Correct Answer
✅ Option C — ` 2,42,000 and ` 45,000
All Options:
- A` 6,70,000 and ` 67,000
- B` 2,20,000 and ` 67,000
- C` 2,42,000 and ` 45,000 ✓
- D` 2,87,000 and ` 45,000 (2 Marks)
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Detailed Solution & Explanation
1. **Transaction (i) u/s Udhay Limited:** - Invoices are issued in the name of the principal, Udhay Limited. - Since Mr. Arun does not issue invoices in his own name, he is not considered the supplier of these goods under Schedule I of the CGST Act. The supply value of ₹ 4,50,000 will be taxed in the hands of Udhay Limited, not Mr. Arun. - The short-term transaction-based loan extended to the customers of Udhay Limited is treated as a separate supply of service by Mr. Arun to the customers. The interest earned (₹ 45,000) represents interest on loans/advances and is exempt from GST under Entry 27 of Notification No. 12/2017-Central Tax (Rate).
2. **Transaction (ii) u/s AST Limited:** - Invoices are issued by Mr. Arun in his own name. - Therefore, Mr. Arun is considered the supplier of these goods under Paragraph 3 of Schedule I of the CGST Act. - Value of supply of goods by Mr. Arun = ₹ 2,20,000. - For a Schedule I agent, the interest charged for the extension of credit/loans (₹ 22,000) is included in the value of the supply of goods under Section 15(2)(d) of the CGST Act, 2017 (as interest/late fee/penalty for delayed payment). - Value of taxable supply of goods on which tax is paid by Mr. Arun = ₹ 2,20,000 + ₹ 22,000 = ₹ 2,42,000.
3. **Summary:** - Taxable supply of goods on which tax will be paid by Mr. Arun = **₹ 2,42,000**. - Value of exempt supply by Mr. Arun = **₹ 45,000**. Hence, **Option C** is the correct answer.
Key Concepts to Understand
Supply
Total amount of a good available to consumers.
Guarantee
A contract to perform the promise, or discharge the liability, of a third person in case of his default (Section 126, ICA 1872). It involves three parties: Principal Debtor, Creditor, and Surety. A guarantee is secondary liability.
Agent
A person employed to do any act for another person (Principal) or to represent the Principal in dealing with third persons, under the authority given by the Principal (Section 182, ICA 1872). An agent creates contractual relations between the Principal and third parties.
Sale of Goods
A contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price (Section 4, Sale of Goods Act, 1930). In a 'Sale', property in goods passes immediately; in an 'Agreement to Sell', it passes in future.
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