CA Final May 2024 Suggested Answers Paper 5 Indirect Tax Laws

FOR CA FINAL EXAM PREPARATION

CA Final 2024
Suggested Answers ·
Paper 5 Indirect Tax
Laws
EXAM YEAR TYPE SUBJECT

CA Final 2024 Suggested Answers Paper 5 Indirect Tax Laws
DATE

May 2024

Notes · Sample Papers · Previous Year Papers · Mock Tests

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PAPER – 5: INDIRECT TAX LAWS
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Question paper comprises of 6 questions. Answer Question No. 1 which is
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compulsory and any 4 questions out of the remaining 5 questions.
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(ii) Working notes should form part of the answer.
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a(iii)g asAll amended
questions should be answered on the basis of the position of (i) GST law
by the Finance Act, 2023 including significant notifications and
circulars and other legislative amendments made upto 31.10.2023 and (ii)
Customs law as amended by the Finance Act, 2023 and significant
notifications and circulars and other legislative amendments made upto
31.10.2023.

Question 1

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XYZ Ltd., a registered supplier under GST in the State of Tamil Nadu, is engaged
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in providing various kinds of supplies of goods and services. It provides the

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following information for month of October, 2023:
S.
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Particulars Amount
No. a (`)
OUTWARD SUPPLY:
(i) Supplies a consignment of goods in the territorial water 5,00,000
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.
(ii)
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Provided pure labour services of construction of a single 12,00,000
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commercial unit located in Delhi not forming part of any
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e 14,00,000
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residential complex to a customer in Delhi.

em (iii) Supplied 25 televisions over the counter to Mr. Vijay, aan
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unregistered buyer, who took it to his residence
Haryana.

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FINAL EXAMINATION: MAY 2024

INWARD SUPPLY:
(i) Received a debit note in respect of inward intra-State 3,00,000
taxable supplies received in the financial year 2020-21 for
the quantity difference as agreed. These inward supplies
were used for all goods manufactured in factory. Date of
debit note is 17th October, 2023.
(ii) Purchased silk yarn (to be used as raw material) from 8,00,000
Mr. Ravi, who manufactures silk yarn from raw silk. Mr.
Ravi is registered in the State of Rajasthan.
(iii) Availed services of an arbitral tribunal in Chennai, Tamil 6,00,000
Nadu to settle a case relating to the Companies Act.
(iv) Purchased raw material form ABK Ltd., registered in the 15,00,000
State of Andhra Pradesh.
(v) Purchased a new truck from a dealer in Cochin, Kerala for 14,00,000
transport of materials.
Notes:
The company provided the following additional information related to above said
transactions or otherwise:
(i) The company claimed depreciation under the Income-tax Act, 1961 on the
value of new truck purchased including all applicable taxes.
(ii) The company provided a corporate guarantee of ` 2.5 crore to BYH Ltd., its
related company, having registered office in the State of Maharashtra, for
loan availed by the later form Mangal Bank Ltd., Maharashtra. No
consideration has been charged against this corporate guarantee.
(iii) In the month of March, 2023, 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, 2023). However, tax due under the said transaction was paid to
Government and input tax credit availed in the month of transaction itself.
(iv) The accountant of the company did not claim input tax credit in respect of
debit note received for the reason that the original purchase was related to
earlier years for which ITC claim eligibility has become time barred.

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(v) Invoice issued to Mr. Vijay for televisions mentions only his name and State.
However, his complete address of Haryana is missing in the invoice.

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(vi) ABK Ltd. is mandatorily required to issue e-invoice. However, it did not issue
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e-invoice with Invoice Reference Number (IRN) although the invoice was

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reflected in GSTR-2B.
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(vii) Turnover of XYZ Ltd. for the precious financial year was ` 190 lakh.
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(viii)lRates of CGST, SGST and IGST are 9%, 9% and 18% respectively for botha
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(ix) 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.
(x) Assume that all the inward supplies have been used only for taxable outward

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supply.
(xi) Company is not covered under any of. the exception of rule 86B of the CGST
Rules, 2017 regarding restriction eon muse of available input tax credit.
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la of M/s XYZ Ltd, to be paid in cash if any,
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after utilizing input tax creditaif any, for the month of October, 2023.
Compute minimum net GST liability

Note: Working notes along with legal reasoning of each item should form part of
your answer. (14 Marks)
Answer
Computation of minimum net GST liability of XYZ Ltd. to be paid
in cash for the month of October 2023

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c. o (`)
S. Particulars Amount CGST SGST IGST
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No. (`) (`) (`)

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Output tax payable under forward charge
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las (i) Supply of 5,00,000 45,000
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45,000

ag consignment
territorial waters
in [5,00,000
x 9%]
[5,00,00
0 x 9%]
[Where supply is in
territorial waters,

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FINAL EXAMINATION: MAY 2024

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]
(ii) Pure labour services 12,00,000 2,16,000
[Since pure labour [12,00,000
services provided for x 18%]
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
immoveable
property, viz. Delhi.]
(iii) Supply of 25 14,00,000 2,52,000
Televisions 1 [14,00,000
[Inter-State supply x 18%]
since place of supply
is location as per the
address of the
unregistered
recipient (name of
the State) recorded

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It has been most logically assumed that the value of supply of ` 14,00,000 is for 25
televisions supplied.

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in the invoice issued
in respect of the
supply, viz. Haryana.]
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(iv)
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Corporate guarantee 2,50,000 45,000 c. o
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provided. [2,50,000
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[Deemed supply x 18%]

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under of
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the CGST Act, 2017
even though made
without any
consideration. Inter-
State supply since
place of supply is
Maharashtra
(location of
recipient). Further,
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value of supply is
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higher of:
(i) 1% of the
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amount of such
guarantee a g
offered,
or
(ii) actual
consideration
[Thus, value of
supply is 1% of ` 2.5
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crores, i.e. ` 2,50,000]

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c. o (45,000) (45,000) em
Total output tax 45,000 45,000 5,13,000

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Less: ITC available for
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la (36000)
(1,44,000)

las set off [Refer note -CGST
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-SGST -IGST

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below.]
a [IGST credit is
utilized for payment
-CGST
(36000)
of IGST. CGST and -SGST

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FINAL EXAMINATION: MAY 2024

SGST credit is first
utilized for payment
of CGST and SGST
liability respectively
and thereafter, for
payment of IGST
liability.]
Net output tax Nil Nil 2,97,000
payable in cash
GST payable under reverse charge
Tax on services 54,000 54,000
provided by the
arbitral tribunal is
payable under
reverse charge by
the recipient of
service.
[Arbitral tribunal
services to XYZ Ltd.,
a business entity
with aggregate
turnover exceeding
the applicable
threshold limit for
registration [viz.
` 20 lakh] in the
previous financial
year are liable to tax
under reverse charge
mechanism.]
Tax on silk yarn 1,44,000
supplied by a person
who manufactures it
from raw silk to a
registered person is

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payable under
reverse charge.

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Minimum net GST 54,000 54,000 4,41,000

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payable for set off

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Working note - Computation of eligible ITC available for set off
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S.
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a(i) Debit note received.
No. (`) (`) (`) (`)
3,00,000 27,000 27,000
[ITC on debit notes [3,00,000 [3,00,000
issued in a financial × 9%] × 9%]
year (FY) can be
availed, any time till
30th November of the
succeeding FY or the
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date of filing of the
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relevant annual

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return, whichever is
earlier, based on
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date of issue of debit
note, irrespective of a
the date of original
invoice/ supply.]
(ii) Silk yarn purchased. 8,00,000 1,44,000
[Inter-State supply [8,00,000
since place of supply × 18%]
is location where
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movement of goods
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terminates, viz. Tamil

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Nadu. Further, ITC on

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goods to be used in
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gla course or
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a furtherance of
business is available.]

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FINAL EXAMINATION: MAY 2024

(iii) Services of the 6,00,000 54,000 54,000
Arbitral Tribunal [6,00,000 [6,00,000
availed. × 9%] × 9%]
Such services are
intra-State supply
since place of supply
is Tamil Nadu
(location of
recipient). Further,
ITC on services used
in course or
furtherance of
business is available.]
(iv) Raw Material 15,00,000
purchased from ABK
Ltd.
[ITC cannot be
claimed on the e-
invoices without IRN
since an e-invoice
without IRN is not
treated as valid
document for
claiming ITC.]
(v) Truck purchased. 14,00,000
[ITC is not available
since depreciation
has been claimed on
the GST component.]
(vi) Condition of
payment of value of
supply plus tax
within 180 days does
not apply to supplies
on which tax is
payable under

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reverse charge
mechanism.

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Total ITC available 81,000 81,000 1,44,000

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Question 2
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em the following services during the month of October, 2023.
(a) A banking
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company M/s. YVPAY Bank Ltd. is registered under GST laws and
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provided
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a No. Particulars Amount (`)

(i) Discount earned on bills discounted 6,00,000
(ii) Interest earned on reverse repo transaction 2,00,000
(iii) Penal interest recovered from the borrower for the 5,00,000
delay in payment of loan EMIs/Dues
(iv) Services to merchants accepting credit /debit card 6,50,000
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payments using Point of Sale (POS) machine of bank.
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(In 50% cases, the amount per transaction was up to

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` 1,500 while in the other cases, the amount was

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between ` 1,500 to ` 2,000)
(v) Commission received 12,00,000
(vi) Interest charges for last payment of credit card dues 4,00,000

M/s. YVPAY Bank Ltd. had opted for optional method, under section 17(4) of
the CGST Act, 2017, for claiming input tax credit in respect of its operations.
For the month of October, 2023, the relevant details for input tax credit are
as follows:

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(i) Amount of GST paid on eligible input services - ` 8,00,000

m (ii) Amount of GST paid on eligible capital goods - ` 6,00,000
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s e section 17(5)
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(iv) Applicable rate of GST is 18% on services provided.
a Based on the information given above, calculate the net GST payable by the
bank for the month of October 2023. Ignore bifurcation of CGST and SGST or
IGST. (5 Marks)

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FINAL EXAMINATION: MAY 2024

(b) M/s. Win here 2407 is an online money gaming platform operating from
Singapore. It provides its users a platform to play and win money in different
games etc. that are available on its web portal.
In the month of October 2023, Mr. Anil (player), an unregistered person
located in India, deposited an amount of ` 15,000 (inclusive of GST) in the
master wallet available on the portal of M/s Win here 2407. Subsequently,
following transactions were undertaken by Mr. Anil during the month of
October, 2023.
(i) Mr. Anil utilized the amount of ` 2,500 from the master wallet towards
playing a virtual racing game on the portal. As a winning amount
` 11,000 was credited to the master wallet of Mr. Anil.
(ii) On another portal operated by M/s Win here 2407 in the name of Win
90, Mr. Anil placed a bet of face value of ` 12,000 on an international
cricket match. The amount of such bet was paid through the master
wallet with applicable taxes and accordingly, the bet amount of ` 12,000
with applicable taxes was transferred from the master wallet of Mr. Anil
to the bank account of Win 90. However, he lost the bet.
(iii) Mr. Anil transferred the balance amount from the master wallet to his
bank account after doing the aforesaid transactions.
Based on the information provided above, answer the following questions,
providing reasons in brief:
(1) Compute the taxable value under GST law and total GST payable on the
aforesaid given transactions in the hands of M/s Win here 2407 in India.
(2) Determine the net amount transferred by Mr. Anil from the master wallet
to his bank account after the aforesaid transactions.
Note:
Assume all the above transactions to be exclusive of GST unless otherwise
specified. Rate of GST applicable is 28% (ignore the bifurcation of GST
amount into CGST and SGST or IGST). Calculate amount of value and tax
rounded off to nearest rupee. (5 Marks)
(c) Calculate the assessable value (rounded off to nearest one rupee) under the
Customs Act, 1962 with appropriate working notes form the following
particulars related to import of a machine (by sea) by Daksh Industries from
USA in the month of October 2023:

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S. Particulars Amount
No.

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(i) Cost of machine at the port of exportation US $ 8,200

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(ii) Freight from port of export to port of import US $1,800
(iii) .Daksh Industries had paid to seller the cost for e
em packing (not as condition of sale but included in cost
US $ 400
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a (iv) Actual selling commission paid by Daksh Industries ` 20,000
to local agent of exporter.
(v) Actual insurance charges paid are also not -
ascertainable.
(vi) Ship demurrage charge paid by Daksh Industries at ` 15,000
port of importation.

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(vii) Engineering charges paid by Daksh Industries to ` 1,25,000

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consultancy firm in Mumbai as a condition of sale.

em ` 80 for one US $
Note:
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lashould form part of your answer. (4 Marks)
(i) Rate of exchange to be considered

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(ii) Relevant legal reasoning
Answer
(a) Computation of net GST payable by YVPAY Bank Ltd.

Particulars GST @ 18% 2
(`)
(i) Discount earned on bills discounted -
[Exempt since consideration is represented by
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m way of discount.]
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c. o em
[Exempt since consideration is represented by s
(ii) Interest on reverse repo transaction -

s em g la
gla way of interest paid to bank.]
a
a 2
It has been assumed that the amounts given in the question are exclusive of GST. However,
it is also possible to solve the question assuming that the amounts given in the question is
inclusive of GST.

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FINAL EXAMINATION: MAY 2024

(iii) Penal interest on delayed payment of EMIs -
[Penal interest paid to bank is exempt]
(iv) Services to merchants accepting credit/debit -
card payments
[Exempt since such services are provided to
merchants in relation to settlement of an
amount upto ` 2,000 per transaction through
credit/debit card.]
(v) Commission for debt collection services 2,16,000
[Not exempt, since it is not a service of
extending deposits, loans or advances.]
(vi) Interest charges for late payment of credit card 72,000
dues
[Not exempt, since specifically excluded.]
Output tax payable 2,88,000
Less: 50% of eligible ITC on input services and
capital goods availed in October [(` 8,00,000 + (7,00,000)
` 6,00,000) × 50%]
[Blocked credit cannot be availed.]
Net GST payable Nil

(b) (1) Computation of taxable value of supply and total GST payable
(i) Value of supply of online money gaming = Total amount
deposited with the supplier by the player
= Initial deposit of ` 15,000 (inclusive of GST) by Mr. Anil with
M/s Winhere 2407 after excluding GST = ` 11,719 (` 15,000 ×
100/128) [rounded off]
GST payable = ` 11,719× 28%
= ` 3,281 (rounded off) – [A]
(ii) Value of supply of online bet = 100% of the face value of the bet
= ` 12,000
GST payable = ` 12,000 × 28%
= ` 3,360 – [B]
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Total amount payable = [A] + [B] = ` 6,641
(2) Computation of net amount transferred by Mr. Anil from the
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master wallet to his bank account

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. Deposit
Particulars Amount (`)

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s e Less – GST on deposit
15,000

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l Less – Payment for virtual racing game
(3,281)
a
a Add – Winning from virtual racing game
(2,500)
11,000
Less – Payment for bet placed on Win 90 (12,000)
Less – GST on the bet placed on Win 90 (3,360)
Net balance transferred 4,859

(c) Computation of assessable value

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Particulars Amount in Amount in

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$ `

la s
Cost of machine at port 8,200 6,56,000
importation
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a commission
Add: Local agent’s 250
[Includible as not a buying (` 20,000/` 80) 20,000
commission.]

FOB as per customs 8,450 6,76,000
Add: Freight 1,800 1,44,000
[Freight charges till port of

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importation are includible in

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assessable value.]
c o
. 7,605
c. o Add: Insurance charges @ 1.125% 95.0625
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em la
of FOB

las Add: Ship demurrage (` 15,000/
a g
187.50 15,000

ag ` 80)
[Includible in cost of transport.]
Assessable Value (in $) 10,532.5625

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FINAL EXAMINATION: MAY 2024

Amount (`)
Assessable value (in `) 8,42,605 8,42,605
[$10,532.5625× ` 80]

Notes:
1. Packing charges incurred by the buyer are includible in assessable
value even though they are not paid as a condition of sale.
2. Engineering charges are not included in the assessable value as
engineering work is undertaken in India.
Question 3
(a) Determine the ‘place of supply’ along with justification for the following
independent cases:
I. Crystal Clear Water Ltd. (CCWL) is a manufacturer of mineral water and
registered under GST in Mumbai, Maharashtra. CCWL enters into a
contract with Global Advertising Agency (GAA) registered under GST in
Ahmedabad, Gujarat for displaying its advertisement on hoardings at an
awards event organized at Convention Centre Gandhinagar, Gujarat on
31.10.2023. the structure on which the hoardings are to be displayed is
taken on rent by GAA from Mr. Kapoor (unregistered person based in
Delhi.). Determine the ‘place of supply’ for tax invoice to be raised by
GAA to CCWL.
II. Mr. Sunil (unregistered person under GST) is a resident of Delhi and
currently posted in Dehradun, Uttarakhand. He went on an official visit
to Arunachal Pradesh. He purchased a leather bag on 15.10.2023 from
Arunachal Pradesh and shop keeper M/s ABC issued a tax invoice in the
name of Mr. Sunil only. Mr. Sunil returned back to Dehradun along with
leather bag. Determine the ‘place of supply’ for tax invoice issued by M/s.
ABC to Mr. Sunil.
III. Mr. Pintu (unregistered person under GST), resident of Karnal, Haryana
went to visit Shimla, Himachal Pradesh along with his family during
holidays in the month of October 2023. Due to some medical emergency,
he purchased some medicines on 20.10.2023 from a medical store at
Mall Road, Shimla and the tax invoice was issued in the name of Mr.
Pintu mentioning the address as Karnal, Haryana only. The medicines
purchased were consumed in Shimla during the period of stay.

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Determine the ‘place of supply’ for tax invoice issued by medical store to
Mr. Pintu. (5 Marks)

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(b) Mr. Sharma, director of VEE Ltd., provides personal guarantee on 31.10.2023

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to a nationalized bank for sanctioning the cash credit facility of ` 100 lakh

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sanctioned in favour of VEE Ltd. Mr. Sharma was not paid any consideration

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for the same by VEE Ltd.
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Whether the said activity undertaken by Mr. Sharma will be considered as
supply? If yes, what will be the value of such services? Explain in brief the
relevant provisions of GST law. (5 Marks)
(c) GHN Ltd. imported certain items on 14th October 2023. According to GHN
Ltd, these items should be classified under chapter heading no. XXXX.AB of
the Customs Tariff schedule whereas the Department’s view was that these
items should be classified under different chapter heading number XXXX.AC.
So, there was a dispute going on between GHN Ltd. and the Department
regarding the classification of product.
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Meanwhile, an exemption notification was issued on 26th October 2023 which

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exempted the disputed goods by classifying it under chapter heading number

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XXXX.AB for the future imports from 30th October 2023 onwards.
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Now, GHN Ltd. claimed that since the Department exempted product under
chapter heading XXXX.AB. Hence, its items are also to be classified under the
same heading even though it imported goods earlier.
Discuss with the help of decided case law if any, whether the contention of
GHN Ltd. is correct as per law?
Note: Chapter headings given above are just an example and not the real
one. (4 Marks)

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Answer

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(a) (I) In the given case, services provided by GAA to CCWL are advertisement

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services.

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The place of supply of such services made to a registered person is

gla location of such person.

a Thus, place of supply for tax invoice to be raised by GAA to CCWL is
location of CCWL, i.e. Mumbai, Maharashtra.

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FINAL EXAMINATION: MAY 2024

(II) In case of supply of goods to an unregistered person over the counter
(OTC), where address of such person is not recorded in the invoice, the
place of supply is location of the supplier.
Since in the given case, the address of Mr. Sunil is not recorded in the
invoice, place of supply is location of M/s ABC i.e. Arunachal Pradesh.
(III) In case of supply of goods to an unregistered person over the counter
(OTC), where address of such person is recorded in the invoice (i.e.
name of State of said person is recorded in invoice), the place of supply
is location as per said address.
Thus, in the given case, since the address of Mr. Pintu is recorded in
the invoice, place of supply is Karnal / Haryana.
(b) Since director and company are related persons in terms of Schedule I of
the CGST Act, 2017, the activity of providing personal guarantee by a
director to the banks/ financial institutions for securing credit facilities for
their companies is to be treated as a supply of service, even when made
without consideration.
Thus, the activity of providing personal guarantee by Mr. Sharma to the
nationalized bank will qualify as supply.
Value of such supply will be the open market value (OMV) in terms of
rule 28 of the CGST Rules, 2017.
However, as per RBI Guidelines, no consideration by way of commission,
brokerage fees or any other form, can be paid to the director by the
company, directly or indirectly, in lieu of providing personal guarantee to
the bank for borrowing credit limits, except in exceptional cases.
Thus, it is clarified that OMV of said supply may be treated as zero / Nil and
therefore, no tax is payable on such supply of service by Mr. Sharma to VEE
Ltd.
(c) The contention of GHN Limited is correct as per law. As per judicial ruling,
if an exemption notification classifies a product under a specified Chapter
heading from a specific date, the said classification can be accepted for the
period prior to it being beneficial to the applicant.

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Question 4
(a) Rajwada Operators Limited (ROL) is registered under GST in the State of
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Karnataka as an Electronic Commerce Operator (ECO). It owns and operates
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a web portal which supplies various goods and services on behalf of various

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sellers/service providers to its ultimate customers. Details of supplies
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eSale of goods worth ` 1,47,500/- (including GST) by A Ltd., registered g l a
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undertaken through ROL in the month of October 2023 are as under:

g a
l supplier of Rajasthan to B Ltd., Gujarat. Also, goods worth taxable valuea
(i)

a of ` 1,40,000/- sold by A Ltd., Rajasthan to B Ltd., Gujarat in the month
of September 2023 were returned back in the month of October 2023.
(ii) Value of services provided from 21.10.23 to 30.10.23 by way of
transportation of passengers by motor vehicles by X Ltd., registered
under GST in Karnataka to Z Ltd., registered under GST in Karnataka
amounting to ` 5,50,000/- (it includes ` 1,50,000/- against
transportation services provided by omnibus).
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(iii) Miss Zara of Mumbai books a room for 3 days and 2 nights in Raj Niwas

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Palace, Jodhpur, Rajasthan through Maharaja Resorts Ltd. (MRL), also an

a s
ECO registered under GST in Karnataka. MRL is integrated with ROL who
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has an agreement with Raj Niwas Palace. Raj Niwas Palace is registered
under GST in Rajasthan and raises an invoice for ` 1,50,000/- to Miss
Zara and receives ` 1,45,000/- from ROL for the same.
All the figures given above are exclusive of GST except wherever specified
separately. Assume rate of CGST and SGST to be 9% each and IGST to
be 18% on all inward and outward supplies of goods and services.
Compute the amount of TCS to be collected by ROL for the month of
October 2023.

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Working notes should form part of your answer. (5 Marks)

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(b) Bhagwan Manufacturers & Exporters Company (BMEC) is registered under

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GST in the State of Rajasthan and supplies various goods in domestic as well

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as in international markets. It is engaged in both manufacturing and trading

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of goods. It exports goods without payment of tax under bond or letter of

a undertaking in accordance with the provisions of section 16(3) of the IGST
Act, 2017.
BMEC provides the following information in relation to various supplies made
by it during October, 2023 tax period:
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FINAL EXAMINATION: MAY 2024

S. Particulars (` )
No
1. Taxable value of goods ‘Star’ supplied within India 14,00,000/-
2. Taxable value of goods ‘Sun’ exported without 10,00,000/-
payment of tax under letter of undertaking.
(However, taxable value of such goods when supplied
domestically by BMEC in similar quantities is
` 6,00,000).
3. Taxable value of goods ‘Moon’ exported without 2,00,000/-
payment of tax under bond.
(However, taxable value of such goods when supplied
domestically by BMEC in similar quantities is
` 1,50,000)
The input tax credit (ITC) availed for the above tax period is as follows:
S.No. Particulars (` )
1 Input tax credit availed on capital goods 1,00,000/-
2 Input tax credit availed on inputs 3,00,000/-
3 Input tax credit availed on inputs services 1,50,000/-
BMEC also provided following additional information:
(i) All the above inputs, input services and capital goods are used in
manufacturing process and all the conditions for availing input
tax credit have been complied with.
(ii) The balance in the electronic credit ledger of BMEC at the time of
filing the refund application is ` 1,50,000/-.
(iii) The balance in the electronic credit ledger of BMEC at the end of
the October 2023 tax period for which the refund claim is being
filed after GSTR-3B for the said period has been filed is
` 3,25,000/-
You are required to compute the amount refundable to Bhagwan
Manufacturers & Exporters Company against accumulated unutilized input tax
credit for October 2023 tax period according to the provisions of GST law by
giving necessary explanations for treatment of various items. (5 Marks)

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(c) Varun Goyal, an IT professional and a person of Indian origin, is residing in
USA for the last 14 months. He wishes to bring a used microwave oven
(costing approximately ` 1,85,500/- and weighing 15 kg) with him during his
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permanent return to India. He purchased the oven in USA 6 months before
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and he has been using that oven for his personal use in his kitchen. He is not
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aware of Indian customs rules.
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Analyze and summarize the related legal provision of the Baggage Rules,
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2016 and provide him with some advice in this regard. Relevant legal
provisions should form part of your answer. (4 Marks)
Answer
(a) (i) ROL is liable to collect tax at source under section 52 of the CGST Act,
2017 @ 1% under IGST of the net value of inter-State taxable supplies
of goods (Value of taxable supplies made less value of supplies
returned) made through it by the electronic commerce operator (ECO)

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- A Ltd.

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Net value of taxable supplies = ` 1,25,000 (` 1,47,500× 100/118) –

eNil.m
` 1,40,000 = Nil / (Negative Value)

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Thus, TCS to be collected iss
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(ii) ROL is liable to collect TCS, since the tax on services, by way of
transportation of passengers by an omnibus provided by a company
through ECO, is not payable by ECO, under section 9(5) of the CGST
Act, 2017.
= ` 1,50,000 × 0.5%
=` 750 each under CGST and SGST
ROL is not required to collect TCS on transportation of passenger
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services by other motor vehicles supplied through it worth ` 4,00,000
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as tax on the same is payable by ROL itself under section 9(5) of the

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CGST Act, 2017.

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CGST and 0.5% under SGST of the net value ofg intra-State taxable
(iii) ROL, being supplier side ECO is liable to collect TCS @ 0.5% under

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a supplies of accommodation services made through it by Raj Niwas
Palace.
= ` 1,50,000 × 0.5%

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FINAL EXAMINATION: MAY 2024

=` 750 each under CGST and SGST
(b) As per rule 89(4) of the CGST Rules, 2017, in the given case, refund of ITC
in the case of zero-rated supply of goods without payment of tax under
bond/LUT is as follows:
Turnover of zero-rated supply
Refund of goods Net ITC on inputs
= ×
Amount and input services
Adjusted Total Turnover

[9,00,000* + 2,00,000**] [1,50,000+3,00,000 3
= ×
[9,00,000 + 2,00,000+14,00,000] ]
=` 1,98,000
*Turnover of goods ‘Sun’ = Lower of (i) ` 6,00,000 × 1.5 or (ii) ` 10,00,000,
i.e. ` 9,00,000
**Turnover of goods ‘Moon’ = Lower of (i) ` 1,50,000 × 1.5 or (ii) ` 2,00,000,
i.e. ` 2,00,000
Refundable amount is the least of the following:
(a) Refund as per rule 89(4) of the CGST Rules, 2017 [` 1,98,000]
(b) Balance in ECL at the time of filing refund application, [` 1,50,000] and
(c) Balance in ECL at the end of October 2023 for which refund is being
filed after the return in Form GSTR-3B for the said period has been filed
[` 3,25,000]
Thus, the refundable amount is ` 1,50,000.
ITC is on capital goods is not eligible for refund.
(c) A person, who is engaged in a profession abroad shall, on return after a
minimum stay of 1 year during the preceding 2 years, be allowed clearance
free of duty, inter alia, personal and household articles, including specified
articles upto an aggregate value of ` 2,00,000.

3
It has been most logically presumed that ITC figures given in the question pertains to both
CGST and SGST or IGST.

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One of such specified articles is Microwave oven. However, the Indian
passenger should not have availed this concession in the preceding 3 years.

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Thus, Varun Goyal can bring Microwave oven duty free provided he had not
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availed this concession in the preceding 3 years.

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Question 5
e order passed dated 1 April 2023 issued to Sita Ram Pvt. Ltd., the gl
(a) In san a s
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lCommissioner of Central Tax, being Revisionary Authority has confirmeda
st

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a IGST demand of ` 1400 crore, penalty of ` 200 crore and interest of ` 20
crore.
Sita Ram Pvt. Ltd. admits the tax liability, penalty and interest to the extent
of ` 200 crore, ` 20 crore and ` 10 crore respectively but wishes to litigate
the balance amount of demand and thus, Sita Ram Pvt. Ltd. deposits the
required amount of pre-deposit on 12th April 2023 and files an appeal with
the GSTAT.

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GSTAT decides the appeal in favour of Sita Ram Pvt. Ltd. on 12th June 2023.
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Sita Ram Pvt. Ltd. submits an application seeking refund of the pre-deposit

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along with applicable interest on 2nd July 2023 and the department

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acknowledges the application on the same day. The amount of pre-deposit is
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refunded to Sita Ram Pvt. Ltd. on 15th October 2003.
With reference to provisions of the GST law, compute the amount of pre-
deposit required to be deposited before filing an appeal to GSTAT and interest
payable by the Department on refund of such pre-deposit, if any, along with
necessary explanations. (5 Marks)
(b) GST Department initiated prosecution proceedings against Mr. Sahil, a
taxable person under GST. Mr. Sahil collected ` 8 crore as GST but failed to
pay the same to the Government beyond the period of three months from the
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date on which such payment became due.
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s e of facts
request for

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compounding of offence. Mr. Sahil made full and true disclosure
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la a on 20.10.2023.
relating to the case. After considering the request, the Commissioner directed

ag him to pay an amount of ` 5.2 crore as compounding amount
As per the provisions of section 138 of the CGST Act, 2017 read with relevant
rule of the CGST Rules, 2017, examine the issue and provide the answers with
supporting explanatory note to the following:

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FINAL EXAMINATION: MAY 2024

(1) Determine the minimum and maximum compounding amount which
can be determined by the Commissioner.
(2) Is the amount determined by the Commissioner in this case within the
limits prescribed under the GST law?
(3) In what time period will Mr. Sahil have to pay the compounding amount
ordered by the Commissioner? (5 Marks)
(c) Mr. Pandya imported certain raw material from Japan. However, Mr. Pandya
was not able to furnish certain supporting documents related to the said raw
material imported along with the Bill of Entry for home consumption. Mr.
Pandya requested the customs officials to deposit the said imported goods in
a public bonded warehouse for a period of 20 days so that he obtains the
required documents. The Customs officer initially denied for allowing
warehousing and afterwards insisted Mr. Pandya to execute an indemnity
bond for the goods to be deposited in the warehouse.
Examine the correctness of the stand taken by the Customs Officer.
(4 Marks)
Answer
(a) The amount of pre-deposit to be made by Sita Ram Pvt. Ltd. for filing the
appeal to the GSTAT is as under-
(i) full amount of tax, interest and penalty as admitted by it, i.e. ` 230
(200+20+10) crores and
(ii) 20% of the remaining tax in dispute, i.e. ` 240 crore (20% of ` 1,200
crore) subject to a maximum of ` 100 crores (in case of IGST).
= ` 330 crores
If the pre-deposit made by the appellant before the Tribunal is required to
be refunded consequent to any order of the Tribunal, interest @ 9% p.a.
shall be payable from the date of payment of the amount till the date of
refund of such amount.
Period of delay counted from 12th April 2023 is 186 days
Interest (rounded off)= ` 100 crore × 9% × 186/366 = ` 4,57,37,705

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(b) (1) Since Mr. Sahil has collected amount exceeding ` 5 crores as tax but
failed to pay the same to the Government beyond a period of 3 months
from the date on which such payment became due:
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(i) minimum amount for compounding is 50% of the tax evaded, i.e.,

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` 4 crore (50% of ` 8 crore).
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e ` 6 crore (75% of ` 8 crore). l a
l a s (ii) maximum amount for compounding is 75% of the tax evaded i.e.,
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a (2) Yes, the amount for compounding determined by the Commissioner
i.e. ` 5.2 crore is within the above limits prescribed under the GST law.
(3) Mr. Sahil has to pay the compounding amount ordered by the
Commissioner within 30 days from the date of the receipt of the order.
(c) Where Assistant/Deputy Commissioner of Customs is satisfied on an
application of the importer that the imported goods, entered for home
consumption / warehousing cannot be cleared within a reasonable time,
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such goods may, pending clearance/removal, be permitted to be stored in

mbe warehoused goods for the purpose
a public warehouse for a period not exceeding 30 days.
Such goods shall not be deemedeto
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aaccordingly warehousing provisions shall not
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of the Customs Act, 1962 and
a is popularly known as warehousing without
apply to such goods. This
warehousing.
Thus, goods imported by Mr. Pandya can be stored in the public warehouse
for a period of 30 days.
However, the stand taken by the Customs officer to insist him to execute
an indemnity bond for goods to be deposited in warehousing is not valid
in law since warehousing provisions are not applicable to such goods.

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Question 6
c
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c. o (a) Under
powers of revision under section 108 of the CGST Act, 2017. se
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what circumstances, the Revisional Authority (RA) cannot exercise

em l a (6 Marks)
las Is there any exception to the above provision?
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ag (b) What is search warrant? Who is the competent authority to issue Search
Warrant under the CGST Act, 2017? What details should be contained in a
Search Warrant?

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FINAL EXAMINATION: MAY 2024

OR
(b) Which officers under section 72 of the CGST Act, 2017 are empowered and
are required to assist proper officers in the implementation of the CGST Act?
(4 Marks)
(c) Under Foreign Trade Policy (FTP), what does the National Trade Facilitation
Action Plan aim to achieve? Enumerate the trade facilitation measures which
are provided under Foreign Trade Policy (FTP). (4 Marks)
Answer
(a) The RA shall not exercise the power of revision if:
(a) the order sought to be revised has been subject to an appeal before
Appellate Authority (AA) or Tribunal or High Court or Supreme Court;
or
(b) the period of 6 months (from the date of communication of order) has
not yet expired or more than 3 years have expired after the passing of
the decision/order sought to be revised; or
(c) the order has already been taken for revision at an earlier stage; or
(d) the order sought to be revised is itself a revisional order.
(e) Non appealable orders and decisions i.e. order covered under
section 121.
The RA may still pass an order on any point which has not been raised and
decided in an appeal before AA/Tribunal/High Court/Supreme Court,
before the expiry of a period of 1 year from the date of the order in such
appeal or before the expiry of a period of 3 years from the date of initial
order, whichever is later.
(b) A search warrant is a written authority to conduct a search.
The competent authority to issue a search warrant is an officer of the rank
of Joint Commissioner or above.
A search warrant must indicate the existence of a reasonable belief leading
to the search. Search warrant should contain the following details:
 the violation under the GST law,

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 the premise to be searched,
the name and designation of the person authorized for search,
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

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the name of the issuing officer with full designation along with his
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. and place of issue,
round seal,
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eserial number of the search warrant,
 date
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
a  period of validity i.e. a day or 2 days etc.
Note – Any two points may be mentioned.
(b) Alternative Answer
Under section 72 of the CGST Act, 2017, the following officers have been
empowered and are required to assist CGST officers in the execution of
CGST Act:

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(i) Police;
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(ii) Railways
(iii) Customs;
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g Government engaged in collection of GST;
(iv) Officers of State/UT/aCentral
(v) Officers of State/UT/ Central Government engaged in collection of land
revenue;
(vi) All village officers;
(vii) Any other class of officers as may be notified by the Central/State
Government.

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(c) The National Trade Facilitation Action Plan aims to achieve:

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 Improvement in ease of doing business through reduction in

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transaction cost and time

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 Reduction in cargo release time

ag  A paperless regulatory environment
 A transparent and predictable legal regime
 Improved investment climate through better infrastructure

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FINAL EXAMINATION: MAY 2024

Note – Any two points may be mentioned.
The following trade facilitation measures are provided under FTP:
 Free passage will be provided to export consignment
 There will not be any seizure of export related stock except in
exceptional cases.
 Single window system to facilitate export of perishable agricultural
produce.
 DGFT is implementing the Niryat Bandhu Scheme for mentoring new
and potential exporter on the intricacies of foreign trade through
counseling, training and outreach programmes including the ‘Districts
as Export Hubs’.
 DGFT online customer portal provides information relating to export
and import including Acts, rules, policy and procedures.
 Online facilities for e-RCMC/RC related processes, e-Certificate of
Origin (e-CoO) and Quality Control and Trade Disputes (QCTD) are also
available on said common digital platform.
 DGFT has undertaken a number of IT Initiatives to enable a paperless,
contactless and transparent environment for availing benefits under
the export promotion schemes.
 A dedicated 24 X 7 Helpdesk facility has been put in place to assist the
exporters in filing online applications on the DGFT portal and other
matters pertaining to FTP.
 A large number of Trade Facilitation measures have been taken by
Customs Department.
 Authorised Economic Operator (AEO) Programme
 Towns of Export Excellence (TEE)
 Duty Free Entitlements to Select Sectors
 Special privileges granted to Status Holders
 DGFT is committed to function as a facilitator of exports and imports.

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 Continuous efforts are being made for better collection, compilation
and wider dissemination of Trade Data and Statistics to help the policy
makers, researchers, exporters and importers to formulate their trade
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strategy.
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 DGFT has in place a Citizen’s Charter, giving time schedules for

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providing various services to clients.

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Note – Any four points may be mentioned.

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