Taxation - GSTSubjectiveQuestion 6090 of 512
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Question 7 (a) Mr. Ranjan availed ITC of ₹ 1,00,000 in GSTR-3B for the month of June, 2024. The Output tax liability for June 2024 was Nil. His intra-State output supply for the month of July 2024 was ₹ 5,00,000 (excluding GST). He utilized the available ITC against the output tax liability for the month of July 2024 while 2 Vishwakarma Technical Institute qualifies as an educational institution since it is an ITI which provides courses notified under Apprentices Act, 1961, i.e. approved vocational education courses. 3 It has been most logically assumed that ₹ 19,500 is room rent charges for ICCU. filing GSTR-3B. Mr. Ranjan found on 22nd September, 2024 that he wrongly availed ITC of ₹ 1,00,000 in the month of June 2024. He reversed the unutilized amount of wrongly availed ITC standing in credit ledger on 30th September, 2024 and paid the utilized amount of ITC by cash. The GST rate is 18%. Calculate the interest payable under the applicable GST law, if Mr. Ranjan filed: (i) Form GSTR-3B for the month of June 2024 on 19 July, 2024. (ii) Form GSTR-3B for the month of July 2024 was filed on 25 August, 2024. (Note: The due date of filing of GSTR-3B is 20th day of the following month. But the due date of filing of GSTR-3B was extended to 22nd August, 2024 for the month of July 2024) (5 Marks) (b) Briefly discuss the provisions related to inspection and verification of goods in transit as laid in Rule 138C of CGST Rules, 2017. (5 Marks)

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Detailed Solution & Explanation

(a) Output tax liability for the month of July, 2024 = ₹ 5,00,000 x 18% = ₹ 90,000. Mr. Ranjan has utilized wrongly availed ITC amounting to ₹ 90,000 for discharging this tax liability while filing GSTR-3B for the month of July 2024. In case of wrongful availment and utilization of ITC, the interest shall be calculated on the amount of ITC wrongly availed and utilised, for the period starting from the date of utilisation of such wrongly availed ITC till the date of reversal of such credit or payment of tax in respect of such amount at the specified rate. No interest is payable for ₹ 10,000 since it was not utilized even though wrongly availed. The date of utilisation of such ITC shall be taken to be earlier of the following:- (a) Due date of filing of return [22nd August, 2024] or (b) Actual date of filing of return [25th August, 2024]. TAXATION i.e. 22nd August, 2024 Amount of ITC wrongly availed and utilized = ₹ 90,000 Date of utilization of wrongly availed ITC =22nd August, 2024 Date of payment of tax = 30th September, 20244 Period of delay = 23rd August, 2024 to 30th September, 2024 (Both days inclusive) = 39 days Rate of interest - 18% Interest will be as follows: = ₹ 90,000 x 18% x 39/365 = ₹ 1,731 (rounded off) [₹ 865 each under CGST and SGST] (b) A summary report of every inspection of goods in transit shall be recorded online by the proper officer in Part A of a prescribed form within 24 hours of inspection and the final report in Part B of said form shall be recorded within 3 days of such inspection. However, where the circumstances so warrant, the Commissioner, or any other officer authorised by him, may, on sufficient cause being shown, extend the time for recording of the final report in Part B of said form, for a further period not exceeding 3 days. The period of 24 hours or, as the case may be, 3 days shall be counted from the midnight of the date on which the vehicle was intercepted. Where the physical verification of goods being transported on any conveyance has been done during transit at one place within the State/Union territory or in any other State/Union territory, no further physical verification of the said conveyance shall be carried out again in the State/Union territory, unless a specific information relating to evasion of tax is made available subsequently.

Key Concepts to Understand

Supply

Total amount of a good available to consumers.

Ledger

The principal book of accounts in which all business transactions are classified and posted under separate account heads. It is also called the 'Book of Final Entry' or the 'King of All Books'.

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