Guru Enterprises (Delhi), a registered taxpayer, made a taxable supply to Y Ltd. (Delhi) for a price of 10,00,000 (excluding any tax or discounts).…

CA Intermediate · Taxation · MTP · September 2024
Guru Enterprises (Delhi), a registered taxpayer, made a taxable supply to Y Ltd. (Delhi) for a price of 10,00,000 (excluding any tax or discounts). It received a price linked subsidy of 1,10,000 from Jiva Enterprises Pvt Ltd. The price of 10,00,000 is after consideration of such subsidy amount. Further, after delivery of the goods to Y Ltd., Guru Enterprises arranged post-delivery inspection of goods and charged - 10,000 for the same. In respect of above supply, Guru Enterprises had procured some raw material from X Ltd., for which it owed - 25,000. The said amount was directly paid by Y Ltd. to X Ltd. and was not included in the price of goods of 10,00,000 mentioned above. The payment of consideration for above supply was delayed by Y Ltd. Hence, an interest amount of 20,000 (in lumpsum) was also charged by Guru Enterprises. The applicable tax rates are - CGST - 6%, SGST - 6% and IGST - 12%. You are required to determine value of taxable supply as well as the applicable tax liability for the above supply transaction.

Suggested Answer and Working Notes:

Computation of value of taxable supply and tax liability Particulars Amount (₹) Price of goods (exclusive of tax and discounts) 10,00,000 Add: Subsidy received from Jiva Enterprises Pvt. Ltd. [Subsidy provided by non-Government bodies and which is directly linked to the price, is includible.] 1,10,000 Add: Post-delivery inspection charges [Anything done by the supplier in respect of the supply of goods after the delivery of goods is not includible in value.] - Add: Amount directly paid by Y Ltd. to X Ltd. [Liability of the supplier, in relation to the supply being valued, if discharged by the recipient of supply and not included in the price, is includible in the value.] 25,000 Add: Interest [Interest for delayed payment of consideration is includible in the value. Since interest is received in lumpsum, amount is inclusive of GST [₹ 20,000 x 100/112] (rounded off).] 17,857 Value of taxable supply 11,52,857 CGST @ 6% (rounded off) 69,171 SGST @ 6% (rounded off) 69,171

Topics: Paper 3B: Goods and Services Tax

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic