MINDSPARK ACADEMY CLASSES FOR CA, CS, CMA

GST Full length

SUGGESTED ANSWER SHEET
Marks: 50
Part A: MCQ (Marks- 15)
1. What are different types of supplies covered under the scope of Supply?
(a) Supplies made with consideration
(b) Supplies made without consideration
(c) Both of the above
(d) None of the above

2. Can a registered person opting for composition scheme collect GST on his outward
supplies?
(a) Yes, in all cases
(b) Yes, only on such goods as may be notified by the Central Government.
(c) Yes, only on such services as may be notified by the Central Government.
(d) No

3. Which of the following Activities or transactions shall not be treated as a supply of

goods?
(a) Title in goods under an agreement that property shall pass at a future date
(b) undivided share in goods without transfer of title in them
(c) Goods forming part of business assets are transferred/disposed off by/under
direction of person carrying on business so as no longer to form part of those assets,
whether or not for consideration
(d) Supply of goods by an unincorporated association or body of person to a member
4. Sarthak Constructor has constructed individual residential units for agreed
consideration of 1.2crore per unit . 90 lakh per unit were received before issuance
of completion certificate by the competent authority and balance after completion.
What type of supply involved in the given transaction?
a. supply of goods
b. Supply of services
C. Neither supply of goods nor supply of service
d. either supply of goods or supply of services

5. In case of Goods Transport Agency (GTA) services, tax is to be paid under forward
charge if:

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(a) GST is payable @ 12%

(b) GST is payable @ 5% and a factory registered under the Factories Act, 1948 is the
recipient of GTA service.
(c) An unregistered individual end customer is the recipient of GTA service.
(d) A registered casual taxable person is the recipient of GTA service.

For question 6 to 10 refer (2 marks each)

Based on the above answer the following questions:

6.

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7.

8.

9.

10.

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PART B: DESCRIPTIVE QUESTIONS

MARKS: 35

Ques 2. Answer the following: (Any 3) 15 Marks

1. State with brief reason, whether following suppliers of taxable goods are required
to register under the CST Law:
(I) Mr. Raghav is engaged in wholesale cum retail trading of medicines in the State
of Assam. His aggregate tumover during the financial year is Rs. 9,00,000 which
consists of Rs. 8,00,000 as Intra-State supply and Rs. 1,00,000 as Inter state supply.
(II) Mr S.N Gupta of Rajasthan is engaged in trading of taxable goods on his own
account and also acting as an agent of Mr. Rishi of Delhi. His turnover in the financial
year 2017-18 is of Rs. 12 lakhs on his own account and Rs. 9 lakhs onbehalf of
principal. Both turnovers are Intra-State supply. 5 Marks

2. Royal Fashions, a registered supplier of designer outfits in Delhi, decides to exhibit

its products in a Fashion Show being organised at Hotel Park Royal, Delhi on 4th
January. For the occasion, it gets the service by way of makeover of its models from
Aura Beauty Services Ltd., Ashok Vihar, on 4th January, for which a consideration
of` 5,00,000 (excluding GST) has been charged. Aura Beauty Services Ltd. issued a
duly signed tax invoice on 10 th February showing the lumpsum amount of `
5,90,000inclusive of CGST and SGST @ 9% each for the services provided. Answer
the followingquestions:
(i) Examine whether the tax invoice has been issued within the time limit prescribed
under law.
(ii) Tax consultant of Royal Fashions objected to the invoice raised suggesting that the
amount of tax charged in respect of the taxable supply should be shown separately in
the invoice raised by Aura Beauty Services Ltd. However, Aura Beauty Services Ltd.
contended that there is no mandatory requirement of showing tax component
separately in the invoice. You are required to examine the validity of the objection
raised by tax consultant of Royal Fashions. (5 MARKS)

3. M/s Software Limited reduced the amount of Rs. 2,00,000 from the output tax
liabilityin contravention of provisions of section 42(10) of the CGST Act, 2017 (ie.
Under or excess claim of ITC) in the month of December 2017, which is ineligible
credit. A showcause notice was issued by the Tax Department to pay tax along with
interest. M/s Software Limited paid the tax and interest on 31 st March, 2018.
Calculate interest liability (Ignore penalty) (5M)

for a period of 101 days and interest liability will be Rs. 13.282 (approx.).]

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Q 4. (5M)
(A) State whether the provisions pertaining to tax collected at source under
section 52 of CGST Act, will be applicable, if Fitan Ltd. sells watch on its own
through its ownwebsite?

(B) State whether the provisions pertaining to tax collected at source under section
52 of CGST Act, will be applicable, if ABC limited who is dealer of Royul brand sells
watches through Slipkart, an electronic commerce operator?

Ques 3. Answer the following: (any 4) (20 Marks)

1. XYZ & Co., a firm of Chartered Accountants, issued invoice for servicesrendered
to Mr. A on 7th September. Determine the time of supply in the following independent cases:
(1) The provision of service was completed on 1st August and payment was received
on 28th September.
(2) The provision of service was completed on 14th August and payment was received
on 28th September.
(3) Mr. A made the payment on 3rd August. However, provision of service was
remaining to be completed at that time.
(4) Mr. A made the payment on 15th September. However, provision ofservice was
remaining to be completed at that time. (5m)

2. Following are the particulars, relating to one of the machine sold by SQM ltd. To
ACDLtd. In the month of February 2020 at list price of Rs. 9.50.000 (exclusive
of taxes and discount) further, following additional amounts have been charged
from ACD Ltd: (5m)

S. No. Particulars Amount (Rs)

(i) Municipal taxes chargeable on the machine 45.000
(ii) Outward freight charges (Contract 65.000
was to deliver machine at ACD
Ltd.’s factory i.e. F.O.R. contract)
Additional information:

1. SQM Ltd. Normally gives an interest-free credit period of 30 days for

payment,after that it charges interest @1% p.m. or part thereof on list price.
2. ACD Ltd. Paid for the supply after 45 days, but SQM Ltd. Waived the
interestpayable.

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3. SQM Ltd. Received Rs. 50.000 as subsidy, from one non-government

organisation (NGO) on sale of such machine. This subsidy was not linked to the
price of machine andalso not considered in list prise of Rs. 9.50.000.
4. ACD Ltd. deducted discount of Rs. 15,000 at the time of final payment, which
wasnot as per agreement.
5. SQM Ltd. collected Rs. 9,500 as TCS (tax collected at source) under the
provisionsof the Income Tax Act, 1961.
Compute the value of taxable supply as per the provision of GST laws, considering
that the price is the sole consideration for the supply and both parties are
unrelated to eachother.

Note: Correct legal provision should form part of your answer. (5 M)

3. CANWIN Ltd., a registered supplier, is engaged in the manufacture of Tanks. The

company provides the following information pertaining to GST paid on the purchases
made/input services availed by it during the month of January 2018:

Particulars GST Paid (Rs.)

(i) Purchase of Machinery where debit note is issued 1.15.000
(ii) Input purchased was directly delivered to Mr. Joe, a 80.000
job worker and a registered supplier
(iii) Computers purchased (Depreciation was claimed on 50.000
the said GST portion under the Income-Tax Act,
1961)
(iv) Works Contract services availed for construction of 4.25.000
Staff quarters within the company premises
Determine the amount of ITC available to M/s. CANWIN Ltd. For the
month ofJanuary 2018 by giving brief explanations for treatment of various items.
Subject to the information given above, all the conditions necessary for availing
the ITC have beenfulfilled. (5 M)

4. Janku Ltd. A registered person is engaged in the business of spices. It provides

following details for GST paid during October, 2018.

S. No Particulars GST Paid(Rs.)

1. Raw spices purchase-Raw spices used for 50.000
furtherance of business
-Raw spices used for personal use of Directors 20.000

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2. Electric machinery purchased to be used in the 25.000

manufacturing process.
3. Motor vehicle used for transportation of the 55.000
employee
4. Payment made for material and to contractor for 1.25.000
construction of staff quarter.

Determine the amount of ITC available to Jamku Ltd. For the month October,
2018with all related workings and explanation.

All the conditions necessary for availing the ITC have been fulfilled.
[5 Marks]

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