CA Final January 2026 Suggested Answers Paper 5 Indirect Tax Laws

FOR CA FINAL EXAM PREPARATION

CA Final 2026
Suggested Answers ·
Paper 5 Indirect Tax
Laws
EXAM YEAR TYPE SUBJECT

CA Final 2026 Suggested Answers Paper 5 Indirect Tax Laws
DATE

January 2026

Notes · Sample Papers · Previous Year Papers · Mock Tests

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PAPER – 5: INDIRECT TAX LAWS
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PART I – Multiple Choice Questions

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em raw cashew nuts from Mr. Ram, an agriculturalist in Maharashtra. gla
1. BAA Ltd., a company registered under GST in the State of Maharashtra,
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a for the same was issued by Mr. Ram on 12.06.2025. Cashew nuts werea
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purchased

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a received by BAA Ltd. on 15.06.2025. The payment for the full amount of
transaction was made by BAA Ltd. in advance on 10.06.2025.
What is the time of supply?
(A) 10.06.2025
(B) 12.06.2025
(C) 15.06.2025

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. c Trade Policy enable duty free import
(D) 12.07.2025 (2 Marks)

em One of the duty exemption schemes
2. Duty exemption schemes under Foreign

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a Scheme (DFIA). Which of the following
of inputs required for export production.

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a ineligible to avail benefit under Duty Free Import
is Duty Free Import Authorisation
statement(s) makes person
Authorisation Scheme (DFIA):
(i) DFIA is issued only for products for which Standard Input and Output
Norms (SION) have been notified.
(ii) Minimum value addition of 15% is required to be achieved.
(iii) Inputs with 'Actual user' condition required.

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Choose the correct option:

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(A) (i), (ii) and (iii)

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(B) (i) and (ii)

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(C) (ii) and (iii)

a (D) Only (i) (2 Marks)

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FINAL EXAMINATION: JANUARY 2026

3. M/s ABC has imported some goods from London and cleared for home
consumption. The same were finally re-assessed u/s 18(2) of the Customs Act,
1962. The particulars of the same are given as under:

Particulars Date/Amount (`)
Date of provisional assessment 10.01.2025
Date of final reassessment 10.03.2025
Excess duty demanded after final reassessment 2,00,000
Date of payment of excess duty 20.03.2025
Rate of interest applicable 15% per annum

Choose the correct option with respect to the amount of interest payable by
M/s ABC:
(A) Interest amounting to ` 5,671
(B) Interest amounting to ` 6,493
(C) Interest amounting to ` 6,805
(D) Interest amounting to ` 6,411 (2 Marks)
Integrated Case Scenario - I
Manohar & Sons is a registered person under GST in Ahmedabad, Gujarat. Its
aggregate turnover in the preceding financial year was ` 6.5 crore. Manohar &
Sons provides supply of various types of services and goods.
Following details have been provided for the transactions undertaken in the
month of June 2025:

Sr. Particulars
No.
(i) Provided services of accommodation to 15 students studying in
Ahmedabad University. Charging ` 19000 per person per month for
contract period from 1st April to 30th June 2025.
(ii) Goods received from a person registered under composition scheme for
` 1,25,000
(iii) Provided restaurant services amounting to ` 2,50,000. Restaurant is
situated inside a hotel which is not covered under 'specified premises’ and
restaurant services are taxable @ 5% without the benefit of ITC.

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(iv) Provided services of transportation of goods by own trucks, registered as
GTA to Department of Central Government who has taken registration u/s

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51 of the CGST Act, 2017 for an amount of ` 2,35,000
(v)
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Paid ` 80,000 for purchase of aluminum scrap from Mr. Rammohan, an
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unregistered person.
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(vi)
s em on a fee amounting to ` 2,50,000.
Received legal services from Ramjas & Co. LLP, for an on-going court
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la Supply of copper scrap to Raj Industries, a registered person under GST for a
matter
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a amount of ` 4,66,690, inclusive of tax.
(vii)

(viii) Inward supply of goods for providing restaurant services mentioned in
point (iii) for ` 1,20,000

Notes:
1. As a GTA operator, Manohar & Sons has not exercised the option of paying
GST under forward charge.
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2. Where location of supplier and location of recipient has not been mentioned,

emcopper scrap in point (vii) falls under
consider it as intra-State supply.
3. Aluminum scrap in point (v) s
laSchedule to the Customs Tariff Act, 1975.
and

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a furnishing details of one invoice at the time of filing
Chapters 72 to 81 in the First
4. Manohar & Sons missed out
GSTR-1 for the month of May 2025 on 9th June 2025. They are willing to file
GSTR-1A to add the invoice in the particulars already declared in GSTR-1.
5. All figures are exclusive of GST except otherwise mentioned.
6. Amounts to be rounded off to nearest rupee, wherever required.
7. All inward supplies used for providing taxable supplies only except otherwise

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mentioned.
m 8. All the conditions necessary for availing input tax credit have been . complied
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with

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Tax rates applicable are given below:

ag Particulars CGST SGST IGST
Restaurant services from specified premises 9% 9% 18%

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FINAL EXAMINATION: JANUARY 2026

Restaurant services from other than specified 2.5% 2.5% 5%
premises (without the benefit of ITC)
Goods and services other than above 9% 9% 18%

Based on the information provided in the case scenario given above, choose the
correct or most appropriate answer for Question Nos. 4 to 9 below:
4. Amount of GST payable under forward charge (FCM) by Manohar & Sons for
the month of June 2025 is:
(A) ` 41,845 each under CGST and SGST
(B) ` 83,745 each under CGST and SGST
(C) ` 88,645 each under CGST and SGST
(D) ` 1,04,895 each under CGST and SGST (2 Marks)
5. Amount of input tax credit available to Manohar & Sons for the month of
June 2025 is:
(A) ` 51,750 each under CGST and SGST
(B) ` 40,950 each under CGST and SGST
(C) ` 40,500 each under CGST and SGST
(D) ` 29,700 each under CGST and SGST (2 Marks)
6. Amount of tax payable under reverse charge (RCM) by Manohar & Sons for
the month of June 2025 is:
(A) ` 7200 each under CGST and SGST
(B) ` 28,350 each under CGST and SGST
(C) ` 29,700 each under CGST and SGST
(D) ` 50,850 each under CGST and SGST (2 Marks)
7. Amount of TDS to be deducted on outward supplies provided by Manohar &
Sons during the month of June 2025 is:
(A) ` 3955 each under CGST and SGST
(B) ` 4667 each under CGST and SGST
(C) ` 6305 each under CGST and SGST

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(D) ` 7299 each under CGST and SGST (2 Marks)
8. Which of the following statement(s) is/are true in respect of Form GSTR -1A
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which is willing to be filed by Manohar & Sons?

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(i) Form GSTR-1A is optional facility.

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(ii) Form GSTR-1A can be filed to add new records which was missed out in

a Form GSTR-1A can be filed for change in GSTIN of a recipient for aa
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a supply reported in Form GSTR-1 for a tax period.
Choose the correct answer:
(A) (i), (ii) and (iii)
(B) (i) and (ii)
(C) (i) and (iii)

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(D) (ii) and (iii) (2 Marks)

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emfor B2C supply.
9. Manohar & Sons will be required to report HSN code in Form GSTR-1 with:

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(A) 6 digits for B2B supply and also
(B) 4 digits for B2B supplygand
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(C) 6 digits for B2B supply and 4 digits for B2C supply.
(D) 4 digits for B2B supply and 6 digits for B2C supply. (2 Marks)
Integrated Case Scenario - II

PG Instamart, an e-commerce operator, is registered under GST in Patna (Bihar).
It provides platform for various suppliers to list and sell their products online to

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ultimate customers. It also has a separate food division on its e-platform where

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vendors can list and make supply of restaurant services (other than the services
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ethrough it by
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supplied by restaurants, eating joints located at 'specified premises').

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las During the month of June 2025, following supplies were
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made

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various suppliers:
a 1. M/s A (regular registered dealer) supplied apparels valued at ` 1,50,000 and
apparels valued at ` 40,000 were returned to it.

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FINAL EXAMINATION: JANUARY 2026

2. M/s B (a composition dealer) supplied goods valued at ` 60,000 and goods
valued at ` 70,000/- were returned to it.

3. In addition to above, other registered dealers located in Bihar supplied goods
valued at ` 2,40,000 through it.
4. Restaurants/eating joints supplied food items valued at ` 3,00,000 through it.

Further, the following information is also provided related to June, 2025:
(i) For the above services provided, PG Instamart charged commission/ fee of
` 80,000/- from the suppliers.

(ii) Eligible ITC available on various inputs and input services received during the
month is CGST ` 10,000 and SGST ` 10,000.
(iii) During the month a customer won a voucher worth ` 1,000 in month end sale
scheme. The voucher was issued on 30.06.2025 and it is redeemable against
any supply received between 01.07.2025 to 15.07.2025.
(iv) PG Instamart will also start in near future separate division on its online
platform through which metered cab or auto rickshaw owners can supply
services of transport of passenger.
Additional information:
(a) All the figures given above are exclusive of GST, wherever applicable.
(b) Applicable rates of GST are:

Particulars IGST CGST SGST

Supply of goods 12% 6% 6%

Supply of restaurant services (without the benefit 5% 2.5% 2.5%
ITC)

Supply of other services 18% 9% 9%

(c) All transactions are intra-State except where specifically mentioned.
(d) Subject to the information given above, conditions for availing ITC are
complied with. There is no opening balance of ITC.

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(e) PG Instamart filed monthly return GSTR-8 for the month of June 2025 on
19.09.2025.

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Based on the above information, choose the correct or most appropriate answer

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to the Question Nos. 10 to 15 below:
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10. Total output GST payable for the month of June 2025 by PG Instamart is:

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(A) 35,100 CGST and 35,100 SGST

a (B) ` 7,290 CGST and ` 7,290 SGST
` `

(C) ` 14,700 CGST and ` 14,700 SGST

(D) ` 14,790 CGST and ` 14,790 SGST (2 Marks)

11. Net GST payable in cash for the month of June 2025 by PG Instamart is
(A) ` 7,500 CGST and ` 7,500 SGST

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(B) ` 4,790 CGST and ` 4,790 SGST
(C) ` 4,700 CGST and ` 4,700 SGST .
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(D) ` 25,100 CGST and ` 25,100sSGST
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gl on which TCS is collectible for month of June
(2 Marks)

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12. The value of taxable supplies
2025 by PG Instamart is:
(A) ` 3,50,000
(B) ` 3,40,000
(C) ` 4,50,000

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(D) ` 3,90,000 (2 Marks)

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13. The amount of TCS payable by PG Instamart on supplies made by M/s A for

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the month of June 2025 is:

s em (A) ` 275 CGST and ` 275 SGST
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(B) ` 875 CGST and ` 875 SGST
(C) ` 850 CGST and ` 850 SGST
(D) ` 375 CGST and ` 375 SGST (2 Marks)

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FINAL EXAMINATION: JANUARY 2026

14. With respect to separate division on its online platform through which
metered cab or auto rickshaw owners can supply services of transport of
passenger. Which of the following statements is CORRECT?
(A) Services of transportation of passengers by metered cabs or auto
rickshaws are exempt under exemption notification.

(B) Registered cab/ auto rickshaw owner themselves are liable to pay tax on
supplies made through PG Instamart, but for supplies made by
unregistered cab/rickshaw owners PG Instamart is liable to pay tax.

(C) An unregistered person cannot supply services of transportation of
passengers through electronic commerce operator.
(D) Transport of passenger by metered cab or auto rickshaw supplied
through ECO are not exempt from GST and tax on such services shall be
paid by PG Instamart for both unregistered as well as registered cab/
rickshaw owners. (2 Marks)
15. PG Instamart filed monthly return GSTR 8 for the month of June, 2025 on
19.09.2025, the total late fee to be levied under CGST and SGST shall be:
(A) ` 14,200

(B) ` 10,000
(C) ` 5,000
(D) ` 16,200 (2 Marks)
Answer Key
MCQ Correct Option
1. A
2. C
3. B
4. A
5. D
6. C

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7. A
8. B
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9. A
10.
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11. A

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14. D
15 B

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FINAL EXAMINATION: JANUARY 2026

Part II - Descriptive Questions
(i) Question paper comprises of 6 questions. Answer Question No. 1 which is
compulsory and any 4 questions out of the remaining 5 questions.
(ii) Working notes should form part of the answer.
(iii) All questions should be answered on the basis of position of (i) GST law as
amended by the Finance (No. 2) Act, 2024 including significant notifications
and circulars and other legislative amendments made, which have become
effective up to 30.06.2025 and (ii) Customs law as amended by the
Finance (No. 2) Act, 2024 including significant notifications and circulars and
other legislative amendments made, which have become effective up to
30.06.2025.
Question 1
Manor Co. Ltd. is a company incorporated in India under the Companies Act, 2013
and is registered under GST in Visakhapatnam, Andhra Pradesh. They are
engaged in manufacturing of taxable goods and provide various types of services
related to advertisement sector, research and development services in
pharmaceutical sector, software development, Data Hosting Service Provider
(DHSP).
Following details have been provided for the transactions undertaken during the
month of June 2025:

Sr. Particulars Amount
No. (`)
(i) Supply of services by providing right to use the space on 12,50,000
hoardings for advertisement at premium locations in
Vijayawada, Andhra Pradesh to Laxmi Enterprise, a
registered person in Coimbatore, Tamil Nadu.
(ii) Supply of goods to Broadway Exports, a merchant exporter in 15,00,000
Visakhapatnam, Andhra Pradesh
(iii) Provided Research & Development services under a contract 25,20,000
related to clinical trials to Elysium Pharmaceuticals, USA.
(iv) Provided services as Data Hosting Service Provider (DHSP) to 18,65,000
Malher International, Germany, a Cloud Computing Service
Provider (CCSP)

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(v) Supply of services to Marshal & Co. located in New Zealand. 10,90,000
Manor Co. Ltd. is sister concern of Marshal & Co.

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(vi) Export of services to Libra Software Co. of Australia. Due to 25,60,000
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urgent requirement of supply of software, Manor Co. Ltd. took

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help of Klare Software Co. of New Zealand, who is not related
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to Manor Co. Ltd., for a consideration paid of 25% of the total

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l Inward supplies:
contract amount of 25,60,000.

a (i) Paid for hiring of Yacht in Australia for 25 days from Bizzee 1,40,000
Corporation registered under GST in Delhi.
(ii) Paid under works contract for construction of effluent plant 2,25,000
in the manufacturing unit for treatment of wastewater to
remove pollutants before reuse. It is an intra-state supply.

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Additional information:

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(a) Ownership of hoardings mentioned in point (i) is of Manor Co. Ltd.
(b) Merchant exporter and Manor Co. m
s e mentioned in Notification no. 40/2017
Ltd has availed the benefits available and

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CT(R) dated 23.10.2017, withl reference to point (ii) mentioned above.
also complied with all the conditions
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(c) Regarding point (iii) mentioned above clinical trials have been performed in
Visakhapatnam only. Clinical trials have been conducted to develop drug for
human consumption. It helps in collection of information related to drugs
profile in human body such as absorption, distribution, metabolism, excretion
and interaction. It allows choice of safe dosage.
(d) In respect to point (iv), there is no contact between Manor Co. Ltd being DHSP

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and the end users/consumers/subscribers of the Malher International,

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Germany being foreign CCSP. Manor Co. Ltd provides data hosting services

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to the Malher International, Germany on a web platform through computing

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and networking equipment, for the purpose of collecting, storing, processing,

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distributing or allowing access to large amounts of data.
(e) Marshal & Co. has been incorporated by or under the a
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laws prevailing in New

(f) In respect to point (vi) Manor Co. Ltd raised invoice for whole contract value
whereas payment to Klare Software Co. has been directly made by Libra

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FINAL EXAMINATION: JANUARY 2026

Software Co. RBI by general instruction or by specific approval has allowed
that a part of the consideration for such exports can be retained or utilized
outside India.
(g) Effluent plant is fixed to earth by a foundation.
(h) All figures are exclusive of tax except otherwise provided for.
(i) All transactions related to export of services fulfils all conditions mentioned
in section 2(6) and section 13(2) of IGST Act, 2017.
(j) GST rates are 9% each for CGST and SGST and 18% IGST for all inward and
outward supplies, except otherwise provided for.
(k) All inward supplies have been used for taxable supplies only.
(l) LUT/Bond has been executed/filed for the export related supplies.
(m) All the conditions necessary for availing input tax credit have been complied
with.
(n) Your answers should be explained with relevant provisions of GST Law and
clarifications if any.
Compute the net minimum GST payable in cash for the month of June 2025 by
Manor Co. Ltd. (14 Marks)
Answer
Computation of minimum net GST liability payable in cash for the
month of June 2025

S. Particulars Value CGST SGST IGST
No. (`) (`) (`) (`)
GST payable under
forward charge
(i) Supply of services by 12,50,000 1,12,500 1,12,500 -
providing right to use the (12,50,000 (12,50,00
space on hoardings x 9%) 0
[It is an intra-State supply x 9%)
since place of supply is
Andhra Pradesh being the

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location where the
hoardings are located.]

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(ii) Supply of goods to 15,00,000 750 750 -

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merchant exporter (15,00,000 (15,00,00

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[Supplies to merchant x 0.05%) 0
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exporters are taxed x 0.05%)

l a@ 0.05% CGST/SGST.

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Further, it is an intra-State
supply since place of
supply is Visakhapatnam
being location of goods
at the time at which
movement terminates for
delivery to recipient.]
(iii) Research & Development 25,20,000 - - Nil
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services

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[Place of supply is USA,

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being the location of
recipient. Further, it is
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zero-rated supply, since it
qualifies as export of a
services1. Further,
LUT/Bond has been
executed.]
(iv) Provided services as 18,65,000 - - Nil
DHSP

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[Place of supply is

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Germany, being location
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of recipient. Further, it is

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zero rated supply, since it

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qualifies as export of
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Since said services are being provided from taxable territory to non-taxable territory as
per a contract and such services fulfill all other conditions of export of services except the
condition that place of supply is outside India, the place of supply shall be the location of
the recipient of services in terms of Notification No. 04/2019 IT dated 30.09.2019.

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FINAL EXAMINATION: JANUARY 2026

services2. Further,
LUT/Bond has been
executed]
(v) Supply of services to 10,90,000 - - Nil
Marshal & Co.
[Services provided to
related establishment
incorporated under the
laws outside India qualify
as ‘export of services’ 3
and thus, is a zero-rated
supply. Further, LUT/Bond
has been executed.]
(vi) Export of services to Libra 25,60,000 - - Nil
Software Co. of Australia.
[Total contract value will
be considered as export
of services and thus, is a
zero-rated supply4.
Further, LUT/Bond has
been executed.]
Total output tax 1,13,250 1,13,250
Less: ITC available for set off
[Refer working note
below.]
[FIRST IGST credit is being
utilized for payment of
(57,600) (57,600)
CGST and SGST in equal
proportion.]
Thereafter, CGST and (20,250) (20,250)
SGST credit is being
utilized for payment of

2
Circular No. 232/26/2024 GST dated 10.09.2024
3
Circular No. 161/17/2021 GST dated 20.09.2021
4
Circular No. 78/52/2018 GST dated 31.12.2018

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CGST and SGST liability
respectively.

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Net tax payable 35,400 35,400 Nil

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GST payable under

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reverse charge

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Add: Services provided by
6,40,000 - - 1,15,200
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Klare Software Co. (25% of
[Tax on portion of 25,60,000)
imported services
provided by supplier
outside India to recipient
outside India is payable
under reverse charge by
supplier in India.5

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Minimum net GST 35,400 35,400 1,15,200
payable in cash
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[Tax payable under reverse
charge, being not an
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output tax, cannot be set
off against ITC and will a g
have to be paid in cash.]

Working note - Computation of eligible ITC available for set off

Particulars Amount CGST SGST IGST
(`) (`) (`) (`)
Services provided by Klare 6,40,000 - - 1,15,200

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Software Co.

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[ITC of IGST paid on said imported
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services is available. 6]

s em Hiring of Yacht 1,40,000 -
g la Nil

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5
Circular No. 78/52/2018 GST dated 31.12.2018
6
Circular No. 78/52/2018 GST dated 31.12.2018

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FINAL EXAMINATION: JANUARY 2026

[ITC on yacht being a vessel is
blocked; thus, ITC on hiring of
such vessels is also blocked.]
Works contract 2,25,000 20,250 20,250 -
[Since plant is affixed to earth by
foundation, it is eligible plant and
machinery and ITC on works
contract services availed for
construction of eligible plant and
machinery is allowed.]
Total ITC available 20,250 20,250 1,15,200
Note - In terms of sections 49(5), 49A, 49B, rule 88A and Circular No. 98/17/2019 GST dated
23.04.2019 prescribing the sequence of utilisation of ITC, ITC of IGST can be set off against
CGST and SGST liability in any order and in any proportion. Thus, there can be multiple ways
to set off the ITC of IGST against CGST and SGST liability to keep net GST payable in cash to
minimum. However, in all cases, total amount of net GST payable in cash will be ` 70,800
together under CGST and SGST and ` 1,15,200 under IGST.

Question 2
(a) Rinku Pvt. Ltd. is registered under GST in Faridabad (Haryana). It has a unit
engaged in manufacturing of potato chips and also indulged in supply of
service of hiring motor vehicles. It reports the following transactions during
the month of June 2025:
(i) On 05.06.2025, it purchased potatoes for ` 18,00,000 from farmers and
also hired Tarun Services, registered under GST in Punjab, for grading,
sorting, cleaning of potatoes so purchased at the factory of Tarun
Services for invoice value of ` 2,00,000 in the same month.
(ii) On 10.06.2025, it was allotted an industrial plot in Faridabad (Haryana)
on 99-year lease by JBL Industrial Developers Pvt Ltd. on payment of
One-time upfront premium ` 30,00,000 which was capitalized as
intangible asset in the books and Annual lease rent ` 2,00,000.
(iii) On 15.06.2025, it gave on hire a non-air conditioned bus, having
capacity of more than 12 passengers to Health Department of Haryana
Government for transporting its employees for total consideration of

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` 50,000. As per contract fuel cost is to be borne by the Health
Department.

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All the above amounts are exclusive of GST, wherever applicable.

o m m
.c e
Applicable rates of GST are:

m
e of services l a s
s
Particulars CGST SGST IGST

a
l Supply of service of hire of non-air conditioned a g
g
Supply 9% 9% 18%

a 2.5% 2.5% 5%
motor-vehicle (if cost of fuel is borne by
operator)
Supply of service of hire of non-air conditioned 6% 6% 12%
motor-vehicle (if cost of fuel is borne by
recipient)

m
You are required to calculate net tax payable by Rinku Pvt. Ltd. for the month

. co
of June 2025. Reason of the treatment of each transaction should form part

em
of your answer. There is no opening balance of ITC in e-credit ledgers and no
ITC is blocked u/s 17(5).

l a s (5 Marks)

a g
(b) Malhar Corporation, a partnership firm, registered under regular scheme of
GST in Delhi. Following information has been provided regarding inward and
outward transactions undertaken by Malhar Corporation in the month of
June 2025:

Sr. Particulars Amount (`)
No.

(i) Services of sponsorship provided to Kaniksha Co. 12,50,000

m
co
Pvt. Ltd

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(ii) Received rent from Garima Industries, a registered 3,50,000

em la se
person under composition scheme, against renting

s g
of office space in a commercial building.

gla a
a
(iii) Services provided by Delhi Development Authority 2,45,000
(DDA) to Malhar Corporation.

(iv) Housekeeping and Civil Maintenance services 2,25,000
provided to Municipal Corporation of Delhi (MCD)

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FINAL EXAMINATION: JANUARY 2026

Headquarters. Out of the total value goods valued
for ` 50,000 are included.

(v) Received online money gaming services from Nitro 4,50,000
Co., an online money gaming provider established
in Australia.

All figures are exclusive of GST, wherever applicable. All inward and outward
supplies are to be treated as intra-State supplies in case required information
is not provided.

Compute the value of taxable supplies on which Malhar Corporation has to
pay GST under Reverse Charge Mechanism (RCM) for the month of June 2025.
(5 Marks)
(c) Sun and Moon Ltd is planning to import a machinery by air from USA. The
company is evaluating two different scenarios. You are required to compute
assessable value for levy of customs duty under each of the scenarios given
below:
Scenario-1: FOB US $ 40000, freight, loading, unloading and handling
charges associated with the delivery of the imported goods to the place of
importation is not known, cost of Insurance to the place of importation is
US $ 200.
Scenario-2: FOB-Unascertainable, sum of FOB and cost of Insurance to the
place of importation is US $ 40,200, freight, loading, unloading and handling
charges associated with the delivery of the imported goods to the place of
importation are not known. Insurance charges are not known separately.

Further, you are also required to comment on the inclusion of the following
charges in the assessable value:

Sl. No. Particulars

(i) Transhipment charges to another customs station in India, and
the cost of insurance, transport, loading, unloading handing
charges associated with such transshipment.

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(ii) Material and component supplied in USA by buyer free of cost

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(4 Marks)

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Answer
.c s e
(a)
s em
Computation of net tax payable by Rinku Pvt. Ltd. for the
g l a
laParticulars a
month of June, 2025

a g Value CGST SGST IGST
(`) (`) (`) (`)
Hiring out of non-AC bus to 50,000 3,000 3,000 -
Health Department of Haryana [50,000 [50,000
[Hiring out of such motor x 6%8] x 6%]
vehicles are exempt only when
hired to a State Transport
Undertaking (STU). However,
m
co
since Health Department is not a

.
em
State Transport Undertaking,

s
said services are taxable.
Further, tax is payable under
g l a
a
forward charge and not payable
under reverse charge as supplier
is a body corporate and cost of
fuel is not included in
7
consideration. ]
Total output tax 3,000 3,000 -
Less: Input tax credit [Refer (3,000) (3,000) -
working note below.]

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c. o
IGST credit is being utilized

m
against payment of CGST and

c. o SGST liability respectively.
m
seNil
em la
Net GST payable Nil -

las a g
ag 7
It is an intra-State since place of supply is Haryana being location of recipient and
supplier is also in Haryana.
8
Applicable rate of GST is 6% CGST and SGST each on supply of service of hiring of non-
airconditioned motor-vehicle if cost of fuel is borne by the recipient.

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FINAL EXAMINATION: JANUARY 2026

Working note - Computation of eligible ITC available for set off

Particulars Amount CGST SGST IGST
(`) (`) (`) (`)
Purchase of potatoes 18,00,000 - - -
[No ITC is available
since supply of
potatoes is exempt.]
Services received from 2,00,000 36,000
Tarun Services for
sorting, grading and
cleaning of potatoes at
its factory
[Taxable since said
processes are exempt
only when they are
carried out at an
agricultural farm and in
the given case, services
are not being carried
out at an agricultural
farm. ITC is available as
these services are used
in course or furtherance
of business.]
Long term lease of 32,00,000 2,88,000 2,88,000
plot910 (30,00,000
+2,00,000)
Total ITC available11 2,88,000 2,88,000 36,000

9
It has been assumed that supplier is registered.
10
It is assumed that annual rent paid in the month of June itself for the whole year.
11
Since the applicable rate of GST on outward supply of service of hiring of motor vehicles is
12%, ITC on inputs and input services used in providing said services is available.

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(b) Value of taxable supplies on which GST is payable under reverse charge
by Malhar Corporation

m
m c. o
Particulars Value

c o
Tax on .outward supplies of sponsorship is payable under reverse
(`)
em
em mechanism by body corporate recipient i.e., Kaniksha Co
Nil
l a s
s
laPvt Ltd.
charge
ag
g
a Thus, supplier - Malhar Corporation will not pay tax under reverse
charge.
Tax on rent received from composition dealer is not payable under Nil
reverse charge but under forward charge by Malhar Corporation
Services provided by DDA Nil
[Tax is not payable under reverse charge since services are not
received from local authority as DDA is not a local authority.]
m
. co
Tax on housekeeping and civil maintenance services is not payable Nil

em
under reverse charge but under forward charge by Malhar
Corporation
l a s
Online money gaming
a g
[IGST is payable by supplier (Nitro Co.)]
Nil

Total taxable value of supply on which tax is to be paid by Nil
Malhar Corporation under reverse charge

(c) Computation of assessable value

Particulars Amount
($)

m
Scenario-1
om
c. 40,000
c. o FOB
m
se 8,000
s em la
Add: Freight, loading, etc.

la
[20% of FOB since such cost is not ascertainable.]
a g
ag Add: Cost of insurance 200
[Actual charges are includible.]
Assessable value/CIF 48,200

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FINAL EXAMINATION: JANUARY 2026

Scenario-2
Sum of FOB and cost of insurance to the place of 40,200
importation
Add: Freight, loading, etc. 8,040
[20% of (FOB +Insurance) since such cost is not
ascertainable.]
Assessable value/ CIF 48,240
Further, transshipment charges to another customs station in India, and the
cost of insurance, transport, loading, unloading, handling charges
associated with transshipment of imported goods to another customs
station in India are not includible in the assessable value.
Materials and components supplied in USA by the buyer free of cost are
includible in the assessable value.
Question 3
(a) The Resident Welfare Association (RWA) of SKS Housing Society in Delhi
received various amounts during the month of June 2025. The society has
three blocks containing 100 two-bedroom flats, 50 four bedroom flats and 50
premium apartments respectively. The following information is provided
regarding the collection made by the society during the month of June 2025.
(i) Maintenance charges of ` 5,000/- each have been collected from
two-bedroom flats, ` 7,000/- each from four-bedroom flats and ` 9,000/-
each from premium flats. The amount of maintenance charges includes
collection from Mr. A, who owns 4 two bedrooms, 1 four-bedroom flat
and 1 premium apartment.
(ii) Electricity charges collected from families of two-bedroom flats
apportioned to ` 1,000/- per flat from 100 flats for use of electricity for
use of lifts and lights in common area, parks etc.
(iii) A cultural programme was conducted and ` 2,000/- per member from
four bedroom flats and premium apartments was also collected.
(iv) Three members of the SKS Society paid ` 5,000/- each for use of space in
the publications released by the society.

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Further RWA is of the view that the RWA is not liable to pay tax as the total
amount collected is less than the amount of exemption available per flat

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c. o
based on total amount received/total number of flats.

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From the above you are required to comment based on the above information

m .
with respect to the value of taxable services provided by the Resident Welfare
s e
s e
Association (RWA) during the month of June 2025 giving explanation for
g l a
l a
treatment of each of the item and examine the view taken by RWA. (5 Marks)
a
a(b)g Section 7(2) of the IGST Act, 2017 states that import of goods means bringing
goods into India from a place outside India. Whether goods mentioned here
includes intangible goods also and how the IGST will be levied on import of
such goods. You are required to examine the above situation with respect to
levy of IGST on import and enumerate which intangible goods have been
notified for such levy. (5 Marks)
(c) M/s Star Imports Ltd. imported machinery from Germany. While the goods

m
were lying in the customs warehouse awaiting clearance, a fire accident

c. o
destroyed the entire consignment. The fire was accidental and not due to

m proper officer under section 23 of the
ethe
importer's negligence.

s
la of duty. Is application of M/s Star Imports
M/s Star Imports Ltd. applied to

g
Ltd. tenable? Would youraanswer be changed if fire occurred after clearance
Customs Act, 1962 for remission

for home consumption? Your answer should include necessary explanation.
(4 Marks)
Answer
(a)

Particulars Amount (`)

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(i) Maintenance charges 4,50,000
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c. o m
[Maintenance charges received by an RWA up to [50 × 9,000]

em la se
an amount of ` 7,500, per month per member are

s g
exempt. In the given case, maintenance charges

gla received by RWA are taxable since they exceed
a
a ` 7,500 per month per member.
Above ceiling/threshold of ` 7,500 will apply
separately to each residential apartment owned
by a member. Thus, Mr. A will be eligible for

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FINAL EXAMINATION: JANUARY 2026

separate ceiling/threshold limit of ` 7,500 for each
of its residential apartments.]
(ii) Electricity charges collected -
[Not includible in value as collected as pure agent
and also excludible while computing above
ceiling/threshold of ` 7,50012.]
(iii) Cultural programme 2,00,000
[Taxable.] [(2,000 x 50) +
(2,000 x 50)]
(iv) Use of space in society’s publications 15,000
[Taxable.] [5,000×3]
Total value of taxable services 13 6,65,000
Thus, view taken by RWA is not correct since
exemption limit is to be computed for each type
of flats separately.

(b) The term ‘goods’ under GST law includes intangible goods also, for
instance, actionable claims. IGST on goods (other than intangible goods)
imported into India is levied and collected in accordance with the
provisions of the Customs law, in terms of proviso to section 5(1).
However, customs duty is not applicable on intangible goods as they do
not physically cross customs frontiers.
Resultantly, the Government is empowered to notify certain goods for
whom proviso to section 5(1) may not be applicable for levy and collection
of IGST and in whose case, IGST shall be levied and collected in the manner
specified in section 5(1) only.
Supply of online money gaming is notified intangible goods for this
purpose. This implies that import of specified actionable claim of online

12
It has been assumed that the electricity charges are being collected by RWA as a pure
agent. However, if it is assumed that the electricity charges are not being collected by
RWA as a pure agent, same are includible in value as not collected as pure agent.
However, since total maintenance charges for two-bedroom flats still do not exceed
` 7,500, per month per member, they are exempt.
13
It has been assumed that the RWA is registered under GST.

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money gaming will be taxed under IGST as import of goods without
applicability of customs duty.

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c. o
Note – Read section 7(2) as section 2(10) in question 2(b).

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.co em
(c) Where imported goods have been destroyed, duty on such goods shall be

m
remitted provided such destruction has occurred before clearance for home
e l a s
l a s g
consumption. Therefore, in the given case, M/s Star Imports Ltd. is eligible
a
ag Thus, the application of M/s Star Imports Ltd. is tenable/correct. However,
for remission.

if fire occurred after clearance for home consumption, M/s Star Imports Ltd.
would not be eligible for remission.
Question 4
(a) Suraj Pvt Ltd registered in Delhi filed a refund application under section 54
of the CGST Act, 2017 for the refund of unutilised ITC amounting to

m
` 20,00,000 on 1 st May 2025. On scrutiny of documents, the proper officer

co
found deficiency in documents submitted and issued a deficiency memo on
.
em
10th May 2025. The assessee re-filed fresh refund application on 15 th May

s
2025. The proper officer rejected the refund claim on 10 th July 2025.

g l a
a
The assessee filed an appeal on 1 st September 2025. The Appellate Authority
allowed refund and the refund was released on 20 th September 2025.
Suraj Pvt Ltd is of view that it is entitled to interest on refund whereas the
proper officer's contention is that the refund was granted within specified
time from date of application, so the assessee is not entitled to any interest.
Is contention of the Suraj Pvt. Ltd. correct? If yes, compute the amount of
interest payable to Suraj Pvt Ltd. Reasons should form part of answer.
(5 Marks)

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(b) Atul Works Corp., unregistered person in the State of Haryana, is a job worker
m .
c. o m
for Modern Products Limited, registered in Haryana. In the month of

em se
April, 2025, it raised bill of ` 60,000 as job work charges for the goods which

s la
were sold by Modern Products Limited for ` 4,00,000. Further, waste

la
generated in job work process was sold by Modern Products Limited for
a g
ag ` 50,000.
Details of inputs and capital goods stock with Atul Works Corp. on 30.04.2025
(out of goods received from Modern Products Limited) is as below:

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FINAL EXAMINATION: JANUARY 2026

A. Machine sent by machine manufacturer directly to Atul ` 10,00,000
Works Corp. on behalf of Modern Products Limited on
18.04.2022 and the same was received by Atul Works
Corp. on 02.05.2022
B. Dies and tools sent by Modern Products Limited on ` 5,00,000
07.04.2022 and received on the same day.
C. Inputs sent by Modern Products Limited on 27.04.2024 ` 3,00,000
received by Atul Works Corp. on 03.05.2024

Based on the above information you are required to comment with detailed
explanation/reasons on:
(i) How Modern Products Limited can supply goods directly from the
premises of Atul Works Corp.?
(ii) Determine value of supply to be declared by Modern Products Limited in
its Form GSTR-1 for the month of April, 2025.
(iii) If Machine is required for further job works, then what is the maximum
extension of time that can be allowed and who can allow it? (5 Marks)
(c) Ms. Kulvir, aged 27 years, a person of Indian oigin came to India with her
baby of one year age after vising Germany for three months. Some of the
articles amounting to ` 1,00,000, she brought were prohibited for import into
India and made request to the proper officer for detention of the same for
the purpose of being returned to her on his leaving India. In addition, the
following articles were brought:

Sl. Particulars Amount (`)
No.
1. Jewellery -20 gms 1,50,000
2. Used personal effect of infant 10,000
3. Laptop 1,50,100
4. Personal effect 15,000

Determine taxable value of baggage along with necessary explanation with
reference to Baggage Rules, 2016 read with Custom Act, 1962. (4 Marks)

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Answer
(a) If an applicant’s refund claim is initially denied by the Adjudicating
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c. o
Authority and the Appellate Authority upholds the claim on appeal made
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to it, the applicant needs to file a second refund application consequent to

m .
said order.
s e
s e @ 9% p.a. is payable from the date immediately after the expiry of gl a
a
If refund is not issued within 60 days of filing the second application,

g l60 days (i.e. from 61 day) from the date of receipt of said application tilla
interest
a the date of refund. st

Thus, in the given case, no interest is payable since refund has been paid
before expiry of said 60 days. Additionally, interest @ 6% p.a. is payable for
the period commencing from the date immediately after expiry of 60 days
from his first application (i.e. 15 th May 2025 being fresh application filed
after deficiency memo) till the expiry of 60 days after filing of his second

m
application pursuant to the appellate orders or date of actual refund,
whichever is earlier.
. c o
m
eto 20.09.2025 (both inclusive) is 68 days:
s
Therefore, interest payable is as follows:

a
gl× 68/365
Period of delay from 15.07.2025
Interest = ` 20,00,000 × a
6%
= ₹ 22,356.16 or 22,356 (rounded off).
The contention of Suraj Pvt Ltd. is correct and the contention of the proper
officer is not correct.
(b) Modern Products Limited can supply goods directly from the premises of
Atul Works Corp. (job worker) after declaring premises of the job-worker

m
as his additional place of business in his GST registration.

m c. o
c. o
Computation of value of supply to be declared in Form GSTR-1 of
m
seAmount (`)
Modern Products Limited

s em g la
la
Particulars

g a
a
Goods sold after job work 4,00,000
Sale of waste generated from job work 50,000
Machine directly sent by manufacturer to job worker -

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FINAL EXAMINATION: JANUARY 2026

[Not a supply since the 3 years’ time limit from the date
of receipt of machine by the job worker has not yet
lapsed.]
Dies and tools -
[Not a supply since the provision of return of goods is not
applicable in case of moulds and dies, jigs and fixtures or
tools supplied by the principal to job worker.]
Inputs 3,00,000
[Deemed as supply since inputs have not been received
back within 1 year from the date of sending out to the job
worker.]
Total value of supply 7,50,000

Maximum extension of time allowed is 2 years by the Commissioner.
(c) Computation of taxable value of baggage

Particulars Amount (`)
Jewellery 20 gms 1,50,000
[Jewellery allowance is allowed only for passenger
residing abroad for more than one year.]
Used personal effects of infant -
[Allowed duty free.]
Laptop -
[Exempt from customs duty. If One laptop computer
when imported into India by a passenger of the age of
18 years or above
Personal effects -
[Allowed duty free.]
Total 1,50,000
Less: General Free Allowance (50,000)
Taxable value of baggage 1,00,000

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Note – No customs duty is payable on detained goods. 14.
Question 5
m
m
(a) Mr. Dinesh, an unregistered person is selling its products through Buykart, a
c. o
.co em
registered e-commerce operator. On the basis of inspection by the GST

em
authorities at the premises of Mr. Dinesh, proper officer of GST determined
l a s
l a s
that he has made intra-state sale of goods valued ` 12,00,000 and inter-State
ag
ag
sale of goods valued ` 3,00,000 through Buykart. Proper officer under CGST
Act, 2017 issued summon to Mr. Ravi who is CFO of Buykart to appear before
him and to tender/record the statement, but Mr. Ravi failed to appear before
the proper officer on scheduled date. GST rate applicable to such goods is
CGST 9%, SGST 9% and IGST 18%. Determine total amount of penalty, if any,
which may be levied on Buykart, Mr. Dinesh and Mr. Ravi as per the
provisions of the CGST Act, 2017.
Also enumerate that while imposing penalties, for which of the above

m
applicable penalties, proper officer should adhere to general disciplines given

c o
. cause notice under section 74 of the
under section 126 of the CGST Act, 2017? (5 Marks)

m
e Authority for the issue involving time
s
(b) M/s Truthful Limited was issued show

a
and place of supply. In the lorder dated 30.08.2024 issued to M/s Truthful
CGST Act, 2017 by the Adjudicating

ag of CGST has confirmed IGST tax demand of
Limited, the Joint Commissioner
` 410 crore along with penalty of ` 410 crore and interest of ` 120 crore. The
Company is disputing the entire demand.
The company wants to know along with the necessary explanation:
(i) The amount of pre deposit it must make under the IGST Act for filing
appeal before the Appellate Authority.

m
c. o
(ii) Assuming that Appellate Authority also confirms the adjudication order

m
c. o
of Joint Commissioner, the amount of pre deposit the company is
required to make before the Appellate Tribunal.
m
eentertain
em l a s
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(iii) Conditions where the Appellate Tribunal can refuse to the

la
appeal.

ag
14
It has been presumed that declaration has been filed by Ms. Kulvir in respect of detained
goods.

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FINAL EXAMINATION: JANUARY 2026

(iv) If M/s Truthful limited is unsuccessful in appeal before the Appellate
Tribunal, where the appeal would lie against the order of Appellate
Tribunal. (5 Marks)
(c) What is the procedure of disposal of goods imported from place outside India
mentioned under section 48 of the Customs Act 1962 which are not cleared
either of home consumption or for warehousing within 30 days from date of
unloading? (4 Marks)
Answer
(a) (i) Penalty leviable on Mr. Dinesh

Mr. Dinesh is liable to a penalty,
for intra-State supply:
Higher of:
(a) ` 10,000
or
(b) Amount equivalent to the tax evaded
Thus, amount of penalty in the given case is [9% of `12,00,000]
=` 1,08,000 each under CGST and SGST
for inter-State supply:

Higher of:
` 20,000

or

Amount equivalent to the tax evaded
Thus, amount of penalty in the given case is [18% of `3,00,000]

= Rs 54,000 IGST
Total penalty leviable on Mr. Dinesh is ` 2,70,000 (1,08,000 +1,08,000 +
54,000)

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(ii) Penalty leviable on Buykart

m
Since Buykart allows an unregistered person (other than those exempted

m c. o
by notification) to make supply through it 15, he is liable to a penalty,

c. o
for intra State supply:
s em
s emof: l a
ag
Higher

g l(a)a ` 10,000
a or
(b) Amount equivalent to the tax evaded
Thus, amount of penalty in the given case is [9% of `12,00,000]

= Rs 1,08,000 each under CGST and SGST
for inter State supply:

m
. co
Higher of:
(a) ` 20,000
s em
or
g l a
a
(b) Amount equivalent to the tax evaded
Thus, amount of penalty in the given case is [18% of `3,00,000] = Rs 54,000
IGST

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15
It is assumed that Mr. Dinesh has not availed exemption under Notification No.

m .
34/2023 CT dated 31.07.2023. Thus, he is not eligible to make supplies through

c. o se
m
e-commerce operator since he is unregistered. In that case, Buykart will be liable to

em la
penalty under clause (i) of section 122(1B) of the CGST Act, 2017 as given above.

s g
However, if it is assumed that Mr. Dinesh has availed exemption under Notification No.

gla a
34/2023 CT dated 31.07.2023, he has an enrolment number though which he is allowed

a
to make intra-State supply (but not inter-State supply) of goods through e-commerce
operator even though he is unregistered. Thus, in that case, Buykart will be liable to
penalty under clause (ii) of section 122(1B) of the CGST Act, 2017 allows a person not
otherwise eligible to make inter-State supply to make said supply through it. In both
cases, amount of penalty will remain same.

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FINAL EXAMINATION: JANUARY 2026

Total penalty leviable on Buykart is ` 2,70,000 (1,08,000 + 1,08,000 +
54,000)

(iii) Penalty leviable on Mr. Ravi
Since Mr. Ravi (CFO of Buykart) failed to appear before the proper officer,
penalty up to ` 25,000 each under CGST and SGST or up to ` 50,000 under
IGST is leviable.
General disciplines related to penalty as given in section 126 are to be
adhered to while imposing penalty on Mr. Ravi.
(b) (i) Amount of pre deposit before Appellate Authority:
= 10% of disputed tax or ` 40 crores whichever is less
` 41 crore (` 410 crores × 10%) subject to a maximum of ` 40 crore
= ` 40 crores
(ii) Amount of pre deposit before Appellate Tribunal:
= 10% of disputed tax or ` 40 crores whichever is less
` 41 crore (` 410 crores × 10%) subject to a maximum of ` 40 crore
= ` 40 crores
(iii) The Appellate Tribunal can refuse to entertain the appeal where
the tax or ITC involved or the difference in tax or the difference in ITC
involved or the amount of fine, fees or penalty determined by such
order, does not exceed ` 50,000.
(iv) Since one of the issues involved is place of supply, appeal against
orders passed by Tribunal would lie to the Supreme Court.
(c) If there are any goods imported from a place outside India, which are not
cleared either for home consumption or for warehouse within 30 days, the
custodian of the goods is permitted to sell the goods by auction with the
approval of the customs department and after giving notice to the
importer.
CBIC has clarified vide Circular No. 49/2018-Cus dated 03.12.2018 that after
the successful bidder has been informed about the result of the auction, a

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consolidated bill of entry, buyer-wise will be filed with the Customs in the
prescribed format by the concerned custodian for clearance of the goods

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The proper officer of Customs shall assess the goods to duty in accordance
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with the extant law within 15 days of filing of Bill of Entry and after

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assessment inform the amount of duty payable to the concerned custodian.
s e
The eauctioned goods shall be handed over to the successful bidder after
s l a
a and out-of-charge orders given by the proper officer, on g
g lpayment of dues.
assessment
a
a
Animals, perishable goods and hazardous goods may, with the permission
of the proper officer, be sold at any time or even before the expiry of the
30 days limit. Arms and ammunition may be sold at such time and place
and in such manner as the Central Government may direct.
Question 6

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(a) M/s Apoorva Limited, a domestic company intends to start a new business in

. co
Mumbai, involving supply of goods which are mostly meant for foreign

em
buyers located in Sri Lanka. There are some difficulties being faced by M/s

a s
Apoorva Limited in determination of classification and place of supply of

l
ag to seek advance ruling from the authority for
goods.
M/s Apoorva Limited wants
Advance Ruling in respect of both the above issues. However, M/s Apoorva
Limited has the following apprehensions:
(i) That it cannot seek advance ruling with respect to determination of place
of supply of Goods in the proposed transactions.
(ii) The advance ruling cannot be sought unless it is registered under CGST

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Act, 2017.

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(iii) If the advance ruling is sought, it has to seek ruling every financial year.

c. o (iv) Whether the ruling given by AAR of one state/UT shall be m
s e applicable in

s em other States/UTs.
g laand whether the
gla a
(v) Whether appeal lies to AAAR against the orders of AAR

a orders by AAAR is final and cannot be further appealed against.
As a GST consultant you are required to advise M/s Apoorva Limited with
reasons for your advice. (6 Marks)

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FINAL EXAMINATION: JANUARY 2026

(b) 'Documents include written or printed record of any sort and electronic
record as defined in the Information Technology Act, 2000'. As per the CGST
Act, 2017 which documents qualify as 'Deemed Documents' and what are the
provisions for their admissibility in any proceedings under the said Act?
(4 Marks)
OR
As per section 130 of the CGST Act, 2017 goods become liable to confiscation
when any person supplies or receives any goods in contravention of any of
the provisions of this Act with intent to evade payment of tax. Briefly discuss
the manner of release of such confiscated goods under the CGST Act, 2017.
(4 Marks)
(c) Quality Control Orders (QCOs) are regulatory mandates issued by Indian
government to ensure that products meet specific quality standards.
However, imports of inputs under Advance Authorisations are allowed
without compliance to the mandatory Quality Control Orders (QCOs) subject
to certain conditions, you are required to enumerate those conditions.
(4 Marks)
Answer
(a) (i) Yes, M/s Apoorva Limited is correct M/s Apoorva Limited cannot seek
advance ruling with respect to determination of place of supply.
(ii) No, M/s Apoorva Limited is not correct M/s Apoorva Limited can seek
advance ruling since a person desirous of obtaining GST registration is
also eligible to seek advance ruling 16.
(iii) No, M/s Apoorva Limited is not correct. There is no need to take advance
ruling for every financial year. Advance Ruling once sought will be binding
till the time the law, facts and circumstances supporting the original
advance ruling remain same.

16
It is important to note here that M/s Apoorva Limited, though not registered, is eligible
to seek advance ruling. However, it can seek advance ruling on an issue other than place
of supply.

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(iv) No, the ruling given by the AAR of one State/UT will not be applicable in
any other States/UT.

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(v) Yes, M/s Apoorva Limited is correct since appeal lies to AAAR against the
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orders of AAR and no further appeal lies beyond the appeal against order

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of AAAR as same is final.
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(b) Following shall be deemed as ‘documents’:

g l• Micro film of a document
a • Reproduction of the image(s) embodied in such micro film.
• Facsimile copy of a document
• Computer-generated printed statement
• Information stored electronically
• Information in hard copies

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Above documents shall be admissible in any proceedings under GST law,

.
without further proof or production of the original, as evidence of any

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contents of the original or of any fact stated therein of which direct
evidence would be admissible.

g l a
(b) Alternative Answer
a
Whenever any goods become liable to confiscation, the officer shall give to
the owner of the goods an option to pay in lieu of confiscation, such fine
as he thinks fit.
Maximum amount of fine = Market value of the goods confiscated less Tax
chargeable thereon
Aggregate of such fine and penalty leviable shall not be less than the

o m
c
penalty equal to 100% of tax on such goods.
m . QCO
c. o (c) Imports em
of inputs under Advance Authorisation without mandatory

s
em aused exclusively
compliance are allowed only with pre-import condition.

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Imports of inputs under Advance Authorisation must be

ag for manufacturing export goods under the same authorisation.
Exemption from QCOs must be specifically endorsed.

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Unutilised inputs or products made from such inputs cannot be transferred
to DTA.
Unutilised inputs or products made from such inputs must be destroyed or
re-exported, with payment of effective duty along with interest to customs
authorities and specified composition fee to DGFT.
Exemption from QCOs applies to physical exports only.
Import of inputs without compliance to the mandatory QCOs under DFIA
scheme is not allowed.

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