UrbanLedger Ltd., a registered supplier under GST in the State of Tamil Nadu, is engaged in providing various kinds of supplies of goods and…

CA Final · Indirect Tax Laws · MTP · May 2026
UrbanLedger Ltd., a registered supplier under GST in the State of Tamil Nadu, is engaged in providing various kinds of supplies of goods and services. It provides the following information for month of October of the current financial year: S. No. Particulars Amount (₹) OUTWARD SUPPLY: (i) Supplies a consignment of goods in the territorial water to M/s Vikram Industries, registered in Kerala. The said territorial waters is located at a distance of 12 nautical miles from the baseline of State of Kerala and 11 nautical miles from the baseline of State of Tamil Nadu. 5,00,000 (ii) Provided pure labour services of construction of a single commercial unit located in Delhi not forming part of any residential complex to a customer in Delhi. 26,00,000 (iii) Sold the goods to a party in Turkey 7,00,000 INWARD SUPPLY: (i) Goods received which are intended to be used for activities relating to company's obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013; 6,00,000 (ii) Purchased silk yarn (to be used as raw material) from Mr. Ravi, who manufactures silk yarn from raw silk. Mr. Ravi is registered in the State of Rajasthan. 8,00,000 (iii) Company was allotted an office on rent by the State Government 9,00,000 Notes: The company provided the following additional information related to above said transactions or otherwise: (i) The goods sold in Turkey were purchased from Taiwan and sold in Turkey without bringing them to India. Purchase value was - 5,00,000. (ii) The company supplied large paper rolls to Ford Mount School, Bengaluru (Karnataka), for printing of question papers for 2,50,000. As directed by the school, UrbanLedger Ltd. delivered the paper rolls at a printing press located in Trivandrum, Kerala. (iii) In the month of March of preceding financial year, company had availed services in an inter-State transaction with a taxable value of 9,00,000 and a tax rate of 18%. This transaction was liable to tax under reverse charge. Payment for the same to the supplier was not made till the current month (overdue for 181 days during October of the current financial year). However, tax due under the said transaction was paid to Government and input tax credit availed in the month of transaction itself. (iv) Turnover of UrbanLedger Ltd. for the precious financial year was 150 lakh. (v) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively for both inward and outward supply of goods and services involved. (vi) All the amounts given above are exclusive of the GST, wherever applicable. There is no opening balance of any input tax credit and all the conditions necessary for availing the input tax credit have been fulfilled except if mentioned otherwise and also that details of GST paid on inward supplies are available in GSTR 2B. (vii) Assume that all the inward supplies have been used only for taxable outward supply. Compute minimum net GST liability of UrbanLedger Ltd, to be paid in cash if any, after utilizing input tax credit if any, for the month of October of the current financial year. Note: Working notes along with legal reasoning of each item should form part of your answer. (14 Marks)

Suggested Answer and Working Notes:

Computation of minimum net GST liability of UrbanLedger Ltd. to be paid in cash for the month of October Particulars Amount (₹) CGST (₹) SGST (₹) IGST (₹) Output tax payable under forward charge Supply of consignment in territorial waters [Where supply is in territorial waters, place of supply is deemed to be in coastal State where nearest point of the appropriate baseline is located. Therefore, place of supply will be in Tamil Nadu and hence, supply will be intra-State supply] 5,00,000 45,000 [5,00,000 x 9%] 45,000 [5,00,000 x 9%] Pure labour services [Since pure labour services provided for construction of only residential unit are exempt, such services provided for construction of commercial unit are taxable. Further, it is an inter-State supply since place of supply is location of immovable property, viz. Delhi.] 26,00,000 4,68,000 [26,00,000 x 18%] Supplied large paper rolls to Ford Mount School delivered at its premises in Bengaluru (Karnataka) for printing the question papers [Not exempt under Entry 66(a) of Notification No. 12/2017 CT (R) dated 28.06.2017. Further, since goods are delivered at Kerela printing press on the direction of Fort Mount School, Bengaluru (Bill to Ship to transaction), place of supply is Bengaluru, Karnataka and it is inter-State transaction.] 2,50,000 45,000 [2,50,000 x 18%] Goods purchased from Taiwan sold in Turkey without bringing into India [Neither treated as supply for goods nor as supply of services.] Nil -- -- -- Total output tax 45,000 45,000 5,13,000 Less: ITC available for set off [Refer note below.] [IGST credit is utilized for payment of IGST. CGST and SGST credit is first utilized for payment of CGST and SGST liability respectively and thereafter, for payment of IGST liability.] (45,000) -CGST (45,000) -SGST (1,44,000) -IGST (36000) -CGST (36000) -SGST Net output tax payable in cash Nil Nil 2,97,000 Add: GST payable under reverse charge Office received on rent from State Government to UrbanLedger Ltd. (a registered person) [Liable to tax under reverse charge mechanism.] 81,000 81,000 Tax on silk yarn supplied by a person who manufactures it from raw silk to a registered person is payable under reverse charge. 1,44,000 Minimum net GST payable for set off 81,000 81,000 4,41,000 Working note - Computation of eligible ITC available for set off S. No. Particulars Amount (₹) CGST (₹) SGST (₹) IGST (₹) (i) Goods to be used for CSR [ITC is blocked.] 6,00,000 -- -- -- (ii) Silk yarn purchased. [Inter-State supply since place of supply is location where movement of goods terminates, viz. Tamil Nadu. Further, ITC on goods to be used in course or furtherance of business is available.] 8,00,000 1,44,000 [8,00,000 x 18%] (iii) Office received on rent from Tamil Nadu Government. [Such services are intra-State supply since place of supply is Tamil Nadu (location of immovable property). Further, ITC on services used in course or furtherance of business is available.] 9,00,000 81,000 [9,00,000 x 9%] 81,000 [9,00,000 x 9%] (iv) Condition of payment of value of supply plus tax within 180 days does not apply to supplies on which tax is payable under reverse charge mechanism. (v) Goods purchased from Taiwan [No ITC since tax is not payable as goods do not become part of the landmass of the country.] Nil -- -- -- Total ITC available 81,000 81,000 1,44,000

Topics: Input Tax Credit

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