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Indirect Tax
Test Paper 2 -FULL SYALLABUS

Duration: 3 Hour Question Paper Marks: 100

This Question Paper comprises of two parts, Part I and Part II

Part I comprise of multiple choice questions (MCQ’s)
Part II Comprise 6 questions which require descriptive type answers. 1 question is
in choice.

Part I

Question 1 (a) (Case Scenario) (5 Marks)

Bunge India Logistics Limited (XLL) is into warehousing and logistics business.It has two Container Freight
Stations (CFS): one at Inland Container Depot (ICD) Dadri, Uttar Pradesh and other at ICD Tughlakabad, Delhi.
XLL is also engaged in the business of freight forwarding and multimodal transportation. Intermittently, XLL also
deals in trading of goods, primarily in export to countries outside India.
XLL started its operations on 30th June by setting up head/ corporate office in Gurgaon, Haryana and two CFS at
U.P. and Delhi. Services as well as invoicing to customers was done from Delhi and U.P. unit only. Top management
was placed at the head office for the management of the company.
The aggregate turnover of the XLL’s Delhi unit crossed Rs. 20 lakh on 31st October. It applied for GST registration
for Delhi on 25th November. Registration was granted on 7th December. GST in respect of stock of goods at Delhi
as on 30th October was Rs. 50 lakh, on 25th November was Rs. 40 lakh and on 7th December was Rs. 20 lakh.

The primary business of XLL is container handling service of import/export containers. In July next year, a shipper
placed a work order on XLL for handling of an export container from ICD Tughlakabadto Dubai UAE, through
Nhava Sheva seaport in Mumbai. XLL wasresponsible for stuffing goods in containers at ICD, assisting in obtaining
customs clearance, and transportation of goods from ICD to seaport. XLL requested the customer to issue e-way
bill for the movement of customs sealed containers from ICD to seaport as the value of goods in container exceeded
Rs. 50,000. However, the customer denied issuing e-way bill stating that the responsibility to issue the same is
on the person who arranges the transport of goods. Consequently, the management of XLL issued e-way bill with
the assistance of a consultant.
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There is a green cess that is applicable on the goods handled through CFS for exports outside India. XLL as a
policy deposits green cess with the Government in the name of the customer and recovers such cess at actuals
from the customer.
Few customers of XLL are based out of Nepal & Bhutan. It provides container handling services for their containers/
cargo which are in transit to Nepal or Bhutan. It receives consideration from Nepal/ Bhutan customers in INR
(Rs.).

All the above amounts are exclusive of GST, wherever applicable. Subject to the information given above, assume
that all the other conditions necessary for availing ITC have been fulfilled.
Based on the facts of the case scenario given above, choose the mostappropriate answer to Q. Nos. 1.1. to
1.5.:-
1.1. Which of the following statements is correct regarding eligibilityof ITC on opening stock at the time of
new registration?
(a) XLL can avail credit of Rs. 50 lakh.
(b) XLL can avail credit of Rs. 40 lakh.
(c) XLL can avail credit of Rs. 20 lakh.
(d) XLL cannot avail credit on opening stock.
1.2. Which of the following statements is correct regarding GSTregistration by XLL?
(a) XLL was liable for registration of only Delhi unit.
(b) XLL was liable for registration of Delhi and UP units.
(c) XLL was liable for registration of Delhi, UP and Haryana units.
(d) XLL was liable for normal registration at Delhi and UP unit,and ISD registration at Haryana unit.
1.3. Which of the following statements is correct regarding generation of e-way bill for movement from ICD
Tughlakabad to Nhava Sheva seaport in Mumbai?
(a) E-way bill was not required to be generated since goods were being transported from ICD to seaport.
(b) E-way bill was mandatorily required to be generated irrespective of the value of the goods being
transportedas such goods were being transported from ICD to seaport.
(c) E-way bill was required to be generated since the valueof goods being transported exceeded Rs. 50,000.

(d) E-way bill was rightfully issued by Bunge India Logistics Limited being the transporter of goods.
1.4. Which of the following statements is correct regarding value ofcontainer handling services provided by the
company?
(a) Value of the taxable container handling services shouldexclude transportation cost and green cess.
(b) Value of the taxable container handling services shouldexclude green cess but include transportation
cost.
(c) Value of the taxable container handling services shouldexclude transportation cost but include green
cess.
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(d) Value of the taxable container handling services shouldinclude transportation cost and green cess.
1.5. Which of the following statements is correct regarding invoicing to Nepal/ Bhutan customers?
(a) GST is not chargeable on container handling services provided to Nepal/ Bhutan customers as the place of
supply of such services is outside India.
(b) GST is not chargeable on container handling services provided to Nepal/ Bhutan customers as the same
qualifies as export of service.
(c) GST is not payable on container handling services provided to Nepal/ Bhutan customers as the supply of
services associated with transit cargo to Nepal and Bhutan are exempt services.
(d) GST is chargeable on container handling services provided to Nepal/ Bhutan customers.

Question 1 (b) (Case Scenario) (5 Marks)

Varun Textile Pvt. Ltd. (hereinafter referred to as VTPL) is engaged in manufacturing and trading of textile products.
Its head office is located in Surat, Gujarat. Besides, it has three other units – Darsh, Kunj and Nitya located in
Mumbai (Maharashtra), Surat (Gujarat) and Pune (Maharashtra) respectively.
The head office (hereinafter referred to as VTPL-HO) and Units Kunj and Nitya are registered under GST. Unit Darsh
is not registered under GST as it is exclusively engaged in supply of exempt goods. Further, VTPL- HO in Surat,
Gujarat is also separately registered under GST as Input Service Distributor (ISD).
VTPL-HO purchased goods worth Rs. 5,00,000 from Mr. Jayesh. However, such goods were directly sent to the
premises of registered job worker, Mr. Dinesh, without being first received at VTPL’s manufacturing unit.
Goods were cleared by supplier – Mr. Jayesh - on 10th April, but were received by the job worker on 16th April. The
job worker carried out the job work and supplied the goods to M/s. Mahendra Enterprises on 13 th April of next
year on payment of tax on the direction of VTPL-HO. VTPL-HO has not declared Mr. Dinesh’s premises as additional
place of business in registration details on GSTN portal.
VTPL-HO bought a new motor vehicle worth Rs. 12,00,000 in exchange of old motor vehicle (Exchange value of
old motor vehicle is Rs. 4,50,000)on 5th July, having seating capacity of 13 persons excluding the driverfor the
daily transport of its employees. Old motor vehicle was purchased 2 years before on 1 st September for Rs. 8,00,000.
Seatingcapacity of the old motor vehicle was 10 persons including driver. Rate of GST on motor vehicle is 18%.
On 25th July, VTPL-HO engaged Bahubali Ltd., a company (registered under GST in Mumbai, Maharashtra) dealing in
textile machineries, to supply machineries worth Rs. 30,00,000 for a spinning unit to be set upat Satara,
Maharashtra. Machineries are supplied in completely knocked down condition at the Satara unit and assembled by
the engineers of Bahubali Ltd. Satara unit is yet to be registered under GST.
Following information is available in respect of the units for which VTPLis registered under GST as an ISD, for
month of July:
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Input Service CGST (Rs.) SGST IGST Remarks

(Rs.) (Rs.)

X 50,000 50,000 - Used in Unit Darsh

Y - - 1,20,000 Used in Unit Nitya andDarsh

Z 4,000 4,000 - Used in Unit Kunj [Input Service Z is in respect

of servicing of motor bike (with engine capacity
of 120 cc) used in Kunj Unit for business
purpose]

Total turnover of the units for the last financial year are given under.

Unit Turnover
(Rs.)
Darsh 15,00,000
Kunj 8,00,000
Nitya 10,00,000

Note:
1. Applicable rate of CGST and SGST is 6% each and IGST is 12%on all inward and outward supplies,
unless otherwise specified.
2. All the units are operational during the year unless specificallymentioned otherwise in the question.
3. All the amounts given above are exclusive of GST, whereverapplicable.
4. Subject to the information given above, assume that all the otherconditions necessary for availing ITC
have been fulfilled.
Based on the facts of the case scenario given above, choose the mostappropriate answer to Q. Nos. 1.1. to
1.5. as follows:-

1.1. Which of the following statements is/are correct in respect of thegoods sent for job work to Mr. Dinesh?
1. VTPL is not eligible to take input tax credit as it has not declared the premises of the job worker as
its additional place of business.
2. VTPL is required to reverse the input tax credit as job worker returned the goods after 1 year from
10th April.
3. VTPL is not required to reverse the input tax credit as job worker returned the goods before 1
year from 16th April.
4. VTPL cannot directly sell the goods to M/s Mahendra Enterprises from job worker’s premises as
VTPL has not declared the premises of the job worker as its additional place of business.
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(a) 1st and 4th

(b) 2nd and 4th
(c) Only 3rd
(d) Only 4th

1.2. Which of the following statements is true in context of input tax credit to be distributed by ISD VTPL-HO
to Unit Kunj?
(a) CGST and SGST credit of Rs. 54,000 each and IGST creditof Rs. 1,20,000 will be distributed as
IGST credit, to Unit Kunj in proportion to its turnover of preceding financial year to the total turnover
of all the three units of the preceding financial year.
(b) Ineligible credit of CGST and SGST of Rs. 4,000 each will be distributed as ineligible credit of
IGST of Rs. 8,000 to Unit Kunj.

(c) Credit of CGST and SGST of Rs. 4,000 each will be distributed as credit of IGST of Rs. 8,000 to
Unit Kunj.
(d) Ineligible credit of CGST and SGST of Rs. 4,000 each will be distributed as ineligible credit of
CGST and SGST of Rs. 4,000 each to Unit Kunj.

1.3. Amount to be distributed by VTPL-HO to Unit Darsh is-

(a) CGST and SGST credit of Rs. 50,000 each; IGST credit of Rs. 72,000.
(b) CGST and SGST credit of Rs. 50,000 each; IGST credit of Rs. 54,545.
(c) IGST credit of Rs. 1,72,000.
(d) nil as Unit Darsh is not registered under GST and isexclusively engaged in supply of exempt goods.

1.4. Place of supply of the machinery supplied by Bahubali Ltd. on25th July and the tax charged thereon
is:
(a) Surat, Gujarat; CGST and SGST
(b) Satara, Maharashtra; CGST and SGST
(c) Mumbai, Maharashtra; IGST
(d) Surat, Gujarat; IGST
1.5. Amount of ITC available on purchase of new motor vehicle inexchange of old motor vehicle as on
5th July is ___ _.
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(a) nil as ITC is blocked on motor vehicle under section 17(5)of the CGST Act, 2017
(b) Rs. 2,16,000
(c) Rs. 1,35,000
(d) Rs. 2,97,000

Question 2 (2 Marks)

M/s. Aman Plastics is a manufacturer of plastic toys. It is registered under GST in Shimla, Himachal Pradesh.
It procures its raw materials from Punjab. During the month of April 2020, it purchased material of Rs. 35.00 lakh
and paid IGST thereon amounting to Rs. 6.30 lakh. It supplied 30% of its production in the Stateof Jammu and
Kashmir, whereas the 70% of its production was supplied taxable @ 0.1% to a merchant exporter during the
month of April 2020.
The returns for the month of April 2020 were duly filed in time, i.e. within the due date of 20 th May, 2020. The
last date upto which the taxpayer can claim refund of input tax credit on account of inverted duty structure is:
(a) 20th April, 2022
(b) 20th May, 2022
(c) 31st March, 2023
(d) 20th April, 2021

Question 3 (2 Marks)

Which of the following transactions does not qualify as supply underGST law?
(a) Disposal of car without consideration and where the supplier has not claimed input tax credit on such
car.
(b) When a principal makes supplies to his agent who is also registered under GST and is situated within the
same State and the invoice for further supply is issued by the agent in his name.
(c) When the Head Office makes a supply of services to its own branch outside the State.
(d) When a person imports services without consideration for the purposes of his business from his elder
son living outside India.

Question 4 (2 Marks)

Mrs. Arshiya is a consultant. She has provided the following detailsrelating to services provided and received
by her:
1. Supply of management consultancy services for Rs. 500,000 p.a.
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2. Supply of accounting services for Rs. 200,000 p.a.

3. Renting of immovable property for residential purposes for Rs. 10,000 p.m.
4. Management consultancy services provided to a hospital for Rs. 50,000 one time
5. Services provided to a client outside India for Rs. 50,000 p.m.
6. Services received from a lawyer for Rs. 1,00,000
Note: Assume that amounts given above are exclusive of GST, whereverapplicable.
What shall be her aggregate turnover for the financial year under GSTprovided her aggregate turnover during
previous financial year was Rs. 24 lakh?

(a) Rs. 9,10,000

(b) Rs.15,70,000
(c) Rs. 14,70,000
(d) Rs. 8,20,000

Question 5 (2 Marks)

State whether the following statements are true or false:

1. Zero rated supply means supply of any goods or services or both which attracts nil rate of tax.
2. Exempt supply means export of goods or services or both or supply of goods or services or both to a Special
Economic Zone developer or a Special Economic Zone unit.
3. Non-taxable supply means supply of goods or services or both which is not leviable to tax under the CGST Act,
2017 but leviable to tax under the IGST Act, 2017.
4. ITC may be availed for making zero rated supply of exempt goods.
(a) False, False, False, True
(b) True, False, False, False
(c) True, True, False, False
(d) False, False, False, False

Question 6 (2 Marks)

Mr. Ronit Shekh, proprietor of M/s. Royal Shoe & Company, is running a business of manufacturing shoes with the
brand name of ‘JUNOON’. The manufacturing unit is located in Delhi and is registered under GST. However, due to
low profitability in the business, he has decided to transfer his business to his friend Mr. Dilip Tijori. Mr. Dilip Tijori
is already running the business of manufacturing shoes under a proprietorship firm named M/s Hawai Shoes &
Company which is located in Mumbai and registered under GST.
Mr. Ronit Shekh has approached you to help him with the issue of transfer of unutilized input tax credit in electronic
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credit ledger of M/s. RoyalShoe & Company to M/s Hawai Shoes & Company.
Advise Mr. Rahul Roy with the correct option in accordance with the provisions of the CGST Act, 2017:
(a) M/s. Royal Shoe & Company cannot transfer unutilised input tax credit in its electronic credit ledger to M/s
Hawai Shoes & Company as the proprietors are different.
(b) M/s. Royal Shoe & Company can transfer the unutilized input tax credit in its electronic credit ledger to M/s
Hawai Shoes & Company and it can further be utilized in setting off GST liability for succeeding period.
(c) M/s. Royal Shoe & Company can transfer unutilized input taxcredit in its electronic credit ledger to M/s
Hawai Shoes & Company and it can be further utilized in setting off GST liability for a period upto the month
of September following the year in which ITC was transferred.
(d) M/s. Royal Shoe & Company cannot transfer unutilized input tax credit in its electronic credit ledger to M/s
Hawai Shoes & Company but can claim refund of such unutilized input tax credit.

Question 7 (2 Marks)

In which of the following cases, importer can claim pilferage and choose not to pay duty under section 13 of the
Customs Act, 1962 provided the goods are not restored to the importer after pilferage?
(i) Goods pilfered while on high seas
(ii) Goods pilfered before unloading
(iii) Goods pilfered after unloading but before order for homeconsumption given by proper officer
(iv) Goods cleared for home consumption
(a) (i) and (ii)
(b) (i) and (iii)
(c) Only (ii)
(d) Only (iii)

Question 8 (2 Marks)

Bata Shoe Co. sent certain goods abroad for repairs. Bata Shoe Co. has been advised by their consultants that
they will have to pay customs duty only on fair cost of repairs, freight and insurance charges, both ways, on
re-import of exported goods under Notification No. 45/2017 Cus dated 30.06.2017 provided they fulfill following
conditions:
(i) The re-importation is done within 3 years or, if time is extended,within 5 years.
(ii) The exported and re-imported goods are same.
(iii) The ownership of goods should not have changed. Which one of the above-mentioned conditions is/are
correct?
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(a) (i), (ii) and (iii)

(b) (ii) and (iii)
(c) (i) and (iii)
(d) Only (ii)

Question 9 (2 Marks)

Certain goods were imported by air. The free on board value of goodsis Rs. 100. The cost of transport, loading,
unloading and handling charges up to place of importation is Rs. 25. The cost of insurance is Rs. 10. For the
purposes of rule 10(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, which
of the following shall be added to the value of imported goods?
(a) Cost of transport, loading, unloading and handling charges – Rs. 25; and Cost of insurance Rs. 10
(b) Cost of transport, loading, unloading and handling charges – Rs. 25; and Cost of insurance Rs.
1.125
(c) Cost of transport, loading, unloading and handling charges – Rs. 20; and Cost of insurance Rs.
1.125
(d) Cost of transport, loading, unloading and handling charges – Rs. 20; and Cost of insurance Rs. 10

Question 10 (2 Marks)

Which of the following statements is false?

(a) Anti-dumping duty is imposed when any article is exported from any country to India at more than its
normal value.
(b) Safeguard duty shall not be applicable on articles imported by a 100% EOU or SEZ unit unless specifically
made applicable.
(c) Safeguard duty shall not be imposed on articles originating from developing country if the share of
imports of that article fromthat country ≤ 3% of the total imports of that article into India.
(d) Central Government may exempt notified quantity of any article, when imported from any country into
India, from whole/part ofthe safeguard duty.

Question 11 (2 Marks)

Which of the following statements is/are incorrect in relation to refund provisions under the Customs Act, 1962?
(i) Interest on delayed refund is payable to the applicant only if duty ordered to be refunded is not refunded within
3 months from the date of receipt of application.
(ii) If imports were made by an individual for his personal use, the amount of duty found refundable, is paid to the
applicant instead of being credited to the Consumer Welfare Fund.
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(iii) Application for refund has to be made within 1 year of payment of duty where duty is paid under protest.
(iv) Doctrine of unjust enrichment is applicable if refund of duty is relatable to drawback of duty payable under
sections 74 and 75.
(a) (i) and (iv)
(b) (i) and (ii)
(c) (iii) and (iv)
(d) (ii), (iii) and (iv)
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Part II

Question 12 (a) (8 Marks)

‘PQ’, a statutory body, deals with the all the advertisement and publicity of the Government. It has issued
a release order to ‘Star Plus’ channel (registered in State ‘A’) for telecasting an advertisement relating to one
of the schemes of the Government in the month of September 20XX. The advertisement will be telecasted in
the States of ‘A’, ‘B’, ‘C’, ‘D’ and ‘E’. The total value of the service contract entered into between ‘Star Plus’ and
‘PQ’ is ₹ 10,00,000 (exclusive of GST).

You are required to determine the place of supply of the services in the instant case as also the value of supply
attributable to the States of ‘A’, ‘B’, ‘C’, ‘D’ and ‘E’.

Further, compute the GST liability [CGST & SGST or IGST, as the case may be] of ‘Star Plus’ as also advise
it as to whether it should issue one invoice for the entire contract value or separate State- wise invoices.
The other relevant information is given hereunder:

Table 1
Viewership figures of ‘Star Plus’ channel in the last week of June
States 20XX as provided by the Broadcast Audience Research Council

A 50,000
B+C 1,00,000
D+E 50,000
Table 2
Population as per latest census
States
(in crores)
A 50
B 180
C 20
D 100
E 25
The applicable rate of tax is as under:
CGST SGST IGST
9% 9% 18%

Question 12 (b) (3*2= 6 Marks)

Sachdeva Forex Private Limited, registered in Delhi, is a money changer. It has undertaken the following
purchase and sale of foreign currency:

1,000 US $ are purchased from Nandi Enterprises at the rate of ₹ 68 per US $. RBI reference rate for US $ on
that day is ₹ 68.60.
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2,000 US $ are sold to Menavati at the rate of ₹ 67.50 per US$. RBI reference rate for US $ for that day is
not available.

Determine the value of supply in each of the above cases in terms of:

A. Rule 32(2)(a) of the CGST Rules, 2017

B. Rule 32(2)(b) of the CGST Rules, 2017.

Question 13 (a) (6 Marks)

Pride Flexibles Manufacturers Ltd., a manufacturer of bottle caps, is registered in Dhanbad (Jharkhand). It
imports a bottle caps making machine from Japan.

Pride Flexibles Manufacturers Ltd. avails the services of Baburao Logistics, a licensed customs broker in
Kolkata (West Bengal), in meeting all the legal formalities for getting the said machine cleared from the
customs station.

Pride Flexibles Manufacturers Ltd. also authorises Baburao Logist ics to incur, on its behalf, the expenses
in relation to clearance of the imported machine from the customs station and bringing the same to its
warehouse at Dhanbad. These expenses would be reimbursed by Pride Flexibles Manufacturers Ltd. to
Baburao Logistics on actual basis. In addition, Pride Flexibles Manufacturers Ltd. will also pay the agency
charges to Baburao Logistics for the services rendered by it

Baburao Logistics raised an invoice in July as follows:

S. No. Particulars Amount*

(₹)

(i) Agency charges 5,00,000

(ii) Customs duty on machine 3,80,000

(iii) Port charges 33,000

(iv) Dock dues 56,000

(v) Charges for transport of machine from Kolkata port, West Bengal to 48,000
Baburao Logistics’ godown in Asansol, West Bengal
(vi) Charges for transport of machine from Baburao Logistics’ Asansol 67,000
godown to the warehouse of Pride Flexibles Manufacturers Ltd. in Dhanbad,
Jharkhand

(vii) Unloading of machine at Kolkata port, West Bengal 83,000

(viii) Hotel expenses 45,000

(ix) Travelling expenses 50,000

(x) Telephone expenses 2,000

*exclusive of GST, wherever applicable

Compute the value of supply made by Baburao Logistics with the help of given information. Would your
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answer be different if Baburao Logistics charges ₹ 13,00,000 as a lump sum consideration for clearing the
imported machine from the customs station and bringing the same to the warehouse of Pride Flexibles
Manufacturers Ltd.?

Question 13 (b) (6 Marks)

Madhav Stelco Ltd., a registered supplier of Bengaluru (Karnataka), is a manufacturer of goods. The
company provides the following information pertaining to GST paid on input supplies during the month of
April, 20XX:

Sl. No. Items GST paid

in
(Rs.)
(i) Life Insurance premium paid by the company on the life of 1,50,000
factory employees as per the policy of the company

(ii) Raw materials purchased for which invoice is missing but 38,000
delivery challan is available.

(iii) Raw materials purchased which are used for zero rated outward 50,000
supply.

(iv) Works contractor's service used for repair of factory building 30,000
which is debited in the profit and loss account of company.

(v) Company purchased the capital goods for

Rs. 4,00,000 and claimed depreciation of Rs. 44,800 (@ 10%) on the 48,000
full amount of Rs. 4,48,000 under Income Tax Act, 1961.

Other Information: -

i. In the month of September, 20XX, of previous financial year, PQR Company Ltd. availed input tax credit
of Rs. 2,40,000 on purchase of raw material which was directly sent to job worker's premises under a challan
on 25-09-20XX of the same financial year. The said raw material has not been received back from the Job
worker up to 30-04-20XX of the current financial year.

ii. All the above input supplies except (ii) above have been used in the manufacture of taxable goods.

Compute the amount of net input tax credit available for the month of April, 20XX with necessary explanations
for your conclusion for each item. You may assume that all the other conditions necessary for availing the
eligible input tax credits have been fulfilled.
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Question 14 (a) (10 Marks)

Varun Enterprises, registered in Delhi, is engaged in supply of various goods and services exclusively to
Government departments, agencies etc. and persons notified under section 51 of the CGST Act, 2017. It has
provided the information relating to the supplies made, their contract values and the payment due against each
of them in the month of October, 20XX as under:

Total contract Payment

S. Particulars value due in
No.
(inclusive of October,
GST) (₹) 20XX (₹)
Supply of stationery to Fisheries Department,
(i) 2,60,000 15,000
Kolkata
Supply of car rental services to Municipal Corporation of 20,000
(ii) 2,95,000
Delhi
Supply of a heavy machinery to Public Sector Undertaking 25,000
(iii) 5,90,000
located in Uttarakhand
Supply of taxable goods to Delhi office of
National Housing Bank, a society established by 50,000
(iv) 6,49,000
Government of India under
the Societies Registration Act, 1860
Interior decoration of Andhra Bhawan
located in Delhi. Service contract is entered 12,39,000
(v) into with the Government of Andhra 12,39,000
Pradesh (registered only in Andhra
Pradesh)
Supply of printed books and printed post
50,000
cards to a West Delhi Post Office [Out of
total contract value of ₹ 9,72,000, contract for books &
(vi) value for supply of books (exempt from 9,72,000 20,000 for
GST) is ₹ 7,00,000 and for supply of printed post
cards
printed post cards (taxable under GST) is ₹
2,72,000.]
Maintenance of street lights in Municipal
area of East Delhi* [The maintenance
contract entered into with the Municipal
Corporation of Delhi also involves
replacement of defunct lights and other
3,50,000
(vii) spares. However, the value of supply of goods is not more 3,50,000
than 25% of the value of
composite supply.]
*an activity in relation to any function
entrusted to a Municipality under article
243W of the Constitution
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You are required to determine amount of tax, if any, to be deducted from each of the receivable given above
assuming the rate of CGST, SGST and IGST as 9%, 9% and 18% respectively.
Will your answer be different, if Varun Enterprises is registered under composition scheme.

Question 14 (b) (4 Marks)

Batra Dynamics, having its head office in Chennai, Tamil Nadu carries on the following activities with
respective turnovers in a financial year:

Supply of petrol at Chennai, Tamil Nadu 18,00,000

Value of inward supplies on which tax is payable on reverse charge 9,00,000
basis
Supply of transformer oil at Chennai, Tamil Nadu 2,00,000

Value of branch transfer from Chennai, Tamil Nadu to Bengaluru, Karnataka 1,50,000
without payment of consideration

Value of taxable supplies at Manipur branch 11,50,000

It argues that it does not have taxable turnover crossing threshold limit of ₹40,00,000 either at Chennai,
Tamil Nadu or Bengaluru, Karnataka and including turnover at Manipur branch. It believes that the
determination of aggregate turnover is not required for the purpose of obtaining registration, but is required
for determining composition levy.

Decide based on the above facts:

(i) The aggregate turnover of Batra Dynamics.

(ii) All conditions that fulfil the requirements for registration under CGST Act, 2017 in the given circumstances.

Question 15 (a) (6 Marks)

With reference to the Customs Tariff Act, 1975, discuss the validity of the imposition of customs duties in the
following cases:-

(a) Both countervailing duty and anti-dumping duty have been imposed on an article to compensate for the same
situation of dumping.

(b) Countervailing duty has been levied on an article for the reason that the same is exempt from duty borne by
a like article when meant for consumption in the country of origin.

(c) Definitive anti-dumping duty has been levied on articles imported from a member country of World Trade
Organization as a determination has been made in the prescribed manner that import of such article into
India threatens material injury to the indigenous industry.
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Question 15 (b) (8 Marks)

Karvy Ltd.. imported a machine from UK in May, 20XX. The details in this regard are as under:

(i) FOB value of the machine: 10,000 UK Pound

(ii) Freight (Air): 3,000 UK Pound

(iii) Licence fee, the buyer was required to pay in UK: 400 UK Pound

(iv) Buying commission paid in India Rs. 20,000

(v) Date of bill of entry was 20.05.20XX and the rate of exchange notified by CBIC on this date was Rs. 99.00 per
one pound. Rate of BCD was 7.5%.

(vi) Date of arrival of aircraft was 25.05.20XX and the rate of exchange notified by CBIC on this date was Rs. 98.50
per pound and rate of BCD was 10%.

(vii) Integrated tax was 12% and ignore GST Compensation Cess.

(viii) Insurance premium details were not available.

You are required to compute the total customs duty and integrated tax payable on the importation of machine.
You may make suitable assumptions wherever required.

Question 16 (a) (6 Marks)

Fibercromes Pvt. Ltd. imported five mainframe computer systems from Flexsonics Computers, USA on
31.01.20XX paying customs duty of Rs. 30.45 lakhs. The computers worked for some time but in June 20XX
some technical faults developed in the systems resulting in complete closure of work. On being informed
about the problem, Flexsonics Computers sent his technicians from USA, to repair the systems in June 20XX
itself. However since no solution was found, the Management of Fibercromes Pvt. Ltd re-shipped/returned
the goods to Flexsonics Computers, USA on 31.12.20XX.

You are the Financial Controller of the Fibercromes Pvt. Ltd. Board of Directors has approached you for
advising whether import duty paid can be taken back from the Central Government when goods are sent
back. Advise, in the light of the provisions of Customs Act, 1962.

Question 16 (b) (6 Marks)

Jindal Mectec Pvt. Ltd. is a manufacturing company registered under GST in the State of Uttar Pradesh. It
manufactures two taxable products ‘Alpha’ and ‘Beta’ and one exempt product ‘Gama’. On 1st October 20XX,
while product ‘Beta’ got exempted through an exemption notification, exemption available on ‘Gama’ got
withdrawn on the same date. The turnover (exclusive of taxes) of ‘Alpha’, ‘Beta’ and ‘Gama’ in the month of
October, 20XX was ₹ 9,00,000, ₹ 10,00,000 and ₹ 6,00,000.
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XYZ Pvt. Ltd. has furnished the following details:

S. No. Particulars Price (₹) GST (₹)

(a) Machinery ‘U’ purchased on 01.10.20XX for being used in 2,00,000 36,000
manufacturing all the three products
(b) Machinery ‘V’ purchased on 01.10.20XX for being used 1,00,000 18,000
in manufacturing product ‘Alpha’ and ‘Gama’
(c) Machinery ‘W’ purchased on 01.10.20XX for being 3,00,000 54,000
exclusively used in manufacturing product ‘Beta’
(d) Machinery ‘Y’ purchased on October 1, four years 4,00,000 72,000
before
01.10.20XX for being exclusively used in manufacturing
product
‘Beta’. From 01.10.20XX, such machinery will also be used
for manufacturing product ‘Gama’.
(e) Machinery ‘Z’ purchased on October 1, two years 3,00,000 54,000
before
01.10.20XX for being used in manufacturing all the three
products
(f) Raw Material used for manufacturing ‘Alpha’ purchased on 1,50,000 27,000
05.10.20XX

(g) Raw Material used for manufacturing ‘Beta’ purchased on 2,00,000 36,000
10.10.20XX

(h) Raw Material used for manufacturing ‘Gama’ purchased on 1,00,000 18,000
15.10.20XX

Compute the following:

(i) Amount of input tax credit (ITC) credited to Electronic Credit Ledger, for the month of October 20XX
(ii) Amount of aggregate value of common credit (Tc)
(iii) Common credit attributable to exempt supplies, for the month of October 20XX
(iv) GST liability of the company payable through Electronic Cash Ledger, for the month of October 20XX

Note: Assume that all the procurements made by the company are from States other than Uttar Pradesh.
Similarly, the company sells all its products in States other than Uttar Pradesh. Rate of IGST is 18%. All the
conditions necessary for availing the ITC have been complied with. Ignore interest, if any and make suitable
assumptions wherever required.
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Question 17 (a) (4*2 = 8 Marks)

Write short notes on the following with reference to the provisions relating to EOU/EHTP/STP/BTP as contained
in the FTP:

(i) Entitlement for supplies from DTA

(ii) Inter-unit transfer

(iii) Sale of unutilized material

(iv) Exit from EOU Scheme

Question 17 (b) (6 Marks)

Pursuant to audit conducted by the tax authorities under section 65 of the CGST Act, 2017, a show cause notice
was issued to Home Furnishers, Surat, a registered supplier, alleging that it had wrongly availed the input tax
credit without actual receipt of goods for the month of July, 20XX. In the absence of a satisfactory reply from
Home Furnishers, Joint Commissioner of Central Tax passed an adjudication order dated 20.08.20XX (received by
Home Furnishers on 22.08.20XX) confirming a tax demand of ₹ 50,00,000 and imposing a penalty of equal amount
under section 122 of the CGST Act, 2017.

Home Furnishers does not agree with the order passed by the Joint Commissioner. It decides to file an appeal
with the Appellate Authority against the said adjudication order. It has approached you for seeking advice on the
following issues in this regard:

1) Can Home Furnishers file an appeal to Appellate Authority against the adjudication order passed by the Joint
Commissioner of Central Tax? If yes, till what date can the appeal be filed?

2) Does Home Furnishers need to approach both the Central and State Appellate Authorities for exercising its right of
appeal?

Home Furnishers is of the view that there is no requirement of paying pre-deposit of any kind before filing an appeal
with the Appellate Authority. Give your opinion on the issue.