1.

INTRODUCTION TO GOODS AND SERVICE TAX (GST) Important Theory Questions

Section – A (2 Marks) Explain the Composition and Functions of GST Council.

The GST Council is a constitutional body in India responsible for making decisions and recommendations related
1. Give the meaning of GST. [2021 (BCU)] to the Goods and Services Tax (GST) system. It consists of members from the central government and the state
Goods and Service Tax means a tax on supply of goods or services, or both, except taxes on supply of governments.
alcoholic liquor for human consumption (Article 366 (12A) of Constitution of India). Here is an explanation of the composition and functions of the GST Council:
GST is a value added tax levy on sale or service or both.
GST is a destination-based consumption tax. Composition:
1. Chairman: The Union Finance Minister serves as the Chairman of the GST Council.
2. Write any 2 features of GST. [2021 (BNU)] 2. Members: The GST Council comprises the Union Minister of State for Finance and the Ministers or
1) GST is a value added tax levy on sale or service or both. representatives of finance or taxation from each state government.
2) GST is a destination-based consumption tax.
Functions:
3. State any two objectives of GST. [2022 (BU)] [2019 (BU)] 1. Tax Rate Recommendations: One of the primary functions of the GST Council is to recommend the tax
1) To achieve the ideology of ‘One Nation, One Tax’. rates applicable to goods and services under the GST system. It determines the rates for various categories,
2) To eliminate the cascading effect of taxes. including the basic rate, higher rate for luxury goods and demerit goods, and lower rate for essential goods.
2. Tax Thresholds and Exemptions: The council decides the turnover thresholds for businesses to determine
4. State any two advantages of registration under GST Act. [2022 (BNU)] [2019 (BU)] if they fall under the composition scheme or are exempted from GST. It also recommends exemptions and
1) Legally Compliant Operations. concessions for specific goods, services, or categories of taxpayers.
2) Input Tax Credit (ITC). 3. GST Law and Rules: The GST Council plays a crucial role in formulating and amending GST laws, rules,
and procedures. It reviews and recommends changes to the GST Acts, rules, and regulations to ensure
5. What is Dual GST Model? [2017 (BU)] uniformity and harmonization across the country.
The Dual Goods and Services Tax Model is a system of taxation that incorporates both central and state- 4. Dispute Resolution: The council addresses any disputes that arise between the central and state governments
level taxes. It is a unique feature of the GST system implemented in India. regarding GST implementation or any other issues related to the taxation system. It strives to resolve such
Under this model, the GST is levied concurrent by both the central and state governments on the supply of disputes through dialogue and consensus.
goods and services. 5. IGST Apportionment: The council determines the apportionment of the Integrated Goods and Services Tax
In Dual GST Model, there are two components: (IGST) revenue between the central and state governments. It decides the formula for sharing the revenue
1) Central Goods and Services Tax (CGST) based on the place of supply rules.
2) State Goods and Services Tax (SGST) 6. Compensation Cess: In cases where a state faces revenue losses due to the implementation of GST, the
council recommends the modalities for compensation to be provided by the central government. It ensures
6. What are the taxes subsumed in GST? [2021 (BCU)] that states are adequately compensated for any loss of revenue during the initial years of GST
Taxes subsumed by the CGST: Taxes subsumed by the SGST: implementation.
1) Central Excise Duty 1) Value Added Tax (VAT) 7. Other Matters: The GST Council may discuss and make decisions on various other matters related to GST
2) Central Sales Tax 2) Sales Tax implementation, including administration, compliance, technology, data management, and simplification of
procedures.
7. What is GST Council? [2018 (BU)] The decisions taken by the GST Council require a three-fourth majority, with each member's vote carrying equal
The GST Council is a constitutional body established under Article 279A of the Indian Constitution. weight. This ensures a collaborative approach and collective decision-making between the central and state
It is responsible for making recommendations on various aspects of the Goods and Services Tax (GST) to governments. The GST Council's objective is to create a unified and harmonized indirect tax system for the entire
the central and state governments. The council plays a crucial role in the decision-making process related to country, promoting ease of doing business and economic growth.
GST policies, rules, rates, and other important matters.

8. What is Taxable Event under GST? [2017 (BU)]

It refers to the event or transaction that triggers the liability to pay GST.
In other words, it is the specific activity or circumstance upon which the tax is levied. The taxable event
determines when the liability to collect and remit GST arises for the supplier of goods or services.

9. Expand PAN and TIN. [2022 (BNU)] [2021 (BCU)]

PAN – Permanent Account Number
TIN – Taxpayer Identification Number
 2. GST ACTS: CGST ACT, SGST ACT (KARNATAKA), IGST ACT 12. Agent:
Agent refers to a person or entity that acts on behalf of another person or entity, known as the principal, to
perform certain tasks or represent their interests.
Section – A (2 Marks)
The agent acts as a representative or intermediary, authorized to act on behalf of the principal and make
decisions or carry out specific actions as per their instructions or within the scope of their authority.
1. What do you mean by IGST? [2022 (BNU)]
IGST stands for Integrated Goods and Services Tax.
13. Business:
It is a component of the Goods and Services Tax (GST) system implemented in India.
Business refers to an organization or entity engaged in commercial, industrial, or professional activities with
IGST is levied on the supply of goods and services between different states within the country.
the primary objective of generating income or profit. It involves the production, purchase, or sale of goods
or services to meet the needs and demands of customers in the market.
2. State any two features of IGST Act. [2022 (BU)] [2019 (BU)]
1) Levy and Collection of IGST on Inter-State Supplies
14. Exempt Supply:
2) Input Tax Credit (ITC) Mechanism
Exempt Supply refers to the category of supplies or transactions that are specifically excluded from the levy
of Goods and Services Tax (GST). These supplies are exempted from GST and do not attract any tax liability.
3. Define Goods as per CGST Act. [2021 (BNU)] [2019 (BU)] [2018 (BU)]
In other words, no GST is charged or collected on exempt supplies.
According to Section 2(52) of the Central Goods and Services Tax Act,2017;
“Goods” means every kind of movable property other than money and securities but includes actionable
15. Outward Supply:
claim, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed
Outward Supply refers to the supply of goods or services made by a registered taxable person to another
before supply or under a contract of supply.
person. It involves the transfer of ownership, possession, or the provision of services in return for
consideration.
4. What are Capital Goods? [2022 (BU)] [2021 (BU)]
Capital Goods refers to assets that are used in the production or manufacturing process of goods or services.
16. Place of Supply:
Capital Goods play a vital role in the production and expansion of a business and are classified as fixed assets
Place of Supply refers to the location or jurisdiction where a supply of goods or services is considered to be
on the company’s balance sheet.
made for the purpose of determining the applicable taxes and jurisdictional rules.
5. What is Principal Supply? [2021 (BU)] [2017 (BU)]
17. Supplier:
Principal Supply refers to the supply of goods or services that forms the predominant element of a composite
Supplier refers to a person or entity who supplies or is responsible for the supply of goods or services.
or mixed supply, and upon which other supplies in the composite or mixed supply depend.
The supplier is an essential participant in a transaction, as he is the party responsible for providing or making
It is the primary or main supply in a transaction that determines the nature of the overall supply.
available the goods or services to the recipient.
6. What is meant by ‘Place of Business’? [2021 (BNU)] [2021 (BU)] [2018 (BU)]
18. Job Work:
Place of Business refers to any location where a business is regularly conducted.
Job Work refers to a process where a registered person (referred to as the ‘principal’) sends goods or semi-
It includes not only the main office or establishment, but also other places where business-related activities
finished goods to another person (referred to as the ‘job worker’) for further processing, assembly,
take place, such as warehouses, go-downs, factories, branches, and other premises.
completion, or any other specific treatment or work.
7. What is Reverse Charge? [2022 (BNU)] [2017 (BU)]
19. Manufacture:
Reverse charge is a mechanism under the Goods and Services Tax (GST) system where the liability to pay
Manufacture refers to the process of transforming raw materials or components into finished goods by
tax is shifted from the supplier of goods or services to the recipient of the goods or services.
utilizing physical, mechanical, or chemical processes.
It involves the creation, production, or assembly of goods that result in a new product with a distinct name,
8. Who is an Intermediary? [2021 (BU)]
character, and use.
Intermediary means a broker, an agent, or any other person, by whatever name called, who arranges or
facilitates the supply of goods or services or both, or securities, between two or more persons.
20. Input Tax:
Input Tax refers to the Goods and Services Tax (GST) paid by a registered taxpayer on the purchase or
9. What do you mean by Consideration? [2021 (BU)]
procurement of goods or services used for business purposes.
Consideration refers to the payment made or agreed to be made in monetary or non-monetary form in
It is an important concept in the GST system and is a key component in the calculation of tax liability and
exchange for the supply of goods or services. Consideration forms a fundamental element in determining the
claiming input tax credit.
tax liability under GST.
21. Input Tax Credit:
10. Aggregate Turnover:
Input Tax Credit (ITC) is a mechanism provided under the Goods and Services Tax (GST) system that allows
Aggregate turnover refers to the total value of all taxable supplies (both goods and services), exempt supplies,
registered taxpayers to claim a credit for the tax paid on inputs, i.e., raw materials, goods, or services, which
exports, and inter-state supplies made by a registered taxpayer within a financial year.
are used in the course of business.
It enables taxpayers to offset the tax paid on inputs against their final tax liability, reducing the overall tax
11. Adjudicating Authority:
burden.
The Adjudicating Authority refers to the authority or body empowered under the specific laws to pass
judgments, decisions, or orders on matters related to legal or regulatory compliance.
In the context of the Goods and Services Tax (GST) in India, the Adjudicating Authority is established under
the Central Goods and Services Tax (CGST) Act, 2017.
22. Person: 3. PROCEDURE AND LEVY UNDER GST
Person refers to a legal entity or an individual that can have legal rights and obligations.
It is a broad term that encompasses various entities and individuals who are recognized by law and can
Section – A (2 Marks)
engage in legal transactions and activities.
1. Who is a Non-Resident Person? [2017 (BU)]
23. Works Contract:
A non-resident taxable person means any person who occasionally undertakes transactions involving the
Works Contract refers to a contract where a person agrees to carry out a combination of works involving
supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no
both goods and services.
fixed place of business or residence in India.
It is a composite contract that includes both the supply of goods and the provision of services for the execution
of a specific project or undertaking.
2. Who is Casual Taxable Person? [2021 (BU)] [2021 (BCU)]
24. Export of Goods / Services: A Casual Taxable Person refers to an individual or business entity that occasionally undertakes transactions
involving the supply of goods or services in a taxable territory where they do not have a fixed place of
Export of Goods refers to the supply of goods from the territory of one country to the territory of another
country. business.
It involves sending goods out of the home country to be received and consumed in a foreign country. They are not regular taxpayers and do not have a permanent establishment in the specific jurisdiction where
they engage in business activities.
25. Import of Goods / Services:
Import of Goods refers to the act of bringing goods into a country from abroad or from a customs territory. 3. When will a Non-Resident become liable for registration under GST Act? [2018 (BU)]
It involves the movement of tangible, physical products across international borders for the purpose of A non-resident person becomes liable for registration when they satisfy certain conditions outlined in the
law. The registration requirements for non-resident persons are covered under Section 24 of the Central
consumption, trade, or use within the importing country.
Goods and Services Tax (CGST) Act, 2017.
26. Location of Supplier of Service:
4. What is Mixed Supply? [2022 (BU)] [2021 (BNU)] [2019 (BU)]
Location of the Supplier of Service refers to the place or jurisdiction where a supplier of services is
Mixed Supply refers to a supply of two or more individual goods or services, or any combination thereof,
established or has a fixed establishment from which the services are provided.
made together for a single price.
It is a concept used to classify transactions that involve multiple elements or components.
27. Location of Recipient of Service:
Location of Recipient of Service refers to the place where the recipient of a service is located or where they
have their business establishment. 5. What is Composite Supply? [2022 (BNU)] [2018 (BU)]
Composite Supply refers to a supply of goods or services that are naturally bundled together and are provided
in conjunction with each other, forming an integral part of a single supply.
In a composite supply, there is a principal supply that gives the essential character to the transaction.

6. What is Zero Rated Supply? [2022 (BU)] [2021 (BU)]

Zero Rated Supply refers to the supply of goods or services that are subject to a 0% GST rate.
Zero Rated Supplies are treated as taxable supplies, but no GST is levied on them.
It means that the input tax incurred while making zero-rated supplies is eligible for refund or credit.

7. What is ISD? [2021 (BNU)]

Input Service Distributor refers to an office or establishment of a supplier of goods or services that receives
input tax credits (ITC) on inputs, input services, or both, and distributes or allocates the ITC to other branches
or units of the same organization.
 Important Theory Questions Problems on Time of Supply

Briefly explain the Special Provisions applicable to Casual Taxable Person. Time of Supply:
The Goods and Services Tax (GST) has special provisions applicable to casual taxable persons. A casual taxable 1) Time of Supply of Goods
person is an individual or business entity who occasionally undertakes taxable activities in a jurisdiction where 2) Time of Supply of Services
they do not have a regular place of business. Here are the special provisions applicable to casual taxable persons:
1. Registration: Casual taxable persons are required to register under GST, regardless of their turnover. They 1) Time of Supply of Goods (Section 12):
need to obtain a unique GSTIN (Goods and Services Tax Identification Number) as a casual taxable person. Procedure:
This registration is temporary and valid for a specific period mentioned during registration. a) Under Section 12 (1):
2. Advance Deposit: Before commencing business activities, a casual taxable person is required to make an Earlier of the following
advance deposit of tax liability. The deposit is made to the tax authorities to secure the payment of taxes.
3. Return Filing: Casual taxable persons must file GST returns for the period they are registered. They need Invoice Date of Payment Made
to submit the GSTR-1 (outward supplies), GSTR-2 (inward supplies), and GSTR-3 (monthly return) forms.
However, instead of monthly filing, casual taxable persons file returns for the duration of their registration, Invoice Due Invoice Received
as specified during registration.
4. Simplified Compliance: The compliance requirements for casual taxable persons are simplified compared Removal Arrival
to regular taxpayers. They are not required to maintain detailed records of every transaction but should
maintain records sufficient to support the information provided in the GST returns. b) Under Section 12 (2): If Payment made in Advance;
5. Input Tax Credit: Casual taxable persons are not eligible to claim input tax credit on purchases made during Earlier of the following
their registration period. They are only allowed to utilize the advance deposit made to meet their tax liability.
6. Validity and Extension: The registration as a casual taxable person is valid for the specific period mentioned Removal Invoice Arrival
during registration. If the person requires an extension, they can apply for an extension of their registration
period before the expiry date. The extension is granted at the discretion of the tax authorities.
It is important for casual taxable persons to comply with these special provisions to avoid penalties or legal
consequences. It is advisable to consult with tax professionals or local tax authorities for specific guidelines and 2) Time of Supply of Services (Section 13):
requirements applicable in their jurisdiction, as the provisions may vary slightly based on local regulations.
In Date of Service Provided, Date of Invoice issued and Date of Payment Made
a) Rule – 1: If Invoice Issued within 30 days of Date of Service Provided
Earlier of the following

Date of Issue of Invoice Date of Payment Made

b) Rule – 2: If Invoice Issued after 30 days of Date of Service Provided

Earlier of the following

Date of Service Provided Date of Payment Made

 Section – B (6 Marks) 2. From the following information determine the Time of Supply: [2021 (BNU)]
Goods Made Available
Sl. No. Date of Removal Date of Invoice Receipt of Payment
1. From the following information determine the Time of Supply: [2022 (BNU)] to Recipient
Sl. No. Date of Actual Provision of Service Date of Invoice Bill Receipt of Payment 1 01-10-2019 03-10-2019 10-10-2019 20-08-2019
1 10-01-2021 30-01-2021 06-01-2021 2 15-11-2019 05-11-2019 16-11-2019 10-12-2019
2 10-01-2021 12-02-2021 30-06-2021 3 10-12-2019 10-12-2019 15-12-2019 15-11-2019
3 10-01-2021 12-02-2021 05-01-2021 (Part) 4 - 08-01-2020 10-01-2020 14-02-2020
25-02-2021 (Remaining) 5 - 08-06-2019 02-06-2019 18-07-2019
4 10-01-2021 22-02-2021 12-02-2021 6 - 13-04-2019 18-04-2019 13-03-2019
Solution: Solution:
Computation of Time of Supply of Services under Section 13 of CGST Act, 2017 Computation of Time of Supply of Goods under Section 12 of CGST Act, 2017
Sl.No. Time of Supply Remarks Sl.No. Time of Supply Remarks

Here, the invoice is issued within 30 days of service provided. Here, the Payment is made after of Date of Invoice.
The Date of Receipt of Payment (06-01-2021) is earlier than Date of Invoice (30- The Date of Removal (01-10-2019) is earlier than Date of Receipt of Payment
1 06-01-2021 1 01-10-2019
01-2021). (20-08-2019).
So, Date of Receipt of Payment (06-01-2021) is Time of Supply. So, Date of Removal (01-10-2019) is Time of Supply.

Here, the invoice is issued after 30 days of service provided. Here, the Payment is made after of Date of Invoice.
The Date of Service Provided (10-01-2021) is earlier than Date of Receipt of The Date of Invoice (05-11-2019) is earlier than Date of Receipt of Payment (10-
2 10-01-2021 2 05-11-2019
Payment (30-06-2021). 12-2019).
So, Date of Service Provided (10-01-2021) is Time of Supply. So, Date of Invoice (05-11-2019) is Time of Supply.

Here, the invoice is issued after 30 days of service provided. Here, the Payment is made before of Date of Invoice.
The Date of Receipt of Payment (05-01-2021) is earlier than Date of Service The Date of Removal and Date of Invoice (10-12-2019) is earlier than Date of
3 (a) 05-01-2021 3 10-12-2019
Provided (10-01-2021). Goods Made Available to Recipient (15-12-2019).
So, Date of Receipt of Payment (05-01-2021) is Time of Supply. So, Date of Removal and Date of Invoice (10-12-2019) is Time of Supply.

Here, the invoice is issued after 30 days of service provided. Here, the Payment is made after of Date of Invoice.
The Date of Service Provided (10-01-2021) is earlier than Date of Receipt of The Date of Invoice (08-01-2020) is earlier than Date of Receipt of Payment (14-
3 (b) 10-01-2021 4 08-01-2020
Payment (25-02-2021). 02-2020).
So, Date of Service Provided (10-01-2021) is Time of Supply. So, Date of Invoice (08-01-2020) is Time of Supply.
Here, the Payment is made after of Date of Invoice.
Here, the invoice is issued after 30 days of service provided. The Date of Goods Made Available to Recipient (02-06-2019) is earlier than
The Date of Service Provided (10-01-2021) is earlier than Date of Receipt of 5 02-06-2019 Date of Receipt of Payment (18-07-2019).
4 10-01-2021
Payment (12-02-2021). So, Date of Goods Made Available to Recipient (02-06-2019) is Time of
So, Date of Service Provided (10-01-2021) is Time of Supply. Supply.
Here, the Payment is made before of Date of Invoice.
The Date of Invoice (13-04-2019) is earlier than Date of Goods Made Available
6 13-04-2019
to Recipient (18-04-2019).
So, Date of Invoice (13-04-2019) is Time of Supply.
 3. In accordance with the provisions of Section 12 of CGST Act, 2017 determine the Time of Supply of 4. In accordance with the provisions of Section 12 of CGST Act, 2017 determine the Time of Supply of
the following cases: [2021 (BCU)] the following independent cases: [2019 (BU)]
Goods Made Available Goods Made Available
Sl. No. Date of Removal Date of Invoice Receipt of Payment Sl. No. Date of Removal Date of Invoice Receipt of Payment
to Recipient to Recipient
1 01-07-2020 02-07-2020 03-07-2020 15-08-2020 1 01-08-2018 03-08-2018 10-08-2018 20-06-2018
2 03-07-2020 01-07-2020 04-07-2020 25-08-2020 2 15-09-2018 05-09-2018 16-09-2018 10-10-2018
3 04-08-2020 04-08-2020 06-08-2020 01-07-2020 3 08-12-2018 08-12-2018 15-12-2018 15-11-2018
4 - 02-10-2020 03-10-2020 15-11-2020 4 - 10-01-2019 12-01-2019 16-02-2019
5 - 04-10-2020 01-10-2020 25-11-2020 5 - 10-06-2018 02-06-2018 20-07-2018
6 - 04-11-2020 06-11-2020 01-10-2020 6 - 15-04-2018 20-04-2018 15-03-2018
Solution: Solution:
Computation of Time of Supply of Goods under Section 12 of CGST Act, 2017 Computation of Time of Supply of Goods under Section 12 of CGST Act, 2017
Sl.No. Time of Supply Remarks Sl.No. Time of Supply Remarks
Here, the Payment is made after of Date of Invoice. Here, the Payment is made before of Date of Invoice.
The Date of Removal (01-07-2020) is earlier than Date of Receipt of Payment The Date of Removal (01-08-2018) is earlier than Date of Invoice (03-08-2018)
1 01-07-2020 1 01-08-2018
(15-08-2020). and Date of Goods Made Available to Recipient (10-08-2018).
So, Date of Removal (01-07-2020) is Time of Supply. So, Date of Removal (01-08-2018) is Time of Supply.

Here, the Payment is made after of Date of Invoice. Here, the Payment is made after of Date of Invoice.
The Date of Invoice (01-07-2020) is earlier than Date of Receipt of Payment (25- The Date of Invoice (05-09-2018) is earlier than Date of Receipt of Payment (10-
2 01-07-2020 2 05-09-2018
08-2020). 10-2018).
So, Date of Invoice (01-07-2020) is Time of Supply. So, Date of Invoice (05-09-2018) is Time of Supply.

Here, the Payment is made before of Date of Invoice. Here, the Payment is made before of Date of Invoice.
The Date of Removal and Date of Invoice (04-08-2020) is earlier than Date of The Date of Removal and Date of Invoice (08-12-2018) is earlier than Date of
3 04-08-2020 3 08-12-2018
Goods Made Available to Recipient (06-08-2020). Goods Made Available to Recipient (15-12-2018).
So, Date of Removal and Date of Invoice (04-08-2020) is Time of Supply. So, Date of Removal and Date of Invoice (08-12-2018) is Time of Supply.

Here, the Payment is made after of Date of Invoice. Here, the Payment is made after of Date of Invoice.
The Date of Invoice (02-10-2020) is earlier than Date of Receipt of Payment (15- The Date of Invoice (10-01-2019) is earlier than Date of Receipt of Payment (16-
4 02-10-2020 4 10-01-2019
11-2020). 02-2019).
So, Date of Invoice (02-10-2020) is Time of Supply. So, Date of Invoice (10-01-2019) is Time of Supply.
Here, the Payment is made after of Date of Invoice. Here, the Payment is made after of Date of Invoice.
The Date of Goods Made Available to Recipient (01-10-2020) is earlier than The Date of Goods Made Available to Recipient (02-06-2018) is earlier than
5 01-10-2020 Date of Receipt of Payment (25-11-2020). 5 02-06-2018 Date of Receipt of Payment (20-07-2018).
So, Date of Goods Made Available to Recipient (01-10-2020) is Time of So, Date of Goods Made Available to Recipient (02-06-2018) is Time of
Supply. Supply.
Here, the Payment is made before of Date of Invoice. Here, the Payment is made before of Date of Invoice.
The Date of Invoice (04-11-2020) is earlier than Date of Goods Made Available The Date of Invoice (15-04-2018) is earlier than Date of Goods Made Available
6 04-11-2020 6 15-04-2018
to Recipient (06-11-2020). to Recipient (20-04-2018).
So, Date of Invoice (04-11-2020) is Time of Supply. So, Date of Invoice (15-04-2018) is Time of Supply.
 Problems on Transaction Value Section – B (6 Marks)
Important Points to Remember: 1. Compute the transaction value of taxable goods and IGST payable from the following information.
1) If price includes GST, it should be excluded. Wholesale price of a product sold to Gujarat from a dealer in Bangalore (including GST 12%)
a) Case – 1: If Amount is Given → (Price – GST) ₹5,70,000.
100 The following items are not included in the price.
b) Case – 2: If Percentage is Given → (Amount × )
1) Secondary Packaging Cost ₹10,800
100 + rate
2) Cost of Special Packaging ₹16,200
2) All Inclusions (Expenses) must be Added. 3) Cost of Returnable Packaging ₹8,000
Primary, Secondary and Special Cost of Packaging must be Added. 4) Freight and Insurance ₹7,500
But, for Cost of Durable and Returnable Goods: 5) Trade Discount ₹20,000 [2022 (BU)] [2021 (BNU)] [2018 (BU)]
a) If Excluded → Ignore Solution:
b) If Included → Deduct (Less) Computation of Transaction Value
Particulars Amount Amount
3) All Exclusions (Incomes) must be Deducted. 100 5,08,929
Trade Discount and Normal Discount should be Deducted. Selling Price (5,70,000 × )
112
In case of Special Discount; Special Discount does not come under Normal Practice. Add: Inclusions:
a) If Special Discount is availed → Add back Normal Secondary Packaging Cost 10,800
b) If Special discount is not availed → Ignore Special Packaging Cost 16,200
Freight and Insurance 7,500
4) Profit Less: Exclusions:
Normal Practice for granting Profit is on Cost of Product → (Cost of Product × %) Trade Discount (20,000) 14,500
% Cost of Product 5,23,429
If on Sales → Cost of Product ×
100 – % Add: Profit (on Cost / on Sales) -
Add: Penalty -
5) Any Subsidy given by the Government → Exempted Add: Accessories -
Any Subsidy given by any Authority other than Government → Taxable Transaction Value 5,23,429

6) If Discount is Given in Percentage → Refer Purchase Entry or Selling Price in the Problem
Computation of GST Payable
Specimen for Computation of Transaction Value Scheme: Composite Nature: Inter Rate: 12%
Particulars Amount Amount Particulars Amount
Total Selling Price (Excluding GST) **** 12 62,811
Add: Inclusions (Expenses) *** IGST (5,23,429 × )
100
Less: Exclusions (Incomes) (***) *** GST Payable 62,811
Cost of Product ****
Add: Profit (on Cost / on Sales) ***
Add: Penalty ***
Add: Accessories *** ***
Transaction Value ****

Scheme to determine rate under Transaction Value:

a) Composition Scheme:
If Accessories supplied along with the main product (principle supply), if it is necessary, essential, or
naturally bundled, then it is composite supply.
Rule → Rate of Main Product is applicable.
Example: Machinery costing ₹80,000 at 18% GST supplied with accessories which are necessary for the
running of machinery at ₹4,000 and rate is 28%.
Here, main product is machinery, so 18% is applicable.

b) Mixed Scheme:
Here accessories will not be necessary, essential, or naturally bundled. It is Optional.
Rule → Whichever is ‘high’ is applicable.
Example: Machinery costing ₹80,000 at 18% GST supplied with accessories which are not necessary for
the running of machinery at ₹4,000 and rate is 28%.
Here, highest rate 28% is applicable.
 2. Compute the Transaction Value of taxable goods and GST Payable from the following information. 3. Compute the Transaction Value of goods from the following information and GST Payable by a dealer
Wholesale Price of a product sold to Tamil Nadu from a dealer in Bangalore including GST of 12% registered in Karnataka. [2017 (BU)]
₹70,000. Particulars Amount
Following items are not included in the prices: Selling Price (including IGST of ₹2,000) 43,000
a) Normal Secondary Packaging Cost ₹4,000. Following transactions are not included in the above price:
b) Cost of Special Packaging ₹2,000. Freight Charges paid by supplier charged separately 1,000
c) Cost of durable and returnable packaging ₹3,000. Normal Secondary Packing Cost 1,500
d) Freight Charges paid by the Supplier ₹1,600. Cost of Durable and Returnable Packing 1,500
e) Insurance on freight paid by the supplier ₹400. Insurance on Freight paid by supplier charged separately 500
f) Trade discount ₹4,000. [2021 (BCU)] Trade Discount (normal practice) 1,000
Solution: Rate of GST 18%
Computation of Transaction Value Solution:
Particulars Amount Amount Computation of Transaction Value
100 62,500 Particulars Amount Amount
Selling Price (70,000 × )
112 Selling Price (43,000 – 2,000) 41,000
Add: Inclusions: Add: Inclusions:
Normal Secondary Packaging Cost 4,000 Freight Charges 1,000
Special Packaging Cost 2,000 Normal Secondary Packaging Cost 1,500
Freight Charges 1,600 Insurance on Freight 500
Insurance on Freight 400 Less: Exclusions:
Less: Exclusions: Trade Discount (1,000) 2,000
Trade Discount (4,000) 4,000 Cost of Product 43,000
Cost of Product 66,500 Add: Profit (on Cost / on Sales) -
Add: Profit (on Cost / on Sales) - Add: Penalty -
Add: Penalty - Add: Accessories -
Add: Accessories - Transaction Value 43,000
Transaction Value 66,500
Computation of GST Payable
Computation of GST Payable Scheme: Composite Nature: Inter Rate: 18%
Scheme: Composite Nature: Inter Rate: 12% Particulars Amount
Particulars Amount 18 7,740
12 7,980 IGST (43,000 × )
IGST (66,500 × ) 100
100 GST Payable 7,740
GST Payable 7,980
 4. XYZ Limited of Chennai agreed to sell an electronic motor on which the rate of GST applicable is 5. How would you arrive at the transaction value for the purpose of levy of GST from the following
12% to ABC Limited of Bangalore for ₹7,500 on ex-factory basis. particulars and calculate GST payable. The selling price of the product exclusive of GST ₹10,000, rate
Other particulars are: of GST is applicable to the product at 5%, trade discount allowed as per normal trade practice before
a) Transportation and transit insurance were arranged by XYZ Limited, this was at the request of delivery of the product is ₹1,200, freight attributable for the supply of the product is ₹750 from factory
ABC Limited, and amounted to ₹625 and ₹750 respectively which were charged separately. to buyer place which is not included in the above selling price. [2021 (BU)]
b) A discount of ₹500 was given to ABC Limited on the agreed price on payment of advance of ₹1,750. Solution:
c) Interest of ₹400 was charged from DEF Limited, as it failed to make the payment within 30 days. Computation of Transaction Value
d) Packaging charges of the motor amounted to ₹650. Particulars Amount Amount
e) The expenditure incurred by ABC Limited towards ‘free after sales service’ during warranty Selling Price 10,000
period comes to be ₹250 per motor. Add: Inclusions:
Compute IGST Payable. [2021 (BU)] Freight Charges 750
Solution: Less: Exclusions:
Computation of Transaction Value for XYZ Limited Trade Discount (1,200) (450)
Particulars Amount Amount Cost of Product 9,550
Selling Price 7,500 Add: Profit (on Cost / on Sales) -
Add: Inclusions: Add: Penalty -
Transportation Charges 625 Add: Accessories -
Transit Insurance Charges 750 Transaction Value 9,550
Packaging Charges 650
After Sales Service Charges 250 Computation of GST Payable
Less: Exclusions: - 2,275 Scheme: Composite Nature: Intra Rate: 5%
Cost of Product 9,775 Particulars Amount
Add: Profit (on Cost / on Sales) - 5 1 238.75
Add: Penalty: CGST (9,550 × × )
100 2
Interest Charged from DEF Ltd. 400 5 1 238.75
Add: Accessories - 400 SGST (9,550 × × )
100 2
Transaction Value 10,175 GST Payable 477.50

Computation of GST Payable 6. M/s Harivansh Company Limited manufactures 8,000 units of its Product – X and sold to a wholesaler
Scheme: Composite Nature: Inter Rate: 12% at ₹20 per unit. Also, he manufactures 3,000 units of Product – Y and sold to a dealer at ₹15 per unit.
Particulars Amount 10% trade discount was allowed to the wholesaler as per the normal practice. Cost of packaging and
12 1,221 freight ₹12,000 charged separately. What is the amount of GST payable if the rate of GST is 18%?
IGST (10,175 × )
100 Assume the supply as intra state supply. [2022 (BNU)]
GST Payable 1,221 Solution: Computation of Transaction Value
Particulars Amount Amount
Selling Price:
Product – X (8,000 × ₹20) 1,60,000
Product – Y (3,000 × ₹15) 45,000 2,05,000
Add: Inclusions:
Packaging Cost and Freight 12,000
Less: Exclusions:
Trade Discount (2,05,000 × 10%) (20,500) (8,500)
Cost of Product 1,96,500
Add: Profit (on Cost / on Sales) -
Add: Penalty -
Add: Accessories -
Transaction Value 1,96,500

Computation of GST Payable

Scheme: Composite Nature: Intra Rate: 18%
Particulars Amount
18 1 17,685
CGST (1,96,500 × × )
100 2
18 1 17,685
SGST (1,96,500 × × )
100 2
GST Payable 35,370
 7. M/s Raghu Company Limited manufactures 5,000 units of Product – A and sold to a wholesaler at ₹12 Section – C (14 Marks)
per unit. Also, he manufactures 2,000 units of Product – B and sold to a dealer at ₹10 per unit. 10%
trade discount was allowed to the wholesaler as per the normal practice. Cost of packaging and freight 1. Mr. Madan, a dealer submits the following information in relation to manufacture and selling of water
₹10,000 charged separately. What is the amount of GST payable if the rate of GST is 28%? Assume pumps. Compute the Transaction Value from the following information.
the supply as intra state supply. [2019 (BU)] Particulars Amount
Solution: Computation of Transaction Value 1) Import of Raw Materials (Excluding 20% BCD on import and 12% GST) 4,20,000
Particulars Amount Amount 2) Raw materials purchased from Karnataka 4,81,600
Selling Price: (Including CGST at 14% and SGST at 14%)
Product – A (5,000 × ₹12) 60,000 3) Subsidy received from an NGO which was directly related to price of goods 11,000
Product – Y (2,000 × ₹10) 20,000 80,000 4) Raw Material from Goa including GST at 5% 84,000
Add: Inclusions: 5) Penalty Levied by Mr. Madan for delayed payment 1,000
Packaging Cost and Freight 10,000 6) Subsidy received from Central Government which was directly linked to the price 34,000
Less: Exclusions: of the product
Trade Discount (80,000 × 10%) (8,000) 2,000 7) Additional incentives paid to the Employees 9,000
Cost of Product 82,000 8) Warranty and Manufacturing Charges 40,000
Add: Profit (on Cost / on Sales) - 9) Service received from a registered dealer to manufacture a machinery; rate of 25,000
Add: Penalty - GST applicable to these services is 12%
Add: Accessories - Along with the machine he supplied 3 different necessary components at a fixed price of ₹40,000 each.
Transaction Value 82,000 Mr. Madan is a registered dealer and he sold the machine at a profit of 10%. [2022 (BU)] [2018 (BU)]
Solution: Computation of Transaction Value
Computation of GST Payable Particulars Amount Amount
Scheme: Composite Nature: Intra Rate: 28% Import of Raw Materials 4,20,000
Particulars Amount Add: BCD (4,20,000 × 20%) 84,000 5,04,000
28 1 11,480 Raw Materials from Karnataka 3,76,250
CGST (82,000 × × ) 100
100 2
28 1 11,480 (4,81,600 × )
SGST (82,000 × × ) 128
100 2 Raw Material from Goa 80,000
GST Payable 22,960 100
(84,000 × )
105
Selling Price 9,60,250
Add: Inclusions:
Subsidy Received from an NGO 11,000
Subsidy Received from Central Government Exempt
Additional Incentives paid to the Employees 9,000
Warranty and Manufacturing Charges 40,000
Services Received to manufacture Machinery 25,000
Less: Exclusions: - 85,000
Cost of Product 10,45,250
Add: Profit (10,45,250 × 10%) 1,04,525
Add: Penalty levied for delayed payment 1,000
Add: Accessories (40,000 × 3) 1,20,000 2,25,525
Transaction Value 12,70,775
 2. A dealer in Kerala entered a contract with supplier in Bangalore to deliver Machinery along with 3. A dealer in Mysore, agreed to supply 10 Computer Systems to a dealer in Bangalore in the month of
essential accessories, from the following information determine the Transaction Value and GST August – 2019 on the following terms:
Payable. Particulars Amount
Particulars Amount 1) Place of each CPU supplied (Exclusive of GST 18%) 20,000
1) Price of Machinery (excluding taxes) 14,40,000 2) Price of each Desktop supplied (Inclusive of GST at 12%) 7,840
2) Installation and erection expenses charged separately in invoice 48,000 3) Packaging for Transportation 2,000
3) Packaging Charges (Primary and Secondary) 36,000 4) Transport charges to recipient place charged separately in Invoice 4,000
4) Design and Engineering Charges paid by the buyer 24,000 5) Commission paid to the agents to fix up agreement for the sale 4,000
5) Cost of material supplied by buyer free of charge 7,200 6) Late fee charged to buyer for the delayed payment 2,000
6) Pre-delivery Inspection Charges 3,000 7) Subsidy received from an NGO which was directly linked to the price of the goods 25,000
7) Loading and Handling Charges within the factory 3,600 8) Subsidy received from Government which was directly linked to the price of the goods 10,000
Other Information: The dealer supplied following essential items along with the CPU:
a) Cash Discount is 2% on price of machinery was allowed as per terms of contracts. Since full a) 10 Keypads supplied along with the Desktops costing ₹400 each and rate of GST applicable is 12%.
payments was received before dispatch of machinery. b) 10 Mouses supplied along with the Desktops costing ₹500 each and rate of GST applicable is 12%.
b) Bought out accessories supplied along with machinery valued at ₹12,000 which was necessary for c) Cost of Operating Software supplied for all the systems is ₹20,000. GST applicable to the software
the working. These bought out goods are charged for tax at the rate of 5%. is 5%
c) GST rate is 18%. [2021 (BNU)] d) Special discount of ₹4,000 was given, if advance of ₹1,00,000 is paid with order. The buyer has paid
Solution: Computation of Transaction Value the advance with the order.
Particulars Amount Amount Find the Transaction Value and the GST Payable for the month of August – 2019. [2019 (BU)]
Price of Machinery 14,40,000 Solution: Computation of Transaction Value
Add: Inclusions: Particulars Amount Amount
Installation and Erection Expenses 48,000 CPU (20,000 × 10) 2,00,000
Packaging Charges (Primary and Secondary) 36,000 100 70,000
Desktop (7,840 × 10 × )
Design and Engineering Charges 24,000 112
Cost of Material Supplied free of charge (*) 7,200 Selling Price 2,70,000
Pre-Delivery Inspection Charges 3,000 Add: Inclusions:
Loading and Handling Charges 3,600 Packaging for Transportation 2,000
Less: Exclusions: Transport charges 4,000
Cash Discount (14,40,000 × 2%) (28,800) 93,000 Commission Paid to the Agents 4,000
Cost of Product 15,33,000 Subsidy Received from an NGO 25,000
Add: Profit - Subsidy Received from Central Government Exempt
Add: Penalty levied for delayed payment - Special Discount (*) 4,000
Add: Accessories 12,000 12,000 Less: Exclusions: - 39,000
Transaction Value 15,45,000 Cost of Product 3,09,000
Add: Profit -
Here, main product is Machinery, so 18% GST is applicable. Add: Penalty levied for delayed payment 2,000
Add: Accessories:
Computation of GST Payable Keypads (400 × 10) 4,000
Scheme: Mixed Nature: Inter Rate: 18% Mouses (500 × 10) 5,000
Particulars Amount Cost of Operating Software 20,0000 31,000
18 2,78,100 Transaction Value 3,40,000
IGST (15,45,000 × )
100
GST Payable 2,78,100 Here, the highest rate is 18%, so 18% GST is applicable.

Computation of GST Payable

Scheme: Composite Nature: Intra Rate: 18%
Particulars Amount
18 1 30,600
CGST (3,40,000 × × )
100 2
18 1 30,600
SGST (3,40,000 × × )
100 2
GST Payable 61,200
 Problems on Output Tax 2. Compute the amount of Output Tax (GST) to be uploaded by the dealer for the month of December –
Output Tax: A tax levied on sales is called as output tax. 2020 and which is the last date to upload it in Credit Ledger. [2021 (BCU)]
Important Dates to Remember: Exemptions for Output: Particulars Amount
Last Date to Upload Output Tax in E – Ledger → 10th of Next Month 1. Exports 1) Product – AB sold to a dealer in Delhi, rate of GST notified to this product is 12%. 9,00,000
Scrutiny → 15th of Next Month 2. Goods sold to S.E.Z 2) Product – CD sold to a dealer in Bangalore at nil rate of GST. 12,00,000
Last Date for Payment → 20th of Next Month 3. 0 (or) Nil Rate 3) Product – EF sold to a dealer in Mumbai, rate of GST at 5%. 7,50,000
4. Exempt 4) Product – GH exported to USA; the rate notified by GST Council for this product is 9,60,000
Problems on Output Tax 12% if it is sold in India.
Section – C (14 Marks) 5) Product – IJ sold to a dealer in Union Territory, rate of GST notified is 12%. 9,00,000
6) Product – KL at 18% GST sold to a dealer in Jammu and Kashmir. 1,80,000
7) Product – MN at 28% GST sold to an unregistered dealer in Hubli. 6,00,000
1. From the following information compute the amount of Output Tax to be uploaded by the dealer who 8) Product – OP sold to a unit of SEZ in Bangalore, the rate of GST is 18%. 3,00,000
has registered in Karnataka for the month of January – 2022 and which is the last date to upload it in 9) Product – QR which is exempted from GST is sold to a registered dealer in Punjab. 7,80,000
Credit Ledger. [2022 (BNU)] [2021 (BU)] [2017 (BU)] 10) Product – ST sold dealer in Bidar who has registered under Composition Scheme at 2,25,000
Particulars Amount 28% GST.
1) Product – A sold to a dealer in Bengaluru, rate of GST notified to this product is 18%. 4,00,000 11) Product – UV sold to a unit of SEZ in Mangalore, the rate of GST notified for this 2,40,000
2) Product – B sold to a dealer in Mysore, rate of GST applicable at 12%. 1,40,000 product is 5%.
3) Product – C at Nil rate of GST sold to a dealer in Puducherry. 5,00,000 12) Product – WX sold to a dealer within the state, the rate of GST notified is 18%. 1,50,000
4) Product – D at 5% GST sold to a dealer in Jammu and Kashmir. 5,60,000 Solution:
5) Product – E at 28% GST sold to an unregistered dealer within the state. 2,40,000 Computation of GST Payable
6) Product – F rate of GST notified is 12% sold to a SEZ developer in Bengaluru. 8,00,000 Particulars Nature Rate CGST SGST IGST
7) Product – G sold to a dealer in Union Territory, rate of GST notified is 18%. 6,00,000
1) Product – AB sold to a dealer in Delhi. Inter 12% - - 1,08,000
8) Product – H which is exempted from GST is sold to a registered dealer of Pune. 10,00,000
(9,00,000 × 12%)
9) Product – I exported to China, the GST rate notified by GST Council for this product 4,00,000
2) Product – CD sold to a dealer in Bangalore at nil Exempt - - - -
is 28%, if it is sold in India.
rate of GST.
10) Product – J sold to a unit of SEZ in Mysuru, the rate of GST notified to this product 12,00,000
3) Product – EF sold to a dealer in Mumbai. Inter 5% - - 37,500
is 12%.
(7,50,000 × 5%)
11) Product – K sold to a registered dealer within the state, rate of GST is 18%. 9,00,000
4) Product – GH exported to USA. Exempt - - - -
12) Product – L sold to a dealer in Belagavi who has registered under composition scheme 2,00,000
5) Product – IJ sold to a dealer in Union Territory. Inter 12% - - 1,08,000
at 28% GST.
(9,00,000 × 12%)
Solution: Computation of GST Payable 6) Product – KL sold to a dealer in Jammu and Inter 18% - - 32,400
Particulars Nature Rate CGST SGST IGST Kashmir. (1,80,000 × 18%)
1) Product – A sold to a dealer in Bengaluru. Intra 18% 36,000 36,000 - 7) Product – MN sold to an unregistered dealer in Intra 28% 84,000 84,000 -
(4,00,000 × 18% × ½) Hubli. (6,00,000 × 28% × ½)
2) Product – B sold to a dealer in Mysore. Intra 12% 8,400 8,400 - 8) Product – OP sold to a unit of SEZ in Bangalore. Exempt - - - -
(1,40,000 × 12% × ½) 9) Product – QR which is exempted from GST is Exempt - - - -
3) Product – C at Nil rate of GST sold to a dealer Exempt - - - - sold to a registered dealer in Punjab.
in Puducherry. 10) Product – ST sold dealer in Bidar who has Intra 28% 31,500 31,500 -
4) Product – D sold to a dealer in Jammu and Inter 5% - - 28,000 registered under Composition Scheme.
Kashmir. (5,60,000 × 5%) (2,25,000 × 28% × ½)
5) Product – E sold to an unregistered dealer within Intra 28% 33,600 33,600 - 11) Product – UV sold to a unit of SEZ in Exempt - - - -
the state. (2,40,000 × 28% × ½) Mangalore.
6) Product – F sold to a SEZ developer in Exempt - - - - 12) Product – WX sold to a dealer within the state. Intra 18% 13,500 13,500 -
Bengaluru. (1,50,000 × 18% × ½)
7) Product – G sold to a dealer in Union Territory. Inter 18% - - 1,08,000 Total Output Tax Payable 1,29,000 1,29,000 2,85,900
(6,00,000 × 18%) The last date to upload Output Tax in Electronic Credit Ledger is 10th January, 2021.
8) Product – H which is exempted from GST is Exempt - - - -
sold to a registered dealer of Pune.
9) Product – I exported to China. Exempt - - - -
10) Product – J sold to a unit of SEZ in Mysuru. Exempt - - - -
11) Product – K sold to a registered dealer within Intra 18% 81,000 81,000 -
the state. (9,00,000 × 18% × ½)
12) Product – L sold to a dealer in Belagavi. Intra 28% 28,000 28,000 -
(2,00,000 × 28% × ½)
Total Output Tax Payable 1,87,000 1,87,000 1,36,000
The last date to upload Output Tax in Electronic Credit Ledger is 10th February, 2022.
 Problems on Services 3. The Ashoka Hotel Group of Companies provided the following services within the state of Kerala from
its various establishments. Compute the amount of GST Payable for the month of November – 2017.
Service Tax: It is classified into two parts. [2017 (BU)]
1) Service of Individual (14M) Particulars Amount
2) Service of Industry (6M) 1) Supply of food or drink in restaurant not having facilities in Air Conditioning at 12% 30,000
GST
Service of Industry: It is mainly classified into two industries. 2) Supply of food or drink in restaurant having licence to serve liquor at 18% GST 90,000
1) Hotel Industry (Everything is Taxable, but Gift is Exempted) ✓ 3) Supply of food or drink in outdoor catering at 18% GST 1,50,000
2) Transportation Industry (Everything is Taxable, but Agricultural Product and Foreign Tourist is Exempted) 4) Renting of Hotel Rooms at 18% GST 2,25,000
5) Supply of food or drink in Air Condition restaurant in 5 star or above rated hotel at 1,50,000
Section – B (6 Marks) 28% GST
Solution:
1. The Dev Hotel Group of Companies provided the following services within state of Karnataka from Computation of GST Payable
its various branches. Compute the amount of GST payable for the month of December – 2021. Particulars CGST SGST
1) Supply of food outdoor catering at 18% GST ₹2,50,000. 1) Supply of Food or Drink in restaurant not having facilities in Air 1,800 1,800
2) Renting of Hotel Rooms at 18% GST ₹3,25,000. Conditioning. (30,000 × 12% × ½)
3) Supply of food and drink in restaurant having licence to serve liquor at 28% GST ₹1,95,000. 2) Supply of food or drink in restaurant having licence to serve liquor. 8,100 8,100
4) Supply of food and drink in AC restaurant in 5 star and above rated hotel at 28% GST ₹5,00,000. (90,000 × 18% × ½)
5) Supply of food or drink in restaurant not having facilities of Air Condition at 12% GST ₹4,00,000. 3) Supply of food or drink in outdoor catering. (1,50,000 × 18% × ½) 13,500 13,500
[2022 (BU)] [2018 (BU)] 4) Renting of Hotel Rooms. (2,25,000 × 18% × ½) 20,250 20,250
Solution: 5) Supply of food or drink in Air Condition restaurant in 5 star or above 21,000 21,000
Computation of GST Payable rated hotel. (1,50,000 × 28% × ½)
Particulars CGST SGST Net GST Payable 64,650 64,650
1) Supply of food outdoor catering. (2,50,000 × 18% × ½) 22,500 22,500
2) Renting of Hotel Rooms. (3,25,000 × 18% × ½) 29,250 29,250
3) Supply of food and drink in restaurant having licence to serve liquor. 27,300 27,300
(1,95,000 × 28% × ½)
4) Supply of food and drink in AC restaurant in 5 star and above rated 70,000 70,000
hotel. (5,00,000 × 28% × ½)
5) Supply of food or drink in restaurant not having facilities of Air 24,000 24,000
Condition. (4,00,000 × 12% × ½)
Net GST Payable 1,73,050 1,73,050

2. Kamath Hotel Group of Companies provided the following services within the state of Karnataka from
its various establishments. Compute the amount of GST Payable for the month of November 2020.
a) Supply of food or drink in restaurant not having facilities in Air Conditioning at 12% GST ₹40,000.
b) Supply of food or drink in restaurant in having licence to serve liquor at 18% GST ₹1,20,000.
c) Supply of food or drink in outdoor catering at 18% GST ₹2,00,000.
d) Renting of Hotel Rooms at 18% GST ₹3,00,000.
e) Supply of food or drink in Air Condition Restaurant in 5 star or above rated hotel at 28% GST
₹2,00,000. [2021 (BCU)]
Solution:
Computation of GST Payable
Particulars CGST SGST
a) Supply of food or drink in restaurant not having facilities in Air 2,400 2,400
Conditioning. (40,000 × 12% × ½)
b) Supply of food or drink in restaurant in having licence to serve liquor. 10,800 10,800
(1,20,000 × 18% × ½)
c) Supply of food or drink in outdoor catering. (2,00,000 × 18% × ½) 18,000 18,000
d) Renting of Hotel Rooms. (3,00,000 × 18% × ½) 27,000 27,000
e) Supply of food or drink in Air Condition Restaurant in 5 star or above 28,000 28,000
rated hotel. (2,00,000 × 28% × ½)
Net GST Payable 86,200 86,200
 4. A transport agency registered in the state of Karnataka provided the following services in the month Service of Individual: Every Service is taxable until it is notified exempt.
of July – 2019.
Particulars Amount List of Exemptions:
1) Transport of passengers by Air Condition Contract or State Carriage, rate of GST 5%. 63,000 1) Transport of Passengers in STC Bus.
2) Transport of passenger by Radio Taxi at 5% GST. 20,000 2) Service provided to a Foreign Tourist.
3) Transport of passengers by Air in Economy Class at 5% GST. 1,20,000 3) Transport of fresh vegetables by lorry to APMC Market.
4) Transport of passenger by Air other than Economy Class at 12% GST. 60,000 4) Service provided to farmer in relation to Agricultural Activity.
5) Service provided to Foreign Tourist in relation to tour conducted wholly (completely) 3,00,000 5) Service provided BY:
outside India which is exempt from GST. - Foreign Diplomatic Mission.
Solution: - RBI.
Computation of GST Payable - TO / BY United Nations for creating awareness about the health.
Particulars CGST SGST 6) House given on Rent for Residential Purpose.
1) Transport of passengers by Air Condition Contract or State Carriage. 1,575 1,575 7) Vacant Land used for Horticulture, Services relating to supply in Farm Labour.
(63,000 × 5% × ½) 8) Service relating to Education.
2) Transport of passenger by Radio Taxi. (20,000 × 5% × ½) 500 500 9) Services by way of Training in recreational activities.
3) Transport of passengers by Air in Economy Class. (1,20,000 × 5% × ½) 3,000 3,000 10) Healthcare Services, Rent of Agro Machinery.
4) Transport of passenger by Air other than Economy Class. 3,600 3,600 11) Public Utility Services.
(60,000 × 12% × ½)
5) Service provided to Foreign Tourist in relation to tour conducted wholly Exempt Exempt
(completely) outside India which is exempt from GST.
Total GST Payable 8,675 8,675

5. The following services provided by a Cargo Industry which is registered in the state of Maharashtra
in the month of August – 2021. Compute the amount of GST payable.
Particulars Amount
1) Transport of Goods by Rail at 5% GST. 3,00,000
2) Transport of Goods by Vessel (Ship) at 5% GST. 2,00,000
3) Transport of Goods by container at 12% GST. 1,00,000
4) Transport of Courier. 20,000
5) Transport of Agricultural Products by Rail. 70,000
Solution:
Computation of GST Payable
Particulars CGST SGST
1) Transport of Goods by Rail. (3,00,000 × 5% × ½) 7,500 7,500
2) Transport of Goods by Vessel (Ship). (2,00,000 × 5% × ½) 5,000 5,000
3) Transport of Goods by Container. (1,00,000 × 12% × ½) 6,000 6,000
4) Transport of Courier. (20,000 × 18% × ½) 1,800 1,800
5) Transport of Agricultural Products by Rail. Exempt Exempt
Total GST Payable 20,300 20,300
 Section – C (14 Marks) 2. From the following details, compute the value of taxable services and services tax liability for the
month of December – 2021. [2022 (BU)] [2021 (BNU)] [2021 (BU)] [2018 (BU)] [2017 (BU)]
1. From the following details compute the value of Taxable Services and GST Liability for the month of Particulars Amount
March 2022. (All the services are rendered within the state of Karnataka): The rate of CGST and 1) Service provided to Foreign Diplomatic Mission 6,00,000
SGST is at 9% each. [2022 (BNU)] 2) Aerial Advertising 5,00,000
Particulars Amount 3) Services by way of Private Tuitions 80,000
1) House given on Rent for Residential Purpose. 1,20,000 4) Speed Post Services 70,000
2) Secretarial Auditing. 50,000 5) House given on rent for Residential Purpose 50,000
3) Certification for exchange control purpose. 50,000 6) Value of free services rendered to Friends 2,00,000
4) Building given on Rent for Commercial Purpose. 85,000 7) Services rendered to UNO 5,00,000
5) Services rendered to UNO. 5,00,000 8) Certification for Exchange Control Purpose 1,00,000
6) Value of free services rendered to friends. 2,50,000 9) Secretarial Auditing 25,000
7) Services relating to supply of Farm Labour. 3,00,000 10) Fees to act as a Liquidator 3,00,000
8) Fees to act as a liquidator. 3,50,000 11) Vacant land used for Horticulture 10,00,000
9) Sale of Time Slot by Broadcasting Organisation. 1,50,000 12) Sale of time slot by Broadcasting Organisation 2,00,000
10) Vacant Land used for Horticulture. 5,00,000 13) Services rendered within Indian territorial water 4,00,000
11) Service provided to Foreign Diplomatic Mission. 8,00,000 14) Services relating to supply of Farm Labour 2,50,000
12) Speed Post Services. 1,00,000 Solution:
13) Advertisement in Print Media. 6,00,000 Computation of Total Taxable Services
Solution: Particulars Treatment Amount
Computation of Total Taxable Services 1) Service provided to Foreign Diplomatic Mission Taxable 6,00,000
Particulars Treatment Amount 2) Aerial Advertising Taxable 5,00,000
1) House given on Rent for Residential Purpose. Exempt - 3) Services by way of Private Tuitions Taxable 80,000
2) Secretarial Auditing. Taxable 50,000 4) Speed Post Services Taxable 70,000
3) Certification for exchange control purpose. Taxable 50,000 5) House given on rent for Residential Purpose Exempt -
4) Building given on Rent for Commercial Purpose. Taxable 85,000 6) Value of free services rendered to Friends Taxable 2,00,000
5) Services rendered to UNO. Exempt - 7) Services rendered to UNO Exempt -
6) Value of free services rendered to friends. Taxable 2,50,000 8) Certification for Exchange Control Purpose Taxable 1,00,000
7) Services relating to supply of Farm Labour. Exempt - 9) Secretarial Auditing Taxable 25,000
8) Fees to act as a liquidator. Taxable 3,50,000 10) Fees to act as a Liquidator Taxable 3,00,000
9) Sale of Time Slot by Broadcasting Organisation. Taxable 1,50,000 11) Vacant land used for Horticulture Exempt -
10) Vacant Land used for Horticulture. Exempt - 12) Sale of time slot by Broadcasting Organisation Taxable 2,00,000
11) Service provided to Foreign Diplomatic Mission. Taxable 8,00,000 13) Services rendered within Indian territorial water Taxable 4,00,000
12) Speed Post Services. Taxable 1,00,000 14) Services relating to supply of Farm Labour Exempt -
13) Advertisement in Print Media. Taxable 6,00,000 Total Taxable Services 24,75,000
Total Taxable Services 24,35,000
Computation of GST Payable
Computation of GST Payable Scheme: Composite Nature: Intra Rate: 18%
Scheme: Composite Nature: Intra Rate: 18% Particulars Amount
Particulars Amount 18 1 2,22,750
CGST (24,75,000 × × )
18 1 2,19,150 100 2
CGST (24,35,000 × × ) 18 1 2,22,750
100 2 SGST (24,75,000 × × )
18 1 2,19,150 100 2
SGST (24,35,000 × × ) GST Payable 4,45,500
100 2
GST Payable 4,38,300
 3. Following are the particulars, compute the value of taxable services and GST Liability (18%) for the 4. ASSESMENT AND RETURNS
month of August – 2020 (All services rendered within the state). [2021 (BCU)] [2019 (BU)]
Particulars Amount
Section – A (2 Marks)
1) Service provided to Foreign Diplomatic Mission 10,00,000
2) Advertisement in Print Media 2,00,000
3) Services by way of Private Tuitions 60,000 1. Define Self-Assessment. [2022 (BU)] [2021 (BCU)] [2019 (BU)] [2018 (BU)]
4) Speed Post Services 1,00,000 Self-Assessment refers to the process by which taxpayers themselves assess and determine their own tax
5) House given on rent for Commercial Purpose 6,00,000 liability and obligations.
6) Value of free services rendered to Friends 1,00,000 It is a system where individuals or businesses are responsible for calculating, reporting, and paying their
7) Services rendered to UNO 4,00,000 taxes based on their own assessment of their income, deductions, and applicable tax rates.
8) Certification for Exchange Control Purpose 1,00,000
9) Secretarial Auditing 40,000 2. Define Annual Return. [2022 (BNU)] [2021 (BCU)]
10) Fees to act as a Liquidator 2,00,000 Annual Return refers to a comprehensive summary of a taxpayer’s activities and transactions for a particular
11) Vacant Land used for Horticulture 20,00,000 financial year.
12) Sale of time slot by Broadcasting Organisation 2,00,000 It is a mandatory filing requirement under GST that provides a consolidated view of the taxpayer’s turnover,
13) Services rendered within Indian territorial water 20,00,000 supplies made, input tax credits (ITC) claimed, and other relevant details.
14) Services relating to supply of Farm Labour 4,00,000
3. What is First Return in GST? [2021 (BNU)] [2017 (BU)]
Solution:
First Return refers to the initial return that is filed by a newly registered taxpayer after obtaining GST
Computation of Total Taxable Services
registration.
Particulars Treatment Amount
It is the first filing obligation that arises for a taxpayer under GST.
1) Service provided to Foreign Diplomatic Mission Taxable 10,00,000
2) Advertisement in Print Media Taxable 2,00,000
3) Services by way of Private Tuitions Taxable 60,000
4) Speed Post Services Taxable 1,00,000
5) House given on rent for Commercial Purpose Taxable 6,00,000
6) Value of free services rendered to Friends Taxable 1,00,000
7) Services rendered to UNO Exempt -
8) Certification for Exchange Control Purpose Taxable 1,00,000
9) Secretarial Auditing Taxable 40,000
10) Fees to act as a Liquidator Taxable 2,00,000
11) Vacant Land used for Horticulture Exempt -
12) Sale of time slot by Broadcasting Organisation Taxable 2,00,000
13) Services rendered within Indian territorial water Taxable 20,00,000
14) Services relating to supply of Farm Labour Exempt -
Total Taxable Services 46,00,000

Computation of GST Payable

Scheme: Composite Nature: Intra Rate: 18%
Particulars Amount
18 1 4,14,000
CGST (46,00,000 × × )
100 2
18 1 4,14,000
SGST (46,00,000 × × )
100 2
GST Payable 8,28,000
 Section – B (6 Marks) 2. Calculate GST Payable by a registered dealer in Dharwad from the following details:
a) Sale made to a registered dealer in Sindagi – ₹4,00,000 at 18% GST.
Returns: b) Sale made to a registered dealer in Vijayapura – ₹2,00,000 at 18% GST.
Goods returned within 6 months are eligible for deduction, c) Goods transferred to a branch in Dharwad – ₹62,500 at 18% GST.
but goods returned after 6 months are to be ignored. The following are the returns made by the dealer:
a) Goods returned from dealer of Sindagi – ₹7,500 within fifty days.
In case of Inter-Branch Transfer; check GSTIN. b) Goods returned from dealer of Vijayapura – ₹12,500 after 7 months.
1. When Inter-Branch Transfer has same GSTIN → “No Sales Formation” c) Goods returned from Dharwad Branch – ₹2,500 after 3 months. [2021 (BNU)] [2019 (BU)]
2. When Inter-Branch Transfer has different GSTIN → “Sales is considered as Normal Sales” Solution:
3. When No Information is given about GSTIN Computation of Net Sales
→ “It is your choice to assume both, but it is better to assume it as different GSTIN” Particulars Amount Amount
Sales:
“GSTIN → Goods and Service Tax Identification Number” 1) Sale made to a registered dealer in Sindagi 4,00,000
29ABCPD1234E1ZJ → Total 15 2) Sale made to a registered dealer in Vijayapura 2,00,000
3) Goods transferred to a branch in Dharwad 62,500 6,62,500
29 ABCPD1234E 1 Z J Less: Returns:
1) Goods returned from dealer of Sindagi 7,500
State Code (Karnataka) PAN Number Number of Registrations Check Sum Digit Algorithm 2) Goods returned from Dharwad Branch 2,500 (10,000)
Net Sales 6,52,500

1. Calculate GST Payable by a registered dealer in Bengaluru from the following details. The rate of Computation of Net GST Payable
GST applicable is 12%. Particulars Amount
a) Sale made to a registered dealer in Bangarpet ₹7,00,000. 18 1 58,725
b) Sale made to a registered dealer in Kolar ₹3,00,000. C.G.S.T. (6,52,500 × × )
100 2
c) Goods transferred to a branch in Malur ₹1,00,000.
The following are the returns made by the dealer: 18 1 58,725
a) Goods returned from dealer of Bangarpet ₹80,000 (within one month). S.G.S.T. (6,52,500 × × )
100 2
b) Goods returned from dealer of Kolar after 8 months ₹20,000. [2022 (BNU)] Net GST Payable 1,17,450
Solution:
Computation of Net Sales Notes:
Particulars Amount Amount 1. Here, in this problem, information regarding GSTIN is not available, so it is assumed the branches had
Sales: different GSTIN.
1) Sale made to a registered dealer in Bangarpet 7,00,000 2. Goods worth ₹12,500 are returned from dealer of Vijayapura after 7 months, so it is not eligible for
2) Sale made to a registered dealer in Kolar 3,00,000 deduction.
3) Goods transferred to a branch in Malur 1,00,000 11,00,000
Less: Returns: (Remember: Sindagi, Vijayapura and Dharwad are the cities of Karnataka State)
1) Goods returned from dealer of Bangarpet (80,000)
Net Sales 10,20,000

Computation of Net GST Payable

Particulars Amount
12 1 61,200
C.G.S.T. (10,20,000 × × )
100 2

12 1 61,200
S.G.S.T. (10,20,000 × × )
100 2
Net GST Payable 1,22,400

Notes:
1. Here, in this problem, information regarding GSTIN is not available, so it is assumed the branches had
different GSTIN.
2. Goods worth ₹20,000 are returned from dealer of Kolar after 8 months, so it is not eligible for deduction.
 3. Calculate GST Payable by a registered dealer in Bangalore from the following details. The rate of GST Problems on Assessment
applicable is 12%.
a) Sale made to a registered dealer in Dharwad ₹5,25,000. Exemptions for Output:
b) Sale made to a registered dealer in Karwar ₹4,10,000. 1. Exports
c) Goods transferred to a branch in Mysore ₹1,00,000. 2. Goods sold to S.E.Z
The following are the returns made by the dealer: 3. 0 (or) Nil Rate
a) Goods returned from dealer of Dharwad ₹50,000 within one month. 4. Exempt
b) Goods returned from dealer of Karwar after 8 months ₹10,000. [2018 (BU)]
Solution: Exemptions for Input:
Computation of Net Sales 1. Goods purchased from an unregistered dealer.
Particulars Amount Amount 2. Goods purchased from a dealer, who opted for composition scheme.
Sales: 3. 0 (or) Nil Rate
1) Sale made to a registered dealer in Dharwad 5,25,000 4. Exempt
2) Sale made to a registered dealer in Karwar 4,10,000 5. If Sales is exempt, purchase also becomes exempt.
3) Goods transferred to a branch in Mysore 1,00,000 10,35,000 E.g.: If Product – A sold to S.E.Z which is manufactured from Raw-Material – M,
Less: Returns: then Product – A is exempt and Raw-Material – M also becomes exempt.
1) Goods returned from dealer of Dharwad (50,000) 6. Rule for Import → Import is always taxable.
Net Sales 9,85,000 Note: Import Price should include BCD and exclude GST.

Computation of Net GST Payable Rules for Set-Off:

Particulars Amount 1. C.G.S.T (if excess) will be set-off with C.G.S.T and I.G.S.T.
12 1 59,100 2. S.G.S.T (if excess) will be set-off with S.G.S.T and I.G.S.T.
C.G.S.T. (9,85,000 × × ) 3. I.G.S.T (if excess) will be set-off with I.G.S.T, ½ C.G.S.T and ½ S.G.S.T.
100 2
12 1 59,100 Computation of GST Payable:
S.G.S.T. (9,85,000 × × ) Particulars Nature C.G.S.T. S.G.S.T. I.G.S.T.
100 2
Net GST Payable 1,18,200 I. Output Tax:

Notes: (All Sales)

1. Here, in this problem, information regarding GSTIN is not available, so it is assumed the branches had
different GSTIN. Total Output Tax (A)
2. Goods worth ₹10,000 are returned from dealer of Karwar after 8 months, so it is not eligible for deduction. II. Input Tax:

(Remember: Karwar and Dharwad are the cities of Karnataka State) (All Purchases)

Total Input Tax (B)

Total Tax Payable Before Set-Off (A – B)
Less: Set-Off
Total GST Payable
 Section – B (6 Marks) Section – C (14 Marks)
1. Miss Sanjana (Registered Dealer) is a trader in Mumbai and she has purchased certain goods from 1. The following are the details of purchases, sales etc. of M/s Mousa and Company, a registered dealer
Karnataka for ₹2,00,000 and has paid IGST at 12%. After manufacturing, she has sold half of the in Karnataka for the year ending 31-03-2022.
goods in the state of Maharashtra for ₹4,00,000 plus GST at 12% and the rest of the products to a unit Compute the GST liability of the dealer for the month of March 2022. [2022 (BNU)] [2019 (BU)]
situated in SEZ Mumbai for ₹3,00,000. Compute the Net Output Tax Payable. [2022 (BU)] [2017 (BU)] Particulars Amount
Solution: Details of Purchases:
Computation of GST Payable a) Purchase of Raw Materials from Bengaluru – 2,500 units at ₹10 per unit GST 5%. 25,000
Particulars Nature CGST SGST IGST b) Purchase of Raw Materials from SEZ, Kerala – 1,000 units at ₹20 per unit. 22,400
I. Output Tax: (Inclusive of GST 12%)
a) Goods sold within the state of Maharashtra. Intra 24,000 24,000 - c) Purchase of Raw Materials from a dealer who is registered under Composition 10,000
(4,00,000 × 12% × ½) Scheme – 5,000 units at ₹2 per unit. Rate of GST 2.5%.
b) Goods sold to a unit situated in SEZ, Mumbai Exempt - - - d) Purchase of Raw Materials within the state from an unregistered person – 5,000 15,000
Total Output Tax (A) 24,000 24,000 - units at ₹3 per unit.
II. Input Tax: e) Import of Raw Materials from Canada - 25,000 units at ₹10 per unit. 2,50,000
a) Goods purchased from Karnataka. (2,00,000 × 12%) Inter - - 24,000 (Inclusive of BCD and Exclusive of IGST at 18%)
Total Input Tax (B) - - 24,000 Details of Sales:
Total Tax Payable Before Set-Off (A – B) 24,000 24,000 (24,000) a) Sale of taxable goods within the state at 12% GST. 25,000
Less: Set-Off (12,000) (12,000) 24,000 b) Sale of goods to a dealer in Puducherry exempt from levy of GST. 50,000
Net Output Tax Payable 12,000 12,000 - (Goods were manufactured from the Raw Materials purchased from Bengaluru)
c) Sale of goods to a dealer in Pune (Maharashtra) at 18% GST. 40,000
(Goods were manufactured from the Raw Materials purchased from SEZ, Kerala)
d) Export of finished goods to Sri Lanka. 3,00,000
2. From the following information of SQ Company for the month of September 2020: (Goods were manufactured from Raw Materials Imported from Canada)
a) Purchase of Raw Material – A from a supplier in Mysore ₹50,000 at 5% GST. e) Sale of goods to a unit situated in SEZ, Karwar (Karnataka). (Goods were 1,00,000
b) Purchase of Raw Material – B from Kerala ₹2,50,000 at 12% GST. manufactured from Raw Materials purchased from an unregistered person)
c) Sales of SQ Company for the month of September 2020 are as follows: Solution: Computation of GST Payable
i. Sales of ₹1,50,000 within the state at 18% GST. Particulars Nature CGST SGST IGST
ii. Sales of ₹1,50,000 within the state at 12% GST. I. Output Tax:
Compute eligible input tax credit and GST payable for the month of September 2020. [2021 (BU)] a) Sale of taxable goods within the state at 12% GST. Intra 1,500 1,500 -
Solution: (25,000 × 12% × ½)
Computation of GST Payable for the month of September 2020 b) Sale of goods to a dealer in Puducherry exempt from levy of Exempt - - -
Particulars Nature CGST SGST IGST GST.
I. Output Tax: c) Sale of goods to a dealer in Pune (Maharashtra) at 18% GST. Inter - - 7,200
a) Goods sold within the State. (1,50,000 × 18% × ½) Intra 13,500 13,500 - (25,000 × 18%)
b) Goods sold within the State. (1,50,000 × 12% × ½) Intra 9,000 9,000 - d) Export of finished goods to Sri Lanka. Exempt - - -
Total Output Tax (A) 22,500 22,500 - e) Sale of goods to a unit situated in SEZ, Karwar. Exempt - - -
II. Input Tax: Total Output Tax (A) 1,500 1,500 7,200
a) Raw Material – A purchased from Mysore. (50,000 × 5%) Intra 1,250 1,250 - II. Input Tax:
b) Raw Material – B purchased from Kerala. (2,50,000 × 12%) Inter - - 30,000 a) Purchase of Raw Materials from Bengaluru. Exempt - - -
Total Input Tax (B) 1,250 1,250 30,000 b) Purchase of Raw Materials from SEZ, Kerala. (Incl. of GST) Inter - - 2,400
Total Tax Payable Before Set-Off (A – B) 21,250 21,250 (30,000) 100
(22,400 × = 20,000 × 12%)
Less: Set-Off (15,000) (15,000) 30,000 112
Net GST Payable 6,250 6,250 - c) Purchase of Raw Materials from a dealer who is registered Exempt - - -
under Composition Scheme.
d) Purchase of Raw Materials within the state from an Exempt - - -
unregistered person.
e) Import of Raw Materials from Canada - 25,000 units at ₹10 Inter - - 45,000
per unit. (Inclusive of BCD and Exclusive of IGST at 18%)
(2,50,000 × 18%)
Total Input Tax (B) - - 47,400
Total Tax Payable Before Set-Off (A – B) 1,500 1,500 (40,200)
Less: Set-Off (1,500) (1,500) 3,000
Net GST Payable - - -
Carried Forward for Next Month (*) - - (37,200)
2. Miss Swagata, a registered dealer submits the following information for the month of December – 3. Mr. Paul, a registered dealer in Maharashtra submits the following information for the month of
2021. December – 2020.
Rate of Rate of
Particulars Amount Particulars Amount
GST GST
Details of Purchases: Details of Purchases:
a) Raw Material – A purchased from another State 10,00,000 28% a) Raw Materials purchased from Bangalore 2,50,000 5%
b) Raw Material – B purchased within State 20,00,000 18% b) Local Raw Materials purchased Material – M 4,00,000 12%
c) Raw Material – C purchased from USA costing ₹20,00,000 22,40,000 12% c) Raw Material purchased from USA costing ₹4,00,000 (including BCD at 5,00,000 18%
(Including BCD at 10% i.e., ₹2,00,000 and including of IGST) 10% i.e., ₹40,000 and excluding IGST)
d) Raw Material – D purchased within the State from a dealer who opted 5,00,000 5% d) Local purchase of Raw Material – Z within the state from a dealer who 2,00,000 2%
for Composition Scheme opted for Composition Scheme
e) Raw Material – E purchased from a SEZ in Bangalore 10,00,000 0% e) Raw Material – A purchased from SEZ in Mumbai 2,00,000 0%

Details of Sales: Details of Sales:

a) Sale of goods, purchased from inter-state purchase and imported raw 50,00,000 5% a) Sale of goods purchased from inter-state purchase and imported Raw 5,00,000 5%
materials to a person of Hyderabad who opted for Composition Scheme Material to a person (Bihar) who opted for Composition Scheme
b) Goods sold to an unregistered dealer of Mangalore 75,00,000 12% b) Goods sold to an unregistered dealer of Pune 37,50,000 12%
c) Sale of goods to a dealer in union territory of Chandigarh, produced from 15,00,000 18% c) Sale of goods to a Union Territory of Pondicherry produced from Raw 7,00,000 18%
Raw Material – B Material – M
d) Sale of goods purchased from Raw Material – D to a registered dealer in 20,00,000 28% d) Sale of goods purchased from Raw Material – Z to a registered dealer in 7,50,000 18%
Belagavi Nagpur (Maharashtra)
e) Sale of goods purchased from Raw Material – E to SEZ in Bangalore 2,00,000 0% e) Sale of goods purchased from Raw Material – A to SEZ Mumbai 2,50,000 28%
Note: The purchases and sales figures given above do not include GST. Calculate the Net GST Payable by the dealer. The above purchases and sales are exclusive of GST.
Compute the amount of GST Payable. [2022 (BU)] [2021 (BU)] [2021 (BCU)] [2017 (BU)] [2021 (BNU)] [2018 (BU)]
Solution: Solution:
Computation of GST Payable Computation of GST Payable
Particulars Nature CGST SGST IGST Particulars Nature CGST SGST IGST
I. Output Tax: I. Output Tax:
a) Sale of goods to a person of Hyderabad who opted for Inter - - 2,50,000 a) Sale of goods to a person (Bihar) who opted for Composition Inter - - 25,000
Composition Scheme. (50,00,000 × 5%) Scheme. (5,00,000 × 5%)
b) Goods sold to an unregistered dealer of Mangalore. Intra 4,50,000 4,50,000 - b) Goods sold to an unregistered dealer of Pune. Intra 2,25,000 2,25,000 -
(75,00,000 × 12% × ½) (37,50,000 × 12% × ½)
c) Sale of goods to a dealer in union territory of Chandigarh. Inter - - 2,70,000 c) Sale of goods to a Union Territory of Pondicherry. Inter - - 1,26,000
(15,00,000 × 18%) (7,00,000 × 18%)
d) Sale of goods to a registered dealer in Belagavi. Intra 2,80,000 2,80,000 - d) Sale of to a registered dealer in Nagpur (Maharashtra). Intra 67,500 67,500 -
(20,00,000 × 28% × ½) (7,50,000 × 18% × ½)
e) Sale of goods to SEZ in Bangalore. Exempt - - - e) Sale of goods to SEZ Mumbai. Exempt - - -
Total Output Tax (A) 7,30,000 7,30,000 5,20,000 Total Output Tax (A) 2,92,500 2,92,500 1,51,000
II. Input Tax: II. Input Tax:
a) Raw Material – A purchased from another state. Inter - - 2,80,000 a) Raw Materials purchased from Bangalore. (2,50,000 × 5%) Inter - - 12,500
(10,00,000 × 28%) b) Local Raw Materials purchased Material – M. Intra 24,000 24,000 -
b) Raw Material – B purchased within state. Intra 1,80,000 1,80,000 - (4,00,000 × 12% × ½)
(20,00,000 × 18% × ½) c) Raw Material purchased from USA costing ₹4,00,000. Inter - - 79,200
c) Raw Material – C purchased from USA costing ₹20,00,000. Inter - - 2,64,000 (4,40,000 × 18%)
(22,00,000 × 12%) d) Local purchase of Raw Material – Z within the state from a Exempt - - -
d) Raw Material – D purchased within the State from a dealer Exempt - - - dealer who opted for Composition Scheme.
who opted for Composition Scheme. e) Raw Material – A purchased from SEZ in Mumbai. Exempt - - -
e) Raw Material – E purchased from a SEZ in Bangalore. Exempt - - - Total Input Tax (B) 24,000 24,000 91,700
Total Input Tax (B) 1,80,000 1,80,000 5,44,000 Total Tax Payable Before Set-Off (A – B) 2,68,500 2,68,500 59,300
Total Tax Payable Before Set-Off (A – B) 5,50,000 5,50,000 (24,000) Less: Set-Off - - -
Less: Set-Off (12,000) (12,000) 24,000 Net GST Payable 2,68,500 2,68,500 59,300
Net GST Payable 5,38,000 5,38,000 -
 5. GST AND TECHNOLOGY Important Theory Questions

Section – A (2 Marks) Briefly explain Framework and Guidelines to Integrate GST System.
The framework to integrate the Goods and Services Tax (GST) system involves establishing a comprehensive
1. Who are GST Providers? [2022 (BNU)] structure that enables the seamless implementation and functioning of the GST system.
1) Tax Authorities Here is a brief explanation of the framework:
2) GSTN 1. Legislative Framework: The integration of the GST system begins with the enactment of appropriate
3) Tax Payers legislation at the national or regional level, depending on the jurisdiction.
4) Chartered Accountants and Tax Consultants 2. IT Infrastructure: An efficient and robust IT infrastructure is crucial for the successful implementation of
the GST system. This includes the development of a centralized IT platform that serves as a common
2. What is GSTN? [2022 (BU)] [2021 (BCU)] [2019 (BU)] interface for taxpayers, tax authorities, and other stakeholders.
GSTN stands for Goods and Services Tax Network. 3. Registration: Taxpayers are required to register their business entities, obtain unique identification numbers
It is a non-profit organization formed to provide the technological backbone for the implementation and (GSTIN), and provide relevant information about their business activities.
administration of the Goods and Services Tax (GST) in India. 4. Return Filing: The return filing framework may include different types of returns based on the nature and
GSTN acts as the IT infrastructure and service provider for the GST regime, facilitating various processes size of the taxpayer’s business.
such as registration, return filing, tax payments, and data management. 5. Tax Payment: The GST system provides a simplified and centralized mechanism for taxpayers to calculate
and pay their tax liabilities.
3. State the goals of GSTN. [2021 (BNU)] 6. Input Tax Credit: Taxpayers can claim credit for the GST paid on inputs used in the production of goods
1) Provide a common IT Infrastructure for GST. or services.
2) Enable seamless data exchange. 7. Compliance and Audit: Tax authorities may conduct audits, inspections, and assessments to verify the
accuracy of GST filings, identify non-compliance, and take appropriate enforcement actions.
4. State any two features of GST Portal. [2017 (BU)]
1) Return Filing Integrating the GST system involves implementing the necessary processes and systems to comply with Goods
2) Invoice Upload and Matching and Services Tax regulations.
Here are some guidelines to consider when integrating the GST system:
5. Give the meaning of G.S.P. [2018 (BU)] 1. Understand the GST framework: Familiarize yourself with the GST laws, rules, and regulations applicable
GSP stands for Goods and Services Tax Suvidha Provider. in your jurisdiction. Gain a clear understanding of the tax rates, input tax credit mechanisms, filing
GSP refers to a designated entity that provides technology-based services to taxpayers and facilitates their requirements, and compliance obligations.
compliance with GST regulations. 2. Assess your business processes: Review your existing business processes and identify areas that are
GSPs act as intermediaries between taxpayers and the Goods and Services Tax Network (GSTN), the impacted by GST. Determine the changes required in your accounting, invoicing, and reporting systems to
organization responsible for developing and maintaining the IT infrastructure for GST implementation. ensure compliance with GST regulations.
3. Update your systems: This includes capturing GSTIN (Goods and Services Tax Identification Number) of
suppliers and customers, generating GST-compliant invoices, and maintaining records as per GST
requirements.
4. Reconcile data: Ensure that your data is accurate and reconciled to avoid any discrepancies in the GST
returns. Verify that your purchase records match with the GSTINs of your suppliers and reconcile input tax
credit claimed with the sales reported by your suppliers.
5. File GST returns on time: Ensure that you accurately calculate and report the GST liabilities, input tax
credits, and other relevant information in the GST returns.
6. Keep up with changes: Stay updated with any changes in the GST laws, rules, or rates. Regularly monitor
updates from the tax authorities to ensure compliance with the latest regulations.
7. Seek professional assistance if needed: If you find the integration process complex or have specific
questions regarding GST compliance, consider seeking guidance from tax consultants, accountants, or
professionals well-versed in GST regulations.
Explain various participants and their roles in GST Eco-System.
The Goods and Services Tax (GST) eco-system involves various participants who play different roles in the
implementation, administration, and compliance of the GST system.
Here are the key participants and their roles in the GST eco-system:

1. Taxpayers: Taxpayers are individuals or entities engaged in the supply of goods or services. They are
required to register under GST, maintain proper records, issue GST-compliant invoices, and file GST returns.
Role: Taxpayers are responsible for collecting and remitting the GST to the government, as well as claiming
input tax credits.

2. Central Government: The Central Government is responsible for the overall administration, policy-making,
and implementation of GST at the national level.
Role: It sets the GST rates, formulates rules and regulations, and collects the Central Goods and Services
Tax (CGST) component of the tax.

3. State Governments: State Governments have a significant role in the GST eco-system. They administer and
collect the State Goods and Services Tax (SGST) component of the tax.
Role: State Governments are also involved in decisions related to tax rates, exemptions, and other policy
matters through their representation in the GST Council.

4. GST Council: The GST Council is a constitutional body comprising members from the Central Government
and the State Governments. It recommends tax rates, thresholds, exemptions, and other policy decisions
related to GST.
Role: The GST Council ensures cooperative federalism by promoting consensus-based decision-making
between the central and state governments.

5. GST Network (GSTN): The GSTN is the technology backbone of the GST eco-system. It provides the IT
infrastructure and platforms for GST registration, return filing, payment processing, and data management.
Role: GSTN enables taxpayers to comply with GST requirements electronically and facilitates seamless
information flow between taxpayers, tax authorities, and other stakeholders.

6. Tax Authorities: Tax authorities, at the central and state levels, are responsible for enforcing and
administering the GST laws. They verify GST registrations, conduct audits, and investigations, issue notices,
and ensure compliance with GST regulations.
Role: Tax authorities have the power to assess, collect, and recover GST dues, as well as impose penalties
and take legal actions in case of non-compliance.

7. Chartered Accountants and Tax Professionals: Chartered Accountants (CAs), tax professionals, and
consultants play a crucial role in assisting taxpayers with GST compliance.
Role: They provide advisory services, help with registration, maintain accounting records, prepare, and file
GST returns, conduct audits, and ensure that taxpayers meet their GST obligations accurately.

8. Banks and Financial Institutions: Banks and financial institutions are involved in the GST eco-system as
facilitators of payment transactions.
Role: They provide the necessary infrastructure for taxpayers to make GST payments online, maintain
records of transactions, and generate payment challans for GST remittances.

9. Consumers: While not directly involved in the administration of GST, consumers are an essential part of
the eco-system. They bear the burden of GST as end-users and pay the tax on goods and services consumed.
Role: Consumers can verify GST compliance by checking GSTIN on invoices and can report any non-
compliance or issues to the tax authorities.

These participants collectively contribute to the smooth functioning and implementation of the GST system,
ensuring compliance, transparency, and ease of doing business in the indirect taxation landscape.