Nandita Pvt. Ltd., registered under GST in the State of Rajasthan, is engaged in making various supplies of goods and services. It also has a branch…

Computation of minimum net GST payable in cash by Nandita Pvt. Ltd. for the month of January S. No. Particulars Amount (₹) CGST (₹) SGST (₹) IGST (₹) (i) Forward derivatives contract [Forward derivative contracts where the settlement takes place by netting off the difference between the forward rate and market rate qualify as securities. Hence, they are neither goods nor services in terms of definitions of goods and services under sections 2(52) and 2(102). Thus, given transaction is not a supply.] 18,00,000 - - - (ii) Renting of dumpers to Dhanvarsha Builders [Not specifically exempt. Further, it is an inter-State supply since place of supply provided to registered person is location of recipient, i.e. Jharkhand.] 11,50,000 2,07,000 [11,50,000 × 18%] (iii) Supply of silk yarn [Tax on silk yarn supplied by a person who manufactures it from raw silk to a registered person is payable under reverse charge by the recipient. Thus, tax is payable by Gajodhar Traders.] 80,00,000 - - - (iv) Accommodation service provided to students [Supply of accommodation services having value of supply less than or equal to 20,000 per person per month is exempt provided that the accommodation service is supplied for a continuous period of atleast 90 days.] 2,00,000 - - - (v) Supply of goods to an agent [Supply of goods by the company to agent qualifies as supply in terms of para 3 of Schedule I of the CGST Act, 2017 since agent issues invoice to customers in its own name. Further, it is an intra-State supply since place of supply is location where movement of goods terminates, viz. Rajasthan. Moreover, value of supply of goods to agent is: (i) Open Market Value (₹ 5,40,000) or (ii) 90% of the price of goods of like kind and quality charged by recipient to unrelated customer - 5,04,000 (5,60,000 × 90%), at the option of supplier [Rule 29]. Since the company wishes to choose most beneficial option, least of the two values has been taken.] 5,04,000 45,360 [5,04,000 × 9%] 45,360 [5,04,000 × 9%] (vi) Inter-State transfer of taxable goods to Uttarakhand branch [ITC of goods received for promotional gifting is not available to branch, as ITC in respect of goods disposed of by way of gift or free samples is blocked in terms of section 17(5)(h). Since recipient -branch is not eligible for full ITC and goods are not intended for further supply as such by it, value of supply of said goods shall be open market value (Rule 28).] 2,80,000 50,400 [2,80,000 × 18%] Total output tax 45,360 45,360 2,57,400 Less: ITC available for set off [Refer Working note below] 9,340 9,340 6,172 Minimum net GST payable in cash (rounded off) 36,020 36,020 2,51,228 Working Note - Computation of eligible ITC available for set off S. No. Particulars Amount (₹) CGST (₹) SGST (₹) IGST (₹) (i) Event management services availed [It is intra-State supply as place of supply of event management services provided to registered person is location of recipient, i.e. Rajasthan. Further, ITC of services used in course or furtherance of business is available.] 5,50,000 49,500 [5,50,000 × 9%] 49,500 [5,50,000 × 9%] (ii) Machine 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. Jharkhand. However, ITC of the same will not be available since the recipient of said intra-State supply is located in a different State than that of place of supply 1 .] 2,00,000 - - - (iii) Electric scooters purchased [It is inter-State supply since place of supply is Jaipur and supplier is in Kerala. Further, ITC on two-wheelers with engine capacity upto 25cc, used in course or furtherance of business, is not blocked in terms of section 17(5)(a) since they are excluded from the definition of motor vehicle.] 1,80,000 32,400 [1,80,000 × 18%] (iv) Penal charges [Penal charges levied by regulatory entities including banks, in compliance with RBI directions are essentially in the nature of charges for breach of terms of contract and hence, no GST is payable on the same 2 . Thus, no ITC is available.] 26,00,000 Total ITC 49,500 49,500 32,400 Computation of eligible ITC available for set-off Common credit [All inward supplies are used commonly for exempt and taxable supplies.] 49,500 49,500 32,400 Less: ITC attributable to exempt supplies [Common credit × (Exempt turnover/ Total turnover)] to be reversed [Common credit × 82,18,000/1,01,52,000] Refer note below (40,070) (40,070) (26,228) Eligible ITC available for set off 9,430 9,430 6,172 Note - As per section 17(3), value of exempt supply includes supplies on which the recipient is liable to pay tax on reverse charge basis and transactions in securities. As per explanation to Chapter V of the CGST Rules, the value of exempt supply for security is 1% of the sale value of such security. Therefore, value of exempt supply in the given case will be the sum of value of output supply on which tax is payable under reverse charge (₹ 80,00,000), accommodation service provided to students (₹ 2,00,000), and value of supply of securities (1% of 18,00,000 = 18,000), which comes out to be - 82,18,000. Total turnover = 1,01,52,000 (₹ 18,00,000 +11,50,000 +80,00,000 +2,00,000 +5,04,000 +2,80,000) 1 Circular No. 170/02/2022 GST dated 06.07.2022 2 Circular No. 245/02/2025 GST dated 28.01.2025