Mr. Karan, a registered supplier in Kochi (Kerala State) has provided the following information of supply received/made during the month of…

CA Intermediate · Taxation · PYQS · September 2025
Mr. Karan, a registered supplier in Kochi (Kerala State) has provided the following information of supply received/made during the month of February, 2025: S. No. Particulars Amount (₹) (i) On 5th February 2025 Supplied goods to Jaara Enterprises, an unregistered partnership firm in Bikaner, Rajasthan. Discount of 10% offered to Jaara Enterprises on this invoice price of 2,00,000 as per pre agreement but not recorded in the invoice. Discount given for this invoice by way of credit note on 28th February 2025. 2,00,000 (ii) Made a supply of machinery to Cool & Co. registered in the State of Kerala. The machinery was installed at Factory site of Cool & Co. in the State of Tamil Nadu as per agreement. 6,00,000 (iii) Provided supply of online educational journals on monthly basis to St. Peters High School, situated in the State of Kerala. 25,000 (iv) Provided renting of his own commercial property situated at Thrissur (Kerala) to Safe Volt Limited of Kerala, in which he is an independent director. 70,000 (v) Supplied a consignment of Office uniform to Rasool Tea Estate situated at Munnar (Kerala). 2,00,000 (vi) Payment made to Mr. Manish, a contractor of Bengaluru for construction of staff quarters within the factory premises at Kochi. Staff quarters capitalised in the books and no depreciation charged. 1,25,000 Mr. Karan provided the following additional information: (i) During the month, supply for 13,000 was made against redemption of foods coupons issued during December 2024 for use against specific Pizza available in a food court run by Mr. Karan in Kochi, coupons were valid till 28.02.2025. (ii) In respect of supply made to Munnar, being a hill station, local levy of Green tax of 10,000 was charged by Mr. Karan in the invoice made to Rasool Tea Estate. (iii) Mr. Karan was advised by his accountant that since he is a director in the company to whom he let out his property, GST is to be paid by the company under Reverse Charge Mechanism [RCM]. (iv) Assume rate of CGST, SGST and IGST are 9%, 9% and 18% respectively for both inward and outward supplies of goods and services, except where otherwise provided. (v) All the amount given above in the table are exclusive of GST and Green Tax or any other tax wherever applicable. (vi) Subject to the information given above, conditions for availing ITC have been complied with. (vii) All the inward and outward supplies to be considered in the course of Intra-State except where information provided to determine the Place of supply. (viii)Assume all the inward supplies used for the taxable outward supplies only. (ix) There was opening balance of Input Tax Credit (ITC) of 1,50,000 of IGST and - 30,000 of CGST and Nil of SGST. From the information given above, you are required to compute the net minimum GST liability payable in cash after deduction of ITC by Mr. Karan for the month of February 2025. Note: Correct relevant legal provision and individual tax amount (if any) for each item should form part of your answer.

Suggested Answer and Working Notes:

Computation of minimum net GST liability payable in cash by Mr. Karan for the month of February 2025: Particulars Value (₹) CGST (₹) SGST (₹) IGST (₹) Supplied goods to Jaara Enterprises [Inter State supply as the place of supply is Rajasthan being the location of the goods at the time when the movement of goods terminates. Further, post supply discount of 20,000 (₹ 2,00,000 × 10%) is deductible from value of supply since such discount is as per pre-agreement.] 1,80,000 [2,00,000-20,000] - - 32,400 [1,80,000 x 18%] Supply of machinery to Cool & Co. [Inter-State supply as place of supply is Tamil Nadu being the place of installation of machinery.] 6,00,000 - - 1,08,000 [6,00,000 x 18%] Supply of online educational journals to St. Peters High School [Supply of online educational journals to an institution providing services by way of education up to higher secondary school is taxable and not exempt. Further, it's an intra-State supply as place of supply is Kerala being location of recipient.] 25,000 2,250 [25,000 x 9%] 2,250 [25,000 x 9%] - Renting of commercial property to Safe Volt Limited [Intra-State supply as place of supply is Kerala being location of immovable property. Further, it is taxable under forward charge and not payable under reverse charge since Mr. Karan rented his commercial property in his personal capacity and not in the capacity of a director. Further, it is taxable under forward charge since Mr. Karan supplier of services of renting of commercial property is a registered person.] 70,000 6,300 [70,000 × 9%] 6,300 [70,000 × 9%] - Supply of consignment of office uniform to Rasool Tea Estate [Green tax of 10,000 is includible in the value of supply, since any taxes levied under any law for the time being in force except: (i) under the CGST/SGST/ UTGST Act and GST Compensation Cess Act OR (ii) under GST law, if charged separately by the supplier, is includible in the value of supply. Further, it's an intra-State supply as place of supply is Kerala being location of recipient.] 2,10,000 [2,00,000 + 10,000] 18,900 [2,10,000 x 9%] 18,900 [2,10,000 x 9%] - Supply against redemption of foods coupons issued during December 2024 [No tax is payable in February. Since supply was identifiable at the time of issue of voucher. Hence, the time of supply was the date of issue of voucher, i.e. December 2024.] 13,000 - - - Total output tax liability 27,450 27,450 1,40,400 Less: ITC available [Refer Working Note below] IGST credit is first utilized for payment of IGST and then for payment of SGST (1,40,400) CGST credit is utilized for payment of CGST liability. (27,450) Remaining CGST credit cannot be utilized for payment of SGST as cross utilization of CGST and SGST is not permissible.] (9,600) Minimum net GST liability payable in cash Nil 17,850 Nil Working Note: Computation of ITC available for set off Particulars Value (₹) CGST (₹) SGST (₹) IGST (₹) Opening ITC -- 30,000 Nil 1,50,000 Payment made for construction of staff quarters within the factory premises [ITC in respect of works contract services used for construction of an immovable property (other than plant and machinery) is blocked ] 1,25,000 Nil Nil - Total 30,000 Nil 1,50,000

Topics: Paper 3B: Goods and Services Tax

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