Buy back of equity shares [treated as dividend under section 46A and section 2(22)(f)] 5,00,000
from Zeta Ltd. 24,000
6,24,000
8(e):
It is presumed that consultation fee includes some cash receipts (5% max.) (the threshold limit of gross receipts is ` 75,00,000), presumptive income would be 50% of ` 50,91,000 i.e. 25,45,000 under section 44ADA.
8(f):
Particulars
(i)Due date of filing of return u/s 139(1), when firm opts to pay tax under presumptive taxation u/s 44ADA would be 31st July.
(ii)31st October
8(g):
The firm to act as per normal provision of Income tax Act, 1961.
SECTION B : INDIRECT TAXES
Q.9 MNO & Co., a Partnership firm, is engaged in the manufacturing of equipment in the State of Gujarat. The firm became liable for registration under GST on 14th July, 2022. It applied for registration on 14th August, 2022 and was granted registration certificate by department on 18th August, 2022.
MNO & Co. supplied goods to Vikram Ltd. The terms of the contract stipulated that goods are delivered to the factory of Vikram Ltd. Goods were removed from the factory of MNO & Co. on November 9, 2022 and were delivered to the factory of Vikram Ltd. on November 15, 2022. Invoice was issued on November 18, 2022 and payment was credited to MNO & Co’s account on December 20, 2022. However, the entry was made in the books when the cheque was received, that is on November 19, 2022.
MNO & Co., is dealing in taxable as well as exempted items. MNO & Co. has provided following information of a consignment which is to be supplied:
S.No.Particulars Amount (`)
(i)Taxable value of supplies indicated on tax invoice 28,000
(ii)Value of exempted supplies shown separately in tax invoice in S No. (i) above 13,000
(iii)Value of goods to be sent to job worker on delivery challan 16,000
Note: - All amounts above are excluding GST.
MNO & Co. has also exported some equipment by air. The FOB price of goods exported is US $ 60000. The shipping bill was presented electronically on 17th October, 2022 and proper officer passed order permitting clearance and loading of goods for export (Let Export Order) on 29th November, 2022. The rate of exchange notified by Central Board of Indirect taxes and Customs (CBIC) on 17th October, 2022 and 29th November, 2022 are 1 US $ = 78 and 1 US $ 77 respectively. Other details are as follows:
ParticularsDateRate
of Duty
Presentation of shipping bill17th October, 202212%
Let Export Order29th November, 202210%
Based on the facts of the case scenario given above, answer the following questions with reference to GST law and Custom Law:
9.1 What will be effective date of registration and also is there any requirement to issue revised invoices? Correct legal provision should form part of your answer.
9.2 With reference to transaction with Vikram Ltd., determine the Time of Supply for the purpose of payment of Tax.
9.3 Decide whether in respect to goods supplied to Vikram Ltd. MNO & Co. needs to mandatory generate e-way bill or not? Assume this is the case of intra-state and rate of tax on taxable goods to be CGST and SGST @ 9% each.
9.4 You are required to determine the export duty payable under Customs law in respect to explored equipment.
[CS Executive Dec. 2023] [5 Marks Each]
Ans.:
9.1 Effective Date of Registration:
Statutory Provision: As per Rule 10 of CGST Rules, 2017:
(a) Where an applicant submits application for registration WITHIN 30 DAYS from the date the person becomes liable to registration, then the effective date of registration is the date on which person becomes liable for registration.
(b) Where an applicant submits application for registration AFTER 30 DAYS from the date the person becomes liable to registration, then the effective date of registration is the date of grant of registration.
In the given case: Since, the application for registration has been submitted after 30 days, the registration shall be effective from the date of registration i.e. 18th August, 2022.
Requirement of Revised Invoices:
As per section 31(3)(a) read with Rule 53 of CGST Rules, 2017, every registered person who has been granted registration with effect from a
date earlier than the date of issuance of certificate of registration to him, may issue revised tax invoices.
The revised tax invoices shall be issued within ONE MONTH from the date of issuance of certificate of registration.
9.2 Time of Supply in Transaction with Vikram Ltd.:
Statutory Provision: As per section 12(2) r.w. NN 66/2017 CT dated 1511-2017, the time of supply of goods for the purpose of payment of tax is the date of issue of invoice or the last date when the invoice ought to have been issued under section 31 of CGST Act, 2017.
In the given case:
Actual date of issue of invoice18-11-2022
Last date when invoice ought to have been issued09-11-2022
Time of Supply (Earlier of above)09-11-2022
9.3 Requirement
of E-way Bill for Goods Supplied to Vikram Ltd.:
Statutory Provision: As per Rule 138(1) of CGST Rules, 2017, whenever there is a movement of goods of consignment value exceeding ` 50,000, the e-way bill is required to be generated. Consignment value of goods shall be the value:
(a) Determined in accordance with the provisions of section 15.
(b) Declared in an invoice, bill of supply or delivery challan and (c) Also includes GST.
But such value excludes the value of exempted supply.
Consignment Value = (28,000 + 16,000) + 18% GST = 44,000 ×1.18 = ` 51,920
E-way Bill: In the given case, an e-way bill is mandatory as the consignment value exceeds ` 50,000.
9.4 Export Duty Under Customs Law for Exported Equipment:
Rate of Exchange Rate: As per third proviso to section 14(1) of the Customs Act, 1962, the assessable value has to be calculated with reference to the rate of exchange notified by the CBIT on the date of presentation of shipping bill of export. i.e. rate prevailing as on 17-10-2022. Hence, “1 US $ = ` 78” will be considered.
Rate of Exchange Duty: As per section 16(1)(a) of the Customs Act, 1962, in case of goods entered for export, the rate of duty prevalent on the date on which the proper officer makes an order permitting clearance and loading of the goods for exportation, is considered i.e. duty prevailing as on 29-11-2022. Hence, excise duty @ 10% is applicable.
Excise Duty Payable:
= US $ 60,000 × ` 78 × 10% = ` 4,68,000
Q.10 Majumdar Industries is a partnership firm located in Jaipur. It is presently engaged in manufacture of machinery parts. Industries has given the following information relating to input tax credit for the month of December, 2023. ParticularsGST
Purchase of raw material received in two equal instalments viz. the first one in December, 2023 and the second instalment in January, 2024.
5,50,000
Purchase of consumables delivered directly to the job workers. Only invoice was received by the firm. 1,50,000
Purchase of bus (seating capacity 18) for transport of employees from residence to factory and back. 8,40,000
Input tax credit in respect of general insurance for motor cars of the firm used by Chief Engineers and Supervisors for official work.
Payment made to ABC Caterers for providing breakfast and lunch to the workers as voluntary staff welfare measure.
12,000
60,000
Now it is proposing to add trade in textile goods in addition to such manufacturing activity in Kota (Rajasthan) w.e.f. 1st April, 2024. Also, it proposes to open its machinery parts manufacturing activity in places such as Udaipur, Jodhpur and Bikaner (all places located within the State of Rajasthan). The management wants to obtain separate GST registration for the said multiple places of business. As regards trade in textile goods, it would be on PAN India basis and it has appointed you as GST consultant.
From June, 2024 Majumdar Industries is further planning to send the raw materials and semi-finished goods to job workers across Rajasthan for scaling up its production quantity of machinery parts. For the purpose of manufacture of the goods it would also send moulds and dies, jigs and other tools to the job workers for getting the product manufactured as per specifications and to achieve uniformity in production.
As a GST Consultant, you are required to give the following answers with reference to GST Law:
(a) Determine the eligible input tax credit available to Majumdar Industries for the month of December, 2023 by giving brief explanations for treatment of various items.
(b) State the time limit for return of semi-finished goods sent to job workers including moulds and dies given to them. When would such movement be treated as supply of goods?
(c) State the conditions to be satisfied by Majumdar Industries seeking separate registration for different places of business within the same State.
(d) When should the E-way bill be generated? Mention the salient features of e-way bills.
[June 2024] [5 Marks each]
Ans.:
(a) Computation of ITC available for December 2023 Inward SuppliesNoteITC
Purchase of Raw Material1 Nil
Purchase of Consumables Delivered Directly to Job Workers 21,50,000
Purchase of Bus for Transport of Employees38,40,000
General Insurance for Motor Cars4 Nil
Payment to Caterers for Employee Meals5 Nil
Total Eligible ITC for December 20239,90,000
Notes:
1. ITC is blocked in respect of purchase of material because as per first proviso to section 16(2), ITC is available on receipt of last instalment only.
2. As per section 19(2), the principal shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a job worker for job work without being first brought to his place of business. Thus, ITC is allowed.
3. The bus is for transport of employees from residence to factory and back. Since the seating capacity is more than 13, ITC is NOT blocked u/s 17(5)(a).
4. The seating capacity of motor car is not more than 13 persons, the ITC is BLOCKED u/s 17(5)(a).
(b) Time Limit for Return of Semi-Finished Goods Sent to Job Workers
Time limit for return of semi-finished goods sent to job worker
The inputs by way of semi-finished goods sent to the job worker should be brought back to the premises of the principal or alternatively supplied by the principal directly from the job worker’s premises within the time period as given below:
Within one year in the case of inputs and Within 3 years in the case of capital goods.
Moulds and dies, jigs and fixtures or tools sent out to a job worker are not to be treated as capital goods and therefore need not be brought back within 3 years’ time referred above.
If the goods are not sold or brought back within the stipulated time as mentioned above, the activity between the principal and the job worker would be treated as ‘supply’ from the date of original dispatch of goods by the principal and accordingly tax is payable thereon by the principal.
Job work includes intermediate goods arising from any treatment or process carried out on the inputs by the principal or the job worker.
(c) Separate registration for multiple places of business within a State
Any person having multiple places of business within a State or a Union Territory requiring separate registration for any such place of business under section 25(2) shall be granted separate registration in respect of each place of business subject to the following conditions, viz.
(i) Such person has more than one place of business as defined in section 2(85);
(ii) Such person shall not be allowed to pay tax under section 10 (composition levy) for any of his places of business if he is paying tax under section 9 for any other place of business.
(iii) All separately registered places of business of such person shall pay tax under the Act on supply of goods or services or both made to another registered place of business of such person and issue a tax invoice or a bill of supply, as the case may be, for such supply.
For the purpose of (ii) above, it is clarified that where any place of business of a registered person has been granted a separate registration it becomes ineligible to pay tax under section 10 for all other registered places of business.
A registered person opting to obtain separate registration for a place of business shall submit a separate application in Form GST REG 01 in respect of each such place of business.
The provisions of rule 9 and rule 10 relating to the verification and the grant of registration shall, mutatis mutandis, apply to an application submitted under this rule.
(
d) E-way Bill: Generation and Salient Features
Under Rule 138 of the CGST Rules, 2017, an e-way bill is required to be generated for the transportation of goods where the consignment value is ` 50,000 or more in relation to:
(a) Supply i.e. supplies to customer;
(b) Other than supply i.e. movement of goods for job work, repairs, etc.;
(
c) Due to inward supply from unregistered persons (any procurement made from any unregistered persons);
(d) Where the goods are sent for job work located in a different state or Union Territory, e-way bill is required to be generated without any value threshold.
Salient features of e-way bill:
(i) For the purpose of calculating the threshold of ` 50,000, the value shall be such as shown on the tax invoice/bill of supply/delivery challan, as the case may be, including the value of taxes but excluding the value of goods which are exempted from payment of tax, where the invoice is issued in respect of both exempt and taxable goods.
(ii) The limit of ` 50,000 is not applicable where goods sent by principal in one State/UT to job worker in other State/UT or handicraft goods sent from one State/UT to another State/UT + by person exempted from registration u/s 24(i)(ii).
(iii) E-way bill can be generated voluntarily even if the value of goods is less than ` 50,000.
(
iv) E-way bill has to be generated for each movement of goods whether it constitutes a taxable supply or an exempt supply or for reasons other than supply.
(
v) E-way bill is also required to be generated regardless of the mode of transportation i.e. Railways, air, vessel or road. However, it is not required where the goods are transported in a non-motorized conveyance.
(vi) It is required even where the goods are transported through a transporter or by own conveyance.
Q.11 VVIP Global Limited registered supplier of Maharashtra has provided the following details for the supply of one machine:
S. No. Particulars Amount (`)
1List price of machine supplied1,20,000
2Cost of protective packing for safe transportation of machine charged separately in the invoice15,000
3Maintenance charges compulsory for the first year (not included in above list price)20,000
4Installation charges of machinery (not included in above list price)2,500
S. No.
Particulars
(`)
5Third party inspection charges (these charges are not recorded in the invoice; these charges are directly paid by the buyer to the third-party inspection agency)4,000
6Price link subsidy received from the Government of Maharashtra in relation to the supply of such machinery (The price of ` 1,20,000 above is after considering the subsidy of ` 30,000)30,000
7Tax levied by local authority on the sale of such machine (not included in above list price)3,500
During the month of March, 2024, VVIP Global Limited supplied three machines in the state of Maharashtra and one machine in the state of Gujarat to the registered dealers.
The aggregate annual turnover of the company during the financial year 2022-23 was ` 8 crore. However, aggregate annual turnover of the current financial year 2023-24 was ` 4 crore only.
VVIP Global Limited also purchased some machines from registered dealers as well as unregistered dealers during the month of March, 2024. The details of inward supplies during the month of March, 2024 were as follows:
S. No. Particulars
1Two Machines purchased from a Dealer who is registered under Regular Scheme in the state of Uttar Pradesh (each machine value ` 75,000) 1,50,000
2One Machine purchased from a Dealer who is registered under Composition Scheme in the state of Maharashtra 76,000
3One Machine purchased from Moon Limited registered under Regular Scheme in the state of Gujarat (Invoice is received and payment is made in the month of March, 2024 but Machine is received in the month of April, 2024) 68,000
4Insurance charges paid to XYZ Insurance Company registered in Pune (Maharashtra) for trucks used for transportation of Machinery for two years (Insurance Premium ` 60,000 per year) 1,20,000
Balance available in the electronic credit ledger of VVIP Global Limited at the beginning of March, 2024:
CGST: ` 15,000
SGST: ` 10,000
IGST: ` 5,000
Additional Information:
(1) On 26 March, 2024, Moon Limited transported the above-mentioned one machine to VVIP Global Limited by road. The distance between registered places of business from Moon Limited to VVIP Global Limited is 375 kilometers.
(2) Rate of CGST, SGST, and IGST to be charged 9%, 9%, and 18% respectively.
(3) Both inward and outward supplies given above are exclusive of taxes, wherever applicable.
(4) All the conditions necessary are availing the ITC have been fulfilled except as mentioned above.
Based on the above case scenario and information, you are required to answer the following questions with reference to GST Law:
(a) Compute the Taxable Value of Supply of each machine for the month of March, 2024, for VVIP Global Limited. (4 Marks)
(b) Compute the Input Tax Credit available for the month of March, 2024, for VVIP Global Limited. (4 Marks)
(c) Compute the Output Tax Liability for the month of March, 2024, for VVIP Global Limited. (3 Marks)
(d) Is the e-way bill required to be generated by Moon Limited? Also, calculate the validity period of the e-way bill under rule 138(10) of CGST Rules, 2017, for the transport of one machine from Moon Limited to VVIP Global Limited if such a machine is transported from over-dimensional cargo. (3 Marks)
(e) Whether the issue of e-invoice is mandatory in respect of supply made by VVIP Global Limited during the month of March, 2024? Also, explain the provision relating to the requirement of issue of e-invoice. (3 Marks)
(f) VVIP Global Limited wants to opt QRMP scheme for the next financial year from 1st April, 2024. Is it possible? Explain the condition and restrictions of QRMP Scheme. (3 Marks) [Dec. 2024]
