Vishwanath Ltd., a registered supplier in Karnataka has provided the following details for supply of one machine·: Particulars Amount in (₹) (1)…

CA Intermediate · Taxation · MTP · September 2024
Vishwanath Ltd., a registered supplier in Karnataka has provided the following details for supply of one machine·: Particulars Amount in (₹) (1) List price of machine supplied [exclusive of items given below from (2) to (4)] 80,000 (2) Tax levied by Local Authority on sale of such machine 6,000 (3) Discount of 2% on the list price of machine was provided (recorded in the invoice of machine) (4) Packing expenses for safe transportation charged separately in the invoice 4,000 Vishwanath Ltd. received - 5,000 as price linked subsidy from a NGO on sale of each such machine, The Price of 80,000 of the machine is after considering such subsidy. During the month of February, Vishwanath Ltd. supplied three machines to Intra-State customers and one machine to Inter-State customer. Vishwanath Ltd. purchased inputs (intra-State) for 1,20,000 exclusive of GST for supplying the above four machines during the month. The Balance of ITC at the beginning of February was: CGST SGST IGST 18,000 4,000 26,000 Note: (i) Rate of CGST, SGST and IGST to be 9%,9% and 18% respectively for both inward and outward supplies. (ii) All the amounts given above are exclusive of GST. (iii) All the conditions necessary for availing the ITC have been fulfilled. Compute the minimum net GST payable in cash by Vishwanath Ltd. for the month of February.

Suggested Answer and Working Notes:

Computation of value of taxable supply Particulars Amount (₹) List price of the machine 80,000 Add: Tax levied by Local Authority on the sale of machine [Tax other than GST, if charged separately, are includible in the value in terms of section 15 of the CGST Act, 2017.] 6,000 Add: Packing expenses for safe transportation [Includible in the value as per section 15 of the CGST Act, 2017.] 4,000 Add: Price-linked subsidy received from a NGO on sale of each machine [Subsidy received from a non-Government body and which is directly linked to the price, the same is included in the value in terms of section 15 of the CGST Act, 2017.] 5,000 Total 95,000 Less: Discount @ 2% on 80,000 [Since discount is known at the time of supply and recorded in invoice, it is deductible from the value in terms of section 15 of the CGST Act, 2017.] 1,600 Value of taxable supply 93,400 Computation of minimum net GST payable in cash by Vishwanath Ltd. Particulars CGST (₹) SGST (₹) IGST (₹) Sale of machine 25,218 25,218 16,812 [Intra-State sales = 93,400 × 3 machines = 2,80,200 [2,80,200 × 9%] [2,80,200 × 9%] Inter-State sales = 93,400 × 1 machine = 93,400] [93,400 × 18%] Total output tax 25,218 25,218 16,812 Less: Set off of IGST against IGST and SGST [IGST credit first be utilized towards payment of IGST, remaining amount can be utilized towards CGST and SGST in any order and in any proportion] (9,188) (16,812) Less: Set off of CGST against CGST and SGST against SGST [CGST credit cannot be utilized towards payment of SGST and vice versa.] (25,218) (14,800) Minimum net GST payable in cash Nil 1,230 Working Note: Computation of total ITC available Particulars CGST (₹) SGST (₹) IGST (₹) Opening balance of ITC 18,000 4,000 26,000 Add: Inputs purchased during the month [₹ 1,20,000 ×9%] [₹ 1,20,000 ×9%] 10,800 10,800 Total ITC available 28,800 14,800 26,000

Topics: Paper 3B: Goods and Services Tax

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