Taxation - Income TaxSubjectiveQuestion 5593 of 146
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Question 5 (a) Galaxy Cube Private Ltd., a registered person in Bharuch, Gujarat, engaged in various lines of business, provided the following details regarding its transactions made during the month of May 2024: Outward / Inward Transactions: Amount ` Supplied a latest technology laptop with touch screen option to Managing Director's friend (Open market value as well as sale to unknown customers was at ` 90,000) 60,000 Supplied printed letter cards to M K Industries, a registered person in Gandhinagar, Gujarat. Logo design was supplied by M K Industries. Out of ` 5,00,000, Materials cost was ` 4,00,000 and balance was Printing cost. 5,00,000 Provided services of transportation of passengers by an Omnibus through an Electronic Commerce Operator (ECO). 12,58,000 Provided catering services to Excel University of Patna, Bihar, which is recognized by UGC for granting recognised qualification 2,12,000 Made supply of goods in the territorial waters to Blue Waters Inc., registered in the State of Maharashtra. Such place of territorial water was at a distance of 5 nautical miles to the baseline of coastal State of Gujarat and 7 nautical miles to the baseline of coastal State of Maharashtra. 4,50,000 Purchased goods from DK & Co., a registered composition dealer. 3,35,000 TAXATION Additional Information : (i) During the course of filing invoices, accountant identified an invoice dated 31.03.2024, issued by Mr. Mahajan, whose residential house was taken on rent for MD of the company for his residential use. Invoice was for ` 50,000 (excluding tax). No payment has been made for this invoice. (ii) All the figures given above are exclusive of GST. (iii) All inward and outward supplies are intra-state except where details of place of recipient are given. (iv) Subject to the information given above, all the conditions necessary for availing the ITC have been fulfilled. (v) GST Rates are as follows: Particulars CGST SGST IGST Supply of Goods 6% 6% 12% Supply of Services 9% 9% 18% Compute the net minimum GST payable in cash by Galaxy Cube Private Ltd. for the month of May 2024. (10 Marks) (b) Gamma Multiplex registered in the State of Punjab, gives the following offers for booking movie tickets : Sr. No. Particulars Price Charged (excluding GST) 1 Tickets only ` 200 per person 2 Combo offer ` 350 per person (which includes ` 200 for ticket and ` 150 for snacks) 3 Snacks only ` 250 per token (snacks quantity will be more when compared to combo offer) For the month of April 2024, Gamma Multiplex situated in Punjab made the following supplies : (i) 10,000 tickets under combo offer (ii) 2,500 tickets only (iii) 1,000 tokens of snacks only GST rates applicable are: Rate of GST CGST SGST IGST Supply of Snacks 2.5% 2.5% 5% Supply of service of exhibition of cinema 9% 9% 18% You are required to determine the following, by explaining the relevant provisions : (i) Rate of GST to be applied when combo supply is made (ii) Rate of GST to be applied when snacks are sold in Multiplex (iii) Gross GST payable by Gamma Multiplex for the month of April, 2024. (5 Marks)

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Detailed Solution & Explanation

### Part (a) Computation of Net Minimum GST Payable in Cash by Galaxy Cube Private Ltd. for May 2024 | Transaction | Value (₹) | CGST (₹) | SGST (₹) | IGST (₹) | Remarks | | :--- | :--- | :--- | :--- | :--- | :--- | | **Outward Supplies:** | | | | | | | Supply of laptop to MD's friend | 90,000\displaystyle 90,000 | 5,400\displaystyle 5,400 | 5,400\displaystyle 5,400 | - | Deemed supply under open market value (₹90,000\displaystyle ₹90,000) u/s 15 (GST @ 12%) | | Printed letter cards to M K Industries (Gujarat) | 5,00,000\displaystyle 5,00,000 | 30,000\displaystyle 30,000 | 30,000\displaystyle 30,000 | - | Predominantly supply of goods (composite supply), GST @ 12% (6% CGST + 6% SGST) | | Passenger transport services by Omnibus through ECO | 12,58,000\displaystyle 12,58,000 | 1,13,220\displaystyle 1,13,220 | 1,13,220\displaystyle 1,13,220 | - | Notified service under forward charge as supplier is a corporate entity, GST @ 18% | | Catering services to Excel University (Patna) | 2,12,000\displaystyle 2,12,000 | - | - | 38,160\displaystyle 38,160 | Inter-State supply, performance place Patna. Taxable since UGC university is not a school. GST @ 18% | | Goods supply in territorial waters | 4,50,000\displaystyle 4,50,000 | 27,000\displaystyle 27,000 | 27,000\displaystyle 27,000 | - | PoS is nearest coastal state Gujarat. Intra-State supply. GST @ 12% | | **Total Output Tax (A)** | | **1,75,620\displaystyle 1,75,620** | **1,75,620\displaystyle 1,75,620** | **38,160\displaystyle 38,160** | | | **Less: Input Tax Credit (ITC):** | | | | | | | Purchase from composite dealer | 3,35,000\displaystyle 3,35,000 | 0\displaystyle 0 | 0\displaystyle 0 | - | Composition dealers do not collect tax; ITC is Nil | | Rent for MD's residential house | 50,000\displaystyle 50,000 | (4,500)\displaystyle (4,500) | (4,500)\displaystyle (4,500) | - | Eligible ITC on rental paid @ 18% (9% each) | | **Total Eligible ITC (B)** | | **(4,500)\displaystyle (4,500)** | **(4,500)\displaystyle (4,500)** | **0\displaystyle 0** | | | **Net GST Payable (A - B)** | | **1,71,120\displaystyle 1,71,120** | **1,71,120\displaystyle 1,71,120** | **38,160\displaystyle 38,160** | Payable in Cash or Credit | | **Add: Reverse Charge Liability:** | | | | | | | Rent of residential dwelling to registered MD | 50,000\displaystyle 50,000 | 4,500\displaystyle 4,500 | 4,500\displaystyle 4,500 | - | Renting of residential dwelling to registered person is under RCM. Payable in CASH. GST @ 18% | | **Net GST Payable in Cash** | | **1,75,620\displaystyle 1,75,620** | **1,75,620\displaystyle 1,75,620** | **38,160\displaystyle 38,160** | (RCM must be paid in cash; ITC can offset forward charge) | --- ### Part (b) GST Analysis for Gamma Multiplex (Punjab) 1. **Rate of GST to be applied when combo supply is made:** - The combo offer of a movie ticket (₹200\displaystyle ₹200) and snacks (₹150\displaystyle ₹150) constitutes a **composite supply** under Section 2(30) of the CGST Act, 2017. - The principal supply is the service of exhibition of cinema (movie ticket). - Under Section 8(a), a composite supply is taxed at the rate applicable to the principal supply. - Therefore, the GST rate for the combo supply is **18%** (9% CGST + 9% SGST), which is the rate for exhibition of cinema. 2. **Rate of GST to be applied when snacks are sold in Multiplex:** - Supply of snacks only is an individual/independent supply of food items. - Therefore, the applicable GST rate for snacks sold over the counter is **5%** (2.5% CGST + 2.5% SGST). 3. **Gross GST Payable by Gamma Multiplex for the month of April 2024:** | Supply Type | Quantity | Rate (%) | Value (₹) | CGST (₹) | SGST (₹) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Combo Offer** (18% GST) | 10,000\displaystyle 10,000 | 18%\displaystyle 18\% | 35,00,000\displaystyle 35,00,000 | 3,15,000\displaystyle 3,15,000 | 3,15,000\displaystyle 3,15,000 | | **Tickets Only** (18% GST) | 2,500\displaystyle 2,500 | 18%\displaystyle 18\% | 5,00,000\displaystyle 5,00,000 | 45,000\displaystyle 45,000 | 45,000\displaystyle 45,000 | | **Snacks Only** (5% GST) | 1,000\displaystyle 1,000 | 5%\displaystyle 5\% | 2,50,000\displaystyle 2,50,000 | 6,250\displaystyle 6,250 | 6,250\displaystyle 6,250 | | **Gross GST Payable** | | | | **3,66,250\displaystyle 3,66,250** | **3,66,250\displaystyle 3,66,250** |

Key Concepts to Understand

Supply

Total amount of a good available to consumers.

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