Mr. Dinkar is the owner of Dinkar Associates which is registered in Ahmedabad, Gujarat. He is engaged in supply of various goods and services in the…

13. Computation of net GST payable in cash, by Mr. Dinkar Particulars Value (₹) CGST (₹) SGST (₹) IGST (₹) GST payable on outward supplies Transfer of tenancy rights [Transfer of tenancy rights to a new tenant against consideration in the form of tenancy premium is taxable even though stamp duty and registration fee have been paid on the same (Circular No. 44/2018 CT dated 02.05.2018). It is an intra-State supply since place of supply is location of immovable property being Ahmedabad, Gujarat.] 8,00,000 72,000 (8,00,000 x 9%) 72,000 (8,00,000 x 9%) Hiring out excavators and dumpers including operators [Taxable since renting of trucks and other freight vehicles with driver for a period of time is a service of renting of transport vehicles (with operator) and not service of transportation of goods by road. Further, since the excavators and dumpers are invariably hired out along with operators and the operators are supplied only when the excavators/ dumpers are hired out, it is a case of composite supply under section 2(30) wherein the principal supply is the hiring out of the excavators and dumpers. As per section 8(a), the composite supply is treated as the supply of the principal supply. Therefore, the supply of manpower for operation of the excavators/ dumpers will also be taxed at the rate applicable for hiring out of the excavator and dumpers (principal supply). Further, it is a taxable intra-State supply since place of supply is location of recipient being Kuchchh, Gujarat.] 12,00,000 [10,00,000 + 2,00,000] 72,000 (12,00,000 x 6%) 72,000 (12,00,000 x 6%) Goods supplied to SEZ unit of Choksi Ltd. [Supply to SEZ unit is a zero-rated supply in terms of section 16(1) (b) of the IGST Act, 2017. No IGST is payable since Mr. Dinkar makes all zero-rated supplies under LUT/bond.] 10,00,000 Nil Supply of goods to Choksi Ltd., Gujarat [It is a taxable intra-State supply since place of supply is location of goods when movement of such goods terminates, viz., Jamnagar, Gujarat. 25,00,000 [35,00,000 - 10,00,000] 2,25,000 (25,00,000 × 9%) 2,25,000 (25,00,000 × 9%) Advance received for the consultancy services to be provided to Mr. Krishna [Tax on the services to be provided is payable at the time of receipt of advance. Since the place of supply is location of recipient, i.e. Gujarat, it is an intra-State supply.] 1,50,000 13,500 (1,50,000 × 9%) 13,500 (1,50,000 × 9%) Export of goods to USA under LUT/bond [Export of goods outside India is a zero-rated supply in terms of section 16(1) (b) of the IGST Act, 2017. No IGST is payable since Mr. Dinkar makes all zero-rated supplies under LUT/bond.] 8,40,000 Nil High sea sales of heavy printing machinery imported from Japan [High sea sales is neither treated as supply of goods nor as supply of services in terms of para 8 (b) of Schedule III of the CGST Act, 2017.] Nil -- -- -- Goods purchased from Japan sold in China without bringing them into India [Third country shipments or triangular trade is neither treated as supply for goods nor as supply of services in terms of para 7 of Schedule III of the CGST Act, 2017.] Nil -- -- -- Total output tax 3,82,500 3,82,500 Nil Less: ITC [Refer working note below] [IGST credit has been utilized for payment of CGST and SGST liability in equal proportion. Thereafter, CGST credit and SGST credit have been utilized to pay the CGST liability and SGST liability respectively.] 81,350 (IGST) 3,01,150 (CGST) 81,350 (IGST) 3,01,150 (SGST) Net GST payable Nil Nil Nil Add: GST payable on inward supplies Imported raw material from Italy [Input tax, inter alia, includes IGST charged on import of goods, in terms of section 2(62). No separate levy of IGST will be there on the component of ocean freight paid by the foreign exporter to the foreign shipping line in the CIF contract by virtue of Union of India vs. Mohit Minerals Pvt. Ltd. 2022 (61) G.S.T.L. 257 (SC) since the Indian importer is liable to pay IGST on the 'composite supply', comprising of supply of goods and supply of services of transportation, insurance, etc. in a CIF contract. 9,00,000 1,62,000 (9,00,000 × 18%) Raw cotton purchased from Mr. Poonawala, Gujarat [It is an intra-State supply since the place of supply is location where movement of goods terminates, i.e. Gujarat, in terms of section 10(1)(a) of the IGST Act, 2017. ITC on goods used in course or furtherance of business is allowed in terms of section 16.] 12,00,000 1,08,000 (12,00,000 × 9%) 1,08,000 (12,00,000 × 9%) GST paid on monthly rent [In case of services used partly for the business purpose and partly for other purposes, ITC is restricted to so much of ITC as is attributable to the purposes of business. Thus, ITC for GST paid on only 2/3rd of monthly rent is available since GST paid on monthly rent attributable to personal purposes (one-third) is not allowed. Further, it is an intra-State supply since the place of supply of services provided in relation to an immovable property is location of immovable property, i.e. Gujarat in terms of section 12(3) of the IGST Act, 2017.] 35,00,000 2,10,000 (35,00,000 X 9%×2/3) 2,10,000 (35,00,000 X 9%×2/3) -- Total net GST payable in cash (CGST and SGST of 1,08,000 each will be paid in cash through GSTN portal and IGST of 1,62,000 will be paid in cash through ICEGATE portal while making customs clearance.) 1,08,000 1,08,000 1,62,000 Working Note - Computation of admissible ITC for February Particulars Value (₹) CGST (₹) SGST (₹) IGST (₹) Opening balance 35,000 35,000 Goods purchased as merchant exporter [It is an inter-State supply since the place of supply is Gujarat, i.e. location where the movement of goods terminates. Shravan Ltd. would have supplied the goods to merchant exporter - Mr. Dinkar - at concessional rate of IGST of 0.1% prescribed under Notification Nos. 41/2017 IT(R) dated 23.10.2017. Further, the merchant exporter is eligible to take ITC of concessional IGST so paid 1 .] 7,00,000 -- -- 700 Heavy printing machinery imported from Japan [No ITC is available since tax is not payable by Mr. Dinkar on the same since in case of high sea sales, IGST is paid by the last high sea sales buyer who clears the goods for home consumption by filing the bill of entry.] Nil -- -- -- Goods purchased from Jamsam Corporation, Japan [No ITC is available since tax is not payable by Mr. Dinkar on the same as goods do not become part of the landmass of the country.] Nil -- -- -- Sales commission paid to agent - Mr. Kenzo [Since service provider Mr. Kenzo is an intermediary in the given transaction, place of supply is location of supplier - Mr. Kenzo, i.e. outside India (Japan), in terms of section 13(8) (b) of the IGST Act, 2017. Since location of supplier and place of supply are outside India, tax is not payable on said transaction under reverse charge on said services.] 5,00,000 -- -- -- Imported raw material from Italy [Input tax, inter alia, includes IGST charged on import of goods, in terms of section 2(62). No separate levy of IGST will be there on the component of ocean freight paid by the foreign exporter to the foreign shipping line in the CIF contract by virtue of Union of India vs. Mohit Minerals Pvt. Ltd. 2022 (61) G.S.T.L. 257 (SC) since the Indian importer is liable to pay IGST on the 'composite supply', comprising of supply of goods and supply of services of transportation, insurance, etc. in a CIF contract. 9,00,000 1,62,000 (9,00,000 × 18%) Raw cotton purchased from Mr. Poonawala, Gujarat [It is an intra-State supply since the place of supply is location where movement of goods terminates, i.e. Gujarat, in terms of section 10(1)(a) of the IGST Act, 2017. ITC on goods used in course or furtherance of business is allowed in terms of section 16.] 12,00,000 1,08,000 (12,00,000 × 9%) 1,08,000 (12,00,000 × 9%) GST paid on monthly rent [In case of services used partly for the business purpose and partly for other purposes, ITC is restricted to so much of ITC as is attributable to the purposes of business. Thus, ITC for GST paid on only 2/3rd of monthly rent is available since GST paid on monthly rent attributable to personal purposes (one-third) is not allowed. Further, it is an intra-State supply since the place of supply of services provided in relation to an immovable property is location of immovable property, i.e. Gujarat in terms of section 12(3) of the IGST Act, 2017.] 35,00,000 2,10,000 (35,00,000 X 9%×2/3) 2,10,000 (35,00,000 X 9%×2/3) -- Total ITC available 3,53,000 3,53,000 1,62,700 Note – Since as per section 49(5) read with rule 88A, ITC of IGST can be utilised towards payment of CGST and SGST in any proportion and in any order, the ITC of IGST of 1,62,700 can be set off against the CGST and SGST liability in any proportion and in any order. In above answer, ITC of IGST has been set off in equal proportion against the payment of CGST and SGST liability. However, multiple answers are possible to given question owing to multiple ways of utilizing the ITC of IGST for payment of CGST and SGST liability.