9. Purchase of confectionery items which are to be used to supply free of cost to customers in a customer meet organised by DEF Pvt. Ltd. 1,00,000 Opening balance of Input Tax credit at the beginning of Jan 2024. CGST ` 25,000 SGST ` 25,000 IGST ` 30,000 Additional Information: (1) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively unless otherwise mentioned. (2) Both inward and outward supplies are exclusive of taxes, wherever applicable. (3) All the conditions necessary for availing the ITC have been fulfilled. From the information given above, compute the output tax liability and input tax credit available to DEF Pvt. Ltd., for the month of January, 2024. Make suitable assumptions wherever required. (10 Marks)
Options
A(i) Computation of output tax liability of DEF Pvt. Ltd. for January,
2024
Particulars
Value
(`)
CGST
@ 9%
(`)
SGST
@ 9%
(`)
IGST @
18%
(`)
Output tax payable
Intra-State supply of
taxable goods 1
5,00,000
45,000
45,000
Consideration for non-
performance of contract
[Being
‘liquidated
damages’, they are not
the
consideration
for
tolerating
the
non-
performance
of
the
contract. Hence, not a
supply]
2,00,000
-
-
1 Intra-State supply of taxable goods has been logically considered as outward supply in the
above solution.
Service of booking of
flight tickets2
[Taxable since service of
booking of air tickets is
being
provided
here.
Only
the
service
of
transportation
of
passengers in economy
class
embarking
from
Bagdogra is exempt.
Further,
the
place
of
supply of services made
to a registered person is
the
location
of
such
person, viz. Delhi in given
case. Thus, same is inter-
State supply.]
20,000
3,600
Selling of Pune unit as
going concern to H Ltd.
[Services
by
way
of
transfer
of
a
going
concern is exempt.]
10,00,000
-
-
-
Service in relation to
business
exhibition
in
Dubai
[Services by an organiser
to any person in respect
of a business exhibition
held
outside
India
is
exempt.]
5,00,000
-
-
--
2 It has been assumed that entire ` 20,000 represents the service fee/convenience fee charged
by DEF Pvt. Ltd.
TAXATION
Inter-State
supply
of
service3
10,00,000
-
-
1,80,000
Total output tax liability
45,000
45,000
1,83,600
(ii) Computation of input tax credit available to DEF Pvt. Ltd. for
January, 2024
Particulars
Value
(`)
CGST
@ 9%
(`)
SGST
@ 9%
(`)
IGST @
18%
(`)
Opening balance
25,000
25,000
30,000
Issue of debit note for
post delivery service [ITC
on debit notes issued in a
financial year can be
availed
any
time
till
30th November of the
succeeding financial year
or the date of filing of the
relevant annual return,
whichever
is
earlier,
irrespective of the date of
original invoice/ supply.
Further, place of supply
being Pune in given case,
same
is
inter-State
supply.]
25,000
4,500
Receipt
of
intra-State
services
[ITC on services used in
the course or furtherance
of business is allowed.]
6,00,000
54,000
54,000
3 Inter-State supply of service has been logically considered as outward supply in the above
solution.
Purchase
of
confectionery items
[ITC on food or beverages
is specifically disallowed
unless the same is used
for
making
outward
taxable supply of the
same category or as an
element of the taxable
composite
or
mixed
supply.]
1,00,000
-
-
--
Total
79,000
79,000
34,500
Note:
In the above solution, the words, “DEL Pvt. Ltd.” be read as “DEF Pvt. Ltd.” in Sr. no.
6 of the Question.
BComputation of GST payable by the ABC Infra for February, 2024
Particulars
CGST @
9% (`)
SGST @ 9%
(`)
(i)
Consideration for agreeing to install
effluent plant
[Taxable since it is a supply of service
of agreeing to the obligation to do
an act.]
49,500
49,500
(ii)
Distribution of 500 passes of cricket
match
[Exempt
since
consideration
for
services by way of right to admission
to unrecognised sporting event is
not more than ` 500 per person4]
- -
(iii) Booking air tickets in economy class5
10,800 10,800
4 Consideration charged is ` 485 per person (` 2,42,500/500).
5 It has been assumed that entire ` 1,20,000 represents the service fee/convenience fee
charged by ABC Infra.
TAXATION
[Taxable since service of booking of
air tickets is being provided here.
Only the service of transportation of
passengers
in
economy
class
terminating in Manipur is exempt.]
(iv) Service of construction of buildings
provided to State Government
[Taxable since value of supply of
goods constitutes more than 25% of
the value of the composite supply of
goods and services.]
73,800 73,800
Total GST payable by ABC Infra
1,34,100 1,34,100
Note: In the given question, it has been assumed that the amounts given in the
question are exclusive of GST. It is also possible to assume the given amounts as
inclusive of GST and answer shall change accordingly.
C
D
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