Poorva Impex Ltd., a registered entity under GST in the State of Maharashtra, is engaged in making various supplies. It is not engaged in…

13. Computation of minimum net GST payable in cash for the month of April Particulars Amount (₹) CGST (₹) SGST (₹) IGST (₹) GST payable under forward charge Promotion and marketing of information technology services to Poorva Inc. [Since the place of supply of promotion and marketing services is the location of recipient – Poorva Inc., viz, outside India, they qualify as export of services by Poorva Impex Ltd. to Poorva Inc. since all the conditions of section 2(6) of the IGST Act, 2017 are complied with 1 . Further, all exports made by Poorva Impex Ltd. are through furnishing of LUT without payment of IGST.] 20,00,000 - - - Supply of printed letter cards [Since letter cards are supplied by the printer using its own physical inputs to print the logo supplied by the recipient, it is a composite supply wherein the predominant/ principal supply is supply of goods. It is an intra-State supply since the place of supply is Maharashtra being the location where movement of goods terminates, in terms of section 10(1)(a).] 8,72,000 52,320 [8,72,000 × 6%] 52,320 [8,72,000 × 6%] - Intra-State supply of raw cotton [Taxable under forward charge in terms of Notification No. 4/2017 CT (R) dated 28.06.2017. Reverse Charge mechanism is not applicable since here, raw cotton is being sold by a person other than agriculturist.] 5,00,000 12,500 [5,00,000 × 2.5%] 12,500 [5,00,000 × 2.5%] - Maintenance services provided to Municipal Corporation of Greater Mumbai [Taxable, since the value of supply of goods constitutes more than 25% of the value of composite supply of goods and services provided to the local authority [Notification No. 12/2017 CT (R) dated 28.06.2017]. Further, principal supply is supply of maintenance services. It is an intra-State supply since the place of supply is Maharashtra being location of the recipient, in terms of section 12(2) of the IGST Act, 2017.] 1,20,000 10,800 [1,20,000 × 9%] 10,800 [1,20,000 × 9%] - Inter-State service of giving motor vehicles on hire [Services by way of giving on hire to a State Transport Undertaking (STU), a motor vehicle are exempt only when such motor vehicle is meant to carry more than 12 passengers. Thus, in the given case, service of giving cars on hire is not exempt [Notification No. 9/2017 IT (R) dated 28.06.2017]. Further, it is an inter-State supply as place of supply being location of recipient is Gujarat, in terms of section 12(2) of the IGST Act, 2017.] 3,00,000 - - 54,000 [3,00,000 × 18%] Total output tax 75,620 75,620 54,000 Less: ITC available for set off [Refer working note] [ITC of IGST is utilized for payment of IGST liability and ITC of CGST and SGST is utilized for payment of CGST and SGST liability respectively.] (18,000) (18,000) (54,000) Net GST 57,620 57,620 Nil GST payable under reverse charge Metal scrap purchased [Tax on metal scrap purchased by a registered person from an unregistered person is payable under reverse charge in terms of Notification No. 4/2017 CT (R) dated 28.06.2017.] 2,00,000 18,000 [2,00,000 × 9%] 18,000 [2,00,000 × 9%] - Information technology services procured from Thomas Inc. through electronic mode [Tax on information technology services imported is payable under reverse charge vide Notification No. 10/2017 IT (R) dated 28.06.2017.] 1,50,000 - - 27,000 [1,50,000 × 18%] Corporate guarantee provided by Poorva Inc. [Where corporate guarantee is provided by the foreign/ overseas entity for a related entity located in India, GST would be payable under reverse charge mechanism, by the recipient of service, i.e., the related entity located in India. Further, since supplier foreign/ overseas entity is unregistered, self-invoice shall be issued by it in terms of section 31(3)(f). Moreover, if a supplier gives a corporate guarantee on behalf of a related party located in India for securing of credit facilities from a bank/financial institution by such related party, as per rule 28(2), the value of service is 1% of the amount of guarantee offered per annum or actual consideration, whichever is higher, i.e. 1% of 1.5 crore; invoice is raised at said value. Since Poorva Impex Ltd. is eligible for full ITC, value of supply will be value declared in the invoice [Proviso to rule 28(2)]. 1,50,000 - - 27,000 [1,50,000 × 18%] Total net GST payable in cash 75,620 75,620 54,000 Working Note - Computation of eligible ITC available for set off Particulars Amount (₹) CGST (₹) SGST (₹) IGST (₹) Machines purchased [It is intra-State supply since place of supply in case of goods not involving movement of goods is location of goods at the time of delivery to recipient, viz. Gujarat, in terms of section 10(1)(c) of the IGST Act, 2017. However, ITC of the same will not be available since the recipient of said intra-State supply is located in a different State / UT than that of place of supply 2 .] Nil - - - Metal scrap purchased [It is intra-State supply since place of supply is Maharashtra being the location of the goods at the time at which the movement of goods terminates for delivery to the recipient, in terms of section 10(1)(a) of the IGST Act, 2017. ITC is available since said goods are being used in course or furtherance of business.] 2,00,000 18,000 [2,00,000 × 9%] 18,000 [2,00,000 × 9%] - Information technology services procured from Thomas Inc. through electronic mode [The place of supply is Maharashtra being location of the recipient, in terms of section 13(2) of the IGST Act, 2017. Supply of any services where supplier is outside India and the recipient and place of supply is in India, qualifies as import of services. Further, in case of import of service, tax is payable by the person importing such service vide Notification No. 10/2017 IT (R) dated 28.06.2017. ITC is available since said services are being used in course or furtherance of business.] 1,50,000 - - 27,000 [1,50,000 × 18%] Machinery sent for carrying out repair work to George Inc. [Since the place of supply of repair services is outside India being the location where the services are actually performed in terms of section 13(3) of the IGST Act, 2017, said services are not amenable to tax.] Nil - - - Corporate guarantee provided by Poorva Inc. [ITC is available since said services are being used in course or furtherance of business.] 1,50,000 - - 27,000 [1,50,000 × 18%] Eligible ITC available for set off [ITC on goods and services issued for making taxable outward supplies including zero-rated supplies (promotion and marketing of information technology services provided to Poorva Inc.) is fully eligible for set-off, in terms of section 17.] 18,000 18,000 54,000