Carbonlite Industries Ltd. (CIL) is supplier registered under GST in Ahmedabad, Gujarat. It is engaged in manufacture of smart watches and supply of…

Carbonlite Industries Ltd. (CIL) is supplier registered under GST in Ahmedabad, Gujarat. It is engaged in manufacture of smart watches and supply of various other goods and services. The smart watches are supplied with a standard warranty period of 1 year. In addition, CIL also offers an optional extended warranty for a further period of 6 months under separate agreement entered into with various customers for smart watches sold through its distributors. Extended warranty is effective after expiry of original warranty which has been provided at the time of actual sale of smart watches. It provides the details of various activities undertaken by it during the month of October as follows: (A) Details of outward supplies Outward supply of smart watches with standard warranty period of 1 year to various distributors during the month Amount (₹) a. Within Gujarat 15,00,000 b. Outside Gujarat 35,00,000 50,00,000 Amount received by CIL for extended warranty provided by it - Sr. No. Particulars For sales effected during the month of October For sales effected during the month of September a. Within Gujarat 1,50,000 50,000 b. Outside Gujarat 3,00,000 1,00,000 Cost of spare parts replenished by CIL to its distributors through delivery challans, without separately charging any consideration, for replacement of parts by the distributor to the customers under warranty – Amount (₹) a. Within Gujarat 25,000 b. Outside Gujarat 30,000 55,000 (B) Details of inward supplies Raw material imported from Germany [Value of the goods was worked out by the Customs authorities as 10,00,000 for the purpose of levy of IGST.] Debit note received from a distributor registered in the State of Karnataka for providing repair services on 2 nd October as part of warranty to one of the customers on behalf of CIL. No consideration was charged from the customer for the same. Date of issue of debit note for repairs undertaken was 25 th October and payment was made by CIL on same day. Amount (₹): 15,000 Purchase of goods on 21 st September from M/s Patagonia LLP, registered in Tamilnadu and filing monthly GSTR-1. M/s Patagonia LLP has filed its Form GSTR-1 for the month of September on 15 th October. Amount (₹): 2,00,000 Intra-State purchase of manufacturing machine sent directly to job worker's premises under delivery challan Amount (₹): 4,00,000 The company provided the following additional information for the month of October: (i) CIL took delivery of the raw material imported Germany from Kandla Port, Gujarat on 13 th October after payment of applicable customs duty and social welfare surcharge @ 10%. (ii) CIL supplied taxable goods in the territorial waters to InnoMek Builders for 6,00,000. Territorial waters is located at a distance of 12 nautical miles from the baseline of Kerala and 15 nautical miles from the baseline of Tamil nadu. (iii) CIL supplied solar panels (used for business purpose & on which no ITC has been taken yet) given free of cost to unrelated person based in Gujarat. [Purchased 2 years’ back at a price of 1,12,100 (including GST). Open market value is 75,000.] (iv) CIL supplied moulds and dies owned by it to unrelated component manufacturers free of cost in October; market value of the same was - 3,30,000. (v) CIL provided free training on ‘Sales & Customer Engagement Skills’ to all its agents free of cost in October; cost of such training was - 1,80,000. (vii) Opening balance of input tax credit at the beginning of October is 95,000 -CGST, 65,000 -SGST and - 5,25,000 -IGST. (viii) All the figures given are exclusive of GST, wherever applicable, except stated otherwise. (ix) Subject to the information given above, all other conditions necessary for claiming ITC were complied with. (x) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively for both inward and outward supply of goods and services, except warranty services for which rates of CGST, SGST and IGST are 2.5%, 2.5% and 5% respectively. Based on the facts of the case scenario given above, choose the most appropriate answer to Q. Nos. 1 to 6 below: