DCM 2201 INDIRECT TAXES JULY-AUG 2025

Description

SESSION	JULY-AUG 2025
PROGRAM	BACHELOR OF COMMERCE
SEMESTER	IV
COURSE CODE & NAME	DCM 2201 INDIRECT TAXES

 

 

 

Set – 1

 

 

Q1. a.  Xing ltd. sells a package that includes:

1. A Laptop (exclusive of GST 18%) 60000
2. A software subscription (for 1 year) (exclusive of GST 12%) 20000

iii. An extended warranty service (for 1 year) (exclusive of GST 5%    2000    

The total price for this package is Rs. 82,000. Determine the tax liability for this mixed supply.

1. State the concept of destination-based tax and consumption-based tax with example 5+5

Ans 1.

(a) Tax Liability for Mixed Supply

Mixed Supply

Under GST, a mixed supply is a combination of two or more individual supplies sold together for a single price where each item can be sold separately and does not depend on the others.

In such cases, GST rate of the highest-taxed item is applied on the entire value of the package (Sec. 2(74), CGST Act).

In this question, the package contains:

Laptop – GST @ 18%

 

1. Destination-Based Tax and Consumption-Based Tax

Destination-Based Tax

A destination-based tax is a taxation principle in which the tax revenue goes to the jurisdiction where the goods or services are consumed, rather than where they are produced. Under this system, tax is imposed based on the place of destination, meaning the final point of delivery or use of the product. Goods may be manufactured in one state or country, but the

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Q2. Discuss the provision of time of supply in case of change in rate of tax in respect of goods and services with example. 5+5 

Ans 2.

Time of Supply Provisions in Case of Change in Rate of Tax for Goods and Services

Under GST, the concept of time of supply determines the exact point when liability to pay GST arises. When the rate of tax changes, it becomes important to identify whether the old rate or the new rate should apply to a particular transaction. The GST Act provides specific rules for determining the time of supply in such circumstances for both goods and services.

 

 

Q3. Determine the place of supply and applicable taxes in the following cases

1. M/s A Ltd. (Delhi) places an order with M/s B Ltd. (Mumbai) to deliver goods directly to M/s C Ltd. (Chennai).
2. An Indian dance troupe (registered in Delhi) performs in Dubai for an event organized by a Dubai-based company.

iii. A passenger books a bus ticket from Delhi to Jaipur. The passenger gives his billing address as Delhi. The transport operator is registered in Delhi

1. Mr. Sharma from Punjab books a hotel room in Goa for his family vacation through an online travel portal.
2. M/s Delhi Traders (located in Delhi) sells a machine to M/s Gurugram Engineers (located in Haryana).The machine is located at a warehouse in Delhi and handed over there itself. 10

Ans 3.

Place of Supply and Applicable Taxes

(i) Delhi company orders goods from Mumbai company to be delivered directly to Chennai buyer

This situation is a bill-to–ship-to transaction under Section 10(1)(b) of the IGST Act. M/s A Ltd. in Delhi places an order with M/s B Ltd. in Mumbai, instructing it to deliver the goods directly to M/s C Ltd. in Chennai. For the purpose of GST, the place of supply is the location of the buyer (A Ltd.), i.e., Delhi, even though the goods move from Mumbai to Chennai.

Since the supplier is in Maharashtra and the place of supply is Delhi, the transaction attracts IGST.

(ii) Indian dance troupe registered in Delhi performing in Dubai

Performance services such as events, concerts, and shows are covered under Section 13(5) of

 

 

Set – 2

 

 

Q4. Discuss the concept of ‘Input Tax Credit’ with example.

Outline the concept of Blocked credit. Mention goods and services on which ITC is blocked 5+5      

Ans 4.

Input Tax Credit and Blocked Credit

Input Tax Credit (ITC)

Input Tax Credit refers to the mechanism under GST that allows a registered taxpayer to reduce the tax paid on inputs from the final tax payable on output. In simple terms, ITC enables businesses to claim credit for the GST they pay on purchases of goods and services used for business purposes. This prevents the cascading effect of taxes, promotes transparency, and ensures that tax is paid only on the value addition at each stage. ITC can be

genuine business activities and maintains tax discipline.

 

 

Q5. No GST is payable if the value of supply is not determined wholly in money between the supplier and the recipient. Is this statement correct. Refer the rules regarding Value of Supply to answer this question          4+6           

Ans 5.

Whether No GST is Payable if Value of Supply Is Not Wholly in Money

The statement “No GST is payable if the value of supply is not determined wholly in money” is incorrect. Under GST law, tax is payable on all supplies of goods or services, irrespective of whether consideration is paid wholly in money, partly in money, or not paid in money at all. The Value of Supply Rules under Section 15 and the CGST Rules, 2017, clearly outline methods to determine the taxable value in such cases. The purpose of these rules is to ensure

 

 

Q6. Compute the customs duty liability as per the provision of the Customs Act 1962 from the following information

FOB price of Imported machinery                                                    21,200 US $                          

Ocean Fright                                                                                      2,200 US $                                     

Insurance                                                                                               600 US $                                    

Exchange Rate                                                                            1 US $ = Rs. 90                                  

Basic Customs Duty                                                                                 10 %                                  

Social Welfare Surcharge                                                                         10 %                                   

IGST                                                                                                         18%                                     

 

Ans 6.

Computation of Customs Duty Liability

Step 1: Compute CIF Value (in USD)

FOB Price = 21,200 USD

Add: Ocean Freight = 2,200 USD

Add: Insurance = 600 USD