CA FINAL (MAY 22)

MCQ SESSION OF
CHAPTER 10A:- Tax Invoice, Credit & Debit Notes

For more details Click on Website Link:-

https://www.cacselectures.com/
Contact on :- 8459256756/7400151012

Follow for more updates/Notes on Social Media

For doubt solving and FREE notes join telegram

channel link is in below
HTTPS://T.ME/MAHESHGOURIDT

For more updates Join on Instagram link is in below

https://instagram.com/camaheshgourofficial?utm_medium=copy_link
 MCQ SESSION

As Promised, complete MCQs sessions on IDT By CA Mahesh Gour Sir Starting from

17th Feb TIME:- 8:30 to 10:30 PM For detailed time table, refer attached image

Don't miss any lectures, click on notify me now

Supply under GST

17/02/22
https://unacademy.com/course/mcq-of-ch-2-supply-under-gst/GUKSBB3P

Charges to GST
18/02/22
https://unacademy.com/course/mcq-of-ch-3-charges-to-gst/14WDUT6U

Exemption under GST - Part 1

21/02/22
https://unacademy.com/course/mcq-of-ch-4-exemption-under-gst-part-i/KTG8UWWO

Exemption under GST Part 2

22/02/22
12:00PM TO 2:00PM
https://unacademy.com/course/mcq-of-ch-4-exemption-under-gst-part-ii/8UGHD5SN

Place of supply
23/02/22
https://unacademy.com/course/mcq-of-ch-5-place-of-supply/9D3E5ESJ

Time of supply
24/02/22
https://unacademy.com/course/mcq-of-ch-6-time-of-supply/BCCCAM04
 INDIRECT TAX LAWS

Chapter 10 A. Tax Invoice, Credit & Debit

Notes
1. Pratik Electricity supplies electricity to RTP Ltd. under a contract. The terms of contract are:
(i) Monthly payment of Rs. 4 lakhs to be made by the recipient on sixth day of the month.
(ii) A quarterly statement of the units consumed, and payments made will be issued by tenth day of the month
succeeding the relevant quarter.
October 6, November 6, December 6 Payment of Rs.2 lakh made in each month
December 10 Statement of accounts issued by supplier for
the quarter
October-December
December 17 Different payment of Rs.50,000 received by
supplier for the quarter October-December
as per statement of accounts
Which of the following statements is true?
(a) Invoice will be issued on October 6, November 6, December 6 and December 10.
(b) Invoice will be issued on October 6, November 6 and December 6
(c) Invoice will be issued on October 6, November 6, December 6 , December 10 and December 17
(d) None of the above
Solution: (a)
Hint: Sec 31, continuous supply, statement received, earlier-before/at the time of issue of statement or DOP.

2. Documents required to send goods from branch office in one state to head office in another state is: -
a) Payment Voucher and e waybill
b) Receipt Voucher and e waybill
c) Tax invoice and e waybill
d) All of the above
Solution: (c)
Hint: minimum two documents that is tax invoice and e-way bill will must be carried.

3. Find out the correct statement regarding issuing a Tax invoice

(i) Description of goods is not required to be given in case of mixed supply of goods
(ii) Quantity is not required to be mentioned in case of goods when goods are sold on “as is where is basis”
(iii) The power of attorney holder can sign the tax invoice in case the taxpayer or his authorized representative has
been travelling abroad
(iv) Place of supply in case of inter-State supply is not required to be mentioned
(a) (ii), (iii) (c) All of the above
(b) (i), (ii), (iii) (d) None of the above
Solution: (d)
Hint:-

(i) Description of goods is required to be given in case of mixed supply of goods

(ii) Quantity is required to be mentioned in case of goods when goods are sold on “as is where is basis”
(iii) The power of attorney holder can not sign the tax invoice in case the taxpayer or his authorized
representative has been travelling abroad
4. Slokita, a registered
Place of person
supply in case supplied goods
of inter-State amounting
supply toto
is required Rs.be2,36,000/-
mentioned (inclusive of GST, taxable @ 18%) to Ankita,
a registered person on 30-11-2019. Ankita further sold such goods to Slok, a consumer who came to his shop on 31-
12-2019 in cash for Rs. 4,36,000/- (inclusive of GST, taxable @ 18%). Slokita, issued a credit note of Rs.23,600/-
(20000+3600/-GST) for rate difference on 20-12-2019 to Ankita. Ankita, then entered a credit note in its books for
 INDIRECT TAX LAWS
the same amount in the name of Slok, without intimating Slok on 20-12-2019 and reduced its output tax liability
accordingly.
As per the provisions of GST law, which of the above mentioned suppliers are allowed to reduce their output tax
liability?
(a) Slokita
(b) Ankita
(c) Both Slokita and Ankita
(d) None of the above, since incidence of tax has been passed on to another person
Solution: (a)
Hint: Output liability of supplier to be reduced.
 INDIRECT TAX LAWS
5. A person who must be issued Tax Invoice________
(a) Registered persons not paying tax under composition scheme
(b) Every supplier
(c) Every taxable person
(d) All the above
Solution: (a)
Hint: RP supplying taxable G/S or receiving taxable G/S from URD should issue tax invoice.

6. Law permits collection of tax on supplies effected prior to registration, but after applying for registration:
(a) Yes, on all supplies, if the revised invoice is raised within one month
(b) No, tax can be collected only on supplies effected after registration is granted.
(c) Yes, but only on intra-State supplies, if the revised invoice is raised within one month
(d) Yes, but only on intra-State supplies effected to unregistered persons, if the revised invoice is raised within one
month
Solution: (a)
Hint: He/she shall issue revised tax invoice within 1 month from the date of issuance of RC to collect tax.

7. A bill of supply can be issued in case of inter-State and intra-State:

(a) Supplies to unregistered persons c) Both of above
(b) Exempted supplies d) None of the above
Solution: (b)
Hint: A registered person supplying exempted goods or services or both can issue bill of supply.

8. Find out the correct option out of the following, the receipt voucher must contain:
(a) Invoice reference c) Full value of supply
(b) Details of goods or services d) None of the above
Solution: (b)
Hint: Receipt voucher is issued = time of adv payment received from the recipient it includes details of G/S.

9. An acknowledgement must be given on receipt of advance payment in respect of supply of goods or services:
(a) Yes, the invoice must be raised to that extent
(b) Yes, in the form of a proforma invoice
(c) Yes, as a receipt voucher
(d) None of the above
Solution: (c)
Hint: Receipt voucher is issued at a time of receipt of advanced payment.

10. A continuous supply of goods requires one of the following as a must:

(a) The supply is made by means of a wire, cable, pipeline or other conduit
(b) The goods must be notified by the Commissioner in this behalf
(c) The contract for supply lasts for a minimum period of 3 months
(d) Supplier invoices the recipient on a regular or periodic basis
Solution: (d)
Hint: Sec 31, continuous supply, invoice should issue before/at the time of issue of statement.

11. The recipient must issue an invoice in which of the following uses:
(a) The supplier fails to issue an invoice
(b) The supplier is unregistered
(c) The goods or services received are notified for tax on reverse charge basis
Solution: (b& c)
Hint: When recipient is RD receives the supplies taxable on RCM us 9(3) or from URD he must issue invoice

12. Is it required to raised payment voucher, the supplier is an unregistered person?

 INDIRECT TAX LAWS
(a) True, as the recipient is required to issue an invoice in that case
(b) False, payment voucher should be issued in addition to raising an invoice for the inward supply
(c) True, if the unregistered person does not require it
(d) False, a payment voucher is the only document to evidence the supply
Solution: (b)
Hint: Issue payment voucher= time of making payment to the supplier addition to invoice which already issued.

13. The time limit for issue of tax invoice in case of continuous supply of goods:
(a) At the time of receipt of payment, if payments are received prior to issue of accounts
(b) On a monthly basis
(c) At the time of issue of statement of account where successive accounts are involved
(d) (a) or (c) whichever is earlier
Solution: (d)
Hint: Sec 31, continuous supply, statement received, earlier-before/at the time of issue of statement or DOP.

14. Time Limit for invoice has to be issued in case of goods sent on sale on approval basis: *****
(a) when the recipient accepts the goods or three months from the date of supply whichever is earlier
(b) when the recipient accepts the goods or six months from the date of removal whichever is earlier
(c) while sending the goods; another Invoice has to be issued by the recipient while rejecting the goods
(d) while sending the goods but the recipient can take credit only when the goods are accepted by him
Solution: (b)
Hint: Sec 31, supply on approval basis, Invoice=earlier of before/at the time of supply or 6m date of approval

15. What will happen if Supply of Services has ceased under a contract before the completion of supply:
(a) Invoice has to be issued within 30 days on the basis of ‘Quantum Meruit’ from the date of cessation
(b) Invoice has to be issued at the time of cessation to the extent of the supply effected
(c) Invoice has to be issued for the full value of the contract after deducting a percentage thereof as prescribed
(d) Invoice cannot be issued as the matter will be sub-judice.
Solution: (b)
Hint: In that case invoice has to be issued at the time of cessation to the extent of the supply effected.

16. The tax invoice should be issued _______the date of supply of service:
(a) Within 30 days from c) Within 1 month from
(b) Within 60 days from
Solution: (a)
Hint: Rule 47, Time limit=within 30 days from the date of supply of services, in case of taxable supply.

17. Mr.Ram has applied for registration can :

(a) Neither collect tax nor claim input tax credit
(b) Issue ‘revised invoice’ and collect tax within 1 month of date of issuance of certificate of registration, subject to
conditions
(c) Provisionally collect tax till his registration is approved, on applying for registration, if he has applied for
registration within prescribed time
(d) All of the above.
Solution: (b)
Hint: It shall be issued within one month from the date of issuance of RC

18. A credit note is issued by ________ and it is a document accepted for GST purposes:
(a) Supplier, for reducing the tax/ taxable value
(b) Recipient, for reducing the tax/ taxable value
(c) Supplier, for increasing the tax/ taxable value
(d) Recipient, for increasing the tax/ taxable value
Solution: (a)
 INDIRECT TAX LAWS

Hint: wholesaler/ retailer has the option to issue a credit note for reducing the tax liability or taxable value
19. For an increase in the tax/ taxable value, a debit note for GST purposes:
(a) Should be issued by the supplier
(b) Should be issued by the recipient
(c) May be issued by the supplier
(d) May be issued by the recipient
Solution: (a)
Hint: When TV/Tax charged in invoice < TV/Tax in respect of such supply, DN issued by supplier to recipient.

20. The last date for declaring the details of a Credit Note issued on 25-Aug-2021 for a supply made on 18-Nov-
2017 is:
a) 20-Nov-2021 – Actual date for filing annual return
b) 20-Jan-2018 – Due Date of Filing of December Return
c) 20-Oct-2018 – Due Date of Filing of September Return
d) 31-Dec-2018 – Last date for filing annual return
Solution: (c)
Hint: If CN issue = earlier of 20th Oct of Following FY or furnishing of Annual return.
[ If credit note is issued within the specified time limit –
(i) September following the end of the financial year in which such supply was made, or
(ii) The date of furnishing of the relevant annual return.]

21. Tax invoice must be issued by__________

(a) Every supplier
(b) Every taxable person
(c) Registered persons not paying tax under composition scheme
(d) All the above
Solution: (c)
Hint: RP supplying taxable G/S or receiving taxable G/S from URD should issue tax invoice.

22. Law permits collection of tax on supplies effected prior to registration, but after applying for registration:
a) Yes, but only on intra-State supplies, if the revised invoice is raised within one month
b) Yes, but only on intra-State supplies effected to unregistered persons, if the revised invoice is raised within one
month
c) Yes, on all supplies, if the revised invoice is raised within one month
d) No, tax can be collected only on supplies effected after registration is granted
Solution: (c)
Hint: He/she shall issue revised tax invoice within 1 month from the date of issuance of RC to collect tax.

23. An invoice must be issued in case of continuous Supply of Goods.

(a) At the time of removal of goods
(b) On transfer of risks and rewards of the goods to the recipient
(c) Before/at the time each successive statement of accounts is issued or with in 6 months from removal which
ever in earlier.
(d) Before/at the time of supply or within 6 month from removal.
(e) None of the above
Solution: (e)
Hint: Sec 31, continuous supply, statement received, earlier-before/at the time of issue of statement or DOP.
 INDIRECT TAX LAWS
24. A payment voucher need not be raised if the supplier is an unregistered person.
a) True, If the recipient is required to issue an invoice in that case
b) True, if the unregistered person does not require it
c) False, a payment voucher is the only document to evidence the supply
d) False, payment voucher should be issued in addition to raising an invoice for the inward supply
Solution: (d)
Hint: Issue payment voucher= time of making payment to the supplier addition to invoice which already issued.

25. In case of goods sent on sale on approval basis, invoice has to be issued:
a) while sending the goods; another Invoice has to be issued by the recipient while rejecting the goods
b) while sending the goods but the recipient can take credit only when the goods are accepted by him
c) when the recipient accepts the goods or six months from the date of removal whichever is earlier
d) when the recipient accepts the goods or three months from the date of supply whichever is earlier
Solution: (c)
Hint: Sec 31, supply on approval basis, Invoice=earlier of before/at the time of supply or 6m date of approval

26. If Supply of Services has ceased under a contract before the completion of supply:
a) Invoice has to be issued within 30 days on the basis of 'Quantum Meruit' from the date of cessation
b) Invoice has to be issued at the time of cessation to the extent of the supply effected
c) Invoice has to be issued for the full value of the contract after deducting a percentage thereof as prescribed
d) Invoice cannot be issued as the matter will be sub-judice
Solution: (b)
Hint: In that case invoice has to be issued at the time of cessation to the extent of the supply effected.

27. A person who has applied for registration can:

a) Provisionally collect tax till his registration is approved, on applying for registration, if he has applied for
registration within prescribed time
b) Neither collect tax nor claim input tax credit
c) Issue 'revised invoice' and collect tax within I month of date of issuance of certificate of registration, subject to
conditions
d) All of the above
Solution: (c)
Hint: He/she shall issue revised tax invoice within 1 month from the date of issuance of RC to collect tax.

28. Jet flix (USA) provide OIDAR Services to various end user customers
a) QR Code is mandatory for Jet Flix if Aggregate Turnover is > 500cr
b) QR Code is mandatory for Jet Flix if Aggregate Turnover is < 500cr
c) QR Code is mandatory for Jet Flix if Aggregate Turnover is equals to 500cr
d) None of the above
Solution: (d)
Hint: The requirement to display a dynamic QR Code is not applicable to OIDAR supplies.

29. The time period prescribed for maintenance of accounts and records, if the taxable person is a party to an appeal or
revision shall be-
a) year after final disposal of such appeal or revision or proceeding, or until the expiry of thirty-six months from the
last date of filing of Annual Return for the year pertaining to such accounts and records, whichever is later
b) Two year after final disposal of such appeal or revision or proceeding, or until the expiry of sixty months from
the last date of filing of Annual Return for the year pertaining to such accounts and records, whichever is later
c) One year after final disposal of such appeal or revision or proceeding, or until the expiry of seventy-two months
from the last date of filing of Annual Return for the year pertaining to such accounts and records, whichever is
later
 INDIRECT TAX LAWS
d) One year after final disposal of such appeal or revision or proceeding, or until the expiry of forty months
from the last date of filing of Annual Return for the year pertaining to such accounts and records, whichever
is later
Solution: (c)
Hint: Refer Sec 36

30. Taxable person has to maintain his records for a period of:
a) expiry of 72 months from the due date of filing of Annual Return for the year
b) expiry of 60 months from the due date of filing of Annual Return for the year
c) expiry of 24 months from the due date of filing of Annual Return for the year
d) (d) expiry of 90 months from the due date of filing of Annual Return for the year
Solution: (a)
Hint: Refer Sec 36

31. X ltd. (mumbai) is engaged in manufacturing & supply of product ‘P. In Financial year 2019-20 Annual Aggregate
Turnover of X ltd. Was RS. 510cr. In financial year 2020-21 The aggregate Turnover of X ltd. Was 90cr.
On 1-4-21 X ltd. Supply a product ‘P’ to Z ltd (Registered Person, Delhi ) for Rs. 10L. For such supply.
a) E-Invoice is Compulsory. c) E-Invoice is not required.
b) E-Invoice is optional. d) None of the above
Solution: (a)
Hint: E invoice is compulsory when Agg TO exceed 500Cr

32. What will be the rate of tax and nature of supply of a service if the sameis not determinable at the time of receipt
of advance?
a) 12%, inter-State supply c) 18%, inter-State supply
b) 12%, intra-State supply d) 18%, intra-State supply
Solution: (c)
Hint: Tax Rate not determine- Rate of tax 18%; Nature of Supply not determine= Inter-state supply

33. ASC, a registered person under GST, supplied goods amounting to ₹ 1,18,000 (inclusive of GST, taxable @ 18%) to BSC,
a registered person under GST on 30th September. BSC further sold such goods to Rakesh, a consumer who came to
his shop on 30th October in cash, for ₹ 2,36,000 (inclusive of GST, taxable @ 18%). ASC issued a credit note of ₹11,800
(₹10,000 + ₹ 1800 - GST) for rate difference on 2nd November to BSC. Thereafter, BSC entered a credit note in
its books for the same amount in the name of Rakesh, without intimating him, on 2nd November and reduced its
output tax liability accordingly.
As per the provisions of GST law, which of the above-mentioned suppliers are allowed to reduce their output tax
liability?
(a) ASC
(b) BSC
(c) Both ASC and BSC
(d) Neither ASC nor BSC, since incidence of tax has been passed onto another person.
Solution: (a)
Hint: wholesaler/ retailer has the option to issue a credit note for reducing the tax liability or taxable value