Chapter 1

Introduction of GST
Question 4
Explain the concept of 'Dual GST' (Nov 17-CA final)
Existing Answer : India has adopted a dual GST which is imposed concurrently by the Centre
and States, i.e. Centre and States simultaneously levy GST on supply of goods or services or
both. Centre has the power to tax intra-State sales &States are empowered to tax services.
GST extends to whole of India including the State of Jammu and Kashmir.
Corrected Answer : under dual GST model, GST is imposed concurrently by centre &
States, i.e. Central & States, simultaneously tax goods and services. Central has power to
levy GST on inter state supplies of goods and / or services. Corrected
 Chapter 2
Question 72
Charge of Tax & Concept of Supply
Missing Notes For Question 72:-
1. 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]. Consequently, being an inter-State supply of goods,
supply of packages to Sukhija Gift Shop of Punjab is subject to IGST @ 18% each.
Further, value of supply includes interest or late fee or penalty charged for delayed
payment of any consideration for any supply in terms of section 15(2)(d) of the CGST
Act, 2017. Thus, penalty of ` 10,000 [considered as inclusive of GST] collected from
Sukhija Gift Shop for the delayed payment will be included in the value of supply. The
total value of supply is ` 6,08,475 [` 6,00,000 + (` 10,000 × 100/118)]
2. Services by way of transportation of goods by road except the services of a Goods
Transportation Agency (GTA) are exempt vide Notification No. 9/2017 IT ® dated
28.06.2017. Since Jaskaran is not a GTA, transportation services provided by him are
exempt from GST. However, since the generators are invariably hired out along with their
transportation till customer's premises, it is a case of composite supply under section
2(30) of the CGST Act, 2017 wherein the principal supply is the renting of generator.
As per section 8(a) of the CGST Act, 2017, the composite supply is treated as the
supply of the principal supply. Therefore, the service of transportation of generators will
also be taxed at the rate applicable for renting of the generator (principal supply).
Consequently, being an inter-State supply of service, service of hiring out the
generators to Morarji Banquet Halls of Chandigarh is subject to IGST @ 18% each.
3. As per section 7(1)(c) of the CGST Act, 2017, an activity made without consideration can
be treated as supply only when it is specified in Schedule I of the CGST Act, 2017. Para 2.
of Schedule I provides that 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, are to be treated as supply even if made without consideration.
However, since the question does not provide that customers are related to
Jaskaran, free gifts given to the customers cannot be considered as a supply under section
7. Consequently, no tax is leviable on the same.
Further, the catering services provided by Jaskaran to his elder brother without
consideration will be treated as supply as Jaskaran and his elder brother , being members
of same family, are related persons in terms of explanation (a)(viii) to section 15 of the
CGST Act, 2017 and said services have been provided in course/furtherance of business.
Value of supply of services between related persons, other than through an agent is
determined as per rule 28 of the CGST Rules, 2017. Accordingly, the value of supply is the
open market value of such supply; if open market value is not available, the value of
supply of goods or services of like kind and quality. However, if value cannot be
determined under said methods, it must be worked out based on the cost of the supply
plus 10% mark -up. Thus, in the given case, value of catering services provided to the elder
brother of Jaskaran is ` 60,500 [` 55,000 × 110%]. Further, being an intra-State supply of
services, catering services are subject to CGST and SGST @ 2.5% each.
5. As per Notification No. 13/2017 CT(R) dated 28.06.2017, GST is payable by the recipient
on reverse charge basis on the receipt of services of transportation of goods by road from a
goods transport agency (GTA) provided such GTA has not paid GST @ 12%. Since in the
given case, Jaskaran has received services from a GTA who has paid GST @ 12%, reverse
charge provisions will not be applicable.
 Chapter 5

Time of Supply
Question 33
1) In case goods are sent for sale on Approval / Return Basis, last day of invoice is date of
From the following Information determine time of supply, if goods are supplied on
acceptance by recipient OR
approval basis
Completion of 6 month if acceptance not given within 6 month. So, Invoice issued after last
Sr. Sale as App. Removal Issue of Accepted by Receipt of date i.e. 15/11/17. Hence, TOS is on 15/11/17.
No. Basis of Goods Services Receipient Payments

1. Acceptance Communicated 01/11/17 25/11/17 15/11/17 25/11/17 Conclusion :-

Within 6 month of Removal Removal Issue of Accepted Receipt Time of
Amt. paid to Supplier before
Sr. Sale as App.
2. 01/11/17 25/11/17 15/11/17 12/11/17 by of
of Goods Services Supply
informing acceptance No. Basis Receipient Payments
Acceptance Not Communicated Acceptance
01/10/17 15/05/18 15/05/18 2/05/18 1.
Within 6 month of Removal 01/11/17 25/11/17 15/11/17 25/11/17 15/11/17
Corrected Communicated
Legal Provision:- Where Goods are being sent for approval on Sale/Return are removed before Within 6 month of
Removal
Supply taken place, Amt. paid to Supplier
Invoice shall be issued.
2. 01/11/17 25/11/17 15/11/17 12/11/17
(a) U/s 12(2) -12/11/17
before informing (b) N/No.66/2017 -15/11/17
(a) Before or at the time of Supply or acceptance
(b) 6 months from the date of Removal
01/04/18 (i.e. 6
Whichever is earlier 3. Acceptance Not 01/10/17 15/05/18 15/05/18 2/05/18
Communicated month from
Determination of TOS :- TOS in above case shall be determined as per Sec. 12 (2) read
Within 6 month Removal)
with N/No. 66/2017. i.e. of Removal Corrected
Ü Date of Invoice or
Ü Last date of Invoice
Whichever is earlier.
So, in given case, Last date of Invoice.
 Chapter 6

Value of Supply
Question 32
Question 49 (Rule 29)
Vsmart Ltd. owns coaching institute in Pune, the institute charges `12,000 per student
During Jan, 20XX, Maharashtra Government run following two lottery schemes-
for giving training in GST. However this training programme is subsidized by different
1. Maha lottery (face value : `200 price as notified in the official Gazette: `180)
institutes as follows- State Government of Maharashtra : `300 per student , Veer
2. Jackpot (face valu : `500, price as notified in the official Gazette `470)
chargeable trust : `100 per student and Government of US : `100 per student.
Maha lottery can be sold only in Maharashtra. Jackpot can be sold even in other States.
consequently, Corrected Vsmart Ltd. charges `11,000 + GST per student.
On Jan, 20XX, 5000 tickets of Maha lottery sold and 2000 tickets of Jackpot lottery
Answer:- Legal Provision:- sec 15(2)(e),
First write general provision here Note 1 refer pg. no 76 sold. Determine the amount of GST in this transaction

Conclusion:- Consequently, value of taxable supply and GST will be calculated as follows Answer: Maha lottery cannot be sold outside panjab. Applicable GST rate is 12%.

Particulars Amount (`) Jackpot can be sold even outside Panjab. Appicable GST rate in the case of Jaackpot is 28%.
Transaction Value 11,000 Nature of Taxable Value (`) IGST @ 28% CGST @ 6% SGST @ 6%
Subsidy paid by Veer Charitable trust 100 supply (`) (`) (`)
Subsidy paid by US Government Intra State 8,92,857 53,571 53,571
100
Supply (`200 x 5000)x 100/ 112 2,18,750
Value of taxable supply 11,200
Inter State 7,81,250 -
CGST @9% 1,008 -
Supply (`500 x 2000) x 100 /128
SGST @9% 1,008 Corrected
Total 13,016

Notes: Amount to be collected from students will be follows : `11,000 + CGST 1,008 + SGST 1,008.
 Chapter 8

Input Tax Credit

Question : 36
UCO Bank has a branch in Ahmedabad engaged in supply of services by way of accepting advances which is not opting for section 17(2), has the option to avail of every month an
deposits and extending loans opted for the option to avail credit of 50% of input tax of amount equal to 50% of the eligible input tax credit on inputs, capital goods and input
the month of which input tax relates under section 17(4). It has a head office at services in that month and rest shall lapse.
Mumbai. Since, UCO Bank has availed an option to avail every month equal to 50% of the eligible
Corrected
Total Input tax credit includes Credit pertaining to the month of Oct 2017:- Corrected
input tax credit on inputs, capital goods input services. Thus in given case –
SI.No Particulars Input tax (`)
CGST & SGST Sl.No Particular CGST/SGST (`) IGST (`)
Services availed from its distinct establishment i.e. 1 Input tax credit available from its distinct 27,000
1 27,000 -
from branch establishment i.e. 1,20,000 - 27,000 Corrected
2 Outdoor catering services received for its employees 32,000
2 Outdoor catering services received for
Nil -
Goods obsolete and value of which to be written its employees
3 11,000
off in books 3 Goods obsolete and value of which to be written Nil
Auditing Services 25,000 off in books
4
4 Auditing Services 25,000
5 Goods for personal use of employees 7,500
Stationery Purchased 15,000 5 Goods for personal use of employees Nil
6
7 Xerox Machine Purchased 70,000 6 Stationery Purchased 15,000
7 Xerox Machine Purchased 70,000
Determine the amount of Input tax credit of October, 2017 that can be availed by
UCO Bank. Total ITC Available 1,10,000 27,000
Answer:- Total Eligible ITC 55,000 (50%) 27,000 (100%)
As per section 17(4) of CGST Act, every banking company or financial institution, including [Note 1]
NBFC, engaged in supply of services by way of accepting deposits or extending loans or Note 1 : ITC for on supply of services availed from its distinct establishment i.e.,
Ahmedabad Branch 50% restriction is not applicable. Hence, full ITC can be availed.
 Question : 58
Mr. X, a supplier of goods, pays GST under regular scheme. Mr. X is not eligible for any
threshold exemption. He has made the following outward taxable supplies in a tax
period:
Particulars (`)
Intra-State supply of goods 8,00,000
Corrected Inter-State supply of goods 3,00,000
He has also furnished the following information in respect of purchases made by
him in that tax period:
Particulars (`)
Intra-State purchases of goods 3,00,000
Inter-State purchases of goods 50,000

Mr. X has following ITCs with him at the beginning of the tax period:
Particulars (`)
CGST 30,000
SGST 30,000
IGST 70,000
Note:
(i) Rate of CGST, SGST and IGST to be 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 net GST payable by Mr.X during the tax period. Make suitable assumptions as

required.
 Chapter 9

Registration
Question 21 As per the above stated provision, Shagun shall be liable to pay an amount of penalty
(I) Shagun started supply of goods in Vasai, Maharashtra from 01.01.20XX. Her turnover which shall be `1,26,000.
exceeded ` 20 lakh on 25.01.20XX. However, she didn't apply for registration. Conclusion:- Therefore, Shagun has not applied for registration within the prescribed time
Determine the amount of penalty, if any, that may be imposed on Shagun on limit & shall be liable to pay the penalty amount of `1,26,000.
31.03.20XX, if the tax evaded by her, as on said date, on account of failure to obtain
ii) As per section 122(3)(d) of the CGST Act, 2017 stipulates that any person who
registration is ` 1,26,000.
(ii) Sagar, managing director of Telecom Solutions Ltd., is issued a summon to appear fails to appear before the officer of central tax, when issued with a summon for
before the central tax officer to produce the books of accounts of Telecom Solutions appearance to give evidence or produce a document in an inquiry is liable to a
Ltd. in an inquiry conducted on said company. Determine the amount of penalty, if penalty which may extend to ` 25,000. Therefore, penalty upto ` 25,000 can be
any, that may be imposed on Sagar, if he fails to appear before the central tax officer.
imposed on Sagar, in the given case. Corrected
Answer :-
(I) Legal provision:- As per section 22 of the CGST Act, 2017, a supplier is liable to be
registered in the State/Union territory from where he makes a taxable supply of goods or
services or both, if his aggregate urnover in a financial year exceeds ` 20 lakh.
As per section 122(1)(xi) of the CGST Act, 2017 stipulates that a taxable person who is
liable to be registered under the CGST Act, 2017 but fails to obtain registration shall be
liable to pay a penalty of:
(a) ` 10,000 or
(b) an amount equivalent to the tax evaded, whichever is higher.
Discussion:- In the given case, The aggregate turnover of Shagun has exceeded the threshold
limit exemption of ` 20 lakhs as on 25.01.20XX and thus liable for registration & shall apply
for registration within 30 days of becoming liable which has been failed to obtain by
Shagun.
 Chapter 10

Tax Invoice
Question : 29
What is the time period within which invoice has to be issued in a case involving
continuous supply of services? (ICAI)
Answer :- In case of continuous supply of services

Particulars Issue of Invoice

Due date of payment is ascertainable from On/before due date of payment
the contract
Not so ascertainable Before/at the time of receipt of payment
Payment is linked to the completion of an on/before the date of completion of that
event event. Corrected
 Chapter 11

Exemption under GST

Question : 29
XYZ Ltd. has a Hotel which he runs in Manali, for which he charges the following tariffs purposes, having value of supply of a unit of accommodation below one thousand rupees
and gives the following details. Calculate the GST liability per day or equivalent are exempt
Room Declared Discount No. of room days Booking Note:- As per N/N 13/2018 -CT (R) dt 26/07/2018, words ‘Declared tariff’ has been
Type Tariff offered Room days substituted by the words ‘Value of supply’. Thus, now after determining the value of
A 1,500 300 10*30=300 [It basically means that 10 such rooms are in the 25 supply if it is less than `1000 then its exempted.
hotel of which occupancy on an Average was 70%] Question : 33
B 900 200 20*30 = 600 [It basically means that 20 such rooms are in 120 Compute value of taxable supplies and GST from following sums received by M/s SKC
the hotel of which occupancy on an Average was 70%] Ltd. (exclusive of GST)
Answer (1) Holding a dance programme, entry tickets whereof were sold for ` 250 per
1) For Type A Rooms person ` 30 lacs
The value of supply is exceeding ` 1000 & thus it does not fall within the purview of Sl. No. 14 (2) Admission to Planetarium: ` 4 lakh, entry ticket whereof is ` 350 per person
of Exemption Notification 12/2017 Central Tax (Rate) wherein Services by a hotel, inn, guest (3) Holding an cricket match between India and South Africa organized by BCCI,
house, club or campsite, by whatever name called, for residential or lodging purposes, having entry tickets whereof were sold for ` 550 per person : ` 610 lacs
value of supply of a unit of accommodation below one thousand rupees per day or equivalent (4) Holding an Indian Premier League (IPL) Match between Pune warriors & Royal

are exempt Corrected Challengers entry ticket whereof were sold for ` 250 per person : ` 80 Lacs
Value of taxable service = `1200 (1500-300) * 25 days * 7 rooms (10 rooms x 70 %) (5) Holding an award function, entry tickets whereof were sold for ` 200 per
= `2,10,000 person : ` 40 lacs
2) For Type B Rooms (6)Admission to Music concert of A.R Rehman entry ticket were sold for `850 per
Since the value of supply is less than `1,000 (900-200 =700) hence, it falls within the purview person
of Sl. No. 14 of Exemption Notification 12/2017 Central Tax (Rate) wherein Services by a (7) Running a video-parlour showing cinematographic films (ticket is ` 600 per

hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging person): `15 lacs
(8) Acting as an events manager for organisation of an entertainment event : ` 8
 lacs (ii) admission to planetarium
(9) Receipt from running a circus ` 15 lacs (iii) Acting as an event manager for organisation
(10) Ballet, with ticket prices of `300 per person : ` 25 lacs entertainment event
(11) Showing cinematographics films (ticket is 700 per person) ` 15 lacs (iv) Circus admission
(12) Gambling Services and Casinos : Bet Value ` 150 lacs, Earnings ` 5 lacs Both are exempted
(v) Admission to cinematography films
Corrected
(vi) Video parlor showing Cinematographic film
Answer
(vii) Ballet show
Particulars Value
(viii) Gambling and Casino services
(1) Holding a dance programme, entry tickets whereof were sold for `250 per person —
(2) Admission to Planetarium (entry ticket is below ` 500 per person) -
(3) Holding a cricket match between India & South Africa organized by BCCI, entry tickets ` 610 Lacs
whereof were sold for ` 550 per person (taxable as ticket price is above `500 per
person)
(4) Holding an Indian Premier League (IPL) Match between Pune Warriors and Royal
Challengers entry ticket whereof were sold for `250 per person (exempt, as price is —
upto ` 500 per person)
(5)Holding an award function, entry tickets whereof were sold for `200 per person
[Exempt, as price is upto `500 per person][Note 1] —
(6) Admission to Music concert of A.R Rehman entry ticket exceeds the limit of ` 500 `25 Lacs
(7) Running a video-parlour showing cinematographic films [ticket is `600 per person] `15 Lacs
(8) Acting as an event manager for organisation entertainment event `8 Lacs
(9) Receipts from running circus (assumed ticket price exceeds `500 per person] `15 Lacs

(10) Ballet, with ticket prices of `300 per person -

(11) Showing cinematographic films [ticket is `700 per person) `15 Lacs
(12) Gambling Services and Casinos `150 Lacs
Value of Taxable Supplies ` 838 lacs

Note :
(1) Services by way of right to admission to an award function, concert, musical performance
and any recognized sports event where the consideration for admission is not more than
`500 per person is exempt.
(2) GST is applicable at prescribed format for the following services irrespective of ticket price
(i) Holding a dance programme