Code No.

2152/E

FACULTY OF COMMERCE
B.Com (cBCS) (VI- Semester) Examination, July I August 2021
Theory and Practice of GST
Paper: Code-BC 603

1. Tax invoice: Under the GST regime, an “invoice” or “tax invoice” means the tax invoice referred
to in section 31 of the CGST Act, 2017. This section mandates the issuance of an invoice or a bill
of supply for every supply of goods or services. It is not necessary that only a person supplying
goods or services needs to issue an invoice. The GST law mandates that any registered person
buying goods or services from an unregistered person needs to issue a payment voucher as well as
a tax invoice.
2. Credit Note in GST : A credit note in GST is a document issued by the supplier in the following
cases: Supplies are returned or found to be deficient by the recipient - When goods supplied are
returned by the recipient of goods/services supplied are found to be deficient by the recipient, the
supplier should issue a Credit Note.
3. Dual GST required in India? India is a federal country where both the Centre and the States has
been assigned the powers to levy and collect taxes through appropriate legislation. Both the levels
of Government has distinct responsibilities to perform according to the division of powers
prescribed in the Constitution for which they need to raise resources. A dual GST will, therefore,
be in keeping with the Constitutional requirement of fiscal federalism.
4. Define tax rate at transaction levels: GST rates defined at the different level can be altered or
overridden in the transaction level in Tally.ERP9.This can be done in rare case like when a
business is involved in local purchases and it rarely record transitions related to imports.
To record the inward supply:
Go to Gateway of Tally> Accounting Vouchers> F9: Purchase.
Click F12: Configure and set the option modification of tax details for GST? To Yes
Press Ctrl+A
5. Time line for payment of GST taxes:

type of Taxpayer GST Payment Due Dates

General 20th Day of the Next Month

Composition 18th Day of the Next Month of Quarter

Non-Resident 20th Day of the Next Month

Input Service Distributor 13th Day of the Next Month

TDS Deductor 10th Day of the Next Month

TCS Collector 10th Day of the Next Month

6. Inter State Outward supply: Under GST, the supply of goods or services from one state to
another would be called interstate supply. The GST Act defines interstate supply as when the
location of the supplier and the place of supply for the customer are in:
Two different States; or Two different Union territories; or State and a Union territory.
 Code No. 2152/E

In addition to the above, the supply of goods imported into India, till they cross the customs
station is also classified as interstate supply. Also, the supply of goods or services to or by a
Special Economic Zone developer or a Special Economic Zone unit is classified as interstate
supply.
7. What are E-ledgerse-Ledger is an electronic form of passbook for GST. These e-ledgers are
available to all GST registrants on teh GST portal. Teh e-ledgers contains details of teh
following:
Amount of GST deposited in cash to government in electronic cash ledger
Balance of Input Tax Credit available (ITC) in electronic credit ledger
Manner of Setoff of GST liability and balance liability (if any) electronic liability ledger
8. Input tax credit set off
As per CGST (Amendment) Act 2018, teh priority of set-off of ITC is as below:
For CGST Output- First set off thru ITC of IGST, than CGST

For SGST Output – First set off thru ITC of IGST, than SGST

For IGST Output – First set off thru ITC of IGST, than CGST & tan SGST

Part: B

9 Write a detail Note on Indian GST model.

GST shall has two components one levied by the Centre (referred to as Central GST), and the other levied
by the States (referred to as State GST)

Central GST and the State GST would be applicable to all transactions of goods and services

iii. Central GST and State GST are to be paid to the accounts of the Centre and the States individually

Central GST and State GST are to be treated individually; their fore taxes paid against the Central GST
shall be allowed to be taken as input tax credit (ITC)

Cross utilization of ITC between the Central GST and the State GST would not be permitted except in the
case of inter-State supply of goods and services Cross utilization of ITC between the Central GST and the
State GST would not be permitted except in the case of inter-State supply of goods and services

Credit accumulation on account of refund of GST should be avoided by both the Centre and the States
except in the cases such as exports, purchase of capital goods, input tax at higher rate than output tax etc.

Uniform procedure for collection of both Central GST and State GST would be prescribed in the
respective legislation for Central GST and State GST.

Composition/Compounding Scheme for the purpose of GST should have an upper ceiling on gross annual
turnover and a floor tax rate with respect to gross annual turnover.

The taxpayer would need to submit periodical returns, in common format as far as possible, to both the
Central GST authority and to the concerned State GST authorities.

Each taxpayer would be allotted a PAN-linked taxpayer identification number with a total of 14/15 digits.
 Code No. 2152/E

BENEFITS/ ADVANTAGES OF DUAL GST MODEL

The Dual GST is a simple and transparent tax with one or two CGST and SGST rates. The dual GST is
already proved and provides the results in:-

reduction in the number of taxes at the Central and State level

decrease in effective tax rate for many goods

removal of the current cascading effect of taxes

reduction of transaction costs of the taxpayers through simplified tax compliance

increased tax collections due to wider tax base and better compliance

10 Explain the procedure of registration under GST and Write the advantages for
registration
Process of Registration For Resident Persons
Step – 1: Declare PAN, mobile no. and email address in Part A of Form GST REG-01
Step – 2: PAN shall be validated from their database, separate one time passwords (OTP) will be
sent to mobile as sms and to email id. On successful verification a reference number shall be
generated and communicated to the applicant on the mobile number and e-mail address.
Step – 3: Using such application reference number, applicant shall electronically submit an
application in Part B of FORM GST REG- 01, duly signed, along with documents specified in the
said Form.
Step – 4: On receipt of an application an acknowledgement shall be issued electronically to the
applicant in FORM GST REG-02.
Step – 5: Officer shall examine the application and documents and if everything is in order then
approve the grant of registration within three working days from the date of submission of
application in FORM GST REG-06
Where Form GST REG-04 is not furnished within 7 days or the proper officer is not satisfied
with the clarification, information or documents furnished, he shall, for reasons to be recorded in
writing, reject such application and inform the applicant electronically in FORM GST REG-05.
If the proper officer fails to take any action-
(a) within 3 common working days from the date of submission of application, or
(b) within 7 common working days from the date of receipt of clarification, information or
documents furnished by the applicant under Step – 5
the application for grant of registration shall be deemed to have been approved. In such case the
certificate will be made available to applicant within 3 days after expiry of above period.

Advantages of taking registration under GST

 Legally recognized as supplier of goods or services.
 Proper accounting of taxes paid on the input goods or services which can be utilized for payment
of GST due on supply of goods or services or both by the business.
 Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on
the goods or services supplied to purchasers or recipients.
 Getting eligible to avail various other benefits and privileges under the GST laws.

 Code No. 2152/E

11. Discuss the Intra state outward supply of goods with examples.

When the supply of goods or services happens within the same state or the union territory then it
is termed as intrastate supply.

Outward Supply

It means a supply of goods or services or both, whether by sale, transfer, barter, exchange,
license, rental, lease or disposal or any other mode, made or agreed to be made by such person in
the course or furtherance of business.

Example 1- Intra-state sales Mr. Raj of Mumbai, Maharashtra sells 10 TV sets to Mr. Vijay of
Nagpur, Maharashtra

The place of supply is Nagpur in Maharashtra. Since it is the same state CGST & SGST will be
charged.

Example 2- No movement of goods Sales Heaven Ltd. (Chennai) opens a new showroom in
Bangalore. It purchases a building for showroom from ABC Realtors (Bangalore) along wif pre-
installed workstations

Place of supply: Bangalore GST: CGST & SGST their is no movement of goods (work stations),
so the place of supply will be the location of such goods at the time of delivery (handing over) to
the receiver.

For example – when a company has supplied to Mysore (in the State of Karnataka) goods from
the Bengaluru factory, both sides in Karnataka are considered an intrastate supply.

Q12

Nature of supply Tax liability Total Tax

liability
CGST SGST IGST
Inter State Inward Supply -24000 (ITC)
200000@12% IGST Tax
Intra state Out ward Supply 18000 18000 - 36000
of half of Goods
3,00,000@12% (CGST 6%,
SGST 6%)
Interstate Out ward Supply - - 36000
of remaining Goods
3,00,000@12%
IGST Set off IGST, 12000 12000
CGST,SGST (in that order)
Total 48000
13. What is composition Dealer? Explain its salient features.

The GST Composition scheme can be availed by a taxpayer whose aggregate turnover of supply
of goods and services is less than 1.5 Core in a financial year. There is no compulsory
registration for the scheme and the taxpayer, who has reason to believe that the annual turnover
 Code No. 2152/E

will be less than the limit prescribed by the law, can apply for the scheme. Unless registered
under the composition scheme, the taxpayer will be treated as a normal taxpayer and
administered accordingly. Only manufacturers of goods, dealers and restaurants can opt for this
scheme.

Features of Composition scheme under GST

 Tax rate : Manufacturers-1 %, Restaurant services- 5%, Composition levy eligible- 1%.
 No credit or input tax
 Composition Schemes Limited to Intra-State Supplies
 Restriction on the collection of tax
 Minimum Compliance
 Needs voluntary application
 Quarterly returns
 Withdrawal from Composition Scheme
14 Explain mixed supply with illustrations?
Mixed supply under GST 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.
Under GST, a mixed supply will has the tax rate of the item which has the highest rate of tax. For
example- A Diwali gift box consisting of canned foods, sweets, chocolates, cakes, dry fruits,
aerated drink and fruit juices supplied for a single price is a mixed supply. All are also sold
separately. Since aerated drinks have the highest GST rate of 28%, aerated drinks will be treated
as principal supply and 28% will apply on the entire gift box.

15. Explain the procedure for intrastate supply of services in Tally ERP.9
Intrastate inward supply
Configure purchase ledgers –Service
1. Go the Gateway of tally> Accounts info>Legers> Alter> Select the purchase ledger
2. GST Applicable
Is GST applicable ? –Applicable
Set/alter GST details?-yes
3. GST details:
 Press F12: Configure and set Enable reverse charge calculation? To yes
 Taxability –Taxable
 Is reverse charge applicable ?-yes
 Enter the GST rates
4. Save the purchase ledger

Record of outward supply of services

Go to Gate of Tally> Accounting voucher> F8: Sales

Q 16. How to determine supply of supply of services in GST

GST is destination-based tax, consumption tax, which means tax will be levied where goods and
services are consumed and will accrue to that state. Under GST, there are three levels of Tax,
 Code No. 2152/E

IGST, CGST & SGST and based on the „‟place of supply‟‟ so determined and the location of the
supplier, the respective tax will be levied.
IGST is levied where the transaction is inter-state, and CGST & SGST are levied where the
transaction is intra-state. For understanding the place of supply for services, the following two
concepts are very important namely:
Location of the recipient of services
Location of the supplier of services

17 Describe the procedure for accounting multiple services in GST a single supply in Tally ERP.9
1. Record transaction for expenses and commission
Create separate ledgers for expenses and commission
 In the pure agent expense ledger, set is GST applicable? To Not Applicable.
2. Record the sales invoice in the accounting invoice mode for the expenses, with out
charging tax
3. Accept the transaction

To record transaction for commission

1. In the commission ledger (income) , set is GST applicable? To applicable and select
services as the type of supply>
2. Record the sales invoice in the accounting invoice mode
3. Select the commission ledger and tax ledger
4. Accept the transaction

18 Explain the various types of GST Returns?