4th Semester M.Com.

Degree Examination, June/July 2018

(CBCS)
COMMERECE
AT-4.4: Goods and Service Taxes

SECTION- A

1. Answer any seven of the following questions. In about 3-4 lines each

a) What is the tax treatment of composite supply and mixed supply

under GST?

Under GST 'Mixed Supply' Means a combination of two or more goods or services
made together for a single price. Each of these items can be supplied separately and
is not dependent on any other. A supply can be a mixed supply only if it is not a
composite supply

b) Whether goods supplied on hire purchase basis will be treated as

supply of goods or supply of services? Give reason

Supply of goods on hire purchase shall be treated as supply of goods as there is

transfer of title, albeit at a future date.

c) What is zero rated supply state with example

Zero Rated. Goods or services on which GST rate of 0 % is applicable are

called zero rated goods or services. ... Input tax credit of inputs and / or input
services used in providing supply attracting zero rate is not available i.e. no input
tax credit on zero rated supplies

Examples of items that may be zero-rated include certain foods and beverages,
exported goods, donated goods sold by charity shops, equipment for the disabled,
prescription medications, water, and sewage services, books and other printed
publications, and children's clothing.
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 d) What is the due date of submission of GSTR-1? Section 37(1).

CBIC has notified the due dates for filing GSTR-1 is June 2019 Month due date is 11th
July 2019

e) Mr. A, a registered person was paying tax under section Composition

Scheme up to 30th July. However, w.e.f. 31st July, Mr. a becomes
liable to pay tax under regular scheme. is he eligible for ITC?

Mr. A is eligible for input tax credit on inputs held in stock and inputs contained in
semi-finished or finished goods held in stock as on 30th July,2017.

f) Expand CPIN and E-FPB.

CPIN- Common Portal identification Number

E-FPB- Electronic Focal Point Branch

g) State the name of output Tax under GST where any of input tax credit
under GST can be availed

h) Define Indian territorial water and Indian customs water.

Indian customs water, means the waters extending into the sea up to the limit of
contiguous zone of India under s. 5 of the Territorial Waters Continental Shelf,
Exclusive Economic Zone and other Maritime Zones Act, 1976 and includes any bay,
gulf, harbour, creek or tidal river.

i) What is input credit in GST?

Input Tax Credit (ITC) Goods and Services Tax (GST) is considered the biggest
reforms in India. ... In simple words, Input Credit means at the time of paying tax on
sales, you can reduce the tax you have already paid on purchases.

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 j) What is the consequence of not filing the GST return with the
prescribed date?

According to the GST rules and regulations, Rs.100 per day is charged by the
taxpayers as penalty for the late filing of GST return. ... Hence, the taxpayer has to face
heavy fines and penalty as the consequence of not filing a GST return by the
prescribed date

SECTION-B

Answer any four of the following in about one page. Each question carries 5
marks.

3. Enumerate the deficiencies of indirect taxes which led to the need for
ushering into GST regime.

The earlier indirect taxes framework in India suffered from various shortcomings.
Although CENVAT (i.e. excise duty) and State-Level VAT were essentially value added
taxes, set-off of one against the credit of another was not possible as CENVAT was a
central levy and State-Level VAT was a State levy. Moreover, CENVAT was applicable
only at manufacturing level and not at distribution levels.

• Despite the introduction of the principles of value-added taxation system in India

(in the form of CENVAT at the central level and in the form of State VAT at the
state level), its application remained piecemeal and fragmented. Businesses
continued to face multiple difficulties because of the shortcomings of the indirect
tax mechanism prevailing in India:

1. No integration of VAT on goods with tax on services/manufacture.

2. Continued imposition of Central Sales Tax (CST), which was non-creditable,

leading to cascading effect thereby adding to the cost of goods.

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 3. Problems relating to distinguishing between goods and services had been a major
cause of concern as the distinction between the two was often blurred.

4. Non-inclusion of several State and local levies in State VAT such as luxury tax,
entertainment tax, etc.

5. Cascading effect of taxes as CENVAT on the goods remains included in the value
of goods taxed under State VAT.

4. Describe the design and implementation Frame work of GSTN

The Goods and Service Tax Network (or GSTN) is a non-profit, non-government organization.
It will manage the entire IT system of the GST portal, which is the mother database for
everything GST. This portal will be used by the government to track every financial
transaction, and will provide taxpayers with all services – from registration to filing taxes and
maintaining all tax details.

Implementation Of GSTN

Considering the broad role of GSTN in reforming Indirect tax system in India, it is understood
that GSTN shall performing following services in a phased manner towards implementation of
GST:

➢ Phase 1: Registration/ Return / Payments

➢ Phase 2: Review of Pilot and project developed by National Securities Depository

Limited (NSDL)

➢ Phase 3: GST Implementation planning

➢ Phase 4: GST solution Development and implementation

The select committee has noted that in report on GST Bill that GSTN is expected to complete
the development of IT infrastructure and services by March, 2016 i.e. exactly one month before
the date on which the Government of onia intends to implement it throughout the country. The

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select committee further recommended that GSTN should implement comprehensive training
programmes at all levels to allay the fears of consumers, stakeholders, organisation etc. the
select committee also recommended that it is imperative that not only IT preparedness is at
very high level but also requisites like IT infrastructure, unified tax credit clearing mechanism,
etc. may be put in place for implementation of GST

5. What kind of inward supplies are required to be furnished in GSTR-2?

Form GSTR 2 is a statement in which a regular dealer needs to capture all the inward supplies
made during the month. Broadly, all the inward supplies from registered businesses, including
the supplies on which tax needs to be paid on reverse charge are required to be captured at the
invoice level to file GSTR 2. In addition to inward supplies, one also needs to declare - the
details of advances paid on supplies liable for reverse charge, and also, the advance amount on
which tax was paid in the earlier returns period but the invoice has been received in the current
returns period. As per the latest recommendations, for the period of July ’17 to March ‘18,
filing of GSTR-1 will be allowed to be done without filing GSTR-2 and GSTR-3 for the
previous month, and the dates for filing of GSTR-2 and GSTR-3 will be decided by a
committee of officers and communicated in due course of time.

Form GSTR 2 filing contains 13 tables in which the following details need to be captured:
➢ Table 1: Details of GSTIN
➢ Table 2: Traders’ details
➢ Table 3: Details of Inward supplies received from a registered person other than the
supplies attracting reverse charge
➢ Table 4: Details of Inward supplies on which tax has to be paid on reverse charge.
➢ Table 5: Details Inputs/Capital goods received from Overseas or from SEZ units on a
Bill of Entry
➢ Table 6: Amendments to details of inward supplies furnished in returns for earlier tax
periods and details of debit notes/credit notes issued
➢ Table 7: Details of Supplies received from composition taxable person and other
exempt/Nil rated/Non-GST supplies received
➢ Table 8: Details of Credit received from ISD
➢ Table 9: Details of TDS and TCS credit received

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 ➢ Table 10: Details of advances paid/advance adjusted on account of receipt of supply
➢ Table 11: Details of Input tax credit reversal/ Reclaim.
➢ Table 12: Details of addition and reduction of amount in output tax for mismatch and
other reasons
➢ Table 13: HSN Summary of Inward Supplies

6. Problem

Solution: -

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7. Problem

Solution:

i. July 1

ii. June 25

iii. June 30 for part payment made and July 1 for balance amount

iv. June 28 (i.e. when payment is entered in the both of account of the recipient)

v. June 23 (i.e. when payment is debited in the recipient bank account)

vi. July 30 (i.e. 31st day from issue of invoice)

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 SECTION-C

Answer any three questions out of five. Each question carries twelve marks

8. Problem

Solution: -

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9. Explain the mandatory guidelines and architecture of GSP to integrate
with the GST system

GSPs are the special entities who have been authorized to develop a platform to enable the
taxpayer to do the GST compliances. GST is biggest tax reform in Indian history. All GST
system functionalities like registration, return filing, payment of taxes, uploading of invoices
will be available through APIs. All return filings under GST will be managed by GSTN.

GSP stands for GST Suvidha Provider. A GSP is considered as an enabler for the taxpayer to
comply with the provisions of the GST law through its web platform (essentially an online
compliance platform such as Clear Tax ).

GSP Ecosystem

Let’s take one example to understand it better:

ABC Ltd is a private multinational company which is running operations on SAP ERP. All
records with respect to Purchases and Sales are maintained in it. At the end of each month,
reports are generated from ERP and attached with the tax return and uploaded on
government’s portal.

Our government is now aiming for single and automated workflow wherein these ERP
companies can build an interface with government’s portal and all the GST related
compliance can be done directly through their software.

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GSP need not be only ERP companies but can be start-ups or technology companies having
expertise in building web applications

In the first round of allotment of license, thirty-four companies have been provided with GSP
license. A complete list of these GSPs is provided here.

FUNCTIONALITIES OF GSP:

a. It will provide a functionality to taxpayer to reconcile sales & purchase invoices

and upload the reconciled invoices on GST Network (GSTN).
b. Consolidated view of all the clients.
c. Get updates on their taxpayers from GST system.
d. Error free Record keeping - Highlighting errors on a real time basis.
e. Action oriented reports for every user.
f. Proving MIS as may be desired by the user at any point of time.

In GST framework, all taxpayers need to provide details of all invoices in a particular format
for various returns. GST will give the automation for all the taxpayers. GST system will not
allow to upload duplicate content. Tax payer’s convenience will be a key in success of GST
regime. Every tax payer requires a gateway of GSP to interact with GSTN for return filing.

10. Problem

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Solution: -

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11. what is goods and services taxes briefly discuss the constitution 101st
amendment act 2016.

Goods and Services Tax (GST) is an indirect tax (or consumption tax) imposed in India on
the supply of goods and services. It is a comprehensive multistage, destination-based tax.
Comprehensive because it has subsumed almost all the indirect taxes except few. Multi-Staged
as it is imposed at every step in the production process, but is meant to be refunded to all parties
in the various stages of production other than the final consumer. And destination-based tax,
as it is collected from point of consumption and not point of origin like previous taxes.

The One Hundred and Twenty Second Amendment Bill of the Constitution of India,
officially known as The Constitution (One Hundred and First Amendment) Act, 2016,
introduced a national Goods and Services Tax in India from 1 July 2017.

The GST is a Value added Tax (VAT) proposed to be a comprehensive indirect tax levy on
manufacture, sale and consumption of goods as well as services at the national level. It replaces
all indirect taxes levied on goods and services by the Indian Central and state governments. It
is aimed at being comprehensive for most goods and services.

On 29 March 2017, CGST, IGST, UTGST and GST compensation law passed in Lok Sabha

The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014 was
introduced in the Lok Sabha by Finance Minister Arun Jaitley on 19 December 2014, and
passed by the House on 6 May 2015. In the Rajya Sabha, the bill was referred to a Select
Committee on 14 May 2015. The Select Committee of the Rajya Sabha submitted its report on
the bill on 22 July 2015. The bill was passed by the Rajya Sabha on 3 August 2016, and the
amended bill was passed by the Lok Sabha on 8 August 2016.

The bill, after ratification by the States, received assent from President Pranab Mukherjee on 8
September 2016, and was notified in The Gazette of India on the same date.

An empowered union committee was set up by the Vajpayee administration in 2000 to

streamline the GST model to be adopted and to develop the required back-end infrastructure
that would be needed for its implementation.

In his budget speech on 28 February 2006, P. Chidambaram, the Finance Minister, announced
the target date for implementation of GST to be 1 April 2010 and formed another empowered
committee of State Finance Ministers to design the road map. The committee submitted its

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report to the government in April 2008 and released its First Discussion Paper on GST in India
in 2009. Since the proposal involved reform/ restructuring of not only indirect taxes levied by
the Central but also the States, the responsibility of preparing a Design and Road Map for the
implementation of GST was assigned to the Empowered Committee of State Finance Ministers
(EC). In April, 2008, the EC submitted a report, titled "A Model and Road map for Goods and
Services Tax (GST) in India" containing broad recommendations about the structure and design
of GST. In response to the report, the Department of Revenue made some suggestions to be
incorporated in the design and structure of proposed GST bill. Based on inputs from GOI and
States, The EC released its First Discussion Paper on Goods and Services Tax in India on 10
November 2009 with the objective of generating a debate and obtaining inputs from all
stakeholders.

A dual GST module for the country has been proposed by the EC. This dual GST model has
been accepted by centre. Under this model GST have two components viz. the Central GST to
be levied and collected by the Centre and the State GST to be levied and collected by the
respective States. Central Excise duty, additional excise duty, Service Tax, and additional duty
of customs (equivalent to excise), State VAT, entertainment tax, taxes on lotteries, betting and
gambling and entry tax (not levied by local bodies) would be subsumed within GST. Other
taxes which will be subsumed with GST are Octroi, entry tax and luxury tax thus making it a
single indirect tax in India.

In order to take the GST related work further, a Joint Working Group consisting of officers
from Central as well as State Government was constituted. This was further trifurcated into
three Sub-Working Groups to work separately on draft legislation required for GST,
process/forms to be followed in GST regime and IT infrastructure development needed for
smooth functioning of proposed GST. In addition, an Empowered Group for development of
IT Systems required for Goods and Services Tax regime has been set up under the chairmanship
of Dr. Shruti Negi.

The Act was passed in accordance with the provisions of Article 368 of the Constitution, and
has been ratified by more than half of the State Legislatures, as required under Clause (2) of
the said article. On 12 August 2016, Assam became the first state to ratify the bill, when the
Assam Legislative Assembly unanimously approved it.

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12. Problem

Solution:

Note: Goods return within 6 months should be excluded from sales price/ value but this rule
does not apply for goods rejected

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