Evershine Pvt. Ltd., a GST registered supplier located in Jaipur, Rajasthan is engaged in taxable supply of packaging goods and consultancy…

CA Intermediate · Taxation · PYQS · May 2024
Evershine Pvt. Ltd., a GST registered supplier located in Jaipur, Rajasthan is engaged in taxable supply of packaging goods and consultancy services. It provides following details of various activities undertaken during the month of September, 2023: (A) Details of Outward Supplies: (1) Supply of goods of 18,00,000 to Vaidehi Enterprises, a registered person of Udaipur, Rajasthan. Further, received - 50,000 from Vaidehi Enterprises towards freight charges (as agreed to deliver the goods at Vaidehi Enterprises' premises) which was not included in above value of supply. (2) Supply of goods worth - 35,00,000 to Calc. Exim, a registered person of Prayagraj, Uttar Pradesh. Further, the amount of 60,000 charged separately (not included above) from Calc. Exim on account of municipal taxes levied in relation to such outward supply. (3) Supply of services to Sunshine Ltd., a registered person in Jodhpur, Rajasthan before discount worth - 6,00,000. Further, discount of 30,000 which has been given at the time of supply of service and duly recorded in the invoice. (4) It delivered the goods worth - 2,00,000 to Jeevan Solutions, a registered person located at Bikaner, Rajasthan on the direction of Raghu Enterprise, a registered person of Mumbai, Maharashtra and tax invoice was issued by Evershine Pvt. Ltd. to Raghu Enterprise of Mumbai, Maharashtra. (B) Details of Inward Supplies: (1) Purchased raw material goods worth - 20,00,000 from PQR Ltd; a GST registered dealer, located at Kanpur, Uttar Pradesh. Goods worth - 1,00,000 out of total purchases were not received during the month. (2) Purchased machinery for manufacturing process worth - 2,00,000 from MPQ Pvt. Ltd., a GST registered dealer, located at Bengaluru, Karnataka. Company has claimed depreciation under Income Tax Act 1961 on full value of the machine, including the GST component. (3) Purchased truck worth - 15,00,000 from GST registered dealer, located at Ajmer, Rajasthan for transportation of its goods. GST rate on truck is: CGST 14%, SGST 14%, IGST 28%. (4) Purchased car (having seating capacity of 7 persons) costing to 10,00,000 excluding GST from Mihir Automobiles Pvt. Ltd., a GST registered dealer, located at Ajmer, Rajasthan for use of its director for official purpose. GST rate on car: CGST 14%, SGST 14%, IGST 28% (5) Purchased goods worth - 5,00,000 from DEF Buildwell Pvt. Ltd., a registered person of Jaipur, Rajasthan for construction of an additional floor of factory building, of Evershine Pvt. Ltd. Notes: Opening balance of Input tax credit as on the beginning of September 2023-CGST - 20,000, SGST - 50,000 and IGST - 75,000. Rate of GST applicable on both inward and outward supply of goods & services: CGST 9%, SGST 9% and IGST @18%, except where otherwise provided. (i) All the figures mentioned above are exclusive of taxes. (ii) Subject to the information given above, conditions necessary for claiming ITC were complied with. (iii) All inward supplies are used for taxable goods only. (iv) Brief and suitable notes should form part of your answer. Calculate the amount of net minimum GST payable in cash by Evershine Pvt. Ltd. for the month of September, 2023.

Suggested Answer and Working Notes:

Computation of minimum net GST payable in cash by Evershine Pvt. Ltd. for the month of September 2023 Particulars Value of supply (₹) CGST @ 9% (₹) SGST @ 9% (₹) IGST @ 18% (₹) Output tax payable Intra-State supply of goods to Vaidehi Enterprises [Since arranging freight is the liability of supplier, it is a composite supply and thus, freight charges are added to the value of principal supply.] 18,50,000 1,66,500 1,66,500 Nil Inter-State supply to Calc. Exim [Municipal tax is includible in value since it is a tax levied under a law other than GST law and is charged separately.] 35,60,000 Nil Nil 6,40,800 Intra-State supply to Sunshine Ltd. [Place of supply is location of recipient. Discount given at the time of supply is deductible from the value since duly recorded in the invoice.] 5,70,000 51,300 51,300 Nil Inter-State supply to Raghu Enterprise [Place of supply in case of bill to ship model is principal place of business of a third person at whose instructions the goods are delivered by supplier to recipient. Thus, it is considered as Inter State supply.] 2,00,000 Nil Nil 36,000 Total output tax 2,17,800 2,17,800 6,76,800 Less: ITC available [Refer note below] Nil Nil (4,17,000) [IGST credit to be utilized first towards payment of IGST.] CGST credit utilized for payment of CGST and IGST in that order (2,17,800) Nil (12,200) SGST credit utilized for payment of SGST and IGST in that order Nil (2,17,800) (42,200) Minimum net GST payable in cash Nil Nil 2,05,400 Working Note: Computation of ITC available Particulars Value (₹) CGST (₹) SGST (₹) IGST (₹) Opening balance 20,000 50,000 75,000 Inter-State purchase of raw material [ITC is not available on 1,00,000 since goods not received during the month.] 19,00,000 Nil Nil 3,42,000 [19,00,000 × 18%] Purchase of machinery [ITC is not available since depreciation has been claimed on the GST component.] 2,00,000 Nil Nil Nil Intra-State purchase of truck 1 [ITC on motor vehicles used for transportation of goods is available.] 15,00,000 2,10,000 [15,00,000 × 14%] 2,10,000 [15,00,000 × 14%] Nil Purchase of car [ITC on motor vehicles for transportation of persons with seating capacity up to 13 persons (including driver), is blocked, except when used for specified purposes.] 10,00,000 Nil Nil Nil Purchase of goods for construction of an additional floor 2 [ITC on goods used in construction of immovable property (other than plant or machinery) on one's own account is blocked if capitalized in the books.] 5,00,000 Nil Nil Nil Total 2,30,000 2,60,000 4,17,000 Note - In above answer, where location of supplier and place of supply are in two different States, it is an inter-State supply and where location of supplier and place of supply are in same State, it is an intra-State supply.

Topics: Paper 3B: Goods and Services Tax

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