MS Ltd. is a company registered under GST. Its turnover in the previous financial year was 2 crores. During the month of October, the company has…

Computation of net GST payable in cash of MS Ltd. for October Particulars CGST (in lakh) SGST (in lakh) IGST (in lakh) GST liability for Product Alpha 54 54 72 Post-supply discount on Product Alpha [In the given case, discount given after effecting the supply is not in terms of an agreement that existed at the time of supply. Therefore, discount is not allowed as deduction from value of supply.] Nil Nil Sale of van by auction used for travel of director [In case of a registered person who has claimed depreciation under section 32 of the Income-Tax Act, 1961 on the said goods, value = Consideration received - Depreciated value on the date of supply.] 0.006 [0.1 × 6%] 0.006 [0.1 × 6%] Transportation cost charged on the product [Supply of goods and transport service is a composite supply as the transportation cost is charged at a flat rate from all customers irrespective of the distance involved. Therefore, rate of principal supply (product) viz. 9% CGST and SGST each is charged on intra-State supply and 18% IGST is charged on inter-State supply.] 0.54 [6 × 9%] 0.54 [6 × 9%] 0.72 [4 × 18%] Total output tax liability 54.546 54.546 72.72 Less: ITC set off 1 [Refer working note (1) below] [IGST credit is first utilized for payment of IGST liability and then for payment SGST and CGST liability in equal proportion] (35.915) (35.915) (72.72) After exhausting IGST credit, CGST and SGST credit is to be utilized. ITC of CGST cannot be utilized for payment of SGST and vice versa. (18.631) (18.631) GST payable in cash [A] Nil Nil Nil GST under reverse charge payable in cash [Refer working note (2) below] [B] 0.153 0.153 [Tax payable under reverse charge, being not an output tax, cannot be set off against ITC and thus, will have to be paid in cash.] Total GST payable in cash = [A]+[B] 0.153 0.153 1 Since ITC of IGST can be utilized for payment of CGST and SGST liability in any proportion and in any order, there can be multiple ways of utilizing IGST credit for payment of CGST and SGST. Working notes: (1) Computation of ITC available with MS Ltd. for October Particulars CGST (in lakh) SGST (in lakh) IGST (in lakh) Eligible credit on inputs and input services for the month 20 20 145 Ball bearings stolen [ITC on stolen goods is blocked. Hence, ITC taken on stolen ball bearings needs to be reversed.] (0.45) Input tax on cosmetic and plastic surgery of CEO of company [ITC on cosmetic and plastic surgery is blocked if the same are not used for making the same category of outward supply or as an element of a taxable composite/ mixed supply. Hence, the same is not credited to the Electronic Credit Ledger] Nil Nil Nil Audit fee [Audit fee is a service used in the course or furtherance of business and thus, credit of input tax paid on such service will be available.] 0.054 [0.6 × 9%] 0.054 [0.6 × 9%] Rent paid to Municipality 0.135 [1.5 × 9%] 0.135 [1.5 × 9%] Sitting fee paid to whole time director [0.20 × 9%] 0.018 [0.20 × 9%] 0.018 [0.20 × 9%] Total 20.207 20.207 144.55 (2) Tax payable under reverse charge Particulars CGST (in lakh) SGST (in lakh) IGST (in lakh) Rent paid to Municipality [Tax on renting of immovable property services supplied by local authority to a registered person is payable under reverse charge.] 0.135 0.135 Sitting fee paid to whole time director [Services provided by employee to employer in the course of his employment are not a supply. Hence, salary paid to director is not taxable. However, sitting fee is a consideration for the services provided beyond course of employment and hence, is taxable. Further, tax on sitting fee paid to director is payable under reverse charge.] 0.018 0.018 Total tax payable under reverse charge 0.153 0.153