CATestSeries.

org (Since 2015)

CA Final | CA Inter | CA IPCC | CA Foundation Online Test Series

Answer Paper

Indirect Tax Laws Duration: 65

Details: Test- 10 (Ch- 10) Marks: 35

Instructions:

 All the questions are compulsory

 Properly mention test number and page number on your answer sheet, Try to upload sheets in
arranged manner.
 In case of multiple choice questions, mention option number only Working notes are
compulsory wherever required in support of your solution
 Do not copy any solution from any material. Attempt as much as you know to fairly judge your
performance.

Legal: Material provided by catestseries.org is subject to copyright. No part of this publication

may be reproduced, distributed, or transmitted in any form or by any means, including photocopying,
recording, or other electronic or mechanical methods, without the prior written permission of the
publisher. For permission requests, write to the publisher, addressed “Attention: Permissions
Coordinator,” at exam@catestseries.org. If any person caught of copyright infringement, strong legal
action will be taken. For more details check legal terms on the website: catestseries.org

CATESTSERIES.ORG
Ans-1

(a) Rule 138(1) provides that e-way Bill is mandatorily required to be generated if the goods
are moved, inter alia, in relation to supply and the consignment value exceeds Rs. 50,000.
Further, explanation 2 to rule 138(1) stipulates that the consignment value of goods shall be
the value, determined in accordance with the provisions of section 15, declared in an invoice,
a bill of supply or a delivery challan, as the case may be, issued in respect of the said
consignment and also includes CGST, SGST/UTGST, IGST and cess charged, if any, in the
document and shall exclude the value of exempt supply of goods where the invoice is issued
in respect of both exempt and taxable supply of goods.
Accordingly, in the given case, the consignment value will be as follows:

= Rs. 65,000 × 112%

= Rs. 72,800.

Since In this case, as the value of the wooden toys supplied by Rajat Toys Pvt. Ltd. exceeds
Rs.50,000 (excluding GST), an e-way bill is obligatory.

(b) An e-way bill contains two parts namely, Part A to be furnished by the registered person
who is causing movement of goods of consignment value exceeding Rs. 50,000/- and part B
(transport details) is to be furnished by the person who is transporting the goods.

Where the goods are transported by the registered person as a consignor or the recipient of
supply as the consignee, whether in his own conveyance or a hired one or a public
conveyance, by road, the said person shall generate the e-way bill on the common portal after
furnishing information in Part B [Rule 138(2)].

Where the goods are transported by railways or by air or vessel, the e-way bill shall be
generated by the registered person, being the supplier or the recipient, who shall, either
before or after the commencement of movement, furnish, on the common portal, the
information in Part B [Rule 138(2A)].

Where the goods are handed over to a transporter for transportation by road, the registered
person shall furnish the information relating to the transporter on the common portal and
the e-way bill shall be generated by the transporter on the said portal on the basis of the

CATESTSERIES.ORG
information furnished by the registered person in Part A [Rule 138(3)].
Where the consignor or the consignee has not generated the e-way bill and the aggregate of
the consignment value of goods carried in the conveyance is more than Rs. 50,000/, the
transporter, except in case of transportation of goods by railways, air and vessel, shall, in
respect of inter-State supply, generate the e-way bill on the basis of invoice or bill of supply
or delivery challan, as the case may be, and may also generate a consolidated e-way bill on
the common portal prior to the movement of goods [Rule 138(7)].

It is crucial for Rajat Toys Pvt. Ltd. to provide accurate details in the e-way bill, including the
vehicle number, transportation document number, and other relevant information.

(c) It is mandatory to generate e-way bill in all cases where the value of consignment of goods
being transported is more than Rs. 50,000/- and it is not otherwise exempted in terms of rule
138(14). If e-way bills, wherever required, are not issued in accordance with the provisions
contained in rule 138, the same will be considered as contravention of rules.

As per section 122(1)(xiv), a taxable person who transports any taxable goods without the
cover of specified documents (e-way bill is one of the specified documents) shall be liable to
a penalty of Rs. 10,000/- or tax sought to be evaded (wherever applicable) whichever is
greater.
Moreover, as per section 129(1), where any person transports any goods or stores any goods
while they are in transit in contravention of the provisions of this Act or the Rules made
thereunder, all such goods and conveyance used as a means of transport for carrying the said
goods and documents relating to such goods and conveyance shall be liable to detention or
seizure. It is imperative for Rajat Toys Pvt. Ltd. to prioritize the issuance of the e-way bill to
avoid legal repercussions and ensure smooth transportation of the wooden toys to the retail
seller in Maharashtra.

(6 Marks)

Ans-2

Flavors Delight Catering Services Pvt. Ltd., having chosen the composition scheme for the
current financial year, enjoys specific relaxations in maintaining certain records as outlined in

CATESTSERIES.ORG
rule 56(2) and (4) of the GST regulations. These exemptions alleviate the record-keeping
burden for businesses opting for the composition levy compared to regular taxpayers. The
key records that Flavors Delight Catering Services Pvt. Ltd. is not required to maintain, in
contrast to a normal taxpayer, are as follows:

(I) Stock of goods: Accounts of stock in respect of goods received and supplied by him, and
such accounts shall contain particulars of the opening balance, receipt, supply, goods lost,
stolen, destroyed, written off or disposed of by way of gift or free sample and the balance of
stock including raw materials, finished goods, scrap and wastage thereof.

(II) Details of tax: Account, containing the details of tax payable (including tax payable under
reverse charge), tax collected and paid, input tax, input tax credit claimed, together with a
register of tax invoice, credit notes, debit notes, delivery challan issued or received during any
tax period.

(5 Marks)

Ans-3

Elegance Beauty Emporium Pvt. Ltd. must carefully navigate the e-way bill issuance process
in line with the Goods and Services Tax (GST) regulations. The situation involves the dispatch
of cosmetic products from two distinct stores in Mumbai to a retail store in Jaipur, utilizing a
single conveyance provided by Shreeji Logistics. The key considerations for e-way bill issuance
are the value of the goods and the locations involved in the transaction.

Firstly, recognizing that the overall value of the cosmetic order is Rs.1,50,000, inclusive of an
18% GST component, it is noted that the order is divided. Goods worth Rs.70,000 are
dispatched from the Bandra store, while products valued at Rs.80,000 are sent from the
Andheri store. Given that the value of each consignment exceeds the prescribed limit for e-
way bill generation, Elegance Beauty Emporium Pvt. Ltd. is obliged to generate separate e-
way bills for each movement.

The FAQs on E-way Bill issued by CBIC clarify that if multiple invoices are issued by the supplier
to one recipient, that is, for movement of goods of more than one invoice of same consignor

CATESTSERIES.ORG
and consignee, multiple e-way bills have to be generated. In other words, for each invoice,
one e-way bill has to be generated, irrespective of the fact whether same or different
consignors or consignees are involved. Multiple invoices cannot be clubbed to generate one
e-way bill. However, after generating all these e-way bills, one consolidated e-way bill can be
prepared for transportation purpose, if goods are going in one vehicle.

(6 Marks)

Ans-4

TechnoCool Appliances Pvt. Ltd.'s contention that the e-way bill is not mandatory due to
reasons other than a standard supply requires a thorough examination of the prevailing
regulations. According to the Goods and Services Tax (GST) framework in India, the issuance
of an e-way bill is generally mandatory for the movement of goods exceeding the prescribed
value, irrespective of the reason behind the transportation.
In the given situation, where refrigerator components valued at Rs.90,000 are being
dispatched from Mumbai to Karnataka for warranty replacements, it is imperative to consider
the provisions of the e-way bill requirements. As per the GST rules, the threshold limit for e-
way bill generation is determined by the value of the consignment, and in this case, the
declared value exceeds the limit.
Furthermore, the purpose of the movement, whether due to a sale, transfer, or warranty
replacement, is not explicitly exempted from e-way bill obligations. The GST regulations
primarily focus on the value of the goods being transported, making it crucial for TechnoCool
Appliances Pvt. Ltd. to adhere to the e-way bill provisions.
Therefore, it is recommended for TechnoCool Appliances Pvt. Ltd. to generate the e-way bill
for the transportation of refrigerator components from Mumbai to Karnataka, considering
the declared value of Rs.90,000. in the given case, since the consignment value exceeds Rs.
50,000, e-way bill is required to be mandatorily generated. Therefore, the claim TechnoCool
Appliances Pvt. Ltd. that e-way bill is not mandatorily required to be generated as the
movement of goods is caused due to reasons other than supply, is not correct.

(6 Marks)

CATESTSERIES.ORG
Ans-5

Zenith Consultancy Solutions Pvt. Ltd., as a supplier of management consultancy services

registered in Haryana, must adhere to the record-keeping requirements outlined in the Goods
and Services Tax (GST) regulations. The period for which books of accounts or other records
need to be maintained is stipulated under Section 36 of the Central Goods and Services Tax
Act, 2017.

Section 36 stipulates that every registered person required to keep and maintain books of
account or other records in accordance with the provisions of sub-section (1) of section 35
shall retain them until the expiry of 72 months from the due date of furnishing of annual
return for the year pertaining to such accounts and records.

However, a registered person, who is a party to an appeal or revision or any other proceedings
before any Appellate Authority or Revisional Authority or Appellate Tribunal or court,
whether filed by him or by the Commissioner, or is under investigation for an offence under
Chapter XIX, shall retain the books of account and other records pertaining to the subject
matter of such appeal or revision or proceedings or investigation for a period of one year after
final disposal of such appeal or revision or proceedings or investigation, or for the period
specified above, whichever is later.

(6 Marks)

Ans-6 MCQ Answer

1. c) Mr. Verma can cancel the e-way bill within 24 hours from the time of generation, but
only if the goods are not transported at all.

Reason:

According to the e-way bill provisions, the e-way bill can be canceled if either the goods are
not transported or if they are not transported as per the details furnished in the e-way bill.
However, the cancellation must be done within 24 hours from the time of generation. In this
case, Mr. Verma can cancel the e-way bill within the specified time frame, but the cancellation

CATESTSERIES.ORG
is allowed only if the goods are not transported at all. This ensures that the e-way bill system
is aligned with the actual movement of goods and their details.

2. c) E-way Bill is mandatory for Mr. Gupta for any movement of goods, irrespective of the
reasons, due to the consignment value exceeding Rs.50,000.

Reason:

According to the E-way Bill regulations, the generation of an E-way Bill is mandatory when
the consignment value exceeds Rs.50,000. This requirement applies to movements of goods,
whether they are in relation to a supply, for reasons other than supply, or due to inward
supply from an unregistered person. In the case of Mr. Gupta, the consignment value exceeds
Rs.50,000, making it mandatory for him to generate an E-way Bill for any movement of goods,
regardless of the specific reasons for the movement. This ensures that the E-way Bill system
is implemented for high-value consignments, promoting transparency and compliance in the
movement of goods.

3. c) Once the goods reach the transporter's godown (recipient taxpayer’s APoB), the e-way
bill is deemed concluded, and its validity is not required to be extended for further movement.

Reason:

In this scenario, according to the provisions mentioned, the transportation under the e-way
bill is deemed to be concluded once the goods reach the transporter's godown, which is
considered the recipient taxpayer's Additional Place of Business (APoB). As a result, the e-way
bill's validity is not required to be extended for further movement within the same city or
town, even if it involves storage in the transporter's godown. However, when the goods move
from the transporter's godown to any other Place of Business (PoB) of the recipient taxpayer,
a valid e-way bill will be required for that specific movement. This ensures clarity in e-way bill
requirements during different stages of transportation.

CATESTSERIES.ORG
4. b) Mr. B can generate an e-way bill for outward movement, but Mr. A is blocked from
generating an e-way bill due to non-filing of Form GSTR-1 for the past 2 months.

Reason:

In this scenario, the correct answer is B. Mr. B, being a regular return filer, is not restricted
from generating an e-way bill for outward movement of goods. However, Mr. A is blocked
from generating an e-way bill for his outward supply to Mr. H due to non-filing of Form GSTR-
1 for the past 2 months. E-way bill generation for outward movement is impacted by the
compliance status of the registered person initiating the movement, and in this case, Mr. A's
non-compliance restricts his ability to generate an e-way bill.

5. b) The e-way bill number in electronic form or mapped to an RFID embedded on the
conveyance is sufficient for movement by road, rail, air, or vessel, and a physical copy is only
required in exceptional cases.

Reason:

As per e-way bill regulations, for the movement of goods, the person-in-charge of a
conveyance (in this case, Mr. Kumar) is required to carry the e-way bill in physical form or the
e-way bill number in electronic form or mapped to an RFID embedded on the conveyance.
However, an exception is made for movement by rail, air, or vessel, where carrying the e-way
bill physically or electronically is not mandatory. In these cases, the e-way bill number can be
mapped to an RFID embedded on the conveyance. Option B reflects this exception, ensuring
clarity on the requirement based on the mode of transportation.

6. b) Inform the authorities about the detention exceeding 30 minutes and upload the
information on the common portal.

Reason:

According to the regulations, once a physical verification of goods on a conveyance has been
conducted during transit at one place within the State or in any other State, no further

CATESTSERIES.ORG
physical verification is required in the State unless specific information regarding tax evasion
is made available subsequently. In the given scenario, since Mr. Raghav's vehicle has been
detained for more than 30 minutes, he is required to upload this information on the common
portal to comply with the reporting requirements outlined in the regulations. This action
ensures transparency and adherence to the stipulated timelines for reporting inspections and
detentions.

(1×6 = 6 Marks)

CATESTSERIES.ORG