GST Questions PDF

## PERFECT REVISION QUESTIONS ### Questions and Answers **Q. No. 1** State the person liable to pay GST in the following independent cases provided recipient is located in the taxable territory: * (a) Services provided by an arbitral tribunal to any business entity. * (b) Sponsorship services pr...

## PERFECT REVISION QUESTIONS ### Questions and Answers **Q. No. 1** State the person liable to pay GST in the following independent cases provided recipient is located in the taxable territory: * (a) Services provided by an arbitral tribunal to any business entity. * (b) Sponsorship services provided by a company to an individual. * (c) Renting of immovable property service provided by the Central Government to a registered business entity. * (d) Services supplied by an insurance agent to an Insurance Company. * (e) Services supplied by a recovery agent to a car dealer. * (f) Security services (services provided by way of supply of security personnel) provided to a registered person. * (g) Veer Transport, a registered Goods Transport Agency (GTA) paying IGST @12%, transported goods by road of Dilip and Company, a sole proprietary firm (other than specified person) which is not registered under GST or any law. * (h) Mr. Kamal Jain an unregistered famous author, received 20 lakhs of consideration from PQR Publications Ltd. for supply of services by way of temporary transfer of copyright covered under section 13(1)(a) of Copyright Act 1957 relating to original literary works of his new book. * (i) Siddhi Builders, registered in Haryana, rented out 20 residential units owned by it in Sanskriti Society to Rudra Technologies, an IT based firm registered in the State of Haryana, for accommodation of its employees. **Ans.** As per CGST Act, 2017: * (a) Services provided by an arbitral tribunal to any business entity are taxable under reverse charge. Therefore, tax is payable under reverse charge by the recipient, business entity. * (b) Sponsorship services provided to Body Corporate or partnership firm are taxable under reverse charge. But in the given case, services have been provided to an individual, therefore reverse charge does not apply to it and GST is payable under forward charge by the supplier, company. * (c) Services by way of renting of immovable property by the Government to a registered person are taxable under reverse charge. Therefore, in the given case, GST is payable under reverse charge by the recipient, business entity. But tax on following services supplied by the Central Government or State Government to a business entity in India is payable by the supplier of services (forward charge): * (i) services of renting of immovable property provided to an unregistered business entity. * (ii) services by the Department of Posts the Ministry of Railways (Indian Railways). (Newly inserted Amendment May 2024). * (iii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport. * (iv) services of transport of goods or passengers. * (d) Services supplied by an insurance agent to any person carrying on insurance business located in the taxable territory are taxable under reverse charge. Therefore, in the given case, GST is payable by the recipient, the Insurance company. * (e) Services supplied by a recovery agent to a banking company are taxable under reverse charge. But in the given case, services are supplied by the recovery agent to a car dealer, therefore GST is payable under forward charge by the supplier, the recovery agent. * (f) Security services provided to a registered person located in taxable territory are taxable under reverse charge. Therefore, in the given case, GST is payable under reverse charge by the recipient, a registered person. * (g) GTA service is taxable @ 5% under reverse charge if the recipient is one of the specified recipients. But In case of forward charge, GST is payable @ 12% by the supplier of service. Therefore, in the given case GST is payable by Veer Transport (GTA) under forward charge as services are not provided to a specified recipient. * (h) Services by an author of transfer of copyright relating to original literary work to a publisher located in taxable territory are taxable under reverse charge. Therefore, in the given case, GST is to be paid by recipient, PQR publication. Tax could be paid under forward charge by the author if he would be registered person. * (i) Services provided by way of renting of residential dwelling for use as residence is exempt from ST. However, where the residential dwelling is rented to a registered person, said exemption is not available. Further, tax on service provided by way of renting of residential dwelling to a registered person is payable by the recipient under reverse charge. Therefore, in the given case, Rudra Technologies is liable to pay GST on the residential dwellings taken on rent by it from Siddhi Builders, under reverse charge mechanism. **Q. No. 2** Mr. Zafar of Assam, provides the following information for the preceding financial year 20X1-X2. You are required to find out the aggregate turnover for the purpose of eligibility of composition levy scheme and determine whether he is eligible for composition levy scheme or not, for the F.Y. 20X1-X2. | Particulars | Amount (in lakhs) | |---|---| | Value of taxable outward supplies (out of above 10 lakhs was in course of inter-state transactions). | 50.00 | | Value of exempt supplies (which include 30 lakhs was received as a interest on loans & advances). | 70.00 | | Value of inward supplies on which he is liable to pay tax under reverse charge | 5.00 | | Value of exports | 5.00 | | **Total** | **95** | All the amounts are exclusive of GST. **Ans.** As per Section 10(1) & 10(2) of CGST Act, 2017 a registered person can opt for composition scheme if his aggregate turnover of the preceding financial year does not exceed 1.50 crores and 75 lakhs in case of special category states (except Assam, Himachal Pradesh and Jammu & Kashmir). Aggregate Turnover includes: * All taxable supplies. * Exempt supplies including Nil rate, wholly exempt, non-taxable supplies. * Export of goods or services of persons having same PAN on all India basis. Aggregate Turnover excludes: * Value of inward supplies on which tax is payable under reverse charge. * CGST, SGST OR UTGST, IGST, Cess. | Particulars | Inclusions/ Exclusions | Amount (in lakhs) | |---|---|---| | Value of taxable outward supplies (Note 1) | Included | 50 | | Value of exempt supplies (Note 2) | Included | 40 | | Value of inward supplies on reverse charge basis. | Excluded | 5 | | Value of exports | Included | Nil | | **Total** | | 95 | **Notes:** * 1. To opt for composition scheme, supplier cannot make inter-state supplies but while calculating aggregate turnover for composition scheme, inter-state supplies is to be included. * 2. Value of exempt supplies except by way of extending deposits, interest on loans and advance is included. Therefore, 70 lakhs - 30 lakhs = 40 lakhs is to be included. **Q. No. 3** Sultan & Sons, a partnership firm, in Nagpur, Maharashtra is a wholesaler of a taxable product 'P' and product 'Q' exempt by way of a notification, in the State of Maharashtra. Its aggregate turnover in the preceding financial year is 130 lakh. The firm wishes to opt for composition scheme under sub-sections (1) & (2) of section 10 of the CGST Act. However, its accountant is of the view that a person engaged in making supply of exempt goods is not eligible for the said scheme. Discuss. Note: Assume that Sultan & Sons is not engaged in manufacture of goods as notified under section 10(2)(e). **Ans.** As per section 10(1) and 10(2) of CGST Act, 2017 a registered person can opt for composition scheme if his aggregate turnover of the preceding financial year does not exceed 1.50 crores. Also, such person must not be engaged in making any supply of goods which are not taxable and must not be engaged in any inter-state outward supplies of goods. In the given case, aggregate turnover of Sultan and Sons, does not exceed 1.50 crores and he is making only intra-state supply of goods and product P is taxable and product Q is exempted by notification. Therefore, he is eligible for composition levy. **Q. No. 4** Swaminathan started the business of supplying shoes in the State of Kerala from 1st April. He makes only intra-State supplies. His turnover for April - June quarter was 20 lakh and for July - September quarter was 100 lakh. Further, one-fourth of his total turnover in each of the quarters was exempt from GST. Being eligible for composition scheme, Swaminathan got himself registered under the composition scheme with effect from 1st July. You are required to compute the tax payable by Swaminathan under composition scheme assuming that he is a manufacturer. Will your answer be different if Swaminathan is trader? **Ans.** As per the provisions of CGST Act 2017, a registered person opting for composition levy for goods pays tax at the rates mentioned below during the current FY, in lieu of the tax payable by him under regular scheme: * **Manufacturers, other than manufacturers of notified goods:** 1% (2% CGST+ 12% SGST/UTGST) of the turnover in the State/ Union territory * **Traders:** 1% (2% CGST+ 2% SGST/UTGST) of turnover of taxable supplies of goods & services in the State/ Union territory of Turnover prior to obtaining registration will not be considered for determining the turnover in a State/Union Territory. **Tax payable by Swaminathan under composition scheme is as follows:** * CGST = 100 lakh × 0.5% = 50,000 * SGST = 100 lakh × 0.5% = 50,000 In case where Swaminathan is a trader, tax payable by him under composition scheme will be as follows: * CGST = 75 lakh (as 25% of turnover is exempt) x 0.5% = 37,500 * SGST = 75 lakh (as 25% of turnover is exempt) × 0.5% = €37,500