore, not to be added to the value.
8. The discounts were not known or agreed for at the time of supply of goods
to the dealers. Therefore, in terms of section 15(3), such discounts cannot
be reduced from the price on which tax had been paid.
9. Computation of total value of taxable supplies made by Red Pepper
Ltd. during the month of March
Government
[Since the subsidy is received from the Government, the
same is not includible in the value in terms of section
15(2)(e)]
Subsidy received from NGO 50,000
[Since the subsidy is received from a non-Government
body and directly linked to the supply, the same is
includible in the value in terms of section 15(2)(e)]
Tax levied by the Municipal Authority 20,000
[Includible in the value as per section 15(2)(a)]
Packing charges 15,000
[Being incidental expenses, the same are includible in the
value as per section 15(2)(c)]
Late fees paid by recipient of supply for delayed payment 5,085
[Includible in the value as per section 15(2)(d) - As the
amount of interest received is a lump sum amount, the
same has to be taken as inclusive of GST] [` 6,000 x
100/118] rounded off
Total value of taxable supplies 15,90,085
10. Computation of value of taxable supply made by M/s. Flo Pro to BP Ltd.
Total 32,000
11. Computation of value of taxable supply made by Shri Krishna Pvt. Ltd.
to Shri Balram Pvt. Ltd.
12. Computation of value of taxable supply made by Koli Ltd. to Ghisa Ltd.
Amount paid by Ghisa Ltd. directly to the supplier for the 20,000
part fitted in the machinery
[Any amount that the supplier is liable to pay in relation to
a supply but which has been incurred by the recipient of
the supply and not included in the price actually paid or
payable for the goods is includible in the value of supply in
terms of section 15(2)(b).]
LEARNING OUTCOMES
After studying this Chapter, you will be able to:
describe what are inputs, input services, capital goods and other
relevant terms in relation to ITC.
explain the various conditions, timelines, restrictions and processes
for taking ITC on goods and services in general and special
circumstances.
identify the items on which ITC is available as also the blocked items
on which ITC is not available.
explain the concept relating to availing of proportionate ITC when
common inputs or input service or capital goods are used or
intended to be used for exempted and taxable supplies or business
and non-business activities.
comprehend and apply the above provisions as also the provisions
relating to utilization of ITC to compute the GST liability of a
registered person payable in cash.
Relevant definitions
Input Tax credit
Apportionment of credit
and blocked credits
Availability of credit in
special circumstances
1. INTRODUCTION
In earlier indirect tax regime, the
credit mechanism for indirect taxes
levied by the Union Government,
(central excise duty and service tax) was governed by the CENVAT Credit Rules,
2004; and the credit mechanism for state-level VAT on sale of goods was governed
by the States under their respective VAT laws. The VAT legislations allowed ITC of
VAT on inputs and capital goods in transactions within the state, but not on inputs
and capital goods coming in the State from outside the state, on which central sales
tax was paid. CENVAT Credit Rules, 2004 allowed availing and utilization of credit
of duty/tax paid on both goods (capital goods and inputs) and services by the
manufacturers and the service providers across the country.
The credit across goods and services was integrated vide the CENVAT Credit Rules,
2004 in the year 2004 to mitigate the cascading effects of central levies namely,
central excise duty and service tax. However, the credit chain remained fragmented
on account of State-Level VAT as the credit of central taxes could not be set off
against a State levy and vice versa. The chain further got distorted as ITC was not
available on inter-State purchases. This resulted in cascading of taxes leading to
increase in costs of goods and services.
The GST regime promises seamless credit on goods and services across the entire
supply chain with some exceptions like supplies charged to tax under composition
scheme and supply of exempted goods and/or services. ITC is considered to be
the lifeline of the GST regime. In fact, it is the provisions of ITC, which essentially
make GST a value added tax i.e., collection of tax at all points of supply chain after
allowing credit of tax paid at earlier points.
Chapter V of the CGST Act [Sections 16 to 21] & Chapter V: Input Tax Credit of the
CGST Rules [Rules 36-45] prescribe the provisions relating to ITC. State GST laws also
prescribe identical provisions in relation to ITC. In this Chapter, provisions of sections
16, 17 and 18 have been discussed; 1 first the statutory provisions of these sections
together with the relevant rules have been extracted followed by their analysis.
Provisions of ITC under the CGST Act have also been made applicable to
the IGST Act vide section 20 of the IGST Act.
1
Provisions of ITC relating to job work and input service distributor [Sections 19, 20 and 21]
will be discussed at the Final level.
ITC is used for payment of tax on taxable output supply to avoid cascading
effect of taxes.
GST law does not require ‘one to one’ co-relation between inputs/input
services and final products/services. Any eligible ITC can be used for payment
of tax on any taxable output supply.
IGST is another core aspect of GST. It is a transitory tax to enable transfer of
ITC when goods or services move from one State to another. This is a unique
feature of Indian GST.
Since ITC can be availed for payment of tax on taxable output supply, as a
natural corollary, ITC is not available when tax is not payable on output
supply, i.e. on exempt supply.
The exception to the above principle is ‘zero rated supply’ 2, i.e. exports or
supplies to a special economic zone (SEZ) developer/unit, where ITC is
available even if no tax is payable on output supply. Such ITC can be used
either for payment of tax on supplies made with tax or refund of the same
can be obtained. This simple mechanism is used to make exports and
supplies to SEZ completely tax free.
If a taxable person is making both taxable and exempt supply, he is entitled
to full credit of ITC in respect of inputs, input services and capital goods
exclusively used for taxable supply and no credit at all for inputs, input
services and capital goods exclusively used for exempt supply.
If common inputs, input services and capital goods are used for taxable as
well as exempt supply, only proportionate ITC attributable to the taxable
supply is available. The common ITC is apportioned in the ratio of value of
taxable supply and exempt supply. Elaborate provisions have been made in
the GST law to prescribe the manner of calculation of proportionate ITC.
Before proceeding to understand the provisions of section 16, 17, 18 and the
relevant rules let us first go through few relevant definitions.
2. RELEVANT DEFINITIONS
Agent means a person, including a factor, broker, commission agent, arhatia,
del credere agent, an auctioneer or any other mercantile agent, by whatever
name called, who carries on the business of supply or receipt of goods or
services or both on behalf of another [Section 2(5)].
2
The concept of zero rated supply and the refund of ITC will be dealt in detail at the Final level.
Business includes
(a) any trade, commerce, manufacture, profession, vocation, adventure,
wager or any other similar activity, whether or not it is for a pecuniary
benefit;
(b) any activity or transaction in connection with or incidental or ancillary
to sub-clause (a);
(c) any activity or transaction in the nature of sub-clause (a), whether or
not there is volume, frequency, continuity or regularity of such
transaction;
(d) supply or acquisition of goods including capital goods and services in
connection with commencement or closure of business;
(e) provision by a club, association, society, or any such body (for a
subscription or any other consideration) of the facilities or benefits to
its members;
(f) admission, for a consideration, of persons to any premises;
(g) services supplied by a person as the holder of an office which has been
accepted by him in the course or furtherance of his trade, profession or
vocation;
(h) activities of a race club including by way of totalisator or a licence to
book maker or activities of a licenced book maker in such club; and
(i) any activity or transaction undertaken by the Central Government, a
State Government or any local authority in which they are engaged as
public authorities [Section 2(17)].
Capital goods means goods, the value of which is capitalized in the books of
account of the person claiming the ITC and which are used or intended to be
used in the course or furtherance of business [Section 2(19)].
Conveyance includes a vessel, an aircraft and a vehicle [Section 2(34)].
Exempt supply means supply of any goods or services or both which attracts
nil rate of tax or which may be wholly exempt from tax under section 11, or
under section 6 of the IGST Act, and includes non-taxable supply [Section
2(47)].
Input means any goods other than capital goods used or intended to be used
by a supplier in the course or furtherance of business [Section 2(59)].
STATUTORY PROVISIONS
Provided further that where a recipient fails to pay to the supplier of goods
or services or both, other than the supplies on which tax is payable on
reverse charge basis, the amount towards the value of supply along with
tax payable thereon within a period of one hundred and eighty days from
the date of issue of invoice by the supplier, an amount equal to the input
tax credit availed by the recipient shall be added to his output tax liability,
along with interest thereon, in such manner as may be prescribed:
Provided also that the recipient shall be entitled to avail of the credit
of input tax on payment made by him of the amount towards the value
of supply of goods or services or both along with tax payable thereon.
(3) Where the registered person has claimed depreciation on the tax
component of the cost of capital goods and plant and machinery
under the provisions of the Income-tax Act, 1961, the input tax
credit on the said tax component shall not be allowed.
(4) A registered person shall not be entitled to take input tax credit in
respect of any invoice or debit note for supply of goods or services
or both after the due date of furnishing of the return under section
39 for the month of September following the end of financial year
to which such invoice or invoice relating to such debit note pertains
or furnishing of the relevant annual return, whichever is earlier.
(2) Input tax credit shall be availed by a registered person only if all the
applicable particulars as specified in the provisions of Chapter VI are
contained in the said document, and the relevant information, as
contained in the said document, is furnished in FORM GSTR-2 3 by
such person.
Provided that if the said document does not contain all the specified
particulars but contains the details of the amount of tax charged,
description of goods or services, total value of supply of goods or
3
Filing of GSTR-2 has been deferred by the GST Council.
(1) A registered person, who has availed of input tax credit on any
inward supply of goods or services or both, but fails to pay to the
supplier thereof the value of such supply along with the tax payable
thereon within the time limit specified in the second proviso to sub-
section (2) of section 16, shall furnish the details of such supply, the
amount of value not paid and the amount of input tax credit availed
of proportionate to such amount not paid to the supplier in FORM
GSTR-2 for the month immediately following the period of one
hundred and eighty days from the date of the issue of the invoice.
(2) The amount of input tax credit referred to in sub-rule (1) shall be
added to the output tax liability of the registered person for the
month in which the details are furnished.
(3) The registered person shall be liable to pay interest at the rate
notified under sub-section (1) of section 50 for the period starting
from the date of availing credit on such supplies till the date when
the amount added to the output tax liability, as mentioned in sub-
rule (2), is paid.
(4) The time limit specified in sub-section (4) of section 16 shall not
apply to a claim for re- availing of any credit, in accordance with
the provisions of the Act or the provisions of this Chapter, that had
been reversed earlier.
ANALYSIS
(i) Eligibility for taking ITC [Section 16(1)]
(a) Registration under GST
Every registered person shall be entitled to ITC of GST charged on
inward supply of goods and / or services. This is subject to the
provisions relating to use of ITC under section 49 and the conditions
and restrictions in the rules. [Section 49 prescribes provisions relating to
payment of tax, interest, penalty & other amounts. The same has been
discussed in detail in Chapter 9: Payment of Tax.]
(b) Goods/services to be used for business purposes
ITC of GST will be available on goods and/or services which are used in
the course or furtherance of the business [See definition of business].
The “intention to use” the goods and/or services in the course or
furtherance of business would also suffice for availing ITC on such
goods and/or services. Thus, tax paid on goods and or/services which
are used or intended to be used for non-business purposes cannot be
availed as credit. ITC will be credited in electronic credit ledger.
4
Concept of Input Service Distributor will be dealt with at the Final level.
5
The provisions relating to filing of GSTR-1 and GSTR-2A have been discussed in detail in
Chapter 10: Returns.]
ILLUSTRATION 1
Vijay Sales, a registered supplier, receives 100 invoices (for inward
supply of goods/ services) involving GST of ` 10 lakh, from various
suppliers during the month of October. Out of 100 invoices, 80
invoices involving GST of ` 6 lakh have been uploaded by the
suppliers in their respective GSTR-1s filed on the prescribed due
date therefor.
Compute the ITC that can be claimed by Vijay Sales in its GSTR-3B
for the month of October to be filed by 20th November assuming
that GST of ` 10 lakh is otherwise eligible for ITC.
ANSWER
ITC to be claimed by Vijay Sales in its GSTR-3B for the month of
October to be filed by 20th November will be computed as under-
Notes:
(1) 100% ITC can be availed on invoices uploaded by the suppliers
in their GSTR-1.
(2) As per rule 36(4), the ITC in respect of invoices not uploaded
by the suppliers in their GSTR-1s is restricted to 10% of
eligible ITC in respect of invoices uploaded in GSTR-1s. Thus,
in respect of 20 invoices not uploaded in GSTR-1s, the ITC has
been restricted to ` 0.6 lakh [10% of ` 6 lakh].
ILLUSTRATION 2
Ajay Sales, a registered supplier, receives 100 invoices (for inward
supply of goods/ services) involving GST of ` 10 lakh, from various
suppliers during the month of October. Out of 100 invoices, 85
Notes:
(1) 100% ITC can be availed on invoices uploaded by the suppliers
in their GSTR-1.
(2) As per rule 36(4), the ITC in respect of invoices not uploaded
by the suppliers in their GSTR-1s is restricted to 10% of
eligible ITC in respect of invoices uploaded in GSTR-1s.
However, since in this case, 10% of the eligible ITC in respect
of invoices uploaded in GSTR-1s [` 0.95 lakh (10% of ` 9.5
lakh)] exceeds the actual ITC [` 0.5 lakh] in respect of 15
invoices not uploaded in GSTR-1, ITC availed should be
limited to actual amount of ITC.
(b) Receipt of the goods and / or services [Section 16(2)(b)]
The registered person taking the ITC must have received the goods
and / or services.
“Bill to Ship to” Model: Under this model, the goods are delivered to
A A bills to B
B
ITC basis the
invoice issued by
A as
goods/services
Supply by B to C deemed to be
B bills to C received by B
Goods/services
Goods shipped/Services being received, C
provided by A to C on entitled to avail ITC
directions of B C basis the invoice
issued by B
(2) The registered head office (New Delhi) of ABC Pvt. Ltd.
enters into a contract with DEF Pvt. Ltd. of New Delhi for
repair and maintenance of computers systems installed at its
registered branch office in Bengaluru, Karnataka. DEF Pvt. Ltd. issues
an invoice on ABC Pvt. Ltd., New Delhi for the services provided by it.
Though the actual services are received by the branch office and not by
the head office, section 16(2)(b) allows ITC of such repair and
maintenance services to head office.
(c) Tax leviable on supply actually paid to Government [Section
16(2)(c)]
The supplier should have actually paid the tax charged on the goods
and/or services, for which ITC is being taken, either in cash or by
utilizing ITC. However, section 41 allows the taxpayer (recipient) to take
ITC provisionally on self-assessment basis. The self-assessed ITC gets
credited to the taxpayer’s electronic credit ledger on provisional basis
in terms of section 49(2).
Thus, even if the recipient has paid the tax to the supplier his claim for
ITC gets confirmed only when the supplier deposits the tax so collected
by him to the Government.
One of the significant features of the Indian GST is the ‘matching
concept’, i.e. ITC claimed by the recipient of supply is matched with the
tax paid by the supplier in relation to that supply. Matching seeks to
ensure that only legit ITC is claimed by the recipient. This was intended
to be achieved through a sophisticated automated return filing
mechanism. Initially, the GST law provided for an elaborate system of
return filing whereby the outward supplies of a supplier uploaded in
GSTR-1 were to be auto-populated as inward supplies in the recipient’s
GSTR-2 and ITC could be availed only on such matched inward supplies.
Basis GSTR-1 and GSTR-2 of the taxpayer, the consolidated return viz,
GSTR-3 was to be auto-generated (for most part), and tax liability paid.
However, the envisaged system could not be operationalized.
any time limit [See discussion on time limit for availing credit under point (vi)].
In case part-payment has been made, proportionate credit would be allowed.
Exceptions
This condition of payment of value of supply plus tax within 180 days does
not apply in the following situations:
a. Supplies on which tax is payable under reverse charge
b. Deemed supplies without consideration
c. Additions made to the value of supplies on account of supplier’s liability,
in relation to such supplies, being incurred by the recipient of the supply
Under situations given in points (b) & (c), the value of supply is deemed to
have been paid.
(4) Due to a quality dispute, PZP Ltd withheld payment on a
machine supplied by a vendor till it could be rectified. Over 180
days went by in this dispute. The credit taken by PZP on the
invoice got added to the output tax liability of PZP and thus, it had
to pay back the credit. Only after the vendor rectified the machine and PZP
released the payment, could PZP take the credit again.
(v) If depreciation claimed on tax component, ITC not allowed
[Section 16(3)]
If the person taking the ITC on capital goods and plant and machinery has
claimed depreciation on the tax component of the cost of the said items
under the Income-tax Act 1961, the ITC on the said tax component shall not
be allowed. Thus, in respect of the tax paid on such items, dual benefit cannot
be claimed under Income-tax Act, 1961 and GST laws simultaneously. In other
words, either depreciation on the tax component can be claimed under
Income Tax Act or ITC of such tax paid can be availed under GST laws.
(vi) Time limit for availing ITC: Due date of filing of return for the
month of September of succeeding financial year or date of
filing of annual return, whichever is earlier [Section 16(4)]
ITC on invoices pertaining to a financial year or debit notes relating to
invoices pertaining to a financial year can be availed any time till the due date
of filing of the return for the month of September of the succeeding financial
year or the date of filing of the relevant annual return, whichever is earlier.
It may be noted that the return for the month of September is to be filed by
STATUTORY PROVISIONS
6
Clause (f) of the rule which contained the provisions for computation of ‘Tr’ has been omitted
vide Notification No. 16/2020 CT dated 23.03.2020. This has rendered the formula given in
clause (g) otiose as the term ‘Tr’ is now nowhere defined in the amended rule.
ANALYSIS
Section 17 requires apportionment and concomitant restriction of ITC in two
situations as also blocking of ITC on specified inward supplies.
In both the above situations, full ITC on inward supplies cannot be taken; only
proportionate ITC is allowed in such scenarios. Where goods and/or services
are used partly for non-business purposes and partly for business purposes,
ITC attributable only to business purposes can be taken by the registered
person. Similarly, where goods and/or services are partly used for making
exempt supplies including zero rated supplies and partly for taxable supplies,
ITC attributable to taxable supplies and zero rated supplies can be taken by
the registered person.
Less: Input tax on inputs & input services that are (T1)
intended to be used exclusively for non-business
purposes
Less: Input tax on inputs & input services that are (T2)
intended to be used exclusively for exempt supplies
Less: Input tax on inputs & input services which are (T3)
ineligible for credit [blocked credits- see discussion
under point (B)]
Less: ITC on inputs & input services that are intended (T4)
to be used exclusively for taxable supplies including
zero rated supplies
five varieties of other sandals and shoes. Dyes are used in the
manufacture of all footwear. However, bright pink is used only for one
of the Hawai varieties, and black is used only for the sandals and shoes.
Blue and yellow are used for all the varieties. Brown is used for non-
business purposes.
In inward supplies during the month -
Input tax on brown dye: ` 10,000 (This is T1)
Input tax on bright pink dye: ` 90,000. (This is T2)
Input tax on black dye: ` 40,000. (This is T4)
Input tax on blue dye: ` 1,00,000
Input tax on yellow dye: ` 15,000
Total input tax: ` 2,55,000 (This is T)
Total input tax reduced by (T1 + T2 + T4, i.e., by ` 1,40,000) is ` 1,15,000.
Amount of common credit (C2) is ` 1,15,000. This has to be apportioned
as given below in Step 2.
Step 2 – Compute credit attributable to exempt supplies
(ineligible credit) by apportionment of common credit
Apportion C2 into credit attributable to exempt supplies D1 as under:
D1 = (E/F) x C2
Where
E = Aggregate value of exempt supplies during the tax period
F = Total turnover in the State during the tax period
Notes:
(i) If the registered person does not have any turnover during the said
tax period, or the above information is not available, the values for
the last tax period may be used.
(ii) Here, exempt supplies include reverse charge supplies, transactions
in securities, sale of land and sale of building when entire
consideration is received either after issuance of completion
certificate by the competent authority or its first occupation,
whichever is earlier. Thus, ITC attributable to such supplies will need
to be reversed.
(vi) Change from exclusive use for taxable including zero rated
supplies to common use: Where capital goods which were
initially covered under (ii) above get subsequently covered
under (iii), add input tax claimed in respect of the same to
aggregate value of ‘Tc’.
Tm = Tc ÷ 60
Te = (E ÷ F) x Tr
Where
E = Aggregate value of exempt supplies made during the tax period
F = Total turnover in the State during the tax period
Notes:
(i) Tm is to be computed during the useful life of capital goods
which is five years from the date of invoice.
(ii) If the registered person does not have any turnover during the said
tax period, or the above information is not available, the values for
the last tax period may be used.
(iii) Here, exempt supplies include reverse charge supplies, transactions
in securities, sale of land and sale of building when entire
consideration is received either after issuance of completion
certificate by the competent authority or its first occupation,
whichever is earlier. Thus, ITC attributable to such supplies will need
to be reversed.
(iv) Here, exempt supplies exclude-
(a) transactions/activities specified in Schedule III except
sale of land and sale of building as specified in point (ii)
above.
Meaning of construction
“Construction” includes re-construction, renovation, additions or
alterations or repairs, to the extent of capitalization, to the said
immovable property.
Thus, if re-construction, renovation, additions or alterations or repairs
are not capitalized, it would not tantamount to construction under GST
law. Consequently, ITC on works contract services availed for such
construction (which is not capitalized) whether for any immovable
property or for any plant and machinery, would be allowed to all the
recipients irrespective of their line of business.
(31) A company buys cement, tiles etc. and avails the services
of an architect for construction of its office building. ITC on
such goods and services is blocked.
(32) MN & Constructions procures cement, paint, iron rods and
services of architects and interior designers for construction of a
commercial complex for one of its clients. ITC on such goods and
services is allowed to MN & Co.
(33) A company buys cement, tiles etc. and avails the services of an
architect for renovation of its office building. The company has booked
such expenditure in its profit and loss account. ITC on such goods and
services is allowed.
(34) ITC on goods and/or services used by an automobile company for
construction of a foundation on which a machinery (to be used in the
production process) is to be mounted permanently, is allowed.
(v) Inward supplies charged to tax under composition levy [Clause
(e) of section 17(5)]
A supplier registered under composition scheme cannot collect tax
from its customers. Thus, such supplier issues bill of supply and not a
tax invoice. A composition supplier pays a lumpsum tax at a specified
rate on its quarterly turnover.
Tax paid on goods and/or services under composition scheme is not
available as ITC.
Since a composition supplier cannot collect any tax on its supplies, from
the recipient of its supplies, it is obvious that no ITC can be availed in
respect of such supplies by the recipients. Nevertheless, section
blocks ITC on
Lost goods
Stolen goods
Destroyed goods
Meaning of ‘gift’
The terms gift has not been defined in the GST law. Therefore, we will
have to look for the definition of gift in other laws. Section 122 of the
Transfer of Property Act, 1882, defines gift as transfer of certain existing
moveable or immoveable property made voluntarily and without
7
The procedure for return of time expired drugs or medicines by issuing credit note is covered
in Chapter 8: Tax Invoice; Credit and Debit Notes; E-Way Bill.
STATUTORY PROVISIONS
(a) a person who has applied for registration under this Act
within thirty days from the date on which he becomes
liable to registration and has been granted such
registration shall be entitled to take credit of input tax in
respect of inputs held in stock and inputs contained in
semi-finished or finished goods held in stock on the day
immediately preceding the date from which he becomes
liable to pay tax under the provisions of this Act;
8
These provisions will be discussed at the Final level.
(2) A registered person shall not be entitled to take input tax credit
under sub-section (1) in respect of any supply of goods or services
or both to him after the expiry of one year from the date of issue of
tax invoice relating to such supply.
(4) Where any registered person who has availed of input tax credit
opts to pay tax under section 10 or, where the goods or services or
both supplied by him become wholly exempt, he shall pay an
amount, by way of debit in the electronic credit ledger or electronic
cash ledger, equivalent to the credit of input tax in respect of inputs
held in stock and inputs contained in semi-finished or finished
goods held in stock and on capital goods, reduced by such
percentage points as may be prescribed, on the day immediately
preceding the date of exercising of such option or, as the case may
be, the date of such exemption:
(5) The amount of credit under sub-section (1) and the amount payable
under sub-section (4) shall be calculated in such manner as may be
prescribed.
Provided that where refractory bricks, moulds and dies, jigs and
fixtures are supplied as scrap, the taxable person may pay tax on
the transaction value of such goods determined under section 15.
(1) The input tax credit claimed in accordance with the provisions of
sub-section (1) of section 18 on the inputs held in stock or inputs
contained in semi-finished or finished goods held in stock, or the
credit claimed on capital goods in accordance with the provisions
of clauses (c) and (d) of the said sub-section, shall be subject to the
following conditions, namely -
(c) the declaration under clause (b) shall clearly specify the
details relating to the inputs held in stock or inputs
contained in semi-finished or finished goods held in stock,
or as the case may be, capital goods–
(2) The amount of credit in the case of supply of capital goods or plant
and machinery, for the purposes of sub-section (6) of section 18,
shall be calculated by reducing the input tax on the said goods at
the rate of five percentage points for every quarter or part thereof
from the date of the issue of the invoice for such goods.
Provided that in the case of demerger, the input tax credit shall be
apportioned in the ratio of the value of assets of the new units as
specified in the demerger scheme.
(3) The transferee shall, on the common portal, accept the details so
furnished by the transferor and, upon such acceptance, the un-
(4) The inputs and capital goods so transferred shall be duly accounted
for by the transferee in his books of account.
Provided that the input tax credit shall be transferred to the newly
registered entities in the ratio of the value of assets held by them at
the time of registration.
(1) The amount of input tax credit relating to inputs held in stock,
inputs contained in semi-finished and finished goods held in stock,
and capital goods held in stock shall, for the purposes of sub-section
(4) of section 18 or sub-section (5) of section 29, be determined in
the following manner, namely,-
(b) for capital goods held in stock, the input tax credit involved
in the remaining useful life in months shall be computed
on pro-rata basis, taking the useful life as five years.
(3) Where the tax invoices related to the inputs held in stock are not
available, the registered person shall estimate the amount under sub-
rule (1) based on the prevailing market price of the goods on the effective
date of the occurrence of any of the events specified in sub-section (4) of
section 18 or, as the case may be, sub-section (5) of section 29.
(4) The amount determined under sub-rule (1) shall form part of the
output tax liability of the registered person and the details of the
amount shall be furnished in FORM GST ITC-03, where such
amount relates to any event specified in sub-section (4) of section
18 and in FORM GSTR-10, where such amount relates to the
cancellation of registration.
(5) The details furnished in accordance with sub-rule (3) shall be duly
certified by a practicing chartered accountant or cost accountant.
(6) The amount of input tax credit for the purposes of sub-section (6)
of section 18 relating to capital goods shall be determined in the
same manner as specified in clause (b) of sub-rule (1) and the
amount shall be determined separately for input tax credit of
central tax, State tax, Union territory tax and integrated tax:
Provided that where the amount so determined is more than the tax
determined on the transaction value of the capital goods, the
amount determined shall form part of the output tax liability and
the same shall be furnished in FORM GSTR-1.
ANALYSIS
Section 18 provides for
(1) entitlement of ITC on inputs in stock and contained in finished goods or work-
in-progress and capital goods (i) at the time of registration/voluntary
registration, (ii) on coming into regular tax-paying status by exiting
composition levy, (iii) on coming into tax-paying status on account of exempt
supply becoming taxable supply
(2) reversal of ITC on inputs in stock and contained in finished goods or work-
in-progress and capital goods (i) at the time of exit from regular tax-paying
status by opting for composition levy, (ii) at the time of exit from tax-paying
status on account of taxable supply becoming exempt supply
(3) amount payable on supply of capital goods or plant and machinery on which
ITC has been taken
(4) transfer of ITC on account of change in constitution of the registered person
(i) Entitlement of ITC at the time of registration/voluntary registration
or switching to regular tax paying status or coming into tax-paying
status [Sub-sections (1) and (2) of section 18 read with rule 40 of
CGST Rules]
The credit on inputs held in stock and contained in semi-finished goods or
finished goods held in stock and capital goods at the time of
registration/voluntary registration or coming into regular tax/tax-paying
status is available in the following manner:
In all the above cases, the registered person has to make an electronic
declaration in the prescribed form on the common portal, clearly specifying
the details relating to the inputs held in stock, inputs contained in semi-
finished or finished goods held in stock and capital goods on the days
mentioned in column (4) of table above. The declaration is to be filed within
30 days (extendable by Commissioner/Commissioner of State
GST/Commissioner of UTGST) from the date when the registered person
becomes eligible to avail ITC. If the claim of ITC pertaining to CGST,
SGST/UTGST, IGST put together exceeds ` 2,00,000, the declaration needs to
be certified by a practicing Chartered Accountant/Cost Accountant.
(37) ‘Z’ becomes liable to pay tax on 1st August and has obtained
registration on 15th August. ‘Z’ is eligible for ITC on inputs held in
stock and as part of semi-finished goods or finished goods held in
stock as on 31st July. ‘Z’ cannot take ITC on capital goods.
(38) ‘A’ applies for voluntary registration on 5th June and obtains
registration on 22nd June. ‘A’ is eligible for ITC on inputs held in
stock and as part of semi-finished goods or finished goods held in
stock as on 21st June. ‘A’ cannot take ITC on capital goods.
The above provisions have been explained with the help of the following diagram:
1 •Sale
Change in constitution of •Merger
registered person •Demerger
•Amalgamtion
•Lease
•Transfer or change in ownership of
business
In the case of demerger, ITC will be apportioned in the ratio of the value of
assets of the new units as specified in the demerger scheme. Here, “value of
assets” means the value of the entire assets of the business irrespective of
whether ITC has been availed thereon or not.
State/Union Territory, can transfer the unutilised ITC (wholly or partly) lying
in his electronic credit ledger to any or all of the newly registered place(s) of
business in the ratio of the value of assets held by them at the time of
registration. Here, the ‘value of assets’ means the value of the entire assets
of the business irrespective of whether ITC has been availed thereon or not.
The registered person should furnish the prescribed details on the common
portal within a period of 30 days from obtaining such separate registrations.
Upon acceptance of such details by the newly registered person (transferee)
on the common portal, the unutilised ITC gets credited to his electronic credit
ledger.
STATUTORY PROVISIONS
(5) The amount of input tax credit available in the electronic credit
ledger of the registered person on account of––
(f) the State tax or Union territory tax shall not be utilised
towards payment of central tax.
Provided that the input tax credit on account of central tax, State
tax or Union territory tax shall be utilised towards payment of
integrated tax, central tax, State tax or Union territory tax, as the
case may be, only after the input tax credit available on account of
integrated tax has first been utilised fully.
ANALYSIS
ITC is credited to a registered person’s electronic credit ledger. A taxable person
is entitled for ITC of CGST, SGST/UTGST and IGST depending upon the nature of
supplies received by him.
To illustrate, a supplier making intra-State, inter-State and imported purchases (of
goods) is eligible for ITC as under:
CGST BCD
IGST
SGST IGST
The person may use the ITC to pay his output tax liability. As we know that Indian
GST is a dual GST wherein two taxes viz, CGST and SGST/UTGST are levied
concurrently on a supply transaction. While the CGST revenue accrues to Central
Government, SGST and UTGST revenue accrue to respective State Government and
Union Territory respectively. Hence, ITC of CGST and SGST/UTGST is not inter-
changeable and thus, cross utilisation of CGST and SGST/UTGST is not permissible.
IGST is a transitory tax. IGST paid by taxpayer initially goes to the Central Clearing
Authority. ITC of IGST can be utilised for payment of CGST or SGST/UTGST (or vice
versa). Thus, cross utilization of IGST and CGST, SGST/UTGST is permissible.
Flexibility has been provided to the taxpayer to utilise ITC of IGST for payment of
CGST and/or SGST/UTGST in any proportion and in any order. If ITC of IGST is used
for payment of SGST/UTGST (or vice versa), corresponding debit/credit is made to
respective State Government/Union Territory.
Sections 49(5), 49A, 49B, rule 88A and Circular No. 98/17/2019 GST dated
23.04.2019 together prescribe the sequence of utilisation of ITC. A combined
reading of such provisions shows that the order of utilization of ITC is as per the
order (of numerals) given below:
The numerals given above can be further explained in the following manner:
(III) Entire ITC of IGST should be fully utilized before utilizing the ITC
of CGST or SGST/UTGST.
(IV) & (V) ITC of CGST should be utilized for payment of CGST and IGST in
that order. ITC of CGST cannot be utilized for payment of
SGST/UTGST
(VI) & (VII) ITC of SGST /UTGST should be utilized for payment of
SGST/UTGST and IGST in that order. However, ITC of
SGST/UTGST should be utilized for payment of IGST, only after
ITC of CGST has been utilized fully. ITC of SGST/UTGST cannot
be utilized for payment of CGST.
(41) Amount of ITC available and output tax liability under different
tax heads
Option 1
ITC of Discharge of Discharge of Discharge of output Balance
output IGST output CGST SGST/UTGST of ITC
liability (`) liability (`) liability (`) (`)
IGST 1000 200 100 0
ITC of IGST has been completely exhausted
CGST 0 100 - 100
SGST/UTGST 0 - 200 0
Total 1000 300 300 100
Option 2
ITC of Discharge of Discharge Discharge of Balance
output IGST of output output of
liability (`) CGST SGST/UTGST ITC (`)
liability (`) liability (`)
IGST 1000 100 200 0
ITC of IGST has been completely exhausted
CGST 0 200 - 0
SGST/UTGST 0 - 100 100
Total 1000 300 300 100
There can be other options also for utilization of ITC of IGST against CGST and SGST
liabilities. In this example, two options for utilizing ITC of IGST against CGST and
SGST liabilities are shown.
ABC Co. Ltd., registered under GST, is engaged in the manufacture of heavy
machinery. It procured the following items during the month of July.
Determine the amount of ITC available with ABC Co. Ltd., for the month of July by
giving necessary explanations for treatment of various items. Subject to the
information given above, assume that all the other conditions necessary for availing
ITC have been fulfilled.
ANSWER
Computation of ITC available with ABC Co. Ltd. for the month of July
ILLUSTRATION 4
(iii) Capital goods 1,20,000 XYZ Ltd. has capitalised the capital
goods at full invoice value inclusive of
GST as it will avail depreciation on the
full invoice value.
Note:
(i) Subject to the information given above, assume that all the other conditions
necessary for availing ITC have been fulfilled.
(ii) The annual return for the previous financial year was filed on 15th September.
ANSWER
Computation of ITC available with XYZ Ltd. for the month of October
ILLUSTRATION 5
XT Pvt. Ltd., a supplier of goods, pays GST under regular scheme. It has made the
following outward taxable supplies in a tax period:
The company has following ITCs with it at the beginning of the tax period:
CGST 57,000
SGST Nil
IGST 70,000
Note:
(i) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively.
(ii) Both inward and outward supplies are exclusive of taxes, wherever applicable.
(iii) All the conditions necessary for availing the ITC have been fulfilled.
Compute the minimum GST, payable in cash, by XT Pvt. Ltd. for the tax period. Make
suitable assumptions as required.
ANSWER
Computation of GST payable on outward supplies
Note : Since sufficient balance of ITC of CGST is available for paying CGST liability
and cross utilization of ITC of CGST and SGST is not allowed, ITC of IGST has been
used to pay SGST (after paying IGST liability) to minimize cash outflow.
7. LET US RECAPITULATE
I. Definitions of certain key terms are summarized by way of
diagrams as under:
BUSINESS
includes
Any activity incidental/ancillary
to it
Any trade/commerce, manufacture,
profession, vocation etc. even if
there is no monetary benefit Any activity of same nature even if
no volume/continuity/frequency
Supply/acquisition of goods
in connection with commencement/
including capital goods & services
closure of business
Provision of facilities by
to its members for consideration
club/association/society etc.
for a consideration
Admission to any premises
EXEMPT SUPPLY
means includes
Non-taxable
supply
Supply attracting NIL rate of Supply wholly exempt
tax from
CGST IGST
Goods Services
used/intended to be used in
the course/ furtherance of
business
INPUT TAX
IGST
Tax payable Tax payable
leviable on Composition
under forward under reverse
import of tax
charge charge
goods
Principal
means
Agent
INWARD SUPPLY
means
with/without consideration
ZERO-RATED SUPPLY
Attributable to
Used partly for business
business purposes
and partly for non-
business purposes
Goods and/or
services ITC available
only as
Used partly for making
taxable (including zero
rated supplies) supplies Attributable to taxable
& partly for exempt supplies including
supplies zero rated supplies
Exempt supplies include reverse charge supplies & transactions in securities and exclude
activities specified in Schedule III except sale of land and sale of building when entire
consideration is received post completion certificate/first occupation, whichever is earlier.
Total IT on I + IS
T1 T2 T3 C1
C2 T4
D1 D2 C3
• C3 will be computed separately for ITC of CGST, SGST/ UTGST and IGST.
• ∑ (D1 + D2) will be computed for the whole financial year, by taking
exempted turnover and aggregate turnover for the whole financial year.
If this amount is more than the amount already reversed every month,
the differential amount will be reversed in any of the month till
September of succeeding year along with interest @ 18% from 1st April
of succeeding year till the date of payment.
• If this amount is less than the amount reversed every month, the
additional amount paid has to be claimed back as credit in the return of
any month till September of the succeeding year.
IT = Input tax
I = Inputs
IS = Input services
ECrl = Electronic Credit Ledger
ZRS = Zero rated supply
ES = Exempt supplies
IT on CG used exclusively for IT on CG used IT on CG not covered under (a) & (b)
non-business/exempt supplies exclusively for taxable denoted as ‘A’ and useful life of such
supplies including zero CG → 5 years from date of invoice
rated supply (ZRS)
Tc
Common credit on CG ⇒ T c = ∑ (A of
common CG whose useful life remains
Tm
during the tax period)
⇒ If CG under (a) subsequently gets covered
under (c), then ‘A’ = IT on CG under (a), and ‘A’ to
be credited to ECrL. T ie = 5% of ‘A’ for every
quarter or part thereof when CG was under (a)
and T ie to be added to output tax liability of the
Common credit of CG for a tax
tax period when ‘A’ is claimed.
period during their useful life ⇒ If CG under (b) subsequently gets covered
Tm = Tc/60 under (c), then IT claimed on CG under (b) to be
added to Tc
Te
When used for When used for- (i) When used for (i) Where a
(i) When ineligible
making (i) making further making an particular category
MV, Ves or AC are
taxable taxable supply of outward taxable of such inward
used for eligible
supplies of- such Ves or AC supply of the supplies is used for
purposes
(i) such MV (ii) passenger same category making an outward
(ii) When received
(ii) trptn of trptn service (sub- taxable supply of
by manufacturer of
passengers (iii) imparting contracting) or the same category
ineligible MV, Ves
(iii) imparting training on as an element of - [Sub-contracting]
or AC
training on navigating/flying a taxable or as an element of
(iii) When received
driving such such Ves/AC composite or a taxable
by a GI service
ineligible MV (iv) trptn of mixed supply. composite or
provider in respect
goods (ii) When mixed supply
of such ineligible
provided by an (ii) When provided
MV, Ves or AC
employer to its by an employer to
insured by it
employees its employees
under statutory under a statutory
obligation obligation
Credit available on
such exceptions
(A) WCS for P & M
(B) WCS availed by a works (A) Construction of P & M
contractor for further supply of (B) Construction of
WCS [Sub-contracting] immovable property for
(C) Where value of WCS is not others
capitalized (C) Value of construction
is not capitalised
Registered person
switching from Registered person's Person applying for Person obtaining
composition levy to exempt supplies registration within 30 voluntary
regular scheme of becoming taxable days of becoming registration
payment of taxes liable for registration
Credit entitled on
Credit entitled on
• Inputs as such held in stock
• Inputs as such held in stock
• Inputs contained in semi-finished goods held in
• Inputs contained in semi-
stock
finished goods held in stock
• Inputs contained in finished goods held in stock
• Inputs contained in finished
• Capital goods [In case of exempt supply
goods held in stock
becoming taxable Capital goods used
exclusively for such exempt supply] reduced
by 5% per quarter or part thereof from the
date of invoice
Note: ITC claimed shall be verified with the
corresponding details furnished by the corresponding
supplier.
ITC, in all the above cases, is to be availed within 1 year from the date of issue of invoice
by the supplier.
Registered person (who has Supplies of registered Cancellation of Supply of capital goods
availed ITC) switching from person getting wholly registration (CG)/ plant and machinery
regular scheme of payment exempted from tax (P& M) on which ITC has
of tax to composition levy been taken
Amount to be paid is
Amount to be reversed is equivalent to ITC on : equivalent to higher of
• Inputs held in stock/ inputs contained in semi-finished or finished goods the following:
held in stock (i) ITC on CG or P&M
• Capital goods less 5% per quarter or
on the day immediately preceding the date of switch over/ date of part thereof from the
exemption/date of cancellation of registration date of invoice
(ii) Tax on transaction
value of such CG or P &
M
• If amount at (i)
Manner of reversal of credit on inputs and capital goods & other exceeds (ii), then
conditions reversal amount will
(i) Inputs ⇒ Proportionate reversal based on corresponding invoices. If such be added to output
invoices not available, prevailing market price on the effective date of switch tax liability.
over/ exemption/cancellation of registration should be used with due • Separate ITC reversal
certification by a practicing CA/ Cost Accountant is to be done for
(ii) Capital goods ⇒ Reversal on pro rata basis pertaining to remaining useful CGST, SGST/UTGST
life (in months), taking useful life as 5 years. and IGST
(iii) ITC to be reversed will be calculated separately for ITC of CGST, • Tax to be paid on
SGST/UTGST and IGST. transaction value
(iv) Reversal amount will be added to output tax liability of the registered when refractory
person. bricks, moulds, dies,
(v) Electronic credit/cash ledger will be debited with such amount. Balance jigs & fixtures are
ITC, if any, will lapse. supplied as scrap.
Value of assets means the value of the entire assets of the business
irrespective of whether ITC has been availed thereon or not.
I. II.
III.
ITC of ITC of
IGST ITC of
CGST
IGST CGST SGST
SGST
CGST/SGST in
any order & in IGST
IGST, only
any proportion when ITC of
CGST = NIL
ITC of IGST =
NIL
ITC of ITC of
CGST SGST/
SGST/ UTGST
CGST
UTGST
13. Babla Enterprises is exclusively engaged in making exempt supply of goods and
is thus, not registered under GST. On 1st October, the exemption available on
its goods gets withdrawn. On that day, the turnover of Babla Enterprises was
` 50 lakh.
Examine the eligibility of Babla Enterprises for availing ITC, if any.
14. Mamta Trade Links trades in exempt goods and provides taxable services. It is
registered under GST. On 1st October, the exemption available on its goods
gets withdrawn.
Analyze the scenario and determine the eligibility of Mamta Trade Links for
availing ITC, if any, on inputs and/or capital goods used in the supply of exempt
goods.
15. Harshgeet Pvt. Ltd., a registered supplier, is engaged in the manufacture of
taxable goods. The company provides the following information pertaining to
purchases made/services availed by it during the month of July:
(3) Inputs to be received in 5 lots, out of which 3rd lot was 80,000
received during the month
Determine the amount of ITC available with Harshgeet Pvt. Ltd. for the month
of July by giving the necessary explanation for treatment of various items.
Subject to the information given above, all the other conditions necessary for
availing ITC have been fulfilled.
16. Jamku Ltd., a registered person, is engaged in the business of spices. It provides
following details in relation to GST paid on inward supplies procured by it
during the month of October.
Determine the amount of ITC available with Jamku Ltd. for the month October
by giving the necessary explanation for treatment of various items. Subject to
the information given above, all the other conditions necessary for availing ITC
have been fulfilled.
17. Dina Ltd., a registered supplier from Maharashtra, is engaged in the
manufacture of passenger autos. The company provides the following details
of purchases made/services availed by it during the month of March:
You are required to determine the ITC available with Dina Ltd. for the month
of March, by giving brief explanations for treatment of various items. Subject
to the information given above, all the other conditions necessary for availing
ITC have been fulfilled.
18. Comfortable (P) Ltd. is registered under GST in the State of Odisha. It is
engaged in the business of manufacturing of iron and steel products. It has
received IT engineering services from High-Fi Infotech (P) Ltd. for
` 11,00,000/- (excluding GST @ 18%) on 28th October. Invoice for service
rendered was issued on 5th November.
Comfortable (P) Ltd. made part payment of ` 4,20,000/- on 30th November.
Being unhappy with service provided by High-fi Infotech (P) Ltd., it did not make
the balance payment. Deficiency in service rendered was made good by High-
Fi Infotech (P) Ltd. by 15th April of next year. Comfortable (P) Ltd. made the
balance payment on 6th July of next year.
Examine the availability of ITC with Comfortable (P) Ltd. in respect of IT
engineering services received by it from High-Fi Infotech (P) Ltd.
19. M/s. Diwan & Sons of New Delhi, has placed an order for 250 kg of plastic
granules @ ` 50 per kg (exclusive of GST) on M/s. Karim & Bros. of Noida, U.P.
M/s. Karim & Bros. has agreed to deliver the goods at the warehouse of M/s.
Diwan & Sons at New Delhi.
While the order was getting packed at the factory of M/s. Karim & Bros., M/s.
Diwan & Sons got an order from Shubhkamna Sales of Hapur, U.P. for 250 kg
of plastic granules @ ` 60 per kg (exclusive of GST). In order to save on
transportation cost, M/s. Diwan & Sons asks M/s. Karim & Bros. to directly
deliver the plastic granules to Shubhkamna Sales at its godown located in
Hapur. Accordingly, M/s. Karim & Bros. has delivered the plastic granules at
the godown of Shubhkamna Sales at Hapur.
Examine the availability of ITC with M/s. Diwan & Sons & M/s. Karim & Bros.
Note: All the parties are registered under GST and rate of GST is 18%.
20. Paritosh & Co., a supplier of goods, pays GST under regular scheme. It has made
the following outward taxable supplies in a tax period:
Paritosh & Co. has following ITCs with it at the beginning of the tax period:
CGST 57,000
SGST 60,000
IGST 1,40,000
Note:
(i) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively.
(ii) Both inward and outward supplies are exclusive of taxes, wherever
applicable.
(iii) All the conditions necessary for availing ITC have been fulfilled.
Compute the minimum GST, payable in cash, by Paritosh & Co. for the tax
period and the ITC to be carried forward to the next month. Make suitable
assumptions as required.
9. ANSWERS/HINTS
1. Input tax means the central tax (CGST), State tax (SGST), integrated tax (IGST)
or Union territory tax (UTGST) charged on supply of goods or services or both
made to a registered person. It also includes tax paid on reverse charge basis
and integrated goods and services tax charged on import of goods. It does
not include tax paid under composition levy.
IGST Act. Thus, full ITC is allowed on inward supplies of BMT Ltd. used for
effecting supplies to the unit in the SEZ.
12. ‘AB’ is eligible for ITC on inputs held in stock and inputs contained in semi-
finished or finished goods held in stock and capital goods as on 30th July. ITC
on capital goods will be reduced by 5% per quarter or part thereof from the
date of invoice.
13. Since the exemption available on goods being supplied by Babla Enterprises
gets withdrawn, it becomes liable to registration as its turnover has crossed
the threshold limit on the day when the exemption is withdrawn.
Assuming that Babla Enterprises applies for registration within 30 days of
1st October and it obtains such registration, it will be entitled to take credit
of input tax in respect of inputs held in stock and inputs contained in semi-
finished or finished goods held in stock on the day immediately preceding
the date from which it becomes liable to pay tax, i.e. 30th September [Section
18(1)(a)]. Input tax paid on capital goods will not be available as ITC in this
case.
14. If the exempt supply made by a registered person becomes a taxable supply,
provisions of section 18(1)(d) become applicable. In the given case, since
Mamta Trade Links is a registered person, section 18(1)(d) will be applicable.
As per section 18(1)(d), Mamta Trade Links will be entitled to take credit of
input tax in respect of inputs held in stock and inputs contained in semi-
finished or finished goods held in stock relatable to such exempt supply and
on capital goods exclusively used for such exempt supply on the day
immediately preceding the date from which such supply becomes taxable, i.e.
30th September. ITC on capital goods will be reduced by 5% per quarter or
part thereof from the date of invoice.
15. Computation of ITC available with Harshgeet Pvt. Ltd. for the month of
July
16. Computation of ITC available with Jamku Ltd. for the month of October
17. Computation of ITC available with Dina Ltd. for the month of
March
18. Every registered person is entitled to take credit of input tax charged on any
supply of goods and/or services which are used or intended to be used in the
course or furtherance of his business if, inter alia, he is in possession of a tax
invoice issued by a supplier and he has received the goods and/or services.
The registered person must pay to the supplier, the value of the goods and/or
services along with the tax within 180 days from the date of issue of invoice.
In the event of failure to do so, the corresponding credits availed by the
registered person would be added to his output tax liability, with interest.
However, once the recipient makes the payment of value of goods and/or
services along with tax, he will be entitled to avail the credit again without
any time limit. In case part-payment has been made, proportionate credit
would be allowed.
In the given case, High-fi Infotech (P) Ltd. provides the service in the month
of October and Comfortable (P) Ltd. receives the invoice in the month of
November. Therefore, in view of the above provisions and assuming all other
conditions required for availing ITC having been fulfilled, ITC of ` 1,98,000
(` 11,00,000 x 18%) will be availed by Comfortable (P) Ltd. in the month of
November when it receives the invoice issued by High-fi Infotech (P) Ltd.
However, proportionate ITC amounting to ` 1,33,932 ⇒ [(` 12,98,000 -
` 4,20,000)/118] x 18] will be added to the output tax liability of Comfortable
(P) Ltd. as full payment has not been made within 180 days of issuance of the
invoice, i.e. by 4th May of next year. ITC of ` 1,33,932 can, however, be availed
again by Comfortable (P) Ltd. in the month of July next year when it makes
the balance payment.
19. One of the conditions for availing ITC is that the registered person taking the ITC
must have received the goods and / or services. However, goods delivered to a
third person on the direction of the registered person by way of transfer of
documents of title or otherwise, either before or during the movement, are
deemed to have been received by such registered person. So, ITC is available to
the registered person, on whose order the goods are delivered to a third person
even though the registered person does not receive the goods.
In the given case, goods have been delivered by M/s. Karim & Bros. (supplier)
to Shubhkamna Sales (third person) on the direction of M/s. Diwan & Sons
(registered person). Therefore, in view of the above provisions, ITC of ` 2,250
(` 50 x 250 x 18%) will be available to M/s. Diwan & Sons (registered person)
on the purchase of 250 kg of plastic granules @ 50 per kg.
Further, in this case there is another supply between Diwan & Sons (supplier)
and Shubhkamna Sales (recipient). Therefore, Shubhkamna Sales can avail
ITC of ` 2,700 (` 60 x 250 x 18%) on the purchase of 250 kg of plastic granules
@ 60 per kg.
20. Computation of GST payable on outward supplies
Note : The above computation is one of the many ways to set off the ITC of
IGST (` 41,000-after set off against IGST liability) against CGST and SGST
liability to compute minimum GST payable in cash. To illustrate, IGST of
` 10,000 can be set off against SGST payable and IGST of ` 31,000 can be set
off against CGST payable. In this situation also, the net GST payable will be
nil but the ITC of CGST and SGST to be carried forward will be ` 25,000 and
` 7,000 (totaling to ` 32,000) respectively. However, if the entire ITC of `
41,000 is set off against CGST payable, then SGST of ` 3,000 will be payable
in cash thus, increasing the cash outflow. Therefore, such a set off would not
be advisable for computing the minimum GST payable.
9
Provisions existing as on the date when the Study Material was released for printing
REGISTRATION
Examples/illustrations/Questions and Answers given in the Chapter are based on
the position of GST law existing as on 31.10.2020
LEARNING OUTCOMES
8.2
Amendment of registration
Cancellation of registration
1. INTRODUCTION
Under any taxation law, registration is the most
fundamental requirement for identification of tax payers
ensuring tax compliance in the economy. It is the first
step towards becoming GST complaint. Under indirect
tax regime, without registration, a person can neither collect tax from his
customers nor claim any credit of tax paid by him.
Registration legally recognizes a person as supplier of
goods or services or both and legally authorizes him to
collect taxes from his customers and pass on the credit of
the taxes paid on the goods or services supplied to the
purchasers/recipients. He can claim the input tax credit of taxes paid and can
utilize the same for payment of taxes due on supply of goods
or services. Registration ensures the seamless flow of input
tax credit from suppliers to recipients at the national level. PAN based
registration
Under GST law, a supplier is required to obtain State-wise
registration. There is no concept of a centralized registration under GST like the
erstwhile service tax regime. A supplier has to obtain registration in every
State/UT from where he makes a taxable supply provided his aggregate turnover
Provisions of registration under CGST Act have also been made applicable to
IGST Act vide section 20 of the IGST Act.
2. RELEVANT DEFINITIONS
8.4
Common portal: means the common goods and services tax electronic
portal referred to in section 146 [Section 2(26)].
Taxable supply: means a supply of goods or services or both which is
leviable to tax under this Act [Section 2(108)].
Taxable territory: means the territory to which the provisions of this Act
apply [Section 2(109)].
Place of business: includes [Section 2(85)]:
a place from where the business is ordinarily carried on, and includes a
warehouse, a godown or any other place where a taxable person stores his
goods, supplies or receives goods or services or both; or
1
Section 107 contains the provisions relating to ‘Appeals to Appellate Authority’. The same shall
be discussed in detail at final level.
(g) services supplied by a person as the holder of an office which has been
accepted by him in the course or furtherance of his trade, profession or
vocation;
(h) activities of a race club including by way of totalisator or a license to book
maker or activities of a licensed book maker in such club
(i) any activity or transaction undertaken by the Central Government, a State
Government or any local authority in which they are engaged as public
authorities.
8.6
In the subsequent paras, we will see when does a person becomes liable to get
registered, what is the procedure for getting registered under GST and how to get
the registration application amended, when can registration be cancelled and when
the cancellation of the registration by the Department be revoked.
Following sections of Chapter VI – Registration of the CGST Act shall be discussed
in this chapter to understand the registration provisions:
STATUTORY PROVISIONS
Sub-section Particulars
(1) Every supplier shall be liable to be registered under this Act in the
State or Union territory, other than special category States, from
8.8
with effect from the date of such transfer or succession.
ANALYSIS
(i) Threshold limit for registration
Every supplier of goods or services or both is required to obtain
registration
in the State or the Union territory from where he makes the taxable
supply
if his aggregate turnover exceeds specified threshold limit in a FY.
Aggregate Turnover
Before, we study what is the applicable threshold
limit for various States/ UTs, let us first
understand the concept of aggregate turnover.
Aggregate turnover is a crucial parameter for
deciding the eligibility of a supplier to avail the
benefit of threshold exemption from registration,
eligibility for composition scheme [Discussed in
Chapter 3 – Charge of GST].
‘Turnover’ in common parlance is the total
volume of business. The term ‘aggregate
turnover’ as defined under section 2(6) of the CGST Act has been presented
in the diagrammatic form as follows:
Aggregate turnover
Includes Excludes
Value of all outward supplies
--Taxable supplies --CGST/ SGST/ UTGST/ IGST/
--Exempt supplies Cess
--Exports --Value of inward supplies on
--Inter-State supplies which tax is payable under
of persons having the same PAN reverse charge.
be computed on all India basis.
8.10
(1) Raghubir Private Ltd. pays GST on sitting fees paid to its
directors for the services rendered by them, under reverse
charge. Value of services provided by the directors to
Raghubir Private Ltd. will form part of the aggregate turnover of the
directors and not of Raghubir Private Ltd.
(B) Aggregate turnover excludes the element of CGST, SGST, UTGST,
and IGST and compensation cess.
(C) Aggregate turnover to include total turnover of all branches
under same PAN
Aggregate turnover is calculated by taking together the value in
respect of the activities carried out on all-India basis.
(2) A dealer ‘X’ has two offices – one in Delhi and another in
Haryana. In order to determine whether ‘X’ is liable for
registration, turnover of both the offices would be taken into
account and only if the same exceeds the applicable threshold limit, X is
liable for registration.
(D) Value of exported goods/services, exempted goods/services,
inter-State supplies between distinct persons having same PAN,
to be included in aggregate turnover.
(3) Madhur Oils, Punjab, is engaged in supplying machine oil
as well as petrol. Supply of petrol is not leviable to GST, but
supply of machine oil is taxable. In order to determine
whether Madhur Oils is liable for registration, turnover of
both non-taxable as well as taxable supplies would be taken into account
and if the same exceeds the applicable threshold limit, Madhur Oils is
liable for registration.
2
The erstwhile State of Jammu and Kashmir has been reorganised into the Union territory of
Jammu and Kashmir (with Legislature) and Union territory of Ladakh vide the Jammu and
Kashmir Reorganisation Act, 2019.
8.12
exclusively in exclusively in
supply of supply of
goods services/ both
goods &
services
8.14
Meghalaya ` 20 Lakh ` 20 Lakh
Uttarakhand Himachal
Nagaland
Pradesh
Puducherry
Tripura All other States
Telangana
8.16
threshold limit for him gets reduced to ` 10 lakh. Further, Raghav is liable to
get registered under GST in both Assam and Tripura on his aggregate turnover
crossing the threshold limit of ` 10 lakh.
(ii) Registration required only for a place of business from where taxable
supply takes place
A person is required to obtain registration with respect to his each place of
business in India from where a taxable supply has taken place. However, a
supplier is not liable to obtain registration in a State/UT from where he
makes an exempt/non-taxable supply.
Further, the threshold limit of a person having places of business in more
than one State/UT in India gets reduced to ` 10 lakh only when such person
makes taxable supplies of goods or services or both from any of the
Special Category States as per section 22. However, in case he makes
exempt/non-taxable supply from a Special Category State and taxable
supplies from a State other than Special Category State, the threshold limit
shall not be so reduced.
(9) Uday Enterprises is engaged in supply of taxable goods in
Maharashtra. It also supplies alcoholic liquor for human
consumption from Nagaland. Its turnover in the current financial
year is ` 34 lakh in Maharashtra and ` 8 lakh in Nagaland.
Since Uday Enterprises is exclusively engaged in making taxable supplies of
goods from Maharashtra, the applicable threshold limit for obtaining
registration is ` 40 lakh. However, the threshold limit will not be reduced to
` 10 lakh in this case, as supply of alcoholic liquor for human consumption
from Nagaland (one of the Special Category States) are non-taxable supplies 3.
In the given case, since the aggregate turnover of Uday Enterprises exceeds the
applicable threshold limit of ` 40 lakh, it is liable to obtain registration. It will
obtain registration in Maharashtra, but is not required to obtain registration in
Nagaland as he is not making any taxable supplies from said State.
(iii) Person liable for registration in case of transfer of business
Where a business is transferred, whether on account of
succession/any other reason [including transfer/change in
the ownership of business due to death of the sole
3
in terms of section 9(1)
4
clarified vide Circular No. 96/15/2019 GST dated 28.03.2019
8.18
and availing the benefit of exemption from registration as mentioned in
point (i) above.
(3) Persons who are required to pay tax under reverse charge on
inward supplies received. However, persons engaged exclusively in
making outward supplies, tax on which is liable to be paid on reverse
charge basis are exempt from registration.
(4) Non-resident taxable persons (NRTP) making taxable supply.
(5) E-commerce:
(i) Every ECO (Electronic Commerce Operator) who is required to
collect tax at source under section 52, ECO means any person
who owns, operates or manages digital or electronic facility or
platform for electronic commerce.
(ii) Persons who supply goods and/or services, other than supplies
specified under section 9(5), through such ECO who is required
to collect tax at source under section 52. However, threshold
limit of ` 20 lakh (` 10 lakh in case of Special Category States of
Mizoram, Tripura, Manipur and Nagaland) is available in case of
suppliers supplying services through ECO.
(6) Persons who are required to deduct tax under section 51, whether or
not separately registered under this Act.
(7) Persons who make taxable supply of goods or services or both on
behalf of other taxable persons whether as an agent or otherwise.
(8) Input Service Distributor, whether or not separately registered under this
Act.
(9) Every person supplying online information and data base access or
retrieval (OIDAR) services from a place outside India to a person in
India, other than a registered person 5;
(10) Persons who are required to pay tax under reverse charge under
section 9(5) and
5The provisions relating to tax deduction at source under section 51, collection of tax at source under
section 52, Input Service Distributor, electronic commerce operators and OIDAR services will be
discussed in detail at the Final Level. Hence, text shaded in green here is only for the purpose of
knowledge of the students.
ILLUSTRATION 1
Examine, with reason, whether registration is required, under CGST Act, in the
following independent cases:
(i) Aadhav Computers of Gujarat is providing computer maintenance service.
Aggregate turnover of Aadhav Computers is ` 15 lakh which comprises both
inter-State and intra-State supply.
(ii) Soft Wings of West Bengal, exclusively trading in garments, supplies its
taxable goods in various States of India from its outlet in West Bengal.
Aggregate turnover of Soft Wings is ` 35 lakh.
ANSWER
(i) Registration is compulsory for suppliers engaged in inter-State supply.
However, as per Notification No. 10/2017 IT dated 13.10.2017, threshold
exemption of ` 20 lakh [` 10 lakh in case of Special Category States of
Mizoram, Tripura, Manipur and Nagaland] is available in case of inter-State
supply of taxable services.
Therefore, Aadhav Computers (aggregate turnover ` 15 lakh) is not required
to obtain registration even though it is engaged in inter-State supply of
taxable services.
(ii) The threshold limit for registration in the State of West Bengal for the
persons engaged exclusively in supply of goods, is ` 40 lakh. However,
registration is compulsory if the supplier is engaged inter-State supply of
goods irrespective of the quantum of aggregate turnover. The threshold
exemption is not available in case of inter-State supply of taxable goods.
Thus, Soft Wings is required to obtain registration.
8.20
(A) Person engaged exclusively in the business of supplying goods and
/or services not liable to tax/wholly exempt from tax: As per
section 23, any person engaged exclusively in the business of supplying
goods or services or both that are not liable to tax or wholly exempt
from tax under CGST Act/IGST Act shall not be liable to registration.
This provision can be understood with the help of following examples:
(10) Madhur Oils, Punjab, is exclusively engaged in supplying
petrol. Supply of petrol is not leviable to GST. Thus, Madhur Oils
is not liable for registration as it is engaged exclusively in
supplying goods not leviable to tax.
(11) Bhavyajyoti Foundation, a charitable trust registered under
section 12AA of the Income-tax Act, 1961, is exclusively engaged
in supply of services by way of charitable activities. Services by an
entity registered under section 12AA of the Income-tax Act, 1961 by way of
charitable activities are exempt from GST. Thus, Bhavyajyoti Foundation is
not liable for registration as it is exclusively engaged in supplying services
exempt from tax.
(B) An agriculturist, to the extent of supply of produce out of
cultivation of land: An agriculturist to the extent of supply of produce
out of cultivation of land is also not liable to registration. The term
agriculturist has been defined under section 2(7) of
the CGST Act as an individual/Hindu Undivided Family
(HUF) who undertakes cultivation of land—
(a) by own labour, or
(b) by the labour of family, or
(c) by servants on wages payable in cash or kind or
by hired labour under personal supervision or the
personal supervision of any member of the family.
From the above definition, it is clear that the benefit of
not being liable to registration is only restricted to the agriculturists who
are individuals or HUFs. Further, if an agriculturist is also engaged in
making any supply other than supply of produce out of cultivation of land,
he shall be liable to registration based on applicable threshold limit.
(12) Deshbandhu is an agriculturist engaged in cultivation of
wheat in his field in the State of Punjab. He was exclusively
engaged in supply of wheat cultivated in his field in the previous
8.22
computed on all India basis, should not exceed an amount of ` 10 lakh in
case of Special Category States of Mizoram, Tripura, Manipur and Nagaland
[Notification No. 10/2017 IT dated 13.10.2017].
(14) Dhola & Co., located in Delhi, is engaged in supply of
taxable goods 6 in the neighbouring States of Punjab and
Haryana. Its aggregate turnover in current FY is ` 10 lakh. Since
it is engaged in making inter-State taxable supply of goods, it is required
to register mandatorily under GST irrespective of its aggregate turnover.
However, if in the above case, Dhola & Co. is engaged in inter- State
supply of taxable services instead of goods, it will be eligible for exemption
from registration till its aggregate turnover does not exceed ` 20 lakh.
C. Persons making inter-State taxable supplies of notified handicraft
goods up to ` 20,00,000
6
other than notified handicraft goods
7
Handicraft goods referred herein are goods as defined and notified in Notification No. 21/2018 CT
(R) dated 26.07.2018. This notification notifies the handicraft items which are eligible for
concessional rate of tax, for instance, handcrafted candles, articles made of paper mache, coir
articles, handbags including pouches and purses; jewellery box, hand embroidered articles, art ware
of iron/aluminium, etc. These examples are only for the purpose of knowledge and are not relevant
for examination purposes. Handicraft goods are defined under said notification as goods
predominantly made by hand even though some tools or machinery may also have been used in the
process; such goods are graced with visual appeal in the nature of ornamentation or in-lay work or
some similar work of a substantial nature; possess distinctive features, which can be aesthetic,
artistic, ethnic or culturally attached and are amply different from mechanically produced goods of
similar utility.
8
Some of the notified products are leather articles, carved wood products, wood turning and
lacquer ware, bamboo products, textiles hand printing, theatre costumes, musical instruments,
dolls and toys, etc. These examples are only for the purpose of knowledge and are not relevant for
examination purpose.
9
Subject to fulfilment of other conditions prescribed under said notification.
8.24
predominantly by hand even though some machinery may also
be used in the process.
Conditions to be fulfilled:
1. CTPs are availing benefit of Notification No. 03/2018 IT dated
22.10.2018 [discussed above].
2. The aggregate value of such supplies, to be computed on all
India basis, does not exceed an amount of ` 20 lakh [` 10 lakh in
case of Special Category States of Mizoram, Tripura, Manipur
and Nagaland] in a FY.
3. Such persons have obtained a PAN and have generated an
e-way bill [Notification No. 56/2018 CT dated 23.10.2018].
Liability to register in respect of services provided by the commission agent
for sale/ purchase of agricultural produce
Circular No. 57/31/2018 GST dated 04.09.2018, inter alia, clarifies as follows:
Mr. A sells agricultural produce by utilizing the services of Mr. B who is a
commission agent as per the Agricultural Produce Marketing Committee Act
(APMC Act) of the State 10. Mr. B identifies the buyers and sells the agricultural
produce on behalf of Mr. A for which he charges a commission from Mr. A. In
cases where the invoice is issued by Mr. B to the buyer, Mr. B is an agent as
covered under Para 3. of Schedule I to the CGST Act. Hence, in such cases, the
services supplied by commission agent Mr. B on behalf of the principal without
consideration shall be deemed to be a supply – Concept of Deemed Supply under
Schedule-I has been discussed in detail in Chapter 2 – Supply under GST.
The registration requirements of the commission agents in such cases have been
examined and clarified as follows:
(i) Since the services provided by the commission agent for sale or purchase of
agricultural produce are exempt from GST vide Notification No. 12/2017 CT
(R) dated 28.06.2017 [Discussed in Chapter 4 – Exemptions from GST], such
commission agents (even when they qualify as agent under Schedule I) are
10
As per the APMC Act, the commission agent is a person who buys or sells the agricultural
produce on behalf of his principal, or facilitates buying and selling of agricultural produce on
behalf of his principal and receives, by way of remuneration, a commission or percentage upon
the amount involved in such transaction.
ILLUSTRATION 2
Examine whether the liability to register compulsorily under section 24 arises in
each of the independent cases mentioned below:
8.26
(1) Meenu, a supplier in Maharashtra, is exclusively engaged in supply of
potatoes produced out of cultivation of her own land, within Maharashtra and
also outside Maharashtra.
(2) Jinu Oils, Gujarat, is engaged in supplying machine oil as well as petrol.
Further, it provides services of refining of oil to customers. Total turnover of
supply of machine oil is ` 10 lakh, supply of petrol is ` 5 lakh and supply of
services is ` 6 lakh.
(3) Tilu is working as an agent, he is supplying taxable goods as an agent of Tiku
(who is registered taxable person) and its aggregate turnover does not exceed
` 20 lakh during the financial year.
ANSWER
(1) Section 24 of the CGST Act provides that persons making any inter-State
taxable supply of goods are required to obtain registration compulsorily
under GST laws irrespective of the quantum of aggregate turnover.
However, as per section 23, an agriculturist, to the extent of supply of
produce out of cultivation of land, is not liable to registration.
Meenu is exclusively engaged in cultivation and supply of potatoes. Thus,
she is not liable to registration irrespective of the fact that she is engaged in
making inter-State supply of goods. Further, Meenu will not be liable to
registration, in the given case, even if her turnover exceeds the threshold
limit.
(2) Section 24 of the CGST Act specifies the categories of persons who are
required to be mandatorily registered under GST irrespective of the
quantum of their aggregate turnover.
In the given case, Jinu Oils does not fall in any of the specified categories.
Therefore, it is not required to obtain registration compulsorily under GST.
However, as per section 22 read with Notification No. 10/2019 CT dated
07.03.2019, a supplier is liable to be registered in the State/Union territory
from where he makes a taxable supply of goods and/or services, if his
aggregate turnover in a financial year exceeds the threshold limit. The
threshold limit for a person making supply of both goods and services is `
10 lakh for the States of Mizoram, Tripura, Manipur and Nagaland and ` 20
lakh for the rest of India. Thus, the applicable threshold limit for the State of
Gujarat is ` 20 lakh for supply of both goods and services. Further,
aggregate turnover includes exempted turnover of goods or services.
STATUTORY PROVISIONS
Sub-section Particulars
8.28
for each such place of business, subject to such conditions as
may be prescribed.
(4) A person who has obtained or is required to obtain more than one
registration, whether in one State or Union territory or more than
one State or Union territory shall, in respect of each such registration,
be treated as distinct persons for the purposes of this Act
8.30
“Aadhaar number” shall have the same meaning as assigned
to it in clause (a) of section 2 of the Aadhaar (Targeted
Delivery of Financial and Other Subsidies, Benefits and
Services) Act, 2016
(8) Where a person who is liable to be registered under this Act fails
to obtain registration, the proper officer may, without prejudice
to any action which may be taken under this Act or under any
other law for the time being in force, proceed to register such
person in such manner as may be prescribed
8.32
amount of tax equivalent to the estimated tax liability of such
person for the period for which the extension is sought.
ANALYSIS
Procedure for registration is governed by section 25 of the CGST Act read with
relevant CGST Rules. Relevant provisions of CGST Rules have been incorporated
at the relevant places. Further, special provisions have been provided for
registration of casual taxable person and non-resident taxable person under
section 27. Concept of deemed registration has been elaborated under section
26. Under GST, the application for registration has to be submitted electronically
at the GST Common Portal – www.gst.gov.in, duly signed or verified.
A large number of forms/formats relating to registration have been prescribed in
the CGST Rules. For every process in the registration chain such as application for
registration, acknowledgment, query, rejection, registration certificate, show cause
notice for cancellation, reply, cancellation, amendment, field visit report etc., there
are separate standard formats 11. This makes the process uniform all over the
country. The decision-making process has also been expedited. Strict time-lines
have been stipulated for completion of different stages of registration process.
(i) Where and by when to apply for registration? [Section 25(1)]
11
Students are advised to go through various forms/formats relating to registration at
http://www.gst.gov.in. for knowledge purposes.
8.34
The provisions of rules 9 and 10 [Discussed in subsequent paras]
relating to verification and grant of registration shall mutatis
mutandis apply to an application submitted under this rule.
(17) Meethalal & Sons - a supplier in Maharshtra - has three
branches in Mumbai, Pune and Mahabaleshwar. Mumbai and
Pune branches are engaged in supply of garments and
Mahabaleshwar branch engaged in supply of shoes. Either it can obtain
single registration for Mahrashtra declaring one of the branches as PPoB
(let’s say Mumbai) and other two branches (Pune and Mahabaleshwar) as
APoB or it can obtain separate GST registration for each of the three
branches in Mumbai, Pune and Mahabaleshwar as separate places of
business.
In case Meethalal & Sons opts to have separate registrations for its all
three branches and Mumbai branch sends some garments [subject to
GST] for sale to Pune branch, Mumbai branch must raise a tax invoice
and pay tax on such transfer of garments to Pune branch.
(C) Composition levy in case of separate registration for multiple
places of business within a State/UT
If a person is paying tax for one of his places of business under
normal scheme, he shall not pay tax under composition levy for any
other place of business.
If one of the places of business [separately registered] of a
registered person becomes ineligible to pay tax under
composition levy, all other registered places of business of said
person would also become ineligible to pay tax under
composition levy.
The provisions of rules 9 and 10 [Discussed in subsequent paras]
relating to verification and grant of registration shall mutatis
mutandis apply to an application submitted under this rule.
(iii) Voluntary registration [Section 25(3)]
A person who is not liable to be registered under section 22 or section 24
may get himself registered voluntarily. In case of voluntary registration, all
provisions of this Act, as are applicable to a registered person, shall apply to
voluntarily registered person. However, once a person obtains voluntary
registration, he has to pay tax even though his aggregate turnover does not
exceed ` 40 lakh/` 20 lakh/` 10 lakh, as the case may be.
(vi) Unique Identity Number (UIN) [Section 25(9) & (10) read with rule 17]
Any specialized agency of the United Nations Organization or
any Multilateral Financial institution and organization as
notified under the United Nations (Privileges and Immunities)
Act, 1947, consulate or embassy of foreign countries and any
other person notified by the Commissioner, is required to obtain a UIN from
the GSTN portal.
This UIN is needed for claiming refund of taxes paid on notified
supplies of goods and/or services received by them, and for
such other purpose as may be notified. UIN granted is a
centralized UIN i.e. it shall be applicable to the territory of India. A person
having UIN is not registered person and thus, is not a taxable person.
The proper officer may, upon submission of an application in prescribed form
or after filling up the said form or after receiving a recommendation from the
Ministry of External Affairs, Government of India, assign a UIN to the said
person and issue a certificate in Form GST REG 06 within 3 working days
from the date of submission of application.
8.36
(vii) Suo-motu registration by the proper officer [Section 25(8) read with
rule 16]
Where, pursuant to any survey, enquiry, inspection, search or any other
proceedings under the Act, the proper officer finds
that a person liable to registration under the Act** Temporary
has failed to apply for such registration, such officer registration
may register the said person on a temporary basis
and issue an order in prescribed form.
**Such person shall either:
(i) submit an application for registration in prescribed form within 90
days from the date of grant of temporary registration, or
(ii) file an appeal against such temporary registration.
In case (ii), if the Appellate Authority upholds the liability to registration,
application for registration shall be submitted within 30 days from the date of
issuance of such order of the Appellate Authority.
Provisions relating to verification and issue of registration certificate [as
contained in rules 9 and 10] [discussed in subsequent paras] shall, mutatis
mutandis, apply to such application submitted by the person granted
temporary registration. GSTIN thereafter granted shall be effective from the
date of order of proper officer granting temporary registration.
(viii) Procedure for registration [Section 25 read with rules 8, 9 & 10]
Provisions relating to procedure for application for registration, verification
of the application and approval & issue of registration certificate are
contained in the rules 8, 9 and 10 respectively. The same have to be read in
conjunction with section 25 provisions. The procedure for registration
prescribed under rules 8, 9 and 10 are also applicable to a person paying tax
under composition levy, every person seeking voluntary registration as well
as a casual taxable person.
However, procedure so laid down will not apply to:
Separate registration forms and procedure have been prescribed for each of the
aforesaid persons. Procedure relating to NRTP has been discussed subsequently,
but procedure for other three persons has been covered at the Final level.
Such persons shall apply for registration in Form GST REG 01. The
application for registration in GST Form REG 01 is divided into two parts –
Part A and Part B.
In order to cater to the needs of tax payers who are not IT savvy, Facilitation
centres have been established which help the taxpayer in submitting the
application for registration, amending the registration certificate, submitting
application for cancellation of registration, revocation of cancellation of
registration, etc. Facilitation Centre shall be responsible for the digitization
and/or uploading of the forms and documents.
8.38
Procedure for registration
Part I
Every person liable to get registered and person seeking voluntary registration shall, before
applying for registration, declare his Permanent Account Number (PAN), mobile number,
e-mail address, State/UT in Part A of FORM GST REG-01 on GST Common Portal.
PAN, mobile number PAN validated online by Mobile number and email
& e-mail address are Common Portal from verified through one time
validated. CBDT database password sent to it.
The procedure after receipt of application by the Proper Officer is depicted in Part II.
Part II
No
If proper officer is satisfied with it?
Yes
Proper officer will grant
registration certificate in within 7 working days from the
Form GST REG-06 date of receipt of information/
clarification/ documents
8.40
✮ Deemed Approval of Application
If the proper officer fails to take any action in the following cases within the
stipulated time, the application for grant of registration shall be deemed to
have been approved-
in cases where a person
successfully undergoes •within a period of 3 working days from
authentication of Aadhaar the date of submission of application
number or is exempt from
Aadhaar authentication
in cases where a person fails to •within a period of 21 days from the date
undergo Aadhaar authentication of submission of application
or does not opt for Aadhaar
authentication
in cases where Proper Officer •within 7 working days from the date of
issues notice seeking clarification, receipt of clarification, information or
information or documents from documents furnished by the applicant
the applicant
12
vide Notification No. 18/2020 CT dated 23.03.2020
8.42
In case applicant is an individual, he shall undergo authentication
of his own aadhaar number.
In case applicant is other than individual, the authentication will
be of aadhaar number of the Karta, Managing Director, whole
time Director, such number of partners, Members of Managing
Committee of Association, Board of Trustees, authorised
representative, authorised signatory and such other notified class
of persons [authorised signatory of all types, Managing and
Authorised partners of a partnership firm and Karta of a Hindu
Undivided Family, have been so notified 13].
(ii) Persons already registered
Every registered person shall undergo authentication/furnish
proof of possession of Aadhaar number, in prescribed form and
manner and within the prescribed time.
B. Where Aadhaar number is not assigned
(i) In case of new applicant
If an aadhaar number is not assigned to a new applicant – either
(i) an individual or (ii) person/class of persons (other than
individual), such individual/person/class of persons shall be
offered alternate and viable means of identification in the manner
specified in rule 9 14.
First proviso to rule 9(1) provides that where a person fails to
undergo authentication of aadhaar number or does not opt for
authentication of Aadhaar number, the registration shall be
granted only after physical verification of the principal place of
business in the prescribed manner (specified in rule 25 discussed
subsequently).
However, in lieu of the physical verification of the place of
business, the proper officer may carry out the verification of such
documents as he may deem fit. For this, he needs to record the
13
vide Notification No. 19/2020 CT dated 23.03.2020
14
Provisos to section 25(6B) and 25(6C) read with Notification No.s 18 and 19/2020 CT both
dated 23.03.2020
15
First proviso to section 25(6A)
16
Second proviso to section 25(6A)
17
vide Notification No. 17/2020 CT dated 23.03.2020
8.44
authentication shall
Individual who is a citizen of India
apply
Managing and Authorised partner
In short, a taxpayer has an option to give his bank account details after
obtaining registration, within 45 days from the date of grant of
registration or the due date of furnishing return, whichever is earlier.
However, this relaxation is not available for those who have been
granted registration as TDS deductor/ TCS collector under rule 12 18 or
who have obtained suo-motu registration under rule 16. They are
mandatorily required to furnish the bank account details at the time of
filing the application for registration.
Physical verification of business premises in certain cases [Rule 25]
Where the proper officer is satisfied that the physical verification of the
place of business of a person is required due to failure of Aadhaar
authentication or due to not opting for Aadhaar authentication before the
grant of registration, or due to any other reason after the grant of
registration, he may get such verification of the place of business, in the
presence of the said person, done. The verification report along with the
other documents, including photographs, shall be uploaded in prescribed
form on the common portal within a period of 15 working days following
the date of such verification.
Issuance of registration certificate [Rule 10]
Where the application for grant of registration has been approved, a certificate
of registration [duly signed or verified through EVC by the proper officer] in
Form GST REG-06 showing the PPoB and APoB is made available to the
applicant on the Common Portal and a Goods and Services Tax Identification
Number (hereinafter referred to as “GSTIN”) i.e. the GST registration no. is
communicated to applicant, within 3 days after the grant of registration.
GSTIN format
State Code PAN Entity Check sum
Code character
Display of registration certificate and GSTIN on the name board [Rule 18]
Every registered person shall display his registration certificate in a
prominent location at his PPoB and at every APoB. Further, his GSTIN also
18
Provisions relating to TDS and TCS have been discussed in detail at Final level.
8.46
has to be displayed on the name board exhibited at the entry of his PPoB
and at every APoB.
(ix) Effective date of registration [Rule 10]
ANSWER
(a) ` 10 lakh for the States of Mizoram, Tripura, Manipur and Nagaland.
(b) ` 20 lakh for the States of States of Arunachal Pradesh, Meghalaya,
Puducherry, Sikkim, Telangana and Uttarakhand.
(c) ` 40 lakh for rest of India. However, the higher threshold limit of
` 40 lakh is not available to persons engaged in making supplies of ice
cream and other edible ice, whether or not containing cocoa, Pan
masala and Tobacco and manufactured tobacco substitutes.
The threshold limit for a person making exclusive taxable supply of services
or supply of both goods and services is as under:-
(a) ` 10 lakh for the States of Mizoram, Tripura, Manipur and Nagaland.
(b) ` 20 lakh for the rest of India.
As per rule 10, where a person submits the application for registration
within 30 days of becoming liable for registration, the effective date of
registration is the date on which the person becomes liable to registration;
otherwise it is the date of grant of registration.
In the light of the above provisions, in the given cases, the applicable
turnover limit for registration will be ` 40 lakh and ` 20 lakh respectively in
case (i) and (ii).
8.48
19
Subject to exemption from registration under Notification No. 56/2018 CT dated 23.10.2018
8.50
Thus, a NRTP has to submit a self-attested copy of his valid
passport along with the application signed by his authorized
signatory who is an Indian Resident having valid PAN. However,
in case of a business entity incorporated or established outside
India, the application for registration shall be submitted along
with its tax identification number or unique number on the basis
of which the entity is identified by the Government of that
country or its PAN, if available.
Application will be submitted by NRTP in a different prescribed form
whereas CTP will submit the application for registration in the normal
form for application for registration i.e. Form GST REG 01 and his
registration of CTP will be a PAN based registration.
(C) Period of validity of registration certificate granted to CTP/NRTP
Registration Certificate granted to
CTP/NRTP will be valid for:
CTP and NRTP will
(i) Period specified in the registration
make taxable
application, or
supplies only after
(ii) 90 days from the effective date of the issuance of the
registration [can be extended certificate of
further by a period not exceeding registration.
90 days by making an application
before the end of the validity of
registration granted to him**]
whichever is earlier.
Provisions relating to verification of application and grant of
registration [under rules 9 and 10] will apply mutatis mutandis, to an
application for registration filed by NRTP.
(D) Advance deposit of tax
At the time of submitting the registration application, CTP/NRTP are
required to make an advance deposit of tax in an amount equivalent
to the estimated tax liability of such person for the period for which
the registration is sought.
Further, CTP/NRTP will get a Temporary Reference Number (TRN) for
making an advance deposit of tax which shall be credited to his
Core fields are name of the business, (legal name) if there is no change in PAN,
addition / deletion of stakeholders, principal place of business (other than change
in State) or additional place of business (other than change in State).
All other fields are non-core fields like name of day to day functionaries, e-mail
ids, mobile numbers, etc.
8.52
The significant aspects of the same are discussed hereunder:
The proper officer shall not reject the application for amendment in the
registration particulars without giving the person an opportunity of being
heard.
Any particular of the application for registration shall not stand amended
with effect from a date earlier than date of submission of application for
amendment on common portal except with order of Commissioner for
reasons to be recorded in writing and subject to conditions specified by
Commissioner in the said order.
Mobile no./e-mail address of authorised signatory can be amended only after online
verification through GST Portal.
8.54
Submission of
Core areas application within 15
days of change
Registered
Person/ UIN
GST
holder
Common Portal
Non-core areas
Permission to be
granted within next 15 No
Registration certificate days
amended Is PO of the opinion
that amendment is
unwarranted/
Yes documents furnished
PO will serve an SCN why
are incomplete/
application for amendment within 15 working days of
incorrect?
should not be rejected? receipt of application
Yes
Yes
No If reply is
satisfactory? within 7 working days of
receipt of reply
Application for amendment
shall be rejected.
within 7 working days of
receipt of reply
9. CANCELLATION OR SUSPENSION OF
REGISTRATION AND REVOCATION OF
CANCELLATION [SECTIONS 29 & 30]
STATUTORY PROVISIONS
Section 29 Particulars
8.56
(a) the business has been discontinued, transferred fully for
any reason including death of the proprietor,
amalgamated with other legal entity, demerged or
otherwise disposed of
(c) the taxable person, other than the person registered under
sub-section (3) of section 25, is no longer liable to be
registered under section 22 or section 24
(2) The proper officer may cancel the registration of a person from such
date, including any retrospective date, as he may deem fit, where,––
Provided that the proper officer shall not cancel the registration
without giving the person an opportunity of being heard.
(3) The cancellation of registration under this section shall not affect
the liability of the person to pay tax and other dues under this Act
or to discharge any obligation under this Act or the rules made
thereunder for any period prior to the date of cancellation
whether or not such tax and other dues are determined before or
after the date of cancellation.
8.58
Section 30 Revocation of cancellation of registration
(2) The proper officer may, in such manner and within such period as
may be prescribed, by order, either revoke cancellation of the
registration or reject the application.
Provided that the application for revocation of cancellation of
registration shall not be rejected unless the applicant has been
given an opportunity of being heard.
ANALYSIS
The provisions relating to cancellation of registration and its revocation are
contained in sections 29 & 30 respectively read with rules 20 to 23. The
registration granted under GST can be cancelled for specified reasons. The
cancellation can either be initiated by the Department on their own motion or the
registered person can apply for cancellation of their registration.
--Business discontinued
--Transferred fully for
Taxable person (other
any reason including
death of the proprietor than voluntarily
Change in the
registered person) who
--Amalgamated with constitution of the
is no longer liable to be
other legal entity business
registered under
--Demerged or section 22 or section 24.
--Otherwise disposed of
8.60
A registered person
has contravened
the prescribed
provisions (Refer I
below)
Proper
Registration was A registered person
officer can
obtained by means has not filed returns
cancel
of fraud, wilful for continuous 6
registration months (Refer II
misstatement or
on his own below)
suppression of facts
if
Voluntarily registered
person has not
commenced the
business within 6
months from the
date of registration
20
Anti-profeetering measure shall be discussed at Final Level.
8.62
**The expression “shall not make any taxable supply” shall
mean that the registered person shall not issue a tax invoice
and, accordingly, not charge tax on supplies made by him
during the period of suspension.
4. The suspension of registration shall be deemed to be revoked
upon completion of the cancellation proceedings by the proper
officer. Such revocation shall be effective from the date on
which the suspension had come into effect.
5. Where any order having the effect of revocation of suspension
of registration has been passed, the provisions of section
31(3)(a) [revised tax invoices] and section 40 [first return] in
respect of the supplies made during the period of suspension
and the procedure specified therein shall apply.
(ii) Procedure for cancellation of registration [Rules 20 and 22]
(a) Voluntary cancellation by registered person
Application
A registered person seeking cancellation of registration 21 shall
electronically submit the application for cancellation of registration in
prescribed form within 30 days of occurrence of the event warranting
cancellation.
He is required to furnish in the application the details of inputs held in
stock or inputs contained in semi-finished/finished goods held in
stock and of capital goods held in stock on the date from which
cancellation of registration is sought, liability thereon, details of the
payment, if any, made against such liability and may furnish relevant
documents thereof.
Order
Where a person who has submitted an application for cancellation of
his registration is no longer liable to be registered, proper officer shall
issue the order of cancellation of registration within 30 days from the
date of submission of application for cancellation.
21
under section 29(1)
22
viz. contravention of the provisions contained in section 29(2)(b)/(c) of the CGST Act.
8.64
whichever is higher, calculated in such manner as may be prescribed.
However, in case of capital goods or plant and machinery, the taxable
person shall pay an amount equal to the input tax credit taken on the said
capital goods or plant and machinery, reduced by such percentage points as
may be prescribed or the tax on the transaction value of such capital goods
or plant and machinery under section 15, whichever is higher.
The manner of determination of amount of credit to be reversed is
prescribed under rule 44. On conjoint reading of section 29(5) and rule 44,
it can be inferred as follows:
Amount of credit to be reversed in respect of INPUTS:
**If tax invoices are not available, the ITC to be reversed will be based on
the prevailing market price (MP) of such goods on the date of cancellation.
Amount of credit to be reversed in respect of CAPITAL GOODS OR
PLANT & MACHINERY:
(23) Capital goods have been in use for 4 years, 6 month and
15 days. The useful remaining life in months = 5 months
ignoring a part of the month.
ITC taken on such capital goods = C
ITC attributable to remaining useful life = C x 5/60
(iv) Other points about cancellation
A person to whom a UIN has been granted under rule 17 cannot apply
for cancellation of registration [Rule 20]
The cancellation of registration will not affect liability of registered
person to pay tax and other dues under the Act for any period prior to
the date of cancellation 23 [Section 29(3)].
(24) The proper officer cancelled the registration of
Naman Associates on 11th October. The tax dues of
Naman Associates for July-September quarter (determined
by the proper officer on 16th December) are ` 50,000. The
cancellation of registration of Naman Associates shall have no effect
on his liability of tax dues of ` 50,000 even though the tax dues are
determined after the cancellation of registration.
The cancellation of registration under either SGST Act/UTGST Act shall
be deemed to be a cancellation of registration under CGST Act
[Section 29(4)].
Once registration is cancelled by the tax authority, the taxpayer will be
intimated about the same via sms and email. Order for cancellation of
registration will be issued and intimated to the primary authorized
signatory by email and sms.
Taxpayer would not be allowed by the Common portal to file return
for the period after date of cancellation mentioned in the cancellation
order. However, he can submit returns of the earlier period (i.e. for the
period before date of cancellation mentioned in the cancellation order
for which registration was active).
23
whether or not such tax and other dues are determined before or after the date of
cancellation.
8.66
(v) Revocation of cancellation of registration [Section 30 read with rule 23]
(A) Procedure for revocation of cancellation
Where the registration of a person is cancelled suo-motu by the
proper officer, such registered person may apply for revocation
of the cancellation to such proper officer, within 30 days from
the date of service of the order of cancellation of registration.
If the proper officer is satisfied that there are sufficient grounds
for revocation of cancellation, he may revoke the cancellation of
registration, by an order within 30 days of receipt of application
and communicate the same to applicant.
Otherwise, he may reject the revocation application. However,
before rejecting the application, he has to first issue SCN to the
applicant who shall furnish the clarification within 7 working
days of service of SCN. The proper officer shall dipose the
application (accept/reject the same) within 30 days of receipt of
clarification.
(B) Where registration was cancelled for failure of registered person
to furnish returns
Where registration was cancelled for failure of registered person to
furnish returns, before applying for revocation, the person has to
make good the defaults, i.e. the person needs to file such returns and
pay any amount due as tax along with any amount payable towards
interest, penalty and late fee in respect of the said returns. However,
the registration may have been cancelled by the proper officer either
from the date of order of cancellation of registration or from a
retrospective date.
(1) Where the registration has been cancelled with effect from
the date of order of cancellation of registration
As we have already seen that the common portal does not allow
furnishing of returns for the period after the effective date of
cancellation, but returns for the earlier period (i.e. for the period
before date of cancellation mentioned in the cancellation order)
can be furnished after cancellation.
Where the registration is cancelled with effect from the date of
order of cancellation of registration, person applying for
Date of order of
cancellation of
Date of order of
not furnished
of registration
registration
Effective date
of cancellation
of registration
8.68
(2) Where the registration has been cancelled with retrospective
effect
Where the registration has been cancelled with retrospective
effect, it is not possible to furnish the returns before filing the
application for revocation of cancellation of registration. In that
case, the application for revocation of cancellation of registration
is allowed to be filed, subject to the condition that all returns
relating to the period from the effective date of cancellation of
registration till the date of order of revocation of cancellation of
registration shall be filed within a period of 30 days from the date
of order of such revocation of cancellation of registration.
(26) The registration of Naman Associates was
cancelled by the proper officer by an order dated
1st June for its failure to furnish returns. The
registration was cancelled with effect from 1st January
itself. It applied for revocation of cancellation of registration and
the order for revocation of cancellation of Naman Associates is
passed on 31st July. In this case, Naman Associates shall be
required to furnish all the returns for the period from 1st January to
31st July within a period of 30 days from 31st July, i.e. by 30th
August.
of cancellation of registration
Date of order of revocation
not furnished
of registration
Effective date of
cancellation of
registration
Points to be noted
Registration under GST is not tax specific, i.e. single registration for all
the taxes i.e. CGST, SGST/UTGST, IGST and cesses.
8.70
2. Persons liable to registration
**` 10 lakh in case of Special Category States of Mizoram, Tripura, Manipur &
Nagaland
8.72
•in every such State/UT in which he is •in every such State/UT in which he is
so liable so liable
•within 30 days from the date on •at least 5 days prior to the
which he becomes liable to commencement of business
registration
Application submitted
within 30 days of the •Effective date is the date on which he
applicant becoming liable becomes liable to registration
to registration
Application submitted
after 30 days of the •Effective date is date of grant of
applicant becoming liable registration
to registration
Every person liable to get registered and person seeking voluntary registration shall,
before applying for registration, declare his PAN, mobile number, e-mail address,
State/UT in Part A of FORM GST REG-01 on GST Common Portal.
PAN, mobile number PAN validated online by Mobile number and email
& e-mail address are Common Portal from verified through one-time
validated. CBDT database password sent to it.
8.74
Part II
GST law prescribes special procedure for registration, as also for extension of the
operation period of such Casual or Non-Resident taxable persons.
They have to apply for registration at least 5 days in advance before making any
supply.
8.76
Except for the changes in some core information in the registration application,
a taxable person shall be able to make amendments without requiring any
specific approval from the tax authority.
In case there is change in core fields of information, the taxable person will
apply for amendment within 15 days of the event necessitating the change.
The Proper Officer, then, will approve the amendment within the next 15 days.
Registration
can be --
--Business Registration
cancelled can be A registered person has
discontinued/ contravened the prescribed
either by cancelled
proper Transferred/ provisions
by the
officer or Amalgamated with
proper
on an other legal entity/ officer on A registered person has not
application Demerged or his own filed returns for continuous 6
of the Otherwise disposed of months (3 months for
registered composition supplier)
person Change in the
constitution of the Voluntarily registered person
business has not commenced the
business within 6 months
from the date of registration
Taxable person no
longer liable to be Registration was obtained by
registered means of fraud, wilful
misstatement or suppression
of facts
Once a registered person has applied for cancellation of registration or the proper officer
seeks to cancel his registration, proper officer may suspend his registration during
pendency of proceedings relating to cancellation of registration filed by such registered
person.
Registered person seeking cancellation shall PO shall issue a SCN to the registered
apply for the same within 30 days of person who has to reply to said notice
occurrence of the event warranting within 7 days.
cancellation, in prescribed form, furnishing
the details of inputs held in stock or inputs
contained in semi-finished/finished goods Proceedings shall be Cancellation
held in stock and of capital goods held in dropped order shall
stock on the date from which cancellation of be issued
registration is sought, liability thereon, within 30
payment, if any made & relevant documents. If reply Where instead of days of reply
to SCN replying to SCN, person to SCN
is furnishes all pending where
Proper officer (PO) shall issue the order satisfa returns & makes full registration
of cancellation within 30 days of ctory payment of tax along is liable to
submission of application for the same. with interest & late fee. be cancelled
Revocation of cancellation
In case where registration is cancelled suo-motu by the proper officer, the taxable person
can apply within 30 days of service of cancellation order, requesting the officer for revoking
the cancellation ordered by him.
However, before so applying, the person has to make good the defaults (by filing all
pending returns, making payment of all dues and so) for which the registration was
cancelled by the officer.
If satisfied, the proper officer will revoke the cancellation earlier ordered by him.
However, if the officer concludes to reject the request for revocation of cancellation, he will
first observe the principle of natural justice by way of issuing notice to the person and
hearing him on the issue.
8.78
11. TEST YOUR KNOWLEDGE
1. Determine the effective date of registration in following cases:
(a) The aggregate turnover of Dhampur Footwear Industries of Delhi has
exceeded the applicable threshold limit of ` 40 lakh on 1st September. It
submits the application for registration on 20th September. Registration
certificate is granted to it on 25th September.
(b) Mehta Teleservices is an architect in Lucknow. Its aggregate turnover
exceeds ` 20 lakh on 25th October. It submits the application for
registration on 27th November. Registration certificate is granted to it
on 5th December.
2. In order to be eligible for grant of registration, a person must have a
Permanent Account Number issued under the Income- tax Act, 1961. State
one exception to it.
3. State which of the following suppliers are liable to be registered:
(a) Agent supplying taxable goods on behalf of some other taxable person
and its aggregate turnover does not exceed the applicable threshold
limit during the financial year.
(b) An agriculturist who is only engaged in supply of produce out of
cultivation of land and its aggregate turnover exceeds the applicable
threshold limit during the financial year.
4. Pure Oils, Delhi has supplied machine oil and high-speed diesel in the month of
April as per the details given in table below. Pure Oils is not yet registered.
8.80
16. What is the responsibility of the taxable person making supplies to UN
bodies?
17 What is the validity period of the registration certificate issued to a casual
taxable person and non- resident taxable person?
18. What happens when the registration is obtained by means of willful mis-
statement, fraud or suppression of facts?
19 Is there an option to take centralized registration for services under GST Law?
20. What could be the liabilities (in so far as registration is concerned) on transfer
of a business?
21. At the time of registration, will the assessee have to declare all his places of
business?
22. Does cancellation of registration impose any tax obligations on the person
whose registration is so cancelled?
12. ANSWERS/HINTS
1. (a) Every supplier becomes liable to registration if his turnover exceeds
the applicable threshold limit [` 40 lakh in this case] in a finacial year
[Section 22 read with Notification No. 10/2019 CT dated 07.03.2019].
Since in the given case, the turnover of Dhampur Industries exceeded
` 40 lakh on 1st September, it becomes liable to registration on said
date.
Further, since the application for registration has been submitted
within 30 days from such date, the registration shall be effective from
the date on which the person becomes liable to registration
[Section 25 read with rule 10]. Therefore, the effective date of
registration is 1st September.
(b) Since in the given case, the turnover of Mehta Teleservices exceeds
the applicable threshold limit [` 20 lakh] on 25th October, it becomes
liable to registration on said date.
Further, since the application for registration has been submitted after
30 days from the date such person becomes liable to registration, the
registration shall be effective from the date of grant of registration.
Therefore, the effective date of registration is 5th December.
8.82
As per section 2(6), aggregate turnover includes the aggregate value of:
(i) all taxable supplies,
(ii) all exempt supplies,
(iii) exports of goods and/or services and
(iv) all inter-State supplies of persons having the same PAN.
The above is computed on all India basis. Further, the aggregate turnover
excludes central tax, State tax, Union territory tax, integrated tax and cess.
Moreover, the value of inward supplies on which tax is payable under reverse
charge is not taken into account for calculation of ‘aggregate turnover’.
Section 9(2) provides that CGST is not leviable on five petroleum products i.e.
petroleum crude, motor spirit (petrol), high speed diesel, natural gas and
aviation turbine fuel. As per section 2(47), exempt supply includes non-
taxable supply. Thus, supply of high speed diesel in Delhi, being a non-
taxable supply, is an exempt supply and is, therefore, includible while
computing the aggregate turnover.
In the backdrop of the above-mentioned discussion, the aggregate turnover
of Pure Oils for the month of April is computed as under:
Pure Oils is making exclusive supply of goods and hence the threshold limit
for registration would be ` 40,00,000. Since the aggregate turnover does not
exceed ` 40,00,000, Pure Oils is not liable to be registered.
5. In case Pure Oils makes the supply in capacity of an agent of Mixed Oils
Ltd.:
Section 24 provides that an agent who is engaged in making taxable
supplying of goods on behalf of other taxable persons, shall be liable to
8.84
7. As per section 22 read with Notification No. 10/2019 CT dated 07.03.2019, a
supplier is liable to be registered in the State/Union territory from where he
makes a taxable supply of goods and/or services, if his aggregate turnover
in a financial year exceeds the threshold limit. The threshold limit for a
person making exclusive taxable supply of services or supply of both goods
and services is as under:-
(a) ` 10 lakh for the Special Category States of Mizoram, Tripura, Manipur
and Nagaland.
(b) ` 20 lakh for the rest of India.
(i) Though Ankit is dealing in Assam, he is not entitled for higher
threshold limit for registration as the same is applicable only in case of
exclusively supply of goods and he is exclusively engaged in providing
services. Thus, the applicable threshold limit for registration in this
case is ` 20 lakh and hence, Ankit is liable to get registered under GST.
(ii) Since Sanchit is engaged in supply of both taxable goods and services,
the applicable threshold limit for registration in his case is ` 20 lakh.
Thus, Sanchit is liable to get registered under GST as his turnover is
more than the threshold limit.
8. Registration will confer following advantages to the business:
Legally recognized as supplier of goods or services.
Proper accounting of taxes paid on the input goods or services which can
be utilized for payment of GST due on supply of goods or services or
both by the business.
Legally authorized to collect tax from his purchasers and pass on the
credit of the taxes paid on the goods or services supplied to purchasers
or recipients.
Become eligible to avail various other benefits and privileges rendered
under the GST laws.
9. No, a person without GST registration can neither collect GST from his
customers nor can claim any input tax credit of GST paid by him.
10. No. Every person who is liable to take a registration will have to get
registered separately for each of the States where he has a business
operation (and making taxable supplies) provided his aggregate turnover
exceeds applicable threshold limit.
11. Yes. In terms of the proviso to sub-section (2) of section 25, a person having
multiple places of buiness in a State may obtain a separate registration for
each place of business, subject to such conditions as may be prescribed.
12. Yes. In terms of sub-section (3) of section 25, a person, though not liable to
be registered under sections 22 or 24 may get himself registered voluntarily,
and all provisions of this Act, as are applicable to a registered taxable
person, shall apply to such person.
13. Yes. In terms of sub-section (8) of section 25, where a person who is liable
to be registered under GST law fails to obtain registration, the proper officer
may, without prejudice to any action which may be taken under CGST Act,
or under any other law for the time being in force, proceed to register such
person in the manner as is prescribed in the CGST Rules.
14. Yes, the registration certificate once granted is permanent unless
surrendered, cancelled, suspended or revoked.
15. In terms of section 25(9) of the CGST Act, all notified UN bodies, Consulate
or Embassy of foreign countries and any other class of persons so notified
would be required to obtain a unique identification number (UIN) from the
GST portal.
The structure of the said ID would be uniform across the States in
conformity with GSTIN structure and the same will be common for the
Centre and the States. This UIN will be needed for claiming refund of taxes
paid on notified supplies of goods and services received by them, and for
any other purpose as may be notified.
16. The taxable supplier making supplies to UN bodies is expected to mention
the UIN on the invoices and treat such supplies as supplies to another
registered person (B2B).
17. In terms of section 27(1) read with proviso thereto, the certificate of
registration issued to a “casual taxable person” or a “non-resident taxable
person” shall be valid for a period specified in the application for
registration or 90 days from the effective date of registration, whichever is
earlier. However, the proper officer, at the request of the said taxable
person, may extend the validity of the aforesaid period of 90 days by a
further period not exceeding 90 days.
18. In such cases, the registration may be cancelled with retrospective effect by
the proper officer [Section 29(2)(e)].
8.86
19. No, the tax paper has to take separate registration in every State from
where he makes taxable supply of services.
20. The transferee or the successor shall be liable to be registered with effect
from such transfer or succession and he will have to obtain a fresh
registration with effect from the date of such transfer or succession [Section
22(3)].
21. Yes. The principal place of business and place of business have been
separately defined under section 2(89) & 2(85) of the CGST Act respectively.
The taxpayer will have to declare the principal place of business as well as
the details of additional places of business in the registration form.
22. Yes, as per section 29(5) of the CGST Act, every registered taxable person
whose registration is cancelled shall pay an amount, by way of debit in the
electronic cash ledger, equivalent to the credit of input tax in respect of
inputs held in stock and inputs contained in semi-finished or finished goods
held in stock or capital goods or plant and machinery on the day
immediately preceding the date of such cancellation or the output tax
payable on such goods, whichever is higher.
24
Provisions existing as on the date when the Study Material was released for printing
8.88
Section 30(1) Section 30(1) Proviso to section
Subject to such conditions Subject to such conditions 30(1) is being
………………………cancellation ………………………cancellation substituted so as
order. order. to empower the
Provided that the Provided that such period jurisdictional tax
registered person who may, on sufficient cause authorities to
was served notice under being shown, and for extend the period
sub- section (2) of section provided to file an
reasons to be recorded in
29 in the manner as application for
writing, be extended,—
provided in clause (c) or revocation of
(a) by the Additional
clause (d) of sub-section cancellation of
Commissioner or the Joint
(1) of section 169 and who registration.
Commissioner, as the
could not reply to the said
case may be, for a period
notice, thereby resulting
not exceeding thirty days;
in cancellation of his
(b) by the Commissioner,
registration certificate and
for a further period not
is hence unable to file
exceeding thirty days,
application for revocation
of cancellation of beyond the period specified
registration under sub- in clause (a).”
section (1) of section 30 of
the Act, against such
order passed up to 31-3-
2019, shall be allowed to
file application for
revocation of cancellation
of the registration not
later than 22-7-2019.
LEARNING OUTCOMES
This Chapter will equip you to –
describe and analyse the provisions relating to tax invoice in case of taxable
supply of goods and in case of taxable supply of services - time-limit and
manner of issuing the same
enumerate the particulars of a tax invoice
understand the provisions relating to e-invoicing
explain the provisions relating to revised tax invoice, bill of supply, receipt
voucher, refund voucher, payment voucher, etc.
identify the cases where no tax invoice is required to be issued and identify
the suppliers of taxable service who are permitted to issue any document
other than tax invoice
explain the provisions relating to transportation of goods without issuance
of invoice
describe the provisions relating to issuance of credit and debit notes
explain the provisions relating to prohibition of unauthorised collection of tax
describe the provisions relating to amount of tax to be indicated in tax
invoice and other documents.
explain the provisions of e-way bill
Revised Tax
Invoice
Consolidated
Tax Invoice
Tax Invoice, Credit and Debit Notes; E-way Bill
Bill of Supply
Receipt
Tax invoice
Voucher
Payment
Credit and Debit notes
Voucher
E-way Bill
1. INTRODUCTION
An invoice is a commercial
instrument issued by a supplier of
goods/services to a recipient. It
identifies both the parties
Invoicing is very crucial aspect for ensuring tax compliance under any indirect
taxation system. In order to ensure transparency, issuance of invoice for every
taxable transaction is a pre-requisite. In case of supply of goods or provision of
services, an invoice is raised by the supplier of such goods or services to the
recipient of the same. Tax invoice acts as a document evidencing the payment
of the value of the goods or services or both as also the tax portion in the same.
In certain cases, an invoice serves as a demand for payment and becomes a
document of title when paid in full.
Under the GST regime, an “invoice” or “tax invoice” means the tax invoice referred to
in section 31 of the CGST Act, 2017. This section mandates the issuance of an invoice
or a bill of supply for every supply of goods or services.
Under GST, a tax invoice is an important document. It not only evidences supply of
goods or services, but is also an essential document for the recipient to avail Input
Tax Credit (ITC). A registered person cannot avail input tax credit unless he is in
possession of a tax invoice or a debit note.
The provisions relating to tax invoices, debit and credit notes are contained in
Chapter VII - Tax Invoice, Credit and Debit Notes [Sections 31 to 34] of the CGST
Act and Chapter-VI: Tax Invoice, Credit and Debit Notes [Rules 46 to 55A] of
Central Goods and Services (CGST) Rules, 2017. Further, E-way Bill provisions
discussed in this chapter are contained in section 68 read with rules 138, 138A,
138B, 138C, 138D & 138E [Chapter XVI] of the CGST Rules, 2017. State GST laws
also prescribe identical provisions in relation to Tax Invoice; Credit and Debit
Notes; E-way Bill.
Provisions of Tax invoice; Credit and Debit Notes; E-way Bill under CGST Act
have also been made applicable to IGST Act vide section 20 of the IGST Act.
Before proceeding to understand the provisions of Tax Invoice, Credit and Debit
Notes, E-way Bill, let us first go through few relevant definitions.
2. RELEVANT DEFINITIONS
for which the supplier invoices the recipient on a regular or periodic basis
and
includes supply of such goods as the Government may, subject to such
conditions, as it may, by notification, specify
STATUTORY PROVISIONS
Sub-section Particulars
Explanation.––For the purposes of this section, the expression “tax invoice” shall
include any revised invoice issued by the supplier in respect of a supply made earlier.
ANALYSIS
The provisions relating to Tax Invoice are
provided under section 31 of the CGST Act as
well as Chapter-VI: Tax Invoice, Credit and Debit
Notes of Central Goods and Services (CGST)
Rules, 2017. The provisions contained in these
rules have been incorporated at the relevant
places.
There is no format prescribed for the Tax Invoice. Only certain fields have been
prescribed as mandatory fields.
A. TAX INVOICE ISSUED BY A SUPPLIER OF TAXABLE GOODS/ TAXABLE
SERVICES
A tax invoice shall be issued by a registered person supplying taxable goods
or taxable services or both. Such tax invoice shall show the prescribed
particulars.
(i) Time limit for issuance of invoice [Sections 31(1), (2), (4) & (5) read
with rule 47]
The time for issuing an invoice would depend on the
nature of supply viz. whether it is a supply of goods or
supply of services.
Rate of tax (central tax, State tax, integrated tax, Union territory
tax or cess);
(v) Number of HSN digits required on tax invoice and class of registered
person not required to mention HSN [Rule 46]
Board may, on the recommendations of the Council, by notification, specify:
(i) the number of digits of Harmonised System of Nomenclature
(HSN) code for goods or services that a class of registered persons
shall be required to mention; or
(ii) a class of supply of goods or services for which specified number
of digits of HSN code shall be required to be mentioned by all
registered taxpayers; and
(iii) the class of registered persons that would not be required to
mention the HSN code for goods or services.
This provision is also applicable to Bill of Supply [The concept of Bill of Supply
is discussed in subsequent paras].
In view of above powers, following has been notified vide Notification No.
12/2017 CT dated 28.06.2017 as amended:
Position effective till 31.03.2021 2
1
in the manner prescribed under rule 48(4)
2
applicable only for students appearing in May, 2021 examination.
3. AT >` 5 crores 4
3
Notification No. 78/2020 CT dated 15.10.2020 has amended Notification No. 12/2017 CT dated
28.06.2017 thereby revising the HSN requirements in the invoice in the above specified manner.
However, since this amendment will be effective from 01.04.2021, it will not be applicable for May,
2021 examination. It will be applicable for November, 2021 examination. For May, 2021
examination, position of law effective till 31.03.2021 (as given in the preceding table) is applicable.
Triplicate Duplicate
Original copy
Original copy
Duplicate copy
Duplicate copy
Triplicate copy
The serial number of invoices issued during a tax period shall be furnished
electronically [through the Common Portal – www.gst.gov.in], in FORM
GSTR-1 [Details of outward Supplies of goods or services].
E-invoicing
The GST Council approved the proposal to introduce electronic-invoice
(hereinafter called as e-invoice) in a phased manner in its 37th meeting
held on 20th September, 2019.
Accordingly, steps have been
taken to introduce 'e-invoicing'
for reporting of business to
business (B2B) invoices to GST
System, beginning from 1st
January 2020 on voluntary
basis. With effect from
1st October, 2020, there is a
switch from voluntary to mandatory e-invoicing for certain notified
category of taxpayers 4.
4
A relaxation has been provided to these notified category of taxpayers till 31.10.2020 vide
Notification No. 73/2020 dated 01.10.2020. In respect of invoices raised by them between
1.10.2020 and 31.10.2020, they are permitted to upload these invoices on e-invoicing portal
within 30 days from the date of invoice.
Advantages of e-invoicing
populated with the e-invoice data. It will become part of the business
process of the taxpayer.
Last but not the least, e-invoicing will eliminate the fake invoices.
Claiming fictitious input tax credit (ITC) by raising fake invoices is also
one of the biggest challenges currently faced by tax-authorities. The
e-invoice system will help to curb the actions of unscrupulous taxpayers
and reduce the number of fraud cases as the tax authorities will have
access to data in real-time.
in Form GST INV-01 on the Common GST Electronic Portal 5 and obtain
an IRN (Invoice Reference Number), in prescribed manner and subject
to prescribed conditions and restrictions.
5
10 dedicated Invoice Reference Portals have been notified as Common Goods and Service Tax
(GST) Electronic Portal for the purpose of preparing e-invoice. These portals are enlisted in
subsequent paras.
6
Special Economic Zones and insurer or banking company or financial institution including
NBFC, GTA, supplier of passenger transportation service, person supplying services by way of
admission to exhibition of cinematograph films in multiplex screens
7
vide Notification No. 13/2020 CT dated 21.03.2020 as amended
Thus, above mentioned entities are not required to issue e-invoices even
if their turnover exceeds ` 500 crore in the preceding financial year
from 2017-18 onwards.
**It is important to note here that only SEZ units and not SEZ
developers are exempt from issuing e-invoices. Thus, SEZ developers
whose turnover exceeds ` 500 crores in any preceding financial year
from 2017-18 onwards are mandatorily required to issue e-invoices.
Further, in case of supplies made by notified persons to SEZ units, e-invoices
need to be issued.
Maharaja Private Limited has an SEZ unit and a regular DTA unit
(both having same PAN). The aggregate total turnover of
Maharaja Private Limited is more than ` 500 crores (considering
both the GSTINs). However, the turnover of DTA unit is below ` 100 crores
for FY 2019-20.
The taxpayer first prepares and generates his invoice using his own
ERP/ accounting/ billing system or manual system 8. The invoice must
conform to the e-invoice schema (standard notified format - discussed
in detail subsequent paras) and must have the mandatory parameters.
8
For entities not having their own ERP/Software solutions, they can use the free offline utility
(‘bulk generation tool’) downloadable from the e-invoice portal. Through this, invoice data can
be easily reported to IRP and obtain IRN/signed e-invoice
9
same as that has been returned by the IRP to the seller
B. Interaction between the IRP and the GST/E-Way Bill Systems and
the Buyer.
Other points:
The e-invoicing system is also available for the E-Commerce
Operators (ECO) to report the invoices to the Invoice Registration
portal, generated by them on behalf of the suppliers.
Bulk uploading of invoices to IRP is also possible.
10
vide Notification No. 14/2020 CT dated 21.03.2020. This notification shall be effective from
01.12.2020.
11
insurer or banking company or financial institution including NBFC, GTA, supplier of passenger
transportation service, person supplying services by way of admission to exhibition of cinematograph
films in multiplex screens, supplier of online information and database access or retrieval (OIDAR)
services. Provisions relating to OIDAR services have been discussed at the Final level.
which is scanned by the buyer, but the buyer has to enter the amount to
be paid to the shop in the mobile payment App. The dynamic QR code,
on the other hand, will have the payment details and thus ‘scan and
pay’ in one go is possible. This has no relevance or applicability to the
e-invoicing in respect to B2B supplies by notified class of taxpayers.
Dynamic QR Code will be generated by the seller himself either on the
Point of Sale (PoS) machine or the invoice issued 12.
B. SPECIAL CASES
(i) Revised Tax Invoice [Section 31(3)(a) read with rule 53]
When issued?
Every registered person who has been
For the purposes of section 31,
granted registration with effect from a
the expression “tax invoice”
date earlier than the date of issuance of
shall include any revised
certificate of registration to him, may
invoice issued by the supplier in
issue Revised Tax Invoices. Such invoices
i respect of a supply made earlier
shall be issued against the invoices
[Explanation to section 31].
already issued during said period.
Revised Tax Invoices shall be issued within 1 month from the date of
issuance of certificate of registration. The words “Revised Invoice” shall
be indicated prominently on such invoices.
This provision is necessary, as a person who becomes
liable for registration has to apply for registration within
30 days of becoming liable for registration. When such
an application is made within the stipulated time period
and registration is granted, the effective date of registration is the date on
which the person became liable for registration.
Thus, there would be a time lag between the date of grant of certificate of
registration and the effective date of registration. For supplies made by such
person during this intervening period, the law enables the issuance of a
revised invoice, so that ITC can be availed by the recipient on such supplies.
12
Discussion on e-invoicing is primarily based on the relevant rules, notifications and FAQS on
e-invoicing hosted on GSTN website.
Supply 1
Supply 2
Mr.A Supply 3 Mr. B
Consolidated Revised
Registered Supply 4 Tax Invoice Unregistered
Supplier Recipient
Supplies between date of grant of certificate of registration & effective date of registration
Name and address of the recipient and the address of delivery, along with
the name of State and its code, if such recipient is un-registered;
Serial number and date of the corresponding tax invoice or, as the case
may be, bill of supply;
ILLUSTRATION 1
Luv & Kush Pvt. Ltd. of Meghalaya engaged in the supply of gifts items and
repair services, provides you the following details:-
The company seeks your advice as to how it should raise revised tax invoices for
supplies made. Is there any specific provision for issuance of revised tax invoices
to unregistered customers? Explain.
ANSWER
A supplier of both goods and services whose aggregate turnover in a
financial year exceeds ` 20 lakh in a State/UT [` 10 lakh in specified Special
Category States] is liable to apply for registration within 30 days from the
date of becoming liable to registration (i.e., the date of crossing the
threshold limit of ` 20 lakh/ ` 10 lakh) in terms of section 22. Since
Meghalaya is not a specified Special Category State, applicable threshold
limit is ` 20 lakh.
Further, where the application is submitted within said period, the effective
date of registration is the date on which the person becomes liable to
registration; otherwise it is the date of grant of registration.
Every registered person who has been granted registration with effect from
a date earlier than the date of issuance of registration certificate to him,
may issue revised tax invoices within 1 month from the date of issuance of
registration certificate in respect of taxable supplies effected during this
period i.e. from the effective date of registration till the date of issuance of
registration.
Since Luv & Kush Pvt. Ltd. has made the application for registration within
30 days of becoming liable for registration, the effective date of registration
becomes the date on which the company becomes liable to registration i.e.
5th September.
Thus, Luv & Kush Pvt. Ltd. may issue revised tax invoices against the
invoices already issued during the period between effective date of
registration (5th September) and the date of issuance of registration
certificate (6th October), within 1 month from 6th October.
Further, Luv & Kush Pvt. Ltd may issue a consolidated revised tax invoice in
respect of all taxable supplies made to unregistered dealers during such
period. However, in case of inter-State supplies made to unregistered
dealers, a consolidated revised tax invoice cannot be issued in respect of all
the recipients located in a State, if the value of a supply exceeds ` 2,50,000.
(ii) No Tax Invoice required to be issued if value < ` 200 – A consolidated
Tax Invoice can be issued [Section 31(3)(b) read with fourth proviso to
rule 46]
A registered person may not issue a Tax Invoice if:
(i) Value of the goods/services/both supplied < `200,
(ii) the recipient is unregistered; and
(iii) the recipient does not require such invoice.
Instead such registered person shall issue a Consolidated Tax Invoice for
such supplies at the close of each day in respect of all such supplies.
Thus, small taxpayers, like small retailers, doing a large number of small
transactions for upto a value of ` 200 per transaction to unregistered customers
need not issue invoice for every such transaction. They can issue one
consolidated invoice at the end of each day for all transactions done during the
day. However, they need to issue an invoice when the customer demands.
However, this option is not available to a
supplier engaged in making supply of services by
way of admission to exhibition of
cinematograph films in multiplex screens.
Above provision is also applicable to Bill of Supply.
ILLUSTRATION 2
Jain & Sons is a trader dealing in stationery items. It is registered under GST
and has undertaken following sales during the day:
Consolidated Tax Invoice can also not be issued for supplies of goods made to
Dhruv Enterprises and Gaurav although both of them are unregistered. The
reason for the same is that the value of goods supplied is not less than ` 200.
(iii) Bill of Supply [Section 31(3)(c) read with rule 49]
Section 31(3)(c) stipulates that a registered person supplying exempted
goods or services or both or a registered person paying tax under
composition levy, shall issue a bill of supply instead of a tax invoice 13.
Person opting for composition levy shall mention the words “composition
taxable person, not eligible to collect tax on supplies” at the top of the bill
of supply issued by him 14.
Supplying exempted goods
or services or both
Tax Bill of
Paying tax under Invoice Supply
Registered
composition levy
Person
Particulars of Bill of Supply
A registered person opting for the composition levy does
not collect tax from the recipient on outward supplies
made by him. Similarly, in case of a registered person supplying exempted
goods and/or services, no tax implications are there. Recipients should not
expect Tax Invoice from such suppliers as they cannot issue tax invoice.
Since no tax is collected from the recipient by a registered person opting for
the composition levy and a registered person supplying exempted goods
and/or services, Bill of Supply issued by such persons does not contain the
details pertaining to rate of tax and amount of tax. Further, value to be
mentioned in the Bill of Supply is not also taxable value.
13
Order No. 3/2019 CT dated 08.03.2019 has stipulated that a person paying tax under
Notification No. 2/2019 will also issue a bill of supply instead of tax invoice.
Fourth proviso to rule 49 has been inserted stipulating the Bill of supply shall have a
14
Quick Response Code. However the same is not yet made effective.
(i) rate of tax is not tax shall be paid at the rate of 18%
determinable
Advance payment
Receipt Voucher
Supply
Tax Invoice
Supplier Recipient
Refund Voucher
Rate of tax (central tax, State tax, integrated tax, Union territory tax or
cess)
(vi) Invoice and Payment Voucher [Section 31(3)(f) & (g) read with second
proviso to rule 46 and rule 52]
The recipient is liable to pay tax on reverse charge basis
where he receives supply of such goods/services/both
which are notified for reverse charge purposes under
section 9(3). Such supplies can be received from a
registered or an unregistered supplier.
Further, a builder/promoter is required to pay GST on reverse charge basis
under section 9(4) in one or more of the following cases:
(i) A builder/promoter must purchase 80% of inputs and input services
used in supplying the service from registered persons. In case of
shortfall, he’s required to pay tax under reverse charge on all such
inward supplies (to the extent short of 80% of the inward supplies
from registered supplier).
(ii) Where cement is received from an unregistered person,
promoter/builder has to pay tax on supply of such cement on reverse
charge basis and
(iii) GST on capital goods is payable by the promoter on reverse charge
basis.
Invoice to be issued by recipient if he is liable to pay tax under
section 9(3)/(4) and receives supplies from an unregistered person
A registered person who is liable to pay tax under reverse charge [under
section 9(3)/9(4) of the CGST Act] shall issue an Invoice in respect of goods
or services or both received by him from the supplier who is not registered
on the date of receipt of goods or services or both. Thus, a recipient liable
to pay tax by virtue of section 9(3) has to issue invoice only when supplies
have been received from an unregistered supplier.
Payment voucher to be issued by recipient at the time of making
payment if he is liable to pay tax under section 9(3)/(4)
Besides, a registered person who is liable to pay tax
under reverse charge [under section 9(3)/9(4) of the
CGST Act] shall issue a Payment Voucher at the time of
making payment to the supplier.
Amount paid;
Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
Place of supply along with the name of State and its code, in case of a
supply in the course of inter-State trade or commerce; and
Following suppliers may issue a tax invoice, but they are also permitted to
issue any other document in lieu of tax invoice, by whatever name called:
Other information as
prescribed for a tax invoice,
under rule 46
Delivery challan
Rule 55 specifies the cases where at the time of removal of goods, goods
may be removed on delivery challan and invoice may be issued after
delivery. These are provided in the following table:
Duplicate copy
Triplicate copy
(d) the original copy of the invoice shall be sent along with the last
consignment.
Goods may be moved within the State/from the State of registration to
another State for supply on approval basis and art works may be sent
by artists to galleries for exhibition on delivery challan along with
e-way bill wherever applicable
Suppliers of jewellery etc. who are registered in one State may have to visit
other States (other than their State of registration) and need to carry the
goods (such as jewellery) along for approval. In such cases if jewellery etc.
is approved by the buyer, then the supplier issues a tax invoice only at the
time of supply.
Since the suppliers are not able to ascertain their actual supplies
beforehand and while ascertainment of tax liability in advance is a
mandatory requirement for registration as a casual taxable person, the
supplier is not able to register as a casual taxable person. Such goods are
also carried within the same State for the purposes of supply.
In view of relevant provisions of rule 55, it is clarified that the goods which are
taken for supply on approval basis can be moved from the place of business
of the registered supplier to another place within the same State or to a
place outside the State on a delivery challan along with the e-way bill
wherever applicable and the invoice may be issued at the time of delivery of
goods.
For this purpose, the person carrying the goods for such supply can carry
the invoice book with him so that he can issue the invoice once the supply
is fructified [Circular No. 10/10/2017 GST dated 18.10.2017].
Likewise, in case where artists supply art works in different States - other
than the State in which they are registered as a taxable person and if the art
work is selected by the buyer, then the supplier issues a tax invoice only at
the time of supply, it is clarified that the art work for supply on approval
basis can be moved from the place of business of the registered person
(artist) to another place within the same State or to a place outside the
State on a delivery challan along with the e-way bill wherever applicable
and the invoice may be issued at the time of actual supply of art work
[Circular No. 22/22/2017 GST dated 21.12.2017].
STATUTORY PROVISIONS
ANALYSIS
(i) Issuance of Credit Note: During the course of trade or commerce, after the
invoice has been issued, there can be situations like:
The supplier has erroneously declared a value which is more than the
actual value of the goods or services provided.
The supplier has erroneously declared a higher tax rate than what is
applicable for the kind of the goods or services or both supplied.
The quantity received by the recipient is less than what has been
declared in the tax invoice.
The credit note is a convenient and legal method by which the value of the
goods or services in the original tax invoice can be amended or revised.
The issuance of the credit note easily allows the supplier to decrease his tax
liability in his returns without requiring him to undertake any tedious
process of refunds.
Section 34(1) provides that where one or more tax invoices have been
issued for supply of any goods or services or both and the taxable value or
tax charged in that/those tax invoice(s) is found to exceed the taxable value
or tax payable in respect of such supply, or where the goods supplied are
returned by the recipient, or where goods or services or both supplied are
found to be deficient, the registered person, who has supplied such goods
or services or both, may issue to the recipient one or more credit notes for
supplies made in a financial year containing the prescribed particulars.
It is important to note that credit note(s) are not
permitted to be issued in case secondary discounts 15 are Secondary
allowed by the supplier since the tax liability of the discounts
supplier does not get reduced in such case. However,
supplier can issue financial/ commercial credit note(s) to reduce the value of
supply payable by the recipient to the supplier [Circular 92/11/2019 GST
dated 07.03.2019].
(ii) Issuance of Debit Note: There can be situations when after the invoice has
been issued:
The supplier has erroneously declared a value which is less than the
actual value of the goods or services or both provided.
The supplier has erroneously declared a lower tax rate than what is
applicable for the kind of the goods or services or both supplied.
The quantity received by the
Debit note shall include a
recipient is more than what has
been declared in the tax invoice. supplementary invoice.
15
Secondary discounts are the discounts which are not known at the time of supply/are offered
after the supply is already over. These discounts are not excluded from the value of supply since
conditions laid down in section 15(3)(b) of the CGST Act are not satisfied. Provisions of
section 15 have been discussed in detail in Unit-II of Chapter 5- Time and Value of Supply.
Section 34(3) provides that where one or more tax invoices have been
issued for supply of any goods or services or both and the taxable value or
tax charged in that tax invoice is found to be less than the taxable value or
tax payable in respect of such supply, the registered person, who has
supplied such goods or services or both, shall issue to the recipient one or
more debit notes for supplies made in a financial year containing the
prescribed particulars.
The issuance of a debit note/supplementary invoice creates additional tax
liability. The treatment of a debit note/supplementary invoice is identical to
the treatment of a tax invoice as far as returns and payment are concerned.
The debit note/supplementary invoice is a convenient and legal method by
which the value of the goods and/or services in the original tax invoice can
be enhanced. The issuance of the debit note allows the supplier to pay his
enhanced tax liability in his returns without requiring him to undertake any
other tedious process.
(iii) Details of Debit Note/Credit Note to be declared in Return
I. Credit Note:
Any registered person who issues a credit note in
relation to a supply of goods or services or both
shall declare the details of such credit note in the
return for the month during which such credit note
has been issued but not later than:
(i) September following the end of the financial year in which such
supply was made,
or
(ii) the date of furnishing of the relevant annual return,
whichever is earlier.
The tax liability shall be adjusted in such manner as may be
prescribed. However, no reduction in output tax liability of the
supplier shall be permitted, if the incidence of tax and interest on such
supply has been passed on to any other person.
II. Debit Note:
Any registered person who issues a debit note in relation to a supply
of goods or services or both shall declare the details of such debit
note in the return for the month during which such debit note has
been issued. The tax liability shall be adjusted in such manner as may
be prescribed.
III. Particulars of the Debit and Credit Notes [Rule 53(1A)]
There is no prescribed format, but credit and debit note issued by a
supplier must contain the following particulars, namely:–
ILLUSTRATION 3
Kartik & Co., a registered supplier under GST, provides the following
information regarding various tax invoices issued by it during the month of
March:
(i) Value of supply charged in invoice no. 1 was ` 2,50,000 against the
actual taxable value of ` 2,30,000.
(ii) Tax charged in invoice no. 4 was ` 32,000 against the actual tax liability
of ` 68,000 due to wrong HSN code being chosen while issuing invoice.
(iii) Value charged in invoice no. 8 was ` 3,20,000 as against the actual
value of ` 4,20,000 due to wrong quantity considered while billing.
Kartik & Co. asks you to answer the following:
(1) Who shall issue a debit/credit note under CGST Act?
(2) Whether debit note or credit note has to be issued in each of the above
circumstances?
(3) What is the maximum time-limit available for declaring the credit note
in the GST Return?
ANSWER
(1) The debit/credit note shall be issued by the registered person who has
supplied the goods and/or services, i.e. Kartik & Co.
(2) Yes, debit/credit note need to be issued in each of the circumstances
as under:
(i) A credit note is required to be issued as the taxable value in
invoice no. 1 exceeds the actual taxable value.
(ii) A debit note is required to be issued as the tax charged in the
invoice no. 4 is less than the actual tax payable.
(iii) A debit note is required to be issued as the value of supply
charged in the invoice no. 8 is less than the actual value.
(3) The details of the credit note cannot be declared later than the return
for the month of September following the end of the financial year in
which such supply was made or the date of furnishing of the relevant
annual return, whichever is earlier.
No registered person shall collect tax except in accordance with the provisions
of this Act or the rules made thereunder.
Rujuta is engaged in providing grooming services. She is not registered
under GST law as her turnover is below the threshold limit. Rujuta cannot
collect tax on the grooming services provided by her as a person who is
not a registered person cannot collect any amount by way of tax under this Act in
respect of any supply of goods or services or both.
devices as may be prescribed. Rule 138 prescribes e-way bill as the document to
be carried for the consignment of goods in certain prescribed cases.
What is e-way bill?
A waybill is a receipt or a document issued by a carrier giving details and
instructions relating to the shipment of a consignment of goods and the details
include name of consignor, consignee, the point of origin of the consignment, its
destination, and route. Electronic Way Bill (E-Way Bill) is a compliance mechanism
wherein by way of a digital interface the person causing the movement of goods
uploads the relevant information prior to the commencement of movement of goods
and generates e-way bill on the GST portal. In other words, E-way bill is an
electronic document generated on the GST portal evidencing movement of
goods.
What are the benefits of e-way bill?
Following are the benefits of e-way bill mechanism:
(i) Physical interface to pave way for digital interface resulting in elimination of
state boundary check-posts
(ii) It will facilitate faster movement of goods
(iii) It will improve the turnaround time of trucks and help the logistics industry
by increasing the average distances travelled, reducing the travel time as
well as costs.
E-way Bill is generated electronically in Form GST EWB 01 on the common
portal (www.ewaybillgst.gov.in). The facility of generation, cancellation, updation
and assignment of e-way bill is available to the supplier, recipient and the
transporter, as the case may be. E-way Bill can be generated through various
modes like Web (Online), Android App, SMS, using Bulk Upload Tool and API
(Application Program Interface) based site to site integration etc.
The pre-requisite for generation of e-way bill is that the person who generates e-
way bill should be a registered person on GST portal and he should register on
the e-way bill portal. If the transporter is not registered person under GST it is
mandatory for him to get enrolled on e-waybill portal (https://ewaybillgst.gov.in)
before generation of the e-way bill.
E-way Bill provisions [as contained in rules 138, 138A, 138B, 138C, 138D and
138E– Chapter XVI of the CGST Rules, 2017] are elaborated as under:
to necessarily contain the value of goods. The value given in the delivery challan
should be adopted in the e-way bill 16.
16
As clarified by CBIC FAQs on E-way Bill.
In this complete scenario. two supplies are involved and accordingly two tax
invoices are required to be issued:
Invoice -1: which would be issued by ‘B’ to ‘A’.
Invoice -2: which would be issued by ‘A’ to ‘C’.
It is clarified that as per the CGST Rules, either A or B can generate the e-
Way Bill but it may be noted that only one e-Way Bill is required to be
generated [Press Release dated 23.04.2018]
(2) Information to be furnished in e-way bill:
An e-way bill Form GST EWB-01 contains two parts:
(I) Part A [comprising of details of GSTIN of supplier & recipient, place of
delivery (indicating PIN Code also), document (Tax invoice, Bill of
Supply, Delivery Challan or Bill of Entry) number and date, value of
goods, HSN code, and reasons for transportation, etc.]: to be
ILLUSTRATION 4
Mr. Shah, a consignor, is required to move goods from Ahmedabad (Gujarat) to
Nadiad (Gujarat). He appoints Mehta Transporter for movement of goods.
Mehta Transporter moves the goods from Ahmedabad (Gujarat) to Kheda
(Gujarat). For completing the movement of goods from Kheda (Gujarat) to
Nadiad (Gujarat), Mehta Transporter now hands over the goods to Parikh
Transporter.
Explain the procedure regarding e-way bill to be followed by consignor and
transporter as per provisions of GST law and rules made thereunder.
ANSWER
In the given scenario, only one e-way bill is required to be issued.
Part A can be filled by either Mr. Shah or recipient of goods or Mehta
Transporter on the appropriate authorisation.
Where the goods are transferred from one conveyance to another, the
consignor or the recipient, who has provided information in Part A, or the
transporter shall, before such transfer and further movement of goods,
update the details of conveyance in the e-way bill on the common portal in
Part B.
Thus, on reaching Kheda, Mr. Shah or the recipient of the goods, who has
filled Part A of the e-way bill, or Mehta Transporter can, before the transfer
17
As clarified by FAQs on E-way Bill by CBIC.
18
As clarified by FAQs on E-way Bill web portal.
In the given situation, Consignor can fill the details in Part A on Friday and
handover his goods to the transporter. When the transporter is ready to move
the goods, he can fill Part B i.e. the assigned transporter can fill the details in
Part B on Monday and the validity period of the e-way bill will start from
Monday [CBIC Press Release dated 31.03.2018].
**Over dimensional cargo means a cargo carried as a single indivisible unit
and which exceeds the dimensional limits prescribed in rule 93 of the
Central Motor Vehicle Rules, 1989, made under the Motor Vehicles
Act, 1988.
Extension of validity period
Extension by Commissioner for certain categories of goods:
Commissioner may, on the recommendations of the Council, by notification,
extend the validity period of an e-way bill for certain categories of goods as
may be specified therein.
The details of the e-way bill generated shall be made available to the -
(a) supplier, if registered, where the information in Part A has been
furnished by the recipient/transporter; or
19
As clarified by FAQs on E-way Bill web portal.
on the common portal, and the supplier/recipient, as the case may be, shall
communicate his acceptance or rejection of the consignment covered by
the e-way bill [Rule 138(11)].
(i) 72 hours of the details being made available to him on the common
portal
or
(ii) the time of delivery of goods,
📝📝 Points to remember
1. E-way bill is not valid for movement of goods without vehicle number on it.
2. Once E-way bill is generated, it cannot be edited for any mistake. However,
it can be cancelled within 24 hours of generation.
3. E- Way Bill may be updated with vehicle number any number of times.
4. The latest vehicle number should be available on e-way bill and should
match with the vehicle carrying it in case checked by the department.
6. Currency
20
in the manner prescribed under sub-rule (4) of rule 48
21
In case of import of goods, bill of entry needs to be carried in lieu of e-way bill. The concept
of bill of entry for imported goods under customs will be discussed at Final Level.
(ii) A person paying tax under regular scheme has not furnished the
returns for 2 consecutive months, or
(iii) A person paying tax under regular scheme has not furnished GSTR-1
(Statement of outward supplies) for any 2 months or quarters, as the
case may be.
However, Commissioner (jurisdictional commissioner) may, on receipt
of an application from a registered person in prescribed form, on
sufficient cause being shown and for reasons to be recorded in writing,
by order, in prescribed form allow furnishing of the said information in
Part A of Form GST EWB-01, subject to prescribed conditions and
restrictions. An order rejecting said request shall not be passed without
giving the said person a reasonable opportunity of being heard. The
permission granted or rejected by the Commissioner of State tax or
Commissioner of Union territory tax shall be deemed to be granted or,
as the case may be, rejected by the Commissioner.
(19) It may be noted that the expressions ‘transported by railways’,
‘transportation of goods by railways’, ‘transport of goods by rail’ and
‘movement of goods by rail’ used in the provisions discussed above does
not include cases where leasing of parcel space by Railways takes place.
Tax invoice or bill of supply to accompany transport of goods [Rule 55A]
Person-in-charge of the conveyance shall carry a copy of the tax invoice or the bill
of supply issued in accordance with the provisions of rules 46, 46A or 49 in a case
where such person is not required to carry an e-way bill under these rules.
8. LET US RECAPITULATE
1. Who can raise a tax invoice?
Registered Person
Receiving taxable goods or
Supplying taxable goods or
services from unregistered
services
supplier
Taxable supply
Goods Services
Name &
Consecutive GSTIN of
GSTIN of address of
Serial Number recipient, if
supplier recipient, if not
& date of issue registered
registered
Description of
Quantity in Total Value of
HSN goods or
case of goods supply
services
Tax rate –
Central tax &
Taxable Value Amount of tax
State tax or Place of supply
of supply charged
Integrated tax,
cess
Address of
Tax payable on Signature of
delivery where
reverse charge authorised
different than
basis signatory
place of supply
Triplicate Duplicate
5. Revised Tax
Revised Tax Invoices to be issued in respect of taxable
supplies effected during this period
Consolidated Tax
Invoice shall be
Value of supply < `200
issued for such
be issued
7. Bill of Supply
Registered Person
8. Receipt Voucher
Advance payment
Supplier Recipient
Receipt Voucher
(i) rate of tax is not tax shall be paid at the rate of 18%
determinable
9. Refund Voucher
Advance payment
Receipt Voucher
Supplier Supply Recipient
Tax Invoice
Refund Voucher
Payment Voucher
Recipient will issue a Payment Voucher at the time of making payment to supplier.
Invoice
Supplier is Supplier is
Supplier is
unregistered unregistered
registered
Where one or more tax invoices have issued for supply of any goods or services
or both
Consolidated E-way After e-way bill has been generated, where multiple
Bill in case of road consignments are intended to be transported in one
transport conveyance, the transporter may indicate the serial
number of e-way bills generated in respect of each such
consignment electronically on the common portal and a
consolidated e-way bill in Form GST EWB-02 may be
generated by him on the said common portal prior to the
movement of goods.
Where the consignor/consignee has not generated the e-
way bill in Form GST EWB-01 and the aggregate of the
consignment value of goods carried in the conveyance is
more than ` 50,000, the transporter shall generate
individual Form GST EWB-01 on the basis of invoice or bill
of supply or delivery challan and may also generate a
consolidated e-way bill in Form GST EWB-02 prior to the
movement of goods [This provision is not yet effective].
the same will also be due on the date on which service is rendered. During
the year, it provided the services on April 1, July 1, October 1, and January 1
in accordance with the terms of contract. When should MBM Caretakers issue
the invoice for the services rendered?
3. The aggregate turnover of Sangri Services Ltd., Delhi, exceeded ` 20 lakh on
12th August. He applied for registration on 3rd September and was granted
the registration certificate on 6th September. You are required to advice Sangri
Services Ltd. as to what is the effective date of registration in its case. It has
also sought your advice regarding period for issuance of Revised Tax Invoices.
4. Shyam Fabrics has opted for composition levy scheme in the current financial
year. It has approached you for advice whether it is mandatory for it to issue
a tax invoice. You are required to advise him regarding same.
5. Royal Fashions, a registered supplier of designer outfits in Delhi, decides to
exhibit its products in a Fashion Show being organised at Hotel Park Royal,
Delhi on 4th January. For the occasion, it gets the service by way of
makeover of its models from Aura Beauty Services Ltd., Ashok Vihar, for which
a consideration is ` 5,00,000 (excluding GST) has been charged. Aura Beauty
Services Ltd. issued a duly signed tax invoice on 10th February showing the
lumpsum amount of ` 5,90,000 inclusive of CGST and SGST @ 9% each for
the services provided. Answer the following questions:
(i) Examine whether the tax invoice has been issued within the time limit
prescribed under law.
(ii) Tax consultant of Royal Fashions objected to the invoice raised
suggesting that the amount of tax charged in respect of the taxable
supply should be shown separately in the invoice raised by Aura Beauty
Services Ltd. However, Aura Beauty Services Ltd. contended that there is
no mandatory requirement of showing tax component separately in the
invoice. You are required to examine the validity of the objection raised
by tax consultant of Royal Fashions.
6. Kidzee Toys Ltd., a wholesaler of toys registered in Chandigarh, is renowned
in the local market for the variety of toys and their reasonable prices. Kidzee
Toys Ltd. makes supply of 100 pieces of baby’s learning laptops and chat
learning phones to Nancy General Store on 25th September by issuing a tax
invoice amounting to ` 1,00,000.
However, the said toys were returned by Nancy General Store on 30th September.
Discuss which document Kidzee Toys Ltd. is required to issue in such a case?
7. Rana Sanga Ltd., a registered supplier has made following taxable supplies to
its customer Babur in the quarter ending 30th June.
10. ANSWERS/HINTS
1. As per the provisions of section 31, invoice shall be issued before or at the
time of removal of goods for supply to the recipient, where the supply
involves movement of goods. Accordingly, in the given case, the invoice
must be issued on or before 29th September.
2. Continuous supply of service means, inter alia, supply of any service which
is provided, or agreed to be provided continuously or on recurrent basis,
under a contract, for a period exceeding 3 months with the periodic
payment obligations.
Therefore, the given situation is a case of continuous supply of service as
repair and maintenance services have been provided by MBM Caretakers on
a quarterly basis, under a contract, for a period of one year with the
obligation for quarterly payment.
the registered person, who has supplied such goods and/or services, may
issue to the recipient one or more credit notes for supplies made in a
financial year containing prescribed particulars.
Thus, one (consolidated) or more credit notes can be issued in respect of
multiple invoices issued in a financial year without linking the same to
individual invoices.
Hence, in view of the above-mentioned provisions, Rana Sanga Ltd. can
issue a consolidated credit note for the goods returned in respect of all the
three invoices.
8. Yes. Chidanand Products Pvt. Ltd. may not issue a bill of supply if the value
of the goods or services or both supplied is less than ` 200 subject to the
condition that:
(a) the recipient is not a registered person; and
(b) the recipient does not require such bill of supply,
and he shall issue a consolidated bill of supply for such supplies at the close
of each day in respect of all such supplies.
9. The statement is not valid in law. As per the CGST Rules, where a registered
person is supplying taxable as well as exempted goods or services or both
to an unregistered person, a single “invoice-cum-bill of supply” may be
issued for all such supplies.
10. The said statement is valid in law. A customer may avail numerous services
from a non-banking financial company in a given tax period. It may issue a
consolidated tax invoice/ statement/ advice, any other document in lieu
thereof, by whatever name called may be issued/ made available,
physically/ electronically, for supply of services made during a month at
the end of the month.
11. A registered person supplying taxable goods shall issue a tax invoice, before
or at the time of removal of goods for supply to the recipient, where the
supply involves movement of goods.
Therefore, in the given case, invoice has to be issued on or before,
11th October (the time of removal of goods).
12. A registered person [other than an insurer/banking company/financial
institution, including an NBFC] supplying taxable services shall issue a tax
(iii) name, address and Goods and Services Tax Identification Number or
Unique Identity Number of the consignee, if registered;
(iv) Harmonised System of Nomenclature code and description of goods;
(v) quantity (provisional, where the exact quantity being supplied is not
known);
(vi) taxable value;
(vii) tax rate and tax amount – central tax, State tax, integrated tax, Union
territory tax or cess, where the transportation is for supply to the
consignee;
(viii) place of supply, in case of inter-State movement; and
(ix) signature.
The delivery challan shall be prepared in triplicate, in case of supply of
goods, in the following manner, namely:–
(a) the original copy being marked as ORIGINAL FOR CONSIGNEE;
(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER;
and
(c) the triplicate copy being marked as TRIPLICATE FOR CONSIGNER.
22
Provisions existing as on the date when the Study Material was released for printing
RETURNS
For the sake of brevity, the term input tax credit has been referred to as ITC in this Chapter. The
section numbers referred to in the Chapter pertain to CGST Act, unless otherwise specified.
Examples/Illustrations/Questions and Answers given in the Chapter are based on the position of
GST law existing as on 31.10.2020.
LEARNING OUTCOMES
This Chapter will equip you to –
GSTR-5
RETURNS
First Return
Annual Return
GSTR-9
GSTR 9
Other returns Final Return
GSTR-10
GSTR-11
Notice to return
defaulters
Default/delay in furnishing return
Levy of late fee
1. INTRODUCTION
The term “return” ordinarily means statement of information (facts) furnished by the
taxpayer, to tax administrators, at regular intervals. The information to be furnished in
the return generally comprises of the details pertaining to the nature of
activities/business operations forming the subject matter of taxation; the measure of
taxation such as sale price, turnover, or value; deductions and exemptions; and
determination and discharge of tax liability for a given period.
In any tax law, “filing of returns” constitutes the most important compliance procedure
which enables the Government/ tax administrator to estimate the tax collection for a
particular period and determine the correctness of the tax compliance of the taxpayers.
Chapter IX of the CGST Act [Sections 37 to 48] prescribes the provisions relating to
filing of returns as under:
Provisions of returns, other than late fee, under CGST Act have also been
made applicable to IGST Act vide section 20 of the IGST Act.
However, the return filing process is under review and is yet not finalized. A simplified
monthly return in Form GSTR 3B was introduced in July, 2017 to help businesses to
file returns easily in the initial months of GST roll out. This was to be followed with
filing of returns - GSTR - 1, 2 and 3. Further, to ease the compliance requirements
for small taxpayers, the GST Council allowed taxpayers with annual aggregate
turnover up to ` 1.5 Crore to file details of outward supplies in Form GSTR-1 on a
quarterly basis and on monthly basis by taxpayers with annual aggregate turnover
greater than ` 1.5 Crore. The GST Council also recommended to postpone the date
of filing of Forms GSTR-2 (details of inward supplies) and GSTR-3 (monthly return)
for all normal taxpayers, irrespective of turnover, till further announcements were
made in this regard.
The return process has still not been streamlined and the GST Council has extended
GSTR-3B filing requirement till end of March 31, 2021. Therefore, in the subsequent
pages of this Chapter, provisions of only those sections which are practically effective,
have been discussed.
Further, the due dates for filing of various statements/returns discussed under this
Chapter are the due dates which are provided under the provisions of the CGST Act
or the due dates specified by notifications which have been consistent over a period
of time. Practically, the due dates are often extended by the Government on account
of various reasons. Also, the quantum of late fee for delayed filing of
statements/returns discussed under this Chapter is the quantum of late fee as
provided under the provisions of the CGST Act. Here also, the Government often
waives off the late fee either partially or fully. It may be noted that such extended
due dates and late fee waivers are not relevant from examination point of view
The GST Council at its 42nd meeting held on 5th October 2020 has recommended
the following incremental changes in the return filing process:
1. Effective 01.01.2021, taxpayers with turnover below ` 5 crores may file
GSTR-3B and GSTR-1 on quarterly basis. Such taxpayers would, for the
first two months of the quarter, have an option to pay 35% of the net tax
liability of the last quarter, using an auto generated challan.
2. Effective 01.01.2021, due date of furnishing quarterly GSTR-1 by
taxpayers to be revised to 13th of the month succeeding the quarter.
Note – Notification No. 74/2020 CT dated 15.10.2020 has revised the due
date for filing quarterly GSTR-1 by the registered persons having
aggregate turnover up to ` 1.5 crores in the preceding financial year or
current financial year to 13th of the month succeeding the end of quarter.
Such date is applicable for the quarters ending December 2020 and
March 2021.
3. Effective 01.01.2021, for monthly filers, auto-generation of liability from
own GSTR-1 and ITC from suppliers’ GSTR-1s through the newly
developed facility in GSTR-2B. For quarterly filers, this facility would be
effective from 01.04.2021. To ensure such auto generation of ITC and
liability in GSTR 3B, GSTR-1 shall be filed mandatorily before filing
GSTR-3B effective 01.04.2021.
4. GSTR-1 and GSTR-3B return filing system to be extended till 31.03.2021
and the GST laws to be amended to make GSTR-1 and GSTR-3B return
filing system as the default return filing system.
However, as on date 1, some of the aforesaid changes recommended in the return
filing process have not become effective. Further, the exact mechanism of the return
filing process would be available only after the relevant notifications are issued by
the Government. Therefore, in this chapter only those provisions which are currently
effective, have been discussed. The amendments which will be made in the law to
give effect to the new process will be given in the Statutory Update, after the new
process becomes operational.
All the returns under GST laws are to be filed electronically. Taxpayers can file
the statements and returns by various modes. Firstly, they can file their statement
and returns directly on the GST common portal online. However, this may be
tedious and time consuming for taxpayers with large number of invoices. For such
taxpayers, offline utilities have been provided by GSTN that can be used for
preparing the statements offline after downloading the auto populated details and
uploading them on the common portal. GSTN has also developed an ecosystem of
GST Suvidha Providers (GSP) that will integrate with the common portal.
The details furnished by the taxpayer in the form of returns shall be consolidated
and stored at the common portal which will be common for both, i.e. Central
Government and State Governments.
2. RELEVANT DEFINITIONS
• Common portal means the common goods and services tax electronic portal
referred to in section 146 [Section 2(26)].
• Electronic cash ledger means the electronic cash ledger referred to in sub-
section (1) of section 49 [Section 2(43)].
• Exempt supply means supply of any goods or services or both which attracts
nil rate of tax or which may be wholly exempt from tax under section 11, or
under section 6 of the Integrated Goods and Services Tax Act, and includes
non-taxable supply [Section 2(47)].
• Goods and services tax practitioner means any person who has been
approved under section 48 to act as such practitioner [Section 2(55)].
• Reverse charge means the liability to pay tax by the recipient of supply of
goods or services or both instead of the supplier of such goods or services or
both under sub-section (3) or sub-section (4) of section 9, or under sub-
section (3) or sub- section (4) of section 5 of the Integrated Goods and
Services Tax Act [Section 2(98)].
• Supplier in relation to any goods or services or both, shall mean the person
supplying the said goods or services or both and shall include an agent acting
as such on behalf of such supplier in relation to the goods or services or both
supplied [Section 2(105)].
• Tax period means the period for which the return is required to be furnished
[Section 106].
♦ ISD
All ♦ Non-resident taxable person
A taxpayer cannot file GSTR-1 before the end of the current tax
period.
However, following are the exceptions to this rule:
a. Casual taxpayers, after the closure of their business
b. Cancellation of GSTIN of a normal taxpayer
A taxpayer who has applied for cancellation of registration will be
allowed to file GSTR-1 after confirming receipt of the application.
CONTENTS OF GSTR- 1
2 Principles determining the place of supply are contained in sections 10 to 13 of the IGST Act. These
It can be seen from the above table that uploading of invoices depends on
whether the supply is B2B or B2C plus whether the supply is intra-State or
inter-State.
Invoices can be uploaded any time during the tax period and not just at
the time of filing of GSTR-1.
(3) For the month of October, the taxpayer can upload invoices
from 1st October to 10th November. In case of late filing of GSTR-
1, invoices can be uploaded after 15th November.
Inter-state Intra-state
Inter-state Intra-state
supplies supplies
supplies supplies
Consolidated
Invoices > Invoices ≤ details of all
Invoice-wise details ` 2,50,000 ` 2,50,000 supplies to be
of all supplies to be uploaded
uploaded
(4) The turnovers of Yellow Lemon Pvt. Ltd., Red Pepper Pvt. Ltd.
and Blue Berry Pvt. Ltd. in the previous financial year are ` 1.5 crore,
` 4.8 crore and ` 5 crore respectively. While Yellow Lemon Pvt. Ltd.
is not required to upload HSN code of the goods sold, Red Pepper
Pvt. Ltd. and Blue Berry Pvt. Ltd. have to upload 2 digits of HSN code of goods
sold by them. This will be the position till 31.03.2021.
(5) The turnovers of Yellow Lemon Pvt. Ltd., Red Pepper Pvt. Ltd. and
Blue Berry Pvt. Ltd. in the previous financial year are ` 1.5 crore, ` 4.8
crore and ` 6 crore respectively. While Yellow Lemon Pvt. Ltd. and
Red Pepper Pvt. Ltd. will be required to upload 4 digits of HSN code of the
goods sold to registered persons, uploading of 4 digits HSN code will be
optional for the two companies when the goods are sold to unregistered
persons. Blue Berry Pvt. Ltd. will have to upload 6 digits of HSN code of goods
sold by it. This will be the position from 01.04.2021.
3
Since this amendment will be effective from 01.04.2021, the same will be applicable for
November 2021 examinations. For May 2021 examinations, the position effective till 31.03.2021
as given in preceding table is applicable.
by way of
can be amended
Particulars
furnished Amendment
in GSTR-1 Tables given
of prior in GSTR-1 of
periods subsequent
periods
What are the precautions that a taxpayer is required to take for a hassle-free
compliance under GST?
One of the most important things under GST is the timely
uploading of the details of outward supplies in GSTR-1.
Timely uploading
How best this can be ensured will depend on the number of
B2B invoices that the taxpayer issues. If the number is of the details of
small, the taxpayer can upload all the information in one outward supplies in
go. However, if the number of invoices is large, the invoices Form GSTR-1
(or debit/ credit notes) should be uploaded on a regular
basis.
for GSTR-3B is being notified as 20th day of the month succeeding the
relevant month.
Considering the difficulties faced by trade and industry in filing of returns, the
Government has introduced staggered filing of GSTR-3B returns as a
temporary measure to de-stress the GST return filing system. The last date for
filing of GSTR-3B for the taxpayers having annual turnover of ` 5 crore and
above in the previous financial year would be 20th of the month. For the
taxpayers having annual turnover below ` 5 crore in previous financial year, the
due date for filing of GSTR-3B would be 22nd or 24th of the month depending
upon the State or Union Territory in which they are registered. Presently, the
staggered filing has been provided for tax periods till March 2021.
GSTR-3B can be submitted electronically through the common portal, either
directly or through a Facilitation Centre notified by the Commissioner.
Further, a Nil GSTR-3B can be filed through an SMS using the registered
mobile number of the taxpayer.
GSTR-3B is a simple return containing summary of outward supplies, inward
supplies liable to reverse charge, eligible ITC, payment of tax etc. Thus, GSTR-
3B does not require invoice-wise data of outward supplies.
The broad content of GSTR-3B are given at next page:
Nil GSTR-3B
Filing of GSTR-3B is mandatory for all normal and casual taxpayers, even if there
is no business activity in any particular tax period. For such tax period(s), a Nil
GSTR-3B is required to be filed.
A Nil GSTR-3B does not have any entry in any of its tables. For example, a
Nil GSTR-3B for a tax period cannot be filed, if the taxpayer has made any
outward supply (including nil-rated, exempt or non-GST supplies) or has
received any supplies which are taxable under reverse charge or it intends to
take ITC etc.
A Nil GSTR-3B can be filed through an SMS using the registered mobile
number of the taxpayer. GSTR-3B submitted through SMS is verified by
registered mobile number-based OTP facility.
A taxpayer may file Nil Form GSTR-3B, anytime on or after the 1st of the
subsequent month for which the return is being filed for.
CONTENTS OF GSTR- 3B
4
A person paying concessional tax @ 6% under Notification No. 2/2019 CT (R) dated 07.03.2019 is also required
to file GSTR-4. Therefore, all the provisions discussed under this heading are also applicable for persons paying
tax under the said notification. It may be noted that the provisions of the composition scheme available under the
said notification have been incorporated under section 10 vide the Finance (No. 2) Act, 2019.
(b) Due date for filing GSTR-4 and Statement for payment of self-
assessed tax
GSTR-4 for a financial year should be furnished by 30th April of the
succeeding financial year.
CONTENTS OF GSTR- 4
◪ Tax liability
Since composition suppliers are not eligible to take ITC, they
discharge their tax liability only by debiting electronic cash ledger.
Filing of GST CMP-08 is mandatory for all taxpayers who have opted to
pay tax under composition scheme, even if there is no business activity in
any particular tax period. For such tax period(s), a Nil GST CMP-08 is
required to be filed.
A Nil GST CMP-08 does not have any entry in any of its tables. For
example, a Nil GST CMP-08 for a tax period cannot be filed, if the
taxpayer has made any outward supplies or has received any supplies
which are taxable under reverse charge.
A Nil GST CMP-08 can be filed through an SMS using the registered
mobile number of the taxpayer. A Nil GST CMP-08 submitted
through SMS is verified by registered mobile number-based OTP
facility.
(f) Statements/return for the period prior to opting for
composition scheme
(f) GSTR-4 for the period prior to exiting from composition scheme
A registered person opting to withdraw from the composition
scheme at his own motion or where option is withdrawn at the
instance of the proper officer will, where required, furnish-
TILL
The provisions explained in points (e) and (f) above have been
explained by way of a diagram given at the next page.
Statements/Return relating
to period prior to opting for GST CMP-08 for GSTR 4 for period
composition scheme to be period prior to prior to exit from
filed exit from composition
composition scheme to be
scheme to be filed by
till filed by
A NRTP is not
required to file
an annual return.
ILLUSTRATION 1
Mr. Akash obtains registration under regular scheme (Section 9). He asks Mr.
Mohan, his tax manager, to pay GST on quarterly basis. However, Mr. Mohan
advises Mr. Akash to pay GST on monthly basis.
You are required to examine the validity of the advice given by Mr. Mohan.
ANSWER
The advice given by Mr. Mohan is valid.
A person registered under regular scheme (Section 9) is required to file a
monthly return in form GSTR-3B. Due date for payment of tax in respect of
the persons required to file GSTR-3B is linked with the due date for filing of
such return. Therefore, a person registered under regular scheme is required
to pay GST on monthly basis by the 20th of the succeeding month, which is
the due date for filing of GSTR-3B.
Quarterly payment of taxes can be made by persons registered under
composition scheme.
(v) Rectification of errors/omissions [Section 39(9)]
ILLUSTRATION 2
Ms. Pragya, a taxpayer registered under regular scheme (Section 9), files
GSTR-3B for the month of October on 20th November. After filing the return,
she discovers that the value of a taxable supply has been under-reported
therein.
Ms. Pragya now wants to file a revised GSTR-3B. Examine the scenario and
give your comments.
ANSWER
Under GST law, a return once filed cannot be revised. However, the details of
those transactions that are required to be amended can be changed in any of
the future GSTR- 1s. For this purpose, specific tables are provided in GSTR-1
to amend previously declared details.
Thus, Ms. Pragya cannot revise GSTR-3B filed by her for the month of October.
However, she can amend the details of the taxable supply, which was under-
reported, in GSTR-1 for the month of November. The tax payable on account
of such error will be paid along with interest in GSTR-3B for the month of
November.
Time limit for making rectification
The maximum time limit within which the rectification of errors/omissions is
permissible is earlier of the following dates:
• Due date of filing of return for the month of September following the
end of the financial year [i.e., 20th October of next financial year] or
• Actual date of filing of the relevant annual return
The last date of filing of annual return for a financial year is 31st December of
next financial year. Hence, if annual return for a financial year is filed before
20th October (next financial year), then no rectification of errors/omissions in
returns pertaining to the said financial year would be permitted thereafter.
Revision of
return
Rectification on
account of
Rectification scrutiny, audit,
in subsequent inspection or
return enforcement
activities
5. OTHER RETURNS
Details of outward
Details of outward
supplies, after
supplies made in
becoming liable to
first tax period
registration but
after grant of the
before grant of the
certificate of
certificate of
registration
registration First Return
(ii) Annual Return [Section 44 read with rule 80 of the CGST Rules]
(a) Who is required to furnish annual return and what is the due
date for the same?
All registered persons are required to file an annual return 5. However,
following persons are not required to file the annual return:
(i) Casual taxable persons.
(ii) Non- resident taxable person
(iii) Input service distributors 6
(iv) Persons authorized to deduct/collect tax at source under section
51/52 7 and
(v) Person supplying OIDAR services from outside India to
unregistered persons in India
The annual return for a financial year needs to be filed by 31 st
December of the next financial year.
The due date of filing annual return may be extended by the
Commissioner/Commissioner of State GST/Commissioner of UTGST
for a class of taxable persons by way of a notification.
Every registered person who is required to get his accounts audited
under section 35(5) 8 shall also furnish electronically a copy of audited
annual accounts and a certified reconciliation statement in the
prescribed form along with the annual return. Reconciliation
Statement reconciles the value of supplies declared in the return
furnished for the financial year with the audited annual financial
statement and such other particulars, as may be prescribed.
5
Filing of annual return in respect of financial years 2017-18, 2018-19 and 2019-20 has been made
voluntary for the registered persons whose turnover is less than ` 2 crore and who have not furnished the
said annual return before the due date. This information is given solely for knowledge purpose.
6 The concept of Input Service Distributor will be discussed at the Final Level.
7 The concept of person deducting/collecting tax at source will be discussed at the Final Level.
8 Section 35 contains the provisions relating to accounts and records. Such provisions will be discussed at
(b) When UIN is issued for purposes other than refund of taxes paid
Such person shall furnish the details of inward supplies of taxable goods
and/or services as may be required by the proper officer in Form
GSTR-11.
`5,000
Late fees levied for delay in filing annual return under section 44
A registered person who fails to furnish the annual return under section 44
by the due date is required to pay a late fee as under:
Indian citizen
Person of sound
mind
A
person
Not adjudicated as
who is insolvent
post not lower than the rank of a Group-B gazetted officer for a
period ≥ 2 years
conditions
(v) Has passed final examination of ICAI/ ICSI/ Institute of Cost Accountants of
India.
The procedure for enrolment of GSTP has been depicted in the following
diagram:
An application in The Application
prescribed form will be In case, the
The enrolment
may be made scrutinised and application is
once done
electronically GSTP certificate rejected,
remains valid
through the will be granted proper
till it is
common portal in the reasons need
cancelled.
for enrolment as prescribed to be given.
GSTP. form.
8. LET US RECAPITULATE
The provisions relating to returns have been summarised by way of tables and
diagrams to help students remember and retain the provisions in a better and
effective manner:
Annual Return
shall be subject to a
Any registered person who liable to pay maximum of 0.25% of
fails to furnish the annual a late fee of his turnover in the
retun by the due date ` 100 per State/Union Territory,
day, under the CGST Act
with a GST registration in the name of his proprietorship firm, he also qualifies as
GST practitioner.
Is the understanding of A correct? Discuss.
9. Quicktax, a GST return filing service provider, has asked its clients to provide the
scanned copies of the tax invoices issued to B2B customers for uploading on the
GST portal and filing the return.
Whether the process followed by Quicktax is correct?
10. X Ltd. is winding up its business in Rajasthan. The Tax Consultant of X Ltd. has
suggested that X Ltd. will have to file either the annual return or the final return
at the time of voluntary cancellation of registration in the state of Rajasthan.
Do you agree with the stand taken by Tax Consultant of X Ltd.? Offer your
comments.
10. ANSWERS/HINTS
1. A regular taxpayer is required to furnish a return u/s 39 for every month even if
no supplies have been effected during such period. In other words, filing of Nil
GSTR-3B is also mandatory.
Therefore, Mr. X is required to file GSTR-3B even if he did not make any taxable
supply during the month of July.
2. In GST since the returns are built from details of individual transactions, there is
no requirement for having a revised return. Any need to revise a return may
arise due to the need to change a set of invoices or debit/ credit notes. Instead
of revising the return already submitted, the system allows changing the details
of those transactions (invoices or debit/credit notes) that are required to be
amended. They can be amended in any of the future GSTR- 1 in the tables
specifically provided for the purposes of amending previously declared details.
As per section 39(9), omission or incorrect particulars discovered in the returns
filed u/s 39 can be rectified in the return to be filed for the month during which
such omission or incorrect particulars are noticed. Any tax payable as a result of
such error or omission will be required to be paid along with interest. The
rectification of errors/omissions is carried out by entering appropriate particulars
in “Amendment Tables” contained in GSTR-1.
enrolment process of GSTP as provided under the GST law and only upon
approval of such enrolment can a chartered accountant represent himself as a
GSTP.
9. No, the process followed by Quicktax is not correct.
The registered persons supplying goods or services to B2B customers are
required to upload the invoice wise details of supplies made during the tax
period. However, there is no requirement to upload the scanned copies of the
invoices issued to the customers on the GST portal at the time of filing returns.
Only information required as per GST returns is to be captured in the return filing
utility and the same is to be uploaded on the GST portal and not the scanned
copies of the actual invoices.
10. No, the stand taken by Tax Consultant of X Ltd. is not correct.
Annual return is required to be filed by every registered person paying tax as
a normal taxpayer. Final return is filed by the registered persons who have
applied for cancellation of registration within three months of the date of
cancellation or the date of cancellation order.
In the given case, X Ltd., a registered person, is winding up its business and
has thus, applied for cancellation of registration. Therefore, it is required to
file both annual return and final return.
9
Provisions existing as on the date when the Study Material was released for printing
by way of issuance of
Exempt Services
Charitable activities BY an entity registered under section
12AA of Income-tax Act.
Services by a person by way of-
(a) conduct of any religious ceremony;
(b) renting of precincts of a religious place meant for general
public, owned/managed by
institutions/entities/trusts, registered under section
12AA/10(23C)(v) of the Income tax Act or body/authority
covered under section 10(23BBA) of the
specified
referred as ‘
(a) to (c) hereinafter
speed post, express parcel post, life insurance,
& agency services provided to a person other
than CG, SG, UT; services’
(b) services in relation to an aircraft/a vessel,
inside/outside precincts of a port/airport;
(c) transport of goods/passengers; or
(d) any service, other than ‘specified services’ above,
provided to business entities.
Services provided by CG/SG/UT/LA to a business entity (BE)
with an aggregate turnover of up to such amount in the
preceding FY as makes it eligible for exemption from
registration under the CGST Act, 2017. This exemption isnot
applicable to specified services and renting of immovable
property service.
Services provided by CG/SG/UT/LA to another CG/SG/UT/LA.
This exemption is not applicable to specified services.
35
earlier known as Integrated Rural Development Programme
Place of Supply:
The place of supply and the location of the supplier are the two determinants to ascertain the nature of
supply i.e., whether a supply is intra--‐State or inter-‐‐ State. In other words, these two factors are required
to determine whether a supply is subject to SGST/UTGST plus CGST in a given State/ Union Territory or
else would attract IGST if it is an inter--‐State supply.
If an inter--‐State transaction is wrongly treated as intra--‐State or vice--‐versa and tax paid accordingly, the
correct tax will need to be paid and refund claimed for tax wrongly paid. Though no interest is levied in
such a case, procedural requirements increase and working capital gets blocked where the amount involved
is huge. Hence, determining correct place of supply is of paramount importance
Proxies to determine place of supply of services
An assumption or proxy which gives more appropriate result than others for determining the place of
supply, can be used for determining the place of supply. The same are discussed below:
(a) location of service provider;
(b) location of service receiver;
(c) place where the activity takes place/ place of performance;
(d) place where the service is consumed; and
(e) place/person to which/whom actual benefit flows
Place of supply
I. Place of Supply When There is Movement of Goods
Note: M/s SAAS will have to be registered in Jharkhand to take up this contract. They can opt to register as a
casual taxable person which will be valid for 90 days (extendable by 90 days more, on basis of a reasonable
cause).
Question 1 - Plane
Mr. Ajay is travelling from Mumbai to Delhi by air. He purchases coffee and snacks while on the plane. The
airlines is registered in both Mumbai and Delhi.
Place of supply: Mumbai
GST: CGST& SGST
The food items were loaded into the plane at Mumbai. So, place of supply becomes Mumbai.
Question 2- Plane- Business travel
Mr. Ajay is travelling from Mumbai to Chennai by air on behalf of his company Ram Gopal and Sons
(registered in Bangalore). In the plane he purchases lunch. The airlines is registered in Mumbai & Chennai.
Place of supply: Mumbai
GST: CGST & SGST
The food items were loaded into the plane at Mumbai. So, place of supply becomes Mumbai. It does not
matter where the buyer is registered.
Question 3- Train
Mr. Vinod is travelling to Mumbai via train. The train starts at Delhi and stops at certain stations before
Mumbai. Vinod boards the train at Vadodara (Gujarat) and promptly purchases lunch on board. The lunch
had been boarded in Delhi.
Place of supply: Delhi
GST: CGST & UTGST/SGST
Question 4 - Import
Ms. Malini imports school bags from China for her shop (registered in Mumbai)
Place of supply: Mumbai
GST: IGST
Question 5- Export
Ms. Anita (Kolkata) exports Indian perfumes to UK
Place of supply: Kolkata
GST: Exempted
Time of Supply:
The Time of supply is the point when the supply is liable to GST. One of the factors relevant for
determining time of supply is the person who is liable to pay tax i.e., Supplier (Forward Charge) or
Receiver (reverse charge). A supply consists of elements that can be separated in terms of time, like,
purchase order / agreement / invoice, dispatch (of goods), delivery (of goods) or provision or
performance of service, entry in the records, payment, and entry of the payment in the records or
deposit in the bank.
The question is: When does GST become payable?
The CGST Act provides separate provisions for time of supply for goods and services vide sections 12
and 13 of CGST Act. Provisions of time of supply under CGST Act have also been made applicable to IGST
Act vide section 20 of the IGST Act.
Section 14 provides for the method of determining the time of supply in case there is a change in the
rate of tax on supply of goods or services.
Time limit for issuance of invoice for supply of goods u/s 31(1):
➢ u/s 31(1), the invoice needs to be issued either before or at the time of removal (where supply
involves movement of goods) of goods/ delivery of goods/ making goods available to recipient.
➢ In case of continuous supply of goods, the invoice should be issued before or at the time of
issuance of periodical statement/receipt of periodical payment [Section 31(4)].
➢ In case of goods sent or taken on approval for sale or return, invoice should be issued before or at
the time of supply or 6 months from the date of removal, whichever is earlier [Section 31(7)].
Excess payment upto Rs. 1000: Option of taking invoice date as time of supply
In terms of the proviso to sub--‐section (2) of section 12, if payment received is up to Rs. 1,000 in excess
of the value of the goods invoiced, the supplier can choose to take the date of invoice issued with
respect to such excess amount as the time of supply of goods for such excess value.
Company X receives an advance of Rs. 50,000 on 30th April, against which it despatches goods worth Rs.
49,200 under invoice dated 5th May.
In this example, Company X has received Rs. 800 in excess, which cannot be considered as payment for
the present invoice, in terms of Explanation 1 to section 12(2). Company X will adjust this excess
amount against the next supply.
The time of supply for Rs. 800 can be taken as the date of the next invoice if the supplier so chooses,
though the payment was received earlier.
If neither the date of invoice nor the date of payment is available, the residual provisions under sub--‐
section (5) of section 12 become applicable [discussed under point (iv) Sec 12(5)].
2. Receipt of goods that are taxable under reverse charge [Section 12(3)]
In reverse charge, recipient is liable to pay GST. Thus time of supply for supplies under reverse charge is
different from the supplies which are under forward charge.
The date of Supply is the Earliest of the following dates:
(a) the date of receipt of goods OR
(b) the date of payment OR
(c) the date immediately after THIRTY days from the date of issue of invoice by the supplier (60
days for services)
If it is not possible to determine the time of supply under (a), (b) or (c), the time of supply shall be the
date of entry in the books of account of the recipient.
For clause (b)-‐‐ the date of payment shall be earlier of-‐
(a) The date on which the recipient entered the payment in his books
OR
MODULE 4 – INDIRECT TAXES
(b) The date on which the payment is debited from his bank account
Ans: As the invoice is not issued before the removal of goods and payment
is made after the removal of goods , hence date of removal of goods
is the time of supply ie., 2-11-20
2. 15-11-20 10-11-20 16-11-20 20-11-20 -
Ans: Time of supply of goods is the date of invoice being issued as the
same being issued prior to date of removal of goods and also
payment is being receive subsequent to the date of invoice ie, 10-11-
20
3. 5-12-20 5-12-20 7-12-20 1-12-20 -
Ans: Time of supply is the date of receipt of payment as the payment is
received prior to the date of invoice of being issued ie, time of supply
is 1-12-20
4. - 2-11-20 4-11-20 6-11-20 -
Ans: Time of supply is the date of issuance of invoice as the invoice is
issued before the goods made available and also payment being
received after the date of invoice TOS is 2-11-20
5. - 10-9-20 5-9-20 15-9-20 -
Ans: In the present case, time of supply is date when goods being made
available to the recipient as the date of invoice and payment is
received subsequent to the goods being made available. Time of
supply is 5-9-20
Registration legally recognizes a person as supplier of goods or services and legally authorizes him
to collect taxes from his customers and pass on the credit of the taxes paid on the goods or
services supplied to the purchasers/recipients. He can claim the input tax credit of taxes paid and
can utilize the same for payment of taxes due on supply of goods or services. There is seamless
flow of input tax credit from suppliers to recipients at the national level.
Under GST, registrations need to be taken State- wise, i.e. there are no centralized registrations under
GST. The registration in GST is PAN based and State specific. One registration per State/UT. GST
identification number called “GSTIN” - a 15- digit number and a certificate of registration incorporating
therein this GSTIN is made available to the applicant on the GSTN common portal.
A business entity having its branches in multiple States will have to take separate State wise
registration for the branches in different States. Further, within a State, an entity with different
branches would have single registration wherein it can declare one place as principal place of
business (PPoB) and other branches as additional place(s) of business (APoB). However, a
business entity having separate business verticals in a State may obtain separate registration for
each of its business verticals otherwise a given PAN based legal entity would have one registration
number – Goods and Services Tax Identification Number (GSTIN) per State. Registration under GST
is not tax specific, which means that there is single registration for all the taxes i.e. CGST,
SGST/UTGST, IGST and cesses. Provisions of registration under CGST Act [Chapter VI - Registration
- Sections 22 to 30] have also been made applicable to IGST Act vide section 20 of the IGST Act.
State GST laws also prescribe identical provisions in relation to Registration.
However, the limit of Rs. 40 lakh will be reduced to if the person is carrying out business in the
specified - States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim,
Tripura, HP and Uttarakhand. (ii) Aggregate turnover: The term aggregate turnover as defined
under section 2(6) of the CGST Act.
ELIGIBILITY AND CONDITIONS FOR TAKING INPUT TAX CREDIT [SECTION 16]
(i) Eligibility for taking ITC [Section 16(1)]
(b) Receipt of the goods and / or services [Section 16(2)(b)]: The person taking the ITC must
have received the goods and / or services.
“Bill to Ship to” Model also included: Under this model, the goods are delivered to a third party
on the direction of the registered person who purchases the goods from the supplier. Receipt of
goods u/s 16(2)(b) includes delivery to another person on the direction of the registered person
by way of transfer of documents of title to goods or otherwise either before or during the
movement of goods. It would be deemed that the registered person has received the goods in
such scenario. So, ITC will be available to the registered person on whose order the goods are
delivered to third person.
A is a trader who places an order on B for a consignment of soda ash. A receives a buying order
from C for the same quantity of soda ash. A instructs B to deliver the goods to C, and in turn he
raises an invoice on C. Though the goods are not physically received at the premises of A, the
condition of section 16(2)(b) is satisfied, and A is entitled to ITC on the consignment.
(d) Filing of return [Section 16(2)(d)]: The registered person taking the ITC must have filed his
return u/s 39. Note: The details of inward supplies are to be filed in GSTR – 2 by the 15th of the
month succeeding the month in which the supplies were received. With the furnishing of such
details, electronic credit ledger gets credited with the relevant ITC.
MODULE 5-INDIRECT TAXES
(iii) Goods received in lots: ITC available only on receipt of last lot [First proviso to section 16(2)]
In case the goods covered under an invoice are not received in a single consignment but are
received in lots / instalments, the ITC can be taken only upon receipt of the last lot / instalment.
XYZ makes an advance payment in August and orders 10 MT of a particular chemical which is in
short supply. The supplier of the chemical raises a bill for the entire amount in August and collects
GST from XYZ on the advance paid. The chemical is delivered in lots over a period of three months
and the supply is completed in November. Though XYZ paid some tax in advance as early as
August, he can take the ITC only on receipt of last instalment of the chemical in the month of
November.
(iv) Payment for the invoice to be made < 180 days [Second proviso to sec 16(2) read with rule 37
of CGST Rules] The registered person must pay the supplier, the value of the goods/services along
with the tax < 180 days from the date of issue of invoice. In the event of failure to do so, the
details of such supplies and corresponding credits thereon must be furnished in the GSTR 2 of the
month immediately following such 180 days. Such credits availed by the registered person would
be added to his output tax liability of the month in which the details are furnished, with interest.
Interest is paid @ 18% from the date of availing credit till the date when the payment is made to
the supplier. However, once the payment is made, the recipient will be entitled to avail the credit
again without any time limit [See discussion on time limit for availing credit under point (vi)]. In
case part payment has been made, proportionate credit would be allowed.
Exceptions
This condition of payment of value of supply plus tax < 180 days does not apply in the following
situations:
Supplies on which tax is payable under reverse charge Deemed supplies without consideration
Due to a quality dispute, PZP Ltd withheld payment on a machine supplied by a vendor till it could
be rectified. Over 180 days went by in this dispute. The credit taken by PZP on the invoice got added
to the output tax liability of PZP and thus, it had to pay back the credit. Only after the vendor
rectified the machine and PZP released the payment, could PZP take the credit again.
(v) If depreciation claimed on tax component, ITC not allowed [Sec 16(3)]
If the person taking the ITC on capital goods / P&M/ has claimed depreciation on the tax
component of the cost of the said items under the Income--tax Act 1961, the ITC on the said tax
component shall not be allowed. Thus, in respect of the tax paid on such items, dual benefit cannot
be claimed under IT Act, 1961 and GST laws simultaneously. In other words, either depreciation
on the tax component can be claimed under IT Act or ITC of such tax paid can be availed under
GST laws.
FY 2020-21 (For invoices raised during this FY, ITC can be claimed: Earlier of)
1.Annual Return 31.12.2021
2.Filing of return of Sep 2021( 22.10.2021)
Exception:
The time limit u/s 16(4) does not apply to claim for re--availing of credit that had been reversed earlier.
Hercules Machinery delivered a machine to XYZ in January 2018 under Invoice no. 49 dated 28 th
January, 2018 for Rs. 4,15,000 plus GST, and undertook trial runs and calibration of the machine as
per the requirements of XYZ. The amount chargeable for the post- delivery activities was covered in a
debit note raised in April 2018 for Rs. 50,000 plus GST. Hercules Machinery did not file its annual
return till October, 2018.
Though the debit note was received in the next financial year, it relates to an invoice received in
the financial year ending March 2018. Therefore, the time limit for taking ITC available on Rs.
50,000 as well as on Rs. 4,15,000 is 20th October, 2018; earlier of the date of filing the annual
return for 2017--18 or the return for September 2018.
(vii) Restriction of ITC in proportion of (i) taxable supplies (ii) business purposes [Sec 17 (1) & (2)]
ITC is restricted in proportion of the use of the goods and/or services (i) in the taxable and / or zero-
rated part of the supply (ii) for business purposes. This is elaborated in heading, Apportionment of
Credit below.
(viii) ITC not allowed on certain supplies [Sec 17(5)]
ITC has been blocked for specified goods/services. This is elaborated in heading Apportionment of
Credit below.
Under the GST regime, an “invoice” or “tax invoice” means the tax invoice referred to in section 31
of the CGST Act, 2017. This section mandates the issuance of an invoice or a bill of supply for
every supply of goods or services. It is not necessary that only a person supplying goods or
services needs to issue an invoice. The GST law mandates that any registered person buying goods
or services from an unregistered person also needs to issue a payment voucher as well as a tax
invoice. The type of invoice to be issued depends upon the category of registered person making
the supply.
The provisions relating to tax invoices, debit and credit notes are contained in Chapter VII - Tax
Invoice, Credit and Debit Notes [Sections 31 to 34] of the CGST Act. State GST laws also prescribe
identical provisions in relation to Tax Invoice, Credit and Debit Notes.
Provisions of Tax invoice, Credit and Debit Notes under CGST Act have also been made applicable
to IGST Act vide section 20 of the IGST Act.
Particulars of a Tax Invoice [Sections 31(1) & (2) read with rule 46]
There is no format prescribed for an invoice, but rules make it mandatory for an invoice to have
the following fields (only applicable fields are to be filled):
(a) Name, address and GSTIN of the supplier;
(b) A consecutive serial number not exceeding 16 characters, in one or multiple series,
containing alphabets/numerals/special characters hyphen or dash and slash, and any combination
thereof, unique for a FY;
(c) Date of its issue;
(d) If recipient is registered - Name, address and GSTIN or UIN of recipient
(e) If recipient is unregistered and value of supply is:
(i) Rs. 50,000 or more: Name & address of the recipient and the address of delivery, along
with the name of State and its code
(ii) Less than Rs. 50,000: unregistered recipient may still request the aforesaid details to be
recorded in the tax invoice
(f) HSN code for goods or services;
(g) Description of goods or services;
(h) Quantity in case of goods and unit or Unique Quantity Code thereof;
(i) Total value of supply of G/S/both;
(j) Taxable value of supply of G/S taking into account discount or abatement, if any;
(k) Rate of tax (central tax, State tax, integrated tax, UT tax or cess);
(l) Amount of tax charged in respect of taxable G/S (central tax, State tax, integrated tax, UT tax or
cess);
(m) Place of supply along with the name of State, in case of a supply in the course of inter-
-State trade or commerce;
(n) Address of delivery where the same is different from the place of supply;
(o) Whether the tax is payable on reverse charge basis; and
(p) Signature or digital signature of the supplier or his authorized representative
Credit Note: It means a document issued by a registered person u/s 34 (1) [Section
2(37)].
Debit Note: It means a document issued by a registered person u/s 34 (3) [Section
2(38)].
Assessment:
Assessment means determination of tax liability and includes self--assessment, re--assessment,
provisional assessment, summary assessment and best judgment assessment. The major determinants
of the tax liability are generally the applicable tax rate and the value. There might be situations
when these determinants might not be readily ascertainable and may be subject to the outcome of a
process that requires deliberation and time.
Hence like under the previous laws, when due to various circumstances it might not be always
possible, at that point of time, to carry out an assessment and determine the exact duty liability,
the GST law also provides for provisional assessment.
Provisional Assessment
Provisional assessment provides a method for determining the tax liability in case the correct tax
liability cannot be determined at the time of supply. The payment of provisional tax is allowed only
against a bond and security. The provisional assessment has to be finalized within six months
unless extended. On finalization, the tax liability can either be more or less as compared to the
provisionally paid tax. In case of increase in the tax liability, the difference is payable along with
interest and in case of decrease in the tax liability the amount will be refunded with interest.
Returns
The term “return” ordinarily means statement of information (facts) furnished by the taxpayer, to tax
administrators, at regular intervals.
The returns serve the following purposes:
a) Mode for transfer of information to tax administration;
MODULE 5-INDIRECT TAXES
b) Compliance verification program of tax administration;
c) Finalization of the tax liabilities of the taxpayer within stipulated period of limitation;
d) Providing necessary inputs for taking policy decision;
e) Management of audit and anti--evasion programs of tax administration
The basic features of the return mechanism in GST includes electronic filing of returns, uploading of
invoice level information, auto- population of information relating to input tax credit from returns of
supplier to that of recipient, invoice level information matching and auto- reversal of input tax credit
in case of mismatch. The returns mechanism is designed to assist the taxpayer to file returns and avail
ITC.
Under GST, a regular taxpayer needs to furnish monthly returns and one annual return. There are
separate returns for a taxpayer registered under the composition scheme, non- resident taxpayer,
taxpayer registered as an Input Service Distributor, a person liable to deduct or collect the tax
(TDS/TCS), a person granted Unique Identification Number.
Revision of Returns:
The mechanism of filing of revised returns for any correction of errors/ omissions has been done
away with. The rectification of errors/omissions is allowed in the return for subsequent month(s).
However, no rectification is allowed after furnishing of the return for the month of September
following the end of the financial year to which such details pertain, or furnishing of the relevant
annual return, whichever is earlier.
Interest on Late GST Payment
An interest of 18 percent is levied on the late payment of taxes under the GST regime. The
interest would be levied for the days for which tax was not paid after the due date.
Penalty for non--‐filing of GST Returns
In case a taxpayer does not file his/her return within the due dates, he/she shall have to pay a late fee
of Rs. 200/- i.e. Rs.100/- for CGST and Rs.100/- for SGST per day (up to a maximum of Rs. 5,000/- )
from the due date to the date when the returns are actually filed.
BY
CA Vishal Bhattad
21
4
MCQ’s
Q. 1. __________ was first country to adopt GST as government behind the introduction of the Goods
indirect system of taxation. & Service tax act?
y
(a) France (a) To bring uniformity of taxes in the country
(b) Germany (b) To increase the government revenue
(c) UK (c) To replace all indirect taxes
(d) India
m
(d) All of the above
Ans:- a b c d Ans:- a b c d
Q. 2. The GST is recommended by the __________ on Q. 9.Which article of the Constitution outlines the
implementation of the Fiscal Responsibility and composition and functions of the GST Council ?
Budget Management (FRBM) Act, 2003 (a) 270
e
(a) Kelkar Task Force (b) 279-A
(b) Chidambaram Task Force (c) 246-A
(c) Jaitely Task Force (d) 269-A
(d) None of the above Ans:- a b c d
ad
Ans:- a b c d
Q. 10 GSTN is a -----------
Q 3:- What kind of tax can be transferred from one (a) Non-profit organisation
person to another? (b) Profit organisation
(a) Direct tax (c) None of the above
(b) Indirect tax (d) One Person company
(c) Both of the above Ans :- a b c d
(d) None of the above
Ac
Ans:- a b c d
Q 11:- Who of the following will be the members of the
GST Council?
Q 4:- What is the difference between a direct & an 1. Union Finance Minister
indirect tax? 2. Union Minister of State in charge of Revenue or
(a) Charge of levy Finance
(b) Nature of transfer 3. Chief Ministers of States
(c) Different collection pattern of tax (a) 1 & 3
(d) All of the above (b) 1 & 2
Ans:- a b c d
(c) 2 & 3
t
(b) Year 2016 Q 12:- Who amongst the following will be considered
(c) Year 2017 as the chairman of GST Council ?
(d) None of the above (a) Union Minister of State
Ans:- a b c d (b) Union Finance Minister
(c) Minister of state revenue
Q 6:- Which of the following constitutional amendment (d) Chief Minister of state
Sm
Ans:- a b c d
(c) Destination based tax
(d) None of the above Q 14:- What does dual GST concept mean?
Ans:- a b c d (a) Charging CGST & IGST
(b) Charging SGST & IGST
Q 8:- Which of the following is the main motive of the (c) Charging both CGST & SGST
2
(d) None of the above Ans:- a b c d
Ans:- a b c d
Q 22:- The proceeds of the GST Compensation Cess
Q 15:- What kinds of taxes are subsumed under GST? leviable under section 8 shall be distributed
y
(a) Central excise duty among States as and when collected.
(b) State VAT/Sales Tax a) Yes
(c) Central Sales Tax b) No
m
(d) Service Tax c)
(e) All of the above d)
Ans:- a b c d Ans:- a b c d
Q 16:- Which of the taxes are out of purview of GST? Q.23. If a state loses revenue because of abolition of
(a) Property tax & stamp duty
e
central sales tax, Central Government will pay
(b) Additional duties of Custom (CVD & SAD) compensation in the form of GST compensation cess
(c) Excise duty on Alcohol for:
(d) Entertainment tax by local body (a) 1 year
ad
(e) Only (a) & (c) (b) 3 years
Ans:- a b c d (c) 5 years
(d) 10 years.
Q 17 :- Which of the following good will not be covered Ans:- a b c d
under the GST act?
(a) Cooking gas Q. 24. Which of the following statement is correct ?
(b) Liquor (A) GST is based on principle of ‘pay as you earn’.
(c) Petrol (B) GST is a destination based tax.
Ac
(d) Both b & c above (c) GST is technically paid by consumers but it is
Ans:- a b c d actually funded by suppliers.
(D) All of the above
Q. 18:-.GST is levied on supply of all goods and Ans:- a b c d
services except:
(a) Alcoholic liquor for human consumption Q.25 The term 'public interest' is ----------vague and
(b) Tobacco uncertain.
(c) Health care services a) Definitely
(d) All of the above b) not
Ans:- a b c d
t
c) To an extent
d) Both (a) and (c) are correct
Q 19:- How many Companies are given permission to Ans:- a b c d
ar
23
4
Ans:- a b c d Q 36:- Which of the following supplies will be classified
as Inter-state supply?
Q. 29.The recommendation of the GST Council will be (a) Supply within same state
__________ . (b) Supply within same union territory
y
(a) Mandatory (c) Supply between two different states/ union
(b) Only Advisory Power territory
(c) Mandatory and sometimes Advisory (d) None of the above
m
(d) Mandatory on States only Ans:- a b c d
Ans:- a b c d
Q 37:- What is Integrated Goods and Services Tax?
Q.30.One of the following states does not fall under (a)Tax imposed on import or export of goods and
special category given under Article 279A of the services
Constitution (b)Tax imposed on value additions to exports
e
(a) Himachal Pradesh (c)Tax imposed on interstate trade
(b) Uttarakhand (d)Both a & c above
(c) Chhattisgarh Ans:- a b c d
(d) Jammu & Kashmir
ad
Ans:- a b c d Q. 38.The items which will be taxable both under
current Central Excise Law and GST even after
Q. 31.Goods and Services Tax (Compensation to the the implementation of the GST Act.
States) Act, 2017 is popularly known as ----------. (a) Motor Spirit
a) GST CSA (b) Alcoholic Liquor for Human Consumption
b) GST Compensation Cess Act (c) Tobacco and Tobacco Products
c) GST Cess Act (d) Natural Gas
d) GST Compensation Act
Ac
Ans:- a b c d
Ans:- a b c d
Q 33:- Which of the following would attract levy of Q 40:- ITC of CGST can be utilised for payment of
CGST & SGST? (a) Only CGST
(a) Inter-state supplies (b) Only SGST
ar
4
(a) Sea Area upto 12 nautical miles from base line c. Both (a) and (b)
(b) Sea Area upto 200 nautical miles from base line d. None of the above
(c) Air space above its territory and territorial waters Ans:- a b c d
(d) All of the above
y
Ans:- a b c d Answer:-
m
all Inter-State supply of goods and / or services ?
(a) State GST (SGST) 2 a 31 b
(b) State GST (SGST) & Integrated GST (IGST)
(c) Central GST (CGST) & integrated GST (IGST) 3 b 32 d
(d) Integrated GST (IGST)
Ans:- a b c d 4 d 33 b
e
5 c 34 c
Q.45. Which of the following is not the role of GSTN in
GST regime? 6 a 35 b
(a) Facilitating registration, forwarding return to Central
ad
and State authorities. 7 c 36 c
(b) Computation and Settlement of IGST, matching tax
payment details with banking network 8 d 37 d
(c) Providing platform for litigation
(d) Providing various MIS reports to Central and State 9 b 38 c
Governments, providing analysis on tax payers
profile, running the matching engine, reversal and 10 a 39 c
reclaim of Input tax credit
Ac
11 b 40 c
Ans:- a b c d
12 b 41 d
Q.46. Officers under SGST Act shall be deemed to be
the officers appointed under: 13 d 42 d
(a) Income tax Act, 1961
(b) Customs Act, 1962 14 c 43 d
(c) CGST Act
(d) None of the Above 15 e 44 d
Ans:- a b c d
t
16 e 45 c
Q. 47. Officers under which Act shall be deemed to be
17 d 46 c
the officers appointed under the provisions of
ar
CGST Act: 18 a 47 a
a. Central Excise Act, 1944
b. Central Sales Tax Act, 1956 19 b 48 c
c. Delhi Value Added Tax Act, 2004
d. Customs Act, 1962 20 d 49 a
Ans:- a b c d
Sm
21 d
Q. 48. The officers appointed under which of the
following Acts are authorised to be the proper 22 b
officers for the purposes of the CGST Act, 2017:
23 c
a. State Goods and Services Tax Act
b. Union Territory Goods and Services Tax Act 24 b
c. Both (a) and (b)
d. None of the above 25 b
Ans:- a b c d
26 c
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25
4
2 Levy of GST
Think GST
Think Vishal Sir..!
1 What is the taxable event under GST? c. Both (a) and (b)
a. Manufacturing of goods d. None of the above
b. Sales of goods Ans:-
c. Provision of Services
y
d. Supply 8. A person who occasionally undertakes transactions
Ans:- a b c d involving supply of goods or services or both,
whether as principal or agent or in any other
m
2. what are different types of supply covered under capacity, but who has no fixed place of business or
scope of supply residence in India is:
a. Supplies made with consideration a. Non–resident taxable person
b. Supplies made without consideration b. Composition dealer
c. Both of the above c. Registered person
e
d. None of the above d. Casual taxable person
Ans:- a b c d Ans:- a b c d
3. Output tax in relation to a taxable person under the 9. Which of the following is a non–taxable supply under
ad
CGST Act, 2017 includes: the CGST Act, 2017:
a. Tax chargeable on taxable supplies made by him a. Supply on which GST levy is not attracted under Sec
b. Tax chargeable on taxable supplies made by his 9 of CGST Act
agent b. Supply on which GST levy is not attracted under Sec 5
c. Tax payable by him under reverse charge of IGST Act
d. Both (a) and (b) c. Supply on which GST levy is not attracted under Sec 9
Ans:- a b c d of CGST Act as well as Sec 5 of IGST Act
Ac d. Supply on which GST is exempted by Government
4. The term “place of business” includes: upon recommendation of GST Council
a. Place from where business is ordinarily carried out Ans:- a b c d
including godown, warehouse, etc.
b. Place where a taxable person maintains his books of 10. Amit of Delhi is participating in Ayush Furniture
account Expo in Haryana where he has no fixed place of
c. Place where taxable person is engaged in business business and exhibiting his products. During the
through an agent expo, the said products will be sold to the people
d. All the above attending and intending to purchase such products
Ans:- a b c d including foreign buyer. In such scenario, Amit
t
a) Mr. Raj sold electronic gadgets to XYZ Co. b. Casual taxable person registration
b) Mr. Veer Supply Beer Shampoo to M/s priya c. Regular taxpayer registration
c) Vijay Electronics disposed scrap part of electric unit d. No registration under GST required.
to a scrap dealer Ans:- a b c d
d) All of the above
Ans:- a b c d 11. “Manufacture” means processing of raw material or
Sm
6
a. Telangana 19. What is the statue of ‘lottery as an actionable claim’
b. Maharashtra under GST law
c. Both (a) and (b) a. Treated as ‘Goods’
d. None of the above b. Treated as ‘Services’
y
Ans:- a b c d c. Treated as ‘goods’ but out of scope of supply
d.Treated as ‘goods’ and remains within scope of supply
13 Which among the following are zero rated supplies? Ans:- a b c d
m
a. Exports
b. Supplies to SEZ 20. "Services" means anything other than goods,
c. Exports and Imports money and securities includes
d. Both (a) and (b) a. Activities relating to the use of money or its
Ans:- a b c d conversion by cash
e
b. Immovable property
14. An exempt supply includes c. Securities
a. Supply of goods or services or both which attracts Nil d. Actionable claims
rate of tax Ans:- a b c d
ad
b. Non-taxable supply
c. Supply of goods or services or both which are wholly 21 Activity of ‘supply of money’ by Bank to a business
exempt from tax under Section 11 of the CGST Act or entity on interest -
under Section 6 of IGST Act a. Treated as ‘Supply of Goods’
d. All of the above b. Treated as ‘Supply of Services’
Ans:- a b c d c. Treated as ‘Supply of Services’ to the extent it is
relating to use of money
Ac
15 As per Section 2(47) of CGST Act, 2017, exempt d. None of the above
supply includes the supply of following type of Ans:- a b c d
goods and services:
a. Supply attracting nil rate of tax 22. Activity of ‘conversion of money/ foreign exchange’
b. Supplies wholly exempt from tax, by way of a by Bank/ Authorized Dealer to a business entity on
notification; interest
c. Non-taxable supply a. Treated as ‘Supply of Goods’
d. All of the above. b. Treated as ‘Supply of Services’
Ans:- . a b c d c. Treated as ‘Supply of Services’ and attracts GST
payment is made to end user
t
16 Goods under CGST Act excludes: d. Treated as ‘Supply of Services’ and attracts GST
a. Securities payment when made to another Bank/ Authorized
b. Unsecured debts Dealer
ar
27
4
payable by Principal (A Ltd.)
25. When will the recipient and supplier be treated as d. shall attract GST as further supply – such further GST
related persons under GST? payable by Agent (Mr C)
a. Where such persons are employer and employee Ans:- a b c d
y
b. Where one of them directly or indirectly controls
other 29. Smart pvt ltd has head office located in Bangalore
c. Where such persons are officers or directors of one (Karnataka). However, the branch of Smart pvt ltd
m
another’s business is located in state of Gujarat. Will be treated as -----
d. All of the above -------------- under GST Act?
Ans :- a b c d a. deemed distinct
b. principle and Agent
26. Mr. A has received technical consultancy services c. Both (a) or (b)
e
from IT Star Consultants, USA. The import of d. None of the above
technical consultancy will not be liable to GST if- Ans:- a b c d
(I) Mr. A pays some consideration for the services
received 30. In which of the following cases, import of services is
ad
(ii) Mr. A pays some consideration for the services taxable under GST?
received and if Mr. A uses the said service for (1) Import of service with consideration in course or
business purposes furtherance of business.
(iii) Mr. A uses the said service for business (2) Import of service with consideration not in course or
purposes even though he does not pay any furtherance of business.
consideration for the same (3) Import of service without consideration from a
(iv) Mr. A uses the said service for personal purposes related person in course or furtherance of
Ac
and does not pay any consideration for the same business.
and is also a partner in IT Star Consultants (4) Import of service without consideration from a
(v) Mr. A uses the said service for business purposes related person not in course or furtherance of
and does not pay any consideration for the same business.
and is also a partner in IT Star Consultants a. (1) and (3)
a. (I), (ii), (v) b. (2) and (4)
b. (ii), (iii) and (v) c. (1), (2) and (3)
c. (iii), (iv) d. (4)
d. (iii), (iv) and (v) Ans:- a b c d
Ans: a b c d
t
behalf to buyers in UP. A Ltd. has dispatched first classify as a supply under GST?
lot of 10,000 units to Mr C (UP) for sales to buyers in a. Yes
UP. Such dispatch to Mr C (UP) : b. No
a. Be treated as ‘supply’ c. On prior Permission of Government
b. Not be treated as ‘supply’ d. Not any
c. Will be treated as supply subsequently Ans:- a b c d
Sm
8
of INR 50,000 c. Does not qualify as supply
b. No, since the gift is not made in course or furtherance d. Supply on the prior permission of Government
of business Ans:- a b c d
c. As per the option of appropriate authority
y
d. No 40. Ram has received a sum of ` 5,00,000 from his
Ans:- a b c d employer on premature termination of his contract
of employment. The GST implication will be:
m
34. ABC Pvt. Ltd. makes certain supplies to Mr. X and a. It is not a supply, hence not chargeable to GST.
Mr. Z. Both of them hold 51% of the voting rights b. It is a supply without consideration, hence not
in the company and exercise major stake in the chargeable to GST.
decision making. Does the same supply stands c. It is a supply, hence chargeable to GST.
as related party transaction? d. It is not supply, but exemption is there.
e
a. Yes Ans:- a b c d
b. No
c. As per the opinion of the appropriate authority 41. GST is payable on the services provided by the
d. None of the above employee to the employer in the course of
ad
Ans:- a b c d employment on:
a. Regular basis;
35. Supply of food or drink items in a restaurant as per b. Contract basis as employed by the company;
CGST Act is------------ c. Contract basis as employed by a contractor;
a. Supply of goods d. None of the above.
b. Supply of service Ans:- a b c d
c. not a supply under GST
d. none of the above
Ac 42. Which of the following activity shall be treated
Ans:- a b c d neither as a supply of goods nor a supply of
services?
36. Mr. A, being a Director of ABC Pvt. Ltd. Is provided a (i) Permanent transfer of business assets where input
car which he uses for his personal purpose. Does tax credit has been availed on such assets
the same classify as supply? If yes under which (ii) temporary transfer of intellectual property right
group? (iii) transportation of deceased
a. Yes, supply of goods (iv) services by an employee to the employer in the
b. Yes, supply of services course of employment
c. Does not qualify as supply a. (i) & (iii)
t
a. Supply of Goods
b. Supply of Services 44. While repairing the factory shed, few goods were
c. Does qualify as supply also supplied along with the labour service.
d. None of the above Whether it is a :
V’
29
4
45. What type of supply shall transfer of title in goods a. Supply and chargeable to GST
under works contract constitute? b. Supply but not chargeable to GST
a. Supply of Goods c. Not supply and hence not chargeable to GST
b. Supply of services d. None of the above.
y
c. Either of the two at the option of authority Ans:- a b c d
d. None of the above
Ans:- a b c d 52. Mr. Vishal has head office in pune and has branches
m
in state of Gujarat, Goa, and Punjab. Mr. Vishal
46. Mr. A has sold his old furniture of the house. Does send goods to its branch Goa worth ` 2,50,000 in
this constitute a supply? a own conveyance. Value of conveyance `
a. Yes 15,00,000 and With the conveyance some tools
b. No and spares parts are also send worth ` 50,000.
e
c. Maybe Calculate total value of taxable supply on which
d. None of the above GST is payable.
Ans:- a b c d a. 3,00,000
b. 2,50,000
ad
47. Ajay let out his land for tenancy for a period of 3 c. 18,00,000
years to Mohan. Such tenancy shall be classified d. 15,50,000
as: Ans:- a b c d
a .Supply of goods
b. Supply of services 53. Mr. X is a dealer of new cars. He sells new cars for
c. Either of the two `8,25,000 agrees to reduce ` 1,25,000 on
d. None of the above surrendering of old car. Mr. Y who intends to buy
Ans:- a b c d
Ac new car worth ` 8,25,000 agreed to exchange his
old car with new car. Under GST law, if Mr. X and
48. High sea sales are considered as supply under GST. Mr.Y is registered person, who will be liable to pay
True or False? GST and what is the value.
a. Yes a. X on 825000 and Y on 125000
b. No b. X on 700000 and Y on 125000
c. May be c. only X on 700000
d. None of the above d. only Y on 125000
Ans:- a b c d Ans:- a b c d
t
49. Michael Ltd. of US supplies certain goods to ABC 54. There is a difference in taxability of goods forming
Pvt. Ltd. of Mumbai. Before goods reach Mumbai part of composite supply and mixed supply. Here
port, it supplies those goods to XYZ Pvt. Ltd. by are few examples from which you need to identify
ar
transfer of documents of title to goods. What kind which is correct example of composite supply and
of transaction is this? mixed supply.
a. Transfer i) Mr. A buys a car and purchases warranty and
b. High sea sales maintenance of the car by paying nominal amount.
c. Composite supply Car, warranty and maintenance here are a mixed
d. Supply supply.
Sm
d. Mr. X for ` 40,000 and no GST liability for Mr. Y. shop. All items have different prices. Chocolates,
Ans:- a b c d juices and biscuits are a mixed supply.
The correct examples of composite and mixed supply
51. Mr. A is a well-known singer. He receives a life-time are: -
achievement award which consist of a memento a. i,iv
and a cheque of ` 10,00,000. It is: b. ii,iii
10
c. ii,iii,iv (ii)When a person import services without
d. None of the above consideration for the purposes of his business from
Ans:- a b c d his elder brother living outside India.
(iii) Disposal of car without consideration and where the
y
55. What shall constitute main item under composite supplier has not claimed input tax credit on such
supply? car.
a. Principal Item (iv) When a principal makes supplies to his agent who is
m
b. Item with Highest tax rate also registered and is situated within the same
c. As per the option of the taxpayer State.
d. None of the above a. (i) & (iii)
Ans:- a b c d b. (I), (ii) & (iii)
c. (iii)
e
56. In composite supply, the principal supply is supply d. (iii) & (ii)
of goods whereas the ancillary supply is supply of Ans:- a b c d
services. Which provision shall apply in respect of
time of supply? Case Study:-
ad
a. Time of supply of service
b. Time of supply of goods Mr. X(Maharashtra)registered under GST is running a
c. Either (a) or (b) business from last 40 years, supply the goods to overall
d. None of the above India. He has a branch in Punjab, Goa, Delhi, Karnataka.
Ans :- a b c d He want to increase sale so he had started working
with agent also in the Assam, Gujarat and made a supply
57. M/s X Ltd. a dealer offer combo packs of shirt, through them in there state.
Ac
watch, wallet, book and they are bundled as a kit Mr. X had want to maintain inventory so that he
and this kit is supplied for a single price as a should not loss any customer he haspurchase
mixed supply. Tax rate for shirt, watch, wallet and software(note1)from his brother who is reside in USA,
book are 12%, 18%, 5% and Nil respectively. The market value ` 8,00,000and his old computer with software
mixed supply will be taxed at: he has donate to seva charity of Mumbai. Value of computer
a. 12% is ` 65,000.
b. 18% Following is supply to
c. 5% Punjab – 20,00,000
d. Nil Goa- 3,80,000
Ans:- a b c d Delhi- 9,85,000
t
Karnataka- 4,65,000
58. What kind of supply is this transaction: Food Assam- 22,80000
supplied to the in – patients as advised by the Gujarat- 8,55,000
ar
11
4
2
d) 1,30,50,000 Ans:- a b c d
Ans:- a b c d
y
a) 6, 96,000 b) fees paid to the court
b) 10, 44,000 c) supply to employee
c) on sale no need to pay GST only at the time of d) all of the above
m
purchase need to pay GST Ans:- a b c d
d) none of the above
Ans:- a b c d
e
supply made to seva charity
a) 3250
b) 7800
c) 11700
ad
d) none of the above
Ans:- a b c d
Ans:- a b c d
8 a 28 d 48 b
Q. 7 which of the following is supply without
ar
12
Q. 8 on which of the following activity GST is not 13 d 33 b 53 a
pay
a) supply to friend 14 d 34 a 54 b
b) supply to Agent
c)court fees 15 d 35 b 55 a
d) supply from his brother a b b
16 36 56
Ans:- a b c d
17 b 37 b 57 b
V’
12
PRACTICE QUESTION CGST/ SGST credit on other inward
supplies (including credit of Rs. 5,000 0.5 lakh each
each on account of Food and Beverages
1 Which one of the following is not a composite supply: expenses)
a. Supply of an air conditioner along with freight,
y
Carried forward credits
insurance and installation CGST : ` 2 lakh
b. Supply of UPS along with external battery SGST : ` 2 lakh
c. Supply of architect services along with supply of IGST : ` 5 lakh
m
material incidental to his services
d. Supply of lodging service by a hotel including Mr. Kabira has also procured consultancy services from
breakfast lawyer for Rs. 1 lakh who is situated in same State in which
Ans:- a b c d Mr. Kabira is registered being taxable @ 18%.
a. IGST: Rs. 2,00,000; CGST: Rs. 2,50,000; SGST: Rs.
e
2 Which of the following is not covered under Schedule 2,50,000
III of CGST Act: - b. IGST: Nil; CGST: Rs. 50,000; SGST: Rs. 2,50,000
(I) Service provided by an employer to his employee on the c. IGST: Nil; CGST: Rs. 59,000; SGST: Rs. 2,59,000
occasion of his marriage d. IGST: Rs. 3,00,000; CGST: Rs. 4,50,000; SGST: Rs.
ad
(ii) The functions performed by the members of 4,50,000
municipalities and local authorities Ans:- a b c d
(iii) The duties performed by a director in a body established
by the Central Government 5 Ms. Chulbuli is registered in Delhi. She has been
(iv) Actionable claims, other than lottery, betting and engaged in the modeling business. Her taxable
gambling turnover during the month of Jul-2018 is 48 lakh
a. (i) & (iii) taxable @ 18%. She has made all supplies within
b. (I)
Ac the State. The carried forward ITC are as under:-
c. (iii) (I) CGST: Rs. 2,35,000
d. None of the above (ii) SGST: Rs. 1,30,000
Ans:- a b c d (iii) IGST: Rs. 1,00,000
During the month of Jul-2018, she travelled abroad and
3. GST compliance rating would be given to whom purchased camera for Rs. 5 lakh on which she paid
a. Input Service Distributor IGST of Rs. 90,000. She utilized this camera partly for
b. Supplier of Goods and/ or Services whose value of business purpose and partly for non-business
taxable turnover is greater than 20 lakhs purposes. Calculate the net GST liability on her output
c. Composition Dealer & Person who is liable to deduct supplies (to be paid in cash) for the month of Jul-2018.
t
TDS/ collect TCS a. CGST: Rs. 4,32,000; SGST: Rs. 4,32,000; IGST: Rs.
d. All of the above 90,000
Ans:- b. CGST: Rs. 1,97,000; SGST: Rs. 3,02,000; IGST: Rs.
ar
a b c d
Nil
4 Mr. Kabira is engaged in the business of sale and c. CGST: Rs. 1,01,000; SGST: Rs. 3,02,000; IGST: Rs.
purchase of handbags taxable @ 18%. Calculate 90,000
his tax liability to be paid in cash for the month of d. CGST: Rs. 11,500; SGST:Rs. 3,02,000; IGST: Rs. Nil
Jul2018 considering the following details- Ans:- a b c d
Sm
Particulars Amount(`)
6. Which of the following transactions does not qualify
Value of inter-State outward supply to
30 lakh as supply under GST law?
registered persons
(i) When the Head Office makes a supply of services to its
Value of intra-State outward supply to own branch outside the State.
50 lakh
registered persons
(ii) When a person import services without consideration for
Value of intra-State outward supply to 15 lakh the purposes of his business from his elder brother
un-registered persons living outside India.
Value of intra-State inward supply from 10 lakh (iii) Disposal of car without consideration and where the
registered persons supplier has not claimed input tax credit on such car.
V’
Value of inter-State inward supply from (iv) When a principal makes supplies to his agent who is
5 lakh
registered persons also registered and is situated within the same State.
Value of intra-State inward supply from 2 lakh a. (i) & (iii)
un-registered persons b. (I), (ii) & (iii)
IGST credit on capital goods purchased in c. (iii)
1.5 lakh
the month of july
d. (iii) & (ii)
13
4
2
Ans:- Business Group?
7. Factory that should Not be considered in a. 35 separate applications in GST REG-01
determining whether goods or services are related b. Only one registration application incorporating the
include---------. entire business verticals in one go
y
a. the nature of the goods or services c. Either of the above at the option of the Business
b. the nature of the production processes Group
c. the type or class of customers for the goods or d. Either of the above at the discretion of the Proper
m
services Officer
d. the type or class of raw material for the goods or Ans:- a b c d
services
Ans:- a b c d 13. There is a difference in taxability of goods forming
part of composite supply and mixed supply. Here
e
8. Meaning of “family” does not include: are few examples from which you need to identify
a. spouse which is correct example of composite supply
b. Children and mixed supply.
c. independent parents i) Mr. A buys a car and purchases warranty and
ad
d. dependent grand-parents maintenance of the car by paying nominal amount.
Ans:- a b c d Car, warranty and maintenance here are a mixed
supply.
9. Supply of goods by any unicorporated association or ii) Mr. A buys a car and purchases warranty and
body of persons to a member thereof for cash, maintenance of the car by paying nominal amount.
deferred payment or other valuable consideration Car, warranty and maintenance here are a composite
is ............. supply.
a. Supply of goods
Ac iii) Mrs. A buys a microwave oven and some utensils for
b. Neither as a supply of goods nor a supply of services use in microwave oven. Both microwave oven and
c. Supply of services utensils are sold at a single price. Microwave oven
d/ Either as a supply of goods or as a supply of services and its utensils here are a mixed supply.
Ans:- a b c d iv) Mrs. A buys chocolates, juices and biscuits from a
shop. All items have different prices. Chocolates,
10. Out of the IGST paid to the Central Government in juices and biscuitsare a mixed supply. The correct
respect of import of goods or service, if the examples of composite and mixed supply are: -
registered taxable person does not avail the said a. i,iv
credit within the specified period, what is the b. ii,iii
t
treatment? c. ii,iii,iv
a. refund it back to the taxable person d. None of the above
b. Can be claimed after the expiry of the specified Ans:-
ar
a b c d
period
c. Apportion to the Central Government based on rate 14. Mr. Z has an agency of wholesale trading of a
equivalent to CGST on similar intra-State supply particular brand in Gas Stoves for Rajasthan and
ans Apportionment to the state where such supply Gujarat and has separate proprietorship firms in
takes place. each of the two States. In Gujarat, Mr. Z additionally
d. None of the above trades in shoes from the same firm. In the context
Sm
14
stoves). India) in Russia
d. Mr. Z can operate with single registration for Gas a. 1), 3) and 4)
Stoves business for Rajasthan and Gujarat and b. 2), 3) and 4)
Shoes business for Gujarat. c. 2) and 3)
y
Ans:- a b c d d. 1) and 2)
Ans:- a b c d
m
dealer of M/s. GG Micro Ltd., located and registered
in Lucknow, Uttar Pradesh. It has sold following
items to Mr. Alla Rakha (a consumer): Answer:-
e
refrigerator (500 litres) taxable@18% 40,000/-
1 d 1 b
Stabilizer for refrigerator @12% 5,000/-
LED television (42 inches) taxaxble @12% 30,000/- 2 b 2 b
ad
Split air conditioner (2 tons) taxable @28% 35,000/- 3 d d
3
Stabilizer for air conditioner taxable @12% 5,000/-
4 b 4 b
Total Value 1,15,000/-
M/s. Jolly Electronics (P) Ltd. has given a single invoice, 5 b 5 d
indicating price of each item separately to Mr. Alla Rakha. b c
Mr. Alla Rakha, has given a single cheque of Rs. 1,00,000/- 6 6
Ac
for all the items as a composite discounted price. State the 7 a 7 d
type of supply and the tax rate applicable on the same.
a. Composite supply; Highest tax rate applicable to 8 c 8 c
split air conditioner, i.e. 28%
b. Mixed supply; Highest tax rate applicable to split air 9 c 9 a
conditioner, i.e. 28%
10 a 10 c
c. Supply other than composite and mixed supply;
Highest tax rate applicable to split air conditioner d
11
i.e. 28%
d. Supply other than composite and mixed supply; 12 a
t
15
4
2
3 Reverse Charge
Think GST
Think Vishal Sir..!
1. When was the notification in respect to suspension of mechanism?
RCM u/s 9(4) was being issued? a. 100% of tax paid
a. 13th October 2017 b. 50% of tax paid
b. 15th November 2017 c. Nil
y
c. 15th October 2017 d. Some portion of tax paid
d. None of the above Ans:- a b c d
Ans:- a b c d
m
9. Which of the following statements are true?
2. In case of reverse charge who is liable to pay tax? a. Self – invoicing must be done
a. Supplier b. A single consolidated monthly invoice can be issued.
b. Recipient
c. Both statements are correct
c. Both a and b
d. Both statements are incorrect
d. None of these
Ans:- a b c d
e
Ans:- a b c d
3. Who are the persons liable to pay tax under reverse
charge mechanism? 10 Is the below statement correct: “A person is not
a. Registered Supplier required to obtain registration if he is required to
ad
b. Registered Recipient pay tax under reverse charge but he has not
c. Unregistered Supplier exceeded his threshold limit”
d. Unregistered Recipient a. Incorrect, the person is required to take registration &
Ans:- a b c d pay tax under reverse charge irrespective the fact that
threshold is crossed or not.
4 Sec 9(4) of CGST reverse charge is applicable when b. Incorrect, if the person is required to pay tax under
supply of goods or services by reverse charge he shall obtain registration only if the
Ac
a. Unregistered supplier to registered person value of supply under reverse charge exceeds the
b. Unregistered supplier to unregistered person threshold limit.
c. Registered supplier to registered person c. Above statement is correct
d. Registered supplier to Unregistered person d. Correct, a person is required to obtain registration if he is
Ans:- a b c d required to pay tax under reverse charge and, he is
making taxable supplies irrespective of the threshold
5. When is the person eligible to claim the tax in case of limit.
RCM? Ans:- a b c d
a. Same month
b. Next month 11.Micro Apparels in Chennai, Tamil Nadu, avails fashion
t
b. Prabhu Designs
6. Can Input tax credit standing in the Electronic credit c. Both
d. None of the above.
ledger be utilized for payment of tax under Reverse
Ans:- a b c d
Charge Mechanism?
a. Yes 12 True or False: In case of legal services by an individual
Sm
d. Yes, if permitted by the authority director and paid him the sitting fees. Is this supply
Ans:- a b c d covered under RCM?
a. Yes
8. What is the amount of Input tax credit available to a b. No
composite dealer falling under Reverse charge c. Not taxable at all
16
d. Taxable under forward charge 19 Bharat Jewellers paid `50,00,000 for sponsorship of
Ans:- a b c d Miss India beauty pageant for sponsorship service.
Who is liable to pay GST?
14. GST is payable by recipient of services in the a. Bharat Jewellers
y
following cases:- b. Miss India Beauty
(i)Services provided by way of sponsorship to ABC Ltd. c. both a 50% and b 50%
(ii)Services supplied by a director of Galaxy Ltd. to Mr. d. None of the above
Krishna.
m
Ans:- a b c d
(iii)Services by Department of Posts by way of speed
post to MNO Ltd.
20 GST is payable by the recipient under reverse charge
(iv)Services supplied by a recovering agent to SNSP
Bank on
a. (i) & (iii) a. Sponsorship service
e
b. (i) & (iv) b. Transport of goods by rail
c. (ii) & (iii) c. transport of passenger by air
d. (ii) & (iv) d. all of the above
Ans:- a b c d Ans:- a b c d
ad
15. In case of Goods Transport Agency (GTA) services, 21 Kokilabehen is appointed as an arbitral tribunal to
tax is to be paid under forward charge if: reliance Industry Ltd. GST is payable by
a. GST is payable @ 12% a. kokilabehen
b. GST is payable @ 5% and a factory registered under b. Reliance Industry Ltd.
the Factories Act, 1948 is the recipient of GTA c. Service of arbitral tribunal is Exempt
service. d. service of arbitral tribunal is not a supply
Ac
c. GST is payable @ 5% and an unregistered individual Ans:- a b c d
end customer is the recipient of GTA service.
d. None of the above 22. Mr. Vishal is appointed as a director of ABC Ltd.
Ans:- a b c d
company (not in capacity of employee) an earn sitting
16.Express Parcel Post Services provided by Department fees ` 5,00,000. Who is liable to pay GST ?
of Post to a business entity. The GST is liable to be a. Mr. CA Vishal
paid by: b. ABC Ltd. Company
a. business entity c. Exempt supply
b. Department of Post d. Not cover in a supply
Ans:- a b c d
t
c. Exempted supply
d. Not at all supply.
Ans:- a b c d 23. Mr Veer is an agent of Life Insurance company. The
ar
17
4
2
b. RCM applicable, Rate – 12% d. None of the above
c. RCM not applicable, Rate – 18% under forward charge Ans:-a b c d
d. Not taxable
Ans:- a b c d 32.Which supply of service is specified under sec 9(5)
y
a. Supply through ECO transportation of passengers by
26. ABC Pvt. Ltd. has taken consultancy services from an cab
engineer in USA. Who shall be liable to pay tax and b. Supply through ECO renting of accommodation by
under what head? unregistered hotels
m
a. ABC Pvt. Ltd. will pay the tax, IGST c. Supply through ECO service by unregistered plumber,
b. ABC Pvt. Ltd. will pay the tax, CGST and SGST housekeeper, etc.
c. Engineer will pay the tax, IGST d. all of the above
d. Engineer will pay the tax, CGST & SGST Ans:- a b c d
Ans:- a b c d
e
33. Ola being an E – commerce operator provides cab
27. Mr. A was having Rs.50,000 in his credit ledger in the services to the passengers through various local
month of January, 2018 and in the same month he service providers. The liability to pay tax on such
made purchases on which tax of Rs. 30,000 under services shall be applicable to:
ad
RCM was to be paid. Which of the following method a. Ola
can be used for the same? b. Passengers
a. Pay Rs. 30,000 by utilizing ITC of Rs. 50,000 c. Local Service Providers
b. Pay Rs. 30,000 from cash ledger d. None
c. Pay Rs. 15,000 by cash and utilize ITC for the balance Ans:- a b c d
amount
d. Anyone of the above can be followed 34. Mr. Alok had to transport his personal goods from
Ans:- Mumbai to Goa. He contacts Sigma travel services.
a b c d
Ac
Sigma travels is passenger bus traveler and also does
28. GTA is under expansion mode and is acquiring lot of transportation of goods i.e., Goods Transport Agency.
trucks for the transportation. It wants to take the ITC He transports goods of all persons including non-
on such capital goods. What rate shall he charge in passengers.
order to avail the ITC? Mr. Alok hands over the goods to Sigma travel
a. 18% services. Sigma travels issues consignment note for
b. 12% his goods. Alok is an unregistered person. What will be
c. 5% GST scenario in this case?
d. 28% a. Goods transport agency service rendered to un-
Ans:- registered person is exempt from tax
t
a b c d
b. Goods transport agency is required to pay GST under
29. ABC National Bank appointed Mr. A, a recovery agent reverse charge for service rendered to un-registered
person
ar
Ans:- a b c d
18
Answer:-
1 a 21 b
2 b 22 b
3 b 23 b
4 a 24 a
5 a 25 a
6 b 26 a
7 b 27 b
8 c 28 b
9 a 29 a
10 a 30 a
11 a 31 b
12 a 32 d
13 a 33 a
14 b 34 a
15 a 35 d
16 b
17 b
18 b
19 a
20 a
19
4
2
Composition
4 Scheme
1. The total composition rate of tax for manufacturers c. Rs. 1 crore
under composition scheme is: d. none of the above
a. 0.5% of turnover Ans:- a b c d
b. 5% of turnover
y
c. 1% of turnover 6. According to Section 2 (6) of the CGST Act, 2017
d. 2.5% of turnover. “aggregate turnover” will include
Ans:- a b c d a. value of all taxable supplies
m
b. value of all outward supplies – whether taxable or non-
2. ABC Ltd., a manufacturer has got itself registered in taxable, whether exempt or non-exempt, whether
Delhi on 1.2.2018 in composition scheme. It makes a zero-rated or not, whether under forward charge or
supply to XYZ Ltd., a registered entity in Delhi. It is reverse charge
confused in respect to what is the GST rate applicable c. value of outward supplies as well as inward supplies
on it under CGST? on which tax is payable on reverse charge basis
e
a. 0.5% d. value of outward supplies under forward charge and
b. 1% value of inward supplies with reverse charge
c. 2% Ans:- a b c d
d. 2.5%
ad
Ans:- a b c d 7.Which of the following will be excluded from the
computation of turnover?
3.To be eligible for registration under Composition a. Value of taxable supplies
scheme it is required that the aggregate turnover of b. Value of exempt Supplies
a registered tax-payer should not exceed c. Non-taxable supplies
__________ in the preceding financial year. (The d. Value of inward supplies on which tax is paid on
limit is _______ for Special Category States (other reverse charge basis
Ac Ans:-
than State of J&K & Uttrakhand) a b c d
cocoa) and supplies the same locally within the same Ans:- a b c d
State itself. The turnover details of his firm are as
9. Raj Ltd. is having 4 places of business – 2 in Delhi
ar
under:
Ü For the period April, 2016 to March, 2017: Rs. (Registered), 1 in Maharahstra (Registered) and 1 in
80,00,000/- Madras (Unregistered as selling Alcholic liquor for
Ü For the period April, 2017 to June, 2017: Rs. human consumption) 'Aggregate Turnover' shall be
25,00,000/- a. Aggregate TO from all 4 places of business (having
Ü For the period July, 2017 to March, 2018: same PAN);
Rs.75,00,000/- b. Aggregate TO of all registered places – 2 places in
Sm
He wants to opt for Composition Scheme. State the Delhi and 1 in Maharashtra (registered with same
composition turnover limit for the State of Jammu and PAN);
Kashmir and whether he is eligible to opt for Composition Ans:- a b c d
Scheme or not. 10. Rama Ltd. has provided following information for the
a. Rs. 75,00,000/-: Yes month of September:
b. Rs. 75,00,000/-: No (I) Intra-State outward supply ` 8,00,000/-
c. Rs. 1,00,00,000/-: Yes (ii) Inter-State exempt outward supply` 5,00,000/-
d. Rs. 80,00,000/-: Yes (iii) Turnover of exported goods ` 10,00,000/-
Ans:- a b c d (iv) Payment made for availing GTA services ` 80,000/-
V’
y
respectively. Which State is eligible to opt for b. No
composition scheme? c. Maybe
a. Haryana d. Yes, with prior permission of Central Government
m
b. Punjab Ans:- a b c d
c. Rajasthan
d. None of the above 17. Mr. Kanjoos located in Delhi wants to opt for
Ans:- a b c d composition scheme for financial year 2018-19. He
is engaged in trading of branded flour which is
12. As per the CGST Act, 2017, “exempt supply” means taxable @ 5% and unbranded flour which is taxable
e
supply of any goods or services at 0%. Turnover of branded flour in FY 2017-18: Rs.
(i) Which attracts nil rate of tax 70,00,000 Turnover of unbranded flour in FY 2017-
(ii) Which may be wholly exempt from tax u/Sec 11 or 18: Rs. 20,00,000 He was also providing service in
u/Sec 6 of the IGST Act the previous year by way of renting of a residential
ad
(iii) Which is non-taxable supply Select the correct unit for which he is charging Rs. 1,00,000 per
answer from the options given below : month as rent. Calculate his aggregate turnover to
a. (ii) determine his eligibility to opt for composition
b. (I) scheme?
c. (iii) a. Rs. 90,00,000
d. All of the above b. Rs. 70,00,000
Ans:- a b c d c. Rs. 1,02,00,000
Ac
d. Rs. 91,00,000
13. ABC Ltd., a trader has got itself registered in Delhi Ans:- a b c d
on 1.2.2018 in composition scheme. In the month of Note:- ICAI has taken this answer but according to us it is
Aug’18, it make supply of taxable goods worth Rs. 3 (c) i.e. 1,02,00,000 as per the definition of aggregate
lacs and exempted goods worth Rs. 1 lac. On what turnover define in sec 2(6)
value it shall pay the GST to the Government?
a. Rs. 1 lac 18. Which of the following manufacturer cannot opt for
b. Rs.3 lacs composition levy?
c. Rs.4 lacs a. Manufacturer of pan masala
d. Rs.2 lacs b. Manufacturer of ice cream
t
Ans:- a b c d
y
a tax payer who has opted for composition composition scheme under Section 10?
scheme? a. Yes
a. A registered person supplying goods under the b. No
m
composition scheme shall issue a bill of supply. c. None of the above
b. Last date for payment of liability towards tax, d. Maybe
interest, penalty, fee or any other sum is 20th day Ans:- a b c d
of each month.
c. A composition dealer shall mention the words 25. Can a person paying tax under composition
“Composition taxable person, not eligible to collect scheme make supplies of goods to SEZ located
e
tax on supplies” at the top of the bill of supply in same State?
issued by him. a. Yes
d. Last date for payment of liability towards tax, b. No
interest, penalty, fee or any other sum is 18th day c. Yes, subject to prior approval of the Central
ad
of the month following each quarter. Government
Ans:- a b c d d. Yes, subject to prior approval of the concerned
State Government
21. Which of the following person cannot opt for Ans:- a b c d
composition scheme?
a. Mr. B, a garment trader having turnover of Rs. 40 26. ABC Pvt. Ltd., a Mumbai based manufacturer of the
lacs. He further rents out his shop and charges Rs. pan masala, has started manufacturing biscuits
70,000 per month.
Ac within same PAN. His threshold of Rs. 20 lacs is
b. Mr. C, manufacturer of hand bags having turnover crossed but is expected to be below Rs. 80 lacs in
upto Rs. 60 lacs the current financial year. Can he opt for
c. Mr. D, selling hand bags through e – commerce composition scheme?
portal which is not liable to collect tax at source U/s a. Yes
52 b. No
d. None of the above c. Maybe
Ans:- . a b c d d. Yes, with prior approval
Ans:- a b c d
22. In which of the following condition the person
t
cannot pay tax under composition scheme? 27. Mr. A is a manufacturer of ice cream. If all other
a. he was not engaged in the manufacture of goods as conditions satisfies, the total effective
notified under clause (e) of sub-section (2) of composition tax rate will be:
ar
have not been purchased in the course of inter- 28. ABC Ltd., a person registered in composition
State trade scheme, operating in 4 different states has filed the
Ans:- a b c d withdrawal intimation in one State. Will this
intimation be applicable to all places of business?
23. Which of the following persons is not eligible for a. Yes
composition scheme even though their aggregate b. No
turnover does not exceed Rs. 1 crore in preceding c. Yes, but with prior permission of Central
FY, in Uttar Pradesh? Government
a. A person supplying restaurant services d. No, but with prior permission of respective State
V’
22
a. Yes extending loans/deposits does not make Grand
b. No Foods ineligible for composition scheme.
c. Yes, subject to prior approval of the Central (5) Supply of services other than restaurant service -
Government supply of farm labour and supply of service of
y
d. Yes, subject to prior approval of the concerned extending loans/deposits - by Grand Foods
State Government makes it ineligible for composition scheme.
Ans:- a b c d a. (1) and (4)
m
b. (2) and (4)
30. Calculate the tax to be paid by Mr. A, a composition c. (1) and (5)
dealer who is involved in trading of garments. d. (3) and (5)
Details of his business is as below: Ans:- a b c d
e
Invoice value = Rs. 9,00,000 composition scheme in middle of the financial
a. Rs. 3,000 year?
b. Rs. 7,000 a. Yes
c. Rs. 9,000 b. No
ad
d. Rs. 2,542 c. None of the above
Ans:- a b c d d.
Ans:- a b c d
31. ABC Pvt. Ltd., has started his business in Delhi and
has got himself registered in Composition 35. Can a registered person opting for composition
Scheme. He has purchased capital goods worth scheme collect GST on his outward supplies?
Rs. 1,28,000 (tax amount Rs. 28,000) and inputs a. Yes, in all cases
Ac
worth Rs. 50,000 (tax amount Rs. 7,000). What is the b. Yes, only on such goods as may be notified by the
eligible amount of ITC that it can claim? Central Government
a. Rs. 28,000 c. Yes, only on such services as may be notified by the
b. Rs. 7,000 Central Government
c. Rs. 35,000 d. No
d. Zero Ans:- a b c d
Ans:- a b c d
36. A Is composition dealer required to maintain books
32. Will composition supplier make the payment of of account as per GST Laws?
CGST & SGST in separate heads or shall make one a. Yes
t
combined payment? b. No
a. Yes, pay under separate heads c. May be
b. No, pay a consolidate amount d. None of the above
ar
c. Maybe Ans:- a b c d
d. Make payment under IGST
Ans:- a b c d 37. In which form can the person file for withdrawal of
composition scheme?
33 Grand Foods is engaged in supplying restaurant a. Form GST CMP-01
service in Delhi. In the preceding financial year, b. Form GST CMP-02
Sm
determining eligibility for composition scheme, in c. 25th day of the succeeding the quarter
the preceding FY is ` 100 lakh. d. 30th day of the succeeding the quarter.
(3) Aggregate turnover of Grand Foods, for Ans:- a b c d
determining eligibility for composition scheme, in
the preceding FY is ` 110 lakh. 39. Which of the following information is not required
(4) Supply of farm labour and supply of service of to be furnished by a composition taxpayer for
23
4
2
quarter April to June in FORM GSTR-4?
(i) import of service Answer:-
(ii) invoice wise inter-State and intra-State inward
supplies received from un-registered persons 1 c 21 a
y
(iii) invoice wise inter-State and intra-State outward
supplies made to registered persons 2 a 22 c
(iv) invoice wise inter-State and intra-State outward
m
supplies made to un-registered persons 3 a 23 d
a. (I), (ii)
b. (iii), (iv) 4 c 24 b
c. (I), (ii), (iv)
5 b 25 b
d. All of the above
Ans:- a b c d
b
e
6 26 b
7 d 27 d
8 c 28
ad
a
9 a 29 b
10 c 30 c
11 d 31 d
12 d 32 a
Ac
13 b 33 a
14 c 34 b
15 a 35 d
16 b 36 a
17 a 37 d
t
18 d 38 a
19 b 39 b
ar
20 b
Sm
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24
5 Time of Supply
1. Which section governs the provisions regarding
determining time of supply of goods? 8. Which notification removed the requirement of
a. Section 12 payment of tax on advance receipt case of
b. Section 13 supply of goods?
y
c. Section 14 a. Notification No. 10/2017 – Central Tax dated
d. Section 15 15.11.2017
Ans:- a b c d b. Notification No. 66/2017 – Central Tax dated
m
15.11.2017
2. Which section governs the provisions regarding c. Notification No. 70/2017 – Central Tax dated
determining time of supply of services? 15.11.2017
a. Section 12 d. None of the above
b. Section 13 Ans:- a b c d
e
c. Section 14
d. Section 15 9. The relaxation of non payment of taxes on the
Ans:- a b c d advance receipt is only to the supplier of goods
and not to the providers of service.
ad
3. The time of supply fixes the point when the a. Correct
_______________ to / of GST arises. b. Incorrect
a. Liability c. Partially correct
b. Payment d. None of the above
c. Provision Ans:- a b c d
d. Recovery
Ans:- a b c d 10. Mr. Ram sold goods to Mr. Shyam worth `
5,00,000. The invoice was issued on 15th
Ac
4. Reverse charge means the liability to pay tax by November. The payment was received on 30th
the _______________ of goods or services or November. The goods were supplied on 20th
both instead of the _______________ of such November. The time of supply of goods will be:—
goods or services or both. a. 15th November
a. Recipient, Supplier b. 30th November
b. Recipient, Agent c. 20th November
c. Supplier, Recipient d. None of the above.
d. Agent, Recipient Ans:- a b c d
Ans:- a b c d
t
6. What is time of supply of goods, in case of d. 16th July or 18th July whichever is suitable to
forward charge? supplier
a. Date of issue of invoice Ans:- a b c d
b. Due date of issue of invoice
c. Date of receipt of consideration by the supplier 12. Determine the time of supply of goods
d. Earlier of (a) & (b) a. Date of issue of Invoice by supplier - 21st July
Ans:- a b c d b. Date of dispatch of goods by the supplier – 22nd July
c. Date of receipt of payment in bank account – 15th
7. What is time of supply of goods, in case of June
supplier opting for composition levy under d. Date of record of payment in books of account – 17th
V’
y
Diwali festival. All 200 Kg. sweets were delivered October 5, October 7 and October 17
to M/s. Ghoomghoom Travels (P) Ltd. on 5th d. None of the above
November, 2018, but without invoice, as Ans- . a b c d
m
accountant of Mr. Banke Bihari was on leave on
that day. However, the invoice was raised for the 17. Mr. A, who has opted for composition levy, supplies
same on 6th November, 2018, when the goods worth Rs. 24,300 to Mr. B and issues an
accountant joined the office after leave. Payment invoice dated 25.09.2018 for Rs. 24,300. and Mr. B
in full was made on 7th November, 2018. pays Rs. 25,000 on 1.10.2018 against such supply of
Determine the time of supply of goods in this case. goods. The excess Rs 700 (being less than Rs.
e
a. 2 nd November, 2018 1,000) is adjusted in the next invoice for supply of
b. 5 th November, 2018 goods issued on 5.01.2018. Identify the time of
c. 6 th November, 2018 supply and value of supply:
d. 7 th November, 2018 a. Rs. 25,000 – 1.10.2018
ad
Ans:- a b c d b. For Rs. 24,300 – 25.09.2018 and for Rs. 700 –
1.10.2018
14. What is time of supply of goods liable to tax c. For Rs. 24,300 – 25.09.2018 and for Rs. 700 –
under reverse charge mechanism? 5.10.2018.
a. Date of receipt of goods d. (b) or (c) at the option of supplier, who has opted
b. Date on which the payment is made for composition levy
c. Date immediately following 30 days from the date Ans:- a b c d
of issue of invoice by the supplier
Ac
d. Earlier of (a) or (b) or (c) 18. What is the time of supply of service if the
Ans:- a b c d invoice is issued within 30 days from the date of
provision of service?
15. On 04.09.2018, supplier invoices goods taxable a. Date of issue of invoice
on reverse charge basis to ABC & Co. ABC & Co. b. Date on which the supplier receives payment
receives the goods on 12.09.2018 and makes c. Date of provision of service
payment on 30.9.2018. determine the time of d. Earlier of (a) & (b)
supply. Ans:- a b c d
a. 04.09.2018
t
quarterly statement of the goods dispatched and the client and Mr. X on 30.12.2017 and 07.01.2018
payments made will be issued by seventh day of respectively. The time of supply of services is:
the month succeeding the relevant quarter. a. 29.12.2017
b. 30.12.2017
August 5, September 5, Payments of ` 2 Lakh made in c. 06.01.2018
October 5 each month d. 05.01.2018
October 7 Statement of accounts issued by Ans:- a b c d
supplier for the quarter july-September
October 17 Differential payment of ` 56,000 20. M/s. Radhika Travels (P) Ltd., purchased a bus
received by supplier for the quarter
V’
July-September as per statement chassis from M/s. Jyoti Motors Ltd., for a
of accounts consideration of Rs. 80.00 Lakh on 1-Aug-2018.
M/s. Radhika Travels (P) Ltd., sent the bus chassis
Which of the following statements is true? for body building to M/s. Hanumant Fabricators,
a. Invoice will be issued on August 5, September 5, and paid in advance the total consideration of Rs.
25.00 Lakh on 10-Aug2018. M/s. Hanumant
26
Fabricators, after completing the bus body, associated enterprise(recipient)
informed M/s. Radhika Travels (P) Ltd., for b. Date of payment
inspection of the work done on 1-Sep-2018. M/s. c. Earlier of (a) & (b)
y
Radhika Travels (P) Ltd., visited the work shop of d. Date of entry in the books of the supplier of
M/s. Hanumant Fabricators, on 7-Sep-2018, and service
confirmed that the bus body was in accordance Ans:- a b c d
with the terms of the contract. M/s. Hanumant 25. Continuous supply of services means a supply
m
Fabricators, raised an invoice of Rs. 25.00 Lakh of services which is provided, or agreed to be
on 15-Sep-2018, and supplied chassis along with provided, continuously or on recurrent basis,
the bus body so constructed, along with the under a contract, for a period exceeding
invoice on 16-Sep-2018. _____________ with ________________ payment
State the time of supply in this case, out of obligations.
e
the choices given below- a. 1 year, annual
a. 10-Aug-2018 b. 3 months, periodic
b. 7-Sep-2018 c. 6 months, half yearly
c. 15-Sep-2018 d. 1 year, periodic
ad
d. 16-Sep-2018 Ans:- a b c d
Ans:- a b c d
26. What is the time of supply of service for the
21. Mr. A purchases redeemable vouchers worth INR supply of taxable services up to Rs.1000 in
8000/- on 1st January. The vouchers are excess of the amount indicated in the taxable
redeemable against purchase of any goods. The invoice?
vouchers are valid till 30th June. What will be the a. At the option of the supplier – Invoice date or Date
Ac
time of supply in case of such vouchers? of receipt of consideration
a. 1st January b. Date of issue of invoice
b. 30th June c. Date of receipt of consideration.
c. The date of redemption of vouchers d. Date of entry in books of account
d. None of the above Ans:- a b c d
Ans:- a b c d
27. What is the time of supply of vouchers when the
22. Value of services rendered is Rs. 1,00,000/. Date supply with respect to the voucher is
of issue of invoice is 5th October 2018. Advance identifiable?
Received is Rs. 25,000/- on 20th September 2018. a. Date of issue of voucher
t
Ans:- a b c d
encashed at retail outlets of PQR Ltd. The
24 What is the time of supply of service in case an employees of ABC Ltd. encashed the same on
associated enterprise receives services from the 01.10.2018. Determine the time of supply of
service provider located outside India? vouchers.
a. Date of entry in the books of account of a. 20.08.2018
27
4
2
b. 20.09.2018 time of supply in respect of the late fees due on
c. 01.10.2018 mr. A?
d. Supply is not identified a. September 2018
y
Ans:- a b c d b. October 2018
c. Time of supply has not arisen
30. Ms. A purchased a gift voucher (it can be d. None of the above
redeemed against any product of the Ans:- a b c d
m
departmental store) from a super market worth
Rs.2,000 on 30.7.2018 and gifted it to her friend 35. Where goods are packed and transported with
on the occasion of her marriage on 05.08.2018. insurance, the supply of goods, packing
her friend encashed the same on 01.09.2018 for materials, transport and insurance is a composite
purchase of a watch. Determine the time of supply and supply of goods is the principal
e
supply. supply. Which section will govern the time of
a. 30.07.2018 supply provisions in this case?
b. 05.08.2018 a. Section 12
c. 01.09.2018 b. Section 13
ad
d. Supply is identified c. Section 14
Ans:- a b c d d. Section 15
Ans:- a b c d
31 M/s. Tanatan received testing services from
Aquarian Solution (P) Ltd. on 10-May-2018. The
payment was entered in the books of account of
Answer:-
M/s. Tanatan on 16-May-2018 and was credited in
Ac
the bank account of supplier on 19-May-2018. In
1 a 12 a 23 d 34 c
the meantime, supplier issued invoice on 18-
May-2018. What will be the time of supply in this 2 b 13 b 24 c 35 a
case? 3 a 14 d 25 b
a. 10-May-2018
b. 18-May-2018 4 a 15 c 26 a
c. 16-May-2018 5 c 16 a 27 a
d. 19-May-2018
Ans:- a b c d 6 d 17 d 28 b
7 d 18 d 29 b
t
9 a 20 a 31 b
a. Date on which return is to be filed
b. Actual date of filing of return 10 a 21 c 32 a
c. Date of payment of tax 11 c 22 c 33 b
d. Date of collection of tax
Ans:- a b c d
Sm
28
6 Value of Supply
Think GST !
Think Vishal Sir...!!
1. The value of supply of goods and services shall be received payment in US dollars. Does the
the - consideration as received falls within the ambit of
a. Transaction value money
b. Retail sale price a) Yes
y
c. Wholesale price b) No
d. None of above c) As per the opinion of Appropriate authority
Ans: a b c d d) None of the above
m
Ans: a b c d
2. Value of supply shall be the transaction value,
if __________________ 8. Consideration excludes:
a. Transaction is between unrelated parties a. Payment in money or otherwise for supply
b. Price is the sole consideration b. Monetary value of an act or forbearance
c. Both (a) and (b) c. Subsidy by the Central and State Government
e
d. None of the above d. All of the above
Ans: a b c d Ans: a b c d
3. Which of the following is included while computing 9.Value of supply shall be construed to include:
ad
the value of supply of goods under GST? a. Any taxes, duties, cess, fees and charges levied under
a. Price of the goods any Act, except GST
b. Packing charges of the goods b. Any amount that the supplier is liable to pay which has
c. Tax levied by Municipal Authority on sale of the goods been incurred by the recipient and is not included in
d. All of the above the price.
Ans:- a b c d c. All the incidental expenses, subsidies linked to supply
and other interest, late fee and penalty
Ac
4. What shall be the treatment of subsidies received d. All of the above
from BAC Private limited while deriving Ans: a b c d
transaction value?
a. Shall be included in the transaction value, even if 10. Value of supply is considered to exclude:
not directly linked with supply a. Taxes, duties, cesses and fees levied under any
b. Shall be included only when such subsidy is directly other Act
linked with supply b. SGST and UTGST
c. (a) or (b) c. Compensation Cess
d. None of the above d. Both (b) and (c)
Ans: a b c d Ans: a b c d
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5. Subsidies not directly linked to the price ----------- 11. Discount given after the supply is deducted from
subsidies provided by the Central and State the value of taxable supply, if –
ar
Governments are includible in value for charge of a. such discount is given as per the agreement
GST entered into at/or before the supply
a. Including b. such discount is linked to the relevant invoices
b. Excluding c. proportionate input tax credit is reversed by the
c. Either (a) or (b) recipient of supply
d. None of the above d. all of the above
Sm
Ans:- a b c d Ans:- a b c d
6. A deposit,----------------, given in respect of the supply 12. Mr. A sells the goods to Mr. B for Rs.20,000 on 1st
of goods or services or both shall not be considered April, 2018 and allows him a credit period on 15
as payment made for the supply unless the supplier days post that penalty of Rs.10 per day shall e
applies the deposit as -----------? levied on the same. Mr. B makes a payment of
a. Which is refundable, consideration for the supply Rs.20,000 on 30th April, 2018 and Mr. A agreed for
b. Which is not refundable, taxable value for the supply the same. What shall be the value on which tax
c. Whether refundable or not, consideration for the shall be levied?
V’
supply a. Rs.20,000
d. Whether refundable or not, taxable value for the b. Rs.20,150
supply c. Rs.20,300
Ans:- a b c d d. Any of the above
Ans: a b c d
7. Mr. A supplied goods worth of 1,00,000 for which he
29
4
2
13. ABC consultancy firm is engaged to register a price to its distributors as per its contract. As per
company for XYZ Ltd. Other than professional fees invoice raised on the items supplied per carton, the
ABC consultancy also recovers fees paid to ROC on list price on the same amounts to INR 500. What
behalf of the XYZ Ltd. Determine Value of Supply? shall be the taxable value of such supply, given that
y
a. Professional Fees the discount is allowed at the time of supply and
b. ROC fees paid on behalf of XYZ Ltd. shown in invoice?
c. Both (a) and (b) a. INR 300
m
d. None of the above b. INR 350
Ans: a b c d c. INR 500
d. None of the above
14. Mr. A is providing construction services to Mr. B. In Ans:- a b c d
addition to the consideration, Mr. B is also supplying
construction material to Mr. A. determine Value of 19. Toll receipts from highway of Kolkata to Durgapur is
e
Supply to levy of GST? ` 80,00,000 and commission earned on toll receipts
a. Consideration excluding construction material is ` 8,00,000. The value of taxable supply will be:
b. Consideration including construction material a. ` 80,00,000
c. Neither of the two above b. ` 8,00,000
ad
d. As provided by the appropriate authority c. ` 88,00,000
Ans: a b c d d. Nil
Ans:- a b c d
15. A Chartered Accountant issued following bill –
(i) Professional fees – ` 1,00,000 20. Mr, A is selling a product for Rs.1,050 inclusive of
(ii) Out of pocket expenses – ` 10,000 GST. Rate of CGST and SGST will be 2.5% each.
(iii) MCA for e-filing of documents on MCA portal – Determine the value of supply.
` 5,000.
Ac
a. INR 1,000
His value of service for tax purposes is: b. INR 1,025
a. ` 1,15,000 c. INR 1,050
b. ` 1,10,000 d. None of the above
c. ` 1,05,000 Ans: a b c d
d. ` 1,00,000
Ans:- a b c d 21. Mr. A supplied services of `20,000 to Mr. B and such
services are covered in reverse charge mechanism.
16. Varun purchased certain goods worth INR 17,000 What shall be the taxable value in this case?
from Dushyant foods Pvt. ltd. As a matter of security, a. 20,000
t
30
a. ` 5,20,000
b. ` 5,25,000 Answers:-
c. ` 4,00,000
d. ` 4,05,000 1 a 15 b
y
Ans: a b c d
2 c 16 b
24. Determine the value of taxable supply as per
3 d 17 c
m
provisions of Section 15 of the CGST Act, 2017?
Contracted value of supply of goods (including GST 4 b 18 b
@ 18%) ` 11,80,000
The contracted value of supply includes the following : 5 b 19 b
1) Cost of Primary Packing ` 25000
2) Cost of protective packing at recipients request for 6 c 20 a
e
safe transportation `15,000
7 a 21 a
a) ` 10,00,000
b) ` 11,80,000 8 c 22 b
ad
c) ` 11,55,000
d) ` 11,40,000 9 d 23 d
Ans: a b c d
10 d 24 a
25. Determine the value of taxable supply as per 25 c
11 d
provisions of section 15 of the CGST Act, 2017?
Contracted value of supply of goods 12 a 26 a
(including GST @ 18%) ` 11,00,000
Ac a 27 a
Not included in above are: 13
I) Commission paid to agent by recipient on instruction
14 b
of supplier `5,000
ii) Freight and insurance charges paid by recipient on
behalf of supplier ` 75,000
a) ` 11,00,000
b) ` 11,80,000
c) ` 10,00,000
d) ` 11,75,000
t
Ans: a b c d
31
4
2
7 Exemption
Think GST !
Think Vishal Sir...!!
Basics:- a legal right.
1. The ac on of removing any tax obliga on or d. Exemp on cannot be claimed at later stage as
the assesse would be debarred, prohibited
y
liability imposed can be called as ___________ ?
a. Refund and estoppel for it.
b. Discount Ans:- a b c d
c. Exemp on
m
d. Allowance 7. Does exemp on from IGST automa cally operate
Ans:- a b c d as exemp on from CGST?
a. Yes
2. What are the way of gran ng exemp on? b. No
a. By general exemp on no fica on and by c. In selected cases
d. Yes, and from SGST also
e
special order
b. By general and specific exemp on Ans:- a b c d
no fica ons
c. By public no fica on and by specific 8. Is the exemp on or exclusion from GST the same
ad
announcement in official Gaze e thing?
d. None of the above a. Yes
Ans:- a b c d b. No
c. In selected cases
3. Under _____________ sec on of CGST / SGST Act d. Can’t be differen ated
and ____________ sec on of IGST Act, Ans:- a b c d
Government can issue a general exemp on
9. If the effec ve date is not men oned in the
no fica on.
Ac no fica on, date of issue of no fica on shall be
a. 6(1) and 11(1)
b. 11(1) and 6(1) treated as effec ve date. Comment.
c. 11(2) and 6(2) a. True
d. 6(2) and 11(2) b. False
Ans:- a b c d c. Maybe
d. The situa on is not possible
4. Under _____________ sec on of CGST / SGST Act Ans:- a b c d
and ____________ sec on of IGST Act,
10. Is it necessary to deposit the tax collected
Government can grant exemp on y way of
wrongly on the supply of goods or services
t
special order.
exempted?
a. 6(1) and 11(1)
a. No, if he doesn’t want to claim ITC
b. 11(1) and 6(1)
b. Yes, it is compulsory
ar
32
Health Care :- Charitable & Religious Sector:-
13. Which of the following services provided by
Good Health Care Nursing home are not exempt? 15. Which one of the following is true?
y
(1) Reiki healing treatment. a. En re income of any trust is exempted from GST
(2) Plas c surgery conducted to repair cle lip of a b. En re income of a registered trust is exempted
new born baby. from GST
(3) Air ambulance services to transport cri cally ill c. Income from specified / defined charitable
m
pa ents from distant loca ons to Ayushman ac vi es of a trust are exempted from GST
Medical Centre. d. Incomes from specified / defined charitable
(4) Pallia ve care for terminally ill pa ents. On ac vi es of a registered trust (u/s 12AA of
request, such care is also provided to pa ents at Income Tax Act) are exempted from GST
their homes. (Pallia ve care is given to improve Ans:- a b c d
e
the quality of life of pa ents who have a serious or
life-threatening disease but the goal of such care is 16. Services by a person by way of conduct of any
not to cure the disease). ___________ is exempt from GST.
a. Religious Ceremony
ad
(5) Alterna ve medical treatments by way of
Ayurveda. b. Marriage Ceremony
a. (1) and (3) c. Fes val Ceremony
b. (2) and (4) d. Entertainment Ceremony
c. (1) Ans:- a b c d
d. (1), (4) and (5) .
Ans:- a b c d 17. Open area in the precincts of a temple has been
rented for a marriage for a day. In which of the
Ac
14.Well-Being Hospital has received the following following cases, such ren ng is exempt from GST?
amounts in the month of June, 20XX in lieu of (a) Temple is owned by Sanatan Charitable Trust
various services rendered by it in the same month. (registered under sec on 12AA of the
You are required to determine its taxable value for Incometax Act, 1961) and considera on
June, 20XX from the details furnished below: charged is ` 9,000.
Sr. No. Particular ` in Lakhs (b) Temple is owned by Sanatan Charitable Trust
1. Service provided by cord blood bank unit of the 24 (registered under sec on 12AA of the
nursing home by way of preservation of stem cells Incometax Act, 1961) and considera on
2. Hair transplant services 100 charged is ` 11,000.
t
3. Naturopathy treatments. Such treatment is a 80 (c) Temple is owned by Sanatan Charitable Trust
recognized system of medicine in terms of section (registered under sec on 12AA of the
2(h) of the Clinical Establishments Act, 2010
Incometax Act, 1961) and considera on
ar
a. 220 lakhs Amount received for counseling of mentally disabled persons 10,50,000
b. 230 lakhs Amount received for ren ng of commercial property owned by 1,50,000
c. 250 lakhs the trust
d. 300 lakhs Amount received for ac vi es rela ng to preserva on of forests 12,35,000
Ans:- a b c d and wildlife
33
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2
a.1,50,000 Abinav enterprises having a turnover of `
b. 5,50,000 25,00,000 lakh in previous year being a
c. 7,00,000 registered person under GST, for such services a
d. 18,68,000 fee of ` 42,000 was charged
y
Ans.: a b c d iii) Mr. Sagar another individual advocate having
turnover of `15 lacs in preceding financial year.
19. Niwas Sadan Charitable Trust is registered under a. Exempt, Taxable, Exempt
m
sec on 12AA of the Income Tax Act, 1961 . It b. Taxable, Taxable, Taxable,
owns and manages a temple located at Mathura c. Exempt, Exempt, Exempt,
meant for general public. The temple compound d. Taxable, Exempt, Taxable
has residen al dwellings, rooms, Kalyan Ans: a b c d
Mandapam, Halls and shops. It provides the
e
following informa on rela ng to supply of its
services for the month of August 2017 . You are
Agriculture Sector:-
required to compute the total taxable value of
supply for the month of August 2017 assuming 22. Which of the following is not exempted -?
ad
that the given amounts are exclusive of GST:- a. Health care service to human beings by
` authorized medical prac oners / para medics
Ren ng of residen al dwellings for use as a residence 18,00,000 b. Health care services to Animals/Birds
Ren ng of rooms for pilgrims (Charges per day ` 1,200) 8,00,000
c. Slaughtering of animals
d. Rearing horses
Ren ng of rooms for devotees (Charges per day ` 750) 6,00,000
Ans:- a b c d
Ren ng of kalyana mandapam (Charges per day ` 15,000) 12,00,000
Ac
Ren ng of halls (Charges per day ` 7,500) 10,75,000 23. If services by way of breeding of fish is ` 5,00,000
Ren ng of shops for business (Charges per month ` 9,500) 4,75,000 and supply of firm labour is ` 2,00,000, the
Ren ng of shops for business (Charges per month ` 12,000) 7,50,000 taxable value of supply will be:
(a) ` 5,00,000
a.27,50,000 (b) ` 2,00,000
b. 32,25,000 (c) Nil
c. 25,50,000 (d) ` 7,00,000.
d. None of the above Ans:- a b c d
Ans.: a b c d
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34
(iii)salt 4. Plantation of Rubber 3.5
(iv)rice 5. Processing of Potato Chips 1.5
(a) (i) & (ii)
y
6. Pest control to protect Agricultural Produce 2.0
(b) (iii)
(c) (iv) 7. Warehousing of minor forest produce 1.70
(d) all of the above 8. Artificial insemination of horses 3.75
m
Ans:- a b c d a. 11.75 lakhs
b. 8.25 lakhs
27. Warehousing of _____________ is exempt from c. 5.25 lakhs
GST. d.6.95 lakhs
1) Rice. Ans: a b c d
2) Minor forest produce
e
3) Jaggery
4) Whole gram
Transport Sector:-
a) 1), 2) and 4)
30. Transporta on of passengers exempted if -
ad
b) 1) and 3)
c) 2), 3) and 4) a. It is by air-condi oned stage carriage
d) 3) b. It is by air-condi oned contract carriage
Ans:- a b c d c. It is by non-air-condi oned stage carriage
for tourism, charter or hire
28. 'Jain Agro Handlers' furnishes the following d. None of the above
Ans:- a b c d
details with respect to the services provided by
them in the month of June, 20XX:
Ac 31. Transporta on of passengers is exempted -
Sr. No. Par culars ` a. In an air-condi oned railway coach
1. Supply of farm labour 58,000 b. In a vessel for public tourism purpose between
2. Warehousing of Biscuit 1,65,000 places in India
3. Sale of rice on commission basis 68,000 c. In a metered cab/auto rickshaw / e rickshaw
4. Training of farmers on use of new pes cides and fer lizers 10,000 d. In all the above men oned
developed through Scien fic research Ans:- a b c d
5. Ren ng of vacant land and other services to a stud farm 1,31,500
(rearing of horses) 32. Transporta on of goods is not exempted if it is -
6. Tes ng undertaken for soil of a farm 1,21,500 a. by a goods transport agency / courier agency
t
b. 4,48,000
or man-made disasters, calami es, accidents or
c. 3,64,500
mishap', newspaper or magazines registered
d. 2,96,500
Ans:- a b c d with the Registrar of Newspapers - is exempted
a. If it is by a goods transport agency
29. You are required to compute the value of taxable b. If it is by a rail - within India
c. If it is by a vessel - within India
services in respect of the following transac ons
d. If it is by all of the above
made available by A. Ltd dealing in agriculture
Ans:- a b c d
related services in the month of December 2019
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35
4
2
(iv) courier agency 2. Freight for transport of food grains and 1,50,000
pulses
(a) (i) & (ii) 3. GTA Service to an Unregistered Person 6,00,000
(b) (iii) & (iv)
y
(not falling in no fied category)
(c) (i) and (iv) 4. Composite Service which include Packing / 2,00,000
(d) (i) [except (iii) & (iv)] & (ii) unpacking, loading, unloading in the course of
transporta on by road
Ans:- a b c d
m
a. Nil
35. Transporta on of ____by rail from Chennai to
b.30,00,000
Gujarat are exempt from GST. (i) pulses (ii)
c.6,00,000
military equipments (iii) electric equipments (iv)
d.2,00,000
biscuits
Ans:- a b c d
e
(a) (i) & (ii)
(b) (i) & (iii)
(c) (ii) & (iv) 39. Calculate the value of taxable service of 'X'
(d) all of the above Transport Company engaged in the business of
ad
Ans:- a b c d transport of goods by road. Give reasons for
taxability or exemp on of each item. No freight is
36. Transport of ______________ by rail are exempt
received from any of the specified category of
from GST:
(a) Milk consignor/consignee. Suitable assump ons may
(b) Salt be made wherever required.
(c) Defence equipments Sr. No. Par culars `
(d) All of the above
Ac
Ans:- a b c d 1. Total freight charges received by 'X' during the year 13,50,000
2. Freight charges received for transpor ng fruits 1,25,000
37. Determine whether the following are liable to GST 3. Freight collected for transpor ng small consignment 75,000
or not for persons who paid less than ` 750 for each consignment
(i) O mini is a radio taxi operator. Value of services 4. Freight collected for transpor ng goods in small vehicles 1,50,000
for persons who paid less than ` 1,500 per trip
provided is ` 1,00,000
(ii) Value of services provided by a Company running a. 10,00,000
air-condi oned buses for point to point travel is b. 13,50,000
`5,00,000. The buses do not stop to pick or drop c.12,25,000
t
of Taxable Services.
36
Ren ng of Immovable property/ Hotel/ (c) Kesar Maharaj is liable to pay CGST and SGST of `
INN, etc.:- 900 and ` 900 respectively.
(d) None of the above
y
Ans:- a b c d
41. Ren ng of residen al dwelling for any purpose
is exempt from GST. Comment. 45. Which of the following are services exempt from GST?
a. Yes, it can be rented for usage of any (a) Services by an artist by way of a performance in folk
m
purpose. or classical art forms of painting/sculpture making
b. No, it should have been rented for residen al etc. with consideration therefor not exceeding ` 1.5
purpose only. lakh.
c. No, it should have been rented for (b) Services by an artist by way of a performance in
commercial purpose only modern art forms of music/ dance/ theatre with
e
d. No, it should have been rented for charitable consideration therefor not exceeding ` 1.5 lakh.
purpose only. (c) Services by an artist by way of a performance in folk
Ans:- a b c d or classical art forms of music/ dance/theatre with
consideration therefor not exceeding ` 2.5 lakh.
ad
42. Mr. Narayan Goel has booked a room on rent in (d) Services by an artist by way of a performance in folk
or classical art forms of music/ dance / theatre with
Sunshine Hotel for the purpose of lodging on
consideration therefor not exceeding ` 1.5 lakh.
10.08.20XX. GST is not payable by Mr.Narayan Ans:- a b c d
Goel in case rent for the same is____
(a) ` 800 46. Services by way of admission to ______________ are
(b) ` 6000 exempt from GST.
(c) ` 11000 (a) Museum
Ac
(d) ` 1500 (b) National park
Ans:- a b c d (c) Tiger reserve
(d) All of the above
43. XYZ Ltd. has a Hotel which he runs in Manali, for Ans:- a b c d
which he charges the following tariffs and gives
47. Compute value of taxable supplies and GST from
the following details. Calculate the taxable value.
following sums received by M/s SKC Ltd. (exclusive
Room Declared Discount No. of room days Booking of GST)
Type Tariff offered Room days
(1) Holding a dance programme, entry ckets
t
10*30=300 [It basically means 25 whereof were sold for `250 per person `30
A 1,500 300 that 10 such rooms are in the
lacs
hotel of which occupancy on an
(2) Admission to Planetarium: ` 4 lakh, entry cket
ar
37
4
2
following informa on rela ng to August, 2018. 52. Fortune Ltd. provides the following informa on
Receipts from: Compute value of Taxable suppy rela ng to their services for the month for
Par culars ` August, 2019, Compute the value of taxable
y
supply.
Performing classical dance 98,000
Particulars `
Performing in television serial 2,80,000
Gross receipts from
m
Services as brand ambassador 12,00,000
Running a Boarding School (including receipts for 28,00,000
Coaching in recrea onal ac vi es rela ve to arts 2,10,000 providing residen al dwelling services `12,00,000)
Performing western dance 90,000
Conduc ng private tui ons 16,00,000
Above figures are exclusive of GST.
Educa on services for obtaining a qualifica on 8,00,000
a. 18,78,000
e
recognised by law of a foreign country
b.17,80,000
c.16,68,000 Conduc ng modular employable skill course, approved 10,00,000
by Na onal Council of voca onal training
d. 15,70,000
ad
Ans:- a b c d Fees from prospec ve employers for campus interview 6,00,000
38
3. Services by a recognized sports body to another recognized sports body 1,20,000 transport of passengers are exempted
Services by individuals such as selectors, commentators, d. All the above men oned
4. 6,90,000
curators, technical experts Ans:- a b c d
y
5. Services of an individual as umpire, referee when provided 1,20,000
59. Compute the value of taxable service in the
directly to a recognized sports body
following case
m
a. 9,30,000 Par culars `
b.13,70,000 Services provided by Government to various individuals 1,05,000
c.14,90,000 by way of issuance of driving licence
d.16,10,000 Services provided by BIRAC approved bio-incubators to incubates 15,00,000
Ans:- a b c
e
d
Transporta on of passengers by ropeway 5,20,000
ad
55. Services provided to the Central Government,
State Government or Union Territory or local a. 13,20,000
authority or a Government Authority by way b. 14,25,000
c.28,20,000
of______________ are exempt.
d.29,25,000
a. In rela on to any func on entrusted to a
Ans:- a b c d
Panchayat under ar cle 243G of the
Cons tu on
Miscellaneous :-
b. In rela on to any func on entrusted to a
Ac
Municipality under ar cle 243W of the
Cons tu on 60. Core services of which organiza on is not
c. In rela on to any func on entrusted to a exempted -
Municipality under ar cle 243G of the a. Services provided by the Insurance
Cons tu on Regulatory and Development Authority of
d. Both (a) and (b) India to insurers
Ans:- a b c d b. Services provided by the Securi es and
Exchange Board of India set up under the
56. Which of the following services is exempt? Securi es and Exchange Board of India Act,
t
39
4
2
member for common use specified members dance performance where considera on
Ans:- a b c d charged is `1,40,000.
(iv) Transporta on of agriculture produce by air
y
62. Which of the following schemes of the life from one place to another place in India
insurance business is exempted? (v) Services by way of loading, unloading, packing,
(a) Janashree Bima Yojana storage or warehousing of rice
m
(b) Aam Aadmi BimaYojana (vi) Service provided by GTA where considera on
(c) Varishtha Pension BimaYojana charged for transporta on of goods for a
(d) All of the above. single
Ans:- a b c d carriage is Rs. 900
(a) (I), (v), (vi)
63. Which of the following services are not exempt
e
(b) (iii), (iv), (v)
from GST? (c) (I), (iii), (iv)
(a) Yoga camp conducted by a charitable trust (d) (iv), (v)
registered under sec on 12AA of the Income- Ans:- a b c d
ad
tax Act, 1961.
(b) Services provided by business correspondent to 66. Which of the following ac vi es are exempt from
the rural branch of a bank with respect to GST?
Savings Bank Accounts (a) Religious pilgrimage organised by Todarmal
(c) Services provided by cord blood bank for Charitable Trust.
preserva on of stem cells. (b) Loading, packing and warehousing of jaggery
(d) Service provided by commentator to a and pulses.
recognized sports body
Ac (c) Milling of paddy into rice.
Ans:- a b c d (d) None of the above.
Ans:- . a b c d
64. Which of the following ac vity is taxable under
GST: - 67. Which of the following statements is true?
(i) Services by a hotel having declared tariff of 1. Services provided by Government ITIs to
` 1,200 but amount charged from customer is individual trainees are exempt from GST.
` 800 2. Services provided by the State Governments and
(ii) Transporta on of passengers by non-air- Private Service Providers by way of
condi oned railways transporta on of pa ents in ambulance are
t
(i) Supply of food by a hospital to pa ents (not 3. Transporta on of pa ents to ABC Nursing Home 1,20,000
and Bheem Mul specialty Hospital, in an ambulance
admi ed) or their a endants or visitors. owned by XYZ Ltd.
(ii) Transporta on of passengers by non-air- 4. Admission to a Telly Award Func on [Value per cket 5,10,000
condi oned railways per person is ` 510]
(iii) Services by a brand ambassador by way of folk 5. Transporta on of milk by a goods transport agency 1,50,000
40
a.5,60,000
b. 6,60,000
y
c. 5,10,000
d. 6,30,000
Ans:- a b c d
m
69. Which of the following is taxable supply
a. Transport facility provided by a School to its
students through a fleet of buses and cabs owned
by the School.
b. Transport facility provided by a School to its
e
students through a private Bus/Cab Operator.
c. Service provided by a private transport operator to
a School in rela on to transporta on of students
ad
to and from a School.
d. Service provided in rela on to repair or
maintenance of aircra owned by a State
Government.
Ans:- a b c d Ac
Answer:-
1 c 11 a 21 a 31 c 41 b 51 a 61 b
2 a 12 c 22 d 32 a 42 a 52 a 62 d
3 b 13 c 23 c 33 d 43 b 53 a 63 d
t
4 c 14 a 24 a 34 d 44 b 54 b 64 c
ar
5 a 15 d 25 d 35 a 45 d 55 d 65 c
6 c 16 a 26 c 36 d 46 d 56 a 66 d
7 b 17 a 27 a 37 d 47 a 57 a 67 a
8 b 18 a 28 c 38 a 48 d 58 d 68 c
Sm
9 a 19 a 29 b 39 a 49 b 59 a 69 d
10 b 20 d 30 d 40 b 50 a 60 c
V’
41
4
2
8 Input Tax Credit
Think GST !
Think Vishal Sir...!!
42
Section16:- 8. Can the taxable person under Composition Scheme
claim input tax credit
1. Whether definition of Inputs includes capital goods. a. Yes
a. Yes b. No
y
b. No c. Only in some cases
c. Certain capital goods only d. Can’t say
d. None of the above Ans:- a b c d
m
Ans:- a b c d
9. Mr. A, non-resident taxable person bought goods
2. Is it mandatory to capitalize the capital goods in from USA for the trade fair to be organized in Pune.
books of Accounts? At the customs, he paid IGST. Will he get the credit
a. Yes of the IGST paid?
b. No a. Yes
e
c. Optional b. No
d. None of the above c. Maybe
Ans:- a b c d d. Yes, with permission of Customs
Ans:- a b c d
ad
3. Whether credit on inputs should be availed based on
receipt of documents or receipt of goods 10. Whether credit on capital goods can be taken
a. Receipt of goods immediately on receipt of the goods?
b. Receipt of Documents a. Yes
c. Both a and b b. No
d. Either receipt of documents or Receipt of goods c. After usage of such capital asset
Ans:- a b c d d. The time when asset is capitalized in books
Ac Ans:- a b c d
4. Whether the recipient can claim ITC on the basis of
revised invoices. 11. ITC avoids the ______________
a) Yes a. Cascading effect
b) No b. Compliance burden
c) c. Working capital usage
d) d. Difficulty in operating business
Ans:- a b c d Ans:- a b c d
5. Whether Input tax credit on Inputs and Capital Goods 12. Which of the following are covered in the definition
t
b. No
c. Maybe iii. Taxes on composition levy
d. None of the above iv. CGST
Ans:- a b c d Mark the correct option:
a. (i) & (ii)
6. Input tax credit is available only when the purchase b. (I), (ii) & (iv)
c. (I), (ii) & (iii)
Sm
43
4
2
d) All of the above b) If purchaser fails to pay value along with tax amount to
Ans:- a b c d supplier within 180 days, then the ITC amount along
with interest should be reversed from the electronic
15. The input tax credit on purchase invoice dated 2nd ledger.
y
May 2017 was omitted to be taken. The accountant c) If purchaser fails to pay taxable value to supplier within
realized this mistake on 1st November 2018. Can he 180 days, then the ITC amount should be added to his
now claim the credit? output tax liability.
m
a. Yes d) If purchaser fails to pay the tax amount to supplier
b. No within 180 days, then the ITC amount should be
c. Yes, with permission of Jurisdictional officer added to his output tax liability.
d. Maybe Ans:- a b c d
Ans:- a b c d
e
16. Comment: Supply of goods can be spread over a to reverse the credit already taken?
period of time, It is not necessary that all elements (a) If payment is not made to the supplier within 45 days
should be supplied at the same time from the date of invoice
a. Correct (b) If payment is not made to the supplier within 90 days
ad
b. Incorrect from the date of invoice
c. Partially correct (c) If payment is not made to the supplier within 180 days
d. None of the above from the date of invoice
Ans:- a b c d (d) None of the above
Ans:- a b c d
17. Mr. A placed an order with Mr. B of 20,000 pcs on 1st
January 2017 and the same order is to be received 22. In case supplier has deposited the taxes but the
Ac receiver has not received the documents, is
on last day of every month i.e. 2,000 pcs per month
shall be received in next 10 months. When can Mr. A receiver entitled to avail credit?
can avail ITC? a. Yes, it will be auto populated in recipient monthly
a. 28th February, 2017 returns
b. 31st October, 2017 b. No as one of the conditions of 16(2) is not fulfilled
c. 31st March, 2017 c. Yes, if the receiver can prove later that documents are
d. Proportionately with receipt of every instalment received subsequently
Ans:- a b c d d. None of the above
Ans:- a b c d
18. If the goods are received in lots/installment, -----------
t
------------------- 23. Mr. A purchased goods from Mr. B on 1st May, 2018
(a) 50% ITC can be taken on receipt of 1st installment and and fulfilled all the conditions for availing the ITC.
balance 50% on receipt of last installment. He availed the credit in the May Month i.e. in its
ar
(b) ITC can be availed upon receipt of last installment. GSTR – 3B which was filed on 15th June, 2018. He
(c) 100% ITC can be taken on receipt of 1st installment. made the payment to Mr. B on 31st December, 2018.
(d) Proportionate ITC can be availed on receipt of each Answer the following questions.
lot/installment. Can recipient claim the credit even if he has not
Ans:- a b c d made the payment to supplier within 180 days?
a. Yes
Sm
44
a. Yes composition levy
b. No (b) free samples
c. Maybe (c) goods used for personal consumption
d. Not allowed (d) all of the above
y
Ans:- a b c d Ans:- a b c d
26. In question 23, is there any time limit for re-availing 32. Which of the following Input Tax credit (ITC) is not
m
the credit? available to the tax payer:-
a. One month (a) ITC on Goods purchased for resale
b. One year (b) ITC on Goods used for providing taxable services
c. 180 days (c) ITC on Goods used in making supplies out of India
d. No time limit (d) ITC on purchase of Motor vehicle for use by director
Ans:- a b c d Ans:- a b c d
e
27. Can the recipient avail the Input tax credit for the 33. ITC of motor vehicles used for _________________
part payment of the amount to the supplier within is allowed.
one hundred and eighty days? (a) Transportation of goods
ad
a. Yes, on full tax amount and partly value amount (b) Transportation of passengers
b. No, he can’t until full amount is paid to supplier (c) Imparting training on driving
c. Yes, but proportionately to the extent of value and tax (d) All of the above
paid Ans:- a b c d
d. Not applicable is eligible to claim refund in respect of
exports of goods le 34. ITC on motor vehicles on its leasing, renting or hire
Ans:- a b c d is not allowed except ________________
Ac a. When used for making outward supply of same
28. What should be the treatment of tax element in a category of goods or services
capital asset? b. When used for making outward supply of different
a. Capitalize the tax element and claim depreciation category of goods or services
b. Claim the ITC at first instance c. When making outward sale of such motor vehicles
c. Either (a) or (b) d. None of the above
d. Both (a) and (b) Ans:- a b c d
Ans:- a b c d
35. ITC is blocked in case of construction, repairs, -------
29. A person has a single GST registration in respect of -, ----------, ------------ except plant & machinery ----
t
c. Rs.75,000
SECTION 17 d. Rs. 80,000
Ans:- a b c d
31. Input tax credit is not available in respect of
_______. 37. In which of the following cases, input tax credit is
(a) services on which tax has been paid under not allowed?
45
4
2
(a) Packing material used in a factory support including foundation & structural
(b) Goods used for providing services during warranty support are --------------- for the ITC.
period a) Eligible
(c) Inputs used for quality control check b) Not eligible
y
(d) Confectionery items for consumption of employees c) Eligible, with permission of Jurisdictional officer
working in the factory d) None of the above
Ans:- a b c d Ans:- a b c d
m
38. GST Authorities raised Mr. A’s place of business and 43. Situations:
found that tax has been evaded. The proceedings I. Health insurance of factory employees [Not
under section 73 were started and Mr. A was made notified by Government]
liable to pay a tax of Rs. 2 crore along with the ii. Composite service used for installation of plant
interest and penalty. For which of the following and machinery
e
amounts Mr. A can claim ITC? iii. Purchase of car used by director for the business
a. Rs. 2 crore meetings only
b. Rs. 2 crore and interest paid separately Comment on the eligibility of the credit in below
c. Rs. 2 crore, interest and penalty paid separately mentioned cases.
ad
d. No ITC shall be allowed a. Not eligible, eligible, not eligible
Ans:- a b c d b. Not eligible, not eligible, not eligible
c. Eligible, not eligible and not eligible
39. Mr. A purchased goods from Mr. B a composition d. Eligible, eligible and not eligible
dealer worth Rs.2,00,000. Since Mr. B was trader so Ans:- a b c d
chocolates to its employees. Can the company supplies certain items to SEZ which are zero-rated.
claim ITC in respect to the inputs used in making He wants to understand which of the following will
such gifts? be included in computation of taxable supplies for
ar
46
47 Compute the value of 'exempted supply' for purpose
of section 17(2) of the CGST Act, 2017 from the 51. Kamlesh hires a works contractor for repairing his
following details: (i) Value of alcoholic liquor for factory building on a lumpsum payment of `
human consumption: ` 1,50,000 (ii) Value of 11,80,000. He debits half of the expenditure in the
y
architect services supplied: `2,00,000 (iii) profit and loss account and the remaining half in the
Securities of face value of ` 1,00,000 sold for ` building account. Assuming the rate of GST to be
95,000 18%, Kamlesh can take input tax credit of:
m
(a) ` 1,50,000 (a) ` 90,000
(b) ` 2,50,000 (b) ` 1,06,200
(c) ` 2,45,000 (c) ` 2,12,400
(d) ` 1,50,950 (d) Nil
Ans:- a b c d Ans:- a b c d
e
48. “Credit of ITC may be availed for making zero rated 52. Input tax Credit is available on all supplies which are
supplies, even if such supply is an exempted used or intended to be used in the course or
supply.” – Comment furtherance of business. Input tax credit will be
a. Correct available under which of the following situations?
ad
b. Incorrect (a) GST paid on motor vehicle used in the course and
c. Partially correct furtherance of business.
d. None of the above (b) GST paid on club membership fees.
Ans:- a b c d (c) GST paid on goods or services or both used for
personnel consumption.
49. Krishna Motors is a car dealer selling cars of an (d) IGST @18% paid on inputs purchased from a vendor
international car company. It also provides in Bangalore where the supplier is registered in
Ac
maintenance and repair services of the cars sold by Rajasthan.
it as also of other cars. Determine the amount of Ans:- . a b c d
input tax credit available with the help of the
following information regarding expenses incurred 53. For banking companies using inputs and input
by it during the course of its business operations: services partly for taxable supplies and partly for
exempt supplies, which of the statement is true?
Cars purchased from the manufacturer for making 20,00,000
further supply of such cars [Two of such cars are (a) ITC shall be compulsorily restricted to credit
destroyed in accidents while being used for test attributable to taxable supplies including zero rated
drive by potential customers. GST paid on their supplies
purchase is ` 1,00,000 ] (b) 50% of eligible ITC on inputs, capital goods, and input
t
Works contract services availed for constructing a car service shall be mandatorily taken in a month and the
50,000
shed in its premises rest shall lapse.
(c) Banking company can choose to exercise either
ar
50. (i) A software professional providing technical exempted services & some taxable services. What
consultancy buys a motorcycle for use of his is the eligible amount of credit?
employee. a) ` 150,000
(ii) A motor driving school buys a car for being used b) ` 75,000
in imparting motor driving training. c) ` 100,000
(iii) A flying school imports an aircraft for use in its d) None of the above
training activity. Ans:- a b c d
(iv) A manufacturer buys a small truck for the
purpose of transporting its inputs and finished 55 Calculate the amount of eligible ITC?
goods. Input tax credit cannot be taken on:
V’
Particulars Amount(`)
(a) (iii) Purchase of mobile phones for employees 20,000
(b) (I), (ii), (iii), (iv) to be used for business purposes
(c) (I) Taxes paid on telephone expenses
5,000
(d) (I), (iii)
Taxes paid on security services availed
Ans:- a b c d 18,000
by registered person for his factory
47
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2
59. Can the unutilized input tax credit be transferred in
Motor vehicle purchased for employees 1,50,000 case of change in constitution of business?
to be used for personal as well as a. Not possible
business purposes b. No, it will be exhausted
y
Motor vehicle purchased for transportation c. Yes, it will be transferred only if there is provision for
2,00,000
of goods within the factory of transfer of liabilities
registered person d. It will be transferred only if it is shown in books of
m
Taxes paid on food expenses incurred 2,000 Account of transferor
by registered person for his employees Ans:- a b c d
Rent-a-cab facility given to employees
as it is obligatory for the employer to 36,000
60. In case of Compulsory registration, input tax credit
provide it under an applicable law can be availed on
The service has been notified by the a. stocks held on the day immediately preceding the
e
Government. date from which he becomes liable to pay tax under
Taxes paid on purchase of cement and theprovisions of this Act, provided application for
other material for renovation of the 16,000
registration is filed within 30 days from the due date
office room (not capitalised)
ad
b. stocks held on the day immediately preceding the
date of grant of registration under the provisions of
this Act.
(a) Rs. 2,95,000 c. stocks held on the day immediately preceding the
(b) Rs. 4,47,000 date of application of registration under the
(c) Rs. 2,43,000 provisions of this Act.
(d) Rs. 2,59,000 d. None of the above
Ans:- a b c Ans:- a b c d
d
Ac
61. In case of Voluntary registration input tax credit can
be availed
SECTION 18
(a) on stocks held on the day immediately preceding the
date from which he becomes liable to pay tax under
56. True or false – “In case of switching from taxable to
the provisions of this Act
exempt transactions or from Regular to
(b) on stocks held on the day immediately preceding the
composition scheme, ITC is fully restricted.”
date of grant of registration under the provisions of
a. Correct this Act.
b. Incorrect (c) on stocks held on the day immediately preceding the
t
Ans. a b c d
57. An assessee obtains new registration. It can avail
credit on inputs lying in stock. What is the time limit 62. In case of supply of plant & machinery on which ITC
for the taking said credit? is taken, tax to be paid on is
a. 1 year from the date of invoice a. Amount equal to ITC availed less 5% for every
b. 3 years from the date of registration quarter or part thereof
Sm
48
64. Is Input tax to be reversed in case of supply of 66. Mr. Natwarlal, a registered person under GST, was
capital goods the proprietor of M/s. Spiceton Restaurant.
(a) Yes fully He died and left behind his wife and son on 15-Aug-
y
(b) No 2018.
(c) Yes, to extent of credit taken as reduced by His son wants to continue the business of the
prescribed percentage or tax on transaction value deceased father.
whichever is higher The GST consultant of M/s. Spiceton Restaurant,
m
(d) Yes, to the extent of transaction value of such goods gave the following advices to the son, how the son
Ans. a b c d could continue the business of his deceased
father.
65. What will happen to the rest of credit carried Which of the following option is correct in
forward in respect of a regular dealer switching accordance with the provisions of GST law-
e
over to composition stream under GST, after (a) The son should get himself registered under the
adjusting to the inputs held in stock? name and style M/s. Spiceton Restaurant, under
a) Carry forward the rest of the credit his own PAN and file Form ITC-02.
b) Credit kept in abeyance till the taxable opts for (b) The son can get the authorized signatory changed
ad
normal scheme once again by approaching to the Proper Officer and can
c) Credit lapses continue the same business.
d) Electronic credit ledger will freeze with the credit (c) The son should close the old firm and start new
available business under different name.
Ans:- a b c d (d) The son should do the business as his mother as
the new proprietor of the M/s. Spiceton Restaurant,
and son should act as a Manager.
Ans:- a b c d
Ac
Answer:-
1 b 11 a 21 c 31 d 41 b 51 a 61 b
2 a 12 b 22 b 32 d 42 b 52 d 62 a
3 c 13 c 23 b 33 d 43 a 53 c 63 a
t
4 a 14 a 24 c 34 a 44 c 54 b 64 c
ar
5 a 15 b 25 a 35 a 45 a 55 a 65 c
6 a 16 a 26 d 36 a 46 c 56 a 66 a
7 d 17 b 27 c 37 d 47 d 57 a
8 b 18 b 28 c 38 d 48 a 58 a
Sm
9 a 19 b 29 a 39 d 49 a 59 c
10 a 20 a 30 d 40 b 50 c 60 a
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49
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9 Payment of Tax
Think GST !
Think Vishal Sir...!!
SECTION 49 c. Total – Cash , liability
d. All of the above
1.Which of the following registers / ledgers are Ans: a b c d
maintained at the GST Portal?
y
a. Electronic liability ledger 8. Credit available in Electronic Credit Ledger can be
b. Electronic cash ledger used for payment of,
c. Electronic credit ledger a. Output Tax
m
d. All of the above b. Output Tax and Interest
Ans: a b c d c. Output Tax, Interest and Penalty
d. Output Tax and Tax under reverse charge
2. Payment of tax made electronically is reflected in, Ans: a b c d
a. Electronic cash ledger
b. Electronic credit ledger 9. Payment of tax, interest or penalty for each month
e
c. Electronic liability ledger shall be made by debiting ___________on or before
d. All of the above the due date of filing return.
Ans: a b c d a. Electronic Cash Ledger
b. Electronic Credit Ledger
ad
3. Payment made through challan will be credited to c. Electronic Liability Ledger
which registers / ledgers? d. Both (a) and (b)
a. Electronic Tax liability register Ans: a b c d
b. Electronic Credit Ledger
c. Electronic cash ledger 10. What is deemed to be the date of deposit in the
d. All of the above electronic cash ledger?
Ans: a b c d a. Date on which amount gets debited in the account of
Ac the taxable person
4. Electronic credit ledger is maintained in Form, b. Date on which payment is initiated and approved by the
a. GST PMT – 1 taxable person
b. GST PMT – 2 c. Date of credit to the account of the appropriate
c. GST PMT – 3 Government
d. GST PMT – 4 d. Earliest of the above three dates
Ans: a b c d Ans: a b c d
5. While making purchases the dealer has to pay GST 11. Which of the following statement is correct: -
which is available as credit while making payment a. Payment of GST can be done by Cash
t
for outward supply. Such credit is reflected in GST b. Payment of GST can be done by Cheque
portal in, c. Payment of GST Can be done by Internet banking
d. Payment of GST can be done within 24 hours of filing of
ar
6. The major heads in the electronic cash ledger, c. Challan Pin Identification Number
electronic liability register and challan for deposit of d. Common Pin Identification Number
tax are Ans: a b c d
a. IGST, CGST, SGST, UTGST & GST Compensation
Cess 13. What is the full form of CIN?
b. Tax, Interest, Penalty, Fee, others and total a. Challan Identification Number
c. Total – cash, liability b. Common Portal Identification Number
d. All of the above c. Common Inquiry Number
Ans: a b c d d. Challan Inquiry Number
V’
Ans: a b c d
7. In each major heads in the electronic cash ledger,
electronic liability register and challan for deposit of 14. What is the full form of BRN?
tax, the minor heads are, a. Bank Reconciliation Number
a. CGST, SGST, UTGST & GST Compensation Cess b. Bank Reconciliation Notification
b. Tax, Interest, Penalty, Fee, others and total c. Bank Reference Notification
50
d. Bank Reference Number c. May be
Ans: a b c d d. It does not matter
Ans:- a b c d
15. What is E – FPB?
y
a. Authorized branches of banks to collect payment of 21. What gets debited to the electronic credit ledger?
GST a. Matched input tax credit
b. Prescribed banks to distribute GST forms b. Provisionally input tax credit
m
c. Prescribed banks for GST workshops c. Unmatched input tax credit
d. All of the above d. All of them
Ans: a b c d Ans:- a b c d
16. Any payment required to be made by a person who is 22. Balance in electronic credit ledger under IGST can be
not registered under the Act, shall be made on the used against which liability?
e
basis of a _______________ . a. IGST Liability only
a. Temporary Identification Number b. IGST and CGST liability
b. Transaction Reference Number c. IGST, CGST and SGST liability
ad
c. Challan Identification Number d. None of them
d. Bank Reference Number Ans:- a b c d
Ans: a b c d
23. A Company has head office in Bangalore and 4
17. Where a person has claimed refund of any amount branches in different states, all registered under
from the electronic cash ledger, the said amount GST and one ISD registered unit in Delhi. How many
shall be debited to the _______________ . electronic cash ledgers will the company have?
a. Electronic Credit Ledger a. 1
Ac
b. Electronic Liability Ledger b. 4
c. Electronic Cash Ledger c. 5
d. Whichever has the higher balance of above d. 6
Ans:- a b c d Ans:- a b c d
18. The electronic liability register of the person shall be 24. Taxable person made an online payment of tax due to
debited by, technical snag CIN was not generated but my bank
a. The amount payable towards tax, interest, late fee, account is debited. what should he do?
etc. as per the return furnished a. wait for 24 hours for re-credit
b. The amount of tax, interest, penalty, etc. as b. Approch bank
t
51
4
2
Ans:- a b c d
Section 50
28. Input tax credit of CGST can be utilised for the
32. The interest rate on GST, if not specified anywhere,
following?
y
shall be treated as ______________ and not as
a. For the payment of penalties
__________
b. For the payment of interest
a. Simple rate, compound rate
c. For payment of IGST
b. Compound rate, simple rate
m
d. For payment of SGST
c. Compound rate, 18%
Ans:- a b c d
d. 18%, 24%
Ans:- a b c d
29. What should the taxable person do if he pay’s tax
under wrong GSTIN?
33. A taxable person failed to pay tax and / or file returns
(a) Pay again under right GSTIN and claim refund
e
on time. He should pay interest on?
(b) Auto-adjustment
a. Gross tax payable
(c) Adjustment on application/request
b. Gross tax payable and input credit claimed
(d) Raise ISD invoice and transfer
c. Net tax payable i.e. amount to be paid after ITC set off
ad
Ans. a b c d
d. No interest payable, if reasonable cause is shown
Ans:- a b c d
30. M/s. Kuber Anand is registered under GST. He has
output tax liability as under-
34. What is the rate of interest in case of belated payment
CGST: Rs. 85,00,000
of tax?
SGST: Rs. 85,00,000
a. 1%
IGST: Rs. 1,05,00,000
b. 10%
It has input tax credits as under-
Ac c. 18%
CGST: Rs. 1,50,00,000 including credit of Rs. d. 24%
75,00,000 carried forward from TRAN-1 Ans:- a b c d
SGST: Rs. 30,00,000
IGST: Rs. 1,20,00,000 35. What is the rate of interest in case of undue or excess
Calculate the amount of tax to be deposited in cash? claim of ITC?
a. CGST: Nil; SGST: Rs. 55,00,000; IGST: Nil a. 18%
b. CGST: Rs. 10,00,000; SGST: Rs. 55,00,000; IGST: b. 24%
Nil c. 30%
c. CGST: Nil; SGST: Rs. 50,00,000; IGST: Nil d. 40%
d. CGST: Nil; SGST: Rs. 40,00,000; IGST: Nil
t
Ans:- a b c d
Ans:- a b c d
36. Mr. A was liable to pay GST of Rs.10,000 on 20.8.2018
ar
31. M/s ABC Ltd is filing his GSTR-3B for the month of but he failed to pay. Later he decided to pay tax on
August 2018. His total credit balance of inputs and 26.10.2018. what would be the period for which
total tax liability payable is given in the table below. interest has to be paid by him?
He needs your guidance to understand the utilization a. 66 days
of credit. Guide him with the rules towards credit b. 67 days
utilization of IGST, CGST, SGST and cash payable c. 68 days
towards tax liability.
Sm
d. 70 days
Tax Total Credit Balance Total Tax liability payable Ans:- a b c d
IGST 80,000 90,000
CGST 87,000 85,000 37. Mr. A was liable to pay GST of Rs.10,000 on 20.7.2018
SGST 75,000 77,000 but he failed to pay. Later he decided to pay tax on
TOTAL 2,42,000 2,52,000 25.09.2018. What would be the amount of interest
a. IGST payable – 10,000, CGST Payable – 0, SGST that has to be paid by him?
payable – 2,000 a. Rs. 325
b. IGST payable – 8,000, CGST Payable – 0, SGST b. Rs. 330
payable – 2,000 c. Rs. 434
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52
a. From the late date of the month in which credit is
claimed Answers:-
b. From the due date for filing GSTR-02 of the month in
which credit is claimed
y
01 d 19 c
c. From the due date for filing GSTR-03 of the month in
which credit is claimed 02 a 20 b
d. From the date of utilization of credit
m
Ans:- a b c d 03 c 21 d
04 b 22 c
39. State which of the following statements are not true?
(I) A taxpayer who makes delayed payment of tax is 05 c 23 c
liable to pay interest at the rate of 18% for a month or
part of the month. a 24 c
e
06
(ii) A taxpayer who makes delayed payment of tax is
liable to pay interest at the rate of 15% for a month or 07 b 25 c
part of the month, if he has bona fide reasons for
08 a c
ad
delay. 26
(iii) A taxpayer who made delayed payment of tax shall d b
09 27
be liable to pay interest at the rate of 24% for a month
or part of the month, if he has mala fide reasons for 10 c 28 c
delay.
(iv) A taxpayer who made delayed payment of tax shall 11 c 29 a
be liable to pay interest at the rate of 18% per annum.
12 b 30 d
a. (I)
Ac
b. (I), (ii), (iii) 13 a b
31
c. All of the above
d. None of the above 14 c 32 a
Ans:- a b c d
15 a 33 a
16 a 34 c
17 c 35 b
18
t
d 36 b
37 b
ar
38 c
39 b
Sm
V’
53
4
2
10 Registration
Think GST !
Think Vishal Sir...!!
Section 22
1. Can a person without GST registration claim ITC and Ans:- a b c d
collect tax?
y
a. Yes 7. In case where a company has places of business all
b. No over India. Can such a company take a single
c. At the discretion of the Government Centralized GST Registration?
m
d. Cannot claim ITC but have to collect tax from the a. Yes
customers b. Optional
Ans:- a b c d c. No
d. Registration only in the state where Head Office is
2. What is the threshold limit for requirement of located
registration under GST? Ans:- a b c d
e
a. Rs. 10 lakhs / 20 lakhs in special category states
b. Rs. 20 lakhs / 5 lakhs in special category states 8. In case of job work, once the work is being
c. Rs. 20 lakhs / 10 lakhs in special category states completed, the value of the goods shall be
ad
d. Rs. 10 lakhs / 5 lakhs in special category states included in the turnover of __________
Ans:- a b c d a. Principal
b. Job worker
3. c. Agent
A. A person is not required to pay GST if he is d. Either of the above
voluntarily registered under GST. Ans:- a b c d
B. Once a person is registered under GST Act, he is
bound to pay GST, even if his turnover is below 9. Where the business carried on by a registered
Ac
prescribed limit (of Rs. 20 / 10 lakhs) person is transferred as a going concern, then will
Comment on the above statements, the transferee be liable to register in GST?
a. A – Correct, B – Incorrect a. Yes
b. A – Incorrect, B – Correct b. No
c. Both A & B – Correct c. Option of transferee
d. Both A & B – Incorrect d. Depends on terms of transfer
Ans:- a b c d Ans:- a b c d
4. In case where a person makes supply from multiple 10. Every person who is liable to be registered under
states and his aggregate turnover exceeds GST shall apply for registration in form:
t
b. In only one state where turnover is greater than 20 lakhs (c) GST REG-30
c. In states where turnover is greater than 20 lakhs (d) GST REG-06
d. In any one of the states Ans:- a b c d
Ans:- a b c d
11 What is the aggregate turnover in a financial year
5. A person registered in one State is ‘unregistered above which a person is required to obtain
Sm
6. A person, resident of UP has business places both at 12. Is the person making supply from territorial waters
Delhi and Rajasthan. From where he has to take of India required to registration
GST Registration? a) No (as the place from where supply is initiated is not
V’
54
of the appropriate base line is located
Ans:- a b c d 15. Mr. Champak, located in the State of Himachal
Pradesh, a job worker, is engaged in providing job
y
13 How the aggregate turnover is calculated for work services relating to silverware articles to his
computing threshold limit of registration? Principal, Mr. Mote Lal, in the State of Rajasthan. The
(I) Aggregate value of all taxable supplies(excluding the value details of his turnover are as under:
of inward supplies on which tax is payable by a person on For the period July, 2017 to March, 2018: Rs. 19,00,000/-.
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reverse charge basis), exempt supplies, export of Mr. Champak, has earned continuous rental income of Rs.
goods/services and interstate supplies of a person having 15,000/- per month from his residential flat in Delhi for nine
same PAN computed on all India basis. months from July, 2017 to March, 2018. He has also made
(ii) Aggregate value of all taxable supplies(excluding the value wholly exempt supplies of handicraft items of Rs. 50,000/-
of inward supplies on which tax is payable by a person on during the period, December, 2017 to March, 2018.
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reverse charge basis), exempt supplies, export of Compute the aggregate turnover of Mr. Champak for the
goods/services and interstate supplies of a person financial year 2017-18 under the CGST Act,
computed for each state separately. 2017, and also state whether he is liable for registration
(iii) Aggregate value of all taxable intrastate supplies, export of under the Act or not.
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goods/services and exempt supplies of a person having a) Rs. 20,85,000/-; Liable for registration.
same PAN computed for each state separately. b) Rs. 20,35,000/-; Liable for registration.
(iv) Aggregate value of all taxable supplies(excluding the c) Rs. 19,00,000/-; Not liable for registration.
value of inward supplies on which tax is payable by a d) Rs. 19,50,000/-; Liable for registration.
person on reverse charge basis), exempt supplies, export Ans:- a b c d
of goods/services and interstate supplies of a person
having same PAN computed on all India basis and Section 23
Ac
excluding taxes if any charged under CGST Act, SGST Act
and IGST Act. 16 "Mr. X is only supplying services under RCM & the total
(a) (I) supplies made during the year was Rs. 100 lakhs."
(b) (ii) Comment.
(c) (iii) a) Mr. X must take compulsory registration under GST
(d) (iv) b) Mr. X may operate without registration under GST
Ans:- a b c d c) Mr. X must take registration as he has exceeded the
threshold limit
14. A new client Mr. Z has recently obtained GST d) None of the above
registration and keeps manual accounts. He has got Ans:- a b c d
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of his goods and does some wholesale trading. He the threshold limit
asks you weather he needs to display the GSTIN b) Required to take compulsory registration only when the
registration and GSTIN at any other places? threshold limit is crossed
a) Mr. Z is required to display his certificate of registration c) Can pay the tax even without taking registration
in a prominent location at his principal place of d) Not required to take registration
business only. Name board at entry shall display Ans:- a b c d
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under the Act or not. (a) if his all India based aggregate turnover exceeds ` 20
a) Rs. Nil; Not liable for registration lakh in a financial year
b) Rs. 10,00,000/-; Not liable for registration (b) if his all India based aggregate turnover exceeds ` 10
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c) Rs. 35,00,000/-; Not liable for registration lakh in a financial year
d) Rs. 30,00,000/-; Liable for registration (c) irrespective of the amount of aggregate turnover in a
Ans:- a b c d financial year
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(d) in case of making inter-State supply of taxable goods,
Section 24 irrespective of the amount of aggregate turnover in a
19. Person making inter – State supply of taxable financial year
services is not required to register if the aggregate Ans:- a b c d
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a. Correct taxable supply of goods on behalf of Lalji (P) Ltd.
b. Incorrect Lalji (P) Ltd. is having aggregate turnover of Rs. 1.5
c. In all cases of inter – State supply the person should crore whereas Mr. Chatpat is having aggregate
turnover of Rs. 18 lacs. Whether he is required to
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be registered
d. None of the above take registration?
Ans:- a b c d (a) No, because his turnover is less than Rs. 20 lacs
(b) Yes, he is compulsorily required to get registered
20. Mr. A of Delhi is supplying specified handicrafts to (c) He is exempt from taking registration by way of
Mr. B of UP. Turnover of Mr. A is only 5 lacs. Is he notification
liable to take registration in GST? (d) He can voluntarily apply for registration
a. Yes Ans:- a b c d
Ac
b. No
Ans:- a b c d 26. Section 24 of the CGST Act, 2017 requires certain
categories of persons who would require compulsory
21. Mr. A of Pune till date is only engaged in making registration irrespective of threshold limit of turnover
exports and supplies to SEZ units. His aggregate for obtaining registration. Mr. A has following 4
turnover is Rs.15 lacs. Is Mr. liable to registration in business ideas in mind, which one of them would not
GST? require him to obtain compulsory registration as per
a. No, as threshold limit is not crossed Section 24.
b. Yes, as the value of supply has exceeded Rs.10 lacs a) Mr. A wants to trade in electronic components, where his
c. Yes, since it is an inter – state supply area of supply would be majorly outside the State.
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d)
Ans:- a b c d monthly receipts to be INR 1,50,000. There is no other
income accruing to him
23. Issupplier (operating under an e-commerce operator Ans:- a b c d
liable u/s 9(5)) exempt from GST in respect of non-e-
commerce supplies 27. Which of the following persons is required to obtain
a) Yes compulsory registration?
b) No (a) Persons exclusively engaged in making supplies tax on
c) Yes, only in case of non-ecommerce supplies which is to be paid by the recipient on reverse charge
d) None of the above basis under section 9(3).
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20,00,000 d. 15 Digits
(d) None of the above. Ans:- a b c d
Ans:- a b c d
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32. What is the full form of UN?
28. State which of the following statement is incorrect: a. Un – identified Nation
(i) An agent, supplying goods on behalf of principal where b. United Identity Number
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invoice is issued in the name of principal, is required to c. Unique Identity Number
get compulsorily registered under GST. d. United in Nation
(ii) Persons who are required to deduct tax under section Ans:- a b c d
51, whether or not separately registered under this Act
are compulsory required to get registered under GST 33. Mr. X becomes liable to pay tax on 1st August, 2018
without any threshold. and has obtained registration on 15th August, 2018.
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(iii) Every person supplying online information and Such person is eligible for input tax credit on
database access or retrieval services from a place inputs held in stock as on:
outside India to a registered person in India is a) 1st August, 2018
compulsory required to get registered under GST b) 31st July, 2018
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without any threshold. c) 15th August, 2018
(iv) Persons who supply services, other than supplies d) He cannot take credit for the past period
specified under sub-section (5) of section 9, through Ans:- a b c d
such electronic commerce operator who is required to
collect tax at source under section 52 are compulsory 34. Threshold limit of Rs. 20 lakhs for GST registration
required to get registered under GST without any means for voluntary registration the person should
threshold. have aggregate turnover of 20 lakhs or more.
(a) (I), (ii)
Ac a) Correct - as per IGST Act
(b) (iii), (iv) b) Incorrect - for voluntary registration the threshold limit
(c) (I), (iii), (iv) is 10 lakhs
(d) None of the above c) Correct - as per CGST Act
Ans:- a b c d d) Incorrect - turnover is not relevant for voluntary
registration
Section 25 Ans:- a b c d
29. The application shall be forwarded to the _________ 35. Within how many days a person should apply for
who shall examine the application and the registration?
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accompanying documents for GST registration. (a) Within 60 days from the date he becomes liable for
a. Proper Officer registration.
(b) Within 30 days from the date he becomes liable for
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b. GSTN
c. GSTP registration.
d. GST Portal (c) No Time Limit
Ans:- a b c d (d) Within 90 days from the date he becomes liable for
registration.
30. The application for registration after being examined Ans:- a b c d
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31. The Number of Digits in the PAN based GSTIN 37. Mr. X, a new client, comes to you to apply for a GST
registration Number will be: Registration for a proprietorship concern and has
a. 10 Digits query on time limit for taking registration? Another
b. 12 Digits question is that he would submit all the required
c. 14 Digits documents of registration now and will not be
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available from tomorrow since he is travelling. He is registration, the effective date of registration shall be:
ready to provide Class 2 digital signatures along with a) Date of grant of registration
required documents. Can application for registration b) Date of application for registration
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be signed digitally in his absence? c) Within three working days from the date of submission
a) Mr. X should take registration within 7 days from the of the application
date on which he becomes liable to registration. He d) Within seven working days from the date of submission
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would not have the option to sign the application using of application
Valid digital signatures. Ans:- a b c d
b) Mr. X should take registration within 15 days from the
date on which he becomes liable to registration. He 42. A non-resident taxable person is required to apply for
would have the option to sign the application using registration:
Valid digital signatures. (a) within 30 days from the date on which he becomes
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c) Mr. X should take registration within 30 days from the liable to registration
date on which he becomes liable to registration. He (b) within 60 days from the date on which he becomes
would have the option to sign the application using liable to registration
Valid digital signatures. (c) at least 5 days prior to the commencement of business
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d) Mr. X should take registration within 15 days from the (d) None of the above
date on which he becomes liable to registration. He Ans:- a b c d
would not have the option to sign the application using
Valid digital signatures. Section 27
Ans:- a b c d
43. A person applying for registration as a casual taxable
38. Mr. A wants to register under GST Act and wants to person shall be given a temporary reference number
Ac
know what is the acceptable Bank account related by the Common Portal ______ .
proof? a. For making advance deposit of tax
I) Scanned copy of first page of passbook b. After validation of email and phone number with OTP
ii) Scanned copy of relevant page of bank statement c. For making proper signature with DSC
iii) Scanned copy of Cancelled cheque without entity or d. None of the above
proprietor name Ans:- a b c d
iv) Scanned copy of Cancelled cheque containing name of the
proprietor or business entity 44. Mr. A has been registered as a casual taxable
a) I or ii person, for an exhibition program conducted at
b) ii or iii Delhi. While obtaining registration Mr. A deposited
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Ans:- a b c d
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(d) None of the above. c. 5 months
Ans:- a b c d d. 6 months
Ans:- a b c d
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non-resident taxable person is: 53. Any registered taxable person, whose registration is
(a) GST REG-01 cancelled by the proper office on his own motion,
(b) GST REG-02 may apply to such officer for revocation of
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(c) GST REG-05 cancellation of the registration within ____________
(d) GST REG-09. from the date of service of the cancellation order.
Ans:- a b c d a. 7 days
b. 15 days
48 Which of the following statement is true for Mr. X, a c. 30 days
casual taxable person? d. 45 days
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(a) Mr. X is not required to take registration under GST. Ans:- a b c d
(b) Mr. X is required to get registration under GST, if the
aggregate turnover in a financial year exceeds ` 20 lakh. 54. The proper officer may cancel the registration of
(c) Mr. X can opt for voluntary registration under GST. taxable person from such date, as he may deem fit,
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(d) Mr. X has to compulsorily get registered under GST in case where a person paying tax under
irrespective of the threshold limit. composition scheme has not furnished returns for
Ans:- a b c d
______.
a. 3 consecutive tax periods
49 The registration certificate granted to Non resident b. 4 consecutive tax periods
taxable person is valid for _____days from the c. 5 consecutive tax periods
effective date of registration. d. 6 consecutive periods
(a) 30 Ans:-
Ac a b c d
(b) 60
(c) 90 55. Which one of the following cannot be a reason for
(d) 120 cancellation of registration?
Ans:- a b c d
(a) There is a change in the constitution of business from
partnership firm to proprietorship.
50. Registration certificate granted to casual taxable (b) The business has been discontinued.
person or non-resident taxable person will be valid (c) A composition taxpayer has not furnished returns for
for: three consecutive tax periods.
(a) Period specified in the registration application (d) A registered person, other than composition taxpayer,
(b) 90 days from the effective date of registration has not furnished returns for three consecutive tax
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d) All of the above of cancellation, has to be discharged. After cancellation
Ans:- a b c d of GST, he can collect GST from his customer but he
cannot claim any input tax credit of GST paid by him.
58. What is the validity of the registration certificate? b) Before cancellation of GST, Mr. Y has to pay an amount
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(a) One year equivalent to the credit of input tax in respect of inputs
(b) No validity held in stock on the day immediately preceding the date
(c) Valid till it is cancelled. of such cancellation or the output tax payable on such
(d) Five years. goods, whichever is higher. After cancellation, of GST,
Ans:- a b c d he cannot collect GST from his customer nor can he
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claim any input tax credit of GST paid by him.
59. Within how many days an application for revocation of c) Before cancellation of GST, Mr. Y has to pay an amount
cancellation of registration can be made? equivalent to the credit of input tax in respect of inputs
(a) Within 7 days from the date of service of the held in stock on the day immediately preceding the date
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cancellation order. of such cancellation or the output tax payable on such
(b) Within 15 days from the date of issue of the cancellation goods, whichever is lower. After cancellation of GST, he
order. cannot collect GST from his customer nor can he claim
(c) Within 45 days from the date of issue of the cancellation any input tax credit of GST paid by him.
order. d) After cancellation of registration, he can sell the stock
(d) Within 30 days from the date of service of the without any tax liability since GST number is cancelled.
cancellation order. Whatever is the GST liability, except during the month
Ans:-. a b c d of cancellation, has to be discharged. After cancellation
Ac
of GST, he cannot collect GST from his customer, but
60. Which of the following statements are correct?
he can claim input tax credit of GST paid by him.
(I) Revocation of cancellation of registration under
Ans:- a b c d
CGST/SGST Act shall be deemed to be a revocation of
cancellation of registration under SGST/CGST Act.
(ii) Cancellation of registration under CGST/SGST Act shall be
SEZ
deemed to be a cancellation of registration under
SGST/CGST Act. 62. ABC, is a SEZ situated in Noida, UP. It wants to set
(iii) Revocation of cancellation of registration under up another SEZ in UP. Which of the SEZ needs to be
CGST/SGST Act shall not be deemed to be a revocation registered in GST?
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obtain registration?
61. Mr. Y was registered under VAT and got provisional a. Yes
registration under GST during migration to GST. b. Not required if he is an agriculturist or person
Registration formalities were completed by exclusively engaged in supplying exempt goods or
submitting the required documents and registration services, ifspecified threshold limit does not exceed in
certificate was obtained. After working for few a financial year.
months, he found that he will not cross the threshold c. Not required if he is an agriculturist or person
limit required for obtaining registration nor will he fall exclusively engaged in supplying exempt goods or
into any case where registration is compulsory. services.
Thus, he decides to surrender the GST number. He d. No, only if specified threshold exceeds in a financial
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aggregate turnover exceeds Rs. 20 lakhs / Rs. 10 the liability under SGST/IGST for period prior to
Lakhs as the case maybe. cancellation of registration?
c.Apersoncancollectthetaxduringtheperiodofhisprovision a. Cancellation of registration will immune his liability
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alregistration. under CGST only.
d. Both (a) and (b) are correct b. Cancellation of registration will immune his liability
Ans:- a b c d under IGST only.
c. Cancellation of registration will immune his liability
65. Which one of following statements are correct? under SGST and CGST but not under IGST.
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a. Voluntary registration is not possible under GST. d. Cancellation does not affect the liability of taxable
b. Voluntarily registered person not liable to comply with person to pay tax and other dues under
all the provisions of the GST. CGST/SGST/IGSTAct.
c. A person may get himself registered voluntarily and Ans:- a b c d
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shall comply with all the provisions of GST.
d. None of the above. 71. Within how many days an application for revocation
Ans:- a b c d of cancellation of registration can be made?
a. Within 7days from the date of service of the
66. PAN issued under the Income Tax Act is mandatory cancellation order.
for grant of registration. b. Within 15 days from the date of issue of the
a. It is one of the documents listed. cancellation order.
b. Yes, but non-resident taxable person may be granted c. Within 45 days from the date of issue of the
Ac
registration on the basis of any other document. cancellation order.
c. Yes, but persons required to deduct tax at source u/s d. Within 30 days from the date of service of the
51 may have TAN in lieu of PAN. cancellation order.
d. Both (b) and (c) Ans:- a b c d
Ans:- a b c d
72. Can a person apply for registration to pay tax u/s 10
67. An E-commerce operator should get registered? for any of his business verticals at his choice?
a. Yes, irrespective of threshold limit a. Yes, irrespective of the registration status of other
b. No, required to register only if his aggregate turnover business verticals.
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exceeds the threshold limit. b. No all of his other business verticals also should
c. Yes, if he is located in North-western states. have obtained registration for paying tax under
d. He is required to register if he is liable to collect tax at section10.
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source and /or his aggregate turnover exceeds the c. Yes, provided majority of the business verticals are
threshold limit. paying undersection10.
Ans:- a b c d d. Yes, if all the business vertical in a state are obtained
registration to pay tax under section10
68. Which of the following requires amendment in the Ans:- a b c d
registration certificate?
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a. Change of name of the registered person 73. Every registered taxable person shall display his
b. Change in constitution of the registered person certificate of registration in a prominent location at
c. Addition, deletion or retirement of partners or his principal and at every other place of business
directors, Karta, Managing Committee, Board of also GSTIN shall be displayed on the name board at
Trustees, Chief Executive Officer or equivalent, the entry of such places.
responsible for the day to day affairs of the business a. No, certificate of registration to be displayed only at a
d. All of the above registered place of business and GSTIN need not be
Ans:- a b c d displayed on the name board.
b. Yes, above statement is correct.
69. What are the consequences of obtaining c. No, GSTIN to be displayed only on the invoices.
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74. Under what circumstances physical verification of
business premises is mandatory?
a. Physical verification of business premises is a
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discretionary power of proper officer.
b. If additional information for registration asked by the
proper officer is not submitted within specified time.
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c. If certificate of registration is obtained on mis
representation of facts.
d. If photograph of the business premise is not
uploaded in the common portal within specified time.
Ans:- a b c d
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75. Does a Medical Service Provider needs to get
registered under GST, if his aggregate turnover (u/s
2 (6) is more than Rs. 20 Lakhs but has taxable
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supply of only an amount of Rs. 2.4 Lakh p.a.?
a. No
b. Yes
Ans:- a b c d
Answers:-
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1 b 11 b 21 c 31 b 41 a 51 a 61 d 71 d
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2 c 12 d 22 a 32 c 42 c 52 d 62 c 72 b
3 b 13 d 23 b 33 b 43 a 53 c 63 c 73 b
4 a 14 b 24 d 34 d 44 a 54 a 64 a 74 a
Sm
5 a 15 a 25 b 35 b 45 c 55 d 65 c 75 b
6 d 16 b 26 d 36 c 46 a 56 d 66 d 76 a
7 c 17 a 27 d 37 c 47 d 57 d 67 d
8 a 18 d 28 c 38 c 48 d 58 c 68 d
9 a 19 a 29 a 39 a 49 c 59 d 69 a
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10 a 20 b 30 a 40 a 50 c 60 a 70 c
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11 Tax Invoice
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b) Date of receipt of advance (b) Receipt Voucher and e way bill
c) Date of provision of goods (c) Payment Voucher and e way bill
d) None of the above (d) All of the above
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Ans:- a b c d Ans: a b c d
9. M/s. Rajdhani (P) Ltd., registered in Delhi, wishes to
2. “Removal”, in rela on to goods, means – transfer the taxable goods to one of its business
a. Dispatch of the goods for delivery by the supplier ver cal having same PAN and registered within
b. Collec on of the goods by the recipient same State. Which document shall be issued by the
c. Either (a) or (b) Company in this situa on?
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d. Receipt of goods by the recipient (a) Delivery Challan
Ans: a b c d (b) Tax Invoice
(c) Bill of Supply
3. ____________ shall accompany transport of goods (d) Invoice-cum-bill of supply
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when e – way bill is not required. Ans:- a b c d
a. Delivery Challan
b. Tax Invoice 10. In case of supply of services, the tax invoice shall
c. Bill of Supply be prepared in the manner of:
d. (b or c) (a) Only original
Ans: a b c d (b) Two copies
(c) Three copies
Ac (d) Four copies.
4. Duplicate Delivery Challan shall be for ---------. Ans:- a b c d
a) Consignee
b) Transporter 11. Mr. X, a registered person deals in supply of
c) Consigner taxable goods. He need not issue tax invoice for the
d) Job worker goods supplied on 16.04.20XX as the value of the
Ans:- a b c d goods is ___.
(a) Rs. 1,200
5. Tax Invoice must be issued within ______________ (b) Rs. 600
from the date of removal of goods sent or taken on (c) Rs. 150
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applica on ll the effec ve date of registra on Ans: a b c d
b. During the period beginning with the effec ve date 21. A registered taxable person shall, on receipt of
of registra on ll the date of issuance of registra on advance payment w.r.t. any supply, issue
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cer ficate a. Debit note
c. During the period beginning with the date of b. Credit note
applica on ll the date of issuance of registra on c. Receipt voucher
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cer ficate d. Tax invoice
d. During the whole period prior to registra on Ans: a b c d
Ans: a b c d
22. No tax is payable on receipt of advance payment
15. Goods may be transported without issue of invoice w.r.t. any supply of __________.
in case of a. Goods
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a. Supply of liquid gas where the quan ty at the me b. Services
of removal from the place of business of the supplier c. Goods or Services or both
is not known, d. Input services
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b. Transporta on of goods for job work Ans: a b c d
c. Transporta on of goods for reasons other than by
way of supply 23. Is it mandatory to indicate the word “Revised
d. All of the above invoice” on revised tax invoice?
Ans: a b c d a. Yes
b. No
16. HSN Code is ___________ code? c. Yes, but if the value exceeds Rs.5,000
a. 8 digit b. 6 digit d. Yes, but if the value exceeds Rs.500
c. 2 digit d. 10 digit
Ac Ans: a b c d
Ans: a b c d
24. In case of taxable supply of services, tax invoice
17. HSN upto ----------should be provided in quarterly shall be issued within __________ from the date of
return in proposed return scheme. supply of service provided that the supplier is other
a) 4 digits than an insurer / banking company / financial
b) 4 digits or more ins tu on / non – banking financial company.
c) 2 digits a. 15 days
d) 0 digit (no HSN required) b. 30 days
Ans:- a b c d c. 45 days
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d. 60 days
18. Invoice shall be prepared in (I) ___________ in case Ans: a b c d
of taxable supply of goods and in (ii)_____________
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in case of taxable supply of services. 24. In case of taxable supply of services by a non-
a) (i) Triplicate, (ii) Duplicate banking financial company (NBFC), invoice shall be
b) (i) Duplicate, (ii) Triplicate issued within a period of __________ from the date
c) (i) Duplicate, (ii) Duplicate of supply of service.
d) None of the above (a) 30 days
Ans:- a b c d (b) 45 days
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(c) 60 days
19. The serial number of invoices issued during a tax (d) 90 days
period shall be furnished in Ans:- a b c d
a. GSTR – 1 25. Mr. A is supplying papers to an Advocate's Office.
b. GSTR – 3B He submi ed the account of total supplies made
c. GSTR – 2 during the 2 months period on the 25th of alternate
d. All of the above month. What type of supply is this?
Ans: a b c d a. Con nuous supply of goods
b. Con nuous supply of services
20. Is it mandatory to start a fresh series of invoice in c. Composite supply
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service has stopped i.e. the service started on c. Goods or services supplied are found to be
11.9.2018 and ceased on 30.9.2018. When should deficient
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the invoice be raised? d. All of the above
a. 11.09.2018 Ans: a b c d
b. 30.09.2018
c. 11.10.2018 33. Mr. A had made a supply in April, 2018. The party
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d. Any of the above returned the goods in May 2018. In which month the
Ans: a b c d credit note is to be reflected?
a. April, 2018
27. Do we have to issue a tax invoice even if we remove b. May 2018
goods for 'sale on approval basis'? c. By 10th April, 2018
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a. Yes b. No d. None of the above
c. Maybe d. None of the above Ans: a b c d
Ans: a b c d
ICAI BGM
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28. Where the goods being sent or taken on approval
for sale or return are removed before the supply 34. Tax invoice must be issued by________
takes place, the invoice shall be issued: (a) Every supplier
(a) before/at the me of supply. (b) Every taxable person
(b) 6 months from the date of removal. (c) Registered persons not paying tax under
(c) Earlier of (a) or (b). composi on scheme
(d) Later of (a) or (b). (d) All the above
Ans:- a b c d
Ac Ans. a b c d
29. Mr. A, a registered ar st took the pain ng from his 35. Law permits collec on of tax on supplies effected
gallery on basis of ________ to an art house for prior to registra on, but a er applying for
subsequent sale. There he issued __________ to registra on:
a customer while selling his art work. (a) Yes, but only on intra-State supplies, if the revised
a. Delivery challan, tax invoice invoice is raised within one month
b. Delivery challan, bill of supply (b) Yes, but only on intra-State supplies effected to
c. Invoice, bill of supply unregistered persons, if the revised invoice is raised
d. E way bill, bill of supply within one month
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services: months from the date of removal whichever is earlier
(a) Yes, in the form of a proforma invoice (d) when the recipient accepts the goods or three
(b) Yes, as a receipt voucher months from the date of supply whichever is earlier
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(c) Yes, the invoice must be raised to that extent Ans. a b c d
(d) None of the above
Ans. a b c d 44. If Supply of Services has ceased under a contract
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before the comple on of supply:
39. A con nuous supply of goods requires one of the (a) Invoice has to be issued within 30 days on the
following as a must: basis of 'Quantum Meruit' from the date of cessa on
(a) The goods must be no fied by the Commissioner (b) Invoice has to be issued at the me of cessa on to
in this behalf the extent of the supply effected
(b) The contract for supply lasts for a minimum (c) Invoice has to be issued for the full value of the
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period of 3 months contract a er deduc ng a percentage thereof as
(c) The supply is made by means of a wire, cable, prescribed
pipeline or other conduit (d) Invoice cannot be issued as the ma er will be sub-
(d) Supplier invoices the recipient on a regular or judice.
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periodic basis Ans. a b c d
Ans. a b c d
45. The tax invoice should be issued _______the date of
40. The recipient must issue an invoice in the following supply of service:
cases: a) Within 30 days from
(a) The supplier fails to issue an invoice b) Within 1 month from
(b) The supplier is unregistered c) Within 15 days from
Ac
(c) The goods or services received are no fied for tax d) On
on reverse charge basis Ans. a b c d
(d) both (b) & (c) above
Ans. a b c d 46. A person who has applied for registra on can:
a) Provisionally collect tax ll his registra on is
41. A payment voucher need not be raised if the approved, on applying for registra on, if he has
supplier is an unregistered person. applied for registra on within prescribed me
(a) True, as the recipient is required to issue an b) Neither collect tax nor claim input tax credit
invoice in that case c) Issue 'revised invoice' and collect tax within 1
(b) True, if the unregistered person does not require month of date of issuance of cer ficate of
t
(a) At the me of issue of statement of account c) Inter-state supplies are made to unregistered
where successive accounts are involved persons where the value of supply is ` 50,000 or more
(b) At the me of receipt of payment, if payments are (d) Supplies are made to registered persons
received prior to issue of accounts Ans. a b c d
(c) On a monthly basis
(d) As and when demanded by the recipient. 48. A credit note is issued by ________ and it is a
Ans. a b c d document accepted for GST purposes:
a) Supplier, for reducing the tax/ taxable value
43. In case of goods sent on sale on approval basis, b) Recipient, for reducing the tax/ taxable value
invoice has to be issued: c) Supplier, for increasing the tax/ taxable value
V’
(a) while sending the goods; another Invoice has to d) Recipient, for increasing the tax/ taxable value
be issued by the recipient while rejec ng the goods Ans. a b c d
(b) while sending the goods but the recipient can take
credit only when the goods are accepted by him
(c) when the recipient accepts the goods or six
66
49. For an increase in the tax/ taxable value, a debit b) Invoice reference
note for GST purposes: c) Full value of supply
y
a) Should be issued by the supplier d) None of the above
b) Should be issued by the recipient Ans. a b c d
c) May be issued by the supplier
m
d) May be issued by the recipient
Ans. a b c d
e
a) 31-Dec-2018 – Last date for filing annual return
b) 20-Jul-2018 – Actual date for filing annual return
c) 20-Jan-2018 – Due Date of Filing of December
Return
ad
d) 20-Oct-2018 – Due Date of Filing of September
Return
Ans. a b c d
1 a 11 c 21 c 31 d 41 d 51 a
2 c 12 b 22 a 32 d 42 a
3 d 13 a 23 a 33 b 43 c
t
4 b 14 b 24 b 34 c 44 b
ar
5 d 15 d 25 b 35 c 45 a
6 b 16 a 26 b 36 a 46 c
7 c 17 b 27 b 37 a 47 b
Sm
8 a 18 a 28 b 38 b 48 a
9 b 19 a 29 a 39 d 49 a
10 b 20 c 30 b 40 d 50 d
V’
67
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2
12 Return
Think GST !
Think Vishal Sir...!!
1. GST Returns are to be filed_______________ . d. Before or at the me of filing return
a. Manually Ans:- a b c d
b. Electronically
y
c. (a) or (b) 8. Challan in FORM GST PMT-06 generated at the
d. (a) or (b) both common portal shall be valid for a period of ------.
Ans:- a b c d a) 7 days
m
b) 15 days
2. Which return is required to be furnished for c) 20 days
outward supplies made by the registered person? d) 30 days
(a) Form GSTR-1
Ans:- a b c d
(b) Form GSTR-2
(c) Form GSTR-4A
9. Which class of person is required to file monthly
e
(d) Form GSTR-6
details of outward supplies of goods or services
Ans:- a b c d
or both in Form GSTR-1?
a) Non resident taxable person
3. Invoice-wise details of Supplies made by Taxable
ad
b) Person required to deduct tax at source
person are filed in __________________ .
c) Person who has opted to pay tax under
a. GSTR-1
composi on scheme
b. GSTR-2
d) Person other than men oned above
c. GSTR-3
Ans:- a b c d
d. All of the above
Ans:- a b c d
10. True or false: Under the GST regime, the
responsibility to compute the correct output tax
4. In Form GSTR-01 which of the following
Ac
liability, eligible input tax credit and net tax
informa on is to be filed?
liability lies with the assessee.
(a) detail of outward supplies of taxable
a) True
goods/supplies
b) False
(b) Details of inward supplies of taxable
c)
goods/supplies
d)
(c) detail of tax deducted
Ans:- a b c d
(d) Detail of amount deposited in cash ledger
Ans:- a b c d
11 Who are the persons liable to comply with
return filling obliga ons under Reverse Charge?
t
quarter
Ans:- a b c d 13. Return is _____________ for Taxable persons
with turnover exceeding Rs.1.50 Crores and
V’
7. In case of monthly returns, taxes will be payable _____________ for taxable persons with
_________. turnover to Rs.1.50 Crores.
a. Before filing the return a. Monthly, Annually
b. At the me of filing return b. Quarterly, Monthly
c. A er or at the me of filing return c. Monthly, Quarterly
68
d. Annually, Monthly (b) The company can revise the return within 90
Ans:- a b c d days
(c) The company will have to pay IGST and claim
y
14. Which of the statement is FALSE with regard to refund of CGST/ SGST
filing of GST return of Mr. Anup, a proprietor (d) No remedy available
registered under GST (non-composi on) who is
Ans:- a b c d
m
filing quarterly return as his annual turnover is
less than 1.5 crore
a) Mr. Anup has to file GSTR-1 quarterly 18. M/s. Gabbar Associates, a registered person in
b) Mr. Anup has to pay tax quarterly. Delhi issued a credit note amoun ng to Rs. 25,000
c) Mr. Anup has to se le his tax liabili es before (inclusive of GST) to Mr. Kalia, an un-registered
filing of return person residing in Delhi against an invoice
e
d) Mr. Anup has to pay tax monthly. amoun ng to Rs. 1,50,000. How the credit note is
Ans:- a b c d to be treated in FORM GSTR-1?
(a) Credit note will be shown separately in Table No.
15. Which of the following is true? 9B of FORM GSTR-1
ad
a. The Commissioner may extend the me limit (b) Taxable supplies to un-registered person is to be
for furnishing the details of outward supplies
shown net of credit note in Table No. 7 of FORM
by no fica on for valid reasons
GSTR-1
b. The details of outward supplies shall include
details of debit notes, credit notes and (c) Credit note need not to be shown in FORM GSTR-1
revised invoices issued in rela on to outward (d) Credit note cannot be issued to an un-registered
supplies person
Ac
c. The details of outward supplies shall be Ans:- a b c d
submi ed in Form GSTR-1 by all the
registered taxable person other than ISD, 19. Mr. A, registered under regular scheme of
non-resident tax payer and a person paying payment of GST, had annual turnover of 3 crores
tax under sec on 10, sec on 51 and last year. He is required to file GSTR-1 on a
sec on52 monthly basis. While filing the GSTR-1 for July
d. All the above
month he found that he has received advances
Ans:- a b c d
worth INR 2,00,000/- for which goods have not
16. Which of the following is FALSE w.r.t HSN been supplied ll month end. The goods will be
supplied in coming months. What would be his
t
disclosure in GSTR 1?
a) Disclosure is not required for taxpayers having repor ng for the above transac on in GSTR-1?
annual turnover uptoRs. 1.5 Crore a) Mr. A is exempt from payment of GST on receipt
ar
code.
received in table 8 rate wise in the tax period
d) Taxpayers having turnover above Rs. 5 Crore
have to mandatorily report 4 digit level HSN and tax to be paid thereon along with
code. respec ve point of sale.
Ans:- a b c d d) Mr. A has to pay tax on advances and adjust the
same on issue of invoice. Recipient will only be
17. M/s. Pee Kay (P) Ltd. is registered in Haryana. able to take input tax credit only in the month
While entering their outward supplies in FORM of issue of Invoice.
GSTR-3B for the month of Jul-18, the company Ans:- a b c d
realized that they had inadvertently shown
V’
inter-State supply as intra-State supply and paid 20. Input Service Distributor (ISD), Tax Deductor&
its wrong liability and filed its return. What is Tax Collector are required to file return _______.
the remedy available now? a. Annually
(a) The company can rec fy wrongly reported b. Quarterly
liability using edit facility c. Monthly
69
4
2
d. Half-Yearly a. Sec on 41 of CGST act
Ans:- a b c d b. Sec on 42 of CGST act
c. Sec on 43 of CGST act
y
21. Any input tax credit omi ed to be taken in a d. Sec on 44 of CGST act
financial year can be taken on or before ______. Ans:- a b c d
a. Filing return for September of next financial year
m
b. Annual return of the financial year 27. Annual return is to be filed by _________
c. (a) or (b) whichever is earlier a. Registered person supplying goods or services
d. (a) or (b) whichever is later or both
Ans:- a b c d b. Input services distributor
c. E-commerce operator paying TCS under
22. Rec fica on of mistake in returns is not allowed sec on 52
e
a er the- d. Casual taxable person
a. Due date for filing of return for the month of Ans:- a b c d
September following the end of the financial year
b. Actual date of filing of relevant annual return 28. Every registered person whose aggregate
ad
c. (a) or (b) whichever is earlier turnover during a financial year-------- shall gate
d. (a) or (b) whichever is later his accounts audited
Ans:- a b c d
a. exceeds 2 core rupees
23. Is it allowed for an e-commerce operator to b. exceeds 1.5 core rupees
rec fy any omission or incorrect par culars c. exceeds 1 core rupees
furnished in the return? d exceeds 2.5 core rupees
Ac
a) Yes, he can rec fy the details at any me Ans:- a b c d
b) Yes but not a er the due date for furnishing of
statement for the month of 29 Every registered person whose aggregate
c) Yes but not a er the actual date of furnishing turnover during a financial year exceeds 2 core
of the relevant annual statement rupees shall gate his accounts audited and
d) Both (b) and (c) are correct statements furnish a copy of audited annual accounts and a
Ans:- a b c d reconcilia on statement, duly cer fied, in
a. Form GSTR-9
24. Every registered taxable person who has made b. Form GSTR-9C
outward suppliers in the period between the c. Form GSTR-11
t
a. First return filed by him a er grant of 30. Annual audit report is required to be cer fied
registra on by prac cing
b. First two return filed by him a er grant of a. CA
registra on b. CMA
c. FORM GSTR-7 c. CA or CMA
d. FORM GSTR-11 d. CA and CMA both
Sm
Ans:- a b c d Ans:- a b c d
25. When is a registered person required to furnish 31. In the GSTR-9C, which reconcilia on is to be
his annual return? made?
a. On or before 31st day of March at the end of a. Reconcilia on of suppliers declared in the
financial year annual return with details of unaudited
b. On or before 30th day of September financial statements
following the end of financial year b. Reconcilia on of suppliers declared in the
c. On or before 31st day of December following returns filed during the financial year with the
the end of financial year details of audited financial statements
V’
70
statements Answers:-
Ans:- a b c d
y
32. Final return shall be furnished in 1 b 11 b 21 c 31 c
a. Form GSTR-8
b. Form GSTR-9 2 a 12 b 22 c 32 c
m
c. Form GSTR-10 c
3 a 13 c 23 d 33
d. Form GSTR-11
Ans:- a b c d 4 a 14 b 24 a 34 b
e
(b) 18th of the month succeeding the quarter 6 b 16 c 26 d 36
(c) Within 3 months of the date of cancella on 7 d 17 c 27 a 37 a
or date of order of cancella on, whichever is
later 8 b 18 b 28 a
ad
(d) 31st December of next financial year
Ans:- a b c d 9 d 19 a 29 b
Ans:- a b c d
71
4
2
CA. SHIVA TEJA
[email protected] Page | 1
Preliminary, Administration, Levy, Collection
1. Which of the following is a non–taxable supply under the CGST Act, 2017:
(a) Supply of goods not leviable to tax under the CGST Act, 2017
(b) Supply of services not leviable to tax under the CGST Act, 2017
(c) Supply which is neither a supply of good nor a supply of service.
(d) Both (a) and (b)
2. The definition of goods under section 2(52) of the CGST Act does not include-
(a) Grass
(b) Money and securities
(c) Actionable claims
(d) Growing crops
3. Agent means:
(a) A person who carries on the business of supply or receipt of goods or services or both
on behalf of another
(b) A person who arranges or facilitates the supply of goods or services or both, but does
not include a person who supplies such goods or services or both on his own account
(c) Both (a) or (b)
(d) None of the above
Ans. (a) A person who carries on the business of supply or receipt of goods or
services or both on behalf of another
5. If a supplier is under the composition scheme, does RCM still apply to the recipient
(a) Yes
(b) No
Ans. (b) No
6. If all supplies made by a supplier are covered under RCM, should they still register under
the CGST Act if the threshold exceeds the prescribed limit
(a) Yes
(b) No - Notification No. 05/2017-Central Tax dated 19.06.2017
8. What are the factors differentiating composite supply & mixed supply?
(a) Nature of bundling i.e. artificial or natural
(b) Existence of principal supply
(c) Both of the above
(d) None of the above
10. What would be the tax rate applicable in case of mixed supply?
(a) Tax rate as applicable on supply attracting the lowest rate of tax
(b) Tax rate as applicable on supply attracting the highest rate of tax
(c) Tax @ 28%
(d) None of the above
Ans. (b) Tax rate as applicable on supply attracting the highest rate of tax
11. ………….of the Constitution provides that no tax shall be levied or collected except by
authority of law?
(a) Article 254
(b) Article 245
(c) Article 265
(d) Article 256
12. What are the supplies on which reverse charge mechanism would apply?
(a) Notified categories of goods or services or both under section 9(3)
(b) Inward supply of goods or services or both from an unregistered dealer under section
9(4)
(c) Both the above
(d) None of the above
Ans. (a) Notified categories of goods or services or both under section 9(3) as
section 9(4) has been deferred presently.
14. In case of lottery procured from State Government by a lottery distributor, GST is payable
by:
(a) Lottery distributor
(b) State Government
(c) Both the above
(d) None of the above
15. Reverse charge under section 9(3) of the CGST Act is applicable on:-
(a) Only on notified services
(b) Only on notified goods
(c) Notified goods & services
(d) None of the above
17. In case of GTA services provided to an Individual not registered under GST and not a
business entity, liability to pay GST is on
(a) Supplier
(b) Recipient
(c) Both
(d) Exempt
Ans. (d) Exempt vide Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate),
dated 28-Jun-2017
18. In case of sponsorship services provided by Mr. A to M/s AB Ltd., liability to pay GST is on:
19. In case of renting of land, inside an Industrial estate, by State Government to a registered
manufacturing company, GST is:
(a) Exempted
(b) Applicable under Normal Charge
(c) Applicable under Reverse Charge
(d) None of the above
Ans. (a) Permanent transfer of business assets on which input tax credit has been
claimed
22. Who can notify a transaction to be supply of ‘goods’ or ‘services’?
(a) CBIC
(b) Central Government on the recommendation of GST Council
(c) GST Council
(d) None of the above
23. As per Section 7, which of the following would attract levy of UTGST?
(a) Inter-state supplies
(b) Intra-state supplies
(c) Any of the above
(d) None of the above
24. Who can notify a supply to be taxed under reverse charge basis?
(a) Board
(b) Central Government on recommendation of GST Council
CA. SHIVA TEJA
[email protected] Page | 5
(c) GST Council
(d) None of the above
26. In case M/s. PQR Ltd., a registered person, has availed rent-a-cab service from M/s ABC
Travels (Proprietor) service then which one of the following is true:-
(a) Reverse charge is applicable as this is a notified service.
(b) Reverse charge is applicable if ABC Travels is not registered.
(c) Joint charge is applicable
(d) None of the above
29. In case of services by an insurance agent to Ms. ABC Insurance Co. Ltd., GST is to be paid by:
(a) Insurance Agent
(b) ABC Insurance Co. Ltd.
(c) Both
(d) None of the above
30. Sitting fees received by director of XYZ Ltd., is liable for GST in the hands of the………
(a) Director
(b) XYZ Ltd
(c) Both of above
(d) None of the above
31. When can credit for tax paid under reverse charge be taken?
(a) Same month
(b) Next month
(c) Any of the two months
Ans. (a) Same month
32. If a supplier is under the composition scheme, then whether tax will be paid under reverse
charge by the composition supplier:
(a) Yes
(b) No
33. Can a registered person under composition scheme claim input tax credit?
(a) Yes
(b) No
(c) Input tax credit on inward supply of goods only can be claimed
(d) Input tax credit on inward supply of services only can be claimed
Ans. (b) No
34. Can a registered person opting for composition scheme collect tax on his outward supplies?
(a) Yes
(b) No
(c) Yes, if the amount of tax is prominently indicated in the invoice issued by him
(d) Yes, only on such goods as may be notified by the Central Government
Ans. (b) No
37. Who will notify the rate of tax to be levied under CGST Act?
(a) Central Government suo moto
(b) State Government suo moto
(c) GST Council suo moto
(d) Central Government as per the recommendations of the GST Council
40. Whether services supplied by individual Direct Selling Agents (DSAs) to banks/ non-
banking financial company (NBFCs) will be covered under Reverse Charge Mechanism:
(a) Yes
(b) No
Ans. (a)Yes
41. Which of the following persons can opt for composition scheme?
(a) Person making any supply of goods which are not leviable to tax under this Act;
(b) Person making any inter-State outward supplies of goods and services(except
restaurant services);
(c) Person effecting supply of goods through an e-commerce operator liable to collect tax
at source
(d) Person providing restaurant services
Ans. (d) Presently, Person providing restaurant services. (It may be noted that CGST
Act Amendment has provided an option to take composition scheme 10% or Rs. 5
Lacs as discussed earlier)17
42. Which of the following will be excluded from the computation of ‘aggregate turnover’?
(a) Value of taxable supplies
(b) Value of exempt Supplies
(c) Non-taxable supplies
(d) Value of inward supplies on which tax is paid on reverse charge basis
Ans. (d) Value of inward supplies on which tax is paid on reverse charge basis
43. What will happen if the turnover of a registered person opting to pay taxes under
composition scheme during the year 2017-18 crosses threshold limit?
(a) He can continue under composition scheme till the end of the financial year
(b) He will be liable to pay tax at normal rates of GST on the entire turnover for the
financial year 2017-18
(c) He will cease to remain under the composition scheme with immediate effect
Ans. (c) He will cease to remain under the composition scheme with immediate
effect.
44. What is the threshold limit of turnover in the preceding financial year for opting to pay tax
under composition scheme for States other than special category States?
(a) ₹ 20 lacs
(b) ₹ 10 lacs
(c) ₹ 50 lacs
(d) ₹ 1 crore
Ans. (d) ₹ 1 crore [Notification No. 46/2017-Central Tax dated 13.10.2017 read with
[Notification No.08/2017-Central Tax dated 27.06.2017]
45. What is the threshold limit of turnover in the preceding financial year for opting to pay tax
under composition scheme for special category states?
(a) ₹ 25 lacs
(b) ₹ 50 lacs
(c) ₹ 75 lacs
(d) ₹ 1 crore
Ans. (c)₹ 75 lacs [Notification No. 46/2017-Central Tax dated 13.10.2017 read with
[Notification No.08/2017-Central Tax dated 27.06.2017]
46. What is the rate applicable under CGST to a registered person being a manufacturer
opting to pay taxes under composition scheme?
(a) 2.5%
(b) 1%
(c) 0.5%
(d) No composition for manufacturer
Ans. (c)0.5% [Notification No. 01/2018-Central Tax dated 01.01.2018]
47. Can composition scheme be availed if the registered person effects inter-State supplies?
(a) Yes
(b) No
(c) Yes, subject to prior approval of the Central Government
(d) Yes, subject to prior approval of the concerned State Government
Ans. (b) No
48. What is the rate applicable under CGST to a registered person being a hotelier (providing
restaurant and accommodation services ) opting to pay taxes under composition scheme?
(a) 1%
(b) 0.5%
(c) 2.5%
(d) Not eligible for composition scheme thus liable to pay normal tax
Ans. (d) Not eligible for composition scheme thus liable to pay normal tax
[Composition scheme is available to restaurant only. Even composition scheme is not
extended to any other service provider]
CA. SHIVA TEJA
[email protected] Page | 9
49. Mr. Richard, a trader in Delhi has opted for composition scheme of taxation under GST.
Determine the rate of total GST payable by him under composition scheme:
(a) 0.5% CGST & 0.5% SGST
(b) 2.5% CGST & 2.5% UTGST
(c) 5% IGST
(d) 5% UTGST
Ans. (a)0.5% CGST & 0.5% SGST
50. Can a registered person opt for composition scheme only for one out of his 3 business
verticals having same Permanent Account Number?
(a) Yes
(b) No
(c) Yes, subject to prior approval of the Central Government
(d) Yes, subject to prior approval of the concerned State Government
Ans. (b)No
BASIC CONCEPTS
52. If Mr. A, having his registered office at Andhra Pradesh, and his operating office at
Telangana which is also registered, but providing advisory services to his client who is
placed at Karnataka. What would be the location of supplier of services in this case?
(a) Telangana
(b) Andhra Pradesh
(c) Karnataka
(d) All of the above
Ans. (a) Telangana
53. As per the CGST Act, 2017, the term "works contract" includes:
(a) Construction, fabrication, completion, erection, installation, etc. of movable property
(b) Construction, fabrication, completion, erection, installation, etc. of immovable property
(c) Both (a) and (b)
(d) None of the above
Ans. (b) Construction, fabrication, completion, erection, installation,
etc. of immoveable property.
54. While repairing the factory shed, few goods were also supplied along with the labour
service. Whether it is a :
(a) Composite Supply
(b) Mixed Supply
Ans. (a) A person who carries on the business of supply or receipt of goods or
services or both on behalf of another.
56. The term 'agriculturist' includes the following persons who undertake cultivation of land:
(a) An individual
(b) A Hindu Undivided Family
(c) A co-operative society
(d) Both (a) and (b)
Ans. (d) Both (a) and (b)
58. The definition of goods under section 2(52) of the CGST Act does not include-
(a) Grass
(b) Money and securities
(c) Actionable claims
(d) Growing crops
Ans. (b) Money and securities
59. Officers under which Act shall be deemed to be the officers appointed under the provisions
of CGST Act:
(a) Central Excise Act, 1944
(b) Central Sales Tax Act, 1956
(c) Delhi Value Added Tax Act, 2004
(d) Customs Act, 1962
62. Output tax in relation to a taxable person under the CGST Act, 2017 includes:
(a) Tax chargeable on taxable supplies made by him
(b) Tax chargeable on taxable supplies made by his agent
(c) Tax payable by him under reverse charge
(d) Both (a) and (b)
64. 'P' Ltd. has its registered office under the Companies Act, 2013 in the State of Maharashtra.
It also has a corporate office in the State of Telangana. What will be the place of business of
'P' Ltd. under the CGST Act, 2017?
(a) Telangana
(b) Maharashtra
(c) Both (a) and (b)
(d) None of the above
65. P Ltd. has a contract with X Ltd. to provide book keeping services to Q Ltd. Q Ltd. is a
66. Mr. X of Delhi is participating in Hitex Furniture Expo in Haryana where he has no fixed
place of business and exhibiting his products. During the expo, the said products will be
sold to the people attending and intending to purchase such products. In such scenario, Mr.
X shall obtain which of the following registration under the CGST Act, 2017:
(a) Non–resident taxable person registration
(b) Casual taxable person registration
(c) Regular taxpayer registration
(d) No registration under GST required.
68. Which of the following is a non–taxable supply under the CGST Act, 2017:
(a) Supply of goods not leviable to tax under the CGST Act, 2017
(b) Supply of services not leviable to tax under the CGST Act, 2017
(c) Supply which is neither a supply of good nor a supply of service.
(d) Both (a) and (b)
Ans. (a) Inward supplies on which tax is payable on reverse charge basis.
72. ABC ltd. has provided following information for the month of Sep, 2018:
(i) Intra-State outward supply Rs. 8,00,000/-
(ii) Inter-State exempt outward supply Rs. 5,00,000/-
(iii)Turnover of exported goods Rs. 10,00,000/-
(iv) Payment made to GTA Rs. 80,000/- Calculate the aggregate turnover of ABC Ltd.
(a) Rs. 8,00,000/-
(b) Rs. 23,80,000/-
(c) Rs. 23,00,000/-
(d) Rs. 18,00,000/-
SCOPE OF SUPPLY
73. What are the factors differentiating composite supply & mixed supply?
(a) Nature of bundling i.e. artificial or natural
(b) Existence of principal supply
(c) Both of the above
(d) None of the above
Ans. (c) Both of the above
74. What would be the tax rate applicable in case of composite supply?
(a) Tax rate as applicable on principal supply
(b) Tax rate as applicable on ancillary supply
(c) Tax rate as applicable on respective supply
(d) None of the above
Ans. (a) Tax rate as applicable on principal supply
75. What would be the tax rate applicable in case of mixed supply?
(a) Tax rate as applicable on supply attracting the lowest rate of tax
(b) Tax rate as applicable on supply attracting the highest rate of tax
(c) Tax @ 28%
CA. SHIVA TEJA
[email protected] Page | 14
(d) None of the above
Ans.(b) Tax rate as applicable on supply attracting the highest rate of tax
76. Which of the following services are covered under Reverse Charge Mechanism of CGST Act,
2017?
i Legal Consultancy Goods
ii. Transport Agency
iii. Manpower Supply
iv. Rent-a-Cab
(a) i & iii
(b) i & iv
(c) i & ii
(d) All the above
Ans. (c)i and ii
77. What will happen if the turnover of a registered person opting to pay taxes under
composition scheme during the year 2017-18 crosses threshold limit?
(a) He can continue under composition scheme till the end of the financial year
(b) He will be liable to pay tax at normal rates of GST on the entire turnover for the
financial year 2017-18
(c) He will cease to remain under the composition scheme with immediate effect
(d) He will cease to remain under the composition scheme from the quarter
following the quarter in which the aggregate turnover exceeds threshold limit
Ans.(c) He will cease to remain under the composition scheme with immediate effect.
78. In case of GTA services provided to an Individual not registered under GST and not a
business entity, liability to pay GST is on
(a) Supplier
(b) Recipient
(c) Both
(d) Exempt
Ans. (d) Exempt
79. In case of sponsorship services provided by Mr. A to M/s AB Ltd., liability to pay GST is on:
(a) Mr. A
(b) M/s AB Ltd.
(c) Both
(d) None of the above
Ans. (b) M/s AB Ltd.
80. In case of renting of land, inside an Industrial estate, by State Government to a registered
manufacturing company, GST is:
(a) Exempted
(b) Applicable under Normal Charge
(c) Applicable under Reverse Charge
(d) None of the above
Ans . (c) Applicable under Reverse Charge
100. What is the threshold limit of turnover in the preceding financial year for opting to pay tax
under composition scheme for States other than special category States?
(a) Rs. 20 lacs
(b) Rs. 10 lacs
(c) Rs. 50 lacs
(d) Rs. 1 crore
Ans. (d) Rs. 1 crore
116. Can a person apply for registration to pay tax u/s 10 for any of his business verticals at his
choice?
(a) Yes, irrespective of the registration status of other business verticals.
(b) No all of his other business verticals also should have obtained registration for paying
tax under section 10.
(c) Yes, provided majority of the business verticals are paying under section 10.
(d) Yes, if all the business vertical in a state are obtained registration to pay tax under
section 10.
Ans. (b) No all of his other business verticals also should have obtained registration
for paying tax under section 10
117. Whether all persons are mandatorily required to obtain registration?
(a) Yes
(b) Not required if he is an agriculturist or person exclusively engaged in supplying exempt
goods or services, if specified threshold limit does not exceed in a financial year.
(c) Not required if he is an agriculturist or person exclusively engaged in supplying exempt
goods or services.
(d) No, only if specified threshold exceeds in a financial year then only need to obtain.
Ans. (c) Not required if he is an agriculturist or person exclusively engaged in
supplying exempt goods or services.
118. Which one of the following is true?
(a) A person can't collect tax unless he is registered.
(b) Registered person not liable to collect tax till his aggregate turnover exceeds Rs.20
lakhs/ Rs.10 Lakhs as the case may be.
(c) A person can collect the tax during the period of his provisional registration.
(d) Both (a) and (b) are correct.
Ans. (a) A person can't collect tax unless he is registered
121. A person having business verticals in a State obtain a separate registration for each
business vertical.
(a) Single, shall
(b) Multiple, shall
(c) Multiple, may
(d) Single, May
Ans. (c) Multiple, may
122. An Unique Identity Number will be allotted to the following persons upon submitting an
application:
(a) All the taxable persons can apply.
(b)Only unregistered persons can apply.
(c) Specialized agency of the UNO or any multilateral financial institution or consulate or
embassy of foreign countries.
(d)No such concept under CGST/SGST Act.
Ans. (c) Specialized agency of the UNO or any multilateral financial institution or
consulate or embassy of foreign countries
123. Every registered taxable person shall display his certificate of registration in a prominent
location at his principal and at every other place of business also GSTIN shall be displayed
on the name board at the entry of such places.
(a) No, certificate of registration to be displayed only at a registered place of business and
GSTIN need not be displayed on the name board.
(b) Yes, above statement is correct.
(c) No, GSTIN to be displayed only on the invoices.
(d) Above statement is correct subject to certificate of registration to be displayed only at
registered place of business.
Ans. (b) Yes, above statement is correct
124. PAN issued under the Income Tax Act is mandatory for grant of registration.
(a) It is one of the documents listed.
(b) Yes, but non-resident taxable person may be granted registration on the basis of any
other document.
(c) Yes, but persons required to deduct tax at source u/s 51 may have TAN in lieu of PAN.
(d) Both (b) and (c)
Ans. (d) Aggregate value of all taxable supplies (excluding the value of inward
supplies on which tax is payable by a person on reverse charge basis),, exempt
supplies, export of goods/services and interstate supplies of a person having same
PAN computed on all India basis and excluding taxes if any charged under CGST Act,
SGST Act and IGST Act
132. Does cancellation of registration under CGST affect the liability under SGST/IGST for period
prior to cancellation of registration?
(a) Cancellation of registration will immune his liability under CGST only.
(b) Cancellation of registration will immune his liability under IGST only.
(c) Cancellation of registration will immune his liability under SGST and CGST but not
under IGST.
(d) Cancellation does not affect the liability of taxable person to pay tax and other dues
under CGST/SGST/IGST Act.
Ans. (d) Cancellation does not affect the liability of taxable person to pay tax and
other dues under CGST/SGST/IGST Act
133. Within how many days an application for revocation of cancellation of registration can be
made?
(a)Within 7 days from the date of service of the cancellation order.
(b)Within 15 days from the date of issue of the cancellation order.
(c)Within 45 days from the date of issue of the cancellation order.
(d)Within 30 days from the date of service of the cancellation order.
Ans. (d) Within 30 days from the date of service of the cancellation order
134. Which of the following statements are correct?
(i) Revocation of cancellation of registration under CGST/SGST Act shall be deemed to be a
revocation of cancellation of registration under SGST/CGST Act.
(ii) Cancellation of registration under CGST/SGST Act shall be deemed to be a cancellation of
registration under SGST/CGST Act.
(iii) Revocation of cancellation of registration under CGST/SGST Act shall not be deemed to be
a revocation of cancellation of registration under SGST/CGST Act.
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(iv) Cancellation of registration under CGST/SGST Act shall not be deemed to be a cancellation
of registration under SGST/CGST Act.
(a) (i) and (ii)
(b) (i) and (iv)
(c) (ii) and (iii)
(d) (iii) and (iv)
Ans. (a) (i) and (ii)
135. Who can submit application for registration in Form GST REG-09?
(a) Non- Resident taxable person
(b) Input service distributor
(c) Person deducting tax at source
(d) Person collecting tax at source
137. State which of the following statement is correct in respect of obtaining a separate
registration for Business verticals:
(a) Person can obtain centralized registration.
(b) Person may obtain a separate registration for each of his verticals.
(c) He can have only two registration in a state.
(d) Either (a) or (b).
Ans. (b) Person may obtain a separate registration for each of his verticals
138. Business which has centralized registration under erstwhile Act.
(a) Shall obtain a centralized registration under GST Law.
(b) Shall obtain separate registration in each state from where it is making taxable supplies
(c) Shall obtain registration on temporary basis.
(d) No need to apply for registration under GST.
Ans. (b) Shall obtain separate registration in each state from where it is making
taxable supplies
139. Every person registered under any of the existing laws, who is not liable to be registered
under the Act may, on or before ………………….. , at his option, submit an application in FORM
GST REG-29 for the cancellation of registration granted to him
(a) September 30,2017
(b) October 31,2017
(c) November 30,2017
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(d) March 31,2018
Ans. (d) March 31, 2018
140. Does a Medical Service Provider needs to get registered under GST, if his aggregate turnover
(u/s 2 (6) is more than Rs. 20 Lakhs but has taxable supply of only an amount of Rs.2.4 Lakh
p.a.?
(a) No
(b) Yes
Ans. (b) Yes [he should get registered and also pay GST on taxable supply.]
141. Who will take registration on services in relation to transportation of goods (including used
household for personal use) if, GTA avails ITC on supplies made by him
(a) GTA, forward charge
(b) GTA, RCM
(c) Service receiver, forward charge
(d) Service receiver, RCM
146. Mr. Santa located in Nashik purchases 10,000 Hero ink pens worth Rs. 4,00,000 from Lekhana
Wholesalers located in Mumbai. Mr. Mohan's wife is an employee in Lekhana Wholesalers.
The price of each Hero pen in the open market is Rs.52. The supplier additionally charges
Rs.5,000 for delivering the goods to the recipient's place of business. The value of such
supply will be :
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(a) Rs. 5,20,000
(b) Rs. 5,25,000
(c) Rs. 4,00,000
(d) Rs. 4,05,000
Ans. (d) Rs. 4,05,000
147. What will be the value of supply if Giriyas supply Sony television set for Rs. 85000 along with
the exchange of an old TV and if the price of the Sony television set without exchange is Rs.
1,00,000, the open market value of the Sony television set is:
(a) Rs. 85,000
(b) Rs. 1,00,000
(c) Rs. 15,000
(d) Rs. 1,15,000
Ans. (b) Rs. 1,00,000
167. The tax invoice should be issued the date of supply of service:
(a) Within 30 days from
(b) Within 1 month from
(c) Within 15 days from
(d) On
Ans. (a) Within 30 days from
170. Law permits collection of tax on supplies effected prior to registration, but after applying for
registration:
(a) Yes, but only on intra-State supplies, if the revised invoice is raised within one month
(b) Yes, but only on intra-State supplies effected to unregistered persons, if the revised
invoice is raised within one month
(c) Yes, on all supplies, if the revised invoice is raised within one month
(d) No, tax can be collected only on supplies effected after registration is granted.
Ans. (c) Yes, on all supplies, if the revised invoice is raised within one month
171. A bill of supply can be issued in case of inter-State and intra-State:
(a) Exempted supplies
(b) Supplies to unregistered persons
(c) Both of above
(d) None of the above.
Ans. (a) Exempted supplies
172. An invoice must be issued:
(a) At the time of removal of goods
(b) On transfer of risks and rewards of the goods to the recipient
(c) On receipt of payment for the supply
(d) Earliest of the above dates.
Ans. (a) At the time of removal of goods.
Ans. (a) At the time of issue of statement of account where successive accounts are
involved
189. In case of goods sent on sale on approval basis, invoice has to be issued:
(a) while sending the goods; another Invoice has to be issued by the recipient while rejecting
the goods
(b) while sending the goods but the recipient can take credit only when the goods are accepted
by him
(c) when the recipient accepts the goods or six months from the date of removal whichever is
earlier
(d) when the recipient accepts the goods or three months from the date of supply whichever is
earlier
Ans. (c) when the recipient accepts the goods or six months from the date of removal,
whichever is earlier.
195. Which of the following is included for computation of taxable supplies for the purpose of
availing credit?
(a)Zero-rated supplies
(b)Exempt supplies
(c)Both
(d)None of the above
Ans. (a) Zero Rated supplies
196. The inputs sent to job work has to be received back within:
(a) 1 year
(b) 2 years
(c) 180 days
Ans. (a) 1 year.
197. The principal is entitled to avail the credit on capital goods sent to job worker directly:
(a) Yes
(b) No
(c) May be
Ans. (a) Yes.
198. If the capital goods sent to job worker has not been received within 3 years from the date of
being sent:
(a) Principal has to pay amount equal to credit taken on such capital goods
(b) No need to pay amount equal to credit taken on such capital goods
(c) It shall be treated as deemed supply of capital goods to the job worker
(d) None of the above
Ans. (c) It shall be treated as deemed supply of capital goods to the job worker
199. The ISD may distribute the CGST and IGST credit to recipient outside the State as
(a) IGST
(b) CGST
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(c) SGST
Ans. (a) IGST
200. The ISD may distribute the CGST credit within the State as
(a) IGST
(b) CGST
(c) SGST
(d) Any of the above.
Ans. (b)CGST
201. According to the condition laid down for distribution of credit, ISD can distribute
(a) Credit in excess of credit available
(b) Only certain percentage of total credit available
(c) Credit equal to the total credit available for distribution.
(d) All of the above.
Ans. (c) Credit equal to the total credit available for distribution.
202. The credit of tax paid on input service used by more than one supplier is
(a) Distributed among the suppliers who used such input service on pro rata basis of
turnover in such State.
(b) Distributed equally among all the suppliers
(c) Distributed only to one supplier.
(d) Cannot be distributed.
Ans. (a) Distributed among the suppliers who used such input service on pro rata basis
of turnover in such State.
203. Whether credit on inputs should be availed based on receipt of documents or receipt of goods
(a) Receipt of goods
(b) Receipt of Documents
(c) Both
(d) Either receipt of documents or Receipt of goods
Ans. (c) Both
204. In case supplier has deposited the taxes but the receiver has not received the documents, is
receiver entitled to avail credit?
(a)Yes, it will be auto populated in recipient monthly returns
(b)No as one of the conditions of 16(2) is not fulfilled
(c)Yes, if the receiver can prove later that documents are received subsequently
(d)None of the above
Ans. (b) No as one of the conditions of 16(2) is not fulfilled
205. Input tax credit on capital goods and Inputs can be availed in one installment or in multiple
installments?
(a) In thirty-six installments
(b) In twelve installments
(c) In one installment
(d) In six installments
Ans. (c) In one installment
Ans. (a) Yes, equivalent to the credit in respect of inputs held in stock (including
semi- finished and finished) and on capital goods held in stock
221. Is Input tax to be reversed in case of supply of capital goods
(a) Yes fully
(b) No
(c) Yes, to extent of credit taken as reduced by prescribed percentage or tax on transaction
value whichever is higher
(d) Yes, to the extent of transaction value of such goods
Ans. (c) Yes, to extent of credit taken as reduced by prescribed percentage or tax on
transaction value whichever is higher
222. The time limit beyond which if goods are not returned, the inputs sent for job work shall be
treated as supply
(a) One year
(b) Five years
(c) Six months
(d) Seven years
Ans. (a) One year
223. Where a supplier of goods or services pays tax under sections 74,129 and 130 (fraud, willful
misstatement etc.), then receiver of goods can avail its credit:
(a) Yes
(b) No
(c) Yes, after receipt of goo ds or services
(d) Yes, after receipt invoice for goods or services of
Ans. (b) No
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224. An assessee obtains new registration, voluntary registration, change of scheme from
composition to regular scheme and from exempted goods/ services to taxable
goods/services. It can avail credit on inputs lying in stock. What is the time limit for taking
said credit?
(a) 1 year from the date of invoice
(b) 3 years from the date of invoice
(c) years from the date of invoice
(d) None of the above
Ans. (a) 1 year from the date of invoice
225. Credit on Input services or capital goods held in stock can be availed in case of new
Registration/Voluntary Registration
(a)Yes
(b)No
(c)Yes, on Input services only
(d)Yes, on capital goods only
Ans. (b) No
226. In case of Compulsory registration, input tax credit can be availed on
(a) stocks held on the day immediately preceding the date from which he becomes liable to pay
tax under the provisions of this Act, provided application for registration is filed within 30
days from the due date
(b) stocks held on the day immediately preceding the date of grant of registration under the
provisions of this Act.
(c) stocks held on the day immediately preceding the date of application of registration under
the provisions of this Act.
(d) None of the above
Ans. (a) stocks held on the day immediately preceding the date from which he becomes
liable to pay tax under the provisions of this Act, provided application for registration is
filed within 30 days from the due date
227. In case of Voluntary registration input tax credit can be availed
(a) on stocks held on the day immediately preceding the date from which he becomes liable
to pay tax under the provisions of this Act
(b) on stocks held on the day immediately preceding the date of grant of registration under
the provisions of this Act.
(c) on stocks held on the day immediately preceding the date of application of registration
under the provisions of this Act.
(d) None of the above
Ans. (b) on stocks held on the day immediately preceding the date of grant of
registration under the provisions of this Act.
228. The time limit beyond which if goods are not returned, the capital goods sent for job work
shall be treated as supply
(a) One year
(b) Five years
(c) Three Years
(d) Seven years
Ans. (c) Three Years
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229. Principal entitled for input tax credit on inputs sent for job work
(a) If goods sent are returned within one year
(b) If goods sent are returned within three years
(c) If goods sent are returned within six months
(d) If goods sent are returned within nine months
Ans. (a) If goods sent are returned within one year
230. Principal entitled for input tax credit on capital goods sent for job work
(a) If goods sent are returned within one year
(b) If goods sent are returned within three years
(c) If goods sent are returned within six months
(d) If goods sent are returned within nine months
Ans. (b) If goods sent are returned within three years
231. Is the principal entitled for credit of goods though he has not received the goods and has been
sent to job worker directly by vendor?
(a) Yes
(b) No
(c) Yes, vendor should be located in same place
(d) None of the above
Ans. (a) Yes
232. In case of ISD whether distributor and recipient should have same PAN
(a) Yes
(b) No
(c) Yes, if in same state and different in other state
(d) None of the above
Ans. (a) Yes
233. Can the credit distributed by an ISD exceed the amount available for distribution?
(a)Yes
(b)No
(c)May be
(d)None of the above
Ans. (b) No
234. If credit applicable to more than one recipient, then it shall be distributed
(a) Equally
(b) On Pro rata basis to the aggregate turnover of such recipients
(c) Proportionately
(d) As per Adhoc Ratio
Ans. (b) On Pro rata basis to the aggregate turnover of such recipients
235. The credit attributable to a particular recipient shall be distributed to
(a) Only to that recipient
(b) To all the recipients
(c) To few recipients
(d) None of the recipients
Ans. (a) Only to that recipient
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236. A person is entitled to take credit of input tax as self-assessed in the return and credited to
Electronic credit ledger on
(a) Final basis
(b) Provisional basis
(c) Partly Provisional and partly final basis
(d) None of the above
Ans. (b) Provisional basis
237. Provisional Input tax credit can be utilized against
(a) Any Tax liability
(b) Self-Assessed Output Tax liability
(c) Interest and Penalty
(d) Fine
Ans. (b) Self Assessed Output Tax liability
238. Matching of Input Tax credit on inward supply by recipient is undertaken with
(a) Monthly return filed by the supplier
(b) Outward supply filed by the supplier
(c) Invoices maintained by the supplier
(d) None of the above
Ans. (b) Outward supply filed by the supplier
239. Is it mandatory that the tax on the supply has to be paid by the supplier so that the recipient
can claim credit?
(a) No
(b) Yes
(c) Optional
(d) Not Applicable
Ans. (b) Yes
240. If there is Mis-match of supplier's outward supply and recipient's claim for Input Tax credit
on the same transaction
(a) It shall be added as output tax liability in the hands of receiver.
(b) It shall be reduced as output tax liability in the hands of receiver
(c) It shall be increased as input tax credit in the hands of receiver
(d) It shall be deceased as input tax credit in the hands of supplier
Ans. (a) It shall be added as output tax liability in the hands of receiver.
241. Input Tax credit as credited in Electronic Credit ledger can be utilized for
(a) Payment of Interest
(b) Payment of penalty
(c) Payment of Fine
(d) Payment of Taxes
Ans. (d) Payment of Taxes
242. When the goods are sent from one job worker to another, the challan may be issued by:
(a) Only by the Principal
(b) Only by Job worker sending goods to another job worker
(c) By any one of the above two
Ans. (c) By any of the above two.
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243. When the goods are sent from one job worker to another, the challan issued by the
principal:
(a) may be endorsed by the job worker sending goods to another job worker
(b) may be endorsed by the Job worker receiving the goods
(c) cannot be endorsed as such
Ans. (a) may be endorsed by the job worker sending goods to another job worker
244. The details of challans in respect of goods dispatched to a job worker or received from a job
worker or sent from one job worker to another during a quarter shall be included in FORM?
(a) Form GST ITC-03
(b) Form GST ITC-04
(c) Form GSTR-2
(d) None of Above
Ans. (a) Form GST ITC-04
245. ITC can be taken on goods if goods not received by registered person but
(a) By his agent on his direction
(b) By the job worker on his instruction
(c) By any other person on his direction
(d) Any of above
Ans. (d) Any of above.
246. ITC can be availed on
(a) Possession of prescribed invoice/ debit note
(b) Receipt of goods/services
(c) Tax on such supply has been paid to government and return being furnished by the
supplier
(d) Fulfilling all the above conditions
Ans. (d) Fulfilling all the above conditions
247. Maximum time limit for availing ITC is
(a) The date of filing of annual return
(b) Due date of filing return u/s 39 for the month of September
(c) Earliest of above two
(d) Later of above two.
Ans. (c) Earliest of above two
248. ITC can be claimed by a registered person for
(a) Taxable supplies for business purpose
(b) Taxable supplies for non-business purpose
(c) Exempted supplies
(d) Non-taxable supplies
(e) All of above
Ans. (a) Taxable supplies for business purpose
249. ITC on motor vehicle can be claimed by
(a) Any registered person
(b) Registered person engaged in same line of business
(c) Any registered person engaged in exempted supply
(d) Any of above
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Ans. (b) Registered person engaged in same line of business
250. Person registered under composite scheme can avail ITC on
(a) Supply of taxable goods/services
(b) Receipt of goods/services on specified time period
(c) Payment to suppliers
(d) None of above
Ans. (d) None of above
251. ITC can be claimed on goods/services for personal use if
(a) Payment to supplier has been made
(b) Return being filed
(c) All of above
(d) No ITC can be claime
Ans. (d) No ITC can be claimed
252. ITC on works contract service can be availed only if
(a) Engaged in same line of business
(b) Service related to movable property
(c) Service related to immovable property
(d) All of above
Ans. (a) Engaged in same line of business
253. An unregistered person can avail ITC on stock if he applies for registration within
(a) 60 days of becoming liable to register under GST
(b) Immediately after becoming liable to register under GST
(c) 30 days of becoming liable to register under GST
(d) Cannot avail ITC on stock
Ans. (c) 30 days of becoming liable to register under GST
254. On sale, demerger, transfer, amalgamation, transferee is allowed to utilize ITC which is
(a) Unavailed in transferor books
(b) Unutilized in e-ledger of transferor
(c) Total ITC available to transferor
(d) None of above
Ans. (b) Unutilized in e-ledger of transferor
255. The principal can avail ITC on goods sent to job-worker which relates to
(a) Inputs
(b) Capital goods
(c) Inputs/capital goods directly sent to job-worker
(d) All of above.
JOBWORK
259. Can a principal supply inputs and/or capital goods from the job-worker's premises?
(a) Yes, only when the job-worker is registered
(b)Yes, even if the job-worker is unregistered by declaring the job-worker's premises as his
additional place of business
(c) Yes, irrespective of whether the job-worker is registered or not, principal is engaged in
the supply of goods which are notified by the Commissioner on this behalf
(d)All of the above
Ans. (d) All of the above
260. Mr. X has sent his goods to Mr. Y on job-work on 07-05-2017. From when it will be
considered as deemed supply if not received back within one year(further extended by one
year)?
(a) 06-05-2018
(b) 07-05-2017
(c) 03-11-2018
(d) Not Taxable
Ans. (b) 07-05-2017
261. If the inputs are not received back within the prescribed limit by the principal then, who is
responsible to pay the GST?
(a) Job worker
(b) Principal
(c) Job worker is responsible when sending such inputs and Principal needs to reverse the
ITC taken earlier.
(d) None of the above
267. Who should discharge the liability of GST on the scrap generated during job-work?
a) Job-worker, if registered
b) Principal, if job-worker is not registered
c) Always principal
d) Option (a) or (b)
Ans. (d) Option (a) or (b)
271. When will the inputs and/or capital goods sent to job-work become a supply?
a) When the inputs and/or capital goods sent to job-worker are not received within 1
year or 3 years respectively
b) When the inputs and/or capital goods sent to job-worker are not supplied, with or
without payment of tax, from the job-workers place within 1 year or 3 years
respectively
c) Both under (a) or (b)
d) None of the above
Ans. (c) Both under (a) or (b)
272. From when will the period of one or three years be calculated under Section 143?
a) The day when such inputs and/or capital goods sent to job-worker
b) The day when the job-worker receives the said goods, in case the job-worker receives
the goods directly
c) Both (a) and (b)
d) None of the above
Ans. (c) Both (a) and (b)
273. Will a principal who sends moulds, dies, jigs, tools and fixtures to job worker's place liable
to pay GST on such removal?
a) No, it is not a supply
b) Yes, if not received within time limit
c) No, as capital goods as referred in section 143 excludes moulds, dies, jigs, tools and
276. Whether the details of goods supplied from job worker's premises need to be included in
Form GST ITC-04?
a) Required for unregistered job worker
b) Required for registered job worker
c) Not required
d) Both (a) & (b)
Ans. (d) Both (a) & (b)
278. Section ______ make provisions relating to Input Tax Credit in respect of inputs sent for job
work.
(a) 18
(b) 19
(c) 143
(d) 141
Ans. (b) 19
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279. Section ________ makes provisions for special procedure for removal of goods for job work
without payment of tax.
(a) 18
(b) 19
(c) 143
(d) 141
Ans. (c) 143
280. If the job-worker is eligible to claim ITC on the goods received from the principal, is there a
time limit within which such ITC shall be availed/claimed by the job-worker?
a) Within September 30 of following year
b) Filing the annual return for the period
c) Option (a) or (b), whichever is earlier
d) No time limit prescribed to claim such ITC
Ans. (c) Option (a) or (b), whichever is earlier
282. If the inputs and/or capital goods are not received or returned within the prescribed time
limit:
(a) Goods. It shall be deemed to be a supply on the day such inputs and/or capital goods
are sent to job-worker and the principal to discharge the GST along with interest.
(b) No consequences
(c) The job-worker to discharge GST on expiry of the prescribed time limit.
(d) Principal to reverse the input tax credit taken on such inputs and or capital
Ans. (a) It shall be deemed to be a supply on the day such inputs and/or capital goods
are sent to job-worker and the principal to discharge the GST along with interest
283. Who is responsible for accountability for any contravention under this Act?
a) Principal
b) Job-worker
c) Manufacturer
d) No-body
Ans. (a) Principal
285. What amount shall be payable by the Principal in case the goods are not brought
back within the time allowed in case of job work?
(a) Tax
(b) Tax + interest
(c) Tax + interest + penalty
(d) None of the above
Ans. (b) Tax + intersest
286. In which of the following forms intimation of job work is required to be made?
(a) GST ITC-01
(b) GST ITC-02
(c) GST ITC-03
(d) GST ITC-04
Ans. (d) GST ITC -04
296. Mr. A, who has opted for composition levy, supplies goods worth Rs. 24,300 to Mr. B and
issues an invoice dated 25.09.2018 for Rs. 24,300. and Mr. B pays Rs. 25,000 on 1.10.2018
against such supply of goods. The excess Rs. 700 (being less than Rs. 1,000) is adjusted in
the next invoice for supply of goods issued on 5.01.2018. Identify the time of supply and
value of supply:
(a) Rs. 25,000 – 1.10.2018
(b) For Rs. 24,300 – 25.09.2018 and for Rs. 700 – 1.10.2018
(c) For Rs. 24,300 – 25.09.2018 and for Rs. 700 – 5.10.2018.
(d) (b) or (c) at the option of supplier, who has opted for composition levy
Ans. (d) ((b) or (c) at the option of the supplier, who has opted for composition levy
under section 10 of the CGST Act, 2017
297. What is the time of supply of service if the invoice is issued within 30 days from the date of
provision of service?
(a) Date of issue of invoice
(b) Date on which the supplier receives payment
(c) Date of provision of service
(d) Earlier of (a) & (b)
Ans. (d) Earlier of (a) & (b)
298. What is the time of supply of service for the supply of taxable services up to Rs.1000 in
excess of the amount indicated in the taxable invoice?
(a) At the option of the supplier – Invoice date or Date of receipt of consideration
(a) Date of issue of
(b) Date of entry in books of accoun invoice
(c) Date of receipt of consideration. t
Ans. (a) At the option of the supplier – Invoice date or Date of receipt of consideration
299. How is the date of receipt of consideration by the supplier determined?
a) Date on which the receipt of payment is entered in the books of account
b) Date on which the receipt of payment is credited in the bank account
c) Earlier of (a) & (b)
d) (a) & (b) whichever is later
Ans. (c) Earlier of (a) & (b)
300. What is the time of supply of service in case of reverse charge mechanism?
(a) Date of payment as entered in the books of account of the recipient
(b) Date immediately following 60 days from the date of issue of invoice
(c) Date of invoice
(d) Earlier of (a) & (b)
Ans. (d) Earlier of (a) & (b)
301. On 04.09.2018, supplier invoices goods taxable on reverse charge basis to ABC &
Co. ABC & Co. receives the goods on 12.09.2018 and makes payment on 30.9.2018.
determine the time of supply.
(a) 04.09.2018
(b) 04.10.2018
321. The time of supply fixes the point when the _______________ to / of GST arises.
(a) Liability
(b) Payment
(c) Provision
(d) Recovery
Ans. (a) Liability
322. Reverse charge means the liability to pay tax by the _______________ of goods or services or
both instead of the_______________ of such goods or services or both.
(a) Recipient, Supplier
(b) Recipient, Agent
(c) Supplier, Recipient
(d) Agent, Recipient
Ans. (a) Recipient, Supplier
323. There was increase in tax rate from 20% to 24% w.e.f. 1.09.2018. Which of the following
rate is applicable when services provided, and invoice raised after change in rate of tax in
September,2018, but payment received in August 2018:
(a) 20% as it is lower of the two
(b) 24% as it is higher of the two
(c) 20% as payment (being one of the factors) was prior to rate change
(d) 24% as invoice was issued in the period during which supply is completed
Ans. (d) 24% as invoice was issued in the period during which supply is completed
324. There was increase in tax rate from 20% to 24% w.e.f. 1.9.2018. Which of the following rate
is applicable if the supplier has opted for composition levy and invoice was issued after
change in rate of tax in September,2018 but payment received, and goods supplied in
August,2018:
325. There was increase in tax rate from 20% to 24% w.e.f.1.9.2018. Which of the following rate
is applicable if the supplier has not opted for composition levy say Sita Manufacturers, Delhi
supplies goods to Aakash Electronics, Dehradun. Further, Goods were removed from its
factory in Delhi on 31.08.2018; invoice is issued on 31.08.2018 and payment is received on
4.09.2018.
(a) 20% as it is lower of the two
(b) 24% as it is higher of the two
(c) 20% as date of invoice and dispatch of goods from factory, has happened before change
of rate
(d) 24% as both, payment and completion of supply, has happened after change of rate
Ans. (c) 20% as date of invoice and dispatch of goods from factory, has happened before
change of rate
326. There was decrease in tax rate from 24% to 20% w.e.f. 1.09.2018. Which of the following
rate is applicable if the supplier has not opted for composition levy say Sita Manufacturers,
Delhi supplies goods to Aakash Electronics, Dehradun. Further, Goods were removed from
its factory in Delhi on 31.08.2018; delivered at Aakash Electronics, Dehradun on 2.02.2018;
invoice is issued on 31.08.2018 and payment is received on 4.09.2018.
(a) 20% as it is lower of the two
(b) 24% as date of invoice and dispatch of goods from factory, has happened before change
of rate
(c) 20% as both, payment and completion of supply, has happened after change of rate
Ans. (b) 24% as date of invoice and dispatch of goods from factory, has happened
before change of rate
327. What is the date of receipt of payment?
(a) Date on which payment is entered in the books of account
(b) Date on which payment is credited to the bank account
(c) Earlier of (a) or (b)
(d) Either of (a) or (b)
Ans. (c) Earlier of (a) or (b)
328. Where amount received is in excess of invoice with amount upto _______________,
supplier has option to choose time of supply as date of issue of fresh invoice for the
said excess amount.
(a) Rs.100
(b) Rs.1,000
(c) Rs.500
(d) Rs.10,000
Ans. (b) 1000
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329. Determine the amount of GST in case of supply of service of Rs.15,00,000 on 4.9.2018
and invoice has been issued on 31.8.2018. Payment received on 30.09.2018. The
CGST rate has been increased from 5% to 18% w.e.f. 1.9.2018.
(a) Rs.2,70,000
(b) Rs.1,00,000
(c) Rs.75,000
(d) Rs.1,20,000
Ans. (a) Rs.270000
330. What is the time of supply of goods liable to tax under reverse charge mechanism?
(a) Date of receipt of goods
(b) Date on which the payment is made
(c) Date immediately following 30 days from the date of issue of invoice by the supplier
(d) Earlier of (a) or (b) or (c)
Ans. (c) Earlier of (a) or (b) or (c)
331. What is the time of supply of service in case of an associated enterprises receives
services from the service provider located outside India?
(a) Date of entry in the books of account of associated enterprise (recipient)
(b) Date of payment
(c) Earlier of (a) or (b)
(d) Date of entry in the books of the supplier of service
Ans. (c) Earlier of (a) or (b)
332. Mr. X has received the payment, but has not deposited the cheque in the bank
account, what is the date of receipt of payment?
(a) Date of receipt of payment
(b) Date of credit in the bank account
(c) Date on which payment is entered in the books of account of the supplier
(d) Earlier of (b) and (c)
Ans. (d) Earlier of (b) and (c)
333. Om which of the following situations, ‘New rate’ shall be applicable?
(a) When the goods have been supplied before the change in rate of tax but
issue of invoice and receipt of payment is after the change in rate of tax.
(b) When the goods have been supplied after the change in rate of tax but issue of
invoice and receipt of payment is before the change in rate of tax.
(c) When the supply of goods and issue of invoice has been done before the change in
rate of tax but receipt of payment is after the change in rate of tax.
(d) When the supply of goods and receipt of payment has been done before the change in
rate of tax.
Ans, (a) When the goods have been supplied before the change in rate of tax but issue
of invoice and receipt of payment is after the change in rate of tax.
334. In which of the following situations, ‘Old rate’ shall be applicable?
(b) No
(c) Maybe
(d) None of the above
Ans.(a) Yes
338. Composite supply will attract the provisions pertaining to time of supply of goods or
services-
(a) Correct
(b) Incorrect
(c) Partially correct
(d) None of the above
Ans,(a) Correct
339. Where goods are packed and transported with insurance, the supply of goods,
packing materials, transport and insurance is a composite supply and supply of
goods is the principal supply. Which section will govern the time of supply
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provisions in this case?
(a) Section 12
(b) Section 13
(c) Section 14
(d) Section 15
Ans.(a) Section 12
340. What shall be the time of supply where services are supplied online? Which is correct?
(a) No separate provision for the online supply of services
(b) Section 13
(c) Both (a) and (b)
(d) None of the above
Ans.(c) Both (a) and (b)
341. If 9% of the work is complete before the change in rate of tax but invoice can be
raised only after completion of supply, then what is the rate of tax to be applied?
(a) New tax rate
(b) Old tax rate
(c) Either (a) or (b)
(d) None of the above
Ans.(a) New tax rate
342. ABC Ltd. have raised the invoice with old rate of tax but now it required to remit
the taxes based on new rate of tax. Can ABC Ltd recover the additional tax payable
from it customer? If yes, how?
(a) Yes, supplementary invoice / debit note
(b) Yes, payment voucher
(c) No
(d) None of the above
Ans.(a) Yes, supplementary invoice / debit note
343. Will the customer be able to take credit of additional taxes referred in above question?
(a) Yes
(b) No
(c) Maybe
(d) None of the above
344. The relaxation of non payment of taxes on the advance receipt is only to the
supplier of goods and not to the providers of service.
(a) Correct
(b) Incorrect
(c) Partially correct
(d) None of the above
Ans.(a) Correct
345. What should the taxable person do if he pay's the wrong tax i.e. IGST instead of CGST/SGST
or vice versa?
(a) Remit tax again and claim refund
(b) It will be auto-adjusted
(c) It will be adjusted on application/request
(d) None of the above
Ans. (a) Remit tax again and claim refund
346. What should the taxable person do if he pay's tax under wrong GSTIN?
a) Pay again under right GSTIN and claim refund
b) Auto-adjustment
c) Adjustment on application/request
d) Raise ISD invoice and transfer
Ans. (a) Pay again under right GSTIN and claim refund
347. Taxable person made an online payment of tax. Due to technical snag CIN was not
generated but my bank account is debited. What should he do?
a) Wait for 24 hours for re-credit
b) Approach bank
c) File application with department
d) File return without challan
Ans. (c) File application with department (FORM GST PMT-07)
348. What is the due date for payment of tax?
a) Last day of the month to which payment relates
b) Within 10 days of the subsequent month
c) Within 20 days of the subsequent month
d) Within 15 days of the subsequent month
Ans. (c) Within 20 days of the subsequent month
349. A Company has head office in Bangalore and 4 branches in different states, all registered
under GST and one ISD registered unit in Delhi. How many electronic cash ledgers will the
company have?
(a) 1
(b) 4
(c) 5
352. The major heads in the electronic cash ledger, electronic liability register and challan for
deposit of tax are
(a) IGST, CGST, SGST, UTGST & GST Compensation Cess
(b) Tax, Interest, Penalty, Fee, others and total
(c) Total – cash, liability
(d) All of the above
Ans.(a) IGST, CGST, SGST, UTGST & GST Compensation Cess
353. In each major heads in the electronic cash ledger, electronic liability register and challan for
deposit of tax, the minor heads are,
(a) CGST, SGST, UTGST & GST Compensation Cess
(b) Tax, Interest, Penalty, Fee, others and total
(c) Total – Cash , liability
(d) All of the above
Ans.(b) Tax, Interest, Penalty, Fee, others and total
354. Credit available in Electronic Credit Ledger can be used for payment of,
(a) Output Tax
(b) Output Tax and Interest
(c) Output Tax, Interest and Penalty
(d) Output Tax and Tax under reverse charge
Ans.(a) Output Tax
355. A taxable person failed to pay tax and/or file returns on time. He should pay interest on?
377. Payment made through challan will be credited to which registers / ledgers?
(a) Electronic Tax liability register
(b) Electronic Credit Ledger
(c) Electronic cash ledger
(d) All of the above
Ans. (c) Electronic cash ledger
378. Electronic credit ledger is maintained in Form,
(a) GST PMT – 1
(b) GST PMT – 2
(c) GST PMT – 3
(d) GST PMT – 4
Ans.(b) GST PMT-2
379. When should be the e – commerce operator collect tax at source?
(a) On the date when the other supplier makes supplies through operator
(b) Day on which the operator remits the consideration to the supplier
(c) When he collects the consideration on behalf of the supplier in respect of such supply
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(d) Option (a) or (c) whichever is earlier
Ans.(c) When he collects the consideration on behalf of the supplier in respect of
such supply
380. What does “net value of taxable supplies” means
(a) This is the difference of Aggregate value of all supplies of goods and services and
Aggregate value of all supplies returned to the suppliers.
(b) This is the difference of Aggregate value of taxable supplies of goods and services
except services u/s 9(5) of IGST Act and Aggregate value of taxable supplies returned
to the suppliers
(c) This is the difference of Aggregate value of taxable and exempted supplies of
goods and services and Aggregate value of supplies returned to the suppliers
(d) None of the above
Ans.(b) This is the difference of Aggregate value of taxable supplies of goods and
services except services u/s 9(5) of IGST Act and Aggregate value of taxable supplies
returned to the suppliers
381. Payment of tax, interest or penalty for each month shall be made by debiting ___________on or
before the due date of filing return.
(a) Electronic Cash Ledger
(b) Electronic Credit Ledger
(c) Electronic Liability Ledger
(d) Both (a) and (b)
382. What is deemed to be the date of deposit in the electronic cash ledger?
(a) Date on which amount gets debited in the account of the taxable person
(b) Date on which payment is initiated and approved by the taxable person
(c) Date of credit to the account of the appropriate Government
(d) Earliest of the above three dates
Ans.(c) Date of credit to the account of the appropriate Government
383. What is the full form of CPIN?
(a) Challan Identification Number
(b) Common Portal Identification Number
(c) Challan Pin Identification Number
(d) Common Pin Identification Number
Ans.(b) Common Portal Identification Number
384. What is the full form of CIN?
(a) Challan Identification Number
(b) Common Portal Identification Number
(c) Common Inquiry Number
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(d) Challan Inquiry Number
Ans.(a) Challan Identification Number
385. A taxable person failed to pay tax and / or file returns on time. He should pay interest on?
(a) Gross tax payable
(b) Gross tax payable and input credit claimed
(c) Net tax payable i.e. amount to be paid after ITC set off
(d) No interest payable, if reasonable cause is shown
Ans.(a) Gross Tax payable
386. What is the rate of interest in case of belated payment of tax?
(a) 1%
(b) 10%
(c) 18%
(d) 24%
Ans,(c) 18%
387. What is the rate of interest in case of undue or excess claim of ITC?
(a) 18%
(b) 24%
(c) 30%
(d) 40%
Ans.(b) 24%
388. Mr. A was liable to pay GST of Rs.10,000 on 20.8.2018 but he failed to pay. Later he decided
to pay tax on 26.10.2018. what would be the period for which interest has to be paid by
him?
(a) 66 days
(b) 67 days
(c) 68 days
(d) 70 days
Ans.(b) 67 days
389. Can SGST paid in one State be utilized for payment of SGST in another state?
(a) Yes
(b) No
(c) May be
(d) It does not matter
Ans.(b) No
390. Mr. A registered as an ISD in Delhi want to transfer the credit of Delhi GST and SGST to its
branch in Mumbai. Is this possible?
(a) Yes
(b) No
(c) Within 10 days after the end of the month in which such amount was collected, but no
time limit for paying the money
(d) No time limit for both
Ans. (a) Within 10 days after the end of the month in which such amount was
collected
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406. Can a supplier take credit of the TCS?
(a) Yes
(b) No
(c) Yes, on the basis of the valid return filed
(d) Yes, on the basis of a valid return filed by the e-commerce operator and there is no
discrepancy in the returns
Ans. (d) Yes, on the basis of a valid return filed by the e-commerce operator and there
is no discrepancy in the returns
407. Is there any matching to be done with the returns filed by supplier and operator?
(a) Yes, return of e-commerce operator should be matched with every return of
supplier
(b) No, no such requirement mandated
(c) Yes, return of e-commerce operator should be matched with every return of
supplier but no consequences if the returns do not match
(d) Yes, return of e-commerce operator should be matched with every return of
supplier and if the returns do not match then the amount of discrepancy will be added to
the outward tax liability of the concerned supplier, where the value of outward supplies
furnished by the operator is more than the value of outward supplies furnished by the
supplier, in his return for the month succeeding the month in which the discrepancy is
communicated.
Ans. (d) Yes, return of e-commerce operator should be matched with every return of
supplier and if the returns do not match then the amount of discrepancy will be
added to the outward tax liability of the concerned supplier, where the value of
outward supplies furnished by the operator is more than the value of outward
supplies furnished by the supplier, in his return for the month succeeding the month
in which the discrepancy is communicated.
408. Every electronic commerce operator required to collect tax at source under section 52 shall
furnish a statement in ……………………., containing details of supplies effected through such
operator and the amount of tax collected as required under section 52(1) of the CGST Act.
(a) Form GSTR-5
(b) Form GSTR-6
(c) Form GSTR-7
(d) Form GSTR-8
Ans. (d) Form GSTR-8
REFUNDS
409. Which section governs the provisions regarding refund in GST?
a) Section 53
b) Section 45
c) Section 54
d) Section 52
Ans. (c) Section 54
410. Can a person also claim refund if he has paid excess tax by mistake?
(a) Yes
(b) No
414. The time limit available to proper officer to pass final order after accepting the refund
application is -
(a) Within sixty days from the date of receipt of application.
(b) Within eighty days from the date of receipt of application.
(c) Within ninety days from the date of receipt of application.
(d) Within thirty days from the date of receipt of application.
Ans. (a) Within sixty days from the date of receipt of application.
415. The SEZ developer or SEZ unit exporting goods and / or services shall not be eligible to
claim refund of IGST paid by the registered taxable person on such supply. Is this statement
-
(a) True
(b) False
Ans. (b) False
416. A SEZ developer or SEZ unit shall not be eligible to claim refund of taxes in respect of its
inward supplies. Is this statement-
(a) True
(b) False
Ans. (a) True
417. Interest on delayed refunds (Section 56)Interest on refund amount is required to be paid
after expiry of ………. from the date of receipt of the application
421. The process of claiming refund is fully electronic due to the existence of GSTN. Comment.
(a) Yes, it’s fully electronic
(b) No, it’s fully manual
(c) No, it’s partially electronic and partially manual
(d) None of the above
Ans. (c) No,it’s partially electronic and partially manual
422. _____________ will be treated as application for refund in case of IGST paid on goods exported.
(a) GSTR – 3
(b) Form GST RFD-01A
(c) Shipping Bill / Bill of Export
(d) FIRC
Ans. (c) Shipping Bill/Bill of Export
423. Is there any provision of provisional payment of refund in case of exports or not?
(a) Yes
(b) No
(c) Partially correct
(d) No clarification in the Act
Ans. (a) Yes
425. What is the minimum limit of refund claim needed to be admitted in GST portal?
(a) Rs. 1000
(b) Rs. 2000
(c) Rs. 500
(d) Rs. 5000
Ans. (b) Rs.2000
428. The interest shall be payable @ _______ for withholding the refund amount.
(a) 5%
(b) 7%
(c) 6%
(d) 6.5%
Ans. (c) 6%
437. Order sanctioning the amount of refund due to the said applicant on a provisional basis
shall be made within ________from the date of the acknowledgement.
(a) 7 days
(b) 15 days
(c) 30 days
(d) 45 days
Ans. (a) 7 days
438. Refunds would be allowed on a provisional basis in case of refund claims on
account of zero rated supplies of goods and / or services made by registered
persons. At what percentage, would such provisional refunds be granted?
(a) 70%
(b) 65%
(c) 80%
(d) 90%
Ans. (d) 90%
439. In case of IGST, 50% will be credited to Central Consumer Fund and balance 50% to
State Consumer Welfare Fund. Validate.
(a) True
(b) False
(c) Partially correct
(d) None of above
Ans. (a) True
440. Deemed exports are covered in _____________.
(a) Section 145
(b) Section 146
(c) Section 147
445. What is the relevant date in case of refund on account of excess payment of GST due to
mistake or inadvertence?
(a) Date of payment of GST
(b) Last day of the financial year
(c) Date of providing of service
(d) None of the above
Ans. (a) Date of payment of GST
447. Relevant date for computing time limit to claim refund in case of deemed exports supply of
goods is
(a) Date of filing returns relating to such deemed exports;
(b) Date of goods leaving India;
(c) Date of payment of Tax;
(d) Date of receipt of consideration in Foreign Exchange;
Ans. (a) Date of filing returns relating to such deemed exports
448. Who is empowered to notify the agencies that are entitled to claim refund under this
section?
(a) Government on the recommendations of the GST Council
(b) Board
(c) GST Council
(d) None of the above
Ans. (a) Government on the recommendations of the GST Council
450. Interest U/s 56 has to be paid for delayed refunds, if the refund is not granted within ……….
(a) 90 days
(b) 3 months
(c) 60 days
(d) None of the above
Ans. (c) 60 days
Ans. (b) To promote and protect the welfare of the consumers and strengthen the
consumer movement in the country
452. Proper and separate account and other relevant records in relation to the Fund in
prescribed form in consultation with the Comptroller and Auditor-General of India shall be
maintained by ……………….
(a) the Government
(b) the authority specified by the Government
(c) the assessee who is claiming refund
(d) (a) or (b)
Ans. (d) (a) or (b)
453. Refund of tax (section 54) Refunds will not be allowed in cases of:-
a) Exports made on which export duty is levied
b) Exports made without payment of tax
c) Inverted duty structures where tax on inputs are higher than tax on outputs
d) None of the above
Ans. (a) Exports made on which export duty is levied
454. Refund application is to be filed before the expiry of ………….from the relevant date.
a) Two years
b) One year
c) 180 days
d) 260 days
Ans. (a) Two years
455. A specialised agency of the UNO can claim refund of tax paid on…
a) Intra-State supply of goods and/or services
b) Inter-state supply of goods and/or services
c) Inward supply of goods and/or services
d) All of the above
Ans. (c) Inward supply of goods and/or services
456. What is the time limit for filing of refund application by a specialised agency of the UNO?
a) Before the expiry of eight months from the last day of the quarter in which such
inward supply received
b) Before expiry of eight months from the last day of the month in which such inward
supply received
c) Before expiry of six months from the last day of the month in which such inward supply
was received
d) Before expiry of six months from the last day of the quarter in which such inward supply
was received
Ans. (d) Before the expiry of six months from the last day of the quarter in which such
inward supply was received
463. Where the tax authorities notice a discrepancy in the details during the scrutiny of
returns, the registered person:
(a) would be liable for interest if he is unable to prove that the discrepancy did not arise
on his account and it was a fault of another person
(b) is required to provide satisfactory/ acceptable explanation for the same within 30
days or any extended timelines as may be permitted
(c) must prepare documents to cover up the discrepancy.
(d) Both (a) and (b)
Ans. (b) is required to provide satisfactory/ acceptable explanation for the same
within 30 days or any extended timelines as may be permitted
464. What is the time limit after which action under section 61 cannot be taken?
(a) 30 days from filing of return or such further period as may be decided by proper officer.
(b) No time Limit
(c) Time limit mentioned in Section 73 or 74 of the Act.
466. What is the time limit for issuing best judgement order under section 62?
(a) 9 months from the end of financial year.
(b) 3 years for cases covered U/s 73 or 5 years for cases covered under 74
(c) 5 years for cases covered U/s 73 or 3 years for cases covered under 74
(d) 5 years from the due date of filing annual return.
Ans. (d) 5 years from the due date of filing annual return
467. Where the tax liability as per the final assessment is higher than tax paid at the time of filing
of return u/s 39 the registered person shall .
(a) not be liable to interest, provided he proves that his actions were bonafide
(b) be liable to pay interest from due date till the date of actual payment
(c) be liable to pay interest from date of the final assessment till the date of actual payment
(d) be liable to pay interest from due date till the date of the final assessment
Ans. (b) be liable to pay interest from due date till the date of actual payment
468. Provisional assessment under the GST law is permitted to be:
(a) At the instance of the taxable person
(b) At the instance of the tax authorities on a best judgment basis in absence of adequate
details or response from registered person
(c) Either of (a) and (b)
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(d) Available only to certain notified persons
470. On the grounds of sufficient reasons being provided by proper officer the time period for
passing final assessment order can be extended by Commissioner for further period of
(a) 2 months
(b) 4 years
(c) 6 months
(d) No time limit.
Ans. (a) Where the registered person furnishes a valid return within 30 days of the
service of the assessment order.
487. Whether the registered person will get immunity from interest & late fee leviable if
assessment order passed u/s 62(1) is withdrawn?
(a) Taxable person will get immunity only from late fee u/s 47.
(b) No, taxable person will still be liable for interest u/s Section 50 and late fee u/s Section
47. Therefore, no immunity has been provided for the same.
(c) Taxable person will get immunity from late fee u/s 47 as well as interest u/s 50.
(d) Taxable person will get immunity only from interest u/s 50.
Ans. (b) No, taxable person will still be liable for interest u/s Section 50 and late fee
u/s Section 47. Therefore, no immunity has been provided for the same.
Assessment of unregistered persons (Section 63)
488. What is the consequence, where a taxable person fails to obtain registration even though
liable to do so?
(a) Proper officer may assess the tax liability to the best of his judgement.
(b) Issue a show cause notice and pass assessment order after providing opportunity of
being heard.
(c) (a) or (b)
(d) (a) and (b)
Ans. (d) (a) and (b)
489. What are the pre requisites for proper officer to pass assessment order under Section 63
(a) Period selected for assessment has to be within 5 years from the end of due date for
filing annual return of relevant period.
(b) Show cause notice has to be issued before passing assessment order.
(c) Opportunity of being heard has to be given before passing assessment order.
(d) All of the above.
492. During the course of audit, the authorised officer may require the registered person:
a) to afford him the necessary facility to verify the books of account or other documents as
he may require
b) to furnish such information as he may require and render assistance for timely
completion of the audit
c) (a) and/or (b)
d) Only (a)
Ans. (c) (a) and/or (b)
493. Special audit u/s 66 can be directed at any stage of scrutiny, enquiry, investigation or any
other proceedings having regard to nature and complexity of the case if, any officer not
below the rank of Assistant Commissioner:
a) is of the opinion that the value has not been correctly declared
b) the credit availed is not within the normal limits
c) assessee does no co-operate
d) (a) or (b)
500. Whether any reason to believe or evidence is required for initiation of audit u/s 65?
a) Reason to believe is a prerequisite for initiation of audit u/s 65.
b) Proper evidence is a prerequisite for initiation of audit u/s 65.
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c) (a) & (b)
d) No, Sec 65 does not specify any such requirements.
Ans. (d) No, Section 65 does not specify any such requirements
501. The tax authorities may conduct audit u/s 65 at:
a) the place of business of the registered person
b) the place of residence of the registered person.
c) the office of the tax authorities.
d) (a) or (c)
Ans. (d) (a) or (c)
502. Prior to the conduct of audit u/s 65 the registered person shall be informed, by way of a
notice, sufficiently in advance:
a) not less than fifteen working days
b) not less than thirty working days
c) not less than ten working days
d) No prior intimation required
Ans. (a) not less than fifteen working days
503. The time limit for completion of the audit u/s 65(1) is:
a) six months from the date of commencement of audit
b) three months from the date of commencement of audit
c) One year from the date of commencement of audit
d) None of the above.
Ans. (b) three months from the date of commencement of audit
504. Where the Commissioner is satisfied that audit u/s 65 in respect of such registered person
cannot be completed within three months from the date of commencement of audit the time
limit can be extended:
a) by a further period not exceeding six months
b) by a further period not exceeding three months
c) by a further period not exceeding nine months
d) no extension of time limit is permissible
Ans. (a) by a further period not exceeding six months
INSPECTION, SEARCH, SEIZURE AND ARREST
Power of inspection, search and seizure (Section 67)
514. What is the prescribed monetary limit of Central Tax for Deputy or Assistant Commissioner
of Central Tax for issuance of show cause notices and orders under Section 73 and 74?
(a) Not exceeding Rupees 10 lakhs
(b) Above Rupees 10 lakhs and not exceeding Rupees 1 crore
(c) Above Rupees 1 crore without any limit
(d) Any amount without any limit
Ans. (b) Above Rupees 10 lakhs and not exceeding Rupees 1 crore
515. In case the person does not deposit tax collected in contravention of Section 76, is the same
recoverable with interest?
(a) Yes
(b) No
(c) At proper officer's discretion
(d) None of the above
Ans. (a) Yes
516. The time limit for payment of tax demand is ………………from the date of service of the order,
(a) 3 months
(b) 90 days
(c) 6 months
(d) 1 year
Ans. (a) 3 months
517. If it is expedient in the interest of the revenue, can the proper officer after recording
reasons in writing, require a taxable person to make payment of tax demand within shorter
period as may be specified by him?
(a) Yes
(b) No
(c) With prior permission of not below the rank of Joint Commissioner
(d) None of the above
Ans. (a) Yes
518. What is the prescribed monetary limit of Integrated Tax for Deputy or Assistant
Commissioner of Central Tax for issuance of show cause notices and orders under Section
73 and 74 read with Section 20 of the IGST Act?
(a) Not exceeding Rupees 20 lakhs
(b) Above Rupees 20 lakhs and not exceeding Rupees 2 crore
(c) Above Rupees 2 crore without any limit
(d) Any amount without any limit
Ans. Above Rupees 20 lakhs and not exceeding Rupees 2 crore
519. What is the prescribed monetary limit of Central Tax for Additional or Joint Commissioner
of Central Tax for issuance of show cause notices and orders under Section 73 and 74?
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(a) Not exceeding Rupees 10 lakhs
(b) Above Rupees 10 lakhs and not exceeding Rupees 1 crore
(c) Above Rupees 1 crore without any limit
(d) Any amount without any limit
Ans. (c) Above Rupees 1 crore without any limit
520. What is the prescribed monetary limit of Integrated Tax for Additional or Joint
Commissioner of Central Tax for issuance of show cause notices and orders under Section
73 and 74 read with Section 20 of the IGST Act?
(a) Not exceeding Rupees 20 lakhs
(b) Above Rupees 20 lakhs and not exceeding Rupees 2 crore
(c) Above Rupees 2 crore without any limit
(d) Any amount without any limit
Ans. (c) Above Rupees 2 crore without any limit
521. Where the service of Notice or issuance of order is stayed by a Court order, can the period
of such stay be excluded in computing the period specified in sub-sections (2) and (10) of
section 73 or in sub-sections (2) and (10) of section 74?
(a) Yes
(b) No
(c) At proper officer's discretion
(d) None of the above
Ans. (a) Yes
522. What is the maximum number of times a hearing can be adjourned?
(a) 1
(b) 3
(c) 5
(d) None of the above
Ans. (b) 3
523. Whether the amount of tax, interest and penalty demanded in the order can exceed the
amount specified in the Notice?
(a) Yes
(b) No
(c) At proper officer's discretion
(d) None of the above
Ans. (b) No
524. What is the time limit for issue of order in case of fraud, misstatement or suppression?
(a) 30 months
(b) 18 months
(c) 5 years
(d) 3 years
Ans. (c) 5 years
525. What is the time limit for issue of order in case of other than fraud, misstatement or
suppression?
(a) 30 months
(b) 18 months
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(c) 5 years
(d) 3 years
Ans. (d) 3 years
526. Is it obligatory on the part of the Department to take on record the assessee's
representation during adjudication and issue of order?
(a) Yes
(b) No
(c) At proper officer's discretion
(d) If requested by notice
Ans. (a) Yes
527. What is the maximum amount of demand for which the officer can issue an order under
section 73 in case of other than fraud, misstatement or suppression?
(a) Amount of tax + interest + penalty of 10% of tax
(b) Amount of tax + interest + penalty of 10% of tax or Rs. 10,000/- whichever is higher
(c) Rs. 10,000
(d) Amount of tax + interest + 25% penalty
Ans. (b) Amount of tax + interest + penalty of 10% of tax or Rs. 10,000/- whichever is
higher
528. What is the maximum amount of demand for which the officer can issue an order under
section 74 in case fraud, misstatement or suppression?
(a) Amount of tax + interest + penalty of 15% of tax
(b) Amount of tax + interest + penalty of 25% of tax
(c) Amount of tax + interest + penalty of 50% of tax
(d) Amount of tax + interest + penalty of 100% of tax
Ans. (d) Amount of tax + interest + penalty of 100% of tax
529. What is the prescribed monetary limit of Central Tax for Superintendent of Central Tax for
issuance of show cause notices and orders under Section 73 and 74?
(a) Not exceeding Rupees 10 lakhs
(b) Above Rupees 10 lakhs and not exceeding Rupees 1 crore
(c) Above Rupees 1 crore without any limit
(d) Not exceeding Rupees 20 lakhs
Ans. (a) Not exceeding Rupees 10 lakhs
530. What is the prescribed monetary limit of Integrated Tax for Superintendent of Central Tax
for issuance of show cause notices and orders under Section 73 and 74 read with Section 20
of the IGST Act?
(a) Not exceeding Rupees 10 lakhs
(b) Above Rupees 10 lakhs and not exceeding Rupees 1 crore
(c) Above Rupees 1 crore without any limit
(d) Not exceeding Rupees 20 lakhs
Ans. (d) Not exceeding Rupees 20 lakhs
531. Whether penalties under any other provisions of the Act be imposed in respect of
adjudication proceedings under section 73 or 74?
(a) Yes
(b) No
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(c) At proper officer's discretion
(d) None of the above
Ans. (b) No
532. What is the time limit for issue of order in pursuance of the direction of the Appellate
Authority or Appellate Tribunal or a Court, from the date of communication of the said
direction?
(a) 30 months
(b) 18 months
(c) 2 years
(d) 5 years
Ans. (d) 2 years
533. Whether interest is payable on the tax short paid or not paid even if it is not specified in the
order determining the tax liability?
(a) Yes
(b) No
(c) Only if concluded by an order later
561. When shall the Director be not liable to pay the tax dues if the company is not able to pay?
(a) Liquidator refuses to pay
(b) Auditor refuses to pay
(c) If the non-recovery is not due to gross neglect of the Director
(d) None of the above
Ans. (c) If the non-recovery is not due to gross neglect of the Director
562. When shall the Director of a Private Limited Company be not liable to pay the tax, interest
or penalty, if the company is not able to pay?
(a) In all cases
(b) Company refuses to pay
(c) If the non-recovery is not due to gross neglect misfeasance or breach of duty of the
Director
(d) None of the above
Ans. (c) If the non-recovery is not due to gross neglect misfeasance or breach of duty
of the Director
568. When two or more companies are amalgamated, the liability to pay tax on supplies between
the effective date of amalgamation order and date of amalgamation order would be on –
a) Transferee;
b) Respective companies;
c) Any one of the companies;
d) None of the above
Ans. (d) Respective Companies.
569. In case of amalgamation between two companies, such companies shall be treated as two
distinct companies till –
a) Till the date of the Court order
571. Commissioner will notify the amount of liability within how many days of intimation
a) 3 months
b) 30 days
c) 60 days
d) 6 months
Ans. (a) 3 months
572. The dues recoverable under this section includes
a) Only Interest
b) Any dues which are recoverable under this Act
c) Only tax
d) Only Penalty
Ans. (b) Any dues which are recoverable under this Act
573. If the estate or any portion of the estate of a taxable person is under the control of the Court
of Wards, Administrative General etc., and the tax due from such taxable person is liable to
be paid by -
a) Court of Wards.
b) Taxable Person
c) Legal representative of taxable person
d) None of the above
Ans. (a) Court of Wards
574. The Court of Wards, Administrative General, etc., must be appointed by
a) Supreme Court
b) High Court
c) Any court
d) None of the above
Ans. (c) Any Court
575. The dues recoverable under this section includes
a) Only Interest
b) Any dues which are recoverable under this Act
c) Only tax
d) Only Penalty
Ans. (b) Any dues which are recoverable under this Act
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576. Who is liable to pay tax if the business of an individual is discontinued before his death?
a) Board of Directors or Manager
b) Any member of his person who is willing to pay
c) Legal representative of taxable person
d) Employee
Ans. (c) Legal representative of taxable person
577. The legal representative or any other person of an individual who is dead is liable to pay
tax, only if -
a) The business has been carried on by the legal representative
b) The business has been carried by the legal representative or any other person
c) The business has been carried by any other person
d) None of the above.
Ans. (b) The business has been carried on by the legal representative or any other
person
578. The expression 'firm' would include a
a) Company
b) LLP
c) HUF
d) AOP
Ans. (b) LLP
579. In case of discontinuance of the AOP, the liability of the member exists in respect of the tax
dues imposed
a) Prior to the date of discontinuance
b) After the date of discontinuance
c) Both prior and after the date of discontinuance
d) None of the above
Ans. (c) Both prior and after the date of discontinuance.
580. The dues recoverable under this section includes
a) Only Interest
b) Any dues which are recoverable under this Act
c) Only tax
d) Only Penalty
Ans. (b) Any dues which are recoverable under this Act
581. As per this section, the member or group of members of HUF or AOP is/are liable to pay tax
on taxable supplies-
a) Even after its partition
b) Upto the time of partition
c) Both (a) and (b)
d) None of the above
Ans. (b) Upto the time of partition
582. In case of discontinuance of HUF business, the liability would arise till the date of
a) Discontinuance
b) Court verdict
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c) As mutually agreed upon by the HUF members
d) Determination of liability by the Department.
Ans. (a) Discontinuance
ADVANCE RULING
(Section 95 to Section 106)
596. When can the Authority declare the Advance Ruling pronounced as void?
(a)Ruling is obtained by suppression of material fact
(b)Applicant does not abide by the ruling
(c)Applicant does not engage in the business 3 months of obtaining the ruling
(d)Supreme Court judgment is opposite to the ruling
Ans (a) Ruling is obtained by suppression of material facts
597. What is the nature of proceedings conducted by the Authority for Advance Ruling?
(a) Administration proceedings
(b) Special Proceedings
(c) Judicial Proceeding
(d) Any of the above
Ans (c) Judicial Proceeding
598. The Authorities for Advance Ruling shall for some specified purpose of exercising its
powers, have all the powers of a_______________.
(a) Supreme Court
(b) High Court
(c) State Court
(d) Civil Court
Ans (d) Civil Court
599. On receipt of an application for advance ruling, Authority for Advance ruling shall:
(a) fix a date of hearing
(b) forward a copy of the same to concerned officers
(c) None of the above
Ans. (b) forward a copy of the same to concerned officers.
600. AAR shall refuse to admit the application if the issue raised in the application is already
pending in the applicant’s own case before:
(a) any First Appellate Authority
(b) the Appellate Tribunal
(c) any Court;
(d) All the above
Ans. (d) All the above
603. A copy of the Advance Ruling signed and certified by the members shall be sent to
(a) Applicant
(b) Concerned officer
(c) Jurisdictional officer
(d) All the above
Ans. (d) All the above
606. The Central Government and the State Government shall appoint an officer not below the
rank of __________ as member of the Authority for Advance Ruling.
(a) Joint Commissioner
(b) Assistant Commissioner
(c) Deputy Commissioner
(d) High Commissioner
Ans (d) Joint Commissioner
607. (a)Advance Ruling is binding on all departmental officers.
(b)Advance Ruling is binding
on all tax payers.
Comment on the above
statements,
(a) A – Correct, B – Incorrect
(b) A – Incorrect, B – Correct
(c) Both A & B – Correct
(d) Both A & B – Incorrect
Ans (d) Both A & B – Incorrect
608. What is the meaning of applicant?
(a) Person registered under the Act.
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(b) Person desirous of obtaining registration under the Act.
(c) Tourist as defined under section 15 of IGST Act, 2017.
(d) (a) or (b).
Ans. (d) (a) or (b)
609. Where shall the Advance Ruling Authority be located?
(a) The Authority shall be located in each State / Union Territory.
(b) The Authority shall be located in Centre.
(c) The Authority shall be located in both Centre & State.
(d) None of the above.
Ans. (a) The Authority shall be located in each State / Union Territory.
611. What procedure should be followed if, the members of the Authority differ on any question
on which the Advance Ruling is sought?
(a) The members of the authority shall state the point or points on which they differ and
make a reference to the Appellate Authority for hearing and decision on such question
(b) The Authority will not take any decision and reject the application
(c) The Authority will remand the case to jurisdictional officer
(d) None of the above
Ans. (a) The members of the authority shall state the point or points on which they
differ and make a reference to the Appellate Authority for hearing and decision on
such question
612. Within how many days the Authority shall pronounce its decision on Advance Ruling from
the date of receipt of application?
(a) 30 days
(b) 60 days
(c) 90 days
(d) 120 days
Ans. (c) 90 days
613. Who can appeal to the AAAR?
(a) Jurisdictional CGST/SGST officer or the applicant
(b) Any Taxable Person
(c) Any citizen concerned about the ruling passed
(d) All of the above
Ans. (a) Jurisdictional CGST/SGST officer or the applicant
649. Within what period should the mistake apparent on record be brought to the notice of the
authority?
a) Three Months
b) Six Months
c) Depends – Three months in case of clerical error or arithmetical error and six months in
other case
Ans. (c) Depends – Three months in case of clerical error or arithmetical error and
six months in other case
650. Can government make retrospective rules?
EXEMPTIONS
Ans. (b) For letting out any residential dwelling property for use as residence
657. Services by a hotel, inn, guest house, club or campsite are exempted for residential /
lodging purposes -
a) If the declared actual tariff for a unit of accommodation is below ₹ 10,000
b) If the declared actual tariff for a unit of accommodation is below ₹ 1,000
c) If the declared actual tariff for a unit of accommodation is exactly ₹ 1,000
d) If the declared actual tariff for a unit of accommodation is above ₹ 1,000
Ans. (b) If the declared actual tariff for a unit of accommodation is below ₹ 1,000
661. Transportation of agricultural produces, milk, salt and food grain including flour, pulses
and rice, 'relief materials meant for victims of natural or man-made disasters, calamities,
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accidents or mishap', newspaper or magazines registered with the Registrar of
Newspapers - is exempted –
a) If it is by a goods transport agency
b) If it is by a rail - within India
c) If it is by a vessel - within India
d) If it is by all of the above
663. Which of the following can be issued by Central Government/ State Government to
exempt goods and/or services on which tax is leviable in exceptional cases?
a) Exemption Notification
b) Special order
c) Other notifications
d) None of the above
666. Service by whom, by way of any activity in relation to any function entrusted to a
municipality under Article 243 W of the Constitution, is exempted?
a) Central Government or State Government or Union territory or Local authority
b) Governmental authority
c) Municipality under Article 243 W of the Constitution
d) All of above
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Ans. (d) All of Above [vide NN 16/2018 dated 27-07-2018]
Ans. (b) If they are to its own members, provided the contribution received is up to ₹
7500 per month from a member towards sourcing goods/services from any third
person for common use of members
671. Which of the following are exempted services?
a) Services by an artist by way of a performance in folk or classical art forms of music/
dance / theatre with consideration therefor not exceeding ₹ 1 lakh
b) Services by an artist by way of a performance in folk or classical art forms of music/
dance with consideration therefor not exceeding ₹ 1.5 lakh
c) Services by an artist by way of a performance in folk or classical art forms of music/
dance / theatre with consideration therefor not exceeding ₹ 1.5 lakh
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d) Services by an artist as a brand ambassador by way of a performance in folk or
classical art forms of music/ dance / theatre with consideration therefor not exceeding ₹
1.5 lakh
Ans. (c) Services by an artist by way of a performance in folk or classical art forms
of music/ dance / theatre with consideration therefor not exceeding ₹ 1.5 lakh
672. Whether Service by way of access to a road or a bridge on payment of annuity is exempt?
a) True
b) False
Ans. (b) For letting out any residential dwelling property for use as
residence
708. Services by a hotel, inn, guest house, club or campsite are exempted for residential
/ lodging purposes -
(a) If the declared actual tariff for a unit of accommodation is below Rs. 10,000
(b) If the declared actual tariff for a unit of accommodation is below Rs. 1,000
(c) If the declared actual tariff for a unit of accommodation is exactly Rs. 1,000
(d) If the declared actual tariff for a unit of accommodation is above Rs. 1,000
Ans. (b) Long term (30 or more years) leases of industrial plots or plots
for development of infrastructure for financial business by State
Government Industrial Development Corporations or Undertakings to
industrial units
723. The details of inward supplies of goods or services in Form GSTR 2 shall be
submitted by
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(a)10th of the succeeding month
(b)18th of the succeeding month
(c)15th of the succeeding month
(d)20th of the succeeding month
Ans. (c) 15th of the succeeding month
724. Every registered taxable person shall be entitled to take credit of input tax in
his return and such input tax credit shall be credited to
(a) Personal Ledger Account
(b) Refund account
(c) Electronic Cash Ledger
(d) Electronic Credit Ledger
Ans. (d) Electronic Credit Ledger
725. The details of every credit note relating to outward supplies furnished by the
registered taxable person shall be matched
(a) With corresponding reduction in claim for input tax credit by the
corresponding taxable person in his valid return for the same tax period or
any subsequent tax period.
(b) For duplication of claims for reduction in the output tax liability
(c) All of the above
(d) None of the above
Ans. (c) All of the above
726. The due date for furnishing the annual return for every financial year by
every registered taxable person is
(a) 30th of September following the end of the financial year
(b) 20th of October following the end of the financial year
(c) 31st of December following the end of the financial year
(d) 31st of May following the end of the financial year
Ans. (c) 31st of December following the end of the financial year
Ans. (d) Return can be rectified before the due date for filing the returns
for month of September or second quarter, as the case may be, following
the end of the financial year
749. A goods and service tax practitioner can undertake the following activities if
authorized by the taxable person
(a) Furnish details inward and outward supplies
(b) Furnish monthly / quarterly return
(c) Furnish Annual and Final return
(d) All of the above
Ans. (d) All of the above
750. Every registered taxable person who is required to get his accounts audited
under section 35(5) shall furnish electronically
(a) Annual return
754. Supply of goods in the course of import into the territory of India is
(a) Intrastate supply
(b) Inter-State supply
(c) Export
(d) Neither Export nor Import
Ans. (b) Inter-State supply
755. Whether goods taken to warehouse from port or customs station exigible to
IGST
(a) Yes
(b) No
Ans. (a) Yes
756. IGST and GST Compensation Cess will payable at the time of removal from
warehouse
760. What is the effect, if the parliament annuls the rules/ notifications issued by
government?
(a) It is as good as no rules/ notifications were issued by the government
(b) The rules/ notifications issued by the government would be effective for
the period from the date of issue till the date they were annulled by the
parliament
(c) There would be no sanctity for the action taken by the department/
assessee on the basis of rules/ notification for the period from the date of
issue till the date of annulment.
(d) The action taken by the department /assesses on the basis of such rules
would be void from the date of annulling the rules/notification.
(e) (a) and (c)
(f) (b) and (d)
790. Out of the IGST paid to the Central Government in respect of import of goods
or services, if the registered taxable person does not avail the said credit
within the specified period and so remains in the IGST account, what is the
treatment?
(a) Refund it back to the taxable person.
(b) Can be claimed after the expiry of the specified period.
(c) Apportion to the Central Government based on rate equivalent to CGST on
similar intra-State supply and Apportion to the state where such supply takes
place.
(d) None of the above.
Ans. (c) Apportion to the Central Government based on rate equivalent
to CGST on similar intra-State supply and Apportion to the State where
such supply takes place
792. The registered person has paid IGST by treating an intra-State supply as
inter-State supply. The officer has levied CGST and SGST as the same is intra-
State supply. What is the remedy?
(a) Pay CGST and SGST along with applicable interest
(b) Pay CGST and SGST and Claim refund of IGST
(c) Forgo IGST paid
(d) None of the above
Ans. (b) Pay CGST and SGST and Claim refund of IGST
793. What is the maximum period for exercising this power of issuing general or a
special order for removal of difficulties?
(a) 4 years
(b) 3 years
(c) 2 years
(d) 1 year
Ans. (b) 3 years
794. What is the time limit for filing an appeal before the High Court?
(a) 60 days
(b) 120 days
(c) 180 days
(d) 360 days
Ans (c) 180 days
795. Which of the provisions of this Act governs appeal to the Appellate Authority?
(a) Section 107 of the CGST Act
(b) Section 108 of the CGST Act
(c) Rules 108 of CGST Rules
(d) Both (a) & (c)
Ans (a) Section 107 of the CGST Act
796. What is the time period provided within which a retired officer of commercial
tax department of any State Government or Union Territory or of board
cannot represent himself as an authorized representative?
797. Which of the following are not covered in the ambit of adjudicating authority?
(a) Revisional Authority
(b) Appellate Authority for advance ruling
(c) CBIC
(d) All of the above
Ans: (d) All of the above
798. Mr. A furnished an application form GST APL -01 for filing an appeal against
an order issued by the department on 22nd September, 2018. Consequently a
provisional acknowledgement was issued to him immediately. Mr. A also
furnished a certified copy of order to the appellate authority on 27th
September, 2018. What shall be the date of filing of appeal in this case?
(a) 22nd September, 2018
(b) 27th September, 2018
(c) Either (a) or (b) at the option of appellate authority
(d) None of the above
Ans (a) 22nd September, 2018
799. Who are the persons this disqualified to stand as Authorised representative
as per the provisions of the GST Act?
(a) Any person dismissed or removed from Government service
(b)Any person is convicted of an offence connected with any proceedings under
CGST Act, SGST Act, IGST Act or UTGST Act
(c) Any person found guilty of misconduct by the prescribed authority or been
adjudged as insolvent
(d) Any of the above
Ans (d) Any of the above
800. What are the instances under which an order passed by the Appellate Tribunal
could be amended by the Tribunal itself?
(a) Where any error is apparent from record
(b) If any error is brought to its notice by the Commissioner or Commissioner of
State tax or the Commissioner of the Union Territory tax or the other party to
the Appeal
(c) Both (a) & (b)
(d) None of the above
Ans: (c) Both (a) & (b)
801. What is the amount office provided for filling or restoration of appeal?
(a) INR 1000/- per Lakh amount of tax or ITC involved.
(b) Difference of tax or ITC involved or interest, Fee, or penalty
(c) Either of (a) or (b) subject to the maximum of INR 25,000/-
802. What is the time limit provided to the commissioner to get an appeal filed
against any order passed or proceedings carried under an Adjudicating
Authority under the Act?
(a) 3 months
(b) 4 months
(c) 5 months
(d) 6 months
803. Where any appeal is filed by any authorized officer under the direction or order
of Commissioner, who shall be considered as appellant for the purpose of this
appeal?
(a) The Commissioner
(b)The Authorized Officer filing such appeal
(c) Either (a) or (b) at the option of appellate authority
(d)None of the above
Ans (b) The Authorized Officer filing such appea
804. What is the time period prescribed to the Appellate Authority to decide an
appeal under the Act?
(a) 6 months
(b) 1 year
(c) 2 year
(d) 3 years
Ans (b) 1 year
805. Which provision of CGST Act governs the powers of Revisional Authority?
(a) Section 107
(b) Section 108
(c) Section 109
(d) None of the above
Ans (b) Section 10
806. Can an Appellate Authority refer back a case to the Adjudicating Authority who
passed the order or decision against which appeal has been made
(a) Yes
(b)No
(c) At the option of Appellate Authority
(d)None of the above
Ans (b) N
807. A copy of order passed by the Appellate Authority shall be sent to:
(a) Adjudicating authority
(b) Appellant
808. Does the presence of each member of any bench is mandatory for hearing any
appeal in the law?
(a) Yes
(b) No
(c) At the option of constituting Authority
(d) None of the above
Ans (b) No
810. The High Court can condone the delay in filing appeal for a period up to
(a) 1 Month
(b) Month
(c) Without any time limit
(d) No condonation powers
Ans. (c) Without any time limit
811. What is the time limit provided for filing an appeal to an Appellate Authority?
812. What is the time limit for filing memorandum of cross objections before
Tribunal?
(a) 15 days
(b) 30 days
(c) 45 days
(d) 60 days
Ans: (c) 45 days
813. Can the “revisional authority” order for staying of operation of any order
passed by its subordinates pending such revision?
(a) Yes
814. What is the further extension in terms of time period provided to an appellant
for filing an appeal to an Appellate Authority?
(a) 15 days
(b) 1 month
(c) 1.5 months
(d) 2 months
Ans (b) 1 month
815. What are the conditions to be fulfilled for filing an appeal to an Appellate
Authority?
(a) The appellant should have paid all amount of tax, interest, fine, fee and
penalty arising from impugned order, which is undisputed.
(b) A sum equal to 10% of the remaining amount of tax in dispute arising from
such order.
(c) Both (a) & (b)
(d) None of the above
Ans (c) Both (a) & (b)
816. What shall be the due course of action, in case of hearing of any appeal, where
any member of the bench is not present during such hearing?
(a) The hearing shall stand cancelled
(b) Such hearing shall be made by bench of remaining two members
(c) Hearing shall be handed over to superior authority
(d) None of the above
Ans (b) Such hearing shall be made by bench of remaining two members
817. What are the instances under which an appeal can be heard by a single member
of the Bench?
(a) Tax or Input Tax Credit amount involved in appeal does not exceed INR 5
lakhs
(b) Difference in the tax or ITC amount does not exceed INR 5 lakhs
Fine, fee or Penalty determined in an order appealed against does not exceed
INR 5 lakhs
(c) Any of the above
Ans (d) Any of the above
818. What shall be the ultimate solution in case where there stands difference in the
opinion of members of Benches constituted under Section 109 CGST Act?
(a) Opinion of President of National Bench shall prevail
(b) Opinion of Members of National Bench shall be preferred
(c) Opinion of Majority shall be accepted
819. Who shall a person appeal if aggrieved by the order of decision of National or
Regional Benches of Appellate Tribunal?
(a) Supreme Court
(b) High Court
(c) District Court
(d) None of the above
Ans (a) Supreme Court
820. What shall be decision of the Bench of the judges in any hearing where conflict
arises among the judges in such Bench?
(a) Decision of Chief Justice of High Court shall prevail
(b) Decision of senior most and experienced Judge is prevailed
(c) Decision of majority shall be considered apt for such purpose
(d) None of the above
Ans (c) Decision of majority shall be considered apt for such purpose
821. What shall be the of filling an appeal with the Appellate Tribunal where
certified copy of order appeal against is filled within 7 days?
a) Date of issue of provisional acknowledgement
b) Date of filling of certified copy of order appealed against
c) Earlier of (a) or (b)
d) None of the above
Ans (a) Date of issue of provisional acknowledgement
822. What are the instances under which no amendment shall be made without
giving the party an opportunity of being heard by the Appellate Tribunal?
(a) Enhancing assessment
(b) Reducing the amount of refund or ITC
(c) Increasing liability of other party
(d) All of the above
Ans (d) All of the above
823. What shall be the period for which interest shall be paid the Appellant on the
refund of amount paid by him as required by the Appellate Authority and
Appellate Tribunal?
(a) From the date of payment till the date of order of such refund
(b) From the date of order till the date of refund
(c) From the date of payment of such amount till the date of refund
(d) None of the above
Ans: (c) From the date of payment of such amount till the date of refund
824. The Appellate Authority or the Appellate Tribunal shall not take any additional
evidence produced unless the adjudicating Authority or an officer authorised in
this behalf by the said authority has been allowed a reasonable opportunity
______________
(a) To examine the evidence or documents or to cross-examine any witness
825. What are the instances under which additional evidence is called upon and
allowed to be submitted by the appellant with the Appellate Tribunal?
(a) Where the adjudicating authority or, Appellate Authority has refused to
admit evidence which ought to have been admitted
(b) Where the Appellant was prevented by sufficient cause from producing the
evidence which he was called upon to produce by the adjudicating Authority or,
as the case may be, the Appellate Authority
(c) Where the Appellant was prevented by sufficient cause from producing
before the adjudicating Authority or, as the case may be, the Appellate Authority
any evidence which is relevant to any ground of Appeal.
(d) Any of the above
Ans: (d) Any of the above
826. How many Judges are required for hearing any appeal against an order of State
or Area Bench of Appellate Tribunal in High Court?
(a) A Signal Judge
(b) A bench of not less than two Judges
(c) A bench of not less than five Judges
(d) None of the above
Ans (b) A bench of not less than two Judges
828. What are the principles to be followed by the appellate Tribunal while
disposing any proceedings before it?
(a) Code of Civil Procedure, 1908
(b) Principle of Natural Justice
(c) (a) & (b) Both
(d) None of the above
Ans (b) Principle of Natural Justice
829. Who shall a person appeal if aggrieved by the order of decision of High Court?
(a) Supreme Court
(b) High Court
830. What are the instances under which an appeal shall be refused to be admitted
by the Appellate Tribunal?
(a) Where amount of tax or ITC involved is less than INR 50,000/-
(b) Where amount of difference in tax or ITC is less than INR 50,000/-
(c) Where amount of fine, Fee, Penalty, determined in an order is less than INR
50,000/-
(d) Any of the above
Ans (d) Any of the above
831. What is the time period provided for filing memorandum of cross objection by
such person against whom an appeal has been preferred?
(a) Within 30 days of notice received
(b) Within 45 days of notice received
(c) Within 60 days of notice received
(d) None of the above
Ans (b) Within 45 days of notice received
832. Who shall a person appeal if aggrieved by the order of decision of State or Area
Benches of Appellate Tribunal?
(a) Supreme Court
(b) High Court
(c) District Court
(d) None of the above
Ans (b) High Court
833. Any person, who contravenes any of the provisions of this Act or any rules
made there under for which no penalty is separately provided for in this Act,
shall be liable to penalty which may extend to
(a) Rs. 5000
834. In case of supply of services, the tax invoice shall be prepared in the manner of:
Ans. (b): In case of supply of services, the tax invoice shall be prepared
in the manner of two copies — the original copy being marked as
original for recipient and the duplicate copy being marked as duplicate
for supplier
836. Suppose Assessable Value (A.V.) including landing charges is ` 100. BCD - 10%,
IGST - 12%, Education Cess – 2%, Secondary & Higher Education Cess - 1%. The
amount of IGST will be:
(a) ` 1.20
(b) ` 13.24
(c) ` 1.24
(d) ` 13.20.
Ans. (b) the calculation of duty would be: BCD = ` 10 [10% of A.V.],
Education cess = ` 0.20 [2% of ` 10], Secondary & Higher education cess
- ` 0.10 [1% of ` 10], IGST - ` 13.24 [` 100 + ` 10 + ` 0.20 + ` 0.10] x 12%
837. In case of determination of rate of basic customs duty, we should consider the
rate of basic customs duty prevailed on:
(a) The date of submission of bill of entry
(c) The date of submission of bill of entry or the date of entry inwards
granted to the vessel, whichever is earlier
838. After detention or seizure, if the owner comes forward for payment, the goods
and conveyance shall be released on payment of an amount equal to __________ in
case of exempted goods.
(a) 2% of the value o`f goods
839. After detention or seizure, if the owner does not come forward for payment, the
goods and conveyance shall be released on payment of an amount equal to
__________ in case of exempted goods.
(a) 5% of the value of goods
(c) The market price of the goods confiscated, less the tax chargeable thereon
Ans: (c) The market price of the goods confiscated, less the tax
chargeable thereon
843. Mr. A fails to appear before the officer of central tax even after the issue of
summon for appearance to give evidence or produce a document in an enquiry.
He shall be liable to a penalty __________ u/s 122(3) of CGST Act.
(a) < Rs. 10000
844. ABC Ltd. supplies taxable services worth Rs. 120000 and charged IGST @ 18%
i.e. to Mr. Y without issuing any invoice. It shall be liable to a penalty of
____________ u/s 122(1) of CGST Act.
(a) Rs. 10000
845. ABC & Co., a partnership firm committed an offence. Who shall be liable for the
same?
(b) All the partners unless they prove offence committed without their
knowledge
(c) All the employees
Ans: (b) All the partners unless they prove offence committed without
their knowledge
847. ___________ includes intention, motive, knowledge of a fact, and belief in, or
reason to believe, a fact.
(a) The state of mind
848. If a person has failed to obtain the registration the penalty is equivalent to:
(a) amount of tax
(b) 10% of tax
(c) upto ₹ 10,000
(d) the amount of tax or ₹ 10,000 whichever is higher
Ans. (d) the amount of tax or ₹ 10,000 whichever is higher
849. If a person fails to appear before GST officer, the maximum penalty that can be
levied is:
(a) amount of tax
(b)10% of tax
(c) upto ₹ 10,000
(d)none of the above
Ans. (d) none of the above
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850. Penalty of 10% of the tax can be levied if:
(a) a person repeatedly had not appeared before GST officer for 3 times
(b) the taxable person has not filed returns for 6 consecutive months or more
(c) a taxable person has been served with show cause notice for 3 times
repeatedly
(d) registered taxable person has not paid under bona fide belief
Ans. (d) registered taxable person has not paid under bona fide belief.
851. General penalty can be levied in addition to the specific penalties prescribed
under the law
(a) Yes, general penalty is levied in addition to the specific penalties
(b) No, when no specific penalty is prescribed, then only the general penalty
applies.
Ans. (b) No, when no specific penalty is prescribed, then only the
general penalty applies.
852. For minor breaches of tax regulations or procedural requirements, the tax
authority shall-
(a) not impose substantial penalties
(b) Up to 10000
(c) Up to 15000
(d) Up to 25000
(d) Yes, no penalty as only the head office needs to display the GSTIN
859. Is there any time limit in which the release of the detained or seized goods
can be sought?
Ans: (a) Yes, after the payment of tax & penalty within 07 days of the
date of detention of goods
860. The inputs and/ or capital goods may be sent by .................................to job
worker under intimation and subject to such conditions as may be
prescribed.
(a) Taxable person
861. The job workers are allowed to send such goods to other
(a) Manufacturers
(b) Traders
862. Who will undertake responsibility and accountability for any contravention
under this section?
(a) Principal
(b) Manufacturer
(d) No body
Ans. (a)Principal
863. What is the time limit within which inputs return to principal?
(a) Courts
867. In case of proceedings against the Companies, the details that can be
published are-
(a) Names and Addresses of the Directors
(a) Only errors which are apparent on the face of the record
Ans. (a) Only errors which are apparent on the face of the record
Ans. (b)If it is evident from the record itself and does not require long
drawn out reasoning
871. What is the time limit within which Capital goods have to be returned to
principal?
(a) One Years
872. What is the time limit to receive back the tools and dies or jigs and fixtures
sent to job worker’s place?
(a) 1year
(b) 3years
(c) 5years
(b) No
(d) ITC on capital goods sent directly to job-worker’s premise is not eligible
unless the same is received in the premises of the principal
Ans. (c)Yes subject to section 143
874. Which section specifies conditions to be fulfilled for claiming ITC on inputs
and CG sent to jobworker?
(a) 19
(b) 55
(c) 143
(d) 177
Ans. (a)19
875. Will the inputs and/or capital goods supplied from the job-worker’s premises
be considered for calculating the aggregate turnover of the job-worker?
(a) Yes
(b) No
(c) Partially true
(d) None of the above
Ans. (b) No
Ans. (d)ITC-04
Ans. (b)Quarterly
(b) Yes
Ans. (b)Yes
881. What is the scope of rectification? Whether any part of the order can be
rectified?
(a) Once it is proved that there is error apparent, any part of the decision can
be rectified
(b) Only the part dealing with legal aspect can be rectified
(c) Only the part dealing with clerical or arithmetic aspect can be rectified
(d) The authority cannot amend the substantive part of the decision etc.
Ans. (a)Once it is proved that there is error apparent, any part of the
decision can be rectified
(a) Post
(b) Courier
(c) Email
(c) Employee
(d) Partner
887. Bank extended housing loan of ` 20,00,000 to Mr. A. The taxable value of
supply will be:
888. Which of the following schemes of the life insurance business is exempted?
889. Ram of Jaipur provides online gaming services. He earns ` 2,00,000 from
Jammu & Kashmir, ` 10,00,000 from foreign users and ` 20,00,000 from other
users in India. The taxable value of service will be:
(a) ` 32,00,000
(b) ` 20,00,000
(c) ` 22,00,000
(d) Nil.
(a) taxable
891. Every registered person whose aggregate turnover during a financial year
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exceeds ______________ rupees shall get his accounts audited by a Chartered
Accountant or a Cost Accountant:
(a) one crore
Ans. (vi) b): Every registered person whose aggregate turnover during
a financial year exceeds rupees two crores shall get his accounts
audited by a Chartered Accountant or a Cost Accountant
893. If the amount of tax is Rs.2,15,235.50, then the amount shall be rounded off
as:
(a) 2,15,236
(b) 2,15,235
(c) 2,15,235.50
(d) 2,15,240
Ans. (a)2,15,236
894. What are the amounts that can be rounded off as per this section?
(a) Interest
(b) Tax
(c) Penalty
(b) SGST
(c) Both
897. The total composition rate of tax for manufacturers under composition
scheme is:
(a) 0.5% of turnover
(b) 5% of turnover
(c) 1% of turnover
898. In case the import manifest or import report is not presented within specified
time limit, the penalty for such delay should not exceed:
(a) ` 50,000
(b) ` 1,00,000
(c) ` 1,50,000
Ans. ii) (a) In case the import manifest or import report is not
presented within specified time limit, the penalty for such delay should
not exceed ` 50,000.
900. Micro Apparels in Chennai, Tamil Nadu, avails fashion designing services of `
50,00,000 from Prabhu Designs in Singapore. Who is liable to pay GST?
(a) Micro Apparels
(c) Both
901. M/s X Ltd. a dealer offer combo packs of shirt, watch, wallet, book and they
are bundled as a kit and this kit is supplied for a single price as a mixed
supply. Tax rate for shirt, watch, wallet and book are 12%, 18%, 5% and Nil
respectively. The mixed supply will be taxed at:
(a) 12%
(b) 18%
(c) 5%
(d) Nil.
Ans. In this case, watch attracts the highest rate of tax in the mixed
supply i.e., 18%. Hence, the mixed supply will be taxed at 18%.
902. Mr. A is a manufacturer of ice cream. If all other conditions satisfies, the total
effective composition tax rate will be:
(a) 1%
(b) 5%
(c) 2%
Ans. Manufacturer of ice cream, pan masala etc. are not eligible for
composition scheme.
904. Mr. Ram sold goods to Mr. Shyam worth ` 5,00,000. The invoice was issued on
15th November. The payment was received on 30th November. The goods
were supplied on 20th November. The time of supply of goods will be:—
(a) 15th November
Ans. (a): The time of supply of goods will be 15th November, as the date
of invoice or payment whichever is earlier.
905. The value of the supply of goods or services or both between distinct persons
as specified in Sec. 25(4) or Sec 25(4) of the CGST Act, 2017 or where the
supplier and recipient are related, other than where the supply is made
through an agent, shall be determined under CGST Rules by:
(a) Rule 27
(b) Rule 28
(c) Rule 29
Ans. (b): The value of the supply of goods or services or both between
distinct persons as specified in Sec. 25(4) or Sec 25(4) of the CGST Act,
2017 or where the supplier and recipient are related, other than where
the supply is made through an agent, shall be determined under CGST
Rules by Rule 28
906. The application form for registration by casual taxable person is:
Ans. (a): The application form for registration by casual taxable person
is GST REG-01, as for normal taxable person
Ans. (a) Except buying commission, all other are includible while
calculating customs valuation.
908. Suppose Assessable Value (A.V.) is ` 1,00,000. BCD - 10%, IGST - 28%, SWS –
10%. The amount of IGST will be:
(a) ` 11,000
(b) ` 31,080
(c) ` 28,000
(d) ` 30,800.
Ans. (b) the calculation of duty would be: BCD = ` 10,000 [10% of A.V.],
SWS – ` 1,000 [1% of ` 10,000], IGST - ` 31,080 [` 1,00,000 + ` 10,000 + `
1,000] x 28%.
(b) 20%
(c) 50%
(b) 25,000
(c) ` 50,000
(d) ` 1,00,000
911. Hospital charging room rent per day per room is ` 1,200 on rooms provided
to inpatients. It is:
(a) Exempted supply
Ans. (a): Hospital charging room rent per day per room is ` 1,200 on
rooms provided to inpatients. It is treated as health care service and
hence room rent in hospitals is exempt.
912. In cases of change in rate of tax and amount is credited to the bank account
after 4 working days from the date of change in rate of tax, the date of receipt
of payment will be:
(a) Date of book entry or date of bank entry, whichever is earlier
Ans. (b): in cases of change in rate of tax, the date of receipt of payment
is the date of credit in the bank account if such credit is after four
working days from the date of change in rate of tax
914. Where the application of registration is found to be deficient for any reason
then the Proper Officer requires any further information and he shall
intimate to the applicant in form:
(a) GST REG-01
Ans. (c): If the Proper Officer fails to take action in 3 working days from
the date of submission of documents of registration, the registration is
deemed to have been approved. Where the application of registration is
found to be deficient for any reason then the Proper Officer requires
any further information and he shall intimate to the applicant in form
GST REG-03 within 3 working days from the date of submission of
documents.
915. The order of set off of input IGST towards payment of output tax liability is:
Ans. (a): The order of set off of input IGST towards payment of output
tax liability is IGST, CGST, SGST, UTGST respectively.
916. If a case involves a substantial question of law and doesn‟t not involve any
issue relating to place of supply, an appeal against orders passed by the State
Bench or Area Bench of the Appellate Tribunal shall lie to
(a) Supreme Court
Ans. (b): If a case involves a substantial question of law and doesn‟t not
involve any issue relating to place of supply, an appeal against orders
passed by the State Bench or Area Bench of the Appellate Tribunal shall
lie to High Court and it may admit such appeal.
917. A vessel Bhishma, sailing from U.S.A. to Australia via India. Bhishma carries
various types of goods namely „A‟, „B‟, „C‟ & „D‟. „A‟ & „B‟ are destined to
Mumbai Port and balance remains in the same vessel. Subsequently vessel
chartered to Australia. The transit goods are:
(a) „A‟ & „B‟
918. Who is the adjudicating authority in case of goods liable for confiscation
amounted upto ` 50,000?
(a) The Superintendent of Customs
919. Which of the following is an ineligible capital goods under EPCG (Export
Promotion Capital Goods) Scheme?
(a) Computer software systems
Ans. (d) The ineligible capital goods under EPCG (Export Promotion
Capital Goods) Scheme are Second hand capital goods & Power
Generator Sets. The other goods mentioned here are eligible capital
goods under EPCG scheme.
920. Which of the following central taxes has been subsumed in the ambit of GST?
Ans. (d) In the GST regime, all the above taxes, such as — Central Excise
duty, Service Tax, CVD on import, Spl. CVD on import, Central Cesses etc.
have been subsumed in the ambit of GST.
921. GST is payable on the services provided by the employee to the employer in
the course of employment on:
(a) Regular basis;
923. In case of transport of goods by rail within India, which of the following item
is an exempted supply?
(a) Transport of postal mails and postal bags;
924. Mr. C of Chennai supplied goods to M/s Smart Jet Airlines of Chennai flying
between Delhi-Mumbai. The goods are loaded in the aircraft in Delhi. The
place of supply of goods will be:
(a) Chennai
(b) Delhi
(c) Mumbai
925. Which of the following is/ are duty exemption scheme(s) under FTP?
Ans. (b) Both Advance Authorisation Scheme and Duty Free Import
Authorisation Scheme are duty exemption schemes. The last two
schemes are reward schemes under FTP.
926. The place which is used for unloading of imported goods and loading of
exported goods, is called:
(a) Inland Container Depot
Ans. (a) After the imported goods are unloaded at the port, the
containers are carried to Inland Container Depots for storage purpose.
From these depots goods can be cleared for Domestic Tariff Area or
cleared for export. Inland Container Depots are used for unloading of
imported goods and loading of exported goods
927. The type of bill of entry which is used for ex-bond clearance for home
consumption from the warehousing, is
(a) Form I (white)
928. Which of the following good/ goods is/ are covered under GST Compensation
Cess?
(a) Pan Masala
Ans. (d) Pan masala, tobacco and tobacco products, cigarettes, aerated
waters, motor vehicles etc. goods are covered under GST Compensation
Cess.
929. The due date to file GSTR-6 (Return for Input Service Distributor) is:
Ans. (b) The GSTR-6 (Return for Input Service Distributor) is to be filed
on a monthly basis and the due date is 13th of the next month.
930. Aminpur Post Office provided basic mail services of ` 2,50,000 and speed post
services of ` 3,00,000. The value of taxable services will be:
(a) 2,50,000
(b) 3,00,000
(c) 5,50,000
Ans. (b): The basic mail services are exempted via entry no. 6 of
notification no. 12/2017-CT (rate). Only the amount of speed post
services of ` 3,00,000is to be considered.
(a) Securities
Ans. (a): Goods means every kind of movable property other than
money and securities but includes actionable claim, growing crops,
grass and things attached to or forming part of the land which are
agreed to be served before supply or under a contract of supply. The
second & third options are examples of actionable claim.
933. A famous actress went to London and avail cosmetic or plastic surgery for her
nose. Whether GST is liable to be paid?
(a) Yes
(b) No
934. In relation to a registered person, input tax means the Central tax, State tax,
integrated tax or Union territory tax charged on any supply of goods or
services or both made to him and includes:—
(a) The integrated goods and services tax charged on import of goods
(b) The tax payable under Reverse Charge Mechanism as per SGST Act
(c) The tax payable under Reverse Charge Mechanism as per UTGST Act
Ans. (d): As per the definition under the CGST Act, input tax does not
include tax paid under composition levy.
B. 4
C. 5
D. 6
1. The definition of goods under section 2(52) of the CGST Act does not include-
a) Grass
c) Actionable claims
d) Growing crops
d) Tax @ 28%
a) CGST
b) SGS
d) IGS
4. Who will notify the rate of tax to be levied under CGST Act?
c) Tax @ 28%
a) CGST
b) SGST
c) IGST
9. Which of the following is not an exception to the rule:"Supply should be made for a consideration".
10. Which is an exception to the rule that "Supplies in the course of business qualify as supply inder
GST"
a) Spouse and children of the person-parents,grand-parents, brothers and sister of the person
whether or not wholly or mainly dependent on the person
c) Parents,grand-parents,brothers and sister of the person if they are wholly or mainly dependent on
the person
d) Spouse and children of the person-parents,grand-parents,brothers and sister of the person if they
are wholly or mainly dependent on the person
12. ------------------supply consists of two or more taxable supplies of goods or services or both, or any
combination thereof which are naturally bundled supplied in conjunction with each other, in the
ordinary course of business, one of which is a principal supply
a) Composite
b) Mixed
d) Individual
a) Supply of goods
b) Supply of services
a) Supply of goods
b) Supply of services
a)CGST
b) SGST
d) IGST
16. Which state has threshold limit of 20 lakh Rs. for both goods and services
a) Assam
b) Himachal Pradesh
c) Uttarakhand
a) Tobacco
b) Liquor
c) Drugs
d) Opium
18. The chain for utilization of Input tax credit for making
a) IGST-CGST-SGST
b) IGST-SGST-CGST
C) IGST-SGST
d) IGST-CGS
a) ITC of CGST is first utilized for payment of CGST and the balance is utilized for payment of
SGST/UTGST
b) ITC of CGST is first utilized for payment of CGST and the balance is utilized for payment of IGST
c) ITC of SGST is first utilized for payment of SGST and the balance is utilized for payment of CGST
d) ITC of SGST is first utilized for payment of SGST and the balance is utilized for payment of SGST
20. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 10% and sells these goods to Rohini of Tamil Nadu.
Then Rohini of Tamil Nadu does value addition of 15% and sells them to Naina of Tamil
Nadu.Assume GST rate to be 18%. Find the IGST payable by Rita on the first level sale.
a) 594000
b) 270000
c) 540000
d) 297000
21. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 10% and sells these goods to Rohini of Tamil Nadu.
Then Rohini of Tamil Nadu does value addition of 15% and sells them to Naina of Tamil
Nadu.Assume GST rate to be 18%. Find the IGST payable by Sita on the second level sale after ITC
adjustment.
3) 540000
b) 594000
c) 300000
d) 54000
22. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 10% and sells these goods to Rohini of Tamil Nadu
Then Rohini of Tamil Nadu does value addition of 15% and sells them to Naina of Tamil
Nadu.Assume GST rate to be 18%. Find the value of goods sold Sita to Rohini (inclusive of GST).
a) 3300000
b) 3894000
c) 594000
d) 3000000
23. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 10% and sells these goods to Rohini of Tamil Nadu.
Then Rohini of Tamil Nadu does value addition of 15% and sells them to Naina of Tamil Nadu.
Assume GST rate to be 18%. Find the CGST payable by on the third level sale after ITC
a) 0
b) 341550
c) 683100
d) 252450
24. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 10% and sells these goods to Rohini of Tamil Nadu.
Then Rohini of Tamil Nadu does value addition of 15% and sells them to Naina of Tamil
Nadu.Assume GST rate to be 18%. Find the IGST credit available for
a) 0
b) b) 341550
c) c) 89100
d) d) 252450
25. Suppose Rita of Karnataka sold goods to Sita of UP worth Rs.30 lacs.Sita of UP does value
addition of 109% and sells these goods to Rohini of Tamil Nadu.
Then Rohini on the tamil Nadu does value addition of 15% and sells them to Naina of Tamil Nadu.
Assume GST rate to be 18%Find the SGST payable by Rohini on the third level sale after ITC
adjustment.
a) 89100
b) 341550
c) 252450
d) 0
Indirect Taxation
BBA SEM – 6
MCQ
1. What of the following taxes is applicable in the case of supply of goods from Gujarat
to Assam?
a) CGST
b) SGST
c) UTGST
d) IGST
2. which of the following taxes is applicable in the case of supply of services from Bihar
to Rajsasthan?
a) CGST
b) SGST
c) UTGST
d) IGST
3. Which of the following commodities is not kept outside the perview of GST?
a) High speed Diesel
b) Natural Gas
c) Supply of liquor for human consumption
d) Aviation turbine fuel
4. which of the following taxes have been subsumed in GST?
a. Central Sales Tax
b. Central Excise Duty and Service Tax
c. Value Added Tax
e) All of Above
5. GST is levied on supply of all goods and serices except?
f) Alcoholic liquor for human consumption
a) Tobacco
b) Legal sevices
c) All of the above
6. who shall be empowered to levy and collect GST on supplies in the course of Inter
state Transactions of trade or commerce?
a) Central Government
a) State Governments
b) Union Territories
c) All of the above
7. Any job work carried out by a labour contractor on another person‘s goods shall be
treated as
a) supply of goods
b) supply of services
c) supply of services provided job work is carried out without any material
d) supply of services whether the job work is carried out with or without
any material.
8. What is the threshold limit of aggregate turnover (after 13-20-2017) for opting to pay
tax under ‗composition scheme‘?
a) Rs. 50 Lakhs
b) Rs. 75 Lakhs
c) Rs. 1 Crore
d) Rs. 75 Lakhs in case of special category states and Rs. 1 crore for any
other State.
9. means the aggregate value of
a) taxable supplies
b) exempted supplies
c) Inter-state supplies and export of goods or services or both
d) All of the above
10. Can person who opts for composition scheme‘ collect any tax from the recipient of
goods or services or both?
a) Yes
b) No
c) Yes, provided the recipient is a registered person
d) Yes, provided the recipient of goods or services is an unregistered person.
11. Who among the following is included in definition of ―Agriculturist‖ as defined in
Section 2(7) of the CGSTAct, 2017?
I. Individual
II. HUF
III. Partnership Firm
IV. Company
State the correct answer from the options given below-
a) I
b) I & II
c) I, II & III
d) I, II, III & IV
12. As per CGST act, 2017 means a distinguishable component of an enterprise that
is engaged in the supply of individual goods or services or a group of related goods or
services which is subject to risks and returns that are different from those of the other
business verticals-
a) Business
b) Business vertical
c) Organization
d) Continuous business
13. Registered person may issue a consolidated tax invoice for such supplies at the close
of each day in respect of all such supplies provided
a) The recipient is not a registered person
b) The recipient does not require such invoice
c) The value of goods and services or both per invoice is less than INR 200
d) All the above conditions are satisfied
14. The registered person who has received a credit note shall declare the details of such
credit note in the return for the month during which such credit note has been issued
but not later than
a) September following the end of the financial year in which such supply was
made
b) The date of furnishing of the relevant annual return
c) September following the end of the financial year in which such supply was
made or the date of furnishing of the relevant annual return; whichever is
earlier
d) 9 months from the date of issue of credit note
15. The registered person who has supplied such goods or services or both shall issue to
the recipient a debit note where a tax invoice has been issued for any goods or
services or both and the taxable value or tax charged in that tax invoice is found to be
a) Less than the taxable value or tax payable in respect of such supply
b) More than the taxable value or tax payable in respect of such supply
c) Less or more than the taxable value or tax payable in respect of such supply
d) Less than the taxable value or tax payable in respect of such supply by INR
100
16. Which of the following category of suppliers is allowed to issue documents in lieu of
tax invoice?
59. XYZ Ltd. is engaged in sale of product X. all the sales are made outside the state.
Particulars INR
Value of receipts of goods & services (SGST & CGST 10%) 7,00,000
Value of product X sold (IGST 20%) 8,40,000
Select the correct answer from the options given below:
111. Where a supply is received at a place of business for which the registration has
been obtained, ‗location of the recipient of services‘ is
a) location of place of business of recipient
b) location of service provider
c) Place where payment is received
d) None of the above
112. Where a supply is received at more than one place ‗location of the recipient of
services‘ is
a) Location of the establishment most directly concerned with the receipt of
the supply
b) Location of service provider
c) Place where payment is received
d) None of the above
113. The maximum limit of IGST rate fixed in the Act is
a) 18%
b) 28%
c) 40%
d) 100%
114. Where an E- commerce operator does not have physical presence in the
taxable territory
a) Tax need not be paid
b) Agent of the E- commerce operator shall be liable to pay tax
c) Tax must be paid in advance
d) IGST is not applicable
115. Where the location of the supplier and the place of supply are in two different
States –
a) IGST is applicable
b) CGST is applicable
c) SGST plus CGST is applicable
d) CGST plus IGST is applicable
116. Where location of the supplier and the place of supply are in two different
Union territories
a) CGST plus UTGST is applicable
b) IGST is applicable
c) SGST plus UTGST is applicable
d) CGST plus IGST is applicable
117. Where location of the supplier and place of supply are in a State and a Union
territory
a) CGST plus UTGST is applicable
b) CGST plus IGST is applicable
c) SGST plus UTGST is applicable
d) IGST is applicable
118. Supply of goods where the location of the supplier and the place of supply of
goods are in the same State or same Union territory shall be treated as
a) Inter state
b) Intra-state supply
c) Taxable supply
d) None of these
119. Supply of goods to or by a Special Economic Zone
a) CGST plus UTGST
b) CGST plus IGST
c) IGST
d) None of these
120. Half share of IGST moves always to
a) Selling state
b) Buying state
c) Equally to selling state and buying state
d) None of these
121. Gifts not exceeding --- in a year by an employer to employee shall not be
treated as supply.
a) Rs. 5,000
b) Rs. 10,000
c) Rs. 50,000
d) Rs. 1,00,000
122. Lease, tenancy, easement or licence to occupy land is a supply of
a) Goods
b) Services
c) Both goods and services
d) None
123. Letting out of the building orresidential complex is a supply of
a) Goods
b) Services
c) Both goods and services
d) None
124. Transfer of the title in goods is a supply of
a) Goods
b) Services
c) Both goods and services
d) None
125. Transfer of right in goods or of undivided share in goods ‗without the transfer
of title‘ is
a) supply of Goods
b) supply of Services
c) supply of Both goods and services
d) None
126. Transfer of title in goods under an agreement which stipulates that property in
goods shall pass at a future date upon payment of full consideration, is a supply of –
a) Both goods and services
b) Services
c) Goods
d) None
127. Any treatment or process which is applied to another person‘s goods is a
supply of
a) Goods
b) Services
c) Both goods and services
d) None
128. Goods held or used for the purposes of the business are put to any private use
or made available to any person for use, is a supply of
a) Goods
b) Services
c) Both goods and services
d) None
129. Construction of a complex, building, civil structure intended for sale to a
buyer, wholly or partly is supply of –
a) Goods
b) Services
c) Both goods and services
d) None
130. Where the entire consideration has been received after issuance of completion
certificate or after its first occupation is
a) Transfer of Goods
b) Transfer of immovable property
c) Transfer fo services
d) None of these
131. Mr. A an architect, agrees to design and construct a building for Mr. Bj, for a
sum of Rs. 1Crore. The construction completed and the amount received by Mr. A.
This is supply of
a) Goods
b) Services
c) Both goods and services
d) None
132. Transfer of the ‗right to use any goods‘ for any purpose for consideration is
supply of
a) Goods
b) Services
c) Both goods and services
d) None
133. Works contract is a supply of
a) Goods
b) Services
c) Both goods and services
d) None
134. Services by an employee to the employer in the course of or in relation to his
employment is
a) Supply of Goods
b) Supply of Services
c) Supply of Both goods and services
d) Not supply
135. Services by any court or Tribunal established under any law is
a)Supply of Goods
b) Supply of Services
c) Supply of Both goods and services
d) Not supply
136. The functions performed by the Members of Parliament, Members of State
Legislature are
a) Supply of Goods
b) Supply of Services
c) Supply of Both goods and services
d) Not supply
137. Duties performed by any person in the Constitutional capacity are
a) Supply of Goods
b) Supply of Services
c) Supply of Both goods and services
d) Not supply
138. On Services provided by E-commerce operator
a) GST applicable
b) GST not applicable
c) Reverse charge applicable
d) IGST applicable
139. The rate of composition tax for trading firms is
a) 1%
b) 2%
c) 3%
d) 12%
140. A Composite taxpayer is required to file summarised details of transactions
a) Annually
b) Half yearly
c) Quarterly
d) Monthly
141. Input tax credit is allowed to
a) Any one who has paid tax
b) Any registered person
c) Any Composite dealers
d) Any dealer under GST
142. Input tax credit shall be allowed only on the support of
a) Delivery note
b) Payment slip
c) Credit note
d) Tax invoice
143. Input tax credit shall be allowed only against
a) Any tax payable
b) Output tax
c) Composite tax
d) Refund
144. Where the goods are received in lots or instalments input tax credit can be
claimed
a) upon reciept of first lot
b) upon receipt of the last lot
c) Any time at the option of the supplier
d) after full payment of price
145. Where a recipient fails to pay the price within 180 days from the date of issue
of invoice, he shall be liable to pay input tax credit to the Government with --- %
interest
a) 10%
b) 12%
c) 18%
d) None of these
146. Input tax credit of an invoice can be availed within a period of -- or the 30th
September following the year of invoice whichever is earlier.
a) 2 years
b) 1 year
c) 6 months
d ) 3 Months
147. If goods or services are partly used for business purposes and partly for other
purposes, input tax credit
a) can be fully claimed
b) can be partly claimed
c) cannot be claimed
d) Not applicable
148. Input tax credit is not available for
a) services
b) zero rated supplies
c) taxable supplies
d) exempt supplies
149. Input tax credit is not available for supplies to
a) SEZ
b) Exports
c) Provide non taxable services
d) Produce taxable goods
150. Input tax for personal vehicles
a) can be claimed by any dealer
b) Blocked credit
c) can be claimed by GST dealers
d) Can be claimed by any person.
Goods and Services Tax
(Multiple Choice Questions)
4. As a result of constitution amendment for GST a Separate List --- has been inserted in the
constitution.
a) Article 246A b) Article 146B c) Article 122 C d) Article 101B
20. GST dealers with annual turnover of --- are not required to use HSN code
a) Less than Rs. 1.5 crore b) less than Rs. 20 lakh
c) less than Rs. 1 crore d) less than Rs. 75 lakh
21. Dealers whose annual turnover between Rs. 1.5 crore and Rs. 5 crore need to use
a) Two-digit HSN code b) Four digit HSN Codes
c) Four digit HSN Codes d) Eight digit HSN codes
22. Dealers with annual turnover of Rs. 5 crore and above must use -- for their invoices.
a) Two-digit HSN code b) Four digit HSN Codes
c) Four digit HSN Codes d) Eight digit HSN codes
27. Base metals, gold, silver, articles of jewellery are taxable in India at the rate of
a) 0.25% b) 1% c) 3% d) 5%
29. Tax Deducted at Source at the rate of 1% is applicable in the case of supplies received by
a) Any GST dealer b) Government Departments
c) Ecommerce operators d) Composite dealers
33. Goods which get input tax credit without being liable to collect output tax is called
a) Exempt goods b) White goods c) Sin goods d) Zero rated goods
35. -- confers powers to Government of India to collect tax on intra-state supply of goods or
services or both.
a) UTGST Act b) IGST Act c) CGST Act d) SGST Act
40. Goods which are used or intended to be used in the course or furtherance of business are
a) Demerit goods b) Business goods c) Capital goods d) None of these
41. A person who occasionally undertakes transactions involving supply of goods or services or
both in the course or furtherance of business is
a) Business person b) Casual taxable person c) composite dealer d) Non resident dealer
42. Supply of two or more taxable supplies naturally bundled and supplied is called
a) Mixed supply b) Composite supply c) Common supply d) Continous supply
43. Goods are packed and transported with insurance, packing materials, transport and insurance.
This is a case of
a) Mixed supply b) Composite supply c) Common supply d) Continous supply
45. Indian Oil Corporation Ltd. sends 10,000 litres of petrol every day to a petrol pump and
invoices the same every week. This is a case of
a) Mixed supply b) Composite supply c) Common supply d) Continous supply
46. Any goods other than capital goods used or intended to be used by a supplier in the course or
furtherance of business is
a) Input b) Output c) Merit goods d) White goods
47. --- refers to receipt of goods or services or both whether by purchase, acquisition or any
other means with or without consideration.
a) Outward supply b) Inward supply c) Taxable supply d) None of these
48. Two or more individual supplies of goods or services, or any combination thereof, made in
conjunction with each other
a) Mixed supply b) Composite supply c) Common supply d) Continous supply
49. A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits,
aerated drinks and fruit juices when supplied for a single price is
a) Common supply b) Composite supply c) Mixed supply d) Continous supply
50. Any person who occasionally undertakes transactions involving supply of goods or services
or both, but who has no fixed place of business or residence in India is
a) Business person b) Casual taxable person c) composite dealer d) Non resident dealer
52. Supply of goods or services which constitutes the predominant element of a composite
supply is called
a) Common supply b) Principal supply c) Mixed supply d) Continous supply
53. Liability to pay tax by the recipient of supply of goods or services is called
a) Output tax b) Reverse charge c) Input tax d) None of these
55. In the GST council meetings , the vote of the Central Government shall have a weightage of
a) 1/3 of votes cast b) 1/2 of votes cast c) 2/3 of votes cast d) None of these
56. In the GST council meetings votes of all the State Governments taken together shall have a
weightage of
a) 1/3 of votes cast b) 1/2 of votes cast c) 2/3 of votes cast d) None of these
62. Where a supply is received at a place of business for which the registration has
been obtained, ‘location of the recipient of services’ is
a) location of place of business of recipient b) location of service provider
c) Place where payment is received d) None of the above
63. Where a supply is received at more than one place ‘location of the recipient of services’ is
a) Location of the establishment most directly concerned with the receipt of the supply
b) Location of service provider c) Place where payment is received d) None of the above
65. Where an E- commerce operator does not have physical presence in the taxable territory
a) Tax need not be paid b) Agent of the E- commerce operator shall be liable to pay tax
c) Tax must be paid in advance d) IGST is not applicable
66. Where the location of the supplier and the place of supply are in two different States –
a) IGST is applicable b) CGST is applicable
c) SGST plus CGST is applicable d) CGST plus IGST is applicable
67. Where location of the supplier and the place of supply are in two different Union territories
a) CGST plus UTGST is applicable b) IGST is applicable
c) SGST plus UTGST is applicable d) CGST plus IGST is applicable
68. Where location of the supplier and place of supply are in a State and a Union territory
a) CGST plus UTGST is applicable b) CGST plus IGST is applicable
c) SGST plus UTGST is applicable d) IGST is applicable
69. Supply of goods where the location of the supplier and the place of supply of goods are in the
same State or same Union territory shall be treated as
a) Inter state b) Intra-state supply c) Taxable supply d) None of these
71. 1,000 bags of sugar are supplied by a sugar mill in Chennai to a wholesaler in Ernakulam.
The sugar bags are sent by the mill to Ernakulam. Payment made by cheque payable at SBI
Madurai. The place of supply is
a) Ernakulam b) Chennai c) Madurai d) Any of these
72. A wholesaler in Ernakulam sends an agent to procure 1,000 bags of sugar from a factory in
Chennai. The invoice and other documents are handed over to the agent in Theni as directed by
the wholesaler. Later the sugar bags are brought to Ernakulam. Amount paid online from SBI
branch Calicut. The place of supply is
a) Ernakulam b) Chennai c) Theni d) Calicut
c) State in which exported goods reaches first d) Place of supply not applicable.
75. The managers of ITC Ltd., Kolkata (GST registered) are given one week training in Munnar,
by Infosys Ltd. Bangalore, for a sum of Rs. 10 Lakhs. Payment given at Mumbai. The place of
supply of service is
a) Mumbai b) Kolkata c) Munnar d) Bangalore
76 The managers of ITC Ltd., Kolkata (not registered under GST) are given one week training
in Munnar, by Infosys Ltd. Bangalore, for a sum of Rs. 10 Lakhs. Payment given at Mumbai.
The place of supply of service is
a) Mumbai b) Kolkata c) Munnar d) Bangalore
77. The place of supply of services to a registered person by way of transportation of goods,
including by mail or courier, shall be
a) The location of such person b) Location of transporting agency
c) Place of payment d) None of these.
79. In case of mobile connection for telecommunication and internet services provided on post-
paid basis, the location of supply is
a) Place of office of the service provider b) Place of payment
c) Billing address of the recipient of services d) Place of supply not relevant
84. Gifts not exceeding --- in a year by an employer to employee shall not be treated as supply.
a) Rs. 5,000 b) Rs. 10,000 c) Rs. 50,000, d) Rs. 1,00,000
88. Transfer of right in goods or of undivided share in goods ‘without the transfer of title’ is
a) supply of Goods b) supply of Services c) supply of Both goods and services d) None
89. Transfer of title in goods under an agreement which stipulates that property in goods shall
pass at a future date upon payment of full consideration, is a supply of -
a) Both goods and services b) Services c) Goods d) None
90. Any treatment or process which is applied to another person’s goods is a supply of
a) Goods b) Services c) Both goods and services d) None
91. Goods held or used for the purposes of the business are put to any private
use or made available to any person for use, is a supply of
a) Goods b) Services c) Both goods and services d) None
92. Construction of a complex, building, civil structure intended for sale to a buyer, wholly or
partly is supply of –
a) Goods b) Services c) Both goods and services d) None
93. Where the entire consideration has been received after issuance of completion certificate
or after its first occupation is
a) Transfer of Goods b) Transfer of immovable property
c) Transfer fo services d) None of these
94. Mr. A an architect, agrees to design and construct a building for Mr. Bj, for a sum of Rs.
1Crore. The construction completed and the amount received by Mr. A. This is supply of
a) Goods b) Services c) Both goods and services d) None
95. Transfer of the ‘right to use any goods’ for any purpose for consideration is supply of
a) Goods b) Services c) Both goods and services d) None
97. Services by an employee to the employer in the course of or in relation to his employment is
a) Supply of Goods b) Supply of Services
c) Supply of Both goods and services d) Not supply
99. The functions performed by the Members of Parliament, Members of State Legislature are
102. Actionable claims, other than lottery, betting and gambling are
a)Supply of Goods b) Supply of Services
c) Supply of Both goods and services d) Not supply
103. Activities undertaken by the Government, or any local authority in which they are
engaged as public authorities are
a)Supply of Goods b) Supply of Services
c) Supply of Both goods and services d) Not supply
105 A DTH company supplies a dish, set-top box, 3 year repairing and subscription of 500
channels for five years services as a package to the customers for Rs. 25,000. This is a
a) Mixed supply b) Composite supply c) Joint Supply d) Not supply
106. One tooth paste and tooth brush and a toilet soap sold in a packet for Rs. 50, is
a) Mixed supply b) Composite supply c) Joint Supply d) Not supply
110. When locally made food products or industrial components or raw materials supplied by
unregistered persons are purchased by a registered persons –
a) GST is applicable b) GST is not applicable c) Reverse charge is applicable d) Not taxable
113. Mr. X, a jewellery owner received the services of a local interior designer (unregistered)
and made a payment of Rs. 1,00,000. Here if the rate of tax on interior designing service is 18%.
a) GST applicable b) Tax not applicable
c) Reverse charge applicable d) IGST applicable
117. The notified limit for payment of composition levy in the case of special category states is
a) Rs. 1 Crore b) Rs. 20Lakh c) Rs. 50 Lakh d) Rs. 75 lakh
124. In order to adopt composition scheme by more than one registered persons having the same
Permanent Account Number, turnover of
a) All must be less than Rs. 1 crore b) At least one must be below Rs. 1 crore
c) All must be more than Rs. 20 lakh b) At least one must be less Rs. 20 lakh.
126. Hotels eligible for composition scheme shall be liable to pay tax at the rate of
a) 5% b) 1% c) 18% d) 12%
128. Time of supply means the date of issue of invoice or date of payment
a) Whichever is earlier b) whichever is later
c) any of the two or d) none of the above
129. In respect of the additional payment for value of supply like interest, late fee etc., the time
of supply is
a) Date additional payment b) Date of original payment
c) date on which supply was received d) Any date at the option of the supplier
130. Mr. C sold goods worth Rs. 30000 to Mr. Dr on 5.8.2017, which were sent on 6.8.2017,
the invoice date being 15.8.2017 and the goods were received by Mr. D on 5.9.2017. Time of
supply is
a) 5.8.2017 b) 6.8.2017 c) 15.8.2017 d) 5.9.2017
131. Mr. Kumar sold goods worth Rs. 40,000 to Mr. Lalu on 2.8.2017, but the payment was
received from Mr. Lalu on 2.10.2017. Time of supply is -
a) 2.8.2017 b) 2.10.2017 c) either 2.8.2017 or 2.10.2017 d) None of these
132. If it is not possible to determine the time of supply, the time of supply shall be
a) decided by the supplier b) decided by the recipient
c) date of entry in the books of recipient d) date of entry in the books of supplier
135. Interest, late fee or penalty for delayed payment of any consideration is
a) Included in value of supply b) Not included in value of supply
c) Included if the recipient requests d) Included at the option of the supplier
136. When the supply of goods or services is for a consideration not wholly in money, the value
of the supply shall be
a) Value declared by the supplier b) value declared by the recipient
c) Open market value of such supply d) None of these
137. A new mobile handset is supplied for Rs.10,000 exchanging an old phone. Without
exchange offer the price of handset is Rs 25,000. Market Value of similar phones is Rs.20,000.
What is the value of supply?
a) Rs 10,000 b) Rs 20,000 c) Rs 25,000 d) Either Rs 25,000 or Rs 20,000
138. A laptop is supplied receiving Rs. 30,000 and a mobile phone worth Rs. 20,000. Value of
supply –
a) Rs 20,000 b) Rs 30,000 c) Rs 50,000 d) Rs 10,000
144. Where the goods are received in lots or instalments input tax credit can be claimed
a) upon reciept of first lot b) upon receipt of the last lot
c) Any time at the option of the supplier d) after full payment of price
145. Where a recipient fails to pay the price within 180 days from the date of issue of invoice,
he shall be liable to pay input tax credit to the Government with --- % interest
a) 10% b) 12% c) 18% d) None of these
146. Input tax credit of an invoice can be availed within a period of -- or the 30th September
following the year of invoice whichever is earlier.
a) 2 years b) 1 year c) 6 months d ) 3 Months
147. If goods or services are partly used for business purposes and partly for other purposes,
input tax credit
a) can be fully claimed b) can be partly claimed c) cannot be claimed d) Not applicable
151. Input tax credit in respect of food and beverages, outdoor catering, beauty treatment, health
services, cosmetic and plastic surgery belong to
a) Exempt category b) Composite tax category c) Blocked credit category d) None of these.
152. Input tax credit in respect of food membership of a club, health and fitness centre belong to
a) Exempt category b) Blocked credit category c) Composite tax category d) None of these.
153. Input tax credit in respect of rent-a-cab, life insurance and health insurance belong to
a) Blocked credit category b) Exempt category c) Composite tax category d) None of these
154. Input tax credit in respect of goods lost, stolen, destroyed, written off or disposed of by
way of gift or free samples; belong to
a) Exempt category b) Composite tax category c) Blocked credit category d) None of these
155. Goods or services or both on which tax has been paid under section 10 belong to
a) Exempt category b) Composite tax category c) Blocked credit category d) None of these
158. In the case of reversal of input tax credit, interest at the rate of --- % is applicable
a) 8% b) 12% c) 18% d) 24%
159. Reversal of Input tax credit happens when a person fails to pay the amount of price
including tax to the supplier within a period of
a) 180 days b) 30days c) 60days d) 90 days
162. When an exempt supply in the hands of registered person becomes a taxable supply, such
person a) can take credit of input tax b) is not entitled to take credit of input tax
c) liable to pay tax on stock d) liable to pay reverse charge
163. A registered person, after availing input tax credit, opts for composition levy,
a) shall be liable to pay the input tax on stock or capital goods b) shall not be liable to pay tax
c) liable to pay reverse charge d) None of these
164. In case of transfer of capital goods or plant and machinery the registered person shall
a) not be liable to pay input tax credit claimed b) be liable to pay the input tax credit claimed
c) liable to pay reverse charge d) None of these
165. Tax credit in respect of goods or inputs sent for job work can be claimed by
a) Job worker b) Principal c) Either by Jobworker or Principal d) Not eligible for input credit
166. A registered person shall not be entitled to take input tax credit after
a) Three months of issuing tax invoice b) Six months of issuing tax invoice
c) One year from the date of issue of tax invoice d) Two years of issuing tax invoice
167. A registered person need not issue a tax invoice if the value of supply less than
a) 100 b) Rs. 200 c) 500 d) 1000
168. A registered person supplying exempted goods or services or paying composition tax under
section 10 shall issue
a) GST Bill b) Bill of supply c) Delivery chalan d) Debit note
169. A registered person shall, on receipt of advance payment for goods or services, issue
a) GST Bill b) Bill of supply c) Receipt voucher d) Debit note
170. After issuing a receipt voucher for advance payment, if no supply is made --- may be
issued against such payment.
a) Refund voucher b) Debit note c) Tax invoice d) Bill of supply
171. In a tax invoice of supply of Rs. 50,000 or more to an unregistered person, the name
and address of the recipient and the address of delivery are
a) Optional b) Compulsory in all cases
c) compulsory to avail input tax credit d) compulsory if the recipient insists
172. In a tax invoice of supply of less than Rs. 50,000 to an unregistered person, the name
and address of the recipient and the address of delivery are
a) Optional b) Compulsory in all cases
c) compulsory to avail input tax credit d) compulsory if the recipient insists
174. A consolidated invoice at the end of a month for supplies on which reverse charge is
applicable is required when the aggregate value of such supplies exceeds
a) Rs. 1,000 in a day b) Rs. 5,000 in a day c) Rs. 10,000 in a day d) Rs. 50,000 in a day
175. In the case of sale to an unregistered person, a registered person may not issue a tax
invoice, if the value of supply is
a) less than Rs. 100 b) less than Rs. 200 c) less than Rs. 500 d) less than Rs. 1,000
176. In the case of the taxable supply of services the invoice shall be issued within a period of
a) 15days b) 30 days c) 45 days d) 90days
182. Mr. P supplied goods of Rs. 1,00,000, to Mr. Q, who returned goods of Rs 10,000 due to
inferior quality. Mr. P will later issue
a) Credit note b) Debit note c) Tax invoice d) Delivery challan
183. A credit note is issued to the recipient of goods in the following cases
1) When the taxable value of goods found to be less 2) Tax charged found to be less
3) When the recipient refuces to make payment 4) None of these
184. Mr. X supplied goods to Mr. Y the cost was Rs. 1,00,000 but wrongly billed as Rs. 10,000.
Mr. X will later issue
a) Debit note to Mr.Y a) Credit note to Mr.Y
c) Tax invoice to Mr.Y d) Delivery chalan to Mr.Y
185. In the case of supply of liquid gas where the quantity at the time of removal from the place
of business of the supplier is not known
a) Delivery challan is not required b) Tax invoice is not required
c) Debit note is required d) credit note is required
189. The input tax credit as self-assessed in the return of a registered person shall be
credited to his electronic
a) Cash Ledger c) Liability register c) Credit Ledger d) Debit ledger
190. IGST credit shall first be utilised towards payment of
a) CGST b) SGST c) IGST d) UTGST
191. The balance of IGST credit after set off IGST can be used towards the payment of
a) CGST b) SGST c) IGST d) UTGST
192. The balance of CGST credit after set off of CGST can be used towards the payment of
a) SGST b) UTGST c) either SGST or UTGST d) IGST
196. Balance of Input credit of SGST after output tax liability of SGST can be utilised to set off
a) CGST b) UTGST c) IGST d) None of these
197. Every person who fails to pay tax shall be liable to pay interest not exceeding
a) 10% b) 12% c) 18% d) 24%
198. A taxable person who makes an undue or excess claim of input tax credit shall be liable to
pay interest not exceeding
a) 10% b) 12% c) 18% d) 24%
200. TDS provision applicable only when the total value of supply, under a contract, exceeds
a) Rs. 1,00,000 b) Rs. 1,50,000 c) Rs. 2,00,000 d) Rs. 2,50,000
201. For the purpose of TDS, the value of supply shall be taken as the amount in the invoice
a) Excluding tax b) Including tax c) Before discount d) None of these
202. After making TDS if the deductor fails to furnish the certificate within five days of
crediting the amount so deducted to the Government, the deductor shall pay a late fee of
a) Rs.100 per day b) Rs.150 per day c) Rs.200 per day d) Rs.250 per day
207. A situation where the rate of tax on input is more than rate of tax on output is
a) Inverted duty structure b) excess input tax credit c) Compensation Cess d) Refund
209. GST registration is mandatory if the aggregate turnover in a financial year exceeds
a) Rs. 20 lakh b) Rs. 50 lakh c) Rs. 75 lakh d) Rs. 1 Crore
210. In specified category states GST registration is mandatory if the aggregate turnover in a
financial year exceeds
a) Rs. 1 Crore b) Rs. 10 lakh c) Rs. 20 Lakh d) Rs. 75 lakh
213. A person who is liable to be registered shall apply for registration within --- from the date
on which he becomes liable to registration
a) 10 b) 15 days b) 30 days c) 90 days
214. If a person liable to be registered has operation in more than one State, he should
a) Obtain registration in all states b) obtain registration in any one state
c) registration is optional d) Registration not mandatory
215. A casual taxable person or a non-resident taxable person shall apply for registration
at least --- prior to the commencement of business
a) 3 days b) 5 days c) 10 days d) 15days
216. Every person who makes a supply from the territorial waters of India
a) shall obtain registration in the coastal State/ union territory b) Any state in India
c) registration not required d) Registration is optional
219. If the proper officer does not take any action within a period of three working days from the
date of submission of the application for GST registration -
a) Fresh application shall be submitted b) Implies Rejection of registration
c) Deemed registration d) implies registration not required.
223. The certificate of registration issued to a casual taxable person or a non-resident taxable
person shall be valid for a period of
a) 30 days b) 90 days c) 6 months d) one year
224. As a result of any surve or search if the proper officer finds that a person liable to
registration, he will be given
a) Deemed registration b) Suomoto registration
c) Cancelled registration d) suspected registration
227. Whcih of the following is not a reason for cancellation of registration by proper officer?
a) contravened the provisions of the Act or the rules b) Not furnished returns in time
c) has not paid tax in time d) Registration has been obtained by means of fraud
229. Which among the following is not compulsory among he accounts and records maintained
by the GST dealers
a) Inward and outward supplies b) Stock of goods
c) Input tax credit availed d) Sundry Debtors
230. Every registered person should keep and maintain the prescribed books of accounts and
records a) At all the offices b) at principal place of business
c) wherever requested by the GST officers d) electronically
232. When turnover during a financial year exceeds --- the accounts and other records must be
audited by a chartered accountant or a cost accountant
a) 1 crore b) 2 crore 3) 5 crore 4) 10 crore
233. Every registered person required to keep and maintain books of account or other records
a) for a period of 2 years b) for a period of 3 years
c) for a period of 5 years d) for a period of 6 years
238. ---- gives the details of goods or services received by the recipients. It is auto populated
out of the GSTR -1 submitted by different suppliers
a) GSTR 3 b) GSTR 3B c) GSTR - 2A d) GSTR 9
240. GSTR - 2A is made available on the 11th of the next month for the
a) Recipients of supplies b) Suppliers c) GST officers d) Customers
241. GSTR-3 is auto-populated by 20th of the next month containing the details of
a) Outward supplies b) inward supplies
c) all outward as well as inward supplies d) None of these
247. GSTR-8 shall contain the details of all the supplies made by the
a) Input service distributors b) E-Commerce seller c) GST dealers d) Composition dealers
250. GST dealers whose annual turnover exceeds Rs. 1 crore, should file a reconciliation
statement in ---- within 31st December of the next fiscal year
a) GSTR 5 b) GSTR 6 c) GSTR 9A d) Form GSTR-9B
254. Government body or a United Nations Body, then a monthly Form GSTR-11 has to file
a) GSTR 11 b) GSTR8A c) GSTR 9A d) GSTR 5
255. A registered person under GST can file quarterly return if the turnover is
a) 2lakh or less b) 75 lakh or less c) One crore of less d) 1.5 crore or less
256. Adding or correcting the details of an outward supply in valid return so as to match the
details of corresponding inward supply is called
a) Rectification of return b) reversal of return c) reconciliation of return d) acceptance of
return
259. The proper officer shall pass an order, allowing payment of tax at such rate or on such
value as may be specified by him. This is called
a) Best judgement assessment b) Provisional assessment c) Self assessment d) Protective
assessment
260. The proper officer may assess the tax liability on the basis of available information,
evidences which is called
a) Best judgement assessment b) Provisional assessment c) Self assessment d) Protective
assessment
268. Where a vehicle has been intercepted and detained for a period exceeding thirty minutes,
the transporter may upload the said information on the common portal in
a) FORM GST INS - 0 4 b) FORM GST INS - 0 10
c) FORM GST INS - 0 9 d) FORM GST INS - 0 6
270. Input credit available without being liable for output tax in the case of
a) Exempt goods b) Non taxable goods c) Zero rated goods d) Demerit goods
272. Goods which are harmful but widely consumed are collective called
a) demerit goods b) merit goods c) inferior goods d) white goods
Q2. Q6.
What is the threshold limit of turnover in the Rama Ltd. has provided following information
preceding financial year for opting to pay tax for the month of September:
under composition scheme? (ICAI – Study (i) Intra-State outward supply Rs. 8,00,000/-
material) (ii) Inter-State exempt outward supply Rs.
a. ` 20 lacs 5,00,000/-
(iii) Turnover of exported goods Rs.
b. ` 10 lacs
10,00,000/-
c. ` 1.5 cr
(iv) Payment made for availing GTA services
d. None of the above
Rs. 80,000/-
Answer :- c. ` 1.5 cr
Calculate the aggregate turnover of Rama
Ltd. (CA inter MTP Mar 19)
Q3. a. Rs. 8,00,000/-
What is the rate applicable under CGST to a b. Rs. 23,80,000/-
registered person being a manufacturer opting c. Rs. 23,00,000/-
to pay taxes under composition scheme? d. Rs. 18,00,000/-nment
a. 2.5% Answer :- c. Rs. 23,00,000/-
b. 0.5 %
c. 0%
d. No composition for manufacturer Q7.
Answer :- (b) 0.5 % Can Composition scheme be availed if the
registered person effects interstate supplies?
a. Yes
b. No
Q4.
c. Yes, subject to prior approval of the Central
Mr. Richard, a trader in Delhi has opted for
Government
composition scheme of taxation under GST.
d. Yes, subject to prior approval of the
Determine the % of total GST payable by him
concerned State Government
under composition scheme:
Answer :- b. No
a. 0.5% CGST & 0.5% SGST
b. 2.5% CGST & 2.5% UTGST
c. 5% IGST Q8.
d. 5% UTGSTtax Can a registered person under Composition
Answer :- a. 0.5% CGST & 0.5% SGST Scheme claim input tax credit?
a. Yes
b. No
c. Input tax credit on inward supply of goods
only can be claimed
d. Input tax credit on inward supply of
services only can be claimed
Answer :- b. No
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Students
Q9. Aggregate Turnover, Turnover in state Notes
Can a registered person opting for Q1.
composition scheme collect tax on his outward Aggregate turnover calculated on:
supplies? a. Registration basis
a. Yes b. All India basis
b. No c. State or Union Territory basis
. c. Yes, if the amount of tax is prominently d. None of the above
indicated in the invoice issued by him Ans:
d. Yes, only on such goods as may be notified
by the Central Government
Q2.
Answer :- b. No
A g g r e g a t e Tu r n o v e r L i m i t f o r o p t i n g
composition scheme in states other than
Q10. special category states:
Which of the following will be excluded from a. 75 Lakhs
the computation of 'aggregate turnover'? (ICAI b. 1.25 Crores
– Study material) c. 1 Crore
a. Value of Taxable supplies d. 1.50 Crores
b. Value of Exempt Supplies Ans:
c. Non-taxable supplies
d. Value of inward supplies on which tax is Q3.
paid on reverse charge basis A g g r e g a t e Tu r n o v e r L i m i t f o r o p t i n g
Answer :- d. Value of inward supplies on which composition scheme in special category states
tax is paid on reverse charge basis other than Assam, Himachal Pradesh and
Jammu & Kashmir:
a. 75 Lakhs
Q11. b. 1.25 Crores
What will happen if the turnover of a registered c. 1 Crore
person opting to pay taxes under composition d. 1.50 Crores
scheme during the year 2017-18 crosses ` 1.5 Ans:
cr?
a. He can continue under composition
scheme till the end of the financial year Q4.
b. He will be liable to pay tax at normal rates A g g r e g a t e Tu r n o v e r L i m i t f o r o p t i n g
of GST on the entire turnover for the composition scheme in special category states
financial year 2017 -2018 of Assam, Himachal Pradesh and Jammu &
c. He will cease to remain under the Kashmir is:
composition scheme with immediate effect a. 75 Lakhs
d. He will cease to remain under the b. 1.25 Crores
composition scheme from the quarter c. 1 Crore
following the quarter in which the d. 1.5 Crores
aggregate turnover exceeds ` 1.5 cr. Ans:
Answer :- c. He will cease to remain under the
composition scheme with immediate effect Q5.
Mr. XYZ a manufacturer has supplies following
goods in F.Y. 18-19
i) Intra State supply of good - ` 25,00,000
ii) Exempt supplies of worth - ` 10,00,000
iii) Export good worth - ` 50,00,000
iv) Non Taxable supplies worth - ` 5,00,000
Calculate aggregate turnover.
a. 90,00,000
b. 85,00,000
c. 75,00,000
d. 80,00,000
Ans:
Q8.
In calculation of aggregate turnover for the Q12.
purpose of determining eligibility for Raj Ltd. is having 4 places of business – 2 in
composition scheme by a manufacture Delhi (Registered),1 in Maharashtra
following items are included: (Registered) and 1 in Madras (Unregistered as
a. All taxable supplies (excluding inward selling Alcholic liquor for human consumption)
supplies on which tax is payable under 'Aggregate Turnover' shall be
RCM) a. Aggregate Turnover from all 4 places of
b. Exempt supplies business (having same PAN);
c. Export and inter-state supplies b. Aggregate Turnover of all registered places –
d. All of the above 2 places in Delhi and 1 in Maharashtra
Ans: (registered with same PAN);
Ans:
Q9.
According to Section 2 (6) of the CGST Act, 2017 Q13.
“aggregate turnover” will include Rama Ltd. has provided following information
a. value of all taxable supplies for the month of September:
b. value of all outward supplies – whether (i) Intra-State outward supply ` 8,00,000/-
taxable or non-taxable, whether exempt or (ii) Inter-State exempt outward supply `
non-exempt, whether zero-rated or not, 5,00,000/-
whether under forward charge or reverse (iii) Turnover of exported goods `
charge 10,00,000/-
c. value of outward supplies as well as inward (iv) Payment made for availing GTA
supplies on which tax is payable on reverse services ` 80,000/-
charge basis Calculate the aggregate turnover of Rama Ltd.
d. value of outward supplies under forward a. ` 8,00,000/-
charge and value of inward supplies with b. ` 23,80,000/-
reverse charge c. ` 23,00,000/-
Ans: d. ` 18,00,000/-
Ans:-
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Students
Q14. Q19. Notes
Mr. Bala has made supply (within State) of a Under composition scheme total tax rate
taxable goods which is of ` 17 lakh, export applicable to Restaurant & Catering Service
supplies of ` 3 lakh and intra-state supply of provider is:
exempt services of ` 4 lakh. His aggregate a. 1% of the Turnover in State or Union
turnover as per section 2(6) of the CGST / SGST Territory
Act, 2017 is : b. 0.5% of the Turnover in State or Union
a.` 17 Lakhs Territory
b. ` 20 Lakhs c. 2.50% of the Turnover in State or Union
c. ` 24 Lakhs Territory
d. None of the above d. 5% (i.e.2.50% CGST + 2.50% SGST) of the
Ans: Turnover in State or Union Territory
Ans:
Q15.
Mr. X, a registered supplier of Uttarakhand Q20.
wants to opt for composition levy. The turnover Eligibility criteria for composition scheme
limit for composition levy is- depends on the aggregate turnover of :
a. ` 50 lakh a. Preceding Financial Year
b. ` 75 lakh b. Current Financial Year
c. ` 1 crore c. None of the above
d. ` 1.5 crore d. Both a & b above
Ans: Ans:
Q16. Q21.
Turnover in State or Union Territory excludes: Total Tax rate under composition scheme for
a. Central Tax suppliers other than manufacturers or
b. State or Union Territory Tax suppliers making supplies under clause (b) of
c. Integrated Tax & Cess para 6 of schedule II will be :
d. All of the above a. 0.5% Turnover in State
Ans: b. 1% Turnover of Taxable supplies of goods
or services in State
c. 1% Turnover in State
Q17.
d. 2.50% Turnover of Taxable supplies of
Exempt Supply includes:
goods or services in State
a. Nil rate supply
Ans:
b. Wholly exempt & non-taxable supply
c. only b above
d. Both a & b above Q22.
Ans: Mr. A a registered person under GST opts for
composition scheme in current financial year
Sec 10(1): Eligibility criteria for Composition Scheme as his aggregate turnover in preceding
financial year was ` 95 lakhs. In CFY his
Q18. turnover crosses ` 1.5 cr. in the month of
Under composition scheme CGST rate October. Will Mr. A continue to be in
applicable to manufacturer is: composition scheme in CFY also?
a. 1% of the Turnover in State or Union a. Yes, composition scheme will be available
Territory in CFY
b. 0.5% of the Turnover in State or Union b. No, composition scheme will not be
Territory available in CFY
c. 0.5% of the Turnover of taxable supply of c. Yes, till the time the turnover is below 1.5
goods or service in State or Union Territory cr. & after that the composition scheme will
d. 2.50% of the Turnover in State or Union be withdrawn
Territory d. No, the composition scheme will be
st
Ans: withdrawn by the end of the 1 quarter
Ans:
Q25.
Which of the following person cannot opt for Q28.
composition scheme? Which of the following persons can opt for the
[Hint: Person may supply service of value not composition scheme?
1) Registered person whose aggregate
exceeding 10% of Turnover in state or ` 5 Lac
turnover in the preceding financial year
whichever is higher]
did not exceed `75 lakh.
a. Mr. B, a garment trader having turnover of `
2) Registered person whose aggregate
40 lacs. He further rents out his shop and turnover in the preceding financial year
charges ` 70,000 per month. did not exceed `1.5 crore.
b. Mr. C, manufacturer of hand bags having 3) A person engaged in Manufacturing of
turnover upto ` 60 lacs Pan Masala, Tobacco and manufactured
c. Mr. D, selling hand bags through e – tobacco substitutes
commerce portal which is not liable to collect 4) A person engaged in the Manufacturing
tax at source U/s 52 of Ice Cream, other edible ice, whether or
d. None of the above not containing Cocoa.
Ans: 5) A person engaged exclusively in the
providing restaurant service.
Q26. 6) A person engaged exclusively in supply
Which of the following statement is incorrect in of medicines.
relation to condition for opting composition Which of the above are correct:
scheme u/s 10(1) a. 1,2,3,5
[Hint: can provide service upto 10% of Turnover b. 1,2,5,6
in State or 5 lakhs whichever is higher] c. 2,3,4,5
d. 3,4,5,6
a. he is not engaged in the supply of services
Ans:-
b. he is not engaged in non taxable supply
c. he is not a manufacturer of such goods as
may be notified by the government on the
recommendations of the council
d. he is not engaged in making supply of
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Students
Q29. Q32. Notes
Mr. Bajaj, a trader of electronic goods in Mr. James Bond wants to avail the
Maharashtra supplies goods to ultimate composition scheme of section 10(1). He is
consumer at the intra-state level only. The registered as NRTP/ CTP under Maharashtra
turnover in state was ` 125 lakhs in preceding CGST Act, 2017 and the aggregate turnover of
financial year whereas turnover of taxable PFY 2018-19 was ` 1.5 crores. State whether
supply of goods was ` 105 lakhs. State the limit Mr. James Bond is eligible for opting
upto which Mr. Bajaj can provide services under composition scheme u/s 10(1).
composition scheme of 10(1). a. Eligible for composition scheme
[Hint: Limit is upto 10% of turnover in state or ` 5 b. Not eligible for composition scheme
lakhs whichever is higher] Ans:
a. ` 5 lakhs
b. ` 10.5 lakhs Q33.
c. ` 12.5 lakhs Mr. A, a composition dealer who trades in
d. ` 10 lakhs garments has received an order from China of
Ans: Rs 5 lacs. Can he accept this order?
a. Yes, he can accept that order
b. No, he cannot accept that order
Ans:-
Conditions for Composition Scheme (Sec 10(2) & Rule5)
Q30. Q34.
Mr. X a trader in Maharashtra registered under Which of the following manufacturer cannot
GST. Identify which of the following transaction opt for composition levy?
makes him ineligible for opting composition a. Manufacturer of pan masala
scheme:[Hint : Restriction is only on manufacturer] b. Manufacturer of ice cream
a. he make supplies of exempt goods c. Manufacturer of tobacco substitutes
b. he deals in goods such as pan masala & d. All of the above
tobacco Ans:
c. both a & b above
d. none of the above Q35.
Ans: In which of the following condition the person
cannot pay tax under composition scheme?
a. he was not engaged in the manufacture of
goods as notified under clause (e) of sub-
Q31. section (2) of section 10, during the
Mr. Ajay, a trader registered under GST, preceding financial year.
engaged in supply of pan masala. Calculate the b. he shall mention the words “composition
taxable value of supply for payment of tax under taxable person, not eligible to collect tax on
composition scheme from the following supplies” at the top of the bill of supply issued
information: by him.
i) Intra State taxable supply of pan masala - c. He is a casual taxable person
` 25,00,000 d. the goods held in stock by him on the
ii) Exempt supplies - ` 10,00,000 appointed day have not been purchased in
iii) Intra-state taxable supply of services the course of inter-State trade
(within the limit of 10% or 5 lakhs) - ` Ans:
4,00,000
iv) Non Taxable supplies worth - ` 5,00,000
[Hint:- taxable supply for traders ] Q36.
a. ` 29,00,000 Whether a restaurant serving alcohol along
b. ` 39,00,000 with other foods to its customers can opt for
composition scheme under section 10(1)?
c. ` 44,00,000
a. Yes, it can opt for Composition Scheme u/s
d. ` 25,00,000
10(1)
Ans:
b. No, it cannot opt for Composition Scheme u/s
10(1)
Ans:
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Students
2017-18 was ` 45 lakhs. In the current financial Procedure under Composition Scheme Notes
year Mr. Ram took the legal service from Mr.
Vakil located in Indore and discharges the tax Q49.
liability under reverse charge on such service. ABC Ltd., a person registered in composition
Identify whether Mr. Ram is eligible for scheme, operating in 4 different states has filed
composition scheme or not? the withdrawal intimation in one State. Will this
a. Eligible intimation be applicable to all places of
b. Not eligible business?
Ans:- a. Yes, it will be applicable
b. No, it will not be applicable
Payment of Tax under Composition Scheme c. Yes, but with prior permission of Central
Government
Q46. d. No, but with prior permission of respective
ABC Ltd., a trader has got itself registered in State Government
Delhi on 1.2.2018 in composition scheme. In the Ans:-
month of Aug’18, it make supply of taxable
goods worth ` 3 lacs and exempted goods Q50.
worth ` 1 lac. On what value it shall pay the GST Can a registered person opt for composition
to the Government? scheme only for one out of his 3 business
a.` 1 lac verticals having same Permanent Account
b. ` 3 lacs Number?
c. ` 4 lacs a. Yes, he can
d. ` 2 lacs b. No, he can not
Ans:- c. Yes, subject to prior approval of the Central
Government
d. Yes, subject to prior approval of the
Q47. concerned State Government
Which of the following statements is not correct Ans:-
for a tax payer who has opted for composition
scheme?
a. A registered person supplying goods under Q51.
the composition scheme shall issue a bill of Can the person operating in regular scheme
supply. shift to composition scheme in middle of the
b. Last date for payment of liability towards tax, financial year?
interest, penalty, fee or any other sum is 20th a. Yes, he can shift
b. No, he cannot shift
day of each month.
Ans:-
c. A composition dealer shall mention the words
“Composition taxable person, not eligible to
collect tax on supplies” at the top of the bill of Q52.
supply issued by him. A Is composition dealer required to maintain
d. Last date for payment of liability towards tax, books of account as per GST Laws?
interest, penalty, fee or any other sum is 18th a. Yes, he is required to maintain books of
day of the month following each quarter. account
Ans:- b. No, he is not required to maintain books of
account
Q48. c. Yes, he is required to maintain books of
Will composition supplier make the payment of account but to a limited extent
CGST & SGST in separate heads or shall make d. None of the above
one combined payment? Ans:-
a. Yes, pay under separate heads
b. No, pay a consolidate amount Q53.
c. Either a or b above In which form can the person file for withdrawal
d. Make payment under IGST of composition scheme?
Ans:- a. Form GST CMP-01
b. Form GST CMP-02
c. Form GST CMP-03
7 b 37 b
Q55.
Due date of filing GSTR 4 is: 8 d 38 b
th
a. 18 day of April following the end of such
FY 9 b 39 a
b. 20th day of the succeeding quarter
c. 25th day of the succeeding quarter 10 d 40 d
th
d. 30 day of April following the end of such
FY 11 c 41 d
Ans:
12 a 42 d
Q56. 13 c 43 d
What is the periodicity of filing return under
14 c 44 b
composition scheme?
a. Monthly 15 b 45 a
b. Half yearly
c. Quarterly 16 d 46 b
d. Annually
Ans: 17 d 47 b
18 b 48 a
Q57.
Which of the following persons is not eligible 19 d 49 a
for composition scheme even though their
aggregate turnover does not exceed Rs. 1.5 20 d 50 b
crore in preceding FY, in Uttar Pradesh? (CA 51 b
21 b
Inter MTP Mar 19)
a. A person supplying restaurant services 22 c 52 c
b. A person supplying restaurant services and
earning bank interest 23 a 53 d
c. A person supplying restaurant services and
warehousing of rice 24 d 54 d
d. A person supplying restaurant services and
warehousing of processed tea. 25 a 55 d
Ans: 56 d
26 a
Note : Assumed the supplier has exceeded the
prescribed limit for providing services. 27 b 57 d
28 b
29 c
30 d
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1
IGP-CS GST MCQs CA Vivek Gaba
(Expected in Exam)
41. Under which Schedule, power to declare certain activity/ transaction as neither supply
of goods nor of services
a) Schedule I c) Schedule III
b) Schedule II d) Schedule IV
42. When was GST Council constituted?
a) 12th September 2016 c) 13th September 2016
b) 20th September 2016 d) 16th September 2016
43. What is address for delivery?
a) Recipient address mentioned in the invoice
b) Recipient address mentioned in delivery challan
c) Not necessarily recipient address
d) Recipient address mentioned in the gate pass
44. Who is an agriculturist?
a) Individual or HUF c) Individual and HUF
b) Partnership d) All of the above
45. An Associated Enterprise is mentioned in?
a) Income Tax Act, 1961 c) Central GST Law, 2017
b) State GST Law, 2017 d) Companies Act, 2013
46. Appointed day is __________________
a) date on which the provisions of the act shall come into force
b) date on which President gave assent
c) date on which both houses passed the act
d) date on which it is sent to Finance Ministry
47. What is conveyance?
a) vessel c) vehicle
b) aircraft d) all of the above
48. Which section mentions about inter-state supply of service?
a) section 8 c) section 18
b) section 14 d) section 12
49. Place of supply referred in Integrated Goods and Service Tax Act is mentioned in
which Chapter?
a) Chapter II c) Chapter V
b) Chapter III d) Chapter VIII
50. Deemed Export is mentioned in which section?
c) section 137 c) section 147
d) section 142 d) section 145
51. When does Quarter end?
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a) March c) September
IGP-CS GST MCQs CA Vivek Gaba
d) value of inward supplies on which tax has been paid under reverse charge
85. Which of the following is subsumed under Central GST?
a) Central Sales Tax c) Customs Duty
b) Service Tax d) all of the above
86. Which of the following true in respect of Goods and Service Tax
a) It is destination based tax c) it is a consumption tax
b) It is levied on supply of goods or services d) All of the above
87. What is the threshold limit for composition levy?
a) ` 40 lakh c) ` 1 crore
b) ` 30 lakh d) ` 70 lakh
88. Which of the following require themselves to be registered compulsory, irrespective of
threshold limit?
a) Casual taxable person c) non-resident taxable person
b) Input service distributor d) all of the above
89. The time of supply of voucher in respect of goods and services shall be
a) date of issue of voucher, in case of identifiable supply
b) date of redemption of voucher
c) both a) and b)
d) none of the above
90. Which article of constitution of India empowers the Parliament to impose IGST in India?
a) 69A c) 279A
b) 265A d) none of the above
91. What does the conditions for supply includes?
a) Supply is a taxable service
b) Supply is made in the taxable territory
c) Supply is made by taxable person
d) All of the above
92. Which form has to be filed for withdrawal from composition levy?
a) GST CMP 04 c) GST CMP 03
b) GST PCT 2 d) GST MIS 1
93. When the taxable turnover is above ` 1.5 crore, it is under the control of
a) State c) Centre
b) Both Centre and State d) exempt from the purview of GST
94. Which of the following statement is correct:-
I. GST is a broad-based tax
II. GST is a destination based tax
III. GST is collected through a staged process i.e. a tax on the value added to goods
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IV. GST is a tax on the consumption of products from business sources, and not on
personal or hobby activities
a) Only I b) I & II Both
b) I, II & III d) I, II, III & IV all statement is correct
95. Which of the following State Taxes have not been subsumed under GST?
i. Road & passenger tax
ii. Central Sales Tax
iii. Toll tax
iv. Luxury Tax
v. Property tax
vi. Electricity duty.
a) i, iii, v & vi c) Only iii, iv & v.
b) Only vi d) None of the above
96. Over the Counter Payment can be made in branches of Banks Authorized (for deposits
up to ____________ per challan per tax period, by cash, cheque or demand draft) to
accept deposit of GST –
a) ten thousand rupees c) One thousand rupees
b) Two thousand rupees d) None of the above
97. The audit needs to be completed within a period of _____ months from the date of
commencement of the audit, but a further extension for a period of ____ months may
be provided by the Commissioner for the reasons recorded in writing –
a) Three, Six c) Six, Six
b) Nine, Three d) Four, Three
98. Where the amount of tax evaded or the amount of input tax credit wrongly availed or
utilised or the amount of refund wrongly taken exceeds 200 lakhs upto 500 lakhs then –
a) imprisonment for a term which may extend to 5 years and with fine
b) imprisonment for a term which may extend to 7 years and with fine
c) imprisonment for a term which may extend to 5 years and without fine
d) imprisonment for a term which may extend to 3 years and with fine
99. What is the threshold limit of Registration under GST?
a) 10 lakhs (for special category States) and Rs. 20 lakhs for other states and Union
territories
b) 20 lakhs (for special category States) and Rs. 10 lakhs for other states and Union
territories
c) 5 lakhs (for special category States) and Rs. 10 lakhs for other states and Union
territories
10
100. Where Goods or services or both are used partly for taxable supplies including zero
rated supplies under IGST or under CGST Act, and partly for exempted supplies –
a) only that amount of input tax which is attributable to the taxable supplies including
zero rated supplies will be allowed as credit and not for exempted supplies
b) 100% ITC Allowed irrespective of the usage of Goods/Services
c) Fix 50% ITC allowed in this cases
d) None of the above
101. Proper officer shall pass an order (Provisional assessment request), within a period not
later than _______ from the date of receipt of such request –
a) 90 days c) 30 days
b) 100 days d) 120 days
102. The time duration for retention of accounts and records under GST is until expiry of
________ from the due date of furnishing of annual return for the year pertaining to
such accounts and records–
a) Seventy-two months c) seventy months
b) seventy-one months d) none of the above
103. Tax rate applicable in hands of Restaurant under composition scheme –
a) 2% (CGST + SGST) c) 5% (CSGT + SGST)
b) 18% (CGST + SGST) d) 2.5% (CGST + SGST)
104. To be eligible for registration under Composition scheme it is required that the
aggregate turnover of a registered tax payer should not exceed _______ in the
preceding financial year & the limit is ______ for North Eastern & Special Category
States)
a) ` 75,00,000/-, ` 50,00,000/- c) ` 50,00,000/-, ` 25,00,000/-
b) ` 100,00,000/-, ` 50,00,000/- d) ` 75,00,000/-, ` 20,00,000/-
105. ________ is excluded from the definition of goods as well as services
a) securities and money c) Only Securities
b) Only Money d) None of the above
106. What is the correct procedure of file return under GST?
i. Submission of return
ii. Rectification of discrepancies in ITC
iii. Matching of claim in reduction in output tax liability
iv. Final acceptance of ITC
v. Matching of ITC
a) i, ii, iii, iv & v c) i, v, iv, ii & iii
b) v, ii, iii, iv & vi d) none of the above
11
b) the date of payment as entered in the books of account or payment is debited in his
bank account, whichever is earlier
c) the date immediately following thirty days from the date of issue of invoice or any
other document
d) earlier of the above
108. Which of the following states covered North Eastern and Special Category States –
i. Assam, Arunachal Pradesh,
ii. Manipur, Meghalaya,
iii. Mizoram, Nagaland,
iv. Tripura, Sikkim,
v. Delhi, Bihar
vi. Jammu & Kashmir
vii. Himachal Pradesh
a) i, ii, iii, iv & vi c) i, ii, iii, iv & vii
b) Only vi d) Only i, ii & iii
109. Which of the following Bills passed by parliament?
i. Central Goods and Services Tax (CGST)Bill
ii. Integrated Goods and Services Tax(IGST) Bill
iii. Union Territory Goods and Services Tax (UTGST)Bill
iv. Goods and Services Tax (Compensation to States) Bill
v. State Goods and Services Tax (CGST)Bill
a) i, ii, iii & iv c) Only i
b) Only i, ii & iii d) None of the above
110. The time duration for retention of accounts and records under GST is until expiry of
________ from the due date of furnishing of annual return for the year pertaining to
such accounts and records–
a) Seventy-two months c) seventy months
b) seventy-one months d) none of the above
111. Taxable Person whose registration has been cancelled or surrendered file final return
on ________
a) within three months of the date of cancellation of date of order of cancellation
whichever is later
b) within Six months of the date of cancellation of date of order of cancellation
whichever is later
c) within three months of the date of cancellation of date of order of cancellation
whichever is Earlier
12
112. Section 56 of the CGST Act, 2017 states that if any tax ordered to be refunded under
section 54 is not refunded within sixty days from the date of receipt of application
interest at such rate __________
a) not exceeding six per cent c) not exceeding nine per cent
b) not exceeding eighteen per cent d) none of the above
113. A report of Special audit signed and certified by the appointed Chartered Accountant
or Cost Accountant is required to be submitted within _____ days although this period
can be further extended to _____ days –
a) 90, 90 c) 90, 30
b) 30, 90 d) 60, 60
114. ________ with respect to goods lost, stolen, destroyed or written off as well as on
goods given as gifts or free samples ________?
a) Input tax credit is not allowed, will also be not allowed
b) Input Tax credit will be allowed, will not be allowed
c) 100% Allowed in both cases
d) None of the above
115. if a recipient fails to pay the amount of supply along with tax payable thereon
_________ from the date of issue of invoice, the recipient will be liable to pay along
with the output tax liability an amount equal to the input tax credit availed by the
recipient along with interest thereon –
a) within 3 months c) within 6 months
b) within 90 days d) none of the above
116. Which of the following activity deemed as Supply under Schedule I even if no
consideration exists –
a) sale of business assets (goods) on which ITC has been availed
b) supply of goods and/or services between related person, except gift upto Rs. 50,000
to employees.
c) agent to principal of vice-versa, if agent supplies / receives goods on behalf of
principal
d) All of the above
117. What is cut off turnover limit for compulsory registration under GST?
a) ` 9 lacs c) exceeds ` 20 lacs
b) ` 50 lacs d) No limit for registration
118. Which of the followings goods are kept out from GST whether Temporarily of
permanent?
a) alcoholic liquor for human consumption
13
b) petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation
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turbine fuel
IGP-CS GST MCQs CA Vivek Gaba
c) Electricity
d) All of the above
119. Import of services for a consideration __________ is deemed as Supply?
a) whether or not in the course or furtherance of business
b) Transaction in the course or furtherance of business
c) Not a Supply
d) none of the above
120. Which of the following taxes leviable on Imports?
a) CGST c) SGST
b) IGST d) all of the above
121. Which of the following subjects will be omitted from the Seventh Schedule?
i. Entry 54 from State List
ii. Entry 55 from State List
iii. Entry 92 and 92C from Union List
iv. Entry 97 of Union List
a) i) & ii) c) ii) & iii)
b) iii) & iv) d) all of the above
122. ________ is payable on all intra-state supply of goods and/or services and _______ is
payable on all inter- State supply of goods and/or services.
a) CGST + SGST/UTGST, IGST c) IGST, CGST
b) IGST, SGST d) None of the above
123. Gift upto value of ` 50,000 in a year to an employee __________ & Gifts in value in
excess of ` 50,000 _______
a) shall not be treated as “Supply”, shall be taxable as ‘Supply’
b) shall be taxable as ‘Supply’, shall not be treated as “Supply”
c) Both activity not covered under supply
d) None of the above
124. Which of the following persons are not eligible of composition scheme?
a) The scheme is not available for services sector, except restaurants.
b) Supplier of goods which are not taxable under the CGST Act/SGST Act/UTGST Act is
not eligible to register under this scheme
c) Tax payers making inter- state supplies is not eligible for composition scheme
d) All of the above
125. Every taxable person shall discharge his tax and other dues under this Act or the
rules made thereunder in the following order, namely:–
i. self-assessed tax, and other dues related to the return of the current tax period
14
ii. self-assessed tax, and other dues related to returns of previous tax periods
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IGP-CS GST MCQs CA Vivek Gaba
iii. any other amount payable under this Act or the rules made thereunder including the
demand determined under section 73 or section 74
a) i, ii & iii c) ii, i & iii
b) iii, ii & I d) iii, i & ii
126. What shall be Time of Supply in case of reverse charge?
a) the date of the receipt of goods
b) the date of payment as entered in the books of account or payment is debited in his
bank account, whichever is earlier
c) the date immediately following thirty days from the date of issue of invoice or any
other document
d) earlier of the above
127. Which of the followings Activities which are neither supply of goods nor supply of
services:
a) Services by employee to employer
b) Services by any court or tribunal
c) Functions performed by the Members of Parliament etc
d) All of the above
128. Which of the following person is not liable for registration?
a) Person supplying exempted goods or services or goods or services which are not
liable for tax under GST
b) An agriculturist, to the extent of supply of produce out of cultivation of land
c) Both a) & b)
d) None of the above
129. Vice Chairperson of GST Council will be from Member from ______?
a) State Government
b) Central government
c) Any member nominated by central government
d) Any of the above
130. The details of outward supplies of goods or services shall be submitted by
a) 10th of the succeeding month
b) 18th of the succeeding month
c) 15th of the succeeding month
d) 20th of the succeeding month
Love
CA Vivek Gaba
15
1 b) 23 c) 45 a) 67 b) 89 c) 111 a)
2 d) 24 a) 46 a) 68 d) 90 d) 112 a)
3 c) 25 d) 47 d) 69 c) 91 d) 113 a)
4 c) 26 a) 48 a) 70 a) 92 a) 114 a)
5 c) 27 b) 49 71 b) 93 b) 115 a)
6 a) 28 b) 50 c) 72 a) 94 d) 116 d)
7 c) 29 a) 51 d) 73 b) 95 a) 117 c)
8 a) 30 b) 52 a) 74 b) 96 a) 118 d)
9 c) 31 d) 53 c) 75 b) 97 a) 119 a)
10 d) 32 d) 54 c) 76 a) 98 d) 120 b)
11 b) 33 d) 55 d) 77 c) 99 d) 121 c)
12 c) 34 a) 56 a) 78 c) 100 a) 122 a)
13 c) 35 d) 57 d) 79 e) 101 a) 123 a)
14 b) 36 c) 58 c) 80 d) 102 a) 124 d)
15 b) 37 c) 59 a) 81 d) 103 c) 125 c)
16 b) 38 c) 60 d) 82 c) 104 a) 126 d)
17 c) 39 c) 61 a) 83 a) 105 a) 127 d)
18 a) 40 b) 62 a) 84 d) 106 c) 128 c)
19 c) 41 c) 63 a) 85 d) 107 d) 129 a)
20 d) 42 a) 64 c) 86 d) 108 c) 130 a)
21 c) 43 a) 65 d) 87 c) 109 a)
22 c) 44 a) 66 c) 88 d) 110 a)
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