Sample Paper CA Final – Paper 8: Indirect Tax Laws (New Course)

Sample Paper CA Final – Paper 8: Indirect Tax Laws (New Course) May 2019 Examination provided by ICAI. The pattern of CA Final question paper would be 30% objective and 70% descriptive under the Old and New Schemes.

1. A taxable person has made following supplies in January, 2018 –

Sales within the State – ₹ 2,00,000.
Exports out of India– ₹ 60,000.
Supplies to SEZ located within the State – ₹ 40,000.

He does not intend to clear goods under Letter of Undertaking (LUT) or bond. The input tax credit available to him during January, 2018 – IGST – Nil. CGST – ₹ 10,000. SGST – ₹ 20,000.

There is no opening balance in his electronic cash ledger or electronic credit ledger. Tax rates are – SGST – 9%, CGST – 9%, IGST – 18%. How much amount is payable by him in cash?

(a) CGST – ₹ 8,000 SGST – Nil
(b) CGST – ₹ 11,600 SGST – ₹ 1,600
(c) CGST – ₹ 8,000, SGST – Nil, IGST – ₹ 5,200
(d) CGST – ₹ 8,000 SGST – Nil, IGST – ₹ 16,000




2. Mr. A has received techical consultancy services from IT Star Consultants, USA. The import of technical consultancy will not be liable to GST if‐

(i) Mr. A pays some consideration for the services received
(ii) Mr. A pays some consideration for the services received and if Mr. A uses the said service for business purposes
(iii) Mr. A uses the said service for business purposes even though he does not pay any consideration for the same
(iv) Mr. A uses the said service for personal purposes and does not pay any consideration for the same and is also a partner in IT Star Consultants
(v) Mr. A uses the said service for business purposes and does not pay any consideration for the same and is also a partner in IT Star Consultants

(a) (i), (ii), (v)
(b) (ii), (iii) and (v)
(c) (iii), (iv)
(d) (iii), (iv) and (v)

3. XY, Bangalore, Karnataka furnishes following information:

(i) 10 MT of inputs stock transferred to branch located in Chennai, Tamil Nadu on 10th April, 20XX. Transfer value of the inputs shown in the invoice is ₹ 10,000.
(ii) 5 MT of inputs supplied to customer located in Chennai at ₹ 12,500 on 10th April, 20XX.
(iii) Cost of production of 1 MT of input is ₹ 750.

(iv) Chennai branch is eligible for full input tax credit.

The value of the inputs stock transferred to Chennai Branch is‐

(a) ₹ 10,000
(b) ₹ 25,000
(c) ₹ 8,250
(d) ₹ 12,500

4. Which of the given activities does not amount to supply?

(a) An architect in India seeks legal advice from his son settled in London free of cost with regard to his family dispute.
(b) A Resident Welfare Association provides the service of depositing the electricity bills of the residents in lieu of some nominal charges.
(c) A dealer of air‐conditioners permanently transfers an air conditioner from his stock in trade, for personal use at his residence.
(d) An electronic commerce operator in India seeks legal advice for its business from its head office in US free of cost.




5. Mr. X enters into a contract with a client for supply of certain services on 18.12.2017. GST is payable on such services underforward charge. Services are supplied on 25.12.2017 and invoiced on 05.01.2018. The client makes payment by cheque for the services on 29.12.2017 and such payment is credited to the bank account of Mr. X on 06.01.2018. The payment is recorded in the books of account of the client and Mr. X on 30.12.2017 and 07.01.2018 respectively.

The time of supply of services is:

(a) 29.12.2017
(b) 30.12.2017
(c) 06.01.2018
(d) 05.01.2018

6. Kesar Maharaj, a registered supplier, gave a classical dance performance in an auditorium. The consideration charged for the said performance is ₹ 1,60,000. Such performance is not for promotion of any product/services. Rate of CGST and SGST on such servicesis 9% each. Assuming the services supplied by him to be intra‐State supplies, which of the following statements are true?

(a) GST liability of Kesar Maharaj is Nil as services provided by him are exempt.
(b) Kesar Maharaj is liable to pay CGST and SGST of ₹ 14,400 and ₹ 14,400 respectively.
(c) Kesar Maharaj is liable to pay CGST and SGST of ₹ 900 and ₹ 900 respectively.
(d) None of the above.

7. Avtaar Enterprises, Kanpur started trading in ayurvedic medicines from July 1, 20XX. Its turnover exceeded ₹ 20 lakh on October 3, 20XX. The firm applied for registration on October 31, 20XX and was issued registration certificate on November 5, 20XX. Can any revised invoice be issued in the given scenario? If the answer to the first question is in affirmative, determine the period for which the revised invoices can be issued as also the last date upto which the same can be issued.

(a) Revised invoice cannot be issued in the given case.
(b) Revised invoices can be issued for supplies made between October 3, 20XX and November 5, 20XX. Further, the revised invoices can be issued for the said period till December 5, 20XX.
(c) Revised invoices can be issued for supplies made between October 31, 20XX and November 5, 20XX. Further, the revised invoices can be issued for the said period till December 31, 20XX.
(d) Revised invoices can be issued for supplies made between July 1, 20XX and November 5, 20XX. Further, the revised invoices can be issued for the said period till December 31, 20XX.

8. Shagun started supply of goods in Vasai, Maharashtra from 01.01.20XX. Her turnover exceeded ₹ 20 lakh on 25.01.20XX. However, she didn’t apply for registration. Determine the amount of penalty, if any, that may be imposed on Shagun under section 122(1) of the CGST Act, 2017 on 31.03.20XX, if the tax evaded by her, as on said date, on account of failure to obtain registration is ₹ 1,26,000:

(a) ₹ 10,000
(b) ₹ 1,26,000
(c) ₹ 12,600
(d) None of the above




9. Kutch Refineries supplies LPG to XYZ Ltd. by a pipeline under a contract. The terms of contract are:
(i) Monthly payment of ₹ 2 lakh to be made by the recipient on fifth day of the month.
(ii) A quarterly statement of the goods dispatched and payments made will be issued by seventh day of the month succeeding the relevant quarter.

Which of the following statements is true?

(a) Invoice will be issued on August 5, September 5, October 5 and October 7.

(b) Invoice will be issued on August 5, September 5 and October 5.
(c) Invoice will be issued on August 5, September 5, October 5, October 7 and October 17
(d) None of the above

10. A Chartered Accountant issued following bill –

(i) Professional fees – ₹ 1,00,000
(ii) Out of pocket expenses – ₹ 10,000
(iii) MCA for e‐filing of documents on MCA portal – ₹ 5,000.

His value of service for tax purposes is:

(a) ₹ 1,15,000
(b) ₹ 1,10,000
(c) ₹ 1,05,000
(d) ₹ 1,00,000

11. Krishna Motors is a car dealer selling cars of an international car company. It also provides maintenance and repair services of the cars sold by it as also of other cars. Determine the amount of input tax credit available with the help of the following information regarding expenses incurred by it during the course of its business operations:

(a) ₹ 19,00,000
(b) ₹ 21,10,000
(c) ₹ 19,50,000
(d) ₹ 20,50,000

12. In which of the following cases, import of services is taxable under GST?

(1) Import of service with consideration in course or furtherance of business.
(2) Import of service with consideration not in course or furtherance of business.
(3) Import of service without consideration from a related person in course or furtherance of business.
(4) Import of service without consideration from a related person not in course or furtherance
of business.

(a) (1) and (3)
(b) (2) and (4)
(c) (1), (2) and (3)
(d) (4)




13. Compute the value of ‘exempted supply’ for purpose of section 17(2) of the CGST Act, 2017 from the following details:
(i) Value of alcoholic liquor for human consumption: ₹ 1,50,000
(ii) Value of architect services supplied:₹ 2,00,000
(iii) Securities of face value of ` 1,00,000 sold for ₹ 95,000

(a) ₹ 1,50,000
(b) ₹ 2,50,000
(c) ₹ 2,45,000
(d) ₹ 1,50,950

14. Grand Foods is engaged in supplying restaurant service in Delhi. In the preceding financial year, it has an aggregate turnover of ₹ 90 lakh from restaurant service and ₹ 10 lakh from supply of farm labour and has earned a bank interest of ₹ 10 lakh. Which of the following statements are true in the given case?
(1) Aggregate turnover of Grand Foods, for determining eligibility for composition scheme, in the preceding FY is ₹ 90 lakh.
(2) Aggregate turnover of Grand Foods, for determining eligibility for composition scheme, in the preceding FY is ₹ 100 lakh.
(3) Aggregate turnover of Grand Foods, for determining eligibility for composition scheme, in the preceding FY is ₹ 110 lakh.
(4) Supply of farm labour and supply of service of extending loans/deposits does not make Grand Foods ineligible for composition scheme.
(5) Supply of services other than restaurant service ‐ supply of farm labour and supply of service of extending loans/deposits ‐ by Grand Foods makes it ineligible for composition scheme.

(a) (1) and (4)
(b) (2) and (4)
(c) (1) and (5)
(d) (3) and (5)

15. Which of the following services provided by Good Health Care Nursing home are not exempt?

(1) Reiki healing treatment.
(2) Plastic surgery conducted to repair cleft lip of a new born baby.

(3) Air ambulance services to transport critically ill patients from distant locations to Ayushman Medical Centre.
(4) Palliative care for terminally ill patients. On request, such care is also provided to patients at their homes. (Palliative care is given to improve the quality of life of patients who have a serious or life‐threatening disease but the goal of such care is not to cure the disease).
(5) Alternative medical treatments by way of Ayurveda.

(a) (1) and (3)
(b) (2) and (4)
(c) (1)
(d) (1), (4) and (5)

16. Open area in the precincts of a temple has been rented for a marriage for a day. In which of the following cases, such renting is exempt from GST?

(a) Temple is owned by Sanatan Charitable Trust (registered under section 12AA of the Income‐tax Act, 1961) and consideration charged is ₹ 9,000.
(b) Temple is owned by Sanatan Charitable Trust (registered under section 12AA of the Income‐ tax Act, 1961) and consideration charged is ₹ 11,000.
(c) Temple is owned by Sanatan Charitable Trust (registered under section 12AA of the Income‐ tax Act, 1961) and consideration charged is ₹ 11,000.
(d) None of the above.




17. BTW Pvt. Ltd. has following units:
A: Factory in Noida, Uttar Pradesh; closed from 2017‐18 onwards, no turnover.
B: Factory in Ghaziabad, Uttar Pradesh; turnover of ₹ 54 crores in 2017‐18;
C: Service centre in Faridabad, Haryana; turnover of ₹ 2 crore in 2017‐18;
D: Service centre in New Delhi; turnover of ₹ 4 crores in 2017‐18;

The company’s corporate office functions as an input service distributor. It hasto distribute input tax credit of ₹ 18 lakh for April, 2018. Of this, an invoice involving tax of ₹ 6 lakh pertains to technical consultancy for Faridabad unit.

Input tax credit will be distributed as:

(a) ₹ 3,00,000 to Noida Factory, ₹ 9,00,000 to Ghaziabad factory, ₹ 3,00,000 to Faridabad service centre and ₹ 3,00,000 to New Delhi service centre.
(b) ₹ 10,80,000 to Ghaziabad factory, ₹ 6,40,000 to Faridabad service centre and ₹ 80,000 to New Delhi service centre.
(c) ₹ 10,80,000 to Ghaziabad factory, ₹ 40,000 to Faridabad service centre and ₹ 80,000 to New Delhi service centre.
(d) ₹ 16,20,000 to Ghaziabad factory, ₹ 60,000 to Faridabad service centre and ₹ 1,20,000 to New Delhi service centre.

18. (i) A software professional providing technical consultancy buys a motorcycle for use of his employee.
(ii) A motor driving school buys a car for being used in imparting motor driving training.
(iii) A flying school imports an aircraft for use in its training activity.
(iv) A manufacturer buys a small truck for the purpose of transporting its inputs and finished goods.

Input tax credit cannot be taken on:

(a) (iii)
(b) (i), (ii), (iii), (iv)
(c) (i)
(d) (i), (iii)

19. Kamlesh hires a works contractor for repairing his factory building on a lumpsum payment of ₹ 11,80,000. He debits half of the expenditure in the profit and loss account and the remaining half in the building account.

Assuming the rate of GST to be 18%, Kamlesh can take input tax credit of:

(a) ₹ 90,000
(b) ₹ 1,06,200
(c) ₹ 2,12,400
(d) Nil

20. An online portal, Best Info, raises invoice for database access on 21st February, 2017 on Roy & Bansal Ltd. The payment is made by Roy & Bansal Ltd. by a demand draft sent on 25th February, 2017 which is received and entered in the accounts of Best Info on 28th February, 2017. Best Info encashes the demand draft and thereafter, gives access to the database to Roy & Bansal Ltd from 3rd March, 2017. In the meanwhile, the rate of tax is changed from 1st March 2017.

What is the time of supply of the service of database access by Best Info?

(a) 25th February, 2017
(b) 28th February, 2017
(c) 21st February, 2017
(d) 3rd March

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