SSP Ltd., a registered person under GST in Gandhinagar (Gujarat), is engaged in making various supplies of goods and services. It provides the…

CA Intermediate · Taxation · PYQS · May 2026
SSP Ltd., a registered person under GST in Gandhinagar (Gujarat), is engaged in making various supplies of goods and services. It provides the following details regarding the transactions undertaken in the month of October 2025: Sr. No. Outward transactions Amount (₹) (i) Supply of goods to Mr. Kartik of Bharuch (Gujarat) who is an unregistered person. Out of supply of goods for 6,00,000,1,00,000 is for exempted goods but no separate invoice has been made for exempt supply and both supplies were shown in the same invoice as different items. 6,00,000 (ii) Issued voucher on 15/10/2025 to AVC Ltd. of Kanpur (Uttar Pradesh) which can be redeemed against the combo of one personal pizza and one vegetable burger before 14/11/2025. 50,000 (iii) Provided local delivery service of goods through M/s B-kart, a registered Electronic Commerce Operator (ECO), registered in the State of Gujarat. 10,50,000 (iv) Stock transferred without consideration to branch of SSP Ltd. in Ahmedabad. Branch has a different GSTIN as it operates in a different segment. (The value of goods for such branch transfer can be taken as 3,50,000 as per Valuation Rules under the GST law) 3,50,000 (v) Provided pure labour services of construction of single commercial unit located in Rajasthan not forming part of any residential complex to a customer in Jaipur (Rajasthan). 6,00,000 Inward transactions Amount (₹) (i) Fees paid to CA Vijay Jain, a practicing Chartered Accountant of Mumbai, not registered under GST. (₹ 2,00,000 for the statutory audit and - 25,000 for certification work) 2,25,000 (ii) On 02/10/2025, SSP Ltd. purchased taxable goods valued - 15,00,000 from VXT Ltd., a registered person in State of Rajasthan. VXT Ltd. raised taxable invoice for 15,00,000. However, the SSP Ltd. paid only - 14,50,000 to VXT Ltd. as full and final payment on 25/10/2025 and the supplier VXT Ltd. issued a commercial/ financial credit note of 50,000 on the same date of payment. 15,00,000 Additional information: (i) SSP Ltd. paid - 75,000 as monthly rent to its full-time director Mr. Rajan Yadav, an unregistered person located in Ahmedabad (Gujarat) for using building owned by Mr. Rajan Yadav as Head Office of SSP Ltd. Mr. Rajan Yadav rented the building in his personal capacity. (ii) Accountant of SSP Ltd. is of the view that since local delivery service of goods is provided as Goods Transport Agency, it is exempt. He is also of the view that, even if the supply is considered taxable, SSP Ltd. is not required to pay tax, since M/s B-Kart is a registered Electronic Commerce Operator (ECO), and M/s B-Kart will pay the tax under the Reverse Charge Mechanism (RCM). (iii) All the figures are exclusive of GST, wherever applicable. (iv) All the conditions necessary for availing the input tax credit have been complied with and details of GST paid on inward supplies are available in GSTR 2B. There is an opening balance of CGST of 1,75,000 as input tax credit at the beginning of the month. (v) Assume that all the inward supplies are used for outward taxable supplies only. (vi) Turnover for the previous financial year was 290 lakh. (vii) Wherever details for determination of place of supply are not given in the question, it shall be taken as intra-State transaction. (viii)Assume the applicable rates of GST for all outward and inward supplies are IGST 18%, CGST 9% and SGST 9%. Compute the minimum net GST liability of SSP Ltd. to be paid in cash if any, for the month of October 2025, after utilising input tax credit. Note: Calculate GST for each point separately and legal explanations for each point should form part of the answer but detailed provision for place of supply is not required.

Suggested Answer and Working Notes:

Computation of minimum net GST liability of SSP Ltd. to be paid in cash, for the month of October, 2025 Particulars Value (₹) CGST (₹) SGST (₹) IGST (₹) GST payable on forward charge Supply of goods to Mr. Kartik, unregistered person [Tax is payable on taxable supply only and not on exempted supply. Further, it is an intra-State supply.] 5,00,000 [6,00,000 -1,00,000] 45,000 [5,00,000 × 9%] 45,000 [5,00,000 × 9%] - Voucher issued to AVC Ltd. [Vouchers are not supply as they are neither supply of goods nor supply of services.] 50,000 - - - Local delivery service provided through ECO – M/s B-kart)¹ [Even though local delivery services provided through an ECO are notified services, tax is not payable by ECO (M/s B-Kart) because supplier (SSP Ltd.) is registered. Thus, tax is payable by the supplier itself². 10,50,000 94,500 [10,50,000 × 9%] 94,500 [10,50,000 × 9%] - Stock transfer to Ahmedabad branch with different GSTIN [Since branch has a separate GSTIN, it is a distinct person. Thus, stock transfer to said branch without consideration also qualifies as supply. Further, it is an intra-State supply.] 3,50,000 31,500 [3,50,000 × 9%] 31,500 [3,50,000 × 9%] - Pure labour construction service for commercial unit [Pure labour services are exempt only when provided for construction of a single residential unit not forming part of residential complex. Since in the given case, pure labour services are being provided for construction of a commercial unit, same is not exempt. Further, it is an inter-State supply] 6,00,000 - - 1,08,000 [6,00,000 × 18%] Total output tax liability 1,71,000 1,71,000 1,08,000 Less: Total eligible ITC [Refer working note] IGST credit is first set off against IGST liability and then against SGST liability since CGST has opening balance of ITC. (1,62,000) (1,08,000) CGST and SGST credit is set off against the CGST and SGST liability respectively. (1,71,000) (6,750) Net GST payable Nil 2,250 Nil Add: GST payable under reverse charge [Tax payable under reverse charge, being not an output tax, cannot be set off against ITC and has to be paid in cash.] Rent paid for office building [Since commercial immovable property has been rented out by unregistered person to registered person, tax is payable under reverse charge.] 75,000 6,750 6,750 Minimum GST liability to be paid in cash 6,750 9,000 Nil Working Note: Computation of total ITC available for set off: Particulars Value (₹) CGST (₹) SGST (₹) IGST (₹) Opening Balance 1,75,000 - - Fees paid to practicing Chartered Accountant [Since supplier is not registered, no GST would have been charged and thus, no ITC is available. Further, tax on CA services is not payable under reverse charge even if supplier is unregistered.] 2,25,000 - - - Purchase of taxable goods from VXT Ltd. [Full ITC is available since commercial/financial credit note issued does not reduce the GST liability. Further, it is an inter-State supply.] 15,00,000 - - 2,70,000 [15,00,000 x 18%] Rent paid for office building³ [Since commercial immovable property has been rented out by unregistered person to registered person, tax is payable under reverse charge and ITC on same is available. It is an intra-State supply,] 75,000 6,750 [75,000 x 9%] 6,750 [75,000 x 9%] Total input tax credit⁴ available 1,81,750 6,750 2,70,000 ¹ Services by way of transportation of goods are exempt under GST. However, this exemption shall not apply to local delivery services provided by an Electronic Commerce Operator. ² The question clearly states that wherever details required to determine the place of supply are not given, the transaction should be treated as an intra-State supply. Since the recipient's location for the local delivery services is not provided in question, it is an intra-State supply. ³ Since director, Mr. Rajan Yadav, has provided services of renting of immovable property to the company - SSP Ltd. – in his personal capacity, reverse charge provisions are not applicable under Entry 6 of Notification No. 13/2017 CT (R) dated 28.06.2017. However, reverse charge provisions are applicable under Entry 5AB. ⁴ Although SSP Ltd. has made exempt supplies, full credit is admissible for set-off since it has been provided in question that all inward supplies are used only for outward taxable supply.

Topics: Paper 3B: Goods and Services Tax

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