IDT CA FINAL – 50 MARKS TEST – PART 2

DIVISION A – MULTIPLE CHOICE QUESTIONS

1. M/s Harimukund Hardwares, a partnership irm registered under GST in the State of Uttar Pradesh, is
engaged in the supply of door and window ittings across India. In the month of October, it made
following outward supplies:
Taxable Date of Date of
Name of value Date of receipt of removal
receiver (State) (Rs.)* invoice payment of goods

M/s Nand Kishore 10th 25th 10th

Traders (Haryana) 5,75,000
October October October
M/s Charanjot
Hardwares & 3,25,000 12th 10th 10th
Fitters (Punjab) October November October

M/s Rana Singh Ji

Hardware Products 17th 12th 20th
2,70,000
(Rajasthan) October October October

M/s Annapurai
Hardwares 3,75,000 18th 29th 19th
(Karnataka) October November October
* excludes discount given, if any.
The applicable tax rate on supply of above goods is 18%. Goods are generally received by parties in
Punjab, Haryana & Rajasthan on 2nd day from the date of removal whereas it takes 5 days to reach
Karnataka.

M/s Harimukund Hardwares gives 2% cash discount to its customers wherever the payment is
received in advance or within 15 days of the date of removal of goods and the respective credit note is
also issued immediately. The buyer also takes necessary legal action with respect to such credit note
immediately.

To supply such goods, as aforesaid, it received services from a local GTA namely, M/s Khatushyam
Transporters (unregistered), who raised consolidated invoice for ` 1,00,000 on 22nd October for
which payment was made on 27th December along with payment for the month of November.
Applicable tax rate on services of transportation of goods is CGST @ 2.5% and SGST @ 2.5%.

Based on the facts of the case scenario given above, choose the most appropriate answer to Q. Nos. 1.1
to 1.3 below: -
(3*2 = 6 MARKS)
1.1 What is the time of supply of goods in case of goods suppliedto M/s Charanjot Hardwares &
Fitters?
(a) 12th October
(b) 10th October
(c) 10th November
(d) 14th November
1.2 What is the time of supply of goods in case of goods supplied to M/s Rana Singh Ji Hardware
Products?
(a) 17th October
(b) 12th October
(c) 20th October
(d) 22nd October
1.3 What is the time of supply in case of services supplied by M/s Khatushyam Transporters?
(a) 22nd October
(b) 27th December
(c) 10th October
(d) 22nd December

2. Mr. Venkat, a practicing Chartered Accountant, based in Hyderabad, is registered under GST in the
State of Telangana. He undertook following transactions/activities during the current inancial year:

(1) He provided consultancy services to Kuick Tours, a UK based entity engaged in the business of e-
commerce in the ield of tour and travels, having its of ice at UK. Kuick Tours paid a sum of Euro
95,000 to Mr. Venkat billed @ 75 per Euro. Mr. Venkat made travel to UK several times during the year
and incurred Euro 5,000 @ ` 75 as incidental expenses (including VAT paid ` 10,000) which was
ultimately charged from Kuick Tours. Kuick Tours also paid a sum of EURO 5,000 @ ` 75 to Mr. Venkat
as interest on account of delay in payment of agreed consideration.
Mr. Venkat also hired the services of a professional irm based in UK to complete the assignment of
providing services to Kuick Tours and paid Euro 10,000 @ ` 75. This was not recovered from Kuick
Tours.

(2) Mr. Venkat’s taxable earnings for services provided in India for the inancial year are ` 85,00,000. In
addition to this, Mr. Venkat also provided return iling services free of charge in the month of July to
Indian residents who were economically weaker. Open market value of such services was ` 1,40,000.

(3) In July, Mr. Venkat also provided inancial services to his real brother Mr. Kamath who is working at
an IT company and earning handsomely, for ` 75,000 (invoice value). However, Mr. Venkat offered him
90% discount on the invoice raised to him. Therefore, Mr. Kamath paid ` 7,500 only.

(4) Dumdum Electricals Ltd., registered under GST in Guwahati, Assam approached Mr. Venkat to
impart GST training to its accounts and inance personnel. Mr. Venkat imparted the said training to 50
employees of Dumdum Electricals Ltd. at a conference room of Swaraj Hotel located in Siliguri, West
Bengal on 25th August.

Notes: The rates of tax are 9% (CGST), 9% (SGST) and 18% (IGST) on all inward/ outward supplies. All
the amounts given above are exclusive of taxes, wherever applicable.

Based on the facts of the case scenario given above, choose the most appropriate answer to Q. Nos. 2.1
to 2.4 below:-
(4*2 = 8 MARKS)
2.1 Compute the value of supply made by Mr. Venkat to Kuick Tour (in Euros).
(a) 120,000
(b) 105,000
(c) 115,000
(d) 125,000
2.2 Compute aggregate turnover of Mr. Venkat for the current inancial year
(a) 1,78,75,000
(b) 1,86,25,000
(c) 1,63,82,500
(d) 1,80,90,000
2.3 What is value of supply made by Mr. Venkat to Mr. Kamath if Mr. Kamath is the son of Mr. Venkat and
not his brother, other facts remaining the same?
(a) ` 7,500
(b) ` 75,000
(c) Not a supply since they are related
(d) Value cannot be determined
2.4 The place of supply of the GST training imparted by Mr. Venkat to the accounts and inance personnel
of Dumdum Electricals Ltd. is ___________
(a) Hyderabad, Telangana
 (b) Guwahati, Assam
(c) Siliguri, West Bengal
(d) Either (a) or (b), at the option of Mr. Venkat

3. Which of the following activities are not exempt from GST?

(i) Religious pilgrimage organised by Todarmal Charitable Trust
(ii) Services provided by a business facilitator to an insurance company in an urban area
(iii) Milling of paddy into rice
Choose the most appropriate option.
(1 MARK)
(a) (i), (ii)
(b) (i), (iii)
(c) (ii), (iii)
(d) (i), (ii), (iii)

DIVISION - B

Q.1 XY Ltd. (registered in Rajasthan) received legal services from an attorney in UK (unrelated person) in
relation to registration of a trademark in UK. A consideration of £ 8,000 was paid by the company to
the attorney in UK.
Determine the place of supply for the service and suggest if XY Ltd. is required to pay tax under
reverse charge on this transaction.
(5 MARKS)

Q.2 Arihant Life Insurance Company Ltd. (ALICL) has charged gross premium of ` 180 lakh from
policy holders with respect to life insurance policies in the 2020-21; out of which ` 100 lakh have
been allocated for investment on behalf of the policy holders.
Compute the value of supply of life insurance services provided by ALICL:
(i) if the amount allocated for investment has been intimated by ALICL to policy holders at the
time of supply of service.
(ii) if the amount allocated for investment has not been intimated by ALICL to policy holders at
the time of providing of service.
(iii) if the gross premium charged by ALICL from policy holders is only towards risk cover.
Note: ALICL has started its operations in the year 2020-21. Thus, the entire gross premium of ` 180
lakh is the premium for the irst year of all the policies. ALICL has not issued any single premium
annuity policy.
(5 MARKS)

Q.3 Determine place of supply in the following cases:

(i) Mr. X, an architect (Kolkata), provides interior decorator services to Mr. Y of New York (USA) in
relation to his immovable property located in New Delhi.

(ii) Mr. A (a Chartered Accountant registered in Kolkata) supplies services to his client in
Bhubaneswar (registered in Bhubaneswar, Odisha).

(iii) ABC Ltd. of Patna imported certain goods from XYZ Inc. of USA. The goods were imported through
vessel and delivery of goods was taken at Kolkata, whereafter the movement terminates and the goods
are stored.

(iv) Mr. X, registered in Guwahati, has availed land-line services from BSNL. The telephone is installed
in residential premises in Kolkata and the billing address is of ice of Mr. X in Guwahati.
 (v) Mr. X, residing in Chennai, is travelling with an Indian Airline aircraft and is provided with movie-
on-demand service for `100 as on-board entertainment during Delhi-Chennai leg of a Bangkok-Delhi-
Chennai light.

(vi) Mr. X of Kolkata purchased online tickets for Aquatica water park in Mumbai.

(vii) Mr. Z, an unregistered person of Kolkata, sends a courier from New Delhi to his friend in Chennai,
Tamil Nadu while he was on trip to New Delhi.

(viii) Mr. X, a registered person in Ranchi, Jharkhand, buys shares from a broker in Patna on NSE,
Mumbai. Determine the place of supply of brokerage service.

(ix) XYZ Ltd., New Delhi entered into contract with an Indian airline for the supply of biscuit packets
for further supply by airline to the passengers in Kolkata-Guwahati route. The biscuits were loaded on
board in Lucknow.
(9 MARKS)

Q.4 Swasthya Nursing Home, a clinical establishment, offers the following services:
(i) Rooms provided to the in-patients where the room charges per day are ₹ 6,500.
(ii) Plastic surgery conducted to repair cleft lip of a new born baby.
(iii) Air ambulance services to transport critically ill patients from distant locations to
Swasthya Nursing Home.
(iv) Supply of food to the in-patients as per the advice of the doctor/nutritionist from its
restaurant – Annapurna Bhawan - located in the basement of Swasthya Nursing Home. The
food is prepared by its employees and nothing is outsourced to any third-party vendors.
(v) Homeopathic medical treatment. Swasthya Nursing Home also operates a cord blood bank
which provides services in relation to preservation of stem cells.
Determine whether GST is payable in respect of each of the above services provided by Swasthya
Nursing Home
(6 MARKS)

Q.5 Chiku Traders is a registered supplier of plastic goods. On 10th April, 2018, Chiku Traders received an
order from Neelu Traders for supply of a consignment of plastic goods. Chiku Traders gets the
consignment ready by 15th April, 2018. The invoice for the consignment was issued the next day.
Neelu Traders collects the consignment from the godown of Chiku Traders on 25th April, 2018 and
hands over the cheque towards payment on the same date. The said payment is entered in the books
of accounts of Chiku Traders on 26th April, 2018 and amount is credited in their bank account on 27th
April, 2018. Determine the time of supply of the plastic goods supplied by Chiku Traders to Neelu
Traders as per the provisions of CGST Act, 2017.
(5 MARKS)

Q.6 Dushyant rents out a commercial building owned by him to Bharat for the month of December, for
which he charges a rent of `19,50,000. Dushyant pays the maintenance charges of ` 1,00,000 (for the
December month) as charged by the local society. These charges have been reimbursed to him by
Bharat. Further, Bharat had given ` 2,50,000 to Dushyant as interest free refundable security deposit.
Further, Dushyant has paid the municipal taxes of ` 2,85,000 which he has not charged from Bharat.
You are required to determine the value of supply and the GST liability of Dushyant for the month of
December assuming CGST and SGST rates to be 9% each. Note: All the amounts given above are
exclusive of GST.
(5 MARKS)