Page 33 - Chapter 2.cdr

D. Computation of tax payable in cash
Total tax liability on outward supplies 2,02,500 2,02,500
CH 2
Less: ITC of IGST 1,26,500 1,63,500
Less: ITC of CGST and SGST 45,000 39,000
(CGST) (SGST)

Forward charge liability on outward 31,000
supplies payable in cash after set off of
ITC

Reverse charge liability payable in cash 27,000 27,000 2,00,000
without set off of ITC Charge of Tax & Concept of Supply
[Tax payable under reverse charge,
being not an output tax, cannot be set
off against ITC and thus, will have to be
paid in cash.]
Total tax liability payable in cash 58,000 27,000 2,00,000
[Since `12,000 (CGST) is available in
Electronic Cash Ledger as opening balance,
additional ` 46,000 (CGST) needs to be paid
in cash.]

Payment of liquidated damages to the 3,00,000 Nil Nil
Government
[Services provided by the Government by
way of tolerating non-performance of a
contract for which consideration in the form
of liquidated damages is payable to the
Government under such contract, is exempt
from GST. Hence, no tax will be payable by
Sukhdev on such input service.]
Note: In terms of section 49B of the CGST Act, 2017, full (100%) IGST credit of `
2,90,000 must be utilised first before using CGST or SGST credit. However, the said

IGST credit can be set off against the CGST and SGST liability in any order and in
any proportion. Thus, the final answer in each case would vary.

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