CA Final – Indirect Tax Laws MCQs – Set I

Aircool Ltd., a supplier of air conditioners, is registered under GST in the State of Maharashtra. It has a policy to gift an air conditioner to its employees [residing in Gujarat] at the end of financial year in terms of the employment contract. The company installs such air conditioners at the residence of the employees.
During the month of March, the company installed 150 air conditioners at the residence of these employees. The total open market value of such air conditioners is ` 52.50 lakh (excluding GST). The tax rate on such air conditioners is 28% (14% CGST, 14% SGST and 28% IGST).
Compute the GST liability of Aircool Ltd., if any.

Mr. James Stewart is a registered person under GST in the State of Maharashtra who sells footwear to his customers locally within the same State. He has been appointed as an agent by Toto Shoes Ltd., a company registered under GST in the State of Karnataka. During a financial year, Toto Shoes Ltd., sends taxable goods worth ` 5.00 crore from its Bengaluru store to Mr. James Stewart who sells such goods for` 5.00 crore by raising invoices using the GSTIN of Toto Shoes Ltd. Mr. James Stewart receives a commission of ` 60.00 lakh from Toto Shoes (P) Ltd., during the said financial year.
Compute the value of supply of Toto Shoes (P) Ltd. and Mr. James Stewart for the financial year assuming that amounts given above are exclusive of GST, wherever applicable.

Which of the following persons can opt for the composition scheme under sub-sections (1) and (2) of section 10 of the CGST Act, 2017?
1. Registered person whose aggregate turnover in the preceding financial year did not exceed ` 75 lakh.
2. Registered person whose aggregate turnover in the preceding financial year did not exceed ` 1.5 crore.
3. A person engaged in manufacture of pan masala, tobacco and manufactured tobacco substitutes.
4. A person engaged in the manufacture of ice cream, other edible ice, whether or not containing cocoa.
5. A person engaged exclusively in providing restaurant service.
6.A person engaged exclusively in supply of medicines.

State which of the following statements is incorrect:
(i) An agent, supplying taxable goods on behalf of principal where invoice is issued in the name of principal, is required to get compulsorily registered under GST.
(ii) Persons who are required to deduct tax under section 51 of the CGST Act, 2017, whether or not separately registered under CGST Act, are compulsory required to get registered under GST without any threshold limit.
(iii) Every person supplying online information and database access or retrieval services from a place outside India to a registered person in India is compulsory required to get registered under GST without any threshold limit.
(iv) Persons who supply services, other than supplies specified under sub-section (5) of section 9 of the CGST Act, 2017, through such electronic commerce operator who is required to collect tax at source under section 52 of the CGST Act, 2017 are compulsory required to get registered under GST without any threshold limit.

Mr. Lal, a registered person under GST, was the proprietor of M/s. Spiceton Restaurant.
He died and left behind his wife and son on 15th August.
His son – Mr. Pal – wants to continue the business of the deceased father.
The GST consultant of M/s. Spiceton Restaurant gives advice to Mr. Pal as to how he can continue the business of his deceased father.
Which of the following options is correct in accordance with the provisions of GST law?

M/s. Raman Plastics is a manufacturer of plastic toys. It is registered under GST in Shimla, Himachal Pradesh.
It procures its raw materials from Punjab. During the month of April 2020, it purchased material of ` 35.00 lakh and paid IGST thereon amounting to ` 6.30 lakh. It supplied 30% of its production in the State of Jammu and Kashmir, whereas the 70% of its production was supplied taxable @ 0.1% to a merchant exporter during the month of April 2020.
The returns for the month of April 2020 were duly filed in time, i.e. within the due date of 20th May, 2020. The last date upto which the taxpayer can claim refund of input tax credit on account of inverted duty structure is:

Radhika Travels (P) Ltd. purchased a bus chassis from Jyoti Motors Ltd. for a consideration of ` 80.00 lakh on 1st August. Radhika Travels (P) Ltd. sent the bus chassis for body building to M/s. Hanumant Fabricators and paid in advance the total consideration of ` 25.00 lakh on 10th August. M/s. Hanumant Fabricators, after completing the bus body, informed Radhika Travels (P) Ltd., for inspection of the work done on 1st September. Radhika Travels (P) Ltd. visited the workshop of M/s. Hanumant Fabricators on 7th September and confirmed that the bus body was in accordance with the terms of the contract. Hanumant Fabricators raised an invoice of ` 25.00 lakh on 15th September and supplied chassis along with the bus body so constructed, along with the invoice on 16th September. State the time of supply in this case for supply made by M/s Hanumant Fabricators, out of the choices given below-

Banke Bihari (Pedewala) owns a famous sweets shop located and registered under GST in Mathura, Uttar Pradesh. He received an order for 200 kg of sweets on 2nd May from Ghoomghoom Travels (P) Ltd., located in same locality of Mathura and registered under GST, for a total consideration of ` 1,00,000. Complete order of sweets was delivered to Ghoomghoom Travels (P) Ltd. on 5th May but without invoice, as accountant of Mr. Banke Bihari was on leave on that day. However, the invoice was raised for the same on 6th May, when the accountant joined the office after leave. Payment in full was made on 7th May.
Determine the time of supply of goods in this case.

M/s. Dhoom Furniture Mart, located and registered under GST in the State of Chhattisgarh, sells furniture from its showroom to M/s. Lucky Dhaba (located and registered under GST in the State of Jharkhand). M/s. Lucky Dhaba requested to deliver the furniture to Mr. Pyare Lal (his landlord) at his new rented home at Patna, Bihar. M/s. Dhoom Furniture Mart sends the furniture with a proper e-way bill to Patna through a transporter who made the delivery to Mr. Pyare Lal.
Determine the place of supply of furniture sold by M/s. Dhoom Furniture Mart to M/s. Lucky Dhaba in the above case.

M/s. Buildwell Engineering Consultants, located and registered under GST in Gurugram, Haryana, provided architectural services to Taj India Ltd., located and registered under GST in Mumbai, Maharashtra, for its hotel to be constructed on land situated in Dubai.
Determine the place of supply of architectural services provided by M/s. Buildwell Engineering Consultants to Taj India Ltd.:

Aflatoon Spares (P) Ltd., located and registered under GST in Haryana, supplied spare parts (FOB basis) to Mr. Laxmi Khurana, an unregistered person, located in Rajasthan. Mr. Laxmi Khurana booked the courier himself with Black Dart Courier (P) Ltd., registered under GST in Delhi for delivery in Rajasthan. Black Dart Courier (P) Ltd. picked up the goods from Haryana and delivered the courier in Rajasthan while passing through the State of Uttar Pradesh.
Determine the place of supply of service provided by Black Dart Courier (P) Ltd. to Mr. Laxmi Khurana:

Mr. Javed, an unregistered person residing in Hisar, Haryana, went to Delhi for seeking admission of his child – Mr. Arjun – in CA IPCC. Mr. Javed got the demand draft generated at ICIDI Bank Ltd., registered under GST in Sahibabad, Uttar Pradesh against cash, for depositing the registration fee to the ICAI.
Mr. Javed does not have a bank account in ICIDI Bank Ltd. and the bank doesn’t have any policy of KYC requirements (name, address and other identity verification policy) for customers not having account with any of its branch in India.
Determine the place of supply of service provided by ICIDI Bank Ltd., Delhi to Mr. Javed.

Which of the following statements is correct while issuing a tax invoice?
(i) Place of supply in case of inter-State supply is not required to be mentioned.
(ii) A registered person whose annual turnover is greater than ` 5 crores in the preceding financial year is not required to mention HSN code for goods or services, supplied by it to a registered person.
(ii) Quantity is not required to be mentioned in case of goods when goods are sold on “as is where is basis”.
(i) Description of goods is not required to be given in case of mixed supply of goods.

What will be the rate of tax and nature of supply of a service if the same is not determinable at the time of receipt of advance?

Which of the following activity is liable to GST?
(i) Supply of food by a hospital to patients (not admitted) or their attendants or visitors
(ii) Transportation of passengers by non-air-conditioned railways
(iii) Services by a brand ambassador by way of folk-dance performance where consideration charged is ` 1,40,000
(iv) Transportation of agriculture produce by air from one place to another place in India
(v) Services by way of loading, unloading, packing, storage or warehousing of rice
(vi) Service provided by GTA where consideration charged for transportation of goods for a single carriage is ` 900

In which of the following cases, compounding of offence is not allowed under section 138 of the CGST Act, 2017?
(i) A person who has been allowed to compound once in respect of any of the offences specified in clauses (a) to (f) of section 132(1) of the CGST Act, 2017
(ii) A person who has been convicted for an offence under GST law by a Court
(iii) A person who has been accused of committing an offence under GST law which is also an offence under any other law for the time being in force

For which of the following acts done by a taxable person, inspection can be ordered under GST law?
(i) Suppression of any transaction of supply of goods or services
(ii) Suppression of stock of goods in hand
(iii) Contravention of any of the provisions of the GST law to evade tax

The time-limit for issuance of order of best judgment assessment is:

Mohandas has supplied goods to Karamchand, under his own invoice, on behalf of his principal Krishnadev. Which of the following statements is correct?

Which of the following activities are not exempt from GST?
(i) Religious pilgrimage organised by Todarmal Charitable Trust.
(ii) Services provided by a business facilitator to an insurance company in an urban area
(iii) Milling of paddy into rice.

Which of the following statements are true?
(i) Services provided by Government ITIs to individual trainees are exempt from GST.
(ii) Services provided by the State Governments and Private Service Providers by way of transportation of patients in ambulance are exempt from GST.
(iii) Services of renting of shops in a hospital are exempt from GST being health care services.
(iv) Services provided by police to PSUs are taxable.

Which of the following transactions does not qualify as supply under GST law?

Korelal Printon (P) Ltd., a registered person under GST in the State of Jammu & Kashmir, is engaged in the business of offset printing and is providing services to various book publishers. A publisher situated in the State of Himachal Pradesh, a registered person under GST, sent content of the books to be printed by Korelal Printon (P) Ltd. in PDF format. The publisher also sent paper worth ` 4.00 lakh (excluding GST) to the printer, free of cost for the purposes of printing its books on 10th February. Korelal Printon (P) Ltd. raised an invoice of ` 1.50 lakh (exclusing GST) against printing of books and returned the printed books through challan to the publisher on 20th August.
The Proper Officer intercepted the vehicle and claimed that Korelal Printon (P) Ltd. should have sent the invoice of ` 5.50 lakh, i.e. including the value of free of cost paper supplied by the publisher.
You may suitably advice which one of the following is the correct option-

Palliwal Associates, a firm of Chartered Accountants registered under GST, located in Jaipur, Rajasthan is providing professional consultancy services to its various clients.
It has taken consultancy services for its business from another establishment of its firm in UK. However, it has not paid any consideration for the same.
Such services would have been taxable @ 18% (CGST @ 9%, SGST @ 9% and IGST @ 18%), had the same been received in India. Further, Palliwal Associates would have paid ` 4.00 lakh, had it not received the said services from its UK establishment.
Determine the GST liability of Palliwal Associates.

In which of the following supplies of goods and services made exclusively to Government departments, agencies etc. and persons notified under section 51 of the CGST Act, 2017, TDS is required to be deducted? The amounts given below are inclusive of GST @ 18%, wherever applicable. Assume that all other conditions for deduction of TDS are fulfilled.
(i) Health Department executed a contract with a local supplier to supply “medical grade oxygen” of ` 2.6 lakh and is making full payment.
(ii) Government school is making a payment of ` 3.5 lakh to a supplier for supply of cooked food as mid-day meal under a scheme sponsored by Central/State Government.
(iii) Municipal Corporation of Kolkata purchases a heavy generator from a supplier in Delhi. Now, it is making payment of ` 5 lakh for such purchase.
(iv) Finance Department in Delhi is making a payment of ` 3 lakh to
a supplier of ‘printing & stationery’ in Delhi.

State whether following statements are true or false:
(i) Any person aggrieved by any decision or order passed by an adjudicating authority under the CGST Act, 2017 may appeal to such Appellate Authority as may be prescribed within 3 months from the date on which the said decision or order is communicated to him.
(ii) No appeal shall be filed to Appellate Authority unless the appellant has paid sum equal to twenty five percent of the remaining amount of tax in dispute arising from the said order, in relation to which appeal is filed.
(iii) Adjournment of appeal shall not be granted more than three times to a party during hearing of the appeal.
(iv) The Appellate Authority shall have the power to refer back the case to adjudicating authority that passed the said decision or order.

Which of the following is/are not considered as a supply under the CGST Act, 2017?

Which of the following is not a supply under the CGST Act, 2017?

Mrs. Reena is a consultant. She has provided the following details relating to services provided and received by her:
1. Supply of management consultancy services for ` 500,000 p.a.
2. Supply of accounting services for ` 200,000 p.a.
3. Renting of immovable property for residential purposes for` 10,000 p.m.
4. Management consultancy services provided to a hospital for` 50,000 one time
5. Services provided to a client outside India for ` 50,000 p.m.
6. Services received from a lawyer for ` 1,00,000
Note: Assume that amounts given above are exclusive of GST, wherever applicable.
What shall be her aggregate turnover for the financial year under GST provided her aggregate turnover during previous financial year was` 24 lakh?

GST compliance rating shall be assigned to:

Where the National Anti-Profiteering Authority determines that a registered person has not passed on the benefit of input tax credit to the recipient by way of commensurate reduction in price, the Authority may order:
(i) reduction in prices
(ii) imposition of prescribed penalty
(iii) cancellation of registration Which of the above options are correct?

Sukanya, a supplier registered under GST, failed to pay the GST amounting to ` 5,000 for the month of January. The proper officer imposed a penalty on Sukanya for failure to pay tax. Sukanya believes that it is a minor breach and in accordance with the provisions of section 126 of the CGST Act, 2017, no penalty is imposable for minor breaches of tax regulations. In this regard, which of the following statements is true?

Minimum and maximum limit for amount for compounding of offences under section 138 of the CGST Act, 2017 are:

Mr. A, a sole proprietor, has to appear before the Appellate Authority. He decides to appear through an authorized representative. Which of the following persons can be appointed as ‘authorized representative’ of Mr. A under GST law?
(i) Sohan, his son, who has been dismissed from a Government service lately.
(ii) Rohan, a Company Secretary, who has been adjudged insolvent.
(iii) Mukul, a practicing High Court advocate.

Which of the following statements are true in case of retirement of a partner from the firm, under GST law?

Under GST law, time-limit for issuance of show cause notice in case of non-payment of ITC is on account of reasons other than fraud, wilful misstatement or suppression of facts, etc. is:

Time-limit for issuance of show cause notice under GST law in case of any amount collected as tax, but not paid to the Central Government is:

Dev Bhoomi Rice (P) Ltd., a registered person under GST, is providing services of processing of milling of paddy into rice, loading, unloading, packing, storage and warehousing of rice in the State of Chhattisgarh. The company has made following supplies during the tax period of April to September:
(i) Loading and unloading of rice: ` 50,00,000.
(ii) Packing and warehousing of rice: ` 30,00,000.
(iii) Processing services of milling of paddy into rice: ` 1,00,00,000.
Determine the amount of GST payable on the above supplies assuming that the applicable rate of tax is 5% and amounts given herein are exclusive of GST.

A Municipal Corporation has invited online bids for maintenance of bus stops for a period of one year from 1st January to 31st December. The work involves composite supply of goods and services wherein the supply of services is the principal supply. The value of goods constitutes 25% of the total value of composite supply.
Mr. Kumar, Managing Director of Khiladi Contractors (P) Ltd., located and registered under GST in Gujarat, wants to bid for the same. He seeks your opinion to determine the taxability of the above supply to quote the best price. Choose the correct option.

Mr. Happy Singh is a resident of Chandigarh. The marriage of his daughter, Khushi Kaur, has been finalized with Mr. Lovely Singh, a NRI settled in Canada. The marriage is scheduled on 14th February in Chandigarh. Mr. Happy Singh wants to send 5,000 marriage invitation cards to all his relatives and friends to attend the marriage. He has to send the invitation by speed post. He is not sure about the taxability of speed post services under GST regime. He seeks your help in determining the applicability of GST on speed post. Choose the correct option.

Mr. Kumar is the Managing Director of Khiladi Equipments (P) Ltd. The company is located and registered under GST in Mumbai, Maharashtra. Mr. Kumar has decided to send food grains and other relief materials worth ` 50,00,000 and ` 20,00,000 through railway and airways respectively, to the cyclone hit victims in Kerala in the month of November. The company has contacted Super Airlines and Indian Railways to transport answer the materials from Mumbai to Kerala and price for the same has been determined as ` 10,00,000 by air and ` 50,000 by railways excluding taxes. Mr. Kumar seeks your help to determine what is the amount of GST payable by Super Airlines and Indian Railways, if applicable GST rate is 18% and the amounts given above are exclusive of GST, wherever applicable.

Mr. Manjot is a trader supplying goods from his firm M/s. Singh Traders. The office of the firm is located in Delhi whereas its godowns are located in the State of Uttar Pradesh, Punjab and Jammu & Kashmir (J & K) respectively.
M/s. Singh Traders made following intra-State supplies from different States during the current financial year:
(i) Delhi – Taxable supplies: ` 21,00,000
(ii) Punjab – Exempted supplies: ` 6,00,000
(iii) Uttar Pradesh – Taxable and exempted supplies: ` 3,00,000 each respectively.
(iv) J & K – Taxable and exempted supplies: ` 8,00,000 and` 3,00,000 respectively.
Ascertain the States in which Mr. Manjot is required to take registration under GST:

Mr. Pandey is an ambulance driver who lives in NCT of Delhi. He provides driving services to Preeti Heart and Lung Institute (PHLI) – a super specialty hospital registered under GST in Delhi – for a consideration of` 25,000 per month.
Mr. Pandey was instructed to pick up a patient in Gurugram to PHLI. While going from Delhi to Gurugram, he picked up 5 passengers for transportation in the ambulance from Delhi to Gurugram and charged` 500 each from them.
You are required to ascertain the taxability of transport services provided by Mr. Pandey in the ambulance from Delhi to Gurugram under the CGST Act, 2017:

M/s. Vishu Megamart, a store located and registered under GST in Rajasthan, has come out with big discount offers at the time of Diwali on various gift items. In order to attract more customers, it has decided to supply a gift pack containing 5 packets of Jeeraram’s Namkeen (200 gram each) taxable @ 12%, 1 packet of Roasted Smoked Almonds (100 gram) taxable @ 18%, 1 packet of Cournville Chocolate (50 mg) taxable @ 28% and 1 bottle of Teal Fresh Juice (1 litre) taxable @ 18% in a single basket for a single price of ` 1,000. State the type of supply and the tax rate applicable on the same.

State which of the following statements is incorrect:
(i) Services by any artist by way of performance in folk or classical art forms of music, dance, or theatre as a brand ambassador if the consideration charged for such performance is not more than
` 150,000 is exempt.
(ii) Services of life insurance business under Life micro-insurance product as approved by the Insurance Regulatory and Development Authority, having minimum amount of cover of` 2,00,000 is exempt.
(ii) Service by an acquiring bank, to any person in relation to settlement of an amount upto ` 2,500 in a single transaction transacted through credit card, debit card, charge card or other payment card service is exempt.
(iv) Services provided by a goods transport agency by way of transport in a goods carriage of, goods, where gross amount charged for the transportation of goods on a consignment transported in a single carriage is ` 2,250, is exempt.
Your options are-

ASC, a registered person under GST, supplied goods amounting to
` 1,18,000 (inclusive of GST, taxable @ 18%) to BSC, a registered person under GST on 30th September. BSC further sold such goods to Rakesh, a consumer who came to his shop on 30th October in cash, for
` 2,36,000 (inclusive of GST, taxable @ 18%). ASC issued a credit note of `11,800 (`10,000 + ` 1800 – GST) for rate difference on 2nd November to BSC. Thereafter, BSC entered a credit note in its books for the same amount in the name of Rakesh, without intimating him, on 2nd November and reduced its output tax liability accordingly.
As per the provisions of GST law, which of the above-mentioned suppliers are allowed to reduce their output tax liability?

Mr. Allauddin, a stationery retailer, located and registered under GST in Allahabad, has received order for supply of goods worth ` 2,00,000 on 12th November from another local registered dealer, Mr. Jallauddin.
Goods were properly supplied with invoice of ` 2,00,000 on 14th November. Mr. Allauddin, incurred the following expenses before the goods were delivered to Mr. Jallauddin:
Packing charges – ` 3,000, Freight & Cartage – ` 2,500, Handling Charges – ` 1,500
Mr. Jallauddin made full payment (including the additional amounts charged by Mr. Allauddin) on delivery of the goods for which he was allowed instant cash discount of ` 2,000.
The applicable rates of tax on the goods supplied are: IGST @ 18%, CGST @ 9% and SGST @ 9% and the amounts given above are exclusive of GST.
Mr. Allauddin, paid CGST ` 18,000 and SGST 18,000. As a tax consultant, what will be your advice relating to further tax liability of Mr. Allauddin-

Mr. Rupesh Patel is voluntarily registered under GST having turnover of` 15,00,000.
He is a practicing Company Secretary providing professional services from his partnership firm located in Chandigarh to its various clients.
He has taken some interior decoration services from abroad for a residential home owned in the name of the firm which is under construction in Chandigarh. He has paid ` 2,00,000 for the same.
In view of the above information, state the correct option:

Shah Beedi Company (P) Ltd. is a manufacturer of cigarettes. It has been registered under GST in the State of West Bengal.
The turnover of the company from the current financial year is` 90,00,000. The excise duty paid on the cigarettes removed is` 10,00,000. CGST and SGST paid on the cigarettes is ` 18,00,000 each.
The company also recovered actual freight of ` 5,00,000 from the buyers on the supply of cigarettes so made during the current financial year and also charged CGST/ SGST thereon. The company paid tax @ 5% under reverse charge while availing the services of GTA of` 5,00,000.
Compute the aggregate turnover of Shah Beedi Company (P) Ltd. assuming that the amounts given above are exclusive of GST.

State whether the following statements are true or false:
1. Zero rated supply means supply of any goods or services or both which attracts nil rate of tax.
2. Exempt supply means export of goods or services or both or supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
3. Non-taxable supply means supply of goods or services or both which is not leviable to tax under the CGST Act, 2017 but leviable to tax under the IGST Act, 2017.
4. ITC may be availed for making zero rated supply of exempt goods.