Keshavrao is a mining contractor. He has crossed the threshold limit for registration in the preceding financial year and is now duly registered…

Division B: Descriptive Questions 1. Computation of tax payable in cash S. No. Particulars Amount (₹) CGST (₹) SGST (₹) IGST (₹) A. GST liability on outward supply (i) Consideration for services provided as an operating member to the Joint Venture [The operating member is providing the mining and exploration service to the joint venture, and thus, the consideration received therefor is not cost petroleum and hence, is liable to tax.] 15,00,000 1,35,000 (15,00,000 x 9%) 1,35,000 (15,00,000 x 9%) (ii) Compensation received in the form of petroleum silt, which, as per the contract with the Government, is part of cost petroleum [Cost petroleum is not a consideration for service to the Government and thus, is not taxable.] 8,00,000 Nil Nil Nil (iii) Sale of petroleum silt to a SEZ developer [Supply to SEZ developer is a zero-rated supply made under a bond/LUT and no tax is payable on the same.] 7,50,000 Nil Nil Nil (iv) Bond amount recovered from employees leaving employment before stipulated period [Not a supply since bond amount recovered is not a consideration for tolerating the act of such premature quitting of employment.] 75,000 Nil Nil Nil (v) 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 has been paid on the same.] 7,00,000 63,000 (7,00,000 x 9%) 63,000 (7,00,000 x 9%) (vi) Renting of dumpers including driver [Taxable.] 5,00,000 45,000 (5,00,000 x 9%) 45,000 (5,00,000 x 9%) Total tax liability on outward supplies 2,43,000 2,43,000 B. GST liability on inward supplies under reverse charge (RCM) (i) Professional services provided by senior advocate to Keshavrao, i.e. a business entity 1,50,000 13,500 (1,50,000 X 9%) 13,500 (1,50,000 x 9%) (ii) Renting of office provided by the State Government to Keshavrao (a registered person) 2,50,000 22,500 (2,50,000 X 9%) 22,500 (2,50,000 x 9%) (iii) Assignment of mining right by Government to Keshavrao (a registered person) 3,00,000 Total tax liability on inward supplies under reverse charge 36,000 36,000 3,00,000 C. Input tax credit (i) Opening balance 50,000 9,000 15,000 (ii) Inter-State purchase of goods and machinery [Since the goods and services are used for effecting taxable supplies] 8,00,000 40,000 (8,00,000 x 5%) (iii) Professional services from senior advocate 1,50,000 13,500 (1,50,000 x 9%) 13,500 (1,50,000 x 9%) (iv) Renting of office [including zero rated supplies, full ITC thereon will be allowed.] 2,50,000 22,500 (2,50,000 x 9%) 22,500 (2,50,000 x 9%) (v) Assignment of mining right 3,00,000 Total ITC 86,000 45,000 3,55,000 Note: [ITC may be availed for making zero rated supply even if such a supply is an exempt supply. Sale of petroleum silt, being a non-taxable supply, is an exempt supply but since it is also a zero-rated supply, ITC can be availed for making such supply.] D. Computation of tax payable in cash Particulars CGST SGST IGST Total tax liability on outward supplies 2,43,000 2,43,000 Less: ITC of IGST [Note: ITC of IGST to be used first before ITC of CGST and SGST] 1,57,000 1,98,000 Less: ITC of CGST and SGST 86,000 (CGST) 45,000 (SGST) Add: Reverse charge liability payable in cash without set off of ITC [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.] 36,000 36,000 3,00,000 Total tax liability payable in cash 36,000 36,000 3,00,000 Less: Balance of Electronic Cash Ledger (-)34000 Net minimum tax liability payable in cash 36,000 2,000 3,00,000