Mock Test Paper - Series II: April, 2024

Date of Paper: 6 April, 2024

Time of Paper: 2 P.M. to 5 P.M.

INTERMEDIATE COURSE: GROUP - I

PAPER – 3: TAXATION
SECTION – A: INCOME TAX LAW
SOLUTIONS
Division A – Multiple Choice Questions
MCQ Sub-part Most Appropriate MCQ Most Appropriate
No. Answer No. Answer
1. (i) (b) 2. (b)
(ii) (d) 3. (a)
(iii) (b)
(iv) (a)
(v) (a)
(vi) (a)
Division B – Descriptive Questions
1. Computation of total income of Mr. Sunil for A.Y. 2024-25 under default
tax regime under section 115BAC
Particulars ` ` `
I Income from house property
Let out portion [First floor]
Gross Annual Value [Rent received 2,95,000
is taken as GAV, in the absence of
other information]
Less: Municipal taxes paid by him in
the P.Y. 2023-24 pertaining to let out 12,500
portion [` 25,000/2]
Net Annual Value (NAV) 2,82,500
Less: Deduction u/s 24
(a) 30% of ` 2,82,500 84,750
(b) Interest on housing loan 75,000 1,59,750
[` 1,50,000/2]
1,22,750
Self-occupied portion [Ground
Floor]
Annual Value Nil

1
 [No deduction is allowable in respect
of municipal taxes paid]
Less: Interest on housing loan [Not Nil
allowable under section 115BAC]
Nil
Income from house property 1,22,750
II Profits and gains of business or
profession
Income from SEZ unit 40,00,000
III Capital Gains
Long-term capital gains on sale of
land (since held for more than 24
months)
Full Value of Consideration [Actual 15,00,000
consideration of ` 15 lakhs, since
stamp duty value of ` 16 lakhs does
not exceed actual consideration by
more than 10%]
Less: Indexed Cost of acquisition
[` 4,00,000 x 348/100] 13,92,000 1,08,000
Cost of acquisition
Higher of -
- Actual cost ` 2.80 lakhs + ` 0.12
lakhs = ` 2.92 lakhs and
- Fair Market Value (FMV) as on
1.4.2001 = ` 4.8 lakhs but cannot
exceed stamp duty value of ` 4
lakhs.
IV Income from Other Sources
Interest on savings bank deposits 30,000
Interest on fixed deposits 40,000 70,000
Gross Total Income 43,00,750
Less: Deduction under Chapter
VI-A
Deduction under section 80JJAA 7,12,800
30% of the employee cost of the new
employees employed during the P.Y.
2023-24 for 240 days or more during
the P.Y. 2023-24 allowable as
deduction [30% of ` 23,76,000 (12 x
18,000 x 11)]
As per section 115BAC, no
deduction under section 10AA or
2
 under Chapter VI-A is allowable
except u/s 80JJAA
Total Income 35,87,950
Computation of tax liability of Mr. Sunil under section 115BAC
Particulars ` `
Tax on total income of ` 35,87,950
Tax on LTCG of ` 1,08,000@20% 21,600
Tax on remaining total income of ` 34,79,950
Upto ` 3,00,000 Nil
` 3,00,001 – ` 6,00,000 [@5% of ` 3 lakhs] 15,000
` 6,00,001 – ` 9,00,000 [@10% of ` 3 lakhs] 30,000
` 9,00,001 – ` 12,00,000 [@15% of ` 3 lakhs] 45,000
` 12,00,001 – ` 15,00,000 [@20% of ` 3 lakhs] 60,000
` 15,00,001 – ` 34,79,950 [@30% of ` 19,79,950] 5,93,985 7,43,985
7,65,585
Add: Health and education cess@4% 30,623
Total tax liability 7,96,208
Tax liability (rounded off) 7,96,210
Note - An individual paying tax u/s 115BAC is not liable to alternate minimum
tax u/s 115JC.
Computation of total income of Mr. Sunil for A.Y. 2024-25 under normal
provisions of the Act
Particulars ` `
Gross Total Income as per default tax regime 43,00,750
under section 115BAC
Less: Interest on borrowing in respect of self- 75,000
occupied house property [` 1,50,000/2]
Gross Total Income as per section 115BAC 42,25,750
Less: Deduction u/s 10AA 12,00,000
[Since the industrial undertaking is established in
SEZ, it is entitled to deduction u/s 10AA@100% of
export profits, since P.Y.2023-24 being the
5th year of operations]
[Profits of the SEZ x Export Turnover received in
convertible foreign exchange/Total Turnover] x
100%
[` 40 lakhs x ` 120 lakhs/ ` 400 lakhs x 100%]
Less: Deduction under Chapter VI-A
Deduction under section 80C
Repayment of principal amount of housing loan 80,000
3
 Insurance premium paid on life insurance policy of
son allowable, even though not dependent on 40,000 1,20,000
Mr. Sunil
Deduction under section 80JJAA [As computed 7,12,800
above]
Deduction under section 80TTA 10,000
Interest on savings bank account, restricted to
` 10,000
Total Income as per regular provisions of the 21,82,950
Act
Computation of tax liability of Mr. Sunil for A.Y. 2024-25 under the regular
provisions of the Act
Particulars ` `
Tax on total income of ` 21,82,950
Tax on LTCG of ` 1,08,000@20% 21,600
Tax on remaining total income of ` 20,74,950
Upto ` 2,50,000 Nil
` 2,50,001 – ` 5,00,000[@5% of ` 2.50 lakhs] 12,500
` 5,00,001 – ` 10,00,000[@20% of ` 5 lakhs] 1,00,000
` 10,00,001 – ` 20,74,950[@30% of ` 10,74,950] 3,22,485 4,34,985
4,56,585
Add: Health and education cess@4% 18,263
Total tax liability 4,74,848
Tax liability (rounded off) 4,74,850
Computation of adjusted total income and AMT of Mr. Sunil for
A.Y. 2024-25
Particulars `
Computation of adjusted total income
Total income as per the normal provisions of the Act 21,82,950
Add: Deduction u/s 10AA 12,00,000
Deduction u/s 80JJAA 7,12,800
Adjusted Total Income 40,95,750
Alternative Minimum [email protected]% 7,57,714
Add: Health and education cess@4% 30,309
AMT liability 7,88,023
AMT liability (rounded off) 7,88,020
Since the regular income-tax payable is less than the alternate minimum tax
payable, the adjusted total income shall be deemed to be the total income and
tax is leviable @18.5% thereof plus cess@4%. Therefore, liability as per
section 115JC is ` 7,88,020.

4
 Since, tax liability as per section 115BAC of ` 7,96,210 is higher than the tax
liability of ` 7,88,020, being higher of AMT liability and tax liability computed
as per normal provisions of the Income-tax Act, 1961, it is beneficial for
Mr. Sunil to exercise the option to shift out of the default tax regime under
section 115BAC. In such a case, his tax liability would be ` 7,88,020 and
Mr. Sunil would be eligible to carry forward the AMT credit of ` 3,13,170
(` 7,88,020 - ` 4,74,850).
2. (a) Under section 6(1), an individual is said to be resident in India in any
previous year, if he satisfies any one of the following conditions:
(i) He has been in India during the previous year for a total period of
182 days or more, or
(ii) He has been in India during the 4 years immediately preceding the
previous year for a total period of 365 days or more and has been
in India for at least 60 days in the previous year.
If an individual satisfies any one of the conditions mentioned above, he
is a resident. If both the above conditions are not satisfied, the individual
is a non-resident.
Therefore, the residential status of Mrs. Sia D’Souza, an American, for
A.Y.2024-25 has to be determined on the basis of her stay in India during
the previous year relevant to A.Y. 2024-25 i.e. P.Y.2023-24 and in the
preceding four assessment years.
Her stay in India during the previous year 2023-24 and in the preceding
four years are as under:
P.Y. 2023-24
01.04.2023 to 16.08.2023 - 138 days
23.03.2024 to 31.03.2024 - 9 days
Total 147 days
Four preceding previous years
P.Y.2022-23 [1.4.2022 to 31.3.2023] - 14 days
P.Y.2021-22 [1.4.2021 to 31.3.2022] - Nil
P.Y.2020-21 [1.4.2020 to 31.3.2021] - Nil
P.Y.2019-20 [1.4.2019 to 31.3.2020] - Nil
Total 14 days
The total stay of Mrs. Sia D’Souza during the previous year in India was
less than 182 days and during the four years preceding this year was for
14 days. Therefore, due to non-fulfillment of any of the two conditions for
a resident, she would be treated as non-resident for the Assessment
Year 2024-25.
5
 Computation of total income of Mrs. Sia D’Souza for the
A.Y. 2024-25
Particulars ` `
Income from house property
Flat located in Mumbai let-out from 01.06.2023
to 31.03.2024 @ ` 26,000 p.m.
Gross Annual Value [26,000 x 10]1 2,60,000
Less: Municipal taxes Nil
Net Annual Value (NAV) 2,60,000
Less: Deduction under section 24
30% of NAV 78,000
Interest on loan [fully allowable as 2,05,000 2,83,000 (23,000)
deduction, since property is let-out]
Income from other sources
- Gold chain worth ` 1,50,000 received from
parents of husband would be exempt, since Nil
parents of husband fall within the definition
of relatives and gifts from a relative are not
chargeable to tax.
- Gift received from friends of her husband
aggregating to ` 1,65,000 is taxable under
section 56(2)(x) since the amount of cash
gifts of ` 1,65,000 exceeds ` 50,000. 1,65,000 1,65,000
Gross Total income/ Total Income 1,42,000
(b) TDS implications
(i) Since overseas tour package is taken on or after 1.10.2023, tax @
5% till ` 7 lakhs and 20% thereafter, is required to be collected u/s
206C(1G) by the seller of an overseas tour programme package,
from Mr. Harish, being the buyer of an overseas tour package, even
if payment is made by account payee cheque.
Accordingly, tax has to be collected@5% on ` 7 lakh and 20% on
` 3 lakhs.
TCS = ` 95,000
(ii) Mr. Aditya has to deduct tax at source@5% u/s 194M, although his
turnover for the P.Y. 2022-23 does not exceed ` 1 crore and he is
not liable to deduct tax at source under section 194C, since the
payment to contractor, Mr. Naresh, exceeds ` 50 lakhs.
Accordingly, tax has to be deducted @5% on ` 55 lakhs.
TDS = ` 2,75,000

1 Actual rent received has been taken as the gross annual the value in absence of other information
(i.e. Municipal value, fair rental value and standard rent) in the question.
6
3. (a) Computation of gross total income of Ms. Priyanka for the A.Y.
2024-25 under normal provisions of the Act
Particulars ` `
(a) Income from salaries (See Working 5,81,000
Note below)
(b) Income from Other Sources
(i) Interest on fixed deposit with a 7,000
company
(ii) Income from specified mutual fund 3,000
(iii) Interest on Fixed Deposit received
by minor daughter (` 4,000 - 2,500 12,500
` 1500)
Gross total income 5,93,500
Working Note:
Computation of salary income of Ms. Priyanka for the
A.Y. 2024-25
Particulars `
Salary [` 40,000 x 12] 4,80,000
Medical facility [in the hospital maintained by the _
company is exempt]
Rent free accommodation
15% of salary from 1.4.2023 to 31.8.2023 and 10% of 58,000
salary from 1.9.2023 to 31.3.2024 (` 4,80,000 × 15% x
5/12) + (` 4,80,000 × 10% x 7/12)
Valuation of perquisite of interest on loan
[Rule 3(7)(i)] – 9.5% is taxable which is to be reduced 24,500
by actual rate of interest charged i.e. [9.5% - 6% = 3.5%]
Use of dining table for 1 month
[` 60,000 x 10/100 x 1/12] 500
Perquisite on sale of dining table
Cost 60,000
Less: Depreciation on straight line method 12,000
@ 10% for 2 years
Written Down Value 48,000
Less: Amount paid by the assessee 30,000 18,000
Purchase through credit card 10,000
Perquisite on sale of car
Original cost of car 2,50,000
Less: Depreciation from 16.7.2021 to 50,000
15.7.2022 @ 20%
7
 Value as on 14.07.2023- being the date of 2,00,000
sale to employee
Less: Amount received from the assessee
on 14.07.2023 1,60,000 40,000
Gross salary 6,31,000
Less: Standard deduction upto ` 50,000 50,000
Income from Salaries 5,81,000
(b) (i) Computation of book profit of the firm under section 40(b)
Particulars Amount Amount
(`) (`)
Net Profit (before deduction of depreciation, 7,50,000
salary and interest)
Less: Depreciation under section 32 2,50,000
Interest @ 12% p.a. [being the maximum 72,000 3,22,000
allowable as per section 40(b)] (` 6,00,000 ×
12%)
Book profit 4,28,000
“Book profit” means the net profit as per the profit and loss account for
the relevant previous year computed in the manner laid down in Chapter
IV-D as increased by the aggregate amount of the remuneration paid or
payable to the partners of the firm if the same has been already deducted
while computing the net profit. Hence, brought forward loss of ` 50,000
of P.Y.2022-23 is not allowed to be set off for computation of “book
profit”.
(ii) Salary actually paid to working partners = ` 25,000 × 2 × 12 = ` 6,00,000
As per the provisions of section 40(b)(v), the maximum allowable working
partners’ salary for the A.Y. 2024-25 in this case would be:
Particulars `
On the first ` 3,00,000 of book profit [(` 1,50,000 or 90% of 2,70,000
` 3,00,000) whichever is more]
On the balance of book profit [60% of (` 4,28,000 – 76,800
` 3,00,000)]
Maximum allowable working partners’ salary 3,46,800
4. (a) Computation of Taxable Income of Mr. Roshan for the A.Y. 2024-25
under normal provisions of the Act
Particulars ` `
Salaries
Shamita’s salary (` 25,000 x 12) 3,00,000
[See Note 1]

8
Less: Standard deduction under section 50,000
16(ia) upto ` 50,000
2,50,000
Less: Loss from house property set off
against salary income as per section 71(3A) 2,00,000 50,000
[See Note 2]
Capital Gains
Short term capital gain 1,50,000
Less: Loss from tea business (` 1,06,000 x 42,400 1,07,600
40%) [See Note 3 & 4]
Income from Other Sources
Dividend income 11,00,000
Taxable Income 12,57,600
The following losses can be carried forward for subsequent
assessment years:
(i) Loss from house property to be carried forward and ` 50,000
set-off against income from house property
(ii) Long-term capital loss of A.Y. 2020-21 can be carried ` 86,000
forward and set-off against long-term capital gains
(iii) Loss from speculative business to be carried forward ` 50,000
and set-off against income from speculative business
Notes:
(1) As per section 64(1)(ii), all the income which arises directly or
indirectly, to the spouse of any individual by way of salary,
commission, fees or any other form of remuneration from a concern
in which such individual has a substantial interest shall be included
in the total income of such individual. However, where spouse
possesses technical or professional qualification and the income is
solely attributable to the application of such knowledge and
experience, clubbing provisions will not apply. Since, Mrs. Shamita
is not adequately qualified for the post and Mr. Roshan has
substantial interest in Ray Ltd by holding 21% of the shares of the
Ray Ltd., the salary income of Mrs. Shamita to be included in
Mr. Roshan’s income.
(2) As per section 71(3A), loss from house property can be set off
against any other head of income to the extent of ` 2,00,000 only.
(3) 60% of the losses from tea business is treated as agricultural
income and therefore exempt under section 10(1). Loss from an
exempt source cannot be set off against profits from a taxable
source.
9
 (4) As per section 71(2A), business loss cannot be set off against
salary income. Hence, 40% of the losses from tea business i.e.,
` 42,400 can be set off against short term capital gains or dividend
income.
(5) Loss from card games can neither be set off against any other
income, nor can it be carried forward.
(6) Loss of ` 50,000 from speculative business can be set-off only
against the income from the speculative business. Hence, such
loss has to be carried forward.
(7) As per section 74(1), brought forward long-term capital loss can be
set-off only against long-term capital gain. Such loss can be carried
forward for eight assessment years immediately succeeding the
assessment year for which the loss was first computed. Since, 8
assessment years has not expired, such loss can be carried
forward to A.Y. 2025-26 for set-off against long-term capital gains.
(b) First alternative
(i) A HUF whose total income without giving effect to, inter alia,
section 54EC, exceeds the basic exemption limit, is required to file
a return of its income on or before the due date under section
139(1). In this case, since the total income without giving effect to
exemption under section 54EC is ` 12 lakhs, exceeds the basic
exemption limit, the HUF is required to file its return of income for
A.Y. 2024-25 on or before the due date under section 139(1).
(ii) If an individual has incurred expenditure exceeding ` 1 lakh towards
consumption of electricity during the previous year, he would be
required to file a return of income, even if his total income does not
exceed the basic exemption limit. Since Mr. Samarth has incurred
expenditure of ` 1,20,000 in the P.Y.2023-24 towards consumption
of electricity, he has to file his return of income for A.Y. 2024-25 on
or before the due date under section 139(1).
(b) Second alternative
Every person who is eligible to obtain Aadhaar Number is required to
mandatorily quote Aadhaar Number:
(a) in the application form for allotment of Permanent Account Number
(PAN)
(b) in the return of income
The provisions of section 139AA relating to quoting of Aadhaar Number
would, however, not apply to an individual who does not possess the
Aadhaar number or Enrolment ID and is:
(i) residing in the States of Assam, Jammu & Kashmir and Meghalaya;

10
(ii) a non-resident as per Income-tax Act, 1961;
(iii) of the age of 80 years or more at any time during the previous year;
(iv) not a citizen of India.
If a person does not have Aadhaar Number, he is required to quote
Enrolment ID of Aadhaar application form issued to him at the time of
enrolment in the application form for allotment of PAN or in the return of
income furnished by him.

11
 SECTION B – GOODS AND SERVICES TAX (50 MARKS)
SUGGESTED ANSWERS
Division A - Multiple Choice Questions

Question Answer
No.
1 (b) The tax is payable at the time of supply of goods
2 (b) ` 5 crores
3 (a) Company has an option to issue single credit note against
multiple invoices.
4 (d) transaction value subject to the conditions mentioned in
Section 15(2) of the CGST Act, 2017.
5 (a) The Company shall be eligible to avail full input tax credit.
6 (c) Invoice by Maharashtra unit to the Gujarat unit of the
Company
7 (c) Mr. Jambulal is liable to obtain registration as he makes the
inter-State supply of goods.
8 (b) No, service by way of renting of residential property is
exempt.

Division B - Descriptive Questions

1. (a) Computation of GST payable
Particulars Value of CGST SGST IGST
supply @ 9% @ 9% @ 18%
(`) (`) (`) (`)
GST payable under forward
charge
Carnatic music performance 1,40,000 12,600 12,600 Nil
given to promote a brand of
readymade garments
[Carnatic music performance by
Mr. Nandan lal is not exempt
from GST even though the
consideration charged does not
exceed ` 1,50,000 since said
performance has been made by
him as a brand ambassador.]
Services of transportation of 1,00,000 9,000 9,000 Nil
students provided to HSMG
College
[Services of transportation of
12
students provided to an
educational institution other
than an institution providing
pre-school education or
education up to higher
secondary school, are not
exempt.]
Services provided to IFMP 2,00,000 18,000 18,000 Nil
Bank as a business
correspondent
[Services provided by a
business correspondent to a
banking company are not
exempt when such services are
provided with respect to
accounts in its urban area
branch.]
Services provided as a 15,000 1,350 1,350 Nil
recovery agent
[Tax is payable under forward
charge since recovery agent’s
services are being provided to a
person other than banking
company/financial institution/
non-banking financial
company.]
Total GST payable under 40,950 40,950 Nil
forward charge (A)
GST payable under reverse
charge
Legal services availed from an 1,75,000 Nil Nil 31,500
advocate
[Legal services received by a
business entity with aggregate
turnover in the preceding
financial year exceeding
threshold limit for registration
(` 20 lakh) are not exempt and
tax on the same is payable
under reverse charge.]
Total GST payable under Nil Nil 31,500
reverse charge (B)
Total GST payable [(A)+(B)] 40,950 40,950 31,500

13
 Computation of total ITC available
Particulars Value of CGST SGST IGST
supply @ 9% @ 9% @ 18%
(`) (`) (`) (`)
Outdoor catering services 50,000 Nil Nil Nil
availed
[ITC on outdoor catering
services is blocked except
when such services are (i)
used by the taxpayer who is in
the same line of business or
(ii) provided by the employer
to its employees under a
statutory obligation.]
Legal services availed 1,75,000 Nil Nil 31,500
[ITC is available as said
services are used in course or
furtherance of business.]
General insurance taken on a 40,000 Nil Nil Nil
car (seating capacity 5) used
for official purposes
[ITC on motor vehicles for
transportation of persons with
seating capacity ≤ 13 persons
(including the driver) is
blocked except when the
same are used for (i) making
further taxable supply of such
motor vehicles (ii) making
taxable supply of
transportation of passengers
(iii) making taxable supply of
imparting training on driving
such motor vehicles. Further,
ITC is not allowed on services
of general insurance relating
to such ineligible motor
vehicles.]
Total ITC available Nil Nil 31,500
Computation of net GST payable in cash
Particulars CGST SGST IGST
@ 9% @ 9% @ 18%
(`) (`) (`)
GST payable under forward charge 40,950 40,950 Nil

14
 Less: ITC of IGST1 [Refer Note] (15,750) (15,750) -
IGST IGST
25,200 25,200 Nil
Add: GST payable under reverse Nil Nil 31,500
charge in cash
[Tax payable under reverse charge,
being not an output tax, cannot be set
off against ITC and thus, will have to be
paid in cash.]
Net GST payable in cash 25,200 25,200 31,500
Note: ITC of IGST can be utilised towards payment of CGST and SGST
in any proportion and in any order.
(b) Computation of value of taxable supply made by M/s. LSP to
Balwant Ltd.
Particulars Amount
(`)
Price of the machine 20,000
[Since the price linked subsidy is received from the State
Government, the same is not includible in the value of
supply]
Third party inspection charges 6,000
[Any amount that the supplier is liable to pay in relation
to the supply but has been incurred by the recipient and
not included in the price actually paid or payable for the
goods, is includible in the value of supply]
Freight charges for delivery of the machine 1,000
[Since arranging freight is the liability of supplier, it is a
case of composite supply and thus, freight charges are
added in the value of principal supply.]
Total 27,000
Less: Discount @ 2% on ` 20,000 being price charged 400
to Balwant Ltd.
[Discount given before or at the time of supply if duly
recorded in the invoice is deductible from the value of
supply]
Value of taxable supply 26,600
2. (a) (i) Services provided by way of renting of residential dwelling for use
as residence except where the residential dwelling is rented to a
registered person is exempt from GST. Further, tax on service
1
Since IGST credit can be set off against CGST and SGST liability in any order and in any proportion,
the same can be set off against CGST and/or SGST liabilities in different ways as well. In all such
cases, net CGST and net SGST payable from Electronic Cash Ledger will differ though the total amount
of net GST payable ( ` 81,900) in cash will remain the same.
15
 provided by way of renting of residential dwelling to a registered
person is payable by the recipient under reverse charge.
Therefore, in the given case, Anant Technologies is liable to pay
GST on the residential dwellings taken on rent by it from Sapna
Builders, under reverse charge mechanism.
(ii) In case of services provided by any person by way of sponsorship
to any body corporate or partnership firm, GST is liable to be paid
under reverse charge by such body corporate or partnership firm
located in the taxable territory.
Since in the given case, sponsorship services are being provided
by the private NGO to a partnership firm – M/s. Verma Consultants,
GST is payable by Verma Consultants on said services under
reverse charge.
(b) Section 10(2A) of the CGST Act, 2017 provides the turnover limit of ` 50
lakh in the preceding financial year for becoming eligible for composition
levy for services. Little Smiles has started the supply of services in the
current financial year (FY), thus, it’s aggregate turnover in the preceding
FY is Nil. Consequently, in the current FY, Little Smiles is eligible for
composition scheme for services. A registered person opting for
composition levy for services shall pay tax @ 3% [Effective rate 6%
(CGST+ SGST/UTGST)] of the turnover of supplies of goods and
services in the State.
Further, Little Smiles becomes eligible for the registration when the
aggregate turnover exceeds ` 20 lakh (the threshold limit of obtaining
registration). While registering under GST, Little Smiles can opt for
composition scheme for services.
The option of a registered person to avail composition scheme for
services shall lapse with effect from the day on which his aggregate
turnover during a financial year exceeds the threshold limit of ` 50 lakh.
However, for the purposes of determining the tax payable under
composition scheme, the expression “turnover in State” shall not include
the value of supplies from the first day of April of a FY up to the date
when such person becomes liable for registration under the CGST Act.
Thus, for determining the turnover of the State for payment of tax under
composition scheme for services, turnover of April,2023 – June,2023
quarter [` 20 lakh] shall be excluded. On next ` 30 lakh [turnover of
July,2023 – September, 2023 quarter], it shall pay tax @ 6% [3% CGST
and 3% SGST].
For the purposes of computing aggregate turnover of a registered person
for determining his eligibility to pay tax under this section, aggregate
turnover includes value of supplies from the 1 st April of a FY up to the
date of his becoming liable for registration.
Thus, while computing aggregate turnover for determining Little Smiles’s
eligibility to pay tax under composition scheme, value of supplies from
16
 the first day of April of a financial year up to the date when it becomes
liable for registration under this Act (i.e. turnover of April,2023 –
June,2023 quarter), are included.
By the end of July, 2023 – September, 2023 quarter, the aggregate
turnover reaches ` 50 lakh. Consequently, the option to avail
composition scheme for services shall lapse by the end of July, 2023 –
September, 2023 quarter and thereafter, it is required to pay tax at the
normal rate of 18%.
Considering the above provisions, the tax payable for each quarter is as
under:-
S. Quarter GST rate Turnover GST payable
No. [CGST + (` in lakh) (` in lakh)
SGST]
1 April, 2023 – June, - 20 -
2023
2 July, 2023 – 6% 30 1.8
September, 2023
3 October, 2023 – 18% 40 7.2
December, 2023
3. (a) A user will not be able to generate e-way bill for a GSTIN if the said
GSTIN is not eligible for e-way bill generation.
The blocking of GSTIN for e-way bill generation is only for the defaulting
supplier GSTIN and not for the defaulting Recipient or Transporter
GSTIN.
A person paying tax under regular scheme who has not furnished the
returns for a consecutive period of 2 tax periods is considered as a
defaulting person.
Suspended GSTIN cannot generate e-way bill as supplier. However, the
suspended GSTIN can get the e-way bill generated as recipient or as
transporter.
In other words, e-way bill generation facility is blocked only in respect of
any outward movement of goods of the registered person who is not
eligible for e-way bill generatio. E-way bills can be generated in respect
of inward supplies of said registered person.
Thus, applying the above provisions, there will be no restriction in
generating e-way Bill by Mr. Roshan as Mr. Roshan who is making
outward movement of goods is a regular return filer.
E-way bill generation is blocked in case of movement of goods made by
Mr. Sohan to Mr. Mohan as it’s an outward movement of goods of
Mr. Sohan who has not filed GSTR-3B for past 2 months.

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 (b) The proper officer may cancel the registration of a person from such
date, including any retrospective date, as he may deem fit, where,-
(a) a registered person has contravened the prescribed provisions; or
(b) a person paying tax under composition scheme has not furnished
returns for a financial year beyond 3 months from due date of
furnishing retun; or
(c) any registered person, other than a person specified in clause (b),
has not furnished returns for a prescribed period; or
(d) any person who has taken voluntary registration has not
commenced business within six months from the date of
registration; or
(e) registration has been obtained by means of fraud, wilful
misstatement, or suppression of facts:
Thus, in view of the above-mentioned provisions, suo-motu cancellation
of registration of Mr. Raj by proper officer is valid in law since Mr. Raj, a
voluntarily registered person, has not commenced his business within 6
months from the date of registration.
Further, where the registration of a person is cancelled suo-motu by the
proper officer, such registered person may, subject to the provisions of
rule 10B, apply for revocation of the cancellation of registration to such
proper officer, within 90 days from the date of service of the order of
cancellation of registration.
However, the said period of 90 days may, on sufficient cause being
shown and for reasons to be recorded in writing, be extended by the
Commissioner or an officer authorised by him in this behalf, not below
the rank of Additional Commissioner or Joint Commissioner, as the case
may be, for a further period not exceeding 180 days.
Thus, considering the above provisions, the contention of Department is
not valid in law as he has applied for revocation within the time limit of
90 days.
4. (a) There are cases where an unregistered person purchases goods over
the counter (OTC) in one State and thereafter, transports the goods to
another State (generally, the State where he resides). For instance,
migrant workers, tourists, etc. who come to a State for work, tourism,
etc. and purchase goods in that State to take it to their respective State.
Similarly, in automobile sector, the residents of a State may travel to
another State to purchase vehicle from that State to take advantage of
lower registration charges and road tax, which vary from State to State
and thereafter, take the vehicle to their State.
Where the supply of goods is made to a person other than a registered
person, the place of supply shall be the location as per the address of
the said person recorded in the invoice issued in respect of the said
supply and the location of the supplier where the address of the said
person is not recorded in the invoice.
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 For this purpose, recording of the name of the State of the said person
in the invoice shall be deemed to be the recording of the address of the
said person.
Or
(a) In case of an event, if the recipient of service is registered, the place of
supply of services for organizing the event is the location of such person.
However, if the recipient is not registered, the place of supply is the place
where event is held.
Since the event is being held in multiple states and a consolidated
amount is charged for such services, the place of supply will be deemed
to be in each State in proportion to the value for services determined in
terms of the contract or agreement entered into in this regard.
In the absence of a contract or agreement between the supplier and
recipient of services, the proportionate value of services made in each
State (where the event is held) will be computed by the application of
generally accepted accounting principles.
(b) The amount available in the electronic credit ledger may be used for
making any payment towards output tax under the CGST Act or the IGST
Act, subject to the provisions relating to the order of utilisation of ITC.
Further, output tax in relation to a taxable person is defined as the tax
chargeable on taxable supply of goods or services or both but excludes
tax payable on reverse charge mechanism.
Accordingly, it is clarified that any payment towards output tax, whether
self-assessed in the return or payable as a consequence of any
proceeding instituted under the provisions of GST laws, can be made by
utilization of the amount available in the electronic credit ledger of a
registered person.
It is further reiterated that as output tax does not include tax payable
under reverse charge mechanism, implying thereby that the electronic
credit ledger cannot be used for making payment of any tax which is
payable under reverse charge mechanism.

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