Sharkfin Limited, a registered dealer in Patna (Bihar), is engaged in various types of supplies. It is not engaged in renting of cars business. The…

CA Intermediate · Taxation · MTP · September 2025
Sharkfin Limited, a registered dealer in Patna (Bihar), is engaged in various types of supplies. It is not engaged in renting of cars business. 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) 7,50,000 6,00,000 (ii) The company pledged its 5% equity shares to the merchant banker for the purpose of proposed initial public offer. (iii) Stock transfer of goods worth - 58,000 without consideration to its branch at Gaya (Bihar). Branch has been declared as an additional place of business in the registration certificate. (iv) Outward supply of services of milling of paddy into rice (Intra-State) 2,00,000 (v) Outward supply of services of giving trucks on hire to a Governmental authority (Intra-State) 1,50,000 Additional Information: (i) All the amounts given above are exclusive of taxes, wherever applicable. (ii) Regarding pledging of shares, the face value of shares is 5,00,000. The market value of shares is 8,00,000. (iii) Rate of GST applicable on various supplies are as follows: Nature of supply CGST SGST IGST Car rental service 2.5% 2.5% 5% Transportation of passengers by air 2.5% 2.5% 5% All other inward and outward supplies 9% 9% 18% You are required to calculate the total output tax liability of Sharkfin Limited for the month of January, 2024.

Suggested Answer and Working Notes:

Computation total output tax liability of Sharkfin 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.] 1,08,000 [6,00,000 × 18%] Pledging of 5% equity shares to the merchant banker [Supply includes supply of goods and services. Shares being securities are neither goods nor services. Thus, transfer of shares which is neither goods nor services is not a supply.] Nil Intra-State stock transfer to Gaya Branch with no separate registration. [Stock transfer between 2 units of a legal entity under single registration is not a deemed supply under GST and hence, the same is not liable to tax under GST since branch with same GSTIN is not a distinct person.] - - Services of milling of paddy into rice. [Milling of paddy into rice cannot be considered as an intermediate production process in relation to cultivation of plants for food, fibre or other similar products or agricultural produce. Thus, it is not eligible for exemption.] 18,000 [2,00,000 x 9%] 18,000 [2,00,000 x 9%] Services of giving trucks on hire to a Governmental authority [Services by way of giving motor vehicles on hire to a Governmental authority are taxable.] 13,500 [1,50,000 x 9%] 13,500 [1,50,000 x 9%] Total output tax Liability 67,500 67,500 1,08,000

Topics: Paper 3B: Goods and Services Tax

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