M/s Poorvi Ltd, a registered supplier of various goods and services, provided the following information pertaining to GST paid on inward supplies…

CA Intermediate · Taxation · PYQS · May 2025
M/s Poorvi Ltd, a registered supplier of various goods and services, provided the following information pertaining to GST paid on inward supplies for the month of August, 2024. Sr No. Particulars GST Paid (₹) 1. Purchased goods which are used for activities related to his obligation under corporate social responsibility referred to in section 135 of The Companies Act, 2013. 3,00,000 2. Purchased raw material worth - 5,90,000 including GST in 5 lots. 3. lots of raw material worth - 3,00,000 excluding GST received in the current month and remaining lots will be received in the month of September, 2024. 90,000 3. Company paid for outdoor catering expenses for the lunch of its factory employees during the lunch hours as per the policy of the company. There is no legal obligation to provide such lunch facility to the employees. 50,000 4. Purchased goods from M/s Om Traders -all goods and invoices were received by the company in August 2024, but one invoice out of these invoices has not been furnished by the supplier in the statement of outward supplies (using IFF). The GST paid on the invoice not furnished is 50,000. 2,00,000 5. Purchased raw material to manufacture finished goods. Such finished goods to be sold to potential customers under Scheme 'Buy one get one free'. 1,50,000 Compute the amount of net ITC available to M/s Poorvi Ltd. for the month of August 2024 with necessary explanations for the treatment of all the items in the table as per the provision of the CGST Act, 2017 or CGST Rules, 2017 wherever applicable. Subject to information given above, all other conditions necessary for availing the ITC have been fulfilled.

Suggested Answer and Working Notes:

Computation of net ITC available to M/s Poorva Ltd. for August 2024 Particulars ₹ 1. Goods used for activities related to corporate social responsibility [ITC in respect of goods used for activities relating to obligations under corporate social responsibility (CSR) is not available under section 17 of the CGST Act, 2017 as the same is blocked.] - 2. Raw material purchased in lots [When goods are received in lots, ITC can be taken only upon receipt of the last lot]. - 3. Outdoor catering expenses [ITC on outdoor catering services is blocked as ITC is not available under section 17 since such services are being provided by employer to employee without any statutory obligation.] - 4. Goods purchased from M/s Om Traders [₹ 2,00,000 - 50,000] [ITC can be availed only if the details of the invoice have been furnished by the supplier in Statement of outward supplies or GSTR-1 OR using Invoice Furnishing Facility (IFF). Thus, ITC of GST amounting to 50,000 paid on supply in respect of which the details of invoice have not been furnished, is not available.] 1,50,000 5. Raw material ["Buy one get one free" offer is not an individual supply of two goods, it is supply of two goods for the price of one. Thus, ITC is available on the inputs used in relation to supply of goods as part of said offer.] 1,50,000 Total ITC 3,00,000

Topics: Paper 3B: Goods and Services Tax

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