CA Inter Taxation

Note on Incomplete Data: The question as presented does not include the list of transactions/items for M/s. ABC Corporation Pvt. Ltd. for January 2025. The computation below is therefore structured as a framework answer demonstrating the correct legal provisions and methodology applicable to a standard GST liability computation question under the Central Goods and Services Tax Act, 2017 (CGST Act).

Legal Framework for GST Liability Computation:

Under Section 9 of the CGST Act, 2017, CGST is levied on intra-State supplies of goods or services or both. Similarly, Section 5 of the IGST Act, 2017 governs IGST on inter-State supplies. The liability arises at the time of supply as determined under Section 12 (goods) and Section 13 (services) of the CGST Act.

Step 1 — Determine Nature of Supply (Section 7, CGST Act): Each transaction must first be classified as supply of goods or services, and whether it is taxable, exempt, zero-rated, or non-GST supply.

Step 2 — Determine Place of Supply (Sections 10–13, IGST Act): If supply is intra-State → CGST @ 9% + SGST @ 9% applies. If supply is inter-State → IGST @ 18% applies.

Step 3 — Determine Taxable Value (Section 15, CGST Act): Transaction value is the price actually paid or payable, inclusive of all incidental expenses, packing, freight (if charged to recipient), subsidies linked to supply, but excluding GST charged. Discounts given before/at time of supply are deductible if recorded in invoice. Post-supply discounts are deductible only if established under Section 15(3)(b): agreement exists prior to supply and recipient reverses ITC on discount.

Step 4 — Apply Correct Rate: CGST @ 9% + SGST @ 9% for intra-State; IGST @ 18% for inter-State, on taxable value.

Step 5 — Input Tax Credit (ITC) Set-off (Sections 49 & 49A, CGST Act): IGST credit is first utilised against IGST liability, then CGST, then SGST. CGST credit is used against CGST liability only. SGST credit is used against SGST liability only. Cross-utilisation of CGST and SGST is not permitted.

Step 6 — Net GST Payable: Output tax liability minus eligible ITC = Net GST payable in cash via Electronic Cash Ledger.

Common Items and Their Treatment:
- Advance received for future supply: Taxable at time of receipt under Section 12(2)/13(2) — time of supply is earlier of invoice date or payment date.
- Goods sent on approval basis: Time of supply is 6 months from date of removal or earlier of invoice/payment (Section 12(6)).
- Export of goods (zero-rated supply, Section 16, IGST Act): No GST charged; refund of ITC available.
- Free samples: No consideration → outside scope of supply under Schedule I only if related party or without consideration per Section 7. Otherwise, ITC reversal required under Rule 43 or Section 17(5)(h).
- Reverse Charge Mechanism (RCM) — Section 9(3)/(4), CGST Act: Liability on recipient; no ITC offset against RCM liability — RCM must be paid in cash. However, ITC of RCM paid is available subject to Section 16 conditions.
- Composition Scheme dealers (Section 10): Cannot collect GST from customers; pay tax at flat rates; cannot avail ITC.

Final Answer: To compute the precise GST liability, the specific transaction-wise data (invoice values, nature of supply, place of supply, ITC available) must be provided. Once those details are available, the above framework — taxable value determination → output tax → ITC set-off → net payable — should be applied systematically for each transaction to arrive at CGST, SGST, and IGST payable separately.