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CA FINAL NEW COURSE (Nov 2022)

GROUP II – PAPER 8
INDIRECT TAX LAWS
(Series 2)
Time Allowed: - 3 Hours Maximum Marks: 100

This question paper comprises two parts, Part I and Part II.
Part I comprises MCQ & Part II comprises questions which require descriptive answers.

PART – I (MCQs)
All MCQs are compulsory

Question no. 1-10 carry 2 marks each and Question no. 11-20 carry 1 mark each
This Case Scenario contains MCQ 1-5

M/s. KBC Insurance Ltd., is an insurance company providing life and non-life products across India.
The company is carrying on its businessfor the past three years with the approval of IRDA.
M/s. KBC Insurance Ltd. secure its business through various insurance agents spread across India.
Those agents include individuals, firm, LLP and private limited company also. However, all of them are
licensed under Insurance Act.
The company availed services of renting of motor vehicles for its employees in PAN India through ‘RR
Travels Private Limited’, where cost of fuel is included in the consideration charged. The service
provider charged 5% GST and informed the company that it is claiming ITC only in respect of the
same line of business.
M/s. KBC Insurance Ltd. provided the following details of insurancebusiness for the month of May-

S. No. Nature of receipt Amount in ₹

i. Premium received on Pradhan Mantri Jan DhanYojana 5,00,000
ii. Premium received on Aam Aadmi Bima Yojana 3,00,000
iii. Premium received on Life micro-insurance product having a sum 4,00,000
assured of ₹ 2.50 lakh
iv. Premium received on reinsurance of Group Personal Accident Policy for Self- 1,00,000
Employed Women
v. Premium received on Fire and Special perilspolicy of various business units 7,00,000
vi. Premium received on Money-back policiesissued 12,00,000

M/s. KBC Insurance Ltd. received a proposal for Pandemic Insurance for IPL matches from the
franchisees. Sum assured for said insurance was ₹ 250 Crores with a premium of ₹ 50 lakh. The
company issued the said policy on 1st July. Invoice for the same was issued on 5th August. Premium
was received on 14th August.
Invoice dated 5th August issued by the company contained the following information,

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i. Serial Number
ii. Name of the Recipient
iii. Address of the recipient
iv. Taxable value
v. Date of its issue
vi. Amount of tax charged
M/s. KBC Insurance Ltd. received the following supplies in the monthof May and the details of GST
paid on such supplies are as follows-
i GST paid on purchase of car for use of Managing Director – ₹ 5,00,000
ii GST paid on bus (seating capacity for 14 persons) purchased by the company for transportation
of its employees from their residence to office and back – ₹ 3,00,000
iii GST of ₹ 80,000 was paid on general insurance taken from Amity Insurance Ltd. for motor
vehicles for transportation of persons with seating capacity ≤ 13 persons (including the
driver) which were used in transportation of staff of the company.
All the amounts given above are exclusive of taxes wherever applicable. All the supply referred
above is intra-State unless specified otherwise. Aggregate turnover of the company is not less than ₹ 10
crores for the past three years. Conditions necessary for availment of ITC are fulfilled subject to the
information given.
Based on the information given above, choose the most appropriate answer for the following
questions-

1. Determine the services on which the company is liable to pay tax under reverse charge?
(a) Service availed from insurance agents
(b) Service availed from RR Travels Private Limited
(c) None of the services availed attracts RCM
(d) Both (a) & (b)

2. Compute the value of exempt supply provided by M/s. KBC Insurance Ltd. for the month
of May?
(a) ₹ 9,00,000
(b) ₹ 13,00,000
(c) ₹ 20,00,000
(d) ₹ 32,00,000

3. Compute the value of taxable Supply made by M/s. KBC Insurance Ltd. for the month of
May?
(a) ₹ 4,00,000
(b) ₹ 12,00,000
(c) ₹ 23,00,000
(d) ₹ 32,00,000

4. Determine the amount of ITC that can be claimed by M/s. KBC Insurance Ltd?
(a) ₹ 80,000

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 (b) ₹ 3,00,000
(c) ₹ 3,80,000
(d) ₹ 8,80,000

5. Which of the following details are not mandatorily required to be mentioned in the
invoice issued by the company?
(a) i and ii
(b) i and iii
(c) i, ii and iii
(d) iv, v and vi

This Case Scenario contains MCQ 6-10

Mr. Pasupathi, registered taxpayer under GST, is engaged in trading of various types of consumer
goods. His turnover in the preceding financial year was below the threshold limit liable for
registration.
He has issued various bill of exchange, unsecured debentures, and promissory notes in course of his
business activity. Further, he is also engaged in betting activities.
During the month of April in the current year, he availed the following services-
(a) GTA services from XYZ Transports (GST was charged @ 5%) – ₹ 35,000
(b) Renting of Godown premises from Local Municipality – ₹ 40,000
(c) Legal service availed from a Firm of Advocates – ₹ 50,000
He sold a car used for his personal purposes for ₹ 1,00,000. He disposed off his old computers for ₹
60,000 on which no ITC was claimed. He also gave away his stock of old consumer goods
amounting to ₹ 75,000 (on which he had claimed ITC) to an Orphanage Home.
He received goods on 1st May that are liable to tax under reverse charge. Invoice was issued on 5th
May and payment for the same was made on 6th June.
He paid repair expenses for truck used for transportation of goods ofhis business. GST component
involved thereon was ₹ 13,000. He arranged for catering on Labour Day function and paid bill in
which GST component was ₹ 15,000. He received first lot of certain goods having GST component of ₹
25,000.
All the amounts given above are exclusive of taxes, wherever applicable. All the supply referred
above is intra-State unless specified otherwise. Conditions necessary for claiming ITC have been
fulfilled subject to the information given above.
Based on the information given above, choose the most appropriate answer for the following
questions:

6. Which of the following is not considered as a supply as per the provisions of CGST Act,
2017?
(i) Bill of Exchange
(ii) Unsecured debentures
(iii) Betting
(iv) Promissory Note
(a) i, ii

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 (b) i, ii and iii
(c) ii, iii and iv
(d) i, ii and iv

7. Determine the value of services taxable under reverse charge mechanism?

(a) ₹ 35,000
(b) ₹ 75,000
(c) ₹ 85,000
(d) ₹ 1,25,000

8. In respect of sale of personal car and disposal of computer and stock of goods, value of
supply will be ___________
(a) ₹ 60,000
(b) ₹ 75,000
(c) ₹ 1,35,000
(d) ₹ 2,35,000

9. Time of Supply of goods received by Mr. Pasupathi is _____________

(a) 1st May
(b) 5th May
(c) 5th June
(d) 6th June

10. Compute the amount of input tax credit (except ITC on services taxable under reverse
charge mechanism) that can be claimed by Mr. Pasupathi?
(a) ₹ 28,000
(b) ₹ 38,000
(c) ₹ 40,000
(d) ₹ 13,000

Question no. 11-20 carry 1 mark each

11. As per Section 11 of CGST Act, 2017 where Government is satisfied that it is necessary in
the public interest so to do, it may, on the recommendations of the council, by special
order in each case, under circumstances of an exceptional nature to be stated in such
order, exempt from payment of tax any goods or services or both on which tax is leviable.
However, if it considers necessary, the Government for clarifying the scope or
applicability may insert an explanation in such order. State the time limit for insertion of
an explanation by the Government in such order/notifications:
(A) Within 6 months
(B) Within 18 months
(C) Within one year
(D) Within two years

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12. A conveyance/vessel may reach a port but may not unload the goods at that port. Such a
phenomenon of temporary stay at a port other than the destination port where the
goods remain in the same vessel under the Customs Act is termed as-----.
(A) Transportation
(B) Warehousing
(C) Transit
(D) Transhipment

13. If the goods so seized are of perishable or hazardous nature, such goods can be released
by an order under only after taxable person pays an amount equivalent to the market
price of such goods or things or the amount of tax, interest and penalty that is or may
become payable by the taxable person, whichever is lower.
(A) GST INS-05
(B) GST INS-04
(C) GST INS-03
(D) GST INS-02

14. During the month of May, Z Ltd. sold goods to Y Ltd. for ₹ 2,55,000 and charged GST @
18%. However, owing to some defect in the goods, Y Ltd. returned the goods by issuing
debit note of ₹ 40,000 in the same month. Z Ltd. records the return of goods by issuing a
credit note of ₹ 40,000 plus GST in the same month. In this situation, GST liability of Z
Ltd. for the month of May will be-
(a) ₹ 45,900
(b) ₹ 38,700
(c) ₹ 53,100
(d) ₹ 40,000

15. C &Co., a registered supplier in Delhi, opted for composition levy under sub-sections (1)
and (2) of section 10 of the CGST Act, 2017. It sold goods in the fourth quarter of a
financial year for ₹ 15,00,000 (exclusive of GST). The applicable GST rate on these goods
is 12%. C & Co. purchased goods from Ramesh & Co., registered in Delhi, for ₹ 9,55,000
on which Ramesh & Co. had charged CGST of ₹ 57,300 and SGST of ₹ 57,300. C & Co. had
also purchased goods from E & Co., registered in Haryana, for ₹ 2,46,000 on which E & Co.
had charged IGST of ₹ 29,520. GST liability of C & Co. for the fourth quarter of the
financial year is-
(a) CGST ₹ 7,500 & SGST ₹ 7,500
(b) CGST ₹ 3,180 & SGST ₹ 32,700
(c) CGST ₹ 32,700 & SGST ₹ 3,180
(d) CGST Nil and SGST Nil

16. Pradeep Traders, registered in Haryana, sold goods inter-State for ₹ 2,05,000 to Balram
Pvt. Ltd. registered in Uttar Pradesh (GST is leviable @ 5% on said goods). As per the
terms of sales contract, Pradeep Traders has to deliver the goods at the factory of Balram
Pvt. Ltd. For this purpose, Pradeep Traders has charged freight of ₹ 2,400 from Balram
Pvt. Ltd. GST is leviable @ 12% on freight. What would be the net GST liability to be paid
in cash in this case assuming that the amounts given herein are exclusive of GST?

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 (a) IGST - ₹ 37,332
(b) IGST - ₹ 10,370
(c) CGST - ₹ 18,666 and SGST - ₹ 18,666
(d) CGST - ₹ 5,185 and SGST - ₹ 5,185

17. Customs duty under the Customs Act, 1962on the imported goods is to be paid on
transaction value adjusted in accordance with provision of Rule-10 which is known as
CIF value. Calculate the CIF value of the imported goods from the following details and
information:
FOB value ₹ 6,35,000; Air Freight ₹ 1,40,000; Insurance ₹ 3,000
(A) ₹ 7,78,000
(B) ₹ 7,65,000
(C) ₹ 7,82,144
(D) ₹ 7,83,719

18. Ascertain the assessable value in USD of the consignment of machine imported in India
from US on the basis of information/ particulars given below ------------.
(i) Cost of Machine at the factory of the US Exporter $ 17500
(ii) Transport charge from the factory to the sea port $ 2500
(iii) Handling charges at the Port of Shipment $ 200
(iv) Buying Commission paid by Importer $ 50
(v) Freight Charges until the Indian Port $ 2500
(A) $ 20,250
(B) $ 22,750
(C) $ 22,927
(D) $ 22,977

19. Ascertain the total value including the import duty and other chargeable taxes paid on
the consignment of Pan Masala imported into India by ABC Imports Limited. CIF value of
the consignment is of ₹ 1,00,000 on which chargeable rate of Basic Custom Duty is
37.5%, IGST is 28% and Compensation Cess is 60%.
(A) 2,65,550
(B) 2,65,756
(C) 2,81,500
(D) 2,89,280

20. The custodian allows the clearance of goods from the customs area on the basis of --------
and where the goods are not cleared within of unloading; demurrage charges are being
levied by the port authorities under the Customs Act.
(A) Out Goods Order; 5 days
(B) Out of Charge Order; 1 day
(C) Clearance Order; 2 days
(D) Out of Charge Order; 3 days

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 PART – II (Descriptive Answers)
This part comprises 6 questions. Question No. 1 is compulsory. Attempt any
4 questions out of the remaining 5 questions.

1 MS Ltd. is a GST registered company. During the month of October, 2020, the 14
company has undertaken the following transactions and wants you to work out
the GST output liability, admissible input tax credit and the amount that will have
to be paid in cash by the company to the Government before taking you as a
Manager in the company. There is no carry forward amount in respect of any of
the items to be considered for the purpose of calculations other than what is
mentioned specifically below.
Rate of IGST can be taken as 18%, CGST 9% and SGST 9% on all goods and
services except GTA service/transportation service and restaurant service for
which CGST and SGST rate would be 2.50% each and IGST rate would be 5%. The
amounts indicated for all the items are without including the CGST and SGST or
IGST element. Whether a supply attracts IGST or CGST/SGST has to be determined
on the basis of details given.
The company has indicated to you that the GST liability for October, 2020 for their
main product alone is ₹ 54 lakh of CGST and SGST each and ₹ 72 lakh IGST and the
eligible credit on the inputs and input services for October, 2020 is ₹ 1.45 crore
IGST and ₹ 20 lakh each towards CGST and SGST which can be straightaway taken
for calculations.
Company has provided you the other details which is not part of the above as
under:

S.No. Details of the transaction

i. During the month of October 2020, the company offered a special
discount of 25% on a product, the sale of which it intended to
discontinue from 1st December 2020 onwards and issued credit notes to
the dealers. This product was lying in stock with the dealers and the
discount offered to the customers was borne by the company by issuing
the credit note. The amount reimbursed to the dealers for the discounts
given to the customers in the month of October 2020 was ₹ 36,00,000
in the courseof inter-State.
ii. The company sold a van used for personal transport by auction. The van
had been purchased at ₹ 3,20,000. The depreciated value at the time
of sale was ₹ 1,40,000.No GST credit was taken. The van was sold for an
amount of ₹ 1,50,000 during the month of October 2020 in the course of
intra-State.
iii. The company has a policy of raising invoices separately towards
transportation cost of their products on their dealers at the time of
invoicing for the products sold to them. The company is collecting GST at
5% on all transactions. The transportation cost is collected as a
percentage of the value of the goods supplied irrespective of the distance
involved. The amount collected during the month of October 2020
towards transportation in intra-State transaction is ₹ 6 lakh and inter-
State transactions is ₹ 4 lakh.

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 iv. The security establishment of the company caught an employee who had
stolen bearings of value ₹ 2.50 lakh during the month of October 2020.
Bearings could not be recovered. But the company successfully
recovered the cost from the employee. IGST credit of ₹ 45,000 had been
taken by the company on these bearings.
v. The company supplies food and beverages to the employees and all the
items are priced at 10% of the actual cost to the company. During the
month of October, 2020, the company had charged ₹ 50,000 to the
employees. Assume that it is intra-State transaction.
vi. During the month of October, 2020, the company purchased 10 mobile
phones in its name and distributed to the employees to enable them to
perform their duties more efficiently for the company. Total price of the
phones was ₹ 1,20,000. At the end of the month, company sold these
mobiles to employees and company recovered only ₹ 20,000 from the
employees.
Assume that it is intra-State transaction.
vii. The company's registered office is located in a building which belongs to
the local Municipality. The monthly rent is ₹ 1.50 lakh.
viii. The whole-time director of the company was paid a salary of ₹ 5 lakh
during the month. He was also paid ₹ 20,000 towards sitting fees for his
participation in the meeting.

Give a brief note to support your treatment for the items wherever required.
Note: Company wants to pay minimum amount of SGST as far as possible.

2 (a) ‘XY’ of Kolkata is engaged in supply of various goods and services. It pays GST 9
under regular scheme. The following information is provided by it for the month
of July:
Payments Amount Receipts Amount
(₹) (₹)
Inter-State purchases of 1,40,000 Inter-State supply of office 2,00,000
office stationery stationery
Repairing of lorry used to 1,00,000 Intra-State supply of 500 4,00,000
transport goods from combi packs containing
warehouse to clients’ one calculator and one
location [Intra-State diary
supply]
Intra-State supply of 1,00,000
services of business
correspondent to
Shubhvidhi Bank with
respect to accounts in its
urban area branch
The following additional information is provided by ‘XY’ in relation to the above
receipts and payments:
(i) 10% of the inter-State supply of office stationery are made to unregistered

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 persons.
(ii) Each combi pack (containing a calculator and a diary) is priced at ₹ 800.
The calculator and the diary are individually priced at ₹ 700 and ₹ 200
respectively.
(iii) An invoice of ₹ 40,000 towards purchase of office stationery is missing and
no other tax paying document is available in respect of such goods.
(iv) All the figures mentioned above are exclusive of taxes, wherever applicable.
(v) Rates of CGST, SGST and IGST for all services, office stationery and
calculator are 9%, 9% and 18% respectively. Rates of CGST, SGST and IGST
for diary are 14%, 14% and 28% respectively.
(vi) Subject to the information given above, all the necessary conditions for
availing input tax credit have been fulfilled.
Details of opening balances of input tax credit as on 1st July is given hereunder:
Tax Amount (₹)
CGST 5,000
SGST 5,000
IGST 80,000
Compute the minimum net GST [CGST, SGST or IGST, as the case may be] payable
in cash by ‘XY’ for the month of July.

2 (b) Product 'Vertigo' was imported by Mr. Mrinal Sen by air from Singapore to 5
Hyderabad. The details of the import transaction are as under:
Particulars Euro
Price of 'Vertigo' at Singapore exporter's factory 7,500
Freight from factory of the exporter to load airport (Singapore airport) 300
Loading and handling charges at the local airport 200
Air freight from said airport to Hyderabad airport 1,350
Insurance charges 1,400
Purchase commission 200

Even though the bill of entry was presented on 20-9-2018, the aircraft, having
been diverted to another foreign airport due to technical reasons, landed at the
Hyderabad airport only on 21-9-2018.
The other details furnished by the importer are as under:
Particulars 20.09.2018 21.09.2018
Rate of basic customs duty 10% 12%
Exchange rate notified by CBEC per € ₹ 80 ₹ 79
Exchange rate prescribed by RBI per € ₹ 79.50 ₹ 80.50
Integrated tax leviable under Section 3(7) of the 6% 12%
Customs Tariff Act, 1975
Based on the above date, you are required to calculate the following:
(i) Assessable value of the product for the purpose of levying customs duty.
(ii) Customs duty and tax payable.

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3 (a) Mr. Gauri Shiva, a registered person in Punjab, supplies goods taxable @ 12% 5
[CGST @ 6%, SGST @ 6% & IGST @ 12%] in the States of Punjab and Haryana. He
has furnished the following details in relation to independent supplies made by
him in the quarter ending June, 20XX:
Supply Recipient Nature of Value (₹)
supply
1 Mr. A, a registered person Inter-State 2,20,000
2 Mr. B, a registered person Inter-State 2,55,000
3 Mr. C, an unregistered person Intra -State 1,80,000
4 Mr. D, an unregistered person Intra-State 2,60,000
5 Mr. M, an unregistered person Inter-State 3,00,000
6 Mr. N, an unregistered person Inter-State 50,000
7 Mr. O, an unregistered person Inter-State 2,50,000
8 Mr. P, an unregistered person Inter-State 2,80,000
9 Mr. Q, a registered person Intra-State 1,50,000
10 Mr. R, a registered person Intra-State 4,10,000
The aggregate annual turnover of Mr. Gauri Shiva in the preceding financial year
was ₹ 1.20 crore. With reference to rule 59 of the CGST Rules, 2017, discuss the
manner in which the details of above supplies are required to be furnished in
GSTR-1.

3 (b) Asha Ltd. supplies raw material to a job worker Kareena Ltd. After completing the 4
job- work, the finished product of 5,000 packets are returned to Asha Ltd. putting
the retail sale price as Rs. 20 on each packet. The product in the packet is covered
under MRP provisions. Determine the transaction value in the hands of Kareena
Ltd. under GST law from the following details: 7
Particulars Value in Rs.
Cost of raw material supplied 30,000
Job worker’s charges including profit 10,000
Transportation charges for sending the raw material to the job 3,000
worker
Transportation charges for returning the finished packets to Asha 4,500
Ltd.
Asha Ltd. paid certain technology transfer fees to ‘Reena Ltd.’, so 22,500
that ‘Kareena Ltd.’ can use the said technology in the given job-
work operation.
Note: Kareena Ltd. offered discount Rs. 2,000, provided full payment is made at
the time of rising invoice and the same is mentioned in the invoice. Asha Ltd.
made full payment at the time of issue of invoice.

3 (c) X Ltd. exported following goods to USA. Discuss whether any duty drawback is 5
admissible under section 75 of the Customs Act, 1962. 8
Product FOB Value of Exported Market price of Duty drawback
goods goods rate

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 A 2,50,000 1,80,000 30% of FOB
B 1,00,000 50,000 0.75% of FOB
C 8,00,000 8,50,000 3.50% of FOB
D 2,000 2,100 1.50% of FOB
Note: Imported value of product C is Rs. 9,50,000.

4 (a) Mutiservices Private Ltd., registered in Punjab, is engaged in supplying a variety 5

of services. Its turnover was ₹ 35 lakh in the preceding financial year. It has
provided the following information for the month of April:

Particulars Amount (₹)

Fee for the coaching provided to students for competitive 6,24,000
exams. The coaching centre is run by Mutiservices Private
Ltd. in Punjab (Intra-State transaction)
Receipts for services provided in relation to conduct of 19,200
examination in Pureit University, Delhi (providing education
recognized by Indian law), being an inter-State transaction
Amount received for transportation of students and faculty 24,000
from their residence to Lotus Public School - a higher
secondary school – and back (Intra-State transaction)
Amount received for providing the security and housekeeping 36,000
services in Dhaani Public School – a pre-school (Intra-State
transaction)
Note: Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively. All the
amounts given above are exclusive of taxes.

Compute the total GST liability of Multiservices Private Ltd. for the month of April.

4 (b) Mr. Vicky Frankyn, an unregistered famous author, received ₹ 3 crore of 4

consideration from Shiv Bhawan Publications (SBP) located in Indore for supply
of services by way of temporary transfer of a copyright covered under section
13(1)(a) of the Copyright Act, 1957 relating to original literary works of his new
book. He finished his work & made available the book to the publisher, but has yet
not raised the invoice.
Mr. Vicky Frankyn is of the view that SBP is liable to pay tax under reverse charge
on services provided by him. SBP does not concur with his view and is not ready
to deposit the tax under any circumstances.
Examine whether the view of Mr. Vicky Frankyn is correct. Further, if the view of
Mr. Vicky Frankyn is correct, what is the recourse available with Mr. Vicky
Frankyn to comply with the requirements of GST law as SBP has completely
refused to deposit the tax.

4 (c) A commodity is imported into India from a country covered by a notification 5

issued by the Central Government under section 9A of the Customs Tariff Act,
1975.

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 Following particulars are made available:
CIF value of the consignment: US$ 25,000
Quantity imported: 500 kgs
Exchange rate applicable: Rs. 60 = US $ 1
Basic customs duty: 12%
Social Welfare Surcharge @ 10%
As per the notification, the anti-dumping duty will be equal to the difference
between the cost of commodity calculated @ US $ 70 per kg. and the landed value
of the commodity as imported.
Appraise the liability on account of normal duties, cess and the anti-dumping duty.
Assume that only ‘Basic customs duty’ (BCD) and education and secondary and
higher education cess are payable. IGST @ 12% is also applicable.
Calculate the Customs Duty Payable.

5 (a) (i) Babla & Bros. is exclusively engaged in making exempt supply of goods and 5
is thus, not registered under GST. On 1 st October, the exemption available on
its goods gets withdrawn. On that day, the turnover of Babla & Bros. was ₹
50 lakh. Examine the eligibility of Babla & Bros. for availing ITC, if any.
(ii) Mamta Sales 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 Sales for availing ITC,
if any, on inputs and/or capital goods used in the supply of exempt goods.

5 (b) In the following cases based on information given and the query, give your 4
comments on the taxability under GST and the rate of GST applicable, if any: 2×7=14
(i) Space Bazar offers a free bucket with detergent purchased. It is composite
supply or mixed supply? Assume rate of GST for detergent @ 28% and bucket
@ 18%.
(ii) Mr. Ravi being a dealer in laptops, sold a laptop bag along with the laptop to a
customer, for Rs. 55,000. CGST and SGST for laptop @ 18% and for laptop
bag @ 28%. What would be the rate of tax leviable? Also find the GST liability.
(iii) A contract awarded by Kolkata Municipal Corporation (KMC) for repair of a
particular road to M/s B Ltd., with terms and conditions that the entire work
should be completed within 30 days. However, there is a delay of 10 days to
complete the work. KMC charged liquidated damaged of Rs. 1,20,000 and the
same recovered from M/s B Ltd. Applicable rate of CGST 9% and SGST 9%.
Previous year turnover of M/s B Ltd. Rs. 2 crores.
Find the following:
(a) Who is liable to pay GST on what amount?
(b) Total tax liability if any.
(iv) M/s M & Co. a sole proprietor, is in the business of selling furniture. Its owner

MOCK TEST SERIES – By CA Atul & Ajay Agarwal (AIR-1)

AIR1CA Career Institute (ACI)
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 took a set of furniture of furnish his house permanently. Will the transaction
be a supply in terms of GST Act?
Note: ITC on such furniture not availed.

5 (c) Compare between ‘Rules’ and ‘Regulations’ under the Customs Act, 1962. Bring out 5
the differences and similarities, if any.

6 (a) Chanchal started providing beauty and grooming services and inaugurated “Care 5
& Care Beauty Centre” in Janak Puri, Delhi on 01st April, 20XX. She opted to pay
tax under Notification No. 2/2019 CT (R) dated 07.03.2019 in the said financial
year. The aggregate turnover of Care & Care Beauty Centre for the quarter ending
30th June, 20XX was ₹ 20 lakh. Further, for the half year ending 30th September,
20XX, the turnover reached ₹ 50 lakh. Care & Care Beauty Centre recorded a rapid
growth and the turnover reached ₹ 70 lakh by the end of October, 20XX.
(i) Determine the total tax liability of Care & Care Beauty Centre by the end of
October, 20XX.
(ii) Care & Care Beauty Centre wishes to opt for composition scheme from the
next financial year. You are required to advise it whether it can do so?
Note: Rate of GST applicable on such services is 18%.

6 (b) The due date for payment of tax by a person paying tax under section 10 of the 4
CGST Act, 2017, i.e. a composition supplier is aligned with the due date of return
to be filed by the said person. Discuss the correctness or otherwise of the
statement.

6 (c) M/s IES Ltd. (assessee) imported certain goods at US $ 20 per unit from an 5
exporter who was holding 30% equity in the share capital of the importer
company. Subsequently, the assessee entered into an agreement with the same
exporter to import the said goods in bulk at US $ 14 per unit. When imports at the
reduced price were effected pursuant to this agreement, the Department rejected
the transaction value stating that the price was influenced by the relationship and
completed the assessment on the basis of transaction value of the earlier imports
i.e., at US $ 20 per unit under rule 4 of the Customs Valuation (Determination of
Value of Imported Goods) Rules 2007.
State briefly, whether the Department's action is sustainable in law?

MOCK TEST SERIES – By CA Atul & Ajay Agarwal (AIR-1)

AIR1CA Career Institute (ACI)
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