
Dear Professional Seniors & Friends,
Welcome to this wonderful weekend MCQ self challenge!
This weekend challenge is on #Input_Tax_Credit_under_GST_Act having 5 MCQs to be self answered by participants to take self challenge. The objective of this post is to discuss the various ITC provisions to be kept in mind while utilizing the same. The detailed answer of these MCQs shall be posted on Monday for the self assessment of the participants. This post shall be of immense use of the participant.
Weekend MCQ 12.1: A Company has Branch-A which is a registered taxable person in Andhra Pradesh conducts conference in a hotel in Lonavla (Maharashtra) where CGST and SGST is charged by the hotel. This Company also has Branch-M which is a registered taxable person in Mumbai? What is the possible scenario among the following options?
(A) The company can take bill in the name of branch A and the input tax credit will be available to branch A.
(B) The company can take bill in the name of branch M and the input tax credit will be available to branch M.
(C) The company can take bill in the name of branch M and the input tax credit will be available to branch A by way of ISD if nexus exists.
(D) None of the above.
Weekend MCQ 12.2: Among the following events, when a person can take credit of input tax credit paid on purchase of goods?
Date of booking order – 25/04/2017
Date of payment/receipt of advance/date of invoice – 27/04/2017
Date of dispatch of goods – 29/04/2017
Date of receipt of goods – 01/06/2017
(A) 25/04/2017
(B) 27/04/2017
(C) 29/04/2017
(D) 01/06/2017
Weekend MCQ 12.3: Among the following events, what amount of net input tax credit will be eligible to be allowed to a person?
Total input tax on inputs and input services for the tax period May 2018 – Rs 1,00,000
Input tax used exclusively for non-business purposes – Rs 10,000
Input tax used exclusively for effecting exempt supplies – Rs 5,000
Input tax used exclusively for effecting supplies on which recipient is liable to pay tax on reverse charge basis – Rs 5,000
Input Tax ineligible u/s 17(5) – Rs 5,000
Input tax credit used exclusively for taxable supplies – Rs 50,000
Aggregate value of exempt supplies(May 2018) – Rs 25,00,000
Total Turnover(May 2018) – Rs 10,00,000
(A) Rs 67,500
(B) Rs 72,500
(C) Rs 62,500
(D) Rs 68,750
Weekend MCQ 12.4: What amount of input tax credit paid on purchase of capital goods will be allowed after the exempt supply has become taxable from a date?
Date of invoice of capital goods – 22-Jan-2018
Date from which exempt goods becomes taxable – 01-Apr-2018
IGST Paid on the capital goods used exclusively in relation – 360000
To goods exempted upto 31-Mar-2018
(A) Rs 1,80,000
(B) Rs 3,60,000
(C) Rs 3,42,000
(D) Rs 3,24,000
Weekend MCQ 12.5: Mr.X becomes liable to pay tax on 5th Aug 2017 and has applied for registration on 22nd Aug 2017 and granted registration certificate on 10th Sep 2017. Which among the following is possible scenario?
(A) He can take credit of input tax in respect of goods held in stock as on 31st July 2017.
(B) He can take credit of input tax in respect of goods held in stock as on 04th Aug 2017.
(C) He can take credit of input tax in respect of goods held in stock as on 21st Aug 2017.
(D) He cannot take credit.
Sincere Regards!
CA Sanjay Kumar Agrawal
Mobile: 9810116321
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Dear Professional Seniors & Friends,
Warm Greetings!
This post of MCQ is on the input tax credit provisions under GST since it is an essential tool to determine the net tax payable.
Answer to MCQ 12.1 : C)
Answer to MCQ 12.2 : D)
Answer to MCQ 12.3 : A)
Answer to MCQ 12.4 : C)
Answer to MCQ 12.5 : D)
Practical Analysis for MCQ 12.1
Practical Analysis for MCQ 12.2
Practical Analysis for MCQ 12.3
Rule 42 of CGST Rules prescribed the procedure for determination of input tax credit in respect of inputs or input services and reversal thereof which is presented below –
Particulars | Reference | GST |
Total input tax on inputs and input services for the tax period May 2018 | T | 1,00,000 |
Input tax used exclusively for non-business purposes | T1 | 10,000 |
Input tax used exclusively for effecting exempt supplies | T2 | 10,000 |
Input tax ineligible under Section 17(5) | T3 | 5,000 |
ITC credited to Electronic Credit Ledger | C1 = T -(T1 + T2 +T3) | 75,000 |
Input tax credit used exclusively for taxable supplies (including zero rated supplies) | T4 | 50,000 |
Common credit | C2 = C1 – T4 | 25,000 |
Aggregate value of exempt supplies for the tax period May 2018 | E | 25,00,000 |
Total Turnover of the registered person for the tax period May 2018 | F | 1,00,00,000 |
Credit attributable to exempt supplies | D1 = (E/F) *C2 | 6,250 |
Credit attributable to non business Purposes | D2 = C2 * 5% | 1,250 |
Net eligible common Credit | C3 = C2 – (D1 + D2) | 17,5000 |
Total credit eligible (Exclusive + Common) | G = T4 + C3 | 67,500 |
Practical Analysis for MCQ 12.4
Date of invoice of capital goods | 22-Jan- 2018 |
Date from which the exempt goods become taxable | 01-Apr-2018 |
No. of quarters from date of invoice | 1 |
Percentage points to be reduced (5% per quarter) | 5% |
IGST paid on the capital goods used exclusively in relation to goods exempted up to 31-Mar-2018 | 3,60,000 |
ITC to be reduced by 5% | (18,000) |
Credit (IGST) available on capital goods | 3,42,000 |
Practical Analysis for MCQ 12.5
(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as professional opinion; you can definitely have your own opinion.)
Sincere Regards!
CA Sanjay Kumar Agrawal
Mobile: 9810116321
To access MCQ posts regularly, please Join Telegram Channel:
https://t.me/caSanjayKumarAgrawal
For All MCQ post please click on:
Webpage: http://www.casanjay.me/
Facebook: https://www.facebook.com/CA.Sanjay.K.Agrawal/
Linkedin: https://www.linkedin.com/in/ca-sanjay-kumar-agrawal/
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