Question 1

You are required to compute the total income and tax payable by Mr. Alok, aged 58 years, a resident individual. Mr. Alok is an advocate and furnishes you the receipts and payments account for the financial year 2020-21.

Receipts and Payments Account:
Receipts – Opening Balance (Cash & Bank): Rs. 80,000; Fee from legal services: Rs. 49,60,000; Motor car loan from SBI @12% p.a.: Rs. 5,00,000; Sale receipts of 5,800 listed equity shares (sold on 31st March 2021): Rs. 5,95,000. Total: Rs. 61,35,000.
Payments – Staff salary and bonus to clerks: Rs. 17,50,000; Other general and administrative expenses: Rs. 22,00,000; Office rent: Rs. 1,48,000; Life Insurance Premium (Sum Assured Rs. 5,00,000): Rs. 49,000; Motor car (Acquired in January 2021 by way of NEFT): Rs. 9,50,000; Books bought by way of …

Accepted Answer

**Computation of Total Income and Tax Payable of Mr. Alok for Assessment Year 2021-22 (Financial Year 2020-21)**

Mr. Alok is an advocate (aged 58, resident individual) following cash system of accounting. His income is computed under four heads.

---

**A. Income from Profession (under Profits and Gains of Business or Profession)**

Fees from legal services received constitute the professional receipt of Rs. 49,60,000.

Allowable deductions are:
- Staff salary and bonus: Rs. 17,50,000 (business expenditure, deductible on payment under cash system)
- General and administrative expenses: Rs. 22,00,000
- Office rent: Rs. 1,48,000
- Motor car maintenance (2/3 only – 1/3 disallowed being personal use): Rs. 48,000
- Books – annual publications (eligible for 100% depreciation under Section 32 of the Income Tax Act 1961): Rs. 80,000
- **Depreciation on motor car**: Cost Rs. 9,50,000 acquired January 2021; used for < 180 days in the year, so rate = 15% × 50% = 7.5%. Depreciation = Rs. 71,250; official use (2/3) = Rs. 47,500
- **Depreciation on computer**: Cost Rs. 52,000 acquired 1-11-2020; used for < 180 days, so rate = 40% × 50% = 20%. Depreciation = Rs. 10,400 (fully for professional use; paid by A/c payee cheque – eligible)
- **Interest on motor car loan**: No interest paid during FY 2020-21 (cash system) → NIL deduction
- Life Insurance Premium: Personal expenditure – NOT deductible as professional expense (eligible under Section 80C)
- Motor car cost, domestic drawings, PPF, cl…

Question 2

What shall be the indexed cost of acquisition of residential house property at Gwalior for computation of capital gains in the hands of Mr. Ram?

Accepted Answer

**Indexed Cost of Acquisition of House Property at Gwalior**

**Step 1 – Determine Cost of Acquisition as on 1.4.2001**

Since the property was purchased on 28.05.1999 (i.e., before 1.4.2001), as per **Section 55(2)(b) of the Income Tax Act, 1961**, the assessee has the option to adopt the **Fair Market Value (FMV) as on 1.4.2001** as cost of acquisition. However, the FMV so adopted shall not exceed the **stamp duty value** as on 1.4.2001.

- Actual cost of acquisition = Rs. 28.5 lakhs
- FMV as on 1.4.2001 = Rs. 33.5 lakhs
- Stamp duty value as on 1.4.2001 = Rs. 32.4 lakhs

Since FMV (Rs. 33.5 lakhs) exceeds stamp duty value (Rs. 32.4 lakhs), the deemed FMV is restricted to **Rs. 32.4 lakhs**.

Cost of acquisition = Higher of (Rs. 28.5 lakhs, Rs. 32.4 lakhs) = **Rs. 32.4 lakhs**

**Step 2 – Treatment of Forfeited Advance under Section 51**

Mr. Ram received Rs. 3.9 lakhs as advance from Mr. Byomkesh in **P.Y. 2011-12** and forfeited it upon failure of the sale. Since this forfeiture occurred **before 1.4.2014**, the **pre-amendment Section 51** applies. Under the pre-amendment provision, the forfeited advance is **deducted from the cost of acquisition** (and is not taxed under Section 56(2)(ix), which applies only to forfeitures on or after 1.4.2014).

Adjusted cost of acquisition = Rs. 32.4 lakhs − Rs. 3.9 lakhs = **Rs. 28.5 lakhs**

**Step 3 – Compute Indexed Cost of Acquisition**

Indexed Cost = Adjusted Cost × (CII of year of sale ÷ CII of base year 2001-02)
= Rs. 28.5 la…

Question 3

The amount of capital gains taxable for A.Y. 2021-22 in the hands of Mr. Ram for sale of residential house property at Gwalior is -

Accepted Answer

**Answer: (A) Rs. 39,21,500**

**Full Value of Consideration (FVOC):** The Gwalior property was sold on 15.04.2020 for Rs. 2,10,00,000. The stamp duty value was Rs. 2,33,00,000. As per **Section 50C of the Income Tax Act, 1961**, where stamp duty value exceeds 110% of actual sale consideration, stamp duty value is adopted as FVOC. 110% of Rs. 2,10,00,000 = Rs. 2,31,00,000, which is less than Rs. 2,33,00,000. Hence, **FVOC = Rs. 2,33,00,000**.

**Cost of Acquisition:** The property was purchased on 28.05.1999 (before 01.04.2001). Under **Section 55(2)(b)**, the deemed cost is the higher of actual cost or FMV as on 01.04.2001, but FMV cannot exceed the stamp duty value as on 01.04.2001. FMV = Rs. 33,50,000; Stamp duty value = Rs. 32,40,000. Since FMV exceeds stamp duty value, deemed FMV = Rs. 32,40,000. This is higher than actual cost of Rs. 28,50,000, so **deemed cost = Rs. 32,40,000**.

**Adjustment for Forfeited Advance:** On 05.02.2012, Mr. Ram received and forfeited an advance of Rs. 3,90,000 from Mr. Byomkesh. Since this forfeiture occurred before 01.04.2014, **Section 51** applies — the forfeited amount is deducted from the cost of acquisition. Adjusted cost = Rs. 32,40,000 – Rs. 3,90,000 = **Rs. 28,50,000**.

**Indexed Cost of Acquisition (ICOA):** CII for base year 2001-02 = 100; CII for P.Y. 2020-21 = 301. ICOA = Rs. 28,50,000 × (301/100) = **Rs. 85,78,500**.

**Long-Term Capital Gain (before exemption):** LTCG = Rs. 2,33,00,000 – Rs. 85,78,500 = **Rs. 1,47,21,500**.
…

Question 4

The amount of capital gains taxable for A.Y. 2021-22 in the hands of Mr. Ram for sale of residential house property at Mumbai is -

Accepted Answer

**Answer: (D) Rs. 64 lakhs**

**Step 1 – Nature of asset:** The Mumbai property was purchased on 28.08.2020 and sold on 30.03.2021, i.e., held for less than 24 months. It is a **Short-Term Capital Asset (STCA)**.

**Step 2 – Cost of acquisition (adjusted for Section 54(2)):** Mr. Ram claimed exemption under **Section 54 of the Income Tax Act, 1961** on sale of the Gwalior property (A.Y. 2021-22) by investing in two residential houses at Delhi and Mumbai for Rs. 54 lakhs each. LTCG from Gwalior exceeded Rs. 108 lakhs, so full investment of Rs. 54 lakhs for the Mumbai property was exempt. Since the Mumbai property is transferred within **3 years of purchase**, under **Section 54(2)**, the exemption availed (Rs. 54 lakhs) is withdrawn and the **cost of acquisition for computing capital gain is reduced to NIL** (Rs. 54 lakhs – Rs. 54 lakhs = Rs. 0).

**Step 3 – Full value of consideration (Section 50C):** The date of agreement (28.02.2021) and date of registration (30.03.2021) differ. Under **Section 50C(2)**, the stamp duty value (SDV) on the date of agreement may be adopted only if any part of the consideration was received through an **account payee cheque / bank draft / ECS on or before the agreement date**. Here, the advance of Rs. 19,000 was received **in cash** — not through banking channels. Therefore, the proviso does not apply, and the **SDV on the date of registration (30.03.2021) = Rs. 64 lakhs** must be used.

**Step 4 – Safe harbour check (Section 50C(1) proviso):**…

Question 5

The amount taxable under section 56(2)(x) in the hands of Mr. Vaibhav, if any, is -

Accepted Answer

**Answer: (C) Rs. 6 lakhs**

Under **Section 56(2)(x) of the Income Tax Act, 1961**, where an individual receives immovable property for a consideration less than the **stamp duty value**, the shortfall (if exceeding Rs. 50,000) is taxable as income from other sources in the hands of the buyer.

**Applicability check — Relative exemption:** The exemption under Section 56(2)(x) applies only when property is received from a defined 'relative.' The definition of relative for this purpose does **not** include a nephew. Mr. Vaibhav is the nephew of Mr. Ram, hence he is **not a relative** and Section 56(2)(x) applies.

**Determination of stamp duty value:** A key proviso to Section 56(2)(x) allows adoption of stamp duty value **as on the date of agreement** (instead of registration), provided the consideration or part thereof has been paid by way of account payee cheque, bank draft, or electronic clearing system on or before the date of agreement. Here, the advance of Rs. 19,000 was paid **in cash** on 15.01.2021 — cash does not qualify as a prescribed mode of payment. Therefore, the proviso **does not apply**, and the stamp duty value as on the **date of registration (30.03.2021)** i.e., **Rs. 64 lakhs** must be used.

**Taxable amount in hands of Mr. Vaibhav = Rs. 64 lakhs − Rs. 58 lakhs = Rs. 6 lakhs**, which exceeds Rs. 50,000, and is accordingly taxable under Section 56(2)(x).

Question 6

What shall be the total tax credit available with Mr. Ram with respect to sale of two house properties during P.Y. 2020-21 assuming the tax was fully deducted by both the buyers at the time of payment?

Accepted Answer

**(c) Rs. 2,68,000**

Under **Section 194-IA of the Income Tax Act, 1961**, the buyer of an immovable property (other than agricultural land) is required to deduct TDS @ **1%** on the amount of consideration paid/credited, where such consideration is Rs. 50 lakhs or more. For P.Y. 2020-21, TDS under Section 194-IA was levied on the actual sale consideration (the amendment making TDS applicable on the higher of consideration or stamp duty value was introduced by Finance Act 2022, effective from A.Y. 2023-24 onwards).

**Sale 1 – Gwalior Property (sold 15.04.2020):** Sale consideration = Rs. 2,10,00,000 (≥ Rs. 50 lakhs). TDS deductible by buyer = 1% × Rs. 2,10,00,000 = **Rs. 2,10,000**.

**Sale 2 – Mumbai Property (sold 30.03.2021):** Sale consideration = Rs. 58,00,000 (≥ Rs. 50 lakhs). TDS deductible by Mr. Vaibhav = 1% × Rs. 58,00,000 = **Rs. 58,000**. (The advance of Rs. 19,000 received in cash on 15.01.2021 forms part of the total sale consideration of Rs. 58 lakhs; TDS is on the full consideration.)

**Total TDS credit available with Mr. Ram = Rs. 2,10,000 + Rs. 58,000 = Rs. 2,68,000.**

Question 7

TPR & Co., a partnership firm selling its product X through the digital facility provided by MKY Limited (an E-commerce operator). MKY Limited has credited in its books of account, the account of TPR & Co. on 31st January, 2021 by sum of Rs. 4,80,000 for the sale of product X made during the month of January 2021. Out of Rs. 4,80,000, it made payment for Rs. 4,00,300 on 3rd February, 2021. Further, Mr. Pawan, who purchased the product X through the facility provided by MKY Limited, has made the payment of sum of Rs. 40,000 directly to TPR & Co. on 15th January, 2021. Which statement is correct regarding requirement of deduction of tax at source by MKY Limited?

Accepted Answer

**Answer: (D)**

Under Section 194O of the Income Tax Act 1961, an e-commerce operator must deduct TDS on the gross amount of consideration received or receivable in relation to sales facilitated by it. The deduction is applicable if the aggregate value of consideration for a seller exceeds Rs. 5,00,000 in a financial year.

Relevant amounts:
• Sales facilitated through MKY Limited and credited: Rs. 4,80,000 (31st January 2021)
• Direct payment by customer through MKY's platform: Rs. 40,000 (15th January 2021)
• **Aggregate consideration: Rs. 5,20,000** (Rs. 4,80,000 + Rs. 40,000)

Since the aggregate consideration of Rs. 5,20,000 exceeds the threshold of Rs. 5,00,000, TDS is mandatory. The TDS is computed at 1% on the gross consideration amount of Rs. 5,20,000, resulting in **Rs. 5,200**. Note: Option (B) incorrectly refers to Section 194C (applicable to contractors), while Section 194O is the correct provision for e-commerce operators. Option (A) is incorrect because the threshold test is satisfied. Option (C) lacks proper factual basis.

Question 8

Mr. Harry, an Indian citizen, is a marketing consultant who provides consultancy to various countries around the globe. Due to his profession, he is required to travel across various countries throughout the year. His marketing project does not last for more than 40 days and therefore his stay in any country including India usually never exceeds 40 days during a year. His income is Rs. 80 lakhs across the globe which is not liable to tax in any country. During the P.Y. 2020-21, an Indian company provides him a marketing project in India. His stay in India for the project is expected to be only 25 days and his income from that project would be Rs. 30 lakhs. Being a highly qualified professional, he consults you about the tax regime on his income and his residential status in India. Which of…

Accepted Answer

**Answer: (A)**

Mr. Harry is an Indian citizen who is in India for 25 days during PY 2020-21. To determine residential status, we apply Section 6 of the Income Tax Act, 1961:

**Resident Status**: A person is resident if present in India for 182 days or more. Alternatively, an Indian citizen earning abroad is deemed resident if in India for 60 days or more AND was resident in at least 9 of 10 preceding years. Since Mr. Harry is in India for only 25 days (which is less than 60 days), he does not qualify as resident under the standard criteria.

**Ordinarily Resident Status**: Had he been resident, he would be RNOR (Resident but Not Ordinarily Resident) because he has not been resident in at least 2 of the 10 preceding years given his global consultancy practice.

**Tax Liability**: Although the residential status is technically non-resident, a non-resident is taxable under Section 5(2) on income arising or accruing in India or received in India. The Rs. 30 lakhs from the Indian company is income from an Indian source and is therefore taxable in India. His global income not taxable elsewhere does not exempt Indian-sourced income from Indian taxation.

Option (A) correctly identifies that the taxable amount is Rs. 30 lakhs (the Indian-sourced income only), which is the appropriate tax treatment for this scenario. Options (B) and (D) incorrectly propose taxation of Rs. 80 lakhs (global income), and Option (C) incorrectly states no tax liability despite Indian-sourced income.

Question 9

Mr. Vyas, aged 80, is a retired government employee. On 1st April 2020, he received the maturity amount of his LIC policy amounting to Rs. 3,50,000. This policy was taken by Mr. Vyas on 1st April 2013 on which the sum assured was Rs. 3,00,000 and the annual premium was Rs. 40,000. His other income comprised of pension amounting to Rs. 85,000. Mr. Vyas furnishes a declaration in Form 15H for non-deduction of tax at source to the insurance company stating that his net tax liability for the year is NIL. Choose the correct statement from below:

Accepted Answer

**Answer: (B)**

Mr. Vyas's claim is correct, and the insurance company is not required to deduct tax at source under Section 194DA.

**Verification of Net Tax Liability:**

*Income Computation:*
Pension income: Rs. 85,000
Less: Standard deduction under Section 16 (lesser of 50% of income or Rs. 50,000): Rs. 42,500
Net pension income: Rs. 42,500

Gain on LIC maturity = Maturity amount - Aggregate premiums paid
= Rs. 3,50,000 - (Rs. 40,000 × 7 years) = Rs. 3,50,000 - Rs. 2,80,000 = Rs. 70,000

Total income: Rs. 42,500 + Rs. 70,000 = **Rs. 1,12,500**

Since Mr. Vyas is aged 80 years, the basic exemption limit is Rs. 5,00,000. As his total income (Rs. 1,12,500) is below this limit, **his net tax liability is NIL**.

*Validity of Form 15H for Section 194DA:*

Section 194DA sub-section (4) explicitly provides: "No deduction shall be made under this section in the case of a resident individual in relation to whom a declaration in Form No. 15H has been furnished for the previous year." This establishes that Form 15H is a valid and recognized declaration under Section 194DA. Therefore, the insurance company is not required to deduct tax once Form 15H is furnished.

Question 10

During the A.Y. 2021-22, Mr. Kabir has a loss of Rs. 6 lakhs under the head 'Income from house property', loss of Rs. 5 lakhs from business or profession and income of Rs. 3 lakhs from long term capital gains. He filed his return of income for the A.Y. 2021-22 on 31.12.2021. Determine the total income of Mr. Kabir for A.Y. 2021-22 and the amount of loss which can be carried forward in a manner most beneficial to him.

Accepted Answer

**Answer: (D)**

Mr. Kabir has filed his return for A.Y. 2021-22 on 31.12.2021, which is after the due date of 31.07.2022, constituting a **belated return** filing.

Under **Section 86(2) of the Income Tax Act, 1961**, when a return is filed after the due date, losses CANNOT be carried forward to succeeding years, with one critical exception: **loss under the head "Income from house property" CAN be carried forward even in a belated return**.

Computation for the current year:
• Loss from business/profession: Rs. 5,00,000
• Loss from house property: Rs. 6,00,000
• Long-term capital gains (LTCG): Rs. 3,00,000

Step-by-step set-off:
1. Loss from business/profession (Rs. 5,00,000) is set off against LTCG (Rs. 3,00,000) to the extent available
2. LTCG reduced to: Nil
3. Remaining loss from business/profession: Rs. 2,00,000 (cannot be carried forward since it's a belated return)
4. Loss from house property (Rs. 6,00,000) has no income to set off, therefore fully carried forward

**Total income for A.Y. 2021-22: Nil**

**Loss to be carried forward: Rs. 6,00,000 from house property only**

The loss from business of Rs. 2,00,000 (being set off partially and unable to set off the balance) is lost and cannot be carried forward due to the belated return filing, as per Section 86(2).

Question 11

Bunty Pvt. Ltd., a supplier of goods, pays GST under regular scheme. It has made the following outward taxable supplies in a tax period:
Intra-State supply of goods: Rs. 11,20,000
Inter-State supply of goods: Rs. 4,20,000

Purchases made in that tax period:
Intra-State purchases of goods: Rs. 2,80,000
Inter-State purchases of goods: Rs. 70,000

ITC available at the beginning of the tax period:
CGST: Rs. 79,800; SGST: Nil; IGST: Rs. 98,000

Notes: (i) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively. (ii) Both inward and outward supplies are exclusive of taxes. (iii) All conditions necessary for availing ITC have been fulfilled.

Compute the minimum GST payable in cash by Bunty Pvt. Ltd. for the tax period. Make suitable assumptions as required.

Accepted Answer

**Computation of Minimum GST Payable in Cash by Bunty Pvt. Ltd.**

As per **Section 49 of the CGST Act, 2017**, ITC must be utilised in the prescribed order. IGST credit is first applied against IGST liability; the balance may be applied against CGST or SGST **in any order** (as per the taxpayer's choice). CGST credit is applied against CGST, then IGST (not SGST). SGST credit is applied against SGST, then IGST (not CGST).

**Step 1 – Output Tax Liability**

Intra-State supply (₹11,20,000): CGST @ 9% = ₹1,00,800 | SGST @ 9% = ₹1,00,800
Inter-State supply (₹4,20,000): IGST @ 18% = ₹75,600

**Step 2 – ITC from Current Period Purchases**

Intra-State purchases (₹2,80,000): CGST @ 9% = ₹25,200 | SGST @ 9% = ₹25,200
Inter-State purchases (₹70,000): IGST @ 18% = ₹12,600

**Step 3 – Total ITC Available**

CGST ITC: ₹79,800 (opening) + ₹25,200 = **₹1,05,000**
SGST ITC: Nil (opening) + ₹25,200 = **₹25,200**
IGST ITC: ₹98,000 (opening) + ₹12,600 = **₹1,10,600**

**Step 4 – Optimal ITC Utilisation (to minimise cash outflow)**

Since SGST ITC (₹25,200) is significantly less than CGST ITC (₹1,05,000), to minimise cash payment, the balance IGST ITC (after setting off IGST liability) should be applied first against **SGST** (which has lower own-ITC coverage). This is permissible under Section 49(5)(a) which allows the remaining IGST credit to be used against CGST or SGST in **any order**.

*IGST ITC utilisation:* ₹1,10,600 against IGST liability of ₹75,600 → IGST fully paid. Balance IGST ITC…

Question 12

Which of the following persons are liable to pay GST on reverse charge in respect of the GTA services (taxable @ 5%) provided by Explore Logistics?
i. Sahil Traders
ii. Mr. Aadi
iii. Small Traders Co-operative society

Accepted Answer

**Answer: (D) i, ii & iii**

Under **Section 9(3) of the CGST Act, 2017** read with **Notification No. 13/2017-Central Tax (Rate)**, when a **Goods Transport Agency (GTA)** provides services (taxable @ 5%), the liability to pay GST shifts to the **recipient** under the **Reverse Charge Mechanism (RCM)** if the recipient falls under any of the specified categories. The specified categories include: (1) any factory registered under the Factories Act, 1948; (2) any society registered under the Societies Registration Act, 1860 or any other law; (3) any co-operative society established under any law; (4) any person registered under the CGST Act; (5) any body corporate established by or under any law; (6) any **partnership firm** whether or not registered under any law, including an Association of Persons (AOP); and (7) any **casual taxable person** located in the taxable territory.

Applying this to the given persons:

**Sahil Traders** is an unregistered partnership firm. The notification expressly includes *any partnership firm whether or not registered*, so Sahil Traders is liable to pay GST under RCM.

**Mr. Aadi** is a casual taxable person. Even though he is not registered under GST, the category is defined by the nature of his supplies (occasional/temporary taxable supplies), and casual taxable persons are expressly listed as specified recipients under RCM. He is therefore liable.

**Small Traders Co-operative Society** is registered under the Societies Registration Act — i…

Question 13

Out of items transported by Explore Logistics, which of the following is/are exempt from GST?
i. Defence Equipments
ii. Railway Equipments
iii. Organic Manure

Accepted Answer

**Answer: (C) i & iii**

Under the GST exemption framework for GTA services, the transportation of certain specified goods is exempt from GST. As per Notification No. 12/2017-Central Tax (Rate), GTA services involving transportation of the following goods are exempt: **relief materials for disaster victims**, **defence or military equipment**, **agricultural produce**, **milk, salt, food grains**, **organic manure**, **newspapers/magazines**, **railway equipment or materials** transported by Indian Railways itself (not by a GTA), etc.

**Defence Equipments** – Transportation of defence/military equipment by a GTA is **exempt** from GST.

**Railway Equipments** – The exemption for railway equipment applies when it is transported by **Indian Railways**, not when transported by a GTA. Hence, when Explore Logistics (a GTA) transports railway equipment, it is **not exempt**.

**Organic Manure** – Transportation of organic manure by a GTA is specifically **exempt** from GST under the said notification.

Therefore, out of the three items, only **Defence Equipments (i)** and **Organic Manure (iii)** are exempt, making option **(C) i & iii** correct.

Question 14

What will be the time of supply in respect of the services provided by Explore Logistics to Mahajan Steels Pvt. Ltd.?

Accepted Answer

**Answer: (D) 1st October**

Under **Section 13(2) of the CGST Act, 2017**, the time of supply of services is determined as the earliest of: (a) date of invoice (if issued within the prescribed period under Section 31(2)) or date of receipt of payment, whichever is earlier; OR (b) date of provision of service (if invoice is NOT issued within the prescribed period) or date of receipt of payment, whichever is earlier.

As per **Rule 47 of the CGST Rules, 2017**, a supplier of services must issue the invoice within **30 days** from the date of supply of service.

Here, service was provided on **1st October**. The prescribed period for issuing the invoice expires on **31st October**. The invoice was issued on **5th November**, which is **beyond the prescribed 30-day period**.

Therefore, clause (b) of Section 13(2) applies. The time of supply is the **earlier of**:
- Date of provision of service = **1st October**
- Date of receipt of payment = **6th November**

The earlier date is **1st October**, which is the time of supply.

Question 15

Which of the following statements is correct in respect of services provided by Explore Logistics to Mahajan Steels Pvt. Ltd.?

Accepted Answer

**Answer: (B)**

When a GTA opts to pay GST under **forward charge at 12%** (as permitted under Notification No. 11/2017-Central Tax (Rate)), the liability to pay GST shifts from the recipient to the GTA itself. Explore Logistics has opted for forward charge from October, so for services provided to Mahajan Steels Pvt. Ltd. on 1st October, **Explore Logistics is liable to pay GST** — not the recipient under reverse charge. The reverse charge mechanism under **Notification No. 13/2017-Central Tax (Rate)** applies only when GTA has not opted for forward charge.

Question 16

In respect of which of the following supplies, Explore Logistics has to provide invoice-wise details in GSTR-1?
i. Inter-State supplies to registered person with invoice value not exceeding Rs. 2,50,000
ii. Inter-State supplies to unregistered person with invoice value not exceeding Rs. 2,50,000
iii. Inter-State supplies to unregistered person with invoice value exceeding Rs. 2,50,000
iv. Intra-State supplies to registered person with invoice value not exceeding Rs. 2,50,000

Accepted Answer

**Answer: (D) i, iii & iv**

Under the **GSTR-1** reporting framework (Rule 59 of the CGST Rules, 2017), invoice-wise details are mandatory in the following situations:

**(i) Inter-State supplies to registered persons** — All B2B (business-to-business) inter-State supplies must be reported **invoice-wise** irrespective of the invoice value. Hence, even if the invoice value does not exceed ₹2,50,000, invoice-wise reporting is required. ✓

**(ii) Inter-State supplies to unregistered persons with invoice value ≤ ₹2,50,000** — These are reported on a **consolidated state-wise basis** in Table 7 of GSTR-1, and NOT invoice-wise. ✗

**(iii) Inter-State supplies to unregistered persons with invoice value exceeding ₹2,50,000** — These must be reported **invoice-wise** in Table 6 of GSTR-1, as the threshold of ₹2,50,000 triggers individual invoice disclosure. ✓

**(iv) Intra-State supplies to registered persons** — All B2B intra-State supplies must be reported **invoice-wise** regardless of invoice value. ✓

Therefore, Explore Logistics is required to provide invoice-wise details in GSTR-1 for supplies **(i), (iii), and (iv)**.

Question 17

Lovely & Co., a registered person, supplies taxable goods to unregistered persons. It need not issue tax invoice for the goods supplied on 16th April, if the value of the goods is ______ and the recipient does not require such invoice.

Accepted Answer

**Answer: (D)** According to Rule 48(2) of the CGST Rules 2017, a registered person making a supply of goods to an unregistered person may issue a **bill of supply** instead of a tax invoice if the value of the supply does not exceed **Rs. 200** and the recipient does not require a tax invoice. Since a bill of supply can be issued instead, a tax invoice need not be issued for supplies below this threshold.

CA Inter Cost & Mgmt

Drill 5 questions from this paper — instant grading

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Worked Solution

Write it like this

1The skeleton

2Examiner-rewarded phrases

3Common trap

Worked Solution

Write it like this

1The skeleton

2Examiner-rewarded phrases

3Common trap