Solved question paper for GST May-2019 (BBA 4th)

Question paper 1

1. SECTION-A

   1. (i) What is Goods and Service Tax?

   Answer:

   GST is an indirect taxes which has replaced many indirect taxes in India. The goods and Service Tax Act was passed in the Parliament on 29th March 2017. The act came into effect on 1st July 2017. Goods and service tax law in India is a comprehensive multistage destination based tax of that is on every value addition full stop in simple word goods and Service Tax is an indirect tax levied on the supply of goods and service. This law has replaced much indirect tax law that previously exist in India.

2. (ii) What is voluntary registration ? When is it required ?

   Answer:

   Voluntary registration under GST has a survival advantages such as a more freedom in interstate sales passing on off input tax credit goods rating etc. However it is important to also have the technology ready to online payment. Even business that have not requirement to register under the goods and service tax can choose the voluntary register themselves under the new tax remain. Every provision under that tax that applied to registered and Titus shall be applicable to those who voluntary resisted to.

3. (iii) Explain TDS.

   Answer:

   TDS stand for tax deducted at source. It was introduced to collect Tax at the sources from where an individual's income is generated. The government uses TDS as a tool to collect tax in order to minimize tax by touching the income. At the time it is generated rather than at a later date. TDS is applicable on various income such as salaries interest received Commission received. TDS on works on the concept that very person making specified type of payment to any person shall deduct tax at the rates prescribed in the Income Tax Act at source and deposit the sense into the government account.

4. (iv) Define the following terms:

   (a) Goods

   (b) Debit Note

   (c) Credit Note

   (d) Bills of Supply

   (e) Tax Invoice

   Answer:

    

   1. Goods:- A good is an object of people want that they can touch or Hold. An example of good is bedspread being sold by a department store.

   2. Debit note:- A debit note on digital memorandum is a commercial document issued by buyer and a seller as a mean of formally requesting a Credit note. Debit note act as the source document to the Purchase return generate.

   3. Credit note:- A receipt given by a shop to a customer who has returned goods which can be e offit against future purchases.

   4. Bills of supply:- A bill of supply is a document of transactions that is a different from a normal tax invoice. A bill of supply is issued in case of an arrested person is a supplier of goods and service.

   5. Tax invoice:- tax invoice is an invoice Ishu for taxable supply of good and service. Tax invoice broadly contains detailed like a description quality value of goods and services tax a charge and particular as many be pre described full stop tax invoice is a primary evidence for a receptor and to claim input tax credit of goods and service.

6. (v) Differentiate mixed supply and composite supply.

   Answer:

   Composite supply	Mixed supply
   Two or more taxable supplies.	You are more individual supplies
   Good sources for combinations	Good sources or combination
   Naturally bundled	Supplied in conjunction
   Site formation service for construction	Other than composite supply
   Supplied in conjunction	For a single price

7. (vi) In what situations refund can be claimed under GST?

   Answer:

   The incense GST paid can be claimed as a refund within two years from the date of payment. This means that if excess GST is paid in the month of November 2017 GST refund application can be submitted until November 2019. The GST law provide for refund of underutilized input credit on tax paid on suppliers under the certain circumstances.

8. SECTION-B

   2. Explain the deficiencies in the Indian taxation system prior to GST.

   Answer:

   The deficiencies in the Indian Taxation system prior to GST are:-

   1. High rate and low field of direct taxes:- In India as in other the rate of direct tax is very high but contribution to the total tax revenues is very low in 1950 is the rate of income tax in India was one of the highest in the word but the revenue was very insignificant. This is because Hai tax action and evidence on a larger scale.

   2. Low contribution of income tax:-Although the rate of income tax is the highest in India the contribution from Such is very low. Texas scenes to be the primary reason author reason is the Hike limit in a country where per capita income is very low. In India the exemption limit has been reached from time to time but the level of variation and per capita income have failed to increase proportionately.

   3. Double taxation of divider:- Moreover due to double taxation of divided the rate of domestic Savings and capital formation has paid to increase applicable. Companies pay corporation and other taxes to the government. A position of net profit after tax usually distributed accuracy share holder in the form of a divided. Opposition of Such dividends income is again text away in the form of personal income tax.

   4. Absence of Agriculture Income:- Author feature of India se Texas system is that there is no tax on agricultural income. agriculture is is the dominant sector of Indian economy full stop the contribution of agriculture and related activity to India's GDP was 29.3 percentage in 1990.

   5. Importance of indirect taxes:- In India importance of indirect taxes has increased over the ear which implies that the importance of direct tax to has diminished full stop in absolent term the contribution of direct tax has increased but the percentage contribution of direct tax has increased but the percentage contribution of such taxes in total tax revenue has declined.

   6. Progressive taxes on Income Tax:- The government has made the system of direct tax progressive and progressive lens is consider in the interest of equity and fore reducing the the disparities in the distribution of income and wealth.

   7. Widening the indirect of tax net:- Over the years the indirect taxes net has been spread wide. Almost all the commodities that we buy high indirect taxes as sales tax in use duty custom duty so on. At present central government revenue from to main Texas Union in rice duty and customer account for about 80% of revenue.

   8. Regressive nature:- Moreover indirect taxes have become more and more regressive over the years false of such taxes are usually imposed on corruption good. In general poor people have a a a hai propensity to custom then the rich people first of infected the marginal propensity gradually decrease with an increase in income.

9. 3. How valuation is done under GST ? Explain the inclusions and exclusions for reaching assess value.

   Answer:

   Valuation under GST:- GST will be one tax to subsume or taxes. It will bring in one Nation one tax regime

   Being a completely new form of interactive taxation there are many question in the mind of the organisations of all top one of the most important question what is valuation of supply under GST? Currently GST will be charged on the taxation value. Taxation value is the price actually paid for the supply of good service between and related parties.

   The value of supply under GST shall include:-

   1. Any taxes, duty, fees, and charge under any actor accept GST

   2. Amount that is supplied is a liable to pay which has been insured by the assistant and is a not include the price.

   3. The value will include for incidental expenses in relation to sale such as packing Commission etc.

   4. Subsidies limit to supply, accept government subsidies will be included.

   5. Interest /late fees/ plenty for delay payment of consideration will be include.

   Inclusion and exclusion of drought out items in the assemble value for payment on duty under Central excise.

   Any Union budget for the year 2000-2001 the Finance Minister change the valuation concept all together. Before amendment in Section 4 valuation used to be done as per normal price basis but after amending the section” transaction value” has been taken as a base for assessment purpose.

   In excise official and living the provision of rule 6 and inclusion and exclusion of value of about out item and a equal concept and this is not the real interpretation of law.

   The buyer was manufacturer of bio-fertilizer using vermi bed provided by assassin. It does not require any wash paper to manufacture by fertilizer. Through vermi wash pipes are required to remove the wastage water during the causes of manufacturing of a bio-fertilizer in agriculture field but main purpose of producing bio-fertilizer get a satisfied with the use v e r m i i b e d only enhance v e r MI wash pipe supplies by the assesses is not as essential items so as to include it value in v e r m i b e d for payment on duty.

11. 4. What is Composition Levy Scheme? Explain its features and discuss the procedure for opting for the Composition Levy Scheme.

    Answer:

    The composition by is an alternative method of by of tax designed for small taxpayer whose turnover is up to Rs. 5 crores and pay as flat rate of the tax regardless of what they manufacturer provide as a service or trade they carry on.

    Composition is a simple and easy scheme under GST for taxpayer. Smart x player can get a ride of GST formalities and pay GST as fix rate of turnover. This scheme can be e adopted by any taxpayer whose turnover is less than 1 crore.

    Features

    1. Eligibility:- Everyone is not eligible to enroll under this scheme. It is only meant for taxpayer who is aggregate turnover does not exceed 75 lakh in a financial year.

    2. Tax rate:- The rate of the tax as prescribed will be less than the regular GST but not less than the 1% of turn turnover during the financial year. The tax rates under this scheme are expected to be between 1 and 3%.

    3. Not eligible for input tax credit:- As per the section 16 of the goods and service on which the composition tax has been paid do not qualify for the input tax credit.

    4. Applies to interest rate supplier:- Local suppliers I. e. All those who is a supply with in a state can only take advantages for this scheme. The interest rate suppliers will come under this is regular GST laws.

    5. Need voluntary application:- All tax payer need to make a voluntary registration every year for getting the benefit of GST composition scheme.

    6. Quarterly Returns:- instead of the feeling 3/4 returns monthly taxpayer who are listed under this game will the required to fill return Once in every quarter.

    Procedure to be followed:-

    For operating composition scheme of following produce need to be followed

    Category of reasons	How to exercise option	Effective date of composition by
    Person migrated form Central Excise and V ATM	Intimation inform CMP 0 1 and declare stock in cmp-03	From beginning in GST
    News Nation under GST	Intimation in registration form	From the effective date of registration
    In other case	Intimation inform cmp-02	Beginning of the financial year

12. 5. Discuss in detail the provisions regarding payment of taxes under GST

    Answer:

    Provisions of payment under GST

    As India is moving towards digitalization GST has provided an easy and simple way of payment of taxes. Under GST Re sign all the tax payer will get 3 electronic ledger namely E-cash ledges, E-Credit ledger and E-liability ledger through their GST profile.

    1. E-cash ledger:- The is Electronic cash ledger under subsection 1 of Section 4 and 9 shall be maintained in form GST PMT-05 for each person liable to pay tax interest penalty for late fee and other for each person, liable to pay tax, interest, penalty, for late fee and other amount on the common for crediting the Amount deposited and debating the payment therefore to work tax, interest, penalty fee or any other amount does payment can be made in cash by debiting and cash ledger maintained on the common portal.

    2. E-debit or credit ledger:- Average district taxable person is required to record and maintain an electronic liability leisure Inn from GST PMT-01 and ad all amount payable will be debited in the said registered. The electronic credit ledger shall be maintained from GST PMT-02 for each registered person eligible for input tax credit under act on the common portal and every claim of input tax credit under the act shall be credited to sad ledger.

    Payment of every liable by a registered taxable person can be made by debiting and liability e ledger for each cash ledger. Any amount of demand debited on amount of penalty imposed or liable to imposed in the electronic tax liability e-register shall we stand reduced to the extent of relief given by the appellate authority or appellate tribunal or court or if the liable. Person makes the payment of tax, interest and penalty is specified in the show Cause Notice on demand order the electronic tax liability register shall be credited accordingly.

    Any payment required to be made by a person who is not as registered under the act shall be made on the basis of a temporary identification number generated through the common portal.

    Under E- cash money can be deposited in the cash ledger by modes at dispatched in the above diagram. Over the country E payment can be made in branches of Bank authorized to accept a deposit of GST. A challenge in from GST pmt-06 is required to be generated and the detail of the amount to be deposited to word tax interest penalty fee or any other amount will be entered in the challan . Challah in FORM GST PMT-06 generated at the common portal shall be valid for period of fifteen days.

13. SECTION-C

    6. Explain the following terms:

    (a) Supply in the course of intra-State trade.

    Answer:

    Supply in the course of intra state:-

    Intra State supply of service means any supply of service where the location of suppliers and place of supply is in the same state but does not include supplied to or bi SEZ developer or SEZ unit

    GST is a destination based tax an end user consuming any goods and service tax full stop the tax is received by the state in which the goods or service are consumed and not by the state in which such goods are manufactured full stop in cases of export the seller of the goods or service is accepted from paying the tax.

    Intra State supply of goods and service is when the location of supplier and the place of supply I. E. Location of the bhaiya are in the same state. In intra-state transaction a seller has to connect both cgst and sgst from the buyer and the cgst gets deposited with Central Government and sgst gets deposited with the State Government.

    Under GST system the following information explain about intra State supply and principal of supply.

    GST would be lived on all supplier of goods or service in the causes of intra State trade or commerce. GST would be applicable to import of goods or services from outside country as well which is indicate in the constitutional amendment act 2016

14. (b) Supply in the course of inter-State trade.

    Answer:

    Supply in the course of inter state:-

    Supply and place of supply will be located in a different states. Therefore in view of section 7(1) supply of goods will be supply in the course of inter-state trade or commerce supply of good or service or both which take place in the cause of export of good or service or both out of the territory of India.

    Intra State supply under GST:/GST would be left on all suppliers of good or service in the cause of interstate trade or commerce first of GST would be applicable to export of good or service from outside country as well which is indicate the constitutional fundamental act 2016.

    Significance of taxing inter state supplier

    GST is primarily e a destination based consumption tax. The place of supply of a particular transaction code with the location of supplier with determines the nature of the tax to be paid by a taxpayer. If the location of the supplier and place of supply are in the same state the transaction will be an interstate transaction and that taxpayers will be liable to pay state Central Texas. If they are in different states the transaction will become interested transaction and the tax payer will be liable to pay in integrated tax and part of the integrated tax collected transposed to the state where the consumption take place the state where the place of the supply in the location.

    Transaction between two UST and transaction to the UT from or to another state are also treated as interstate transaction liable to integrated tax. Transaction with in a UT without legislature would be charged to UTI GST for UT tax full stop the interstate supply will be allowed to credit of various GST taxes paid on his purchase cost of this will allow maintenance of TC chain at all India level.

16. 7. Discuss the situations when refund may arise under GST. What is the procedure for claiming refund under GST?

    Answer:

    Refund under GST:-

    The GST law divider for refund of utilized input credit or tax paid on in where supply under certain circumstances. Under the GST resign there will be a standardized form of refunds. The claim and sanctioning procedure will completely online and time Bond which is a marked departure from the existing time consuming and cumbersome procedure. The relevant provision embroidered in section 54 section 77 of CGST e act 2017 and requirement of submission of relevant documents as listed in the rule 1 of refund rule is an indicator of various situation that may necessitate a refund claim that of the circumstances in which refund under GST available the condition to be complied with and the procedure.

    Procedure

    1. Refund of any balance in the electronic cash ledger can be claimed in the return finished under section 39 in form GSTR-4 or GST R4 or GSTR-7 before the expiry of 2 year of relevant date.

    2. Unutilized input tax credit- the refund of unutilized input credit can be claimed at the end of any tax period in the following cases:-

    • Where the rate of the tax on inward supply is higher then rate of the tax on the outward supply.

    • Where export of good or service or both were made without payment of GST.

    3. Tax paid:- the refund of tax paid can be acclaimed in the following cases at the end of any tax period.

    • Export of good or service or both on payment of GST

    • Tax paid on deemed export.

    • excess payment of tax

    • Payment of tax on provisional basis

    • CGST and SGST or UTGST paid on interstate supply but held as inter state supply.

    4. Refund of tax paid by a specialized agency of UN, consultant for embassy of a foreign country e.on in word supply of goods or service or both by making refund application within 6 months from the end of the quarter in which Sach supply was received.

    5. Other cases:- refund is available for:-

    • Finalization of provisional assessment

    • Favorable order of an appellate authority in favor of a taxpayer

    • Finalization of can exist ration Persia no less tax a liability arising there of

    • Refund of tax paid wrongly

    
     

    6. Refund to International tourist:- Where and international tourist proceed goods in India while leaving the country seek refund of GST paid the refund of GST paid will available at the port of exit provided adequate period has been to subordinate the factor that the person had entered India as a tourist for genuine immigrant purpose.

    7. Credit note for post supply discount for if goods are returned back within a stipulated time full stop father under Section 34 of CGST act 2017 provides credit note can be e insured for post supply discounts or if goods are returned back within spectacled time. When is sach credit note are issued obviously it would reduce output liability of the supplier.

17. 8. Explain the various penalties imposed u/s 122 of GST ACT.

    Answer:

    If you fail to funniest such information you shall be liable to fine of up to Rs. 10000. But where the offence is counting a father fine of rupees hundred is launched each day for which the failure continues. However such a penalty cannot exceed Rs. 25000.

    Penalty for certain offence

    Section 122 of CGST act 2017 page down certain offence along with the plant is. This section is divided into three subsection each attracting different penalties.

    1. Offence and penalties under section sub-section 1 following offence related to section 122(1)(i), 122(1)(ii)and 122(1)(xix)respectively. Accordingly Sach offence occur If as a taxable person you.

    1. Make supply of goods or service

    1. Without issuing invoice

    2. Issuing incorrect of false invoice.

    2. Issue invoice or bill of supply without awaiting a supply a violation of provisions of the act or rule.

    3. Furnish invoice or discount using the registration number of author resistor person.

    Offence involving fraud

    Following options related to section 122(1)(viii), 122(1)(x)and 122(1)(xii)respectively accordingly such offence occur If as a taxable person you:-

    1. Obtain refund of tax fraudulent

    2. With an intention to avoid payment of tax

    • Falsify or substitute financial record.

    • Furnish any false information or return

    3. Furnish false information with regard to registration particular either

    • At the time of applying for registration or subsequently

    Offence related with the tax evasion

    Following offences related to section 122(1)(viii), 122(1)(x)and 122(1)(xii)respectively.

    Accordingly is such of cells occur If as a taxable person you:

    1. Collect tax but fail to deposit it to the government full stop provided such a tax is not deposited for a period exceeding month from due to date.

    2. Suppliers you turn over overloading to of tax

    3. Collector tax in conservation of law or fail to deposit to government. Provided such a tax is not deposited for a period exceeding three months from due date.

    Offense related with TDS and TCS.

     

    Following offences related to section (1)(v), and 122(1)(vi) respectively accordingly Sach of sensor originate If as a taxable person you

    1. Fail to:-

    • Deduct tax on deduct appropriate tax as per section 51.

    • Deposit the deduct text to government

    2. Fail to:-

    • Collector tax are collect appropriate tax as per section 52.

    • Deposit the collected tax to the government

18. 9. What is ITC ? Explain the significance of TTC. Also explain provision of ITC under GST.

    Answer:

    Input tax credit(ITC) meaning reducing the taxes paid on input form taxes to be paid on output. Any supply of service or good is supplied to a taxable person the GST change is known as input tax.

    Input tax credit provision as rule under GST.

    After implication of GST most of the query raised related to import tax credit to link on which goods and services ITC available or not if available then how much availability of ITC on motor vehicle how much ITC available on goods and service which part used for business or party used for any purpose.

    It is a parliament to note that the credit of input tax will be available under GST onley e fulfillment of the following conditions:-

    1. The CENVAT credit master qualified as a amount admissible as input tax credit under both tax resigns

    2. The CENVAT credit must have been reflected as input credit carried forward in the return field for the last period under existing law.

    The amount formed in the return under current indirect tax regime will be available as a opening balance under electronic credit ledger. The balance of 12345678 910 credit is shown in the book of accounts has no relevance here.

    3. Every registered person shall be subject to such condition as restriction as may be prescribed and in the manner as specified in section, 49 be and to take credit of input text change any supply of goods and success or both to him which are used to scented to use in cause of his business and set amount shall be credited to the Electronic cash ledger.

    4. Notwithstanding anything contained in the section number existed person shall enter to ITC in respect to apply of goods and service or both him unless:-

    • He is in procession to tax invoice or debit note.

    • He has received the goods and service or both.

    5. Where registered person has climbed desperation for input tax credit card component of cost of capital goods and p and M under procession of IT Act 1961

    6. A registered person shall not be e entitled to take input tax credit in respect of any invoice or debit not after the due date of furnishing of the return for the month of September following the end of financial year 2 which invoice related or tarnishing of relevant return.