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June 2026Q. 6A(ii)5 marksSyllabus 2022
(ii)Determine whether the suppliers in the following cases are eligible for composition levy, under section 10(1) and 10(2) of CGST Act, 2017 provided their turnover in preceding financial year was ₹ 1.06 crore :
(a)Yash Enterprises is engaged in trading of pan masala in Maharashtra and its supply is only in the same State.
(b)Anirudh Manufacturers has registered offices in Delhi and Haryana and supplies goods in neighbouring States.
(a)A supplier engaged in the manufacture of goods as notified under section 10(2), during the preceding FY is not eligible for composition scheme under section 10(1) and 10(2).
Ice cream and other edible ice, whether or not containing cocoa, Pan masala, Tobacco and manufactured tobacco substitutes and aerated waters are notified under this category.
However, in the given case, since Yash Enterprises is engaged in trading of pan masala and not manufacture and his turnover does not exceed ₹ 1.5 crore, he is eligible for composition scheme subject to fulfilment of specified conditions.
(b)Supplier of inter-State outward supplies of goods or services is not eligible for composition levy.
Since, Anirudh manufacturers made inter-state supply. Hence, he is not eligible for composition levy.
Source: ICSI Guideline Answers, June 2026, Q. 6A(ii) (Syllabus 2022).
December 2024Q. 831 markMCQSyllabus 2017
Which of the following persons engaged in making intra-state supplies from Uttar Pradesh, as prescribed below, is not eligible for composition levy under sub-sections (1) and (2) of the CGST Act, 2017 even though their aggregate turnover does not exceed 1.5 crore in preceding FY ?
(A)A person supplying restaurant services
(B)A person supplying restaurant services and earning bank interest
(C)A person trading in ice cream
(D)A person supplying service of repairing of electronic items
Answer: (D) A person supplying service of repairing of electronic items
(a)Anupam Singh a trader of Himachal Pradesh, provides the following information for the financial year 2023-24
Particulars
Amount (₹)
Intra-state outward supplies of Goods taxable under forward charge
22,00,000
Intra-state outward supplies of Service on which tax is payable under reverse charge mechanism
11,00,000
Value of Exports supplies
12,00,000
Intra-state outward supplies which are chargeable to GST at Nil Rate
18,50,000
Inter-state outward supply which are wholly exempt (it includes Rs. 2.5 lakh received as interest on delay payment from customer)
27,50,000
All the above amounts are exclusive of GST.
You are required to find out the aggregate turnover for the purpose of eligibility of composition levy scheme and determine whether he is eligible for composition levy scheme or not, for the financial year 2024-25.
Computation of Aggregate turnover for composition levy scheme
Particulars
Amount
Intra-state outward supplies of Goods taxable under forward charge
22,00,000
Intra-state outward supplies of Service on which tax is payable under reverse charge mechanism (included)
11,00,000
Value of Exports supplies
12,00,000
Intra-state outward supplies which are chargeable to GST at Nil Rate
18,50,000
Inter-state outward exempted supply (Amount received as interest on delay payment from customer Rs. 2.5 lakh is also included in Value of Supply under section 15 of CGST Act, 2017, hence included for calculating aggregate turnover)
27,50,000
Aggregate Turnover
91,00,000
Since the Aggregate turnover in the specified State of Himachal Pradesh does not exceed the limit of Rs. 1.5 crores during the financial year 2023-24. So, Mr. Anupam Singh is entitled for Composition Scheme u/s 10(1) for the financial year 2024-25.
Source: ICSI Guideline Answers, December 2024, Q. 6(a) (Syllabus 2022).
June 2024Q. 631 markMCQSyllabus 2017
The supplier registered under GST as a composition dealer cannot :
(ii)Lamb & Co. commenced business in retail trade of electronic goods on 5th June, 2023. It applied for registration under regular scheme on the same day. The goods are liable for CGST @ 9% and SGST @ 9%. Its turnover for the year ended 31st March, 2024 was ₹ 72 lakh. It was decided that it would opt for composition levy for the financial year 2024-25. It has input tax credit balance available in electronic credit ledger on 31st March, 2024 was ₹ 30,000 in CGST and ₹ 18,000 in SGST. State the procedure and other requirements to be followed by Lamb & Co. for change over to composition scheme for financial year 2024-25.
Procedure to be followed for change over to Composition Scheme:
In the present case, Lamb & Co. is already registered under GST in regular scheme. Now, from 1.4.2024 onwards, it wants to opt for composition scheme under section 10 of CGST Act. The procedure in this regard is as below.
Lamb & Co. shall intimate electronically in form GST CMP 02 prior to the commencement of the financial year 2024-25.
The amount of input tax credit relating to inputs held in stock, inputs contained in semi-finished and finished goods held in stock, and capital goods held in stock shall, be determined in the following manner, namely, -
a.for inputs held in stock and inputs contained in semi-finished and finished goods held in stock, the input tax credit shall be calculated proportionately on the basis of the corresponding invoices on which credit had been availed by the registered taxable person on such inputs;
b.for capital goods held in stock, the input tax credit involved in the remaining useful life in months shall be computed on pro rata basis, taking the useful life as five years.
On determination of credit liable to be reversed, it shall further furnish the statement in Form GST ITC 03 i.e. ITC reversal on stock within a period of 60 days from the date of commencement of the relevant financial year. [Rule 3(3)].
The credit if any remained in electronic credit ledger after such reversal shall lapse.
Having opted for section 10, the registered person shall not collect any tax from the appointed day but shall issue bill of supply for supplies made after the said day. [Proviso to rule 3(1)]
The intimation filed by Lamb & Co. shall be applicable shall be deemed to be an intimation in respect of all other places of business registered on the same PAN. [Rule 3(5)]
The option to pay tax under section 10 shall be effective from the beginning of the financial year i.e. w.e.f. 1.4.2024. Composite dealer not to collect tax & not claim Input Tax Credit [Section 10(4)]
Source: ICSI Guideline Answers, June 2024, Q. 6A(ii) (Syllabus 2022).
December 2023Q. 741 markMCQSyllabus 2017
The higher eligibility turnover limit of 1.5 Crore under composition scheme is not applicable to :
Krishnan a registered dealer in Karnataka has opted for composition scheme. He has a taxable turnover of goods for 20 lakhs and exempted turnover of goods for 15 lakhs within Karnataka in a tax period. If Krishnan is a trader, the GST to be paid by him for the tax period is :
(b)Yash started the business of supplying shoes in the State of Karnataka from 1st April, 2022. He makes only intra-State supplies. His turnover for April-June quarter was ₹ 20 lakh and for July-September quarter was ₹ 110 lakh. Further, one-fourth of his total turnover in each of the quarter was exempt from GST. Being eligible for composition scheme, Yash got himself registered under the composition scheme with effect from 1st July, 2022.
You are required to compute the tax payable by Yash under composition scheme assuming that he is a manufacturer.
Will your answer be different if Yash is a trader ? Give your answer supported with the relevant provisions of the CGST Act, 2017.
A registered person opting for Composition Levy for goods pays tax at the rates mentioned below during the current financial year, in lieu of the tax payable by him under regular scheme:
Type of dealer
Composition Tax Rate
Manufacturers, other
1% (0.5% CGST + 0.5% SGST/UTGST) of the turnover in
than manufacturers of notified goods
the State/ Union territory.
Trader
1% (0.5% CGST + 0.5% SGST/UTGST) of turnover of taxable supplies of goods & services in the State / Union territory.
Explanation 2 to section 10 Central Goods & Services Tax Act, 2017 provides that for the purposes of determining the tax payable by a person under this section, the expression “turnover in State or turnover in Union territory” shall not include the value of following supplies, namely :- (i) supplies from the first day of April of a financial year upto the date when such person becomes liable for registration under this Act; and (ii) exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount
Tax payable by Yash under composition scheme is as follows: (i) In case where Yash is a manufacturer: Tax payable by him under composition scheme will be on aggregate turnover. CGST = ₹ 110 lakh x 0.5% = ₹ 55,000 SGST = ₹ 110 lakh x 0.5% = ₹ 55,000 (ii) In case where Yash is a trader: The answer would be no different as the legal position for manufacturers and traders is same for the purpose of composition scheme under section 10 of the Central Goods and Services Tax Act, 2017. Tax payable by him under composition scheme will be as follows only on taxable turnover. CGST = ₹ 110 lakh x 75% (as 25% of turnover is exempt) x 0.5% = 82.50 lakh x 0.5% = ₹ 41,250 SGST = ₹ 110 lakh x 75% (as 25% of turnover is exempt) x 0.5% = 82.50 lakh x 0.5% = ₹ 41,250
Source: ICSI Guideline Answers, December 2023, Q. 6(b) (Syllabus 2022).
June 2023Q. 841 markMCQSyllabus 2017
Verma is a retail trader of textile goods at Puducherry. His turnover was ₹ 90 lakh for the financial year 2022-23. He has opted for composition scheme under GST. How much is the amount of tax payable by him?
(A)CGST ₹ 45,000 and UTGST ₹ 45,000
(B)UTGST ₹ 90,000
(C)IGST ₹ 45,000 and SGST ₹ 45,000
(D)CGST ₹ 45,000 and SGST ₹ 45,000
Answer: (D) CGST ₹ 45,000 and SGST ₹ 45,000
ICSI's note: Correct option is D, as puducherry is not a union territory under GST laws.
Mayur Hotel in Jaipur opted for composition scheme under GST for the financial year 2022-23. Its turnover for the year was ₹ 120 lakh. How much is the amount of GST payable by Mayur Hotel?
(A)CGST ₹ 60,000 and SGST ₹ 60,000
(B)CGS T ₹ 1, 20,000 and SGST ₹ 1, 20,000
(C)CGST ₹ 3, 00,000 and SGST ₹ 3, 00,000
(D)CGST ₹ 7, 20,000 and SGST ₹ 7, 20,000 Executive Programme- June 2023
XYZ Ltd., manufacturer of goods opted for composition scheme for financial year 2021- 22. It supplied taxable goods of ₹ 70,00,000 and exempted goods of ₹ 10,00,000 in financial Year 2021-22. The GST liability of XYZ Ltd. would be:
A registered person can claim the benefit of composition scheme for service supplied u/s 10(2A) of the CGST Act, 2017 read with notification No. 2/2019, provided his aggregate turnover in the preceding financial year must not exceed...................:
Priyanka, a registered dealer under composition scheme of Goods & Service Tax wants to withdraw composition scheme for financial year 2021-22. She should file the application in form:
The liability to pay GST would depend on the mechanism the transaction aligns to the supplier who is registered with GST, issues a tax invoice, collects the GST and pays it to the Government. This mechanism under GST is known as:
A registered person can opt under Composition Levy only in respect of one out of his two or more business verticals having same Permanent Account Number (PAN) as per provisions of the CGST Act, 2017.
(A)Yes
(B)No
(C)Yes, subject to prior approval of proper officer
Section 10 of the CGST Act, 2017 contains the provisions regarding composition levy. Section 10(2A) has enhanced the scope of composition levy primarily for small service providers. Find from the following, who cannot opt for composition levy despite enhancement of its scope :
(i)Supplier of services as Salon Stylist
(ii)Supplier of goods which are not leviable to tax
Section 10 of the CGST Act, 2017 contains the provisions regarding composition levy with the objective to bring simplicity and to reduce the compliance cost for the small tax payers. State which out of the following statements is not correct for a tax payer who has opted for composition scheme :
(A)A registered person supplying goods under the composition scheme shall issue a bill of supply and cannot raise tax invoice
(B)Last day of payment of liability towards tax, interest, penalty, fees or any sum is 18th day of the month following each quarter
(C)Last date of payment of liability towards tax, interest, penalty, fees or any sum is 20th day of each month
(D)A composition dealer shall mention the words “composition taxable person, not eligible to collect tax on supplies” at the top of the bill of supply issued by him.
Answer: (C) Last date of payment of liability towards tax, interest, penalty, fees or any sum is 20th day of each month
Furnishing of details of outward supplies and of inward suppliers as per section 37 and 38 of CGST Act, 2017 are not applicable on a person paying tax under composition scheme. However, a person who has opted for composition scheme is still liable to file a return by 30th April, following the end of financial year in Form No. ...................
Taxes paid under GST by a registered person are covered both as Input Tax and Output Tax. State as per provisions of CGST Act, 2017, which out of the following are covered in the definition of Input tax.
Which out of the following is a correct statement regarding collection of composition tax from customers ?
(A)The registered person under composition scheme is not permitted to collect tax. It means that a composition scheme supplier cannot issue a tax invoice.
(B)The registered person under composition scheme is permitted to collect tax. It means that a composition scheme supplier cannot issue a tax invoice.
(C)The registered person under composition scheme is permitted to collect tax. It means that a composition scheme supplier can issue a tax invoice.
(D)The registered person under composition scheme is not permitted to collect tax. It means that a composition scheme supplier can issue a tax invoice.
Answer: (A) The registered person under composition scheme is not permitted to collect tax. It means that a composition scheme supplier cannot issue a tax invoice.
As per section 10 of CGST Act, 2017, the proceeds of the cess and such other amounts as may be recommended by the Council, shall be credited to a nonlapsable Fund known as the ________, which shall form part of the public account of India and shall be utilized for purposes specified in the said section.
(A)Goods and Services Tax Compensation Fund
(B)Consumer Welfare Fund
(C)Central Welfare Fund
(D)Consolidated Fund of India
Answer: (A) Goods and Services Tax Compensation Fund
Section 10(2) of the CGST Act, 2017 lays down various conditions and restrictions relating to eligibility for composition levy. Find from the following in this context, which of the statement is not correct :
(A)The scheme is not available for service sector, except restaurants
(B)Tax payer who is not a manufacturer of such goods as may be notified by the government on the recommendation of the council is also not eligible for composition scheme
(C)Tax payer making supplies through e-commerce operators who are required to collect tax at source shall also be eligible for composition scheme.
(D)Tax payers making interstate supplies are eligible for composition scheme which implies that there is no bar on interstate inward supplies
Answer: (C) Tax payer making supplies through e-commerce operators who are required to collect tax at source shall also be eligible for composition scheme.
Section 10 of the CGST Act, 2017 contains the provisions regarding composition levy having objective to reduce compliance cost for the small tax payers who are having an annual turnover of less than ₹ ________ in the preceding financial year. However, in the States of Arunachal Pradesh and Uttarakhand the aggregate turnover limit shall be ₹________
A person opting to pay tax as per section 10 of the CGST Act, 2017 under composition levy shall as required in Chapter-II of Central Goods and Service Tax Rules, 2017 within 90 days of exercise of option give the intimation of details of stock and inward supplies from unregistered person in Form No._____
The liability to pay GST would depend on the mechanism the transaction aligns to the supplier who is not registered under GST, neither issues a tax invoice nor collects the GST. Tax to the Government on such supply is paid by the recipient. This mechanism under GST is known as ________
Pujara of Mumbai is running a restaurant. His aggregate turnover was ₹ 60 lakh. He did not collect GST on his Restaurant sales of ₹ 60 lakh. His total GST tax liability under composition scheme would be :
Out of the following manufacturer/producer/service provider, who can not avail composition scheme ?
(A)Tax payer making interstate supplies
(B)Manufacturer
(C)Beauty Parlour
(D)Restaurant
ICSI accepted any of these answers: (A) Tax payer making interstate supplies; (C) Beauty Parlour
ICSI's note: Option A and C both are the correct answer as Tax payer making interstate supplies can not avail composition scheme and for FY 18-19, service providers were not eligible for composition scheme.
Balaji & Co. (firm), Chennai, a trader, furnishes the breakup of goods supplied by it during the year. (i) taxable supplies ₹ 40 lakh; (ii) exempt supplies ₹ 15 lakh;
(iii)export of goods ₹ 30 lakh; and (iv) branch transfer of goods ₹ 13 lakh. What is
the aggregate turnover for the purpose of deciding the eligibility for composition scheme under GST ?
Mumbai Soft Drink is a trader owned by Vineet & Co., a partnership firm selling soft drink. They desire to opt. for composition scheme. What is the rate of tax applicable to them under composition scheme ?
The aggregate turnover of Turner & Co. exceeded the limit prescribed for composition scheme on 7-3-2019. What is the course of action to be adopted by Turner & Co. for rest of the financial year ?
(A)Intimate within 7 days to the GST authority and pay GST as normal supplier of goods.
(B)Suspend business till 31-3-2019.
(C)Compute and pay tax as normal supplier w.e.f. 1-4-2018.
(D)Since the period is less than 30 days for the end of the financial year, continue the business as composition dealer.
Answer: (A) Intimate within 7 days to the GST authority and pay GST as normal supplier of goods.
The composition levy payable by a registered person whose aggregate turnover in the preceding Financial Year did not exceed One Crore and fifty lakh rupees making supply by way of or as part of any services or in any other manner whatsoever of goods being food or any other article for human consumption or any drink (other than Alcoholic Liquor for human consumption) where such supply or service is for cash or defer payment or other valuable consideration shall be at ..................... of the turnover.
The liability to pay GST would depend on the mechanism the transaction aligns to the supplier who is registered with GST, issues a tax invoice, collects the GST and pays it to the Government. This mechanism under GST is known as...................... .
The proper officer may cancel the GST registration, if any registered person other than a person paying tax under section 10 of CGST Act, 2017 has not furnished the returns for a continuous period of :
(d)Whether the supplier in the following cases is eligible for composition scheme :
(i)X is an interior decorator and is registered in Punjab. His gross receipts in the preceding financial year amounted to ₹ 60 Lakh.
(ii)A registered dealer in Haryana supplies goods to its neighbouring states along with intrastate supplies. His total turnover in the current financial year is not likely to exceed ₹ 40 Lakh. His aggregate turnover in the preceding financial year was ₹ 45 Lakh.
(i)A registered person whose turnover in the preceding financial year does not exceed ₹ 1 Crore is eligible to pay tax under composition levy in terms of Section 10(1) of the CGST Act, 2017. But the benefit of composition levy scheme is available only to restaurant service providers. In the present case, X is not eligible for composition scheme because he is providing the service of interior decoration which is outside the purview of composition levy. The quantum of turnover of preceding financial year is irrelevant in the present case.
(ii)A person making inter-state supply of goods cannot opt for composition scheme. Turnover of current as well as preceding financial year is irrelevant for the supplier of goods making supply to other states. Therefore, Y cannot opt for composition scheme.
Source: ICSI Guideline Answers, June 2019, Q. 4(d) (Syllabus 2017).
December 2018Q. 761 markMCQOld syllabus
Mr. S, a manufacturer of medicines, whose turnover for financial year 2017-18 was of ₹ 70 lakh opted to pay tax under GST as per composition scheme from 1st April, 2018. His turnover crosses ₹ 1 crore on 30 November, 2018. Will he be allowed to pay tax under composition scheme for the remainder of year i.e. from 1st December, 2018 to 31st March, 2019 ?
(A)Yes, he can avail the benefit till 31st March, 2019
(B)No, the option availed shall lapse from the day on which his aggregate turnover during the financial year 2018-19 exceeds ₹ 1 crore
(C)Yes, the option can be availed upto completion of half financial year i.e. till 30th September, 2018
(D)None of the above
Answer: (B) No, the option availed shall lapse from the day on which his aggregate turnover during the financial year 2018-19 exceeds ₹ 1 crore
(iii)Sun Trading Company, an eligible registered dealer in goods making intra-State supplies within the State of Rajasthan has reported an aggregate turnover of ₹ 75 lakh in the preceding financial year :
(a)Determine whether Sun Trading Company will be eligible for Composition levy.
(b)Will your answer be different, if Sun Trading Company is making intra-State supply within the State of Jammu and Kashmir ?
(a)Section 10 of CGST Act, 2017 provides that a registered person whose aggregate turnover in the preceding financial year did not exceed ₹ 1 crore may opt for composition scheme. The turnover limit is ₹ 75 lakh in case of Special Category States. However, for Jammu and Kashmir and Uttarakhand, the turnover limit is of ₹ 1 crore only.
In the given case, the applicable turnover limit for composition scheme will be ₹ 1 crore as Rajasthan is not a Special Category State.
The aggregate turnover of the registered person Sun Trading Company in the given case does not exceed ₹ 1 crore and it satisfies other conditions of compositions scheme being not making inter-state supplies of goods. It is eligible for composition levy.
(b)Since the turnover limit for determining the eligibility for composition scheme in the State of Jammu and Kashmir is also ₹ 1 crore, Sun Trading Company will be eligible for composition levy with other condition of not making inter-state supplies of goods being fulfilled in this case also.
***
Source: ICSI Guideline Answers, December 2018, Q. 6A(iii) (Syllabus 2017).
December 2025Q. 6A(iv)5 marksSyllabus 2022
(iv)State whether the following supplies would be treated as supply of goods or supply of services as per Schedule II of CGST Act, 2017 :
(a)Renting of immovable property.
(b)Goods forming part of business assets are transferred or disposed of by/under Directions of person carrying on the business.
(c)Transfer of right in goods without transfer of title in goods.
(d)Transfer of title in goods under an agreement which stipulates that property shall pass at a future date.
(e)Temporary transfer or permitting use or enjoyment of any intellectual property right.
S. No.
Nature of Supply
(a)
Renting of Immovable Property is treated as supply of services as per Schedule II of CGST Act, 2017
(b)
Goods forming part of business assets are transferred or disposed of by / under directions of person carrying on the business is treated as supply of goods as per Schedule II of CGST Act, 2017
S. No.
Nature of Supply
(c)
Transfer of right in goods without transfer of title in goods is treated as supply of services as per Schedule II of CGST Act, 2017
(d)
Transfer of title in goods under an agreement which stipulates that property shall pass at a future date is treated as Supply of goods as per Schedule II of CGST Act, 2017
(e)
Temporary transfer or permitting use or enjoyment of any intellectual property rights is treated as supply of services as per Schedule II of CGST Act, 2017
Source: ICSI Guideline Answers, December 2025, Q. 6A(iv) (Syllabus 2022).
December 2024Q. 891 markMCQSyllabus 2017
Assuming that all the activities given below are undertaken for a consideration, state which of the following is not a supply of service ?
(A)Renting of commercial office complex
(B)An employee agreeing to not work for the competitor organization after leaving the current employment
(C)Repairing of mobile phone
(D)Provision of services by an employee to the employer in the course of employment
Answer: (D) Provision of services by an employee to the employer in the course of employment
December 2024Q. 6A(ii)5 marksSyllabus 2022Law changed
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for December 2024.
(ii)Explain the term “specified actionable claim”, under section 2(102A) of CGST Act, 2017. Whether the activity of “specified actionable claim” will be treated as a supply under GST Law or not ?
Section 2(102A) “specified actionable claim” means the actionable claim involved in or by way of-
i.betting;
ii.casinos;
iii.gambling;
iv.horse racing;
v.lottery; or
vi.online money gaming
Earlier, as per Entry 6 of Schedule Ill, actionable claims other than betting, gambling and lottery were outside the purview of GST. It should not be treated as supply.
But with effect from 01.10.2023 entry 6 of Schedule III has been amended as follows: Actionable claims, other than specified actionable claims we outside the purview of GST.
Hence, w.e.f. 1-10-2023 specified actionable claims qualify as supply and taxable under GST @ 28%.
Source: ICSI Guideline Answers, December 2024, Q. 6A(ii) (Syllabus 2022).
June 2024Q. 621 markMCQSyllabus 2017
A private limited company made certain gifts to its employees as under :
(b)State which of the following supply of service is a taxable service or exempt service for the financial year 2023-24, with reference to the provisions of CGST Act, 2017.
(i)ABC Pvt. Ltd sold a division engaged in manufacture of cement as a going concern to XYZ Pvt. Ltd for ₹ 50 lakh on slump sale basis.
(ii)Moon Pvt. Ltd paid ₹ 50,000 to Pandit for conducting Diwali pooja in the factory premises.
(iii)Ajay Enterprises paid ₹ 2,00,000 to Kongu Incubate for the services rendered by it. The total turnover of Kongu Incubate was ₹ 93 lakh during the financial year 2022-23 and the agreement between the parties was entered into on 01.08.2021.
(iv)Mahesh & Co availed services of Rishi & Co for fumigation in its warehouse (where it has stored agricultural produce) and paid ₹ 3 lakh during the financial year 2023-24.
(v)Larry Ltd engaged an artist for performance in folk art theatre performance on the occasion of its founder’s day celebration and paid ₹ 1.85 lakh as consideration to the artist group by name ₹ Megha Theatres’.
Determination of taxable or exempt supply
S. No.
Particulars
(i)
As per Notification No. 12/2017 dated 28th June, 2017 services by way of transfer of division as a going concern, as a whole or independent part is exempt from GST.
(ii)
Service rendered by person by way of conducting any religious ceremony is exempted service as per Notification No. 12/2017.
(iii)
Services provided by incubate is exempt if: its total turnover had not exceeded 50 lakhs during preceding financial year; and a period of 3 years has not been elapsed from the date of entering in to an agreement as an incubate. In the present case, since the turnover of the incubate exceeds Rs. 50 lakhs in the previous financial year, it would not satisfy the first condition, it is not exempt from GST.
(iv)
Service by way of fumigation in a warehouse of agricultural produce is taxable under GST. Earlier it used to be exempt but after amendment in Notification No.12/2017, it has become a taxable service.
(v)
Services by an artist by way of a performance in folk or classical art forms of theatre is not liable for GST if the consideration is not more than Rs. 150000. In this case, the amount paid is more than the monetary limit of Rs. 1,50,000, hence it is not exempt from GST.
Source: ICSI Guideline Answers, June 2024, Q. 6(b) (Syllabus 2022).
June 2024Q. 6(c)5 marksSyllabus 2022
(c)Determine the Value of Supply with reference to the provisions of the CGST Act, 2017 for the following independent cases :
(i)State Government authorized a lottery where the face value per ticket was ₹ 640. The price notified in the official gazette was ₹ 450 per ticket.
(ii)A money changer exchanged USD 10,000 sold by a customer @ ₹ 80 per USD. The RBI reference rate for USD was ₹ 78 for that day.
(iii)An air travel agency charged ₹ 60,000 as basic fare and ₹ 3,000 as other charges and fee and ₹ 2,000 by way of taxes for domestic booking.
(iv)X & Co supplied a mobile handset for ₹ 30,000 along with an exchange of an old handset. The price of new phone without exchange would be ₹ 35,000.
(v)Y Ltd supplied goods to its agent who is also acting as agent for other suppliers. The goods of like kind and quality were subsequently supplied by agent at a price of ₹ 5,000 per unit on the day of supply. Another independent supplier supplied the same goods of quality and kind at a price of ₹ 4,600 per unit.
S. No.
Determination of Value of Supply
(i)
As per section 15(3) and rule 31A, the value of supply of lottery shall be deemed to be 100/128 of the face value of ticket or the price as notified in the official gazette by the organizing State whichever is higher. Therefore, the value of supply shall be 640 x 100/128 = Rs. 500 as it is higher than the price notified in the official gazette being Rs. 450.
(ii)
As per section 15(3) read with rule 32, the difference in the buying rate or the selling rate and RBI reference rate for that currency would be adopted for the total units of currency exchanged. In this case, Rs. 80 - Rs. 78 = Rs. 2 x USD 10,000 = Rs. 20,000 shall be the value of supply of service on purchase of USD (foreign currency) for conversion into INR.
(iii)
As per section 15(3) read with rule 32(3), the value of supply in relation to domestic booking shall be 5% of the basic fare. Therefore, the value of supply would be Rs. 60,000 x 5% = Rs. 3,000.
(iv)
As per section 15(3) read with rule 27, the value of supply of goods or services where the consideration is not wholly in money, the sum of total consideration in money and such further amount in its equivalent shall be the value of supply. In this case, the mobile handsets would have been sold for 35,000 if there was no exchange and therefore, that would be the value of supply when the new mobile handset is supplied for 30,000 along with an exchange of an old handset.
(v)
As per section 15(3) read with rule 29, the value of supply between principal and his agent shall be the open market value of the goods being supplied or 90% of the price charged for the supply of goods of like kind and quality by the recipient to his customer (not being related person) - at the option of the supplier.
In this case 90% of the like kind and quality amounts to Rs. 4,500 (90% of Rs. 5,000) or the value of supply made by another independent supplier being Rs. 4,600 (being an open market value). The choice is open to the supplier regarding adoption of value of taxable supply. So as more beneficial for supplier is Rs. 4,500 will be treated as value of supply.
Source: ICSI Guideline Answers, June 2024, Q. 6(c) (Syllabus 2022).
June 2024Q. 6A(iii)5 marksSyllabus 2022
(iii)B Homes Ltd., was planning to construct a ten storied building complex in Pune. It obtained permission from the Corporation for the same. Another firm J Constructions was constructing a six storied building in the adjacent area. Since the ten storied structure may affect the ventilation of its flats, J Construction approached B Homes Ltd. with a proposition of giving up construction of 4 floors, for which it agreed to pay one time compensation of ₹ 75 lakh. B Homes Ltd. accepted the offer and received the compensation.
Examine whether the aforesaid compensation will attract GST liability. If yes, compute the same, assuming that the applicable SGST and CGST is 9% each. Your answer should also contain the conditions to be complied with, if any.
Particulars
Taxability of compensation received:
Agreeing to obligation to refrain from an act, or to tolerate an act or situation, or to do an act has been specifically declared to be a supply of service vide para 5(e) of Schedule II of the CGST Act, 2017 if the same constitutes a supply as per the CGST Act, 2017.
In the given case, B Homes Ltd. has agreed to build only six floors, even though it is permitted to construct ten floors by the Corporation, for at one time compensation of Rs. 75 lakh. As a consequence, supply of service emerges.
The conditions to be fulfilled are:
i.There must be an expressed or implied agreement or contract must exist.
ii.Consideration must flow in return to this contract/agreement.
Assuming that the amount of Rs.75 lakhs is all inclusive, it has to be treated as inclusive of GST component; hence, GST will be 75,00,000 x 18/118 = 11,44,068 (CGST Rs. 5,72,034 and SGST Rs. 5,72,034)
Source: ICSI Guideline Answers, June 2024, Q. 6A(iii) (Syllabus 2022).
December 2023Q. 531 markMCQSyllabus 2017
The important parameter that constitute supply under CGST Act is/are :
(A)It involved supply of goods or supply of service or both
(B)It is for a consideration
(C)It is made in the course of or furtherance of business
A dealer sent some goods to another dealer for Sales on Approval Basis. In absence of any confirmation even after 6 months, it will be treated as ............... of CGST Act, 2017.
In case of taxable supply of services by NBFC Company, invoice shall be issued within a period of ........................ from the date of supply of service.
Which of the following is not considered as deemed supply under CGST Act, 2017 ?
(A)Permanent transfer or disposal of business assets where ITC has been availed on such assets
(B)Import of services by a person from a related person or from any of his other establishments outside India
(C)Supply of goods by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal
(D)Supply of goods by an unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration
Answer: (D) Supply of goods by an unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration
As per Schedule I of the CGST Act, 2017 any kind of disposal or transfer of business assets made by an entity on permanent basis qualifies as supply, even though it is without consideration. This provision would apply only if :
In respect of which item mentioned below, the provisions of CGST Act, 2017 are NOT applicable as the related provisions are given in UTGST Act, 2017 itself?
Ashoka Enterprises appoints Babulal to procure certain goods for them. Babulal identifies various suppliers who can provide such goods and asks Chetna Enterprises to send the goods and issue the invoice directly to Ashoka Enterprises. Examine and state in the context of CBIC Circular No. 57/31/2018 – GST and provisions of CGST Act, 2017 the act of Babulal in this case be treated as of ........................... .
Schedule –II of the CGST Act, 2017 lists various activities or transactions which are to be treated as supply of goods or supply of services. Find and state which out of the following activities, is a supply of services.
(A)Transfer of rights in goods or undivided share in goods without transfer of title
(B)Transfer of title in goods
(C)Transfer of title in goods under an agreement where property in goods passes at a future date on payment of full consideration
(D)Permanent transfer or disposal of goods forming part of business assets by or under the directions of the person carrying on the business whether or not for consideration
Answer: (A) Transfer of rights in goods or undivided share in goods without transfer of title
Ashok supplies goods to Bhanu who further supplies such goods to Chetan on behalf of Ashok. The consideration for such supply was guaranteed by Bhanu if not paid by Chetan. State the relationship as per provisions of CGST Act, 2017 between Ashok and Bhanu.
Scope of supply has been given under section 7 of the CGST Act, 2017 and schedules I, II and III list various activities to be treated as supply or otherwise. Find from the following activities which is not being covered in Schedule - II of the CGST Act, 2017 :
(A)Permanent transfer or disposal of goods forming part of business assets by or under the direction of the person carrying on the business whether or not for consideration
(B)Supply by unincorporated association to a member thereof for cash
(C)Supply of goods between principal to his agent and vice versa
(D)Development, design, programming, customization, up-gradation, enhancement, implementation of information technology software
Answer: (C) Supply of goods between principal to his agent and vice versa
Section 7(2) of the CGST Act, 2017 provides that notwithstanding anything contained in section 7(1) of the CGST Act, 2017, activities which are neither of goods nor supply of services as specified in schedule-III include _________
(A)Supply of goods by any unincorporated association or body of person to member for cash, deferred payment or other valuable consideration
(B)Temporary transfer or permitting the use or enjoyment of any intellectual property right
(C)Actionable claim, other than lottery, batting and gambling
(D)Renting of immovable property
Answer: (C) Actionable claim, other than lottery, batting and gambling
Supply of goods by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal and supply of goods by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal are even without consideration but are construed as specified in Schedule-I of the CGST Act, 2017 as ------------
Few activities as specified in Schedule-III of CGST Act, 2017 shall be neither treated as supply of goods nor supply of services. Find out from the following activities which shall be neither treated as supply of goods nor supply of services as specified in this schedule :
(i)Actionable claims other than lottery, bating, gambling
Section 7 of the CGST Act, 2017 defines the term ‘supply’ which are further being enumerated in the various schedules as specified in that section. The section includes certain transactions which are even without consideration but being construed as supply and also known as deemed supply. Such transactions are being specified in .......... .
Permanent transfer or disposal of goods forming part of business asset by or under the directions of the person carrying on the business whether or not for consideration as well as transfer of title in goods under an agreement where property in goods passes at a future date on payment of full consideration as per Schedule - II of the CGST Act, 2017 to be treated as ........ .
Power to declare certain activities/transactions as neither supply of goods nor of services is given in :
(A)Schedule IV
(B)Schedule III
(C)Schedule II
(D)Schedule I
ICSI did not treat any of the given options as correct.
ICSI's note: None of the option is correct. Schedule III contains the list of activities which shall be treated neither as a supply of goods nor a supply of services. Schedule III does not contain the power to declare certain activities/ transactions as neither supply of goods nor of services.
(b)State any four activities which are neither treated as supply of goods, nor supply of services, under the GST law.
Schedule III to the CGST Act, 2017 says that the following transactions shall neither be treated as supply of goods nor supply of services:
(i)Services from employee to employer
(ii)Duties performed as chairperson or a member or director in a body established by Central or State Government or local authority and the person is not deemed as an employee before commencement of the Act.
(iii)Functions performed by Members of Parliament, Member of State Legislature, Members of Panchayats, Members of Municipality and Members of other local authorities.
(iv)Duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that Capacity.
(v)Services by any Court/Tribunal.
(vi)Funeral, burial, crematorium or mortuary including transportation of the deceased.
(vii)Sale of land (subject to clause 5(b) of Schedule II) and sale of building.
(viii)Actionable claims (does not include lottery, betting and gambling).
Source: ICSI Guideline Answers, December 2018, Q. 4(b) (Syllabus 2017).
December 2018Q. 5(a)3 marksSyllabus 2017
(a)State with brief reasons whether the following are to be treated as supply of goods/services, as per GST law :
(i)Transfer of business as a going concern.
(ii)Renting of immovable property.
(iii)Permitting use of intellectual property right.
(i)Transfer of business as a going concern is not supply of goods/services and hence not liable for GST as per Schedule II of CGST Act, 2017.
(ii)As per Schedule II of CGST Act, 2017, renting of immovable property is supply of service which is liable for GST.
(iii)As per Schedule II of CGST Act, 2017, temporary transfer or permitting use or enjoyment of any intellectual property right is a supply of service and is liable for GST.
Source: ICSI Guideline Answers, December 2018, Q. 5(a) (Syllabus 2017).
December 2024Q. 691 markMCQSyllabus 2017
A claim for ITC under Reverse Charge can be claimed :
(c)From the following information determine the time of supply of Service under CGST Act, 2017, assuming that GST is payable under reverse charge mechanism (RCM) in each case :
S.
Date of Invoice
Date of Completion
Date of payment
Date of payment
No.
issued by supplier
of service
entered in books of
debited in bank
recipient
account
1.
23.04.2024
21.04.2024
13.07.2024
15.07.2024
2.
23.04.2024
21.04.2024
24.06.2024
22.06.2024
3.
23.04.2024
21.04.2024
03.06.2024
04.06.2024
4.
23.04.2024
24.04.2024
19.04.2024
18.04.2024
5.
23.04.2024
24.04.2024
Not done
Not done
Computation of Time of Supply
Sl.
Date of
Date of
61st day
Time of
Reason
No.
Payment
Payment
from the
Supply
entered in
debited in
Issue of
(whichever
books
bank
Invoice
is earlier)
1.
13.07.2024
15.07.2024
23.06.2024
23.06.2024
Date of payment as entered in the books of account or payment is debited in his bank account or 61st day from the issue of Invoice, whichever is earlier
2.
24.06.2024
22.06.2024
23.06.2024
22.06.2024
Date of payment as entered in the books of account or payment is debited in his bank account or 61st day from the issue of Invoice, whichever is earlier
3.
03.06.2024
04.06.2024
23.06.2024
03.06.2024
Date of payment as entered in the books of account or payment is debited in his bank account or 61st day from the issue of Invoice, whichever is earlier
4.
19.04.2024
18.04.2024
23.06.2024
18.04.2024
Date of payment as entered in the books of account or payment is debited in his bank account or 61st day from the issue of Invoice, whichever is earlier
5.
-
-
23.06.2024
23.06.2024
Date of payment as entered in the books of account or payment is debited in his bank account or 61st day from the issue of Invoice, whichever is earlier
Source: ICSI Guideline Answers, December 2024, Q. 6(c) (Syllabus 2022).
June 2024Q. 531 markMCQSyllabus 2017
Mr. P supplies raw cotton (under Reverse Charge of GST) to Mr. Q who manufactures cotton shirts. Which will be the time of supply from the below mentioned dates ?
(A)01-04-2024 Mr. Q approaches Mr. P and places an order
(B)10-05-2024 Mr. Q receives the Goods
(C)15-05-2024 Mr. P issues invoices
(D)Mr. Q makes a payment by cheque on 20-05-2024 which was debited from Mr. Q’s Bank Account on 25-05-2024.
ICSI did not treat any of the given options as correct.
ICSI's note: RCM is applicable in respect of cross border supplies, interstate supply, interstate supplies. In the question, the word uses is "only". Therefore, none of the options are correct.
How is the aggregate turnover calculated for determining threshold limit for registration ?
(A)Aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis and inter-State supplies), exempt supplies and export of goods/services
(B)Aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, export of goods/services and inter-State supplies of a person computed for each State separately
(C)Aggregate value of all taxable intra- State supplies, export of goods/services and exempt supplies of a person having same PAN computed for each State separately
(D)Aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, export of goods/services and inter-State supplies of a person having same PAN computed on all India basis and excluding taxes if any charged under CGST Act, SGST Act and IGST Act
Answer: (D) Aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, export of goods/services and inter-State supplies of a person having same PAN computed on all India basis and excluding taxes if any charged under CGST Act, SGST Act and IGST Act
AVM Sounds Ltd. entered into a contract to purchase the copyright of a music album of Priyam, a music composer. The composer finished the work and gave the CD to the music company on 20th July and issued invoice on 24th July. The consideration for the contract 2.4 crores was received by the composer on 4th September. If GST is payable under reverse charge basis for this, the time of supply shall be :
Madan provided legal service as advocate to MNO & Co. which fell under reverse charge basis. The services were rendered on 10th June, 2022 and Madan issued invoice on 2nd July, 2022. The cheque dated 5th July, 2022 was honoured by debit to bank account of MNO & Co. on 15th July, 2022. The receipt was recorded in the books of Madan on 10th July, 2022. What is the time of supply under Reverse Charge Mechanism (RCM) in this case?
(A)10th June, 2022
(B)18th September, 2022
(C)15th July, 2022
(D)10th July, 2022
Answer: (C) 15th July, 2022
ICSI's note: Option C is Correct, as per Section 12(3) & 13(3), the time of supply will be 60 days from date of invoice or the date on which amount debited from bank account of recipient; which ever is earlier.
Moon Ltd purchased cotton from agriculturists in respect of which it has to pay GST under reverse charge mechanism. It received the goods on 15th April, 2022. The payment was made to the supplier of goods on 5th May, 2022 which was debited in the bank account as reflected in the bank statement of Moon Ltd on 12th May, 2022. What is the time of supply in this case?
Determine the time of supply in the following case assuming that GST is payable under reverse charge : (1) Date of receipt of goods 1st July (2) Date of payment by recipient of goods August 20th (3) Date of issue of invoice by supplier of goods June 29th.
Generally the supplier of goods or services is liable to pay GST. However, in specified case the liability may be cast on the recipient under the reverse charge mechanism (RCM). Find and state in which out of the following cases the GST is payable by the recipient of services under RCM :
(i)Services provided by way of sponsorship to MNO Ltd
(ii)Services given by Y Ltd to Ram through its director
(iii)Services by department of Posts by way of speed post to ABC Ltd
(iv)Services provided by a recovery agent to IGB Bank Ltd
Tax payers who are required to pay tax for the supply of goods or services or both on the basis of reverse charge (RCM) under GST have to get registered themselves when they cross the threshold limit of turnover of..........................
Section 2(6) defines ‘‘aggregate trunover’’ as the aggregate value of _______ .
(A)All taxable supplies including the value of inward supplies on which tax is payable by a person on reverse charge basis, exempt supplies, export of goods or services or both and interstate supplies of person having the same permanent account number to be computed on all India basis.
(B)All taxable supplies excluding the value of inward supplies on which tax is payable by a person on reverse charge basis, exempt supplies, export of goods or services or both and interstate supplies of person having the same permanent account number to be computed on all India basis.
(C)All taxable supplies excluding the value of inward supplies on which tax is payable by a person on reverse charge basis, exempt supplies, export of goods or services or both and interstate supplies of person having different permanent account number to be computed on all India basis.
(D)All taxable supplies including the value of inward supplies on which tax is payable by a person on reverse charge basis, exempt supplies, export of goods or services or both and interstate supplies of person having different permanent account number to be computed on all India basis.
Answer: (B) All taxable supplies excluding the value of inward supplies on which tax is payable by a person on reverse charge basis, exempt supplies, export of goods or services or both and interstate supplies of person having the same permanent account number to be computed on all India basis.
Section 2(62) of CGST Act, 2017 specify input tax in relation to a registered person, means the Central Tax, State Tax, Integrated Tax or Union Territory Tax charged on any supply of goods or services or both made to him but does not include :
(A)Integrated goods and service tax charged on import of goods
(B)Tax under the provisions of section 9(3) and 9(4)
(C)Tax paid under composition levy
(D)Tax under Union Territory Goods & Service Tax Act
A draft template of invoice to be raised by a registered person liable to pay tax under Reverse Charge Mechanism (RCM) under GST is known as .....................
(A)GST INV-1
(B)GST INV-2
(C)GST INV-3
(D)GST INV-4
ICSI did not treat any of the given options as correct.
ICSI's note: None of the options are correct as correct answer is self invoicing or GSTR - 1. ***
Section 2(6) of the CGST/SGST Act, 2017 defines aggregate turnover which is being computed on all India basis excluding the taxes charged under CGST Act, SGST Act, UTGST Act and IGST Act. Aggregate turnover shall include all supplies made by a taxable person comprising of :
(i)Taxable supply
(ii)Exempt supply
(iii)Export of goods and or services
(iv)All Inter state supply of person having same PAN
(v)Supply on which tax is levied on reverse charge basis
Mini Hotels offers 6 days 5 nights package along with the dinner and Breakfast along with the Room Accommodation for a certain ₹ 10,000 for attracting guests. This type of supply is considered as :
December 2024Q. 6(b)5 marksSyllabus 2022Law changed
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for December 2024.
(b)Preetam, a registered supplier of Kota (Rajasthan), has made the following supplies in the month of July, 2024 :
(i)Supply of a laptop bag along with the laptop to a customer of Mumbai for ₹ 1,70,000 (exclusive of GST).
(ii)Supply of sweets @ ₹ 500 per KG in a box. Cost of each box is ₹ 20 per box. In order to increase his turnover Preetam did not charge the amount of box from customer. During the month of July, 2024, he sold 140 boxes of 1 KG sweet to local customers in Kota.
(iii)Supply of 2,000 kits (at ₹ 75 each) amounting to ₹ 1,50,000 (exclusive of GST) to Kamal Fancy Store in Jodhpur (Rajasthan). Each kit consists of 1 hair oil, 1 beauty soap and 1 hair comb.
(iv)250 kits are given as free gift to Udaipur customers on the occasion of Preetam’s wife birthday. Each kit consists of 1 hair oil and 1 beauty soap. Cost of each kit is ₹ 40, but the open market value of such kit of goods and of goods of like kind and quality is ₹ 50. Input tax credit has not been taken on the goods contained in the kit.
Assume the GST Rate on Laptop is 18%, Laptop bag 28%, Sweet 5%. Empty Box 18%, Hair Oil 18%, Beauty soap 28%, Hair comb 12%. From the above information, compute the GST liability (CGST or SGST or IGST) of Preetam for the month of July, 2024.
Computation of GST liability of Preetam for the month of July, 2024
Particulars
Amount
CGST
SGST
IGST
(Rs.)
(Rs.)
(Rs.)
(Rs.)
(i) Supply of laptop bag along with laptop: [Supply of laptop bag along with the laptop is a composite supply, Tax Rate is taken on principal supply of goods. i.e. Laptop and IGST @ 18%
1,70,000
-
-
30,600
(ii) Supply of sweet along with box: Price of box is not charge separately from customer; hence Tax Rate is taken on principal supply i.e. sweet and CGST and SGST @ 2.5% each will be charged] (500 x 140 x 2.5%)
70,000
1,750
1,750
-
(iii) Supply of kits of hair oil, beauty soap and hair comb: [It is a mixed supply; Rate of GST is taken on supply of that particular supply which attracts highest tax rate. It’s an intra-state supply. Accordingly, CGST and SGST @ 14% each will be charged.]
1,50,000
21,000
21,000
-
(iv) Free gifts to customers cannot be considered as supply under section 7 read with Schedule I of the CGST Act as the gifts are given to unrelated customers without consideration and ITC has not been taken]
Nil
-
-
-
Total GST Liability for the Month of July, 2024
22,750
22,750
30,600
Source: ICSI Guideline Answers, December 2024, Q. 6(b) (Syllabus 2022).
June 2024Q. 671 markMCQSyllabus 2017Law changed
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for June 2024.
A manufacturer manufacturing three different products A, B and C (GST Rates are 12%, 18% and 28% respectively) to be sold in a combined package. The price per package is ₹ 1,000 (exclusive of tax). Total sales made during a particular month is ₹ 4,00,000. What is the nature of supply and amount of GST Per Package ?
December 2023Q. 541 markMCQSyllabus 2017Law changed
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for December 2023.
What would be the rate of tax applicable in case of mixed supply ?
(A)Average of applicable tax rates on various items in the supply
(B)Flat @ 28%
(C)Tax rate applicable on supply attracting highest rate of tax
(D)Tax rate applicable on supply attracting lowest rate of tax
Answer: (C) Tax rate applicable on supply attracting highest rate of tax
Good stay is a three-star hotel. It provides both accommodation and boarding facility combined together for a rent to its guests. What would you call the provision of accommodation and boarding facility?
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for June 2022.
DSR Ltd. is a manufacturer of food products supplied in a package consisting of chocolates (GST Rate 12%), cakes (GST rate 18%) and sweets (GST Rate 28%). The price per package is ₹ 1,250 (exclusive of taxes). In a month, 1,200 of such packages were supplied by the company. What is the nature of supply and the amount of GST ?
A supply made by a taxable person to a recipient consisting of two or more taxable supply of goods or services or both or any combination thereof which are naturally bundled and supplied in conjunction with each other in the ordinarily course of business out of which one is a principal supply has been defined under the CGST Act, 2017 to mean :
As per provision of CGST Act, 2017, supply comprising of two or more individual supplies of goods or services deliberately bundled by a taxable person for a single price that attracts the highest rate of tax of any of the supplies within the package is called as ............. .
“Goods or Services or both together are often supplied in combination and that’s when it may not be simple enough to distinguish supplies and identify separately, as each of them may attract a different rate of tax but is being sold as one package”. In this context examine the following statements and identify which are not correct example of supply as defined in sections 2(30) and 2(74) of the CGST Act, 2017 :
(i)Atal buys a car and also purchases warranty and maintenance package for the car by paying a nominal amount. Car and package of warranty & maintenance are supply as per section 2(74) of the Act.
(ii)Atal buys a Car and purchases package for warranty and maintenance of the car by paying a nominal amount. Car and package of warranty & maintenance are supply as per section 2(30) of the Act.
(iii)Rajni buys a microwave oven and some utensils for use in microwave oven. Both microwave oven & utensils are sold at a single price. Microwave oven & utensils are a supply as per section 2(74) of the Act.
(iv)Rajni buys chocolates, juices and butter from a shop. All the items have different prices, Chocolates, juices & butter are supply as per section 2(74) of the Act.
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for June 2021.
Soundarya & Co. sold product A, Product B and Product C as mixed supply. If sold separately the applicable GST rates are 5%, 12% and 28% respectively. What GST rate would apply when they are supplied together ?
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for June 2021.
What is the highest rate of tax applicable under IGST ?
Main difference between Composite supply and Mixed supply is that :
(A)Composite supply is naturally bundled i.e. goods or services are usually provided together in normal course of business whereas in Mixed supply, the goods or services can be sold separately.
(B)Mixed supply, is naturally bundled i.e. goods or services are usually provided together in normal course of business whereas in Composite supply, the goods or services can be sold separately.
(C)Mixed supply is naturally bundled but Composite supply is not naturally bundled.
(D)There is no difference between Composite supply and Mixed supply.
Answer: (A) Composite supply is naturally bundled i.e. goods or services are usually provided together in normal course of business whereas in Mixed supply, the goods or services can be sold separately.
Two or more taxable supplies of goods/services/both, being supplied in conjunction with each other, are deliberately bundled, a single price is charged for the supply and none of the supplies within the package is identifiable as principal supply is known under GST as ---------------
Section 2(30) of CGST Act, 2017 defines Composite Supply made by a taxable person to a recipient and the tax under GST on such composite supply is to be charged at the rate which is applicable to the _________
December 2020Q. 591 markMCQSyllabus 2017Law changed
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for December 2020.
A combo pack of cosmetic products comprising of items of (i) Hair Dryer of value of ₹ 1,500 taxable under GST @ 28%, (ii) Tooth-paste of value of ₹ 500 taxable @ 12% and (iii) different types of Combs of value of ₹ 500 taxable @ 5%. The total value of combo pack comprising of all such items is of ₹ 2,400. Tax to be charged on such combo pack under the CGST Act, 2017 shall be of -----------
When goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance as per provisions of CGST Act, 2017, is called as :
A supply made by a taxable person to a recipient of goods being buyer consisting of two or more taxable supplies of goods or services or of both or any combination thereof which are only bundled and supplied in conjunction with each other in the ordinarily course of business out of which one is a principal supply has been defined u/s 2(3) of CGST Act, 2017 as ...............
(d)Explain the meaning, with distinctive features as per the CGST Act, 2017, relating to Composite Supply and Mixed Supply.
Composite Supply
Section 2(30) of CGST Act, 2017 defines “composite supply” as a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.
The feature of a composite supply is that one of the supplies within the package is identifiable as a principal supply.
Mixed Supply
Under Section 2(74) of CGST Act, 2017, “mixed supply” means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.
Mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.
Source: ICSI Guideline Answers, December 2018, Q. 5(d) (Syllabus 2017).
December 2024Q. 511 markMCQSyllabus 2017Law changed
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for December 2024.
The highest CGST rate legally permitted for intrastate supplies is .................
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for June 2023.
What is the rate of tax under GST applicable for gold jewellery ?
Unless and until notified by the Central Government on the recommendation of the Council, CGST or IGST or UTGST shall not be levied on the following supplies :
Services provided to an educational institution are being notified as exempt from the levy of tax under GST. Find, from the following services provided to an educational institution by different service providers, which are exempt from the levy of tax under GST :
As per Section 11 of CGST Act, 2017 where Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the council, by special order in each case, under circumstances of an exceptional nature to be stated in such order, exempt from payment of tax any goods or services or both on which tax is leviable. However, if it considers necessary, the Government for clarifying the scope or applicability may insert an explanation in such order. State the time limit for insertion of an explanation by the Government in such order/notifications :
The Government being satisfied that in the public interest it is necessary so to do, it may on the recommendation of the Council grant exemption from tax as per section 11 of the CGST Act, 2017 as a general exemption and/or as a specific exemption. The general exemption under section 11(1) of the CGST Act, 2017 is granted by ___________
Ram gav e a land located in Industrial area to ABC & Co. for a lease term of 5 years for a rental of ₹ 2 lakh per month on 1st April, 2022. Ram is employed in a Nationalised Bank. What would you call the lease of land by Ram to ABC & Co.?
Vineet acquired a machinery for ₹ 5 lakh on 1st July, 2021 and used it for manufacture of goods being exempt supply. GST paid on machinery was @ 18%. The goods so manufactured became taxable from 1st January, 2023. How much could be claimed as ITC by Vineet in respect of machinery when used for manufacture of taxable goods?
Mani & Co. a registered dealer under GST supplied goods to Rupesh (P) Ltd being a developer of SEZ. The supply made by Mani & Co. to Rupesh (P) Ltd shall be called as :
Supplies made under the CGST Act, 2017 to SEZ be treated as ................... and the supplies which are taxable but do not attract GST and for which ITC cannot be claimed be treated as ........................
Section 2 of the CGST Act, 2017 contains the definitions of various terms used at several places in the Act, What is the correct definitions of ‘‘Exempt supply’’ and ‘‘NonTaxable supply’’.
(A)‘‘Exempt supply’’ means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under secton 6 of the IGST Act, and includes non-taxable supply. Where ‘‘Non-Taxable supply’’ means a supply of goods or services or both which is not leviable to tax under this Act or under the IGST Act.
(B)‘‘Exempt supply’’ means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under secton 6 of the IGST Act, and excludes non-taxable supply. Where ‘‘Non-Taxable supply’’ means a supply of goods or services or both which is not leviable to tax under this Act or under the IGST Act.
(C)‘‘Non-Taxable supply’’ means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under secton 6 of the IGST Act, and includes exempt supply. Where ‘‘Exempt supply’’ means a supply of goods or services or both which is not leviable to tax under this Act or under the IGST Act.
(D)‘‘Non-Taxable supply’’ means supply of any goods or services or both which attracts nil rate tax or which may be wholly exempt from tax under section 11, or under section 6 of the IGST Act, and excludes exempt supply. Where ‘‘exempt supply’’ means a supply of goods or services or both which is not leviable to tax under this Act or under the IGST Act.
Answer: (A) ‘‘Exempt supply’’ means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under secton 6 of the IGST Act, and includes non-taxable supply. Where ‘‘Non-Taxable supply’’ means a supply of goods or services or both which is not leviable to tax under this Act or under the IGST Act.
The exempt supply has been defined as supply of any goods/services/both, which attract a Nil rate of tax, or which may be wholly exempt from tax, and therefore, also includes non-taxable supplies. Find which out of the following is covered as an exempt supply under GST.
(A)Branded Aata/Basan/Maida
(B)Services by Post Office
(C)Services by IRDA, SEBI, RBI, EPFO
(D)Services by the Government for transportation of passenger
Answer: (C) Services by IRDA, SEBI, RBI, EPFO
ICSI's note: Services by IRDA, SEBI, RBI, EPFO is covered as an exempt supply under GST.
The exempt supply has been defined as supply of any goods/services/both, which attract a Nil rate of tax, or which may be wholly exempt from tax, and therefore, includes non-taxable supplies. Which of the following is covered as an exempt supply under GST ?
(A)Branded Aata/Basin/Maida
(B)Services by IRDA, SEBI, RBI, EPFO
(C)Services by Post Office
(D)Services by the Government for transportation of passenger
Exempt supply means supply of any goods or services or both which may be wholly exempt from tax under section 11 or under section 6 of the IGST Act and includes ............
(c)Explain the concept of “zero rated supply” and refund claim thereof, under IGST.
Exports and supplies to SEZs are considered as “zero rated supply” on which no tax is payable. However, ITC is allowed, subject to such conditions, safeguards and procedures as may be prescribed and refunds in respect of such supplies may be claimed by following either of these options.
•Supply made without payment of IGST under Letter of Undertaking (LUT)/bond and claim refund of unutilized ITC.
•Supply made on payment of IGST and claim refund of the same.
Source: ICSI Guideline Answers, December 2018, Q. 5(c) (Syllabus 2017).
June 2022Q. 721 markMCQSyllabus 2017
As per section 5 of IGST Act, 2017, the payment of tax by electronic commerce operator (ECO) who does not have physical presence in taxable territory in India be made by ............. .
The exception to the general rule that ‘‘normally, the supplier of goods and services is liable to pay tax on supply, even if he does not collect from his customer i.e. recipient of supply of goods or services’’ shall be applicable where there are :
(A)supply from an unregistered dealer to registered dealer
(B)specified services through an e-commerce operator
As per section 25 of CGST Act, 2017, when employer gifts goods or services to his employees, it will not be considered as taxable supply for the purpose of GST; if the value of supply to an employee does not exceed:
December 2021Q. 731 markMCQSyllabus 2017Law changed
Law changed after this attempt: GST rates were restructured with effect from 22 September 2025 (Notification No. 09/2025-Central Tax (Rate)), so the rates used here may have changed. (ICSI Supplement, December 2026). The answer below reflects the law as it stood for December 2021.
In case of Goods Transport Agency (GTA) services, tax under CGST Act, 2017 is to be paid under forward charge basis where :
(A)GST is payable @ 12%
(B)GST is payable @ 5% and a factory registered under Factories Act, 1948 is the recipient of GTA services
(C)GST is payable @ 5% and an unregistered individual customer is the recipient of GTA service
June 2026, Q. 5(b) · Compute the value of eligible Input Tax Credit under GST for M/s Khatri Electronics Pvt. (Ch. 18)
December 2025, Q. 5(a) · Compute the value of Taxable Outward Supplies under the GST for M/s Optitech Solutions Pvt. (Ch. 17)
December 2025, Q. 5(b) · Compute the value of Output Tax Liability under the GST for M/s Optitech Solutions Pvt. (Ch. 18)
December 2024, Q. 5(b) · Compute the Input Tax Credit available for the month of March, 2024 for VVIP Global Limited. (Ch. 18)
June 2024, Q. 6(a) · Determine the time of supply under the GST provisions in the following situations : (Ch. 17)
December 2023, Q. 61 · Input Tax Credit (ITC) is available in respect of tax paid on : (Ch. 18)
December 2023, Q. 78 · Mr. R is supplying only services which are exclusively taxable under RCM. (Ch. 19)
December 2023, Q. 89 · A an advocate provided legal consultancy services to B for a consideration of 50,000 on 14th August, 2023. (Ch. 17)
June 2023, Q. 61 · Mahesh Electronics Ltd. engaged in manufacture of electronic products, gifted one laptop to Suresh, CFO of the company, free of cost on the … (Ch. 18)
December 2022, Q. 64 · Kabir wants to start a new business of trading of footwear in Jammu & Kashmir. (Ch. 19)
December 2021, Q. 72 · What is the purpose of The Union Territory Goods and Services Tax Act, 2017 (UTGST Act) which was passed by the Parliament? (Ch. 15)
December 2021, Q. 63 · Import of services under the provisions of GST is to be treated as ............ (Ch. 15)
June 2021, Q. 82 · Ramji Medicals is a retail trader of medicines covered by composition levy of GST. (Ch. 19)
December 2020, Q. 77 · According to Rule - 3 of CGST Rules, any registered person opts to pay tax under section 10 of the CGST Act, 2017 shall file an intimation i… (Ch. 18)
December 2020, Q. 87 · A GST registered manufacturing company provides the information and particulars of GST paid for the month of December, 2019 on (a) goods and… (Ch. 18)
December 2020, Q. 87 · A registered person/tax payer opting under composition levy as per provisions contained under CGST Act, 2017 is required to file an annual r… (Ch. 19)
December 2019, Q. 99 · Which of the following persons is not liable for registration under GST law ? (Ch. 19)
December 2018, Q. 6(d) · Explain the meaning of the term “Pure agent” for CGST purposes. (Ch. 17)