Taxation - Income TaxSubjectiveQuestion 6063 of 146
All Questions

Question 6 (a) Nootan Ltd., a registered person in Indore, Madhya Pradesh, provides details of the following transactions carried out during the month of June 2024: Sr. No. Particulars Amount in ₹ 1. Paid remuneration to Mr. Madan, for the services rendered by him in the capacity of Director. Company deducted TDS under section 192 (Salary) and 194J (Professional or Technical services) of Income-Tax Act, 1961. Gross payments made were ₹ 8,50,000 and ₹ 11,50,000 respectively for Salary and Professional services. (Intra-State supply) 20,00,000 2. Paid rent to Indian Railways, registered in Madhya Pradesh, for its property located in the same State, which was taken on lease by the company. 1,25,000 3. Paid to XYZ Security Private Limited, for providing security services to its warehouses across the State. Security agency is not registered under GST. 5,35,000 4. Paid fee to Local Municipal corporation for renewal of the company's factory License for the financial year 2024-2025. 4,800 Additional Information: (i) All above figures are exclusive of taxes, wherever applicable. (ii) Assume the rate of GST as 18%, 9% and 9% for IGST, CGST/SGST respectively. (iii) Turnover of Nootan Limited for the preceding financial year was ₹ 67 lakh. You are required to compute the GST payable by Nootan Limited under Reverse Charge basis for the month of June 2024. Reason for the treatment of each item should form part of the answers. (5 Marks) (b) Determine the Place of Supply for the following independent cases, by briefly stating the relevant provisions : (i) Marxy Pharmaceuticals, registered under GST at Jaipur, Rajasthan hires Sargam Events LLP, registered under GST at Sagar, Madhya Pradesh for its annual event to be held in Gandhinagar, Gujarat. (ii) PSL Ltd., a registered person in Chandigarh, Punjab orders from CMR Ltd., a registered person in Ranchi, Jharkhand for delivery of goods to MHT Ltd., a registered person in Ranchi, Jharkhand. You are required to determine PoS for both of the above supplies made by CMR Ltd. as well as PSL Ltd. (5 Marks)

For any discrepancies in this question, email contact@cadada.in

Detailed Solution & Explanation

(a) Computation of GST Payable by Nootan Limited under reverse charge S. No. Particulars CGST (`) SGST (`) 1. Remuneration paid to Mr. Madan [₹ 11,50,000 × 9%] [(i) Remuneration paid to director for professional services subjected to TDS under section 194J of the Income-tax Act is outside the scope of Schedule III of the CGST Act, 2017 and tax is payable under reverse charge by the recipient company – Nootan Ltd. 1,03,500 1,03,500 TAXATION (b) (i) The place of supply of services provided to registered person by way of organization of a cultural, artistic, sporting, scientific, educational or entertainment event or services related to such event shall be the location of the recipient. Accordingly, place of supply is Jaipur, Rajasthan. (ii) In case of ‘Bill to Ship to’ supply model, where goods are delivered by supplier to recipient at the direction of a third person, the place of supply is the principal place of business of such third person. Accordingly, in case of supply made by CMR Ltd., the place of supply is Chandigarh, Punjab. (ii) However, salary of ₹ 8,50,000 paid to director subjected to TDS under section 192 of the Income-tax Act is not taxable since services provided by an employee to employer in course of or in relation to his employment are outside the scope of supply in terms of Schedule III of the CGST Act, 2017. Thus, the same is neither supply of goods nor supply of services] 2. Paid rent to Indian Railways [Tax on renting of immovable property services provided by Indian Railways is not payable under reverse charge.] Nil Nil 3. Security services received [Tax on security services is not payable under reverse charge since supplier is a body corporate.] Nil Nil 4. Paid fee to Local Municipal Corporation [Not taxable/Exempt since the consideration for the services provided by local authority does not exceed ₹ 5,000.] Nil Nil Total GST payable by Nootan Ltd. under reverse charge 1,03,500 1,03,500 The place of supply involving movement of goods will be their location at the time when the movement of goods terminates for delivery to the recipient. Accordingly, in case of supply made by PSL Ltd., the place of supply is Ranchi, Jharkhand.

Key Concepts to Understand

Supply

Total amount of a good available to consumers.

More Questions from Taxation - Income Tax

On solving the inequalities $5x + y ≤\displaystyle \le 100,\displaystyle ,x + y ≤\displaystyle \le 60,\displaystyle ,x ≥\displaystyle \ge 0,\displaystyle ,y ≥\displaystyle \ge 0$, we get the following solution:

An employer recruits experienced (x)\displaystyle (x) and fresh workmen (y)\displaystyle (y) for his under the condition that he cannot employ more than $11people\displaystyle peoplexand\displaystyle andy$ can be related by the inequality.

The solution set of the equations x+2>0\displaystyle x + 2 > 0 and $2x - 6 > 0$ is

On solving the inequalities; we get $6x + y ≥\displaystyle \ge 18,\displaystyle ,x + 4y ≥\displaystyle \ge 12≥\displaystyle \ge …" style="color:#cc0000">\displaystyle , $2x + y ≥\displaystyle \ge 10

Solve for x\displaystyle x of the inequalities 2≤3x−25≤4\displaystyle 2 ≤\displaystyle \le 3x−25\displaystyle \frac{3x - 2}{5} ≤\displaystyle \le 4 where x∈N\displaystyle x \in N

The common region in the graph of the inequalities x+y≤4\displaystyle x + y ≤\displaystyle \le 4, x−y≤4\displaystyle x - y ≤\displaystyle \le 4, x≥2\displaystyle x ≥\displaystyle \ge 2 is

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