CA FINAL NEW COURSE
INDIRECT TAX LAWS
Test-2 CH -5, 6, 7, 12, 13, 20
Total Marks 50
MCQs
1. Lucky Singh, a resident of Noida and an unregistered person, U.P. (working in a private
firm), went to Himachal Pradesh for a family vacation via Delhi-Chandigarh-Himachal Pradesh
in his own car. After entering Chandigarh, his car broke down due to some technical issue. He
called ‘ONROARDS’ - an emergency roadside car assistance company (registered under GST in
Delhi) to repair the car. The car was repaired by the staff of ‘ONROARDS’. ‘ONROARDS’ does
not have policy to maintain a record of the addresses of the persons taking the car assistance
service. The value of supply amounted to Rs 50,000 (being labour charges Rs 40,000 and
spares Rs 10,000). The bill was supposed to be generated online though the server, but due to
some technical issue, it was not so generated. Determine the place of supply in the given
case.
a) Delhi
b) Chandigarh
c) Noida, U.P
d) Himachal Pradesh
2. Mr. X enters into a contract with a client for supply of certain services on 18.12.20X1. GST
is payable on such services under forward charge. Services are supplied on 25.12.20X1 and
invoiced on 05.01.20X2. This payment is recorded in the books of account of the client and
Mr. X on 30.12.20X1 and 07.01.20X2 respectively.
The time of supply of services is:
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a) 29.12.20X1
b) 30.12.20X1
c) 06.01.20X2
d) 05.01.20X2
3. Happy Singh is the lawful owner of a residential house situated in Chandigarh. The
property has four floors constructed on it. Out of the four floors in his house, first and second
floor are self-occupied and third and fourth floor have been let out for residential purposes.
Ratanjot Singh, who is a tenant on third floor, has surrendered his tenancy rights to
Parminder Singh for a tenancy premium of Rs 5,00,000 on 1st June. Parminder Singh has paid
the applicable stamp duty and registration charges on transfer of tenancy rights. Moreover,
Parminder Singh will pay a monthly rent of Rs 50,000 to Happy Singh from June. Determine
the value of taxable supply, in the given case, for the month of June assuming that the
amounts given above are exclusive of GST, wherever applicable.
a) Happy Singh: Rs 5,50,000; Ratanjot Singh: Nil
b) Happy Singh: Nil; Ratanjot Singh: Rs 5,00,000
c) Happy Singh: Rs 50,000; Ratanjot Singh: Nil
d) Happy Singh: Rs 50,000; Ratanjot Singh: Rs 5,00,000
4. Analyse the transactions mentioned below-
a) Mr. Abhinay, provides architect services to Institute for Rural Development, Government
Agency for Rs 2,80,000/- (inclusive of Rs 30,000/- GST) under a contract in October, 20X1. Mr.
Abhinay, is registered under GST. Being a registered supplier, Institute for Rural Development
deducted TDS of supplier.
b) M/s. Manmohak Apparels, is registered under GST in Madhya Pradesh. It sells leather
handbags across India through e-commerce operator pingpong. Pingpong, is also registered
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with Madhya Pradesh GST Authority as TCS collector and collected TCS @ 1% (0.5 CGST +
0.5% SGST) on supplies made through it, M/s. Manmohak Apparels made sales of Rs
3,45,000/- and received sales returns of Rs 67,700/- in the month of October, 20X1. Sales are
inclusive of tax. Leather handbags are taxable @ 18% GST. Pingpong, collected TCS of Rs
2,350/- from M/s Manmohak Apparels.
Which of the transactions are in compliance with section 51 and section 52 of CGST Act?
a) Only (i)
b) Only (ii)
c) Both (i) and (ii)
d) Neither (i) nor (ii)
5. Mr. X of Agra, Uttar Pradesh purchased goods from Mr. Y of Mumbai, Maharashtra. While
the goods were being packed in Mumbai godown of Mr. Y, Mr. X got an order from Mr. K of
Bangalore, Karnataka for the said goods. Mr. X agreed to supply the said goods to Mr. K and
asked Mr. Y to deliver the goods to Mr. K at Bangalore.
What is/are the place of supply (ies) in this case?
a) Agra
b) Agra, Bangalore
c) Bangalore
d) Mumbai
6. Mr. javed, an unregistered person residing in Hisar, Haryana, went to Delhi for seeking
admission of his child –Mr. Arjun-in CA IPCC. Mr. Javed got the demand draft generated at
ICIDI Bank Ltd., registered under GST in Sahibabad, Uttar Pradesh against cash, for depositing
the registration fee to the ICAI.
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Mr. Javed does not have a bank account in ICIDI Bank Ltd. and the bank doesn’t have any
policy of KYC requirements (name, address and other identity verification policy) for customs
not having account with any of its branch in India.
Determine the place of supply of service provided by ICIDI Bank Ltd., Delhi to Mr. Javed.
a) Delhi
b) Uttar Pradesh
c) Either Delhi or Uttar Pradesh, at the option of the recipient
d) Haryana
7. Diwakar (P) Ltd., registered in Delhi, is engaged in trading of cement as well providing
services by way of renting of commercial properties. On 02.01.20X1, it received a contract of
1,000 kg cement from pakija (P) Ltd., registered in Punjab. Pakija (P) Ltd. directed Diwakar (P)
Ltd. to send the consignment to Gajab & Sons, registered in Gujarat. Diwakar (P) Ltd.
Prepared the consignment on 04.01.20X1 and dispatched the same on the next day from his
warehouse in Gurugram, Haryana. The invoice was also issued on 5.01.20X1. On 07.01.20X1,
it received the cheque and accountant entered the payment in books of accounts. However,
he presented the cheque in bank on 14.01.20X1 which was credited in bank account on
15.01.20X1. In the meanwhile, on 10.01.20X1, the rate of tax on cement was reduced from
28% to 18%.
On inspection of goods it was found that there is some deficiency in quality of goods and
therefore, the deficit goods were returned to Diwarkar (P) Ltd. issued credit note for the
same on 20.01.20X1. Diwarkar (P) Ltd. let out property and received rent for the month of
January from Pakija (P) Ltd. on 10.01.20X1. However, as per the contract entered, the
payments should have been received by 7th of every month.
Based on the above scenario, Diwarkar (P) Ltd., wants to seek your advice on the following
issues:
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What will be the time of supply and rate of tax to be charged in respect of 1,000 kg of
cement?
a) 05.01.20X1; 28%
b) 07.01.20X1; 28%
c) 14.01.20X1; 18%
d) 15.01.20X1; 18%
8. Fury Ltd., India, has received an order for supply of services amounting to $ 5,00,000 from a
US based client. Fury Ltd., India is unable to supply the entire services from India and asks
Neik Inc., Mexico (who is not an establishment of Fury Ltd.) to supply a part of the services,
i.e. 40% of the total contract value to the US client. Fury Ltd. raised the invoice for entire
value of $ 5,00,000, but the US client paid $ 3,00,000 to Fury Ltd. and $ 2,00,000 directly to
Neik Inc., Mexico which is approved by a special order of RBI. Fury Ltd. also paid IGST@ 18%
on the services imported from Neik Inc. Mexico. Assuming all the conditions of section 2(6) of
the IGST Act, 2017 are fulfilled, determine the value of export of services assuming that the
amounts given above are exclusive of GST.
a) $ 3,00,000
b) $ 5,00,000
c) $ 3,90,000
d) $ 5,90,000
9. Every electronic commerce operator required to collect tax at source under section 52 shall
furnish a statement _____________ containing details of supplies effected through such
operator and the amount of tax collected as required under section 52(I) of the CGST Act.
a) Form GSTR-5
b) Form GSTR-6
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c) Form GSTR-7
d) Form GSTR-8
10. In the GSTR-9C, which reconciliation is to be made?
a) Reconciliation of supplies declared in the annual return with details of unaudited
financial statements
b) Reconciliation of supplies declared in the returns filed during the financial year with the
details of audited financial statements
c) Reconciliation of suppliers declared in the annual return with details of audited financial
statements
d) Reconciliation of supplies declared in the GSTR-3B with details of audited financial
statements
(10 x 1 = 10 marks)
Q-1 Determine the place of supply in the following independent cases:-
i. Mr. Sahukaar (New Delhi) boards the New Delhi – Kota train at New Delhi. Mr. sahukaar
sells the goods taken on board by him (at New Delhi), in the train, at Jaipur during the
journey.
ii. Vidhyut Pvt. Ltd. imports electric food processors from China for its kitchen store in Noida,
Uttar Pradesh. Vidhyut Pvt. Ltd. is registered in Uttar Pradesh.
iii. Mr. Aatmaram, a manager in a bank is transferred from bareilly, uttar Pradesh to Bhopal,
Madhya Pradesh. Mr. Aatmaram’s family is stationed in Kanpur, Uttar Pradesh. He hires
Gokul carriers of Lucknow, Uttar Pradesh (registered in Uttar Pradesh), to transport his
household goods from Kanpur to Bhopal.
iv. Bholunath, a resident of New Delhi, opens his saving account in New Delhi branch of best
bank after undergoing the KYC process. He goes to Amritsar for some official work and
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withdraws money from best bank’s ATM in Amritsar thereby crossing his limit of free ATM
withdrawls.
v. Mr. Chakmak, an architect (New Delhi), enters into a contract with Mr. Zeeshaan of New
York to provide professional services in respect of immovable properties of Mr. Zeeshaan
located in pune and New York.
(5 Marks)
Q-2 On the basis of following information, determine the ‘point of Taxation’ in GST:
S. no Event Date
1 Commencement of providing of services 05.06.20XX
2 Completion of services 10.10.20XX
3 Invoice issued 20.10.20XX
4 Payment received by cheque and entered in the books 15.10.20XX
5 Amount credited in Bank A/C 18.10.20XX
6 Rate changed from 12% to 18% 16.10.20XX
Note: Assume that all the days covered in the above case are working days.
(5 Marks)
Q-3 Kaushal Manufacturers Ltd., registered in Delhi, is a manufacturer and supplier of
electronic home appliances. It is paying tax under regular scheme. It supplies the electronic
home appliances in the domestic as well as overseas market. For supplies in other states of
India, the company has appointed consignment agents in each such state, except Gurgaon,
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Haryana and Noida, Uttar Pradesh, where the goods are supplied directly from its Delhi
Warehouse.
In the month of January, consignments of electronic home appliances were sent to cardinal
electrical Pvt. Ltd. and Rochester technos- agents of Kaushal Manufacturers Ltd. in Punjab and
Madhya Pradesh respectively. Cardinal Electricals Pvt. Ltd and Rochester technos supplied
these electronic home appliances under their invoices to the stores located in their respective
states for Rs. 40,00,000 and Rs. 70,00,000 respectively. Open market value of such appliances is
not available.
Further in January, electronic home appliances have been supplied to Ronn Texhnomart- a
wholesale dealer of electronic home appliances in Noida, Uttar Pradesh for consideration of Rs.
23,00,000, from its Delhi warehouse. Kaushal Manufacturers Ltd. owns 75% shares of Ronn
Technomart. Open market value of the electronic home appliances supplied to Ronn
Technomart is Rs. 30,00,000. Further Ronn Technomart is not eligible for full input tax credit.
Kaushal Manufacturers Ltd. also provides repair and maintenance services to electronic
appliance manufacturers located in India.
The company has also furnished the following information for the month of January:
Particulars Amount in Rs.
Supply of electronic home appliances to wholesale dealers of such 84,00,000
appliances in Delhi
Electronic home appliances supplied to Anchor Electricals Inc., USA under 1,26,00,000
LUT [ Consideration received in convertible foreign exchange]
Repair and maintenance services provided to Unitech Ltd., an electronic 8,40,000
appliance manufacturer, located in Delhi
Advance received towards repair and maintenance services to be provided 7,00,000
to Orelec Ltd., an electronic appliance manufacturer, located in Delhi
[repairs and maintenance services have been provided in February and
invoice is issued on 28th February]
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Advance received for electronic home appliances to be supplied to Novick 8,40,000
Electricals, a wholesale dealer of such appliances in Gurgaon, Haryana
[invoice for the goods is issued at the time of delivery of the electronic
appliances in March]
You are required to determine the gross GST liability [CGST & SGST and/or IGST] of Kaushal
Manufacturers Ltd. for the month of January.
Note:
(i) All the given amounts are exclusive of GST, wherever applicable.
(ii) Assume the rates of GST to be as under:
Goods /services supplied CGST SGST IGST
Electronic home appliances 2.5% 2.5% 5%
Repair and maintenance services 9% 9% 18%
You are required to make suitable assumptions, wherever necessary.
(6 Marks)
Q-4 Supplier Y of Mumbai makes taxable supply worth Rs. 10,000/- & exempted supply worth
Rs. 20,000/- in an invoice/bill of supply to finance deptt. of GOI located in new Delhi where
contract for supply is for Rs. 6,00,000/- (Rs. 2,60,000 for taxable supply including GST and Rs.
3,40,000 for exempted supply). The rate of GST is 18%. Following payment is being made by
GOI to Y: Rs. 10,000/- (value of taxable supply) + Rs. 1,800 (integrated tax) + Rs. 20,000/- (value
of exempted supply).
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Whether any deduction of tax is required?
(5 Marks)
Q-5 Mr. X is registered person under GST. State the mode through which he can furnish GSTR-I
or GSTR- 3B or Form GST CMP -08 under following situation-
i. Outward supply = Rs. 90 lakhs (GST@18%), Inward = 70 lakhs (GST@5%), Tax payable = 12.7
lakhs.
ii. Outward supply = Rs. 90 lakhs (GST@18%), Inward supply = 90 lakhs (GST@18%), Tax
payable = nil
iii. Outward supply = Rs. Nil, Inward supply = 70 lakhs (GST@18%), Tax payable = nil
iv. Outward supply = nil, Inward supply= nil Tax payable = nil
v. Composition tax payer = Outward supply = nil, Inward supply = nil, Tax payable = nil
(4 Marks)
Q-6 Avataar Industries, a registered person under GST, has sold whole of its business to Rolex
Manufacturers. Determine the person liable to pay GST, interest or any penalty under GST, law
[determined before sale, but still unpaid] due from Avataar industries upto the time of such
transfer.
(5 Marks)
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Q-7 Zindagi Life insurance company Limited (ZLICL) has collected premium from subscribers and
it does not intimates the amount allocated for investment to subscribers at the time of
collection of premium. During the month of September 2018, it has collected the following
receipts:
SI. No Particulars Amount in (Rs.)
1 Premium for only risk lover 25,00,000
2 Premium from new subscribers 40,00,000
3 Renewal premium 80,00,000
4 Single premium on annuity policy 1,00,00,000
All amounts are exclusive of tax. You are required to compute the value of supply by ZLICL in
accordance with GST laws.
(5 Marks)
Q-8 From the following information of independent cases, your expert advice, with appropriate
reasoning, is sought on the applicability of TDS/TCS provisions of the CGST Act, 2017
You shall also quantify the amount of TDS/TCS, as the case be, if the same is applicable.
i. Top fashions a designer cloth dealer and registered in the state of West Bengal, effected
supply through “QUICK DEAL” an electronic commerce operator. Net value of taxable intra-
state supplies effected for the month of October 2019 was Rs. 1,50,000.
ii. M/s Super Builders, a registered supplier in Tamil Nadu, was awarded a works contract by
government of Tamil Nadu amounting to Rs. 4,30,000. Of this, value of exempt supply was
Rs. 1,00,000.
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iii. Tasty caterers, a registered supplier of Kerala, provided catering services in Kochi, Kerala to
government of Andhra Pradesh for its annual training camp held for its staff. Value of said
services was Rs. 4,50,000.
(5 Marks)
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