Page 18 - Chap24Computation of GST

Notes:

1 Ü As per rule 86B of the CGST Rule 2017, amount available in electronic credit ledger which it
can use to discharge its output tax liability of said month cannot exceed 99% of such tax
liability.
Ü Since the value of taxable supply other than exempt supply and zero-rated supply of Adityanath
Private Limited in August exceeds ₹ 50 lakh.

2 As per section 9(3) of the CGST Act, Tax on legal services provided by an advocate to a business
entity, is payable under reverse charge by the business entity.
3 As per section 9(3) of the CGST Act, Tax on services provided by a GTA who did not exercise the
option to pay tax on its services under forward charge @12% to a body corporate is payable

under reverse charge by the body corporate.
4 Ü As per section 49(4) amount available in electronic credit ledger may be used for making
payment towards output tax. However, tax payable under reverse charge is not an output tax.
Ü Therefore, input tax credit cannot be used to pay tax payable under reverse charge & thus,
tax payable under reverse charge will have to be paid in cash.

5 Ü As per section 13(3)(a) of the IGST Act, If either supplier or recipient is located outside India,
the place of supply of services supplied in respect of goods required to be made physically

available by recipient to supplier is the location where the services are actually performed.
Ü In the given case, place of supply of repair services is received outside India.
Ü Since the location of supplier and place of supply are outside India, said repair services are
not liable to GST.
6 Ü As per proviso to section 17(5)(b) of the CGST Act, ITC on life insurance service is available

only when it is obligatory for an employer to provide said services to its employees under any
law for the time being in force.
Ü Since it is not obligatory for the employer in the given case and thus, the ITC is blocked.
7 As per section 16(1) of the CGST Act, ITC of tax paid on input services used in the course or

furtherance of business is available.
8 Ü As per section 16(1) of the CGST Act, ITC of tax paid on input services used in the course or
furtherance of business is available.
Ü Further, IGST charged on raw material imported from China is also available because input
tax includes IGST charged on import of goods.

9 Ü Services by way of transportation of goods by road are exempt from GST except the
services of a GTA.
Ü Hence, GST is not payable on transportation charges paid for horse pulled carts.

10 Ü As per section 17(3), value of exempt supply includes supplies on which the recipient is
liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject
to clause (b) of paragraph 5 of Schedule II, sale of building.
Ü The value of exempt supply of land and building is the value adopted for paying stamp duty

and for security is 1% of the sale value of such security.
Ü Further, as per explanation to rule 42, the aggregate value of exempt supplies excludes the
value of services of accepting deposits, extending loans or advances where the consideration
is represented by way of interest or discount, except in case of a banking company or a

financial institution including a non-banking financial company, engaged in supplying

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