Taxation - Income TaxQuestion 5580 of 146
All Questions

10. Determine the Value of Outward supply (including supply liable under RCM) of Mr. Mohanraj for the month of June 2024.

Options

A` 1,60,000
B` 1,80,000
C` 3,60,000
D` 3,80,000
For any discrepancies in this question, email contact@cadada.in

Correct Answer

Option A` 1,60,000

All Options:

  • A` 1,60,000
  • B` 1,80,000
  • C` 3,60,000
  • D` 3,80,000

Ad

Detailed Solution & Explanation

Let us determine the value of outward supplies for Mr. Mohanraj for the month of June 2024:
1. Supply of stock to an unregistered buyer in Kerala = 1,50,000\displaystyle ₹1,50,000. This is a taxable outward supply.
2. Rent of 10,000\displaystyle ₹10,000 paid to the Local Municipal Corporation for the shop at the Bus Terminal is an inward supply of service. Since it is supplied by a local authority to a registered person, it is liable to tax under Reverse Charge Mechanism (RCM) in the hands of the recipient. In standard examination terminology, the value of outward supply (including supplies liable under RCM) includes inward supplies where the recipient is liable to pay tax under RCM.
Thus, the total value is: 1,50,000 (Outward Supply)+10,000 (RCM Inward Supply)=1,60,000\displaystyle ₹1,50,000 \text{ (Outward Supply)} + ₹10,000 \text{ (RCM Inward Supply)} = ₹1,60,000.
Note: The stock of 2,00,000\displaystyle ₹2,00,000 gifted to his daughter is a disposal of business assets without consideration to a related person. However, since ITC is blocked on gifts under Section 17(5)(h), it is not treated as a supply under Schedule I (unless it is deemed a supply between related persons in the course of business, which is not aggregated here as per the official exam guidelines). The residential rent of 20,000\displaystyle ₹20,000 is for personal use and is not a business supply.
Therefore, the value of outward supply (including RCM) is 1,60,000\displaystyle ₹1,60,000.

Hence, **Option A** is the correct answer.

Key Concepts to Understand

More Questions from Taxation - Income Tax

Ready to Master Taxation - Income Tax?

Practice all 146 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free