CA VIJAY GAURAV CLASSES

Transcription

1 VGFNLN Total No. of Questions-7 Total No. of Printed Pages- 16 Time Allowed - 3 Hours Maximum Marks INDIRECT TAX Question No. 1 is Compulsory Attempt any five from the remaining six questions Wherever required, suitable assumptions may be made by the candidate and stated clearly in the answer. Working notes should form part of the answer Question No. 1(a) A contract awarded by Bombay Municipal Corporation (BMC) for repair of a particular road to M/s B Ltd. of Mumbai with a total consideration of Rs. 12 lakhs with terms and conditions as stated that: i. It is pure service (excluding works contract service or other composite supplies involving supply of any goods) ii. The entire work should be completed within 30 days. iii. The said work has been completed as per terms and conditions. Applicable rate of GST is 18%. Find the following: A. Is it taxable supply? B. Rework if the contract is in the nature of works contract where material is involved 25% in the value of contract. Is it taxable supply? If so who is liable to pay GST and for what amount? C. Rework if the contract is in the nature of works contract where material is involved 30% in the value of contract. Is it taxable supply? If so who is liable to pay GST and for what amount? VG Professional Studies (P) Limited, P a g e 1

2 Question No. 1(b) Calculate the value of taxable supply of PTN Transport Company engaged in the business of transport of goods by road for the month of April Give reasons for taxability or exemption of each item. No freight is received from any of the specified category of consignor/ consignee. Suitable assumptions may be made wherever required. PTN Transport Company does not avail ITC. GST is 5%: Particular Amount Total freight charges received during the year 14,50,000 Freight charges received for transporting fruits 1,20,000 Freight collected for transporting small consignment for persons 70,000 who paid less than Rs. 750 for each consignment Freight collected for transporting goods in small vehicles for 1,55,000 persons who paid less than Rs. 1,500/- per trip Question No. 1(c) Crown Beers India Pvt Ltd., supplies raw material to a job worker Kareena Ltd. for manufacture of alcoholic liquor for human consumption. After completing the job-work, the finished product of 5,000 beer bottles are returned to Crown Beers India Pvt Ltd., putting the retail sale price as Rs. 200 on each bottle (inclusive of duties and taxes). Kareena Ltd., charged Rs.100 per bottle as job work charges of carrying out of intermediate production process of alcoholic liquor for human consumption from Crown Beers India Pvt. Ltd. Find the GST liability if any in the hands of Kareena Ltd. Rate is 18% Question No. 1(d) Compute the assessable value and total customs duty payable under the Customs Act, 1962 for an imported machine, based on the following information: Particular US $ Cost of the machine at the factory of the exporter 20,000 Transport charges from the factory of exporter to the port for shipment 800 Handling charges paid for loading the machine in the ship 50 Buying commission paid by the importer 100 VG Professional Studies (P) Limited, P a g e 2

3 Lighterage charges paid by the importer 200 Freight incurred from port of entry to Inland Container depot 1,000 Ship demurrage charges 400 Freight charges from exporting country to India 5,000 Date of bill of entry (Rate BCD 20%; Exchange rate as notified by CBEC Rs. 60 per US $) Date of entry inward (Rate BCD 12%; Exchange rate as notified by CBEC Rs. 65 per US $) IGST payable under section 3(7) of the Customs Tariff Act, % Also find the eligible input tax credit to the importer. (5 Marks) Question No. 1(e) Classmate Printers Pvt. Ltd., manufactured register account books & letter pads and exported the same by courier at FOB value of 400 USD per consignment to USA and 350 UK Pounds per consignment to UK. During the year , 40 consignments sent to USA. Exchange rate is Rs. 60 per USD. 20 consignments sent to UK. Exchange rate is Rs. 80 per Pound. Classmate Printers Pvt. Ltd., entitled 2% reward rate. Find the reward amount under MEIS for Classmate Printers Pvt. Ltd. Question No. 1(f) An exporter exported 2,000 pairs of leather Rs. 750 per pair. All industry rate of drawback in fixed on average basis 11% of FOB subject to maximum of Rs. 80 per pair. The exporter found that the actual duty paid on inputs was Rs. 1,95,000. He has approached you, as a consultant, to apply under Rule 7 of the drawback rules for fixation of special brand rate. Advise him suitably. VG Professional Studies (P) Limited, P a g e 3

4 Question No. 2(a) Is the following activities constitute supply under GST (Answer must have justification) a) Renting of vacant land to a stud farm for Rs. 1,50,000. b) Leasing of vacant land to a poultry farm for Rs. 76,000. c) M/s X Ltd. paid penalty under section 49 of the CGST Act, 2017, Rs. 2,00,000 to the Department d) Mr. C is a Practicing Chartered Accountant given appointment to a client Mr. B representing the company for 10AM on Tuesday. Mr. B cancel the appointment at 9AM on Tuesday (i.e. one hour before appointment time). Advance paid by Mr. B for seeking the appointment is forfeited by Mr. C for cancelling the appointment. e) A club has opened up a shop. The members can purchase various goods from such shop. (5 Marks) Question No. 2(b) M/s Paul Ltd. being a trader of laptops has two units in Chennai and in Mumbai. Place Preceding Year Turnover (excluding taxes) In Lacs Chennai 52 Mumbai 12 You are required to answer the following: a) Is M/s Paul Ltd. is eligible for composition levy in the current year? b) If so, can M/s Paul Ltd. opt composition scheme for Chennai location and normal scheme for Mumbai? c) Need to give separate intimations for opting composition scheme in each State. VG Professional Studies (P) Limited, P a g e 4

5 Question No. 2(c) S Pvt. Ltd. was awarded a contract in July 2017 for providing flooring and wall tiling services in respect of a building located in Delhi by N Ltd. As per the terms of contract, S Pvt. Ltd. was to provide all the required material for execution of the contract. However, N Ltd also provided a portion of the material. Whether the services provided by S Pvt. Ltd. are subject to GST? If yes, determine the GST liability of S Pvt. Ltd. from the following - S. No. Particulars Rs. i) Gross amount charged by the S Pvt. Ltd. 6,00,000 ii) Fair market value of the material supplied by N Ltd. 1,00,000 iii) Amount charged by N Ltd. for the material [included in (i) above] 60,000 Note: CGST 6% and SGST 6%. Question No. 2(d) LIC of India provides you the following information for the month of Oct You are required to compute GST payable by the company if the company has opted to pay GST as per Rule 32(4) of CGST Rules, 2017: 1) General policies : Total premiums collected Rs.12,000 lakhs (Out of which 1st year premium is Rs.5,000 lakhs) 2) Only Risk Cover Policies : Premiums collected Rs.500 lakhs. 3) Variable Insurance Policies: Premiums collected Rs.8,000 lakhs. (80% of the amount is allocated for investments on behalf of policy holder for which policy holder is given separate break up in premium receipts). Question No. 3(a) Determine place of supply in the following independent cases: a) M/s X Ltd has place of business in Chennai, being an NBFC given an asset under financial lease to M/s ABC Ltd. of Chennai. The said asset so far used by M/s ABC Ltd in their factory located at Hyderabad. At the end of lease period the said asset acquired by M/s ABC Ltd. at a nominal amount. Find the place of supply VG Professional Studies (P) Limited, P a g e 5

6 b) Mr. D located in New Delhi, place order on Mr. Delhi of New Delhi for installation of Air-condition machine in his factory located in Chennai. Mr. Delhi procures the Indoor and out-door units, set of plugs, electrical cables, distribution boards and other items from different States in India and arranges for delivery in Chennai. The said machine assembled by Mr. Delhi in Chennai. Find the Place of supply c) Chennai express train going form Chennai to Cochin, M/s X Ltd. located in Cochin has supplied the food which are given to passengers during night time. The food packets are loaded at Chennai Central Station, Chennai. Find the place of supply d) Mr. Rohit registered person in Jaipur. He went to Kolkata and stays in a Taj hotel at Kolkata. He also availed Beauty treatment services at hotel. Find the place of supply of service e) Mr. Kapil Sharma a Jalandhar based comedian hosted a comedy show at Singapore on birthday occasion of Mumbai based actor Mr. Shah Rukh Khan s son AbRam. Find the place of supply. f) M/s Kalyan Pvt. Ltd. is an event management company is located in Chennai. Mr. Raj located in Jaipur hires the services of M/s Kalyan Pvt. Ltd., for organizing marriage function of his son in Taj Coromandel, Chennai. Mr. Raj is not a registered person. Find the place of supply g) A movie on demand is provided as onboard entertainment during the Delhi-Chennai leg of a Dubai-Delhi- Chennai flight. Find the place of supply of service? (7 Marks) VG Professional Studies (P) Limited, P a g e 6

7 Question No. 3(b) Mr. Harsha a event organiser located in Malaysia under taken to organize comedy shows of Mr. Bhrami of Hyderabad and Mr. Vadivelu of Chennai in India. The comedy shows are hosted in Telangana, Andhra Pradesh, Tamil Nadu and Pondicherry. Gross value of contract is Rs. 60 crores. State Number of Days Recipient of service Telangana 20 Mr Bhrami Andhra Pradesh 15 Mr Bhrami Tamil Nadu 14 Mr. Vadivelu Pondicherry 1 Mr. Vadivelu Total 50 Find the place of supply of services and value of service. Question No. 3(c) M/s. Hind Fabricators owned by Mr. A is popularly known for assembly of large machines. M/s. SS Fabricators (also owned by Mr. A) is engaged in fabrication of small machines. A factory contracts M/s. Hind Fabricators for fabrication of its machinery, for a fee of Rs. 5,00,000. M/s. Hind Fabricators sub-contracts the work to M/s. SS Fabricators for Rs. 4,00,000, and ensures supervision of the work performed by them. Generally, M/s. SS Fabricators charges a fixed sum of Rs. 1,200 per man hour to its clients; it spends 400 hours on this project. Determine value of supply. Question No. 3(d) Write a short note on Anti-profiteering Committee. Question No. 3(e) Mr. Lal, paid the customs duty in the month of June 2017 Rs. 10,300. It was found by the department officer, the actual amount of duty is Rs. 15,450 for the June Customs duty of Rs. 5,150 as demanded by the department have been paid on 31st July Find the interest under section 28AA of the Customs Act, VG Professional Studies (P) Limited, P a g e 7

8 Question No. 4 (a)(i) On 25th July 2017, Mr. X located in Chennai converted USD 100 into INR, actual exchange rate INR 62 per USD through Akbar Travel a money exchanger. RBI s reference rate for buying and selling was Rs. 61/61.5 respectively on such date. Akbar Travel registered under GST and located at Chennai. a) Find the Value of supply as per Rule 32(2)(a) of the CGST Rules, 2017 and GST where address of the recipient is available with Supplier? b) How much GST is liable to pay, in case where the RBI reference rate for a currency is not available Note: Applicable rate of GST 18%. Question No. 4 (a)(ii) Prince Financial Corporation located in Mumbai being a money exchanger provided the following service in the month of July 2017 to M/s Agarwal Bengaluru. a) US$ 1,000 is changed into UK b) RBI reference rate for that currency at that time for 1US$ is Rs. 61 and for 1UK POUND = Rs. 85 Find the GST liability as per Rule 32(2)(a) of the CGST Rules, Applicable rate of GST 18%. Question No. 4 (a)(iii) M/s. M Ltd., Mumbai is an authorised money changer. It has entered the following transactions (intra-state supplies) of money changing in the month of July 2017: i. 450 transactions of conversion of Dollar into Indian Rupees of Rs. 22,000 per transaction; ii. 125 transactions of conversion of Euro into Indian rupees of Rs. 500 lakhs per transaction; VG Professional Studies (P) Limited, P a g e 8

9 Input Tax Credit on input services Rs. 3,00,000 (CGST Rs. 1,50,000 & SGST Rs. 1,50,000) and input goods Rs. 4,00,000 (CGST Rs. 2,00,000 & SGST Rs. 2,00,000) is available. ITC on capital goods is Rs. 2,50,000 (capital goods purchased in the current year as intra-state purchases). Find GST payable as per Rule 32(2)(b) of the CGST Rules, Question No. 4(b) Mr. D being a dealer in goods sells new brand cars at Rs. 11,00,000. He advertises that customers can sell their old car if they buy new car from him. One customer exchanged his old car for Rs. 2,00,000. Mr. D sold new car to that customer for Rs. 9,00,000. The Central Tax Department demanded to pay GST on Rs. 11,00,000 whereas Mr. D argues that he is eligible to pay GST on the difference namely margin of Rs. 9,00,000 as per Rule 32(5) of the CGST Rules, Discuss and decide the correct approach. Question No. 4(c) Mannat Ltd. of Patna, Bihar has effected intra-state supplies of taxable goods amounting to Rs. 12,00,000 till On it has effected interstate supply of taxable goods amounting to Rs. 1,00,000. Mannat Ltd. is of the opinion that it is not required to get registered under GST law since its aggregate turnover is not likely to exceed Rs. 20,00,000 during financial year As a consultant of the company you are required to advise the company relating to registration requirements. Question No. 4(d) M/s. Vipin Ltd. purchased raw material A 10,000 Rs. 80 per Kg. plus GST. The said raw material was used to manufacture product P. The other information s are as under: i. Processing loss : 2% on inputs A. ii. Transaction value of P : Rs. 100 per kg. iii. Other material M used in the manufacture of P : Rs. 2 lac plus GST. iv. GST on capital goods imported during the period and used in the manufacture of P : v. Basic customs duty Rs. 20,000 vi. IGST under customs under section 3(1) of the Customs Tariff Act, 1975 Rs. 10,000; vii. Rate of GST on A, M and P : 12%. VG Professional Studies (P) Limited, P a g e 9

10 M/s. Vipin Ltd. is not eligible for composition scheme under Section 10 of CGST Act, Compute the amount of input tax credit available and Net GST payable by M/s. Vipin Ltd. Question No. 5(a) Compute the GST liability of Mr. Zed, an air travel agent, for the quarter ended Dec. 31, 2017 using the following details: Particulars Amount Basic air fare collected for domestic booking of tickets 50,00,000 Basic air fare collected for international booking of tickets 80,00,000 Commission received from the airlines on the sale of domestic 4,50,000 and international tickets Year ending bonus received from airlines 50,000 In the above case, would the GST liability of Mr. Zed be reduced if he opts for the special provision for payment of GST as per Rule 32(3) of the CGST Rules, The applicable rate of GST 18% Question No. 5(b) Taj Pvt. Ltd., received the following services from the Government of India during the taxable period: 1) Application fee paid towards processing of application for issuance of advance authorization Rs. 12,000. 2) Security services provided by Government security agency for a period of four months for a total consideration of Rs. 6,000: a. Jan 2018 Part payment Rs. 500 b. Feb 2018 Part payment Rs. 2,000 c. Mar 2018 Part payment Rs. 2,000 d. April 2018 Final payment Rs. 1,500. 3) Customs authorities have charged Merchant Over Time (MOT) fee for Rs. 1,000 at the time of special warehousing of goods. Find the total GST payable by Taj Pvt. Ltd. if any? Previous Turnover of Taj Pvt. Ltd. Rs. 21 lakhs. Applicable rate of GST 18% VG Professional Studies (P) Limited, P a g e 10

11 Question No. 5(c) Guidelines Academy Pvt. Ltd. provided following services in the previous year: 1) Manpower supply services to Higher Secondary School for Rs. 12,00,000. 2) Housekeeping services to Kidzee (i.e. Pre-school education) for Rs. 9,00,000. In the current year Guidelines Academy Pvt. Ltd. received advertisement services for Rs. 75,000 from Indian Railways. Find the following: (a) Who is liable to pay GST? (b) Total tax liability if any? (c) Rework, if the previous total turnover Rs. 11,10,000 then find the GST liability in the current year? Note: Applicable rate of GST 18% Question No. 5(d) Mr. X being a registered person under GST Law provided the following services in the month of Oct 2017: a) Services provided to Gramena Bank located in rural area in the nature of Enrollment of customers and charge Rs. 20,000. b) Disbursal of credit facilities to borrowers involving small amounts strictly as per the instructions of the Bank locate in a village and collected Rs. 12,250. c) Facilitating the repayment of dues owed to the AB bank (Mylapore Branch, Chennai) by its customers and collected fee Rs. 55,000 from the bank. d) Recovery agent services to the LB Bank of India, Mount Road Branch, Chennai, for Rs. 2,20,500. Find the GST liable to pay by Mr. X. applicable rate of VG Professional Studies (P) Limited, P a g e 11

12 Question No. 5(e) X Ltd. has exported following goods to USA. Discuss whether any duty drawback is admissible under section 75 of the Customs Act, Product FOB Value of Market Price of Duty drawback Exported goods goods rate A 2,50,000 1,80,000 30% of FOB B 1,00,000 50, % of FOB C 8,00,000 8,50, % of FOB D 2,000 2, % of FOB Note: Imported value of product C is Rs. 9,50,000. Question No. 6(a) Discuss the correctness or otherwise of the following statements with reference to the provisions of the GST Law a) If a case involves a substantial question of law and does not involve any issue relating to place of supply, an appeal against orders passed by the State Bench or Area Bench of the Appellate Tribunal shall lie to High Court b) Hospital charging room tariff per day per room is Rs. 1,200 on rooms provided to in-patients is exempt. c) Air Speed Airlines transported Fruits (i.e. agricultural produce) from Chennai airport to Meghalaya is exempted supply of service under GST. d) The Chief Secretary to Finance Minister travelled from Delhi to Chennai by rail in an air conditioned coach on official trip. Cost of ticket is Rs. 1,200 is exempt from GST e) Passport is issued by the Office of the External Affairs Ministry under Passport Act, 1967 to individual. The fee of Rs. 6,500 paid by business entity in which such individual person is working is exempt from GST f) The bio-medical waste treatment facility provided to a veterinary clinic is a supply exempt from GST (6 Marks) VG Professional Studies (P) Limited, P a g e 12

13 Question No. 6(b) X Ltd. covered under the Factories Act, Inspector of Factories certified the factory is safe for the workers to carry their work and charged Government fee of Rs. 10,000. X Ltd. owned one more factory at another place, which is not covered under Factories Act, However, X Ltd. obtained safety certificate for the factory from the Inspector of Factories by paying Rs. 15,000 voluntarily. Is it taxable supply? Attract GST? If so who is liable to pay GST. Applicable rate of GST 18%. Question No. 6(c) What do you mean by warehousing without warehousing? Question No. 6(d) LMN Ltd. has imported inputs without payment of duty under Advance Authorization. The CIF value of such inputs is Rs. 20,00,000. The inputs are processed and the final product is exported. The exports made by LMN Ltd. are subject to general rate of value addition prescribed under Advance Authorization Scheme. No other input is being used by LMN Ltd. in the processing. What should be the minimum FOB value of the exports made by the LMN Ltd. as per the provisions of Advance Authorization? Question No. 6(e) Kamakshi charitable trusts running a hospital by hiring visiting doctors/ specialists. Medical services to patients at a concessional rate charged by hospital for Rs. 2,25,500 from patients and paid to visiting doctors/specialists Rs. 2,00,000. Find the following: (a) Exempted supply if any. (b) GST liability if any. GST Rate18%. Question No. 7(a) State the nature of orders against which no appeals can be filed under GST. VG Professional Studies (P) Limited, P a g e 13

14 Question No. 7(b) Synergy Waste Management (P) Ltd. provided following services to Apollo Hospitals Chennai during the month of Oct 2017: i. Collection, transportation, Treatment & Disposal of Bio-Medical Waste for Rs. 5,25,000. ii. Training on Segregation of Bio-Medical Waste to Hospital Staff to further increase efficiency of Bio-Medical Waste Management Services for Rs.1,25,000. iii. Laundry services for Rs. 50,000. iv. Common Bio-medical Waste Treatment Facility services provided to Arvind pharma company during Oct 2017 for Rs. 2,00,000. Find the GST liability for the month of OCT 2017? Question No. 7(c) Green Tree society provided following services in the month of Oct 2017: a) Banquet hall provided to a Member of the society on hire for the purpose of celebrating his son birthday party for Rs. 25,000. b) Payment of electricity bill issued by third person, in the name of its members; collected Rs. 1,10,000 from its members and paid to electricity department Rs.1,00,000. c) contribution per month per member is Rs. 8,500 for 20 members and Rs. 5,000 for 30 members has been received in the Oct Find the tax liability of the Green Tree Society for the month of Oct Note : GST 18% VG Professional Studies (P) Limited, P a g e 14

15 Question No. 7(d) X Pvt. Ltd. engaged in providing taxable services by way of training and coaching activities in relation of information Accounting and Auditing since, 1st July 2017 has the following details in respect of that activity for the month of September, 2017: Date of Date on which Amount in Rs. issuance of payment invoice received ,50, , ,25,000 The date of change in effective rate of tax in this case is from 12% to 18%. These services are rendered in August Find the Time of Supply of service, effective rate of tax and due date of payment of tax. VG Professional Studies (P) Limited, P a g e 15

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