1)Determine whether the following supplies amount to composite supplies: a) A

hotel provides 4 days-3 nights package wherein the facility of breakfast and dinner is
provided along with the room accommodation b) A toothpaste company has offered
the scheme of free toothbrush along with the tooth paste

In both cases, we need to determine whether there are multiple elements being
provided that are distinct and independent or if they are so closely linked that they
form a single supply.

a) For the hotel package, the provision of room accommodation, breakfast, and
dinner are bundled together. However, they are typically considered as separate
elements in the hospitality industry. While they are bundled for convenience, they are
not so closely linked that they cannot be supplied separately. Therefore, this would
likely not be considered a composite supply.

b) In the toothpaste and toothbrush offer, the toothpaste and toothbrush are distinct
items. Even though they are related products, they can be sold separately and are
not so interdependent that they form a single supply. Thus, this would also likely not
be considered a composite supply.

In both cases, the items provided could be seen as part of a promotional offer or a
bundled package, but they do not meet the criteria of forming a composite supply
where one element is principal and the other(s) are ancillary.
2)State person liable to pay GST in the following independent cases provided
recipient is located in the taxable territory: a)Services provided by an arbitral tribunal
to any business entity b)Sponsorship services provided by a company to an
individual c)Renting of immovable property service provided by the Central
Government to a business entity

Sure, let's break down the liability to pay Goods and Services Tax (GST) in each of
these cases:

a) Services provided by an arbitral tribunal to any business entity: In this case,

the liability to pay GST falls on the arbitral tribunal itself. The recipient, being a
business entity, is liable to pay GST under reverse charge mechanism. However, if the
arbitrator is an individual and not a business entity, the liability to pay GST falls on
the arbitrator.

b) Sponsorship services provided by a company to an individual: Here, the

liability to pay GST also falls on the company providing the sponsorship services. The
recipient, being an individual, does not have any liability to pay GST in this scenario.

c) Renting of immovable property service provided by the Central Government

to a business entity: In this case, the liability to pay GST falls on the Central
Government, as it is the service provider. However, the business entity, being the
recipient, is liable to pay GST under reverse charge mechanism.

So, to summarize:

• In case (a), the arbitral tribunal or arbitrator is liable to pay GST.

• In case (b), the company providing the sponsorship services is liable to pay
GST.
• In case (c), the Central Government is liable to pay GST. However, the business
entity, as the recipient, is liable to pay GST under reverse charge mechanism.
3)A hotel owner provided accommodation in Haryana, through an electronic
commerce operator – Cool Trips. The hotel owner is not liable to get registered as
per the provisions of section 22(1) of the CGST Act. Who is the person liable to pay
GST in this case? Would your answer be different if the Electronic Commerce
Operator Cool Trips does not have a physical presence in India?

In this scenario, where the hotel owner is not liable to register under section 22(1) of
the CGST Act, the liability to pay GST falls on the Electronic Commerce Operator
(ECO), Cool Trips, under the provisions of Section 9(5) of the CGST Act, 2017.

Section 9(5) of the CGST Act mandates that the operator of an electronic commerce
platform facilitating the supply of goods or services shall be liable to pay GST on
behalf of the supplier, where such supplies are made through its platform, and the
supplier is not liable to pay tax under Section 9(1) of the CGST Act (which deals with
normal tax liability).

Regarding the second part of your question, if Cool Trips does not have a physical
presence in India, the liability to pay GST would still fall on Cool Trips under the
provisions of Section 9(5) of the CGST Act. The place of establishment of the ECO is
not relevant for determining its liability to pay GST on supplies facilitated through its
platform. As long as the supplies are made through the electronic commerce
platform operated by Cool Trips, it would be liable to pay GST on behalf of the
supplier, i.e., the hotel owner in this case.
4)Determine whether the supplier in the following cases are eligible for composition
levy provided their turnover in preceding year does not exceed Rs. 75 lakh: a)Mohan
is engaged in providing legal services in Rajasthan and is registered in the same State
b)Sugam Manufacturers has registered offices in Punjab and Haryana and supplies
goods in neighbouring States

In both cases, we need to assess whether the suppliers are eligible for the
composition levy under the GST law, considering their respective activities and
locations.

a) Mohan, providing legal services in Rajasthan and registered in the same

State: Under the GST law, certain categories of suppliers, including those providing
services, are not eligible for the composition levy. As legal services fall under the
category of services, Mohan, being engaged in providing legal services, would not be
eligible for the composition levy. Therefore, even if Mohan's turnover in the
preceding year does not exceed Rs. 75 lakh, he cannot opt for the composition
scheme.

b) Sugam Manufacturers, with registered offices in Punjab and Haryana,

supplying goods in neighboring States: The composition scheme is available for
suppliers of goods, subject to certain conditions. However, one of the conditions is
that the supplier should be supplying goods within the same State. Since Sugam
Manufacturers supplies goods in neighboring States (assuming these are different
from the states where they are registered), they would not be eligible for the
composition levy. Therefore, even if Sugam Manufacturers' turnover in the preceding
year does not exceed Rs. 75 lakh, they cannot opt for the composition scheme.

In summary, neither Mohan, providing legal services in Rajasthan, nor Sugam

Manufacturers, supplying goods in neighboring States, would be eligible for the
composition levy under the given circumstances.
5)Mohan Enterprises has two registered business verticals in Delhi. Its aggregate
turnover for the preceding year for both the business verticals was Rs. 70 lakh. It
wishes to pay tax under composition levy for one of the vertical in the current year
while under normal levy for other vertical. You are required to advice Mohan
Enterprises whether he can do so .

Mohan Enterprises can opt for the composition scheme for one of its registered
business verticals in Delhi while opting for the normal levy for the other vertical,
provided that both verticals are independent and separately registered under GST.

The GST law allows for different registered business verticals within the same state to
be treated as distinct entities for the purpose of the composition scheme. However,
there are some conditions to be met:

1. Independence of Business Verticals: Each business vertical must be

independent of each other. This means that they should have separate
business activities, records, and accounts. They should operate as distinct
entities.
2. Separate GST Registration: Each business vertical must be separately
registered under GST. If both verticals of Mohan Enterprises are separately
registered in Delhi, then they can opt for different tax schemes for each
vertical.

Given that Mohan Enterprises has two registered business verticals in Delhi and their
aggregate turnover for the preceding year was Rs. 70 lakh, which is within the Rs. 75
lakh limit for composition scheme eligibility, they can indeed opt for composition
levy for one vertical and normal levy for the other, provided they fulfill the conditions
mentioned above.

However, Mohan Enterprises should ensure compliance with all GST regulations and
maintain proper documentation and records for each business vertical to avoid any
issues with tax authorities.
6)An individual acts as a referee in a football match organized by Sports Authority of
India. He has also acted as a referee in another charity football match organized by a
local sports club, in lieu of a lump sum payment. Discuss whether he is required to
pay any GST

In this scenario, we need to determine whether the individual acting as a referee in

the football matches organized by the Sports Authority of India (SAI) and the local
sports club is required to pay any Goods and Services Tax (GST).

Let's analyze both situations separately:

1. Football match organized by Sports Authority of India (SAI): Since the

Sports Authority of India is a government entity, services provided to or by it
are exempt from GST under the provisions of GST law. Therefore, the
individual acting as a referee in the football match organized by SAI would not
be required to pay any GST on the services provided.
2. Charity football match organized by a local sports club: In the case of the
charity football match organized by a local sports club, if the individual acted
as a referee in exchange for a lump sum payment, this transaction would likely
be considered a supply of services under GST law. Refereeing services are
generally taxable under GST.
If the total income from such refereeing services, along with any other taxable
supplies made by the individual, exceeds the threshold limit for GST
registration (currently Rs. 20 lakh for service providers), the individual would
be required to register for GST and pay GST on the income earned from
refereeing services.
However, if the individual's income from refereeing services remains below the
threshold limit for GST registration, he would not be required to register for
GST or pay any GST on the income earned from refereeing in the charity
football match.

In summary, the individual would not be required to pay any GST for acting as a
referee in the football match organized by the Sports Authority of India. However,
whether he needs to pay GST for refereeing in the charity football match depends on
his total income from refereeing services and other taxable supplies, and whether it
exceeds the threshold limit for GST registration.
7)Can notional interest on security deposit given to the landlord in respect of
residential premises taken on rent by the employer and provided to the employee,
be included in the perquisite value of rent-free accommodation given to the
employee?

Yes, the notional interest on security deposit given to the landlord in respect of
residential premises taken on rent by the employer and provided to the employee
can be included in the perquisite value of rent-free accommodation given to the
employee under certain circumstances.

As per the Income Tax Act, 1961, any benefit or perquisite provided by the employer
to the employee is taxable under the head "Salaries". This includes the value of rent-
free accommodation provided to the employee by the employer.

The Central Board of Direct Taxes (CBDT) has clarified that if the security deposit is
given by the employer on behalf of the employee for residential premises taken on
rent and provided to the employee, and if the employer bears the cost of such
security deposit or reimburses it to the employee, the interest on such security
deposit is treated as a perquisite for the employee and is taxable.

Therefore, the notional interest on the security deposit can be included in the
perquisite value of rent-free accommodation given to the employee. However, it's
important to note that this treatment may vary based on specific circumstances and
provisions of tax laws in different jurisdictions. It's advisable to consult with a tax
expert or accountant for accurate advice tailored to your situation.
8)Is the assessee entitled to depreciation on value of goodwill considering it as
“other business or commercial rights of similar nature” within the meaning of an
intangible asset?

The treatment of goodwill for depreciation purposes depends on the jurisdiction and
the specific provisions of the tax laws therein. However, I can provide a general
perspective on this matter.

In many jurisdictions, goodwill is considered an intangible asset and is eligible for

depreciation under certain conditions. In some cases, tax laws explicitly list goodwill
as an intangible asset eligible for depreciation, while in others, it may fall under a
broader category such as "other business or commercial rights of similar nature."

If the tax laws in a particular jurisdiction classify goodwill or similar rights as

intangible assets eligible for depreciation, then the assessee would indeed be
entitled to claim depreciation on the value of goodwill. However, the specific
conditions and rates of depreciation may vary depending on the tax laws and
regulations.

It's important for the assessee to consult with a tax advisor or accountant familiar
with the tax laws of the relevant jurisdiction to determine the eligibility for
depreciation on goodwill and to ensure compliance with all applicable regulations.
9)What would be the nature of the repair and reconditioning expenditure incurred
on a machine which broke down years ago – Revenue or Capital? Solution:

The nature of repair and reconditioning expenditure incurred on a machine that

broke down years ago can vary depending on the extent of the repairs and
reconditioning.

1. Revenue Expenditure: If the repairs and reconditioning are routine

maintenance activities aimed at restoring the machine to its normal operating
condition, and the expenditure does not significantly enhance the machine's
value, efficiency, or lifespan beyond its original condition, then it would likely
be considered revenue expenditure. Revenue expenditure is typically incurred
for the purpose of maintaining the existing earning capacity of the asset and
is fully deductible as an expense in the year it is incurred.
2. Capital Expenditure: On the other hand, if the repairs and reconditioning
involve substantial reconstruction, replacement of major components, or
upgrades that significantly enhance the machine's performance, efficiency, or
lifespan beyond its original condition, then it would likely be considered
capital expenditure. Capital expenditure is incurred to acquire, improve, or
extend the life of a capital asset and is usually capitalized and depreciated
over the asset's useful life.

Therefore, to determine whether the repair and reconditioning expenditure should

be treated as revenue or capital, one needs to assess the nature and extent of the
repairs, considering whether they merely restore the machine to its normal operating
condition or if they significantly enhance its value or efficiency. Consulting with a tax
advisor or accountant familiar with the specific circumstances and accounting
standards applicable to the situation would be advisable for a precise determination.
10) A person availing composition scheme in Haryana during a financial year crosses
the turnover of Rs. 75 lakh during the course of the year i.e. he crosses the turnover
of Rs. 75 lakh in December. Will he be allowed to pay tax under composition scheme
for the remainder of the year, i.e. till 31st March

In the scenario described, if a person availing the composition scheme in Haryana

crosses the turnover threshold of Rs. 75 lakh during the financial year, they would
generally be ineligible to continue under the composition scheme for the remainder
of that financial year.

Under the GST law, once the aggregate turnover of a taxpayer exceeds the threshold
limit of Rs. 75 lakh in a financial year, they are required to opt for regular GST
registration and cannot continue under the composition scheme. This is specified
under Section 10(2) of the CGST Act, 2017.

Therefore, if the turnover crosses Rs. 75 lakh in December, the person would need to
transition from the composition scheme to regular GST registration starting from
January until the end of the financial year on March 31st. They would be required to
comply with the provisions applicable to regular taxpayers, including filing regular
GST returns and payment of tax as per the applicable rates for their business
activities.
11)A & Co. received Rs. 2 lacs as compensation from B & Co. for premature
termination of contract of agency. What would be the amount so received is? Is it
taxable or not explain

The amount received by A & Co. from B & Co. as compensation for the premature
termination of the contract of agency is Rs. 2 lakhs.

Whether this amount is taxable or not depends on the nature of the compensation
and the provisions of the tax laws in the jurisdiction in which A & Co. operates. In
general, compensation received for the premature termination of a contract could be
treated as either revenue receipt or capital receipt, and the tax treatment would vary
accordingly.

Here are two possible scenarios:

1. Revenue Receipt: If the compensation is considered as a revenue receipt, it

would be taxable as income in the hands of A & Co. under the head "Profits
and Gains of Business or Profession" or "Income from Other Sources,"
depending on the nature of the business and the circumstances of the receipt.
In this case, the entire amount of Rs. 2 lakhs would be taxable in the year of
receipt.
2. Capital Receipt: If the compensation is considered as a capital receipt, it may
not be taxable. Capital receipts are generally those that do not arise from the
regular course of business operations but result from capital transactions or
changes in capital structure. If the compensation is received as damages for
breach of contract or loss of a capital asset (in this case, the agency contract),
it may be treated as a capital receipt and may not be taxable.

To determine the tax treatment accurately, A & Co. should consult with a tax advisor
or accountant familiar with the tax laws applicable to them. They can assess the
specific circumstances surrounding the compensation received and provide guidance
on the proper tax treatment.
12)Can the expenditure incurred for purchase of second hand medical equipment for
use as spare parts for existing equipment be claimed as revenue expenditure?

Whether the expenditure incurred for the purchase of second-hand medical

equipment for use as spare parts for existing equipment can be claimed as revenue
expenditure depends on the specific circumstances and accounting principles
applicable in the jurisdiction.

In general, revenue expenditure refers to expenses incurred for the purpose of

maintaining the existing earning capacity of a business, typically in the ordinary
course of business operations. These expenses are usually deducted in full in the year
they are incurred.

Here are some factors to consider:

1. Nature of the Expense: If the expenditure incurred for the purchase of

second-hand medical equipment is considered necessary for the ongoing
maintenance and repair of the existing medical equipment and is part of the
regular operating expenses of the business, it may be treated as revenue
expenditure.
2. Usefulness and Durability: If the spare parts purchased have a relatively
short useful life and are consumed in the process of maintaining the existing
equipment, they are more likely to be considered revenue expenditure.
3. Accounting Treatment: The accounting treatment may also depend on the
materiality of the expenditure. If the cost of the spare parts is relatively low
and does not significantly affect the financial statements, it may be treated as
revenue expenditure.

However, if the expenditure is significant and results in a substantial enhancement to

the existing equipment's capacity, efficiency, or lifespan, it may be treated as capital
expenditure and capitalized instead of expensed immediately.

Ultimately, the determination of whether the expenditure can be claimed as revenue

expenditure should be based on a careful analysis of the specific circumstances and
in accordance with the applicable accounting standards and tax regulations. It is
advisable to consult with a qualified accountant or tax advisor for guidance tailored
to the particular situation.
13) RXL Pvt. Ltd. manufactures beauty soap with the brand name ‘Forever Young’.
RXL Pvt. Ltd. has organized a concert to promote its brand. Ms. Ahana Kapoor, its
brand ambassador, who is a leading film actress, has given a classical dance
performance in the said concert. The proceeds of the concert worth Rs. 1,20,000 will
be donated to a charitable organization. Whether Ms. Ahana Kapoor will be required
to pay any GST.

Ms. Ahana Kapoor, as a brand ambassador performing in a concert organized by RXL

Pvt. Ltd. to promote its brand "Forever Young," would likely be considered as
providing services in the course or furtherance of business under the Goods and
Services Tax (GST) regime.

According to GST law, services provided by individuals, including performers, are

generally taxable if the aggregate turnover of their services exceeds the threshold
limit for GST registration, which is currently set at Rs. 20 lakhs (subject to certain
exceptions and thresholds in some states).

However, in the case described, where Ms. Ahana Kapoor is performing in a concert
organized specifically to promote the brand "Forever Young" and the proceeds are
being donated to a charitable organization, there are a few points to consider
regarding the GST implications:

1. Service Taxability: Ms. Ahana Kapoor's performance in the concert could be

considered a promotional activity undertaken by RXL Pvt. Ltd. to enhance the
visibility and appeal of its brand. Therefore, it could be argued that Ms.
Kapoor's services are provided in the course or furtherance of business by RXL
Pvt. Ltd. and are thus taxable under GST.
2. Charitable Aspect: Since the proceeds of the concert are being donated to a
charitable organization and are not being retained by RXL Pvt. Ltd. for
commercial gain, there may be considerations regarding the applicability of
GST. Donations made to charitable organizations are generally not considered
as consideration for any supply and therefore may not be subject to GST.
3. Aggregate Turnover: If Ms. Ahana Kapoor's aggregate turnover from her
services, including this performance, exceeds the threshold limit for GST
registration, she would be required to register for GST and pay GST on the
taxable portion of her income.

In summary, Ms. Ahana Kapoor may be required to pay GST on her performance fees
if her aggregate turnover exceeds the threshold limit for GST registration and her
services are considered taxable under GST. However, the charitable aspect of the
event and the specific details of the arrangement may require further examination by
a tax expert to determine the exact GST implications.
14)Can the amount incurred by the assessee for replacing the old mono sound
system in its cinema theatre with a new Dolby stereo system be treated as revenue
expenditure?

The treatment of expenditure incurred for replacing the old mono sound system with
a new Dolby stereo system in a cinema theatre as revenue expenditure or capital
expenditure depends on the nature and purpose of the expenditure and the
accounting standards and tax regulations applicable in the jurisdiction.

Here are some factors to consider:

1. Maintenance vs. Improvement: If the replacement of the old mono sound

system with a new Dolby stereo system is considered as routine maintenance
aimed at keeping the cinema theatre in its existing operating condition, then it
may be treated as revenue expenditure. Revenue expenditure is typically
incurred for the purpose of maintaining the existing earning capacity of the
asset and is fully deductible as an expense in the year it is incurred.
2. Enhancement of Asset: However, if the replacement is considered to
substantially improve the cinema theatre's facilities or increase its earning
capacity by enhancing the quality of the sound system and providing a better
experience for customers, it may be treated as capital expenditure. Capital
expenditure is incurred to acquire, improve, or extend the life of a capital asset
and is usually capitalized and depreciated over the asset's useful life.
3. Accounting Treatment: The accounting treatment may also depend on the
materiality of the expenditure. If the cost of replacing the sound system is
relatively low and does not significantly affect the financial statements, it may
be treated as revenue expenditure. However, if the expenditure is significant
and results in a substantial enhancement to the cinema theatre's facilities, it
may be capitalized and depreciated over its useful life.

In summary, whether the expenditure for replacing the old mono sound system with
a new Dolby stereo system can be treated as revenue expenditure depends on the
specific circumstances and the nature of the expenditure. It is advisable to consult
with a qualified accountant or tax advisor for guidance tailored to the particular
situation and applicable accounting standards and tax regulations.
15)Can payment to police personnel and goondas to keep away from the cinema
theatres run by the assessee be allowed as deduction?

Payments made to police personnel and individuals referred to as "goondas" (thugs

or criminals) to keep away from the cinema theatres run by the assessee cannot be
allowed as a deduction under most tax laws. Such payments would typically be
considered illegal or unethical and would not qualify as legitimate business expenses.

Here are a few reasons why such payments would not be allowed as deductions:

1. Illegal Activities: Payments made to police personnel or criminals to engage

in activities such as intimidation, harassment, or extortion would likely be
illegal. Tax laws generally do not allow deductions for expenses incurred in
connection with illegal activities.
2. Public Policy: Allowing deductions for payments made to police personnel or
criminals to keep away from cinema theatres would be against public policy.
Such deductions would incentivize illegal or unethical behavior and
undermine the rule of law.
3. Business Purpose: Expenses claimed as deductions must be incurred wholly
and exclusively for the purposes of the business. Payments made to police
personnel or criminals to keep away from cinema theatres do not serve a
legitimate business purpose and would not meet this criterion.
4. Regulatory Compliance: Businesses are required to comply with all
applicable laws and regulations. Engaging in activities involving payments to
police personnel or criminals would likely violate various legal and regulatory
requirements.

In summary, payments made to police personnel or criminals to keep away from

cinema theatres would not be allowed as deductions under most tax laws. These
payments are generally considered illegal or unethical and do not meet the criteria
for legitimate business expenses. It is advisable for businesses to conduct their
operations in compliance with the law and to seek guidance from legal and tax
professionals to ensure compliance with all applicable regulations.
16)A telephone company receives Rs. 5000 against an invoice of Rs. 4800. The excess
amount of Rs. 200 can be adjusted against the next invoice. Whether the telephone
company has the option to take the date of the next invoice as the time of supply of
service in relation to the amount of Rs. 200 received in excess against the earlier
invoice.

In the context of Goods and Services Tax (GST), the time of supply determines when
a supply of goods or services is deemed to have occurred, which is crucial for
determining the applicable tax period. The time of supply is generally determined
based on specific events or dates as outlined in the GST law.

In the scenario described, where a telephone company receives Rs. 200 in excess
against an invoice of Rs. 4800 and decides to adjust this excess amount against the
next invoice, the time of supply for the excess amount of Rs. 200 would typically be
determined based on the provisions of the GST law.

According to Section 12(3) of the Central Goods and Services Tax (CGST) Act, 2017,
the time of supply for services is determined as the earliest of the following dates:

1. Date of issue of invoice, if the invoice is issued within the prescribed period.
2. Date of provision of service, if the invoice is not issued within the prescribed
period.
3. Date of receipt of payment, if the payment is received before the date of issue
of invoice or the date of provision of service, whichever is earlier.

In this case, since the telephone company received Rs. 200 in excess against the
invoice of Rs. 4800, the time of supply for the excess amount would be the date of
receipt of payment, which is when the excess amount was actually received by the
company.

Therefore, the telephone company cannot choose the date of the next invoice as the
time of supply for the excess amount of Rs. 200. The time of supply for the excess
amount would be the date when it was actually received by the company, regardless
of whether it is adjusted against the next invoice or not.
17)I bought a set of modular furniture from a retail store. Invoice is issued to me and
I made the payment. The furniture is to be delivered to me later in the week when a
technician is available to assemble and install it. The next day the rate of tax
applicable to modular furniture is revised upward, and the store sends me a
supplementary invoice with the delivery note accompanying the furniture to collect
the differential amount of tax. Is this correct on store’s part

In this scenario, where you purchased modular furniture from a retail store, an
invoice was issued to you, and you made the payment, the store sending you a
supplementary invoice to collect the differential amount of tax due to a change in
the tax rate could be considered correct depending on the applicable tax laws and
regulations.

Here are a few points to consider:

1. Change in Tax Rate: If the tax rate applicable to modular furniture was
revised upward by the tax authorities after your initial purchase but before the
delivery of the furniture, the store would be required to collect the differential
amount of tax from you to comply with the updated tax regulations.
2. Legality of the Supplementary Invoice: Whether the store can issue a
supplementary invoice to collect the differential tax amount may depend on
the specific provisions of the tax laws and regulations in your jurisdiction.
Some tax laws may allow for supplementary invoices in cases of changes in tax
rates, while others may require the store to absorb the additional tax cost.
3. Disclosure and Communication: The store should transparently
communicate the reason for issuing the supplementary invoice to you and
provide a breakdown of the revised tax amount. They should also ensure that
the supplementary invoice complies with all relevant legal requirements,
including proper documentation and invoicing procedures.
4. Customer Communication: It's essential for the store to promptly
communicate any changes in the tax rate and the resulting impact on your
purchase to ensure transparency and avoid any confusion or disputes.

In summary, if there has been a legitimate change in the tax rate applicable to the
modular furniture between the issuance of the initial invoice and the delivery of the
furniture, the store may be justified in issuing a supplementary invoice to collect the
differential tax amount. However, it's crucial for the store to comply with all relevant
legal requirements and communicate the changes transparently to you, the
customer.
18)Whether the rental income derived from the unsold flats which are shown as
stock-in-trade in the books of the assessee would be taxable under the head ‘Profits
and gains from business or profession’ or under the head ‘Income from house
property’, in a case where the actual rent receipts formed the basis of computation of
income?

The treatment of rental income derived from unsold flats, which are shown as stock-
in-trade in the books of the assessee, depends on the intention behind holding the
flats and the specific facts of the case. Generally, rental income can be taxed either
under the head "Profits and gains from business or profession" or under the head
"Income from house property."

Here are the considerations for each head:

1. Profits and gains from business or profession: If the intention behind

holding the unsold flats is primarily for the purpose of trading, i.e., selling
them in the ordinary course of business, then the rental income derived from
such flats would be taxed under the head "Profits and gains from business or
profession." In this case, the flats are treated as stock-in-trade, and any
income derived from them, including rental income, is considered part of the
business income.
2. Income from house property: If the flats are held as investment property,
and the primary intention is to earn rental income from them rather than
trade them, then the rental income would be taxed under the head "Income
from house property." In this case, the flats are treated as assets held for
rental purposes, and rental income is taxed separately under the provisions
related to income from house property.

The determination of the intention behind holding the flats is crucial in deciding the
appropriate head under which rental income should be taxed. This determination is
based on various factors, including the language of the legal documents, the conduct
of the assessee, and the surrounding circumstances.

If the flats are held for both trading and rental purposes, the income derived from
them may be apportioned between business income and income from house
property based on the proportionate use or intention.

It's essential for the assessee to carefully evaluate the circumstances and seek
guidance from a tax advisor or accountant to ensure proper tax treatment of rental
income derived from unsold flats.
19)Can notional interest on interest-free deposit received by an assessee in respect
of a shop let out on rent be brought to tax as business income or income from house
property?

The treatment of notional interest on an interest-free deposit received by an

assessee in respect of a shop let out on rent depends on the specific facts and
circumstances of the case, as well as the intention behind the transaction. Generally,
notional interest on interest-free deposits is not brought to tax unless there is a
specific provision in the tax laws requiring its taxation.

Here are the considerations for each type of income:

1. Business Income: If the shop is let out as part of the assessee's business
activities, and the intention behind receiving the interest-free deposit is
primarily for business purposes, any notional interest on the deposit may be
treated as business income. In this case, the interest-free deposit would be
considered as part of the assessee's trading or business operations, and any
notional interest earned on it would be included in the computation of
business income.
2. Income from House Property: If the shop is let out as an investment
property, and the intention behind receiving the interest-free deposit is
primarily for rental income purposes, any notional interest on the deposit may
be treated as income from house property. In this case, the interest-free
deposit would be considered as part of the rental arrangement, and any
notional interest earned on it would be included in the computation of
income from house property.

However, it's important to note that the tax treatment of notional interest on
interest-free deposits may vary depending on the specific provisions of the tax laws
in the jurisdiction and the interpretation of those provisions by tax authorities and
courts.

In some cases, tax authorities may argue that notional interest on interest-free
deposits should be taxed as income from other sources or under general anti-
avoidance provisions if they believe the arrangement was structured to avoid
taxation.

It's advisable for the assessee to consult with a tax advisor or accountant familiar with
the tax laws and regulations in the relevant jurisdiction to determine the appropriate
tax treatment of notional interest on interest-free deposits in their specific situation.
20)A hotel owner provided accommodation in Haryana, through an electronic
commerce operator – Cool Trips. The hotel owner is not liable to get registered as
per the provisions of section 22(1) of the CGST Act. Who is the person liable to pay
GST in this case? Would your answer be different if the Electronic Commerce
Operator Cool Trips does not have a physical presence in India?

In this scenario, where a hotel owner in Haryana provides accommodation through

an electronic commerce operator (ECO) called Cool Trips, and the hotel owner is not
liable to get registered under section 22(1) of the Central Goods and Services Tax
(CGST) Act, the liability to pay Goods and Services Tax (GST) depends on whether the
ECO is considered an operator or an aggregator as per the GST law.

If Cool Trips is considered an operator under the GST law, it would be liable to pay
GST on the supply of accommodation services provided by the hotel owner. The
liability arises because the hotel owner is not liable to register under GST, and
therefore, the responsibility for paying GST shifts to the ECO acting as the operator
facilitating the supply of accommodation services.

However, if Cool Trips is considered an aggregator under the GST law, the liability to
pay GST would remain with the hotel owner, even if the ECO does not have a
physical presence in India. In this case, the hotel owner would be required to pay GST
on the supply of accommodation services directly to the government.

The distinction between an operator and an aggregator under the GST law is
significant in determining the liability to pay GST for services facilitated through
electronic commerce platforms. The liability rules may vary based on the specific
provisions of the GST law and any clarifications or guidelines issued by the tax
authorities.

It's essential for businesses involved in electronic commerce transactions to

understand their GST obligations and consult with tax advisors or legal experts to
ensure compliance with the GST law.
21)An individual acts as a referee in a football match organized by Sports Authority
of India. He has also acted as a referee in another charity football match organized
by a local sports club, in lieu of a lump sum payment. Discuss whether he is required
to pay any GST

In the scenario described, where an individual acts as a referee in football matches

organized by the Sports Authority of India (SAI) and a local sports club, the GST
(Goods and Services Tax) implications depend on whether the individual is required
to register for GST and if the services provided are exempt from GST.

Here's the analysis:

1. Refereeing Services to Sports Authority of India (SAI): Services provided to

the Sports Authority of India, being a government entity, are generally exempt
from GST. Therefore, if the individual is providing refereeing services to SAI, he
is not required to register for GST or pay GST on these services.
2. Refereeing Services to Local Sports Club (Charity Football Match): In the
case of refereeing services provided to a local sports club for a charity football
match, whether GST is applicable depends on the aggregate turnover of the
individual and the specific provisions of the GST law regarding exemptions
and thresholds for service providers.
o Aggregate Turnover: If the individual's aggregate turnover from all
taxable supplies (including the refereeing services) exceeds the
threshold limit for GST registration (currently Rs. 20 lakhs for service
providers), he would be required to register for GST and pay GST on his
services.
o Exemptions: Certain services provided by individuals may be exempt
from GST, depending on the nature of the service and any specific
exemptions provided under GST law. However, services provided by
referees are not explicitly exempted under GST, so the individual would
need to assess whether his services fall under any exemption
categories.
3. Lump Sum Payment for Refereeing Services: Whether the payment
received by the individual for refereeing services at the charity football match
is subject to GST depends on the nature of the payment and the GST
registration status of the individual, as discussed above.

In summary, if the individual's aggregate turnover exceeds the threshold limit for GST
registration, he would be required to register for GST and pay GST on his refereeing
services, including any lump sum payment received for services provided at the
charity football match. However, services provided to the Sports Authority of India
are generally exempt from GST. It's essential for the individual to evaluate his GST
obligations based on his specific circumstances and consult with a tax advisor if
needed.