M/s Nithilan & Co., a partnership firm, registered supplier under GST in Bengaluru (Karnataka State), has provided the following information for…

CA Intermediate · Taxation · MTP · September 2025
M/s Nithilan & Co., a partnership firm, registered supplier under GST in Bengaluru (Karnataka State), has provided the following information for the month of October: S. No. Details of transactions Amount (₹) (i) Intra-State taxable supply of Direct Selling Agent (DSA) service to public sector Bank. 2,50,000 (ii) Services provided to a Governmental authority by way of sanitation conservancy 99,900 (iii) Rent paid to a residential dwelling taken for running an office for providing DSA services; Owner of the residential property was not registered under GST; This is an intra-State supply availed; 25,000 (iv) Purchased a car for the official use of managing partners of the Firm for business use (Inter-State purchase) 9,00,000 (v) Availed Information Technology services for their business from Partner's friend Mr Colin Hayes from Melbourne, Australia. Mr. Hayes refused to take any consideration. Open Market value of said service was - 1,25,000. (Inter-State transactions) Nil (vi) Provided training and performance appraisal services in Bengaluru to following person: (a) Bhavya Private Limited, a registered supplier in the State of Kerala (b) Ujjwal Cones, a proprietorship concern of Rajasthan, which was not registered under GST 3,00,000 1,00,000 Note: (i) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively. (ii) All the amounts given above are exclusive of taxes. (iii) All the conditions necessary for availing the ITC have been fulfilled. (iv) There was no opening balance of any input tax credit. (v) The turnover of M/s Nithilan & Co was 2 crore in the previous financial year. Compute the net GST payable in cash, by M/s Nithilan & Co. for the month of October. Correct legal provisions should form part of your answer. (10 Marks)

Suggested Answer and Working Notes:

Computation of net GST payable in cash Particulars CGST @9% (₹) SGST @9% (₹) IGST @ 18% (₹) Output tax liability [Refer Working Note] 40,491 40,491 54,000 Less: ITC available 2,250 2,250 - Net GST payable 38,241 38,241 54,000 Add: Tax Payable under reverse charge to be paid in cash [The amount available in the electronic credit ledger may be used for making any payment towards output tax. Further, output tax means the tax chargeable on taxable supply of goods and/or services but excludes tax payable on reverse charge basis. Thus, tax liability under reverse charge has to be paid in cash] 2,250 2,250 - Total GST Payable in cash 40,491 40,491 54,000 Working Note Computation of total value of taxable supplies made by M/s Nithilan & Co. for the month of October Particulars Amount (₹) CGST (₹) SGST (₹) IGST (₹) Taxable under Forward Charge Intra-State taxable supply of DSA service [Since DSA services are provided by partnership firm, so taxable under forward charge] 2,50,000 22,500 22,500 Services provided to a Governmental authority [Specifically exempt under GST] 99,900 - - Information Technology services [Import of services from a non-related person without consideration, in the course or furtherance of business is not a supply.] Nil Training and performance appraisal services to Bhavya Private Limited [Taxable; The place of supply of services in relation to training and performance appraisal to a registered person, shall be the location of such person. Thus place of supply is Kerala and hence an inter-State transaction.] 3,00,000 54,000 Training and performance appraisal services to Ujjwal Cones. [Taxable, The place of supply of services in relation to training and performance appraisal to an unregistered person, shall be the location where the services are actually performed. Thus, place of supply is Bengaluru, hence Intra-State transaction] 1,00,000 9,000 9,000 Total output tax payable under forward charge 63,000 40,491 40,491 54,000 Computation of ITC that can be availed by M/s Nithilan & Co. for the month of October Particulars CGST (₹) SGST (₹) IGST (₹) Rent paid to residential dwelling [ITC not available as raw material is not received in October] 2,250 2,250 Purchase of car [Blocked credit in terms of section 17(5) of the CGST Act, 2017] Nil Total ITC 2,250 2,250

Topics: Paper 3B: Goods and Services Tax

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