M/s Rudra & Co., a partnership firm, registered supplier under GST in Bengaluru (Karnataka State), has provided the following information for…

CA Intermediate · Taxation · MTP · September 2026
M/s Rudra & Co., a partnership firm, registered supplier under GST in Bengaluru (Karnataka State), has provided the following information for the month of October: S. No. Details of transactions Amount (₹) (i) Intra-State taxable supply of Direct Selling Agent (DSA) service to public sector bank. 2,50,000 (ii) Rent paid to a residential dwelling taken for running an office for providing DSA services Owner of the residential property was not registered under GST (Intra-State supply). 25,000 (iii) Purchased a car for the official use of managing partners of the firm for business use (Inter-State purchase). 9,00,000 (iv) Availed Information Technology services for its business from partner's friend Mr Subroto from Melbourne, Australia. Mr. Subroto refused to take any consideration. Open Market value of said service was ₹ 1,25,000. (Inter-State transaction) Nil (v) Provided training and performance appraisal services in a convention centre in Bengaluru to following persons: (a) Fabor Private Limited, a registered supplier in the State of Kerala (b) Dhruv Enterprises, a proprietorship concern of Rajasthan, which was not registered under GST 3,00,000 1,00,000 Note: (i) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively. (ii) All the amounts given above are exclusive of taxes. (iii) All the conditions necessary for availing the ITC have been fulfilled. (iv) There was no opening balance of any input tax credit. (v) The turnover of M/s Rudra & Co was ₹ 2 crore in the previous financial year. Compute the net GST payable in cash, by M/s Rudra & Co. for the month of October. Correct legal provisions should form part of your answer.

Suggested Answer and Working Notes:

Computation of net GST payable in cash Particulars CGST @ 9% (₹) SGST @ 9% (₹) IGST @ 18% (₹) Output tax liability [Refer Working Note 1] 31,500 31,500 54,000 Less: ITC available [Refer Working Note 2] 2,250 2,250 - Net GST payable 29,250 29,250 54,000 Add: Rent paid for residential unit [Service by way of renting of residential dwelling to a registered person is taxable under reverse charge mechanism. Further, tax payable under reverse charge has to be paid in cash since amount available in the electronic credit ledger can be used only for making any payment towards output tax. Tax payable on reverse charge basis is not an output tax.] 2,250 2,250 Total GST payable in cash 31,500 31,500 54,000 Working Notes 1. Computation of output tax payable by M/s Rudra & Co. for the month of October Particulars Amount (₹) CGST (₹) SGST (₹) IGST (₹) Intra-State taxable supply of DSA service [Since DSA services are provided by partnership firm, so taxable under forward charge] 2,50,000 22,500 22,500 Training and performance appraisal services to Fabor Private Limited [Taxable; the place of supply of services in relation to training and performance appraisal to a registered person, shall be the location of such person. Thus, place of supply is Kerala and hence an inter-State transaction.] 3,00,000 54,000 Training and performance appraisal services to Dhruv Enterprises [Taxable, the place of supply of services in relation to training and performance appraisal to an unregistered person, shall be the location where the services are actually performed. Thus, place of supply is Bengaluru, hence Intra-State transaction] 1,00,000 9,000 9,000 Total output tax 31,500 31,500 54,000 2. Computation of ITC that can be availed by M/s Rudra & Co. for the month of October Particulars CGST (₹) SGST (₹) IGST (₹) Information Technology services availed [Import of services from a non-related person without consideration, in the course or furtherance of business is not a supply.] - - - Rent paid to residential dwelling for providing DSA services [ITC is available as services are used in the course or furtherance of business.] 2,250 2,250 - Purchase of car [Blocked credit in terms of section 17(5) of the CGST Act, 2017] Nil Total ITC 2,250 2,250 -

Topics: Paper 3B: Goods and Services Tax

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