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CA VIJAY GAURAV CLASSES

VG Professional Studies (P) Limited, P a g e | 1

D-8, Ist Floor, Near Sai Mandir and Metro Pillar No. 34-35,

Vikas Marg, Laxmi Nagar, Delhi 110 092

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website: www.cavijaygaurav.com

Prepared by CA Vijay Gaurav

Faculty CA-Final DT/IDT/Int. Tax

Faculty CA-Inter Taxation

VGFNLN

Total No. of Questions-7 Total No. of Printed Pages- 16 Time Allowed - 3 Hours Maximum Marks - 100

INDIRECT TAX Question No. 1 is Compulsory

Attempt any five from the remaining six questions Wherever required, suitable assumptions may be made by the candidate and

stated clearly in the answer. Working notes should form part of the answer

Question No. 1(a) A contract awarded by Bombay Municipal Corporation (BMC) for repair of a

particular road to M/s B Ltd. of Mumbai with a total consideration of Rs. 12 lakhs

with terms and conditions as stated that:

i. It is pure service (excluding works contract service or other composite

supplies involving supply of any goods)

ii. The entire work should be completed within 30 days.

iii. The said work has been completed as per terms and conditions.

Applicable rate of GST is 18%.

Find the following:

A. Is it taxable supply?

B. Rework if the contract is in the nature of works contract where

material is involved 25% in the value of contract. Is it taxable

supply? If so who is liable to pay GST and for what amount?

C. Rework if the contract is in the nature of works contract where

material is involved 30% in the value of contract. Is it taxable

supply? If so who is liable to pay GST and for what amount?

(4 Marks)





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Question No. 1(b) Calculate the value of taxable supply of PTN Transport Company engaged in

the business of transport of goods by road for the month of April 2018. Give

reasons for taxability or exemption of each item. No freight is received from any

of the specified category of consignor/ consignee. Suitable assumptions may be

made wherever required. PTN Transport Company does not avail ITC. GST is

leviable @ 5%:

Particular Amount

Total freight charges received during the year 14,50,000

Freight charges received for transporting fruits 1,20,000

Freight collected for transporting small consignment for persons

who paid less than Rs. 750 for each consignment

70,000

Freight collected for transporting goods in small vehicles for

persons who paid less than Rs. 1,500/- per trip

1,55,000

(3 Marks) Question No. 1(c) Crown Beers India Pvt Ltd., supplies raw material to a job worker Kareena Ltd. for

manufacture of alcoholic liquor for human consumption. After completing the

job-work, the finished product of 5,000 beer bottles are returned to Crown Beers

India Pvt Ltd., putting the retail sale price as Rs. 200 on each bottle (inclusive of

duties and taxes). Kareena Ltd., charged Rs.100 per bottle as job work charges

of carrying out of intermediate production process of alcoholic liquor for human

consumption from Crown Beers India Pvt. Ltd. Find the GST liability if any in the

hands of Kareena Ltd. Rate is 18%

(2 Marks) Question No. 1(d) Compute the assessable value and total customs duty payable under the

Customs Act, 1962 for an imported machine, based on the following

information:

Particular US $

Cost of the machine at the factory of the exporter 20,000

Transport charges from the factory of exporter to the port for shipment 800

Handling charges paid for loading the machine in the ship 50

Buying commission paid by the importer 100





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Lighterage charges paid by the importer 200

Freight incurred from port of entry to Inland Container depot 1,000

Ship demurrage charges 400

Freight charges from exporting country to India 5,000

Date of bill of entry

20.02.2018 (Rate BCD 20%; Exchange rate as notified by CBEC Rs. 60 per US $)

Date of entry inward

25.01.2018 (Rate BCD 12%; Exchange rate as notified by CBEC Rs. 65 per US $)

IGST payable under section 3(7) of the Customs Tariff Act, 1975 12%

Also find the eligible input tax credit to the importer.

(5 Marks)

Question No. 1(e) Classmate Printers Pvt. Ltd., manufactured register account books & letter pads

and exported the same by courier at FOB value of 400 USD per consignment to

USA and 350 UK Pounds per consignment to UK. During the year 2015-16, 40

consignments sent to USA. Exchange rate is Rs. 60 per USD. 20 consignments sent

to UK. Exchange rate is Rs. 80 per Pound. Classmate Printers Pvt. Ltd., entitled 2%

reward rate. Find the reward amount under MEIS for Classmate Printers Pvt. Ltd.

(3 Marks) Question No. 1(f) An exporter exported 2,000 pairs of leather shoes @ Rs. 750 per pair. All industry

rate of drawback in fixed on average basis i.e. @ 11% of FOB subject to

maximum of Rs. 80 per pair. The exporter found that the actual duty paid on

inputs was Rs. 1,95,000. He has approached you, as a consultant, to apply under

Rule 7 of the drawback rules for fixation of ‘special brand rate’. Advise him

suitably.

(3 Marks)





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Question No. 2(a) Is the following activities constitute supply under GST (Answer must have

justification)

a) Renting of vacant land to a stud farm for Rs. 1,50,000.

b) Leasing of vacant land to a poultry farm for Rs. 76,000.

c) M/s X Ltd. paid penalty under section 49 of the CGST Act, 2017, Rs.

2,00,000 to the Department

d) Mr. C is a Practicing Chartered Accountant given appointment to a client

Mr. B representing the company for 10AM on Tuesday. Mr. B cancel the

appointment at 9AM on Tuesday (i.e. one hour before appointment time).

Advance paid by Mr. B for seeking the appointment is forfeited by Mr. C

for cancelling the appointment.

e) A club has opened up a shop. The members can purchase various goods

from such shop.

(5 Marks) Question No. 2(b) M/s Paul Ltd. being a trader of laptops has two units in Chennai and in Mumbai.

Place Preceding Year Turnover (excluding taxes) In Lacs

Chennai 52

Mumbai 12

You are required to answer the following:

a) Is M/s Paul Ltd. is eligible for composition levy in the current year? b) If so, can M/s Paul Ltd. opt composition scheme for Chennai location and

normal scheme for Mumbai?

c) Need to give separate intimations for opting composition scheme in each

State.

(4 Marks)





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Question No. 2(c) S Pvt. Ltd. was awarded a contract in July 2017 for providing flooring and wall

tiling services in respect of a building located in Delhi by N Ltd. As per the terms

of contract, S Pvt. Ltd. was to provide all the required material for execution of

the contract. However, N Ltd also provided a portion of the material. Whether

the services provided by S Pvt. Ltd. are subject to GST? If yes, determine the GST

liability of S Pvt. Ltd. from the following -

S. No. Particulars Rs.

i) Gross amount charged by the S Pvt. Ltd. 6,00,000

ii) Fair market value of the material supplied by N Ltd. 1,00,000

iii) Amount charged by N Ltd. for the material [included in (i)

above]

60,000

Note: CGST 6% and SGST 6%.

(4 Marks)

Question No. 2(d) LIC of India provides you the following information for the month of Oct 2017.

You are required to compute GST payable by the company if the company has

opted to pay GST as per Rule 32(4) of CGST Rules, 2017:

1) General policies : Total premiums collected Rs.12,000 lakhs (Out of which

1st year premium is Rs.5,000 lakhs)

2) Only Risk Cover Policies : Premiums collected Rs.500 lakhs.

3) Variable Insurance Policies: Premiums collected Rs.8,000 lakhs. (80% of the amount is allocated for investments on behalf of policy holder for which

policy holder is given separate break up in premium receipts).

(3 Marks) Question No. 3(a) Determine place of supply in the following independent cases:

a) M/s X Ltd has place of business in Chennai, being an NBFC given an asset

under financial lease to M/s ABC Ltd. of Chennai. The said asset so far

used by M/s ABC Ltd in their factory located at Hyderabad. At the end of

lease period the said asset acquired by M/s ABC Ltd. at a nominal

amount. Find the place of supply





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b) Mr. D located in New Delhi, place order on Mr. Delhi of New Delhi for

installation of Air-condition machine in his factory located in Chennai. Mr.

Delhi procures the Indoor and out-door units, set of plugs, electrical

cables, distribution boards and other items from different States in India

and arranges for delivery in Chennai. The said machine assembled by Mr.

Delhi in Chennai. Find the Place of supply

c) Chennai express train going form Chennai to Cochin, M/s X Ltd. located in

Cochin has supplied the food which are given to passengers during night

time. The food packets are loaded at Chennai Central Station, Chennai.

Find the place of supply

d) Mr. Rohit registered person in Jaipur. He went to Kolkata and stays in a Taj

hotel at Kolkata. He also availed Beauty treatment services at hotel. Find

the place of supply of service

e) Mr. Kapil Sharma a Jalandhar based comedian hosted a comedy show

at Singapore on birthday occasion of Mumbai based actor Mr. Shah Rukh

Khan’s son AbRam. Find the place of supply.

f) M/s Kalyan Pvt. Ltd. is an event management company is located in

Chennai. Mr. Raj located in Jaipur hires the services of M/s Kalyan Pvt. Ltd., for organizing marriage function of his son in Taj Coromandel,

Chennai. Mr. Raj is not a registered person. Find the place of supply

g) A movie on demand is provided as onboard entertainment during the

Delhi-Chennai leg of a Dubai-Delhi- Chennai flight. Find the place of

supply of service?

(7 Marks)





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Question No. 3(b) Mr. Harsha a event organiser located in Malaysia under taken to organize

comedy shows of Mr. Bhrami of Hyderabad and Mr. Vadivelu of Chennai in

India. The comedy shows are hosted in Telangana, Andhra Pradesh, Tamil Nadu

and Pondicherry. Gross value of contract is Rs. 60 crores.

State Number of Days Recipient of service

Telangana 20 Mr Bhrami

Andhra Pradesh 15 Mr Bhrami

Tamil Nadu 14 Mr. Vadivelu

Pondicherry 1 Mr. Vadivelu

Total 50

Find the place of supply of services and value of service.

(3 Marks) Question No. 3(c) M/s. Hind Fabricators owned by Mr. A is popularly known for assembly of large

machines. M/s. SS Fabricators (also owned by Mr. A) is engaged in fabrication of

small machines. A factory contracts M/s. Hind Fabricators for fabrication of its machinery, for a fee of Rs. 5,00,000. M/s. Hind Fabricators sub-contracts the work

to M/s. SS Fabricators for Rs. 4,00,000, and ensures supervision of the work

performed by them. Generally, M/s. SS Fabricators charges a fixed sum of Rs.

1,200 per man hour to its clients; it spends 400 hours on this project. Determine

value of supply.

(2 Marks) Question No. 3(d)

Write a short note on Anti-profiteering Committee.

(2 Marks) Question No. 3(e) Mr. Lal, paid the customs duty in the month of June 2017 Rs. 10,300. It was found

by the department officer, the actual amount of duty is Rs. 15,450 for the June

2017. Customs duty of Rs. 5,150 as demanded by the department have been

paid on 31st July 2017. Find the interest under section 28AA of the Customs Act,

1962.

(2 Marks)





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Question No. 4 (a)(i) On 25th July 2017, Mr. X located in Chennai converted USD 100 into INR, actual

exchange rate INR 62 per USD through Akbar Travel a money exchanger. RBI’s

reference rate for buying and selling was Rs. 61/61.5 respectively on such date.

Akbar Travel registered under GST and located at Chennai.

a) Find the Value of supply as per Rule 32(2)(a) of the CGST Rules, 2017 and

GST where address of the recipient is available with Supplier?

b) How much GST is liable to pay, in case where the RBI reference rate for a

currency is not available

Note: Applicable rate of GST 18%.

(2 Marks) Question No. 4 (a)(ii) Prince Financial Corporation located in Mumbai being a money exchanger

provided the following service in the month of July 2017 to M/s Agarwal

Bengaluru.

a) US$ 1,000 is changed into UK £ 571.4286

b) RBI reference rate for that currency at that time for 1US$ is Rs. 61 and for

1UK POUND = Rs. 85

Find the GST liability as per Rule 32(2)(a) of the CGST Rules, 2017.

Applicable rate of GST 18%.

(2 Marks)

Question No. 4 (a)(iii) M/s. M Ltd., Mumbai is an authorised money changer. It has entered the

following transactions (intra-state supplies) of money changing in the month of

July 2017:

i. 450 transactions of conversion of Dollar into Indian Rupees of Rs. 22,000

per transaction;

ii. 125 transactions of conversion of Euro into Indian rupees of Rs. 500 lakhs

per transaction;





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Input Tax Credit on input services Rs. 3,00,000 (CGST Rs. 1,50,000 & SGST

Rs. 1,50,000) and input goods Rs. 4,00,000 (CGST Rs. 2,00,000 & SGST Rs. 2,00,000)

is available. ITC on capital goods is Rs. 2,50,000 (capital goods purchased in the

current year as intra-state purchases). Find GST payable as per Rule 32(2)(b) of

the CGST Rules, 2017.

(4 Marks) Question No. 4(b) Mr. D being a dealer in goods sells new brand cars at Rs. 11,00,000. He advertises

that customers can sell their old car if they buy new car from him. One customer

exchanged his old car for Rs. 2,00,000. Mr. D sold new car to that customer for

Rs. 9,00,000. The Central Tax Department demanded to pay GST on Rs. 11,00,000

whereas Mr. D argues that he is eligible to pay GST on the difference namely

margin of Rs. 9,00,000 as per Rule 32(5) of the CGST Rules, 2017. Discuss and

decide the correct approach.

(2 Marks) Question No. 4(c) Mannat Ltd. of Patna, Bihar has effected intra-state supplies of taxable goods

amounting to Rs. 12,00,000 till 31-12-2017. On 01-01-2018 it has effected inter-

state supply of taxable goods amounting to Rs. 1,00,000. Mannat Ltd. is of the opinion that it is not required to get registered under GST law since its aggregate

turnover is not likely to exceed Rs. 20,00,000 during financial year 2017-18. As a

consultant of the company you are required to advise the company relating to registration requirements.

(2 Marks) Question No. 4(d) M/s. Vipin Ltd. purchased raw material ‘A’ 10,000 kg @ Rs. 80 per Kg. plus GST.

The said raw material was used to manufacture product ‘P’. The other

information’s are as under:

i. Processing loss : 2% on inputs ‘A’.

ii. Transaction value of ‘P’ : Rs. 100 per kg.

iii. Other material ‘M’ used in the manufacture of ‘P’ : Rs. 2 lac plus GST.

iv. GST on capital goods imported during the period and used in the

manufacture of ‘P’:

v. Basic customs duty Rs. 20,000

vi. IGST under customs under section 3(1) of the Customs Tariff Act, 1975 Rs. 10,000;

vii. Rate of GST on ‘A’, ‘M’ and ‘P’ : 12%.





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M/s. Vipin Ltd. is not eligible for composition scheme under Section 10 of CGST

Act, 2017. Compute the amount of input tax credit available and Net GST

payable by M/s. Vipin Ltd.

(4 Marks) Question No. 5(a) Compute the GST liability of Mr. Zed, an air travel agent, for the quarter ended

Dec. 31, 2017 using the following details:

Particulars Amount

Basic air fare collected for domestic booking of tickets 50,00,000

Basic air fare collected for international booking of tickets 80,00,000

Commission received from the airlines on the sale of domestic

and international tickets

4,50,000

Year ending bonus received from airlines 50,000

In the above case, would the GST liability of Mr. Zed be reduced if he opts for

the special provision for payment of GST as per Rule 32(3) of the CGST Rules,

2017. The applicable rate of GST 18%

(3 Marks) Question No. 5(b) Taj Pvt. Ltd., received the following services from the Government of India during

the taxable period:

1) Application fee paid towards processing of application for issuance of

advance authorization Rs. 12,000.

2) Security services provided by Government security agency for a period of

four months for a total consideration of Rs. 6,000:

a. Jan 2018 – Part payment Rs. 500 b. Feb 2018 – Part payment Rs. 2,000

c. Mar 2018 – Part payment Rs. 2,000

d. April 2018 – Final payment Rs. 1,500.

3) Customs authorities have charged Merchant Over Time (MOT) fee for Rs.

1,000 at the time of special warehousing of goods.

Find the total GST payable by Taj Pvt. Ltd. if any? Previous Turnover of Taj Pvt.

Ltd. Rs. 21 lakhs. Applicable rate of GST 18%

(3 Marks)





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Question No. 5(c)

Guidelines Academy Pvt. Ltd. provided following services in the previous year:

1) Manpower supply services to Higher Secondary School for Rs. 12,00,000.

2) Housekeeping services to Kidzee (i.e. Pre-school education) for Rs.

9,00,000.

In the current year Guidelines Academy Pvt. Ltd. received advertisement

services for Rs. 75,000 from Indian Railways. Find the following:

(a) Who is liable to pay GST?

(b) Total tax liability if any?

(c) Rework, if the previous total turnover Rs. 11,10,000 then find the GST liability in

the current year?

Note: Applicable rate of GST 18%

(3 Marks) Question No. 5(d) Mr. X being a registered person under GST Law provided the following services in

the month of Oct 2017:

a) Services provided to Gramena Bank located in rural area in the nature of

Enrollment of customers and charge Rs. 20,000. b) Disbursal of credit facilities to borrowers involving small amounts strictly as

per the instructions of the Bank locate in a village and collected Rs.

12,250.

c) Facilitating the repayment of dues owed to the AB bank (Mylapore

Branch, Chennai) by its customers and collected fee Rs. 55,000 from the

bank.

d) Recovery agent services to the LB Bank of India, Mount Road Branch,

Chennai, for Rs. 2,20,500.

Find the GST liable to pay by Mr. X. applicable rate of GST @18%.

(3 Marks)





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Question No. 5(e) X Ltd. has exported following goods to USA. Discuss whether any duty drawback

is admissible under section 75 of the Customs Act, 1962.

Product FOB Value of

Exported goods

Market Price of

goods

Duty drawback

rate

A 2,50,000 1,80,000 30% of FOB

B 1,00,000 50,000 0.75% of FOB

C 8,00,000 8,50,000 3.50% of FOB

D 2,000 2,100 1.50% of FOB

Note: Imported value of product C is Rs. 9,50,000. (4 Marks)

Question No. 6(a) Discuss the correctness or otherwise of the following statements with reference

to the provisions of the GST Law–

a) If a case involves a substantial question of law and does not involve any

issue relating to place of supply, an appeal against orders passed by the

State Bench or Area Bench of the Appellate Tribunal shall lie to High Court

b) Hospital charging room tariff per day per room is Rs. 1,200 on rooms

provided to in-patients is exempt.

c) Air Speed Airlines transported Fruits (i.e. agricultural produce) from

Chennai airport to Meghalaya is exempted supply of service under GST.

d) The Chief Secretary to Finance Minister travelled from Delhi to Chennai by

rail in an air conditioned coach on official trip. Cost of ticket is Rs. 1,200 is

exempt from GST

e) Passport is issued by the Office of the External Affairs Ministry under

Passport Act, 1967 to individual. The fee of Rs. 6,500 paid by business entity

in which such individual person is working is exempt from GST

f) The bio-medical waste treatment facility provided to a veterinary clinic is

a supply exempt from GST

(6 Marks)





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Question No. 6(b) X Ltd. covered under the Factories Act, 1948. Inspector of Factories certified the

factory is safe for the workers to carry their work and charged Government fee

of Rs. 10,000. X Ltd. owned one more factory at another place, which is not

covered under Factories Act, 1948. However, X Ltd. obtained safety certificate

for the factory from the Inspector of Factories by paying Rs. 15,000 voluntarily. Is

it taxable supply? Attract GST? If so who is liable to pay GST. Applicable rate of

GST 18%.

(2 Marks) Question No. 6(c) What do you mean by warehousing without warehousing?

(2 Marks) Question No. 6(d) LMN Ltd. has imported inputs without payment of duty under Advance

Authorization. The CIF value of such inputs is Rs. 20,00,000. The inputs are

processed and the final product is exported. The exports made by LMN Ltd. are

subject to general rate of value addition prescribed under Advance

Authorization Scheme. No other input is being used by LMN Ltd. in the

processing. What should be the minimum FOB value of the exports made by the LMN Ltd. as per the provisions of Advance Authorization?

(3 Marks) Question No. 6(e) Kamakshi charitable trusts running a hospital by hiring visiting doctors/ specialists.

Medical services to patients at a concessional rate charged by hospital for Rs. 2,25,500 from patients and paid to visiting doctors/specialists Rs. 2,00,000.

Find the following:

(a) Exempted supply if any.

(b) GST liability if any.

GST Rate18%.

(3 Marks) Question No. 7(a) State the nature of orders against which no appeals can be filed under GST.

(4 Marks)





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Question No. 7(b) Synergy Waste Management (P) Ltd. provided following services to Apollo

Hospitals Chennai during the month of Oct 2017:

i. Collection, transportation, Treatment & Disposal of Bio-Medical Waste for

Rs. 5,25,000.

ii. Training on Segregation of Bio-Medical Waste to Hospital Staff to further

increase efficiency of Bio-Medical Waste Management Services for

Rs.1,25,000.

iii. Laundry services for Rs. 50,000.

iv. Common Bio-medical Waste Treatment Facility services provided to

Arvind pharma company during Oct 2017 for Rs. 2,00,000.

Find the GST liability for the month of OCT 2017?

(4 Marks) Question No. 7(c) Green Tree society provided following services in the month of Oct 2017:

a) Banquet hall provided to a Member of the society on hire for the

purpose of celebrating his son birthday party for Rs. 25,000.

b) Payment of electricity bill issued by third person, in the name of its

members; collected Rs. 1,10,000 from its members and paid to

electricity department Rs.1,00,000.

c) contribution per month per member is Rs. 8,500 for 20 members and

Rs. 5,000 for 30 members has been received in the Oct 2017.

Find the tax liability of the Green Tree Society for the month of Oct 2017.

Note : GST 18%

(4 Marks)





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Question No. 7(d) X Pvt. Ltd. engaged in providing taxable services by way of training and

coaching activities in relation of information Accounting and Auditing since, 1st

July 2017 has the following details in respect of that activity for the month of

September, 2017:

Date of issuance of invoice

Date on which payment received

Amount in Rs.

16.09.2017

03.10.2017 2,50,000

20.10.2017

06.10.2017 25,000

02.10.2017 30.09.2017 1,25,000

The date of change in effective rate of tax in this case is 01-10-2017 from 12% to

18%. These services are rendered in August 2017. Find the Time of Supply of

service, effective rate of tax and due date of payment of tax.

(4 Marks)





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