CA FINAL NEW COURSE

INDIRECT TAX LAWS

Test-1 Chapter -1, 2, 3, 4, 9, 10, 11

Total Marks 55

MCQs

1. PQR Ltd. (GST registered in Punjab) has entered into agreement with XYZ Ltd. which
manufactures bicycles. The highlights of the agreement are as follows:

 PQR Ltd. to provide 1000 chain drives on monthly basis.

 PQR Ltd. to incur the freight, packing and insurance charges during each supply of
chain drives
 PQR Ltd. to provide servicing of the drives every fortnight
 Payment for the servicing activity carried out during a month to be released at the end
of the month.
 PQR Ltd. to assist XYZ Ltd. with maintenance of conveyor belts on quarterly basis and
installation of new assembly lines as and when required
 Payment for maintenance of conveyor belts to be released on quarterly basis after the
maintenance activity is carried out.
 Terms of payment for installation of new assembly lines to be finalized as and when
the requirement thereof arises

The agreement is entered into for a period of one year.

Which of the above statement (s) is/are true?

(i) The agreement involves a composite supply of goods (chain drives) and services (freight,
packing and insurance) wherein the supply of chain drives is the principal supply.

(ii) The agreement involves a mixed supply of goods (chain drives) and services (freight,
packing and insurance).

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(iii) The agreement involves continuous supply of services wherein servicing is carried out of
the chain drives.

(iv) The agreement involves mixed supply wherein the individual supplies are supply of chain
drives, supply of servicing activity, supply of maintenance service and supply of installation
service.

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

2. Grand Foods is engaged in supplying restaurant service in Delhi. In the preceding financial
year, it has an aggregate turnover of Rs 95 lakh from restaurant service and Rs 5 lakh from
supply of farm labour and has earned a bank interest of Rs 10 lakh. Which of the following
statements are true in the given case?

(1) Aggregate turnover of Grand Food, for determining eligibility for composition scheme, in
the preceding FY in Rs 90 lakh.

(2) Aggregate turnover of Grand Food, for determining eligibility for composition scheme, in
the preceding FY in Rs 100 lakh.

(3) Aggregate turnover of Grand Food, for determining eligibility for composition scheme, in
the preceding FY in Rs 110 lakh.

(4) Supply of farm labour and supply of service of extending loans/deposits does not make
Grand Foods ineligible for composition scheme.

(5) Supply of services other than restaurant service- supply of farm labour and supply of
service of extending loans/deposits- by Grand Foods makes it ineligible for composition
scheme.

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 a) (1) and (4)
b) (2) and (4)
c) (1) and (5)
d) (3) and (5)

3. Ayushman Medical Centre, a clinical establishment, has provided the following

information:

Particulars Rs 9excluding
GST if applicable)
(i) Consultancy charges paid to doctors 10,00,000
(ii) Food supplied to in-patients as advised by the dietician of the 5,00,000
Ayushman Medical Centre
(iii) Food supplied to attendants of the in-patients 2,50,000
(iv) Alternative medical treatments by way of Naturopathy. such 3,50,000
therapy is a recognized system of medicine in terms of section 2(h)
of clinical establishments Act, 2010
(v) Reiki healing treatments. such therapy is not a recognized system of 5,00,000
medicine in terms of section 2(h) of clinical establishments Act,
2010
(vi) Preservation of stem cells by Ayushman Medical Centre’s cord 90,000
blood bank

You are required to compute the value of taxable supply of Ayushman Medical Centre, if any,
in the light of relevant GST provisions

a) Nil
b) 26,90,000
c) 7,50,000

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 d) 12,50,000

4. Mr. Kaluram, an agriculturist located in the state of Madhya Pradesh, sells agricultural
produce cultivated from land. His turnover for the period April 20X1 to March 20X2 is Rs 25
lakh.

He has made occasional inter-state taxable supplies also of Rs 8 lakh of carpets to the state of
Uttar Pradesh during the month of March 20X2.

Calculate the aggregate turnover of Mr. Kaluran for the financial year 20X1-X2 under the
CGST Act, 2017, and also state whether he is liable forregistration under the Act or not.

a) Nil, not liable for registration

b) Rs 8 lakh, not liable for registration
c) Rs 25 lakh s, liable for registration
d) Rs 33 lakh, liable for registration

5. Avtaar Entreprises, Kanpur (UP) stated trading in ayurvedic medicines from July 1, 20X1. Its
turnover exceeded Rs 40 Lakh on October 3, 20X1. The firm applied for registration on
October 31, 20X1 and was issued registration certificate on November 5, 20X1.

Can any revised invoice be issued in the given scenario? If the answer to the first question is
in affirmative, determine the period for which the revised invoices can be issued as also the
last date upto which the same can be issued.

a) Revised invoice cannot be issued in the given case.

b) Revised invoices can be issued for supplies made between October 3, 20X1 and
November 5, 20X1. Further, the revised invoices can be issued for the said period till
December 5, 20X1.

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 c) Revised invoices can be issued for supplies made between October 31, 20X1 and
November 5, 20X1. Further, the revised invoices can be issued for the said period till
December 31, 20X1.
d) Revised invoices can be issued for supplies made between July 1, 20X1 and November 5,
20X1. Further, the revised invoices can be issued for the said period till December 31,
20X1.

6. M/s ABC Ltd. registered under GST in Delhi, is engaged in printing and selling of books as
well as trading of stationery items. It has provided following information of a consignment
which is to be supplied to Mumbai:

(i) Taxable value of supplies indicated on tax invoice Rs 35,000

(ii) Value of exempted supplies Rs 4,000

(iii) Value of goods to be sent to job worker on delivery challan Rs 19,000

Calculate he consignment value for the purpose of generating e-way bill for inter-state supply
of goods Assume rate of tax on taxable goods to be 18%.

a) Rs 35,000
b) Rs 58,000
c) Rs 64,300
d) Rs 60,300

7. Mr. James Stewart is a registered person under GST in the state of Maharashtra who sells
footwear to his customers locally within the same state. He has been appointed as an agent
by Toto Shoes Ltd., a company registered under GST in the state of Karnataka. During a
financial year, Toto Shoes Ltd., sends taxable goods worth Rs 5.00 crore from its Bengaluru
store to Mr. James Stewart who sells such goods for Rs 5.00 crore by raising invoices using the

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GSTIN of Toto Shoes Ltd. Mr. James Stewart receives a commission of Rs 60.00 lakh from Toto
Shoes (P) Ltd., during the said financial year.

Compute the value of supply of Toto Shoes (P) Ltd. and Mr. James Stewart for the financial
year assuming that amounts given above are exclusive of GST, wherever applicable

a) Toto Shoes (P) Ltd.: Nil and James Stewart: Rs 5.6 crore
b) Toto Shoes (P) Ltd.: Rs 5 crore and James Stewart: Rs 5.6 crore
c) Toto Shoes (P) Ltd.: Rs 5 crore and James Stewart: Rs 60 lakh
d) Toto Shoes (P) Ltd.: Rs 5.6 crore and James Stewart: Nil

8. Shree Ram Seva Trust is a charitable institution registered under section 12AB of the
Income-Tax Act, 1961. It has organized a skill development programme relating to persons
over the age of 65 years residing in a well-planned city, in the month of April. It has received
following amounts under the programme:

Particulars Amount (Rs)

Subscription fees for the programme 50,000
Sponsorship fees 1,00,000
Consideration for supply for goods 3,00,000

Besides, the trust has received the donations of Rs 2,00,000 in April. Hanuman, accountant of
Shree Ram seva Trust, is not able to determine the taxability of the above amounts received
under GST law. He seeks your expertise in determining the same.

Determine the value of taxable supply of Shree Ram Seva Trust, for the month of April:

a) Nil
b) Rs 6,50,000
c) Rs 6,00,000
d) Rs 4,50,000

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9. Mr. Manjot is a trader supplying goods from his firm M/s. Singh Traders.

The office of the firm is located in Delhi whereas its godowns are located in the state of Uttar
Pradesh, Punjab and Jammu & Kashmir (J & k) respectively.

M/s. Singh Traders made following intra-state supplies from different states during the
current financial year:

(i) Delhi- Taxable supplies: Rs 21,00,000

(ii) Punjab- Exempted supplies: Rs 6,00,000

(iii) Uttar Pradesh- Taxable and exempted supplies: Rs 3,00,000 each respectively.

(iv) J & K- Taxable and exempted supplies: Rs 8,00,000 and Rs 3,00,000 respectively.

Ascertain the States in which Mr. Manjot is required to take registration under GST:

a) Delhi, Punjab, Uttar Pradesh and J & K

b) Delhi, Uttar Pradesh and J & K
c) Delhi and Uttar Pradesh
d) Delhi

10. Is e-way bill mandatory in case of transport of the handicraft goods from one state to
another state by a person who has been exempted from the requirement of obtaining
registration?

a) E-way bill is not required as the supplier is exempt from the requirement of obtaining
registration.
b) E-way bill is mandatory only if the value of consignment is more than Rs 50,000
c) E-way bill is mandatory even if the value of consignment does not exceed Rs 50,000
d) None of the above

(10 x 1 = 10 marks)

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Q-1 Mr. Viraj is a registered under GST supplying taxable goods to large number of customers
either directly or through Mr. Tushar , who guarantees payment on of behalf of buyer to the
seller. Mr. Tushar charges a commission of 12% whereas other agent charges commission
@10% for similar services. The only difference was that Mr. Tushar guarantees payment from
buyers whereas other agent does not provide any such guarantee to the principle supplier.
Goods worth Rs. 5 lakhs were supplied by Mr. Viraj to Mr. Somesh fails to pay Rs. 5 lakhs within
the prescribed time. So Mr. Tushar, who has undertaken a guarantee, makes payment to Mr.
Viraj on behalf of Mr. Somesh and charges Rs. 15000 as interest to Mr. Somesh. The open
market value for supply of such goods was Rs. 5.10 lakhs.

i. Whether Mr. Tushar a DCA would fall within the ambit of Para 3 of Schedule I?.
ii. What is the value of supply for Mr. Viraj, assuming GST @12%?.
iii. Whether commission charged by Mr. Tushar (DCA) to Mr. Viraj (Supplier) would be liable to
GST?.
iv. Whether interest charged by Mr.Tushar to Mr. Somesh will form part of the value of supply
goods?.
v. Would your answer differ if Mr. Tushar issue invoice in his own name for supply of goods
on behalf of Mr. Viraj ?.

(6 marks)

Q-2 Mr. Raj a promoter start a building construction project on in new Mumbai for that he
purchases cement from cement from various supplier
Supplier Amount
Mr. Kunal (unregistered ) 1,20,000
Mr. Veer (registered) 2,23,000
ABC ltd (registered) 4,500
MR. Ishit ( unregistered) 2,500

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Total purchases of input and input services including cement during the financial year from
registered supplier is 88%

Calculate the amount of GST payable by Mr. Raj in reverse charge?.

(4 marks)

Q-3 Determine whether GST is leviable in respect of transportation services provided by Om

Shree transport Agency in each of the following independent cases:
Customer Nature of service provided Amount charged
X Transport of salt and food grains 17,50,000
Y(Registered) Transport of books on a consignment transported in a 1,50,000
single goods carriage
M/s Xyz ltd Transport of color TV seats to M/S xyz ltd a registered 3,55,000
entity
Z (unregistered) Transport of auto spares 1,25,000
A Transportation of organic manures 50,000
B Transportation of military equipment’s 25,000
C (registered ) Transportation of polyester fiber 15,000
MANY PERSONS Freight collected for transporting small consignment 10,000
for persons who paid less than Rs. 750 for each
consignment

Note: Om Shree transport agency registered person under GST law. Opted to pay CGST @ 6%
and SGST@ 6 %

(6 marks)

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Q-4
i. Mr. Bajaj of Maharashtra engaged in making taxable as well exempt supply of electronics
goods at intra-state level. The details of transactions carried out by Mr. Bajaj in FY 2023-24
are as follows:
 Intra-state taxable supply - 35 lakhs
 Intra-state exempt supply -2 lakhs
State the compliance procedure regarding registration to be complied by Mr. Bajaj as his
aggregate turnover in FY 2023-24 exceed 20 lakhs.
ii. Would your answer differ if Mr. Bajaj is engaged in inter-state supply as well R?.
iii. Would your answer differ if Mr. Bajaj is engaged in supply of goods and services R?.
iv. Would your answer differ if Mr. Bajaj is making intra-state supply from the state of
Telangana?
v. Would your answer differ if Mr. Bajaj makes supply of service ancillary to composite supply
of goods?

(6 marks)

Q-5 Is a registered person liable to pay tax under reverse charge under section 9(3) 19 (4) of the
CGST Act required to issue required to issue an invoice?. Discuss the relevant provisions under
CGST Act and rules there under.
(4 marks)

Q-6 Decide with reason whether e-way bill is required to be issued under CGST Act, 2017 in
the following independent cases :

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a) Square Ltd, registered in Andhra Pradesh, sends goods to its job worker cube & Co. in
Karnataka, which is also registered under GST. Value of the consignment was Rs. 45,000
(including GST).
b) Mr. Bheeshma of Telangana started doing business in notified handicraft products as a
casual taxable person. He got his first order of Rs. 30,000 from Tamil nadu which he
transports. He is not registered under GST since he has a threshold limit of Rs 20 lakh.

(4 marks)

Q-7 Pethalal has obtained registration in the current financial year in Uttar Pradesh. His
turnover in the preceding financial year was Rs. 19,90,000. He has received the following
amounts in respect of the activities undertaken by him month of September:
S. No Particulars Amount (Rs.)
1 Funeral Services 8,80,000
2 Services of warehousing of jiggery 50,000
3 Electrically operated buses given on hire to Municipal Corporation 5,00,000
4 Services provided to recognized sports body as commentator 2,00,000
5 Commission received as an insurance agent from insurance company 65,000
6 Commission received as business facilitator for the services provide to 15,000
the urban branch of a nationalized bank with respect to savings bank
accounts
7 Security services (supply of security personnel) provided to Damodar 28,000
Engineering College (DEC) * [ registered under GST] for the security of
the college premises
*All the engineering courses run by DEC are recognised by the law [
The All India Council for Technical Education (AICTE)]

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 Further, he has received
following services in the month of September:
S. No Particulars Amount (Rs.)
a Freight paid to unregistered goods transport agency for his business 1,00,000
activities relating to serial number (i) above
b Legal advice received from M/s Kannon Associates , a partnership firm, 50,000
seeking advice in relation to a tax disputes of the business

All the transactions stated above are intra – Stated transactions and amounts given are
exclusive of GST, wherever applicable.

You are required to calculate net GST payable by Pethalal for the month of September. THERE
was no opening balance of input tax credit. Rate of CGST and CGST is 9% each for all the
outward supplies made by Pethalal.

(7 marks)

Q-8
I. Examine whether the suppliers are eligible for composition levy under section 10 of the
CGST Act, 2017 in the following independent cases in the beginning of the current financial
year.
a) Technology Enterprises, registered in Jalandhar, Punjab, is engaged in manufacturing
computer systems. Its aggregate turnover in the preceding financial year is Rs. 125 lakh.
Technology Enterprises supplies the computer systems manufactured by it within the
State of Punjab only. With a view to expand its business operations, it will also start
providing the repairing services of computer systems in the current financial year.

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 b) M/s. Siddharth & Sons, registered in Delhi, owns a restaurant Tasty Foods' with a
turnover of Rs. 112 lakh in the preceding financial year. In view of the growing customer
demand, it will also start intra-State trading of beverages in Delhi.
c) Sitaram Associates, registered in Sikkim, is engaged in running a food chain Veg Kitchen'
in the State. It has a turnover of Rs. 73 lakh in the preceding financial year. In the
current financial year, it decides to shut down the food chain owing to huge losses being
incurred in the said business. Instead, it will start providing intra-State architect services,
d) Deepti Services Ltd., registered in Uttarakhand, is exclusively providing hair styling
services. It has turnover of Rs. 34 lakh in the preceding financial year.

Will your answer be different, if Deepti Services Ltd, also start supplying beauty products
along with providing hair styling services in the current financial year?

II. Varun & Arun Associates started a partnership firm of architects in Bhopal (Madhya
Pradesh) on 01.04.2023; The firm provides architecture services, in Madhya Pradesh. It
provided the following details of its turnover
April - June Rs. 20 lakh
July – Sept Rs. 30 lakh
Oct - Dec Rs. 20 lakh

The firm has obtained the registration under section 22 of the CGST Act, 2017 and pays tax
under composition scheme. Determine the tax liability of Varun & Arun Associates for the
quarters: Apr-Jun, Jul-Sept and Oct-Dec.

Note: The rates of tax on architectural services are CGST- 9% and SGST-9%.

(8 marks)

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