Aashima Limited, a registered dealer in Patna (Bihar), is engaged in various types of supplies. The company provided the following details for the…

CA Intermediate · Taxation · MTP · January 2025
Aashima Limited, a registered dealer in Patna (Bihar), is engaged in various types of supplies. The company provided the following details for the month of January 2024: Sl. No. Particulars Amount in ₹ (i) Outward supply of goods made during the month to various non-related persons: As given in particulars column Particulars Market value Transaction Value (₹) a. in the State of Bihar (Intra-State) 3,00,000 4,00,000 b. to other States (Inter-State) 2,00,000 1,00,000 (ii) Services by way of warehousing of potato chips (Inter-State transaction) 5,00,000 (iii) Stock transfer without consideration to its branch at Gaya (Bihar). Branch has separate GSTN for convenience of accounting and billing. Value under section 15 of the CGST Act, 2017 -20,000 (Intra -State) Nil (iv) Intra-State inward supply of various services for use in the course or furtherance of business (30 invoices) 6,50,000 Additional Information: (a) All the amounts given above are exclusive of taxes. (b) During the course of arranging and filing documents, the accountant of Aashima Limited observed that an invoice for 30,000 (excluding tax) dated 02.12.2023 was omitted to be recorded in the books of accounts and no payment was made against the same till the end of January 2024. This invoice was issued by Mr. Suhaas of Patna, from whom Aashima Limited had taken cars on rental basis. Invoice included cost of fuel also. (Intra-State transaction). (c) Rate of GST applicable on various supplies are as follows: Nature of supply CGST SGST IGST Car rental service 2.5% 2.5% 5% All other inward and outward supplies 9% 9% 18% (d) No opening balance of input tax credit exists in the beginning of the month. (e) Out of the 30 invoices of inward supply received, 6 invoices with taxable value amounting to 1,50,000 were e-invoices in which Invoice Reference Number (IRN) was not mentioned. However, all the invoices were duly reflected in GSTR 2B for the month of January 2024, since the suppliers had filed their GSTR-1. (f) Subject to the information given above, conditions necessary for claiming ITC were complied with. (g) Aashima Ltd. is not engaged in renting of cars business. You are required to calculate the amount of net GST liability payable in cash by Aashima Limited for the month of January 2024. Brief notes for treatment given for each item should form part of your answer.

Suggested Answer and Working Notes:

Computation of net GST payable in cash by Aashima Ltd. for the month of January 2024 Particulars CGST (₹) SGST (₹) IGST (₹) Outward intra-State supply of goods made in the State of Bihar [Value of supply is the transaction value of the goods.] 36,000 [4,00,000 × 9%] 36,000 [4,00,000 × 9%] Outward supply of goods made to other States [Value of supply is the transaction value of the goods.] 18,000 [1,00,000 × 18%] Services by way of warehousing of potato chips [Taxable since services by way of warehousing of only cereals, pulses, fruits & vegetables are exempt.] 90,000 [5,00,000 × 18%] Intra-State stock transfer to Gaya Branch with separate registration [Supply of goods between distinct persons in course or furtherance of business qualifies as supply even if made without consideration.] 1,800 [20,000 × 9%] 1,800 [20,000 × 9%] Total output tax 37,800 37800 1,08,000 Less: Input Tax Credit [Refer Working Note below] [CGST credit should be utilized for payment of CGST and IGST in that order. Similarly, SGST credit should be utilized for payment of SGST and IGST in that order. ITC of CGST cannot be utilized for payment of SGST and vice versa.] (37,800) (CGST) (7,200) (SGST) (7,200) (CGST) (37,800) (SGST) Net GST payable in cash Nil Nil 93,600 Working Note: Computation of ITC available Particulars CGST (₹) SGST (₹) IGST (₹) Intra-State inward supply of services [₹ 6,50,000 - 1,50,000] [ITC cannot be claimed on the e-invoices without IRN since an e-invoice without IRN is not treated as valid document for claiming ITC.] 45,000 [5,00,000 × 9%] 45,000 [5,00,000 × 9%] -- Cars taken on rental basis from Mr. Suhaas [Tax on renting of motor car services wherein cost of fuel is included in consideration provided by a non-body corporate to a body corporate and invoice is issued charging CGST/SGST @ 2.5% is payable under reverse charge. Time of supply of such services is 1 st February being earlier of date of payment, or date immediately following 60 days since issue of invoice by the supplier. Since the time of supply of renting of motor car services in the given case does not fall in January, tax liability on the same does not arise in said month. Further, ITC on renting of motor car services received is blocked since the recipient - Aashima Ltd. is not in the same line of business.] -- -- -- Total ITC available 45,000 45,000 --

Topics: Paper 3B: Goods and Services Tax

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