Page 13 - Chap24Computation of GST

4) Computation of net GST liability of Jankinandan Associates for the tax period:-

Particulars ( )₹
GST payable on outward supply [As computed earlier] 4,77,000
Less: Input tax credit (ITC) [As computed earlier] 4,31,758
GST payable from Electronic Cash Ledger [A] 45,242
Add: GST payable on legal services under reverse charge [₹ 5,25,000 X 18%] [Note 7] [B] 94,500

Total GST paid from Electronic Cash Ledger [Note 8] (A+B) 1,39,742

Notes:

1 As per section 16(1)(a) of IGST Act 2017, Export of goods is a zero-rated supply & A zero rated
supply can be supplied without payment of tax under LUT as per section 16(3)(a) of that Act.
2 Ü As per section 2(6) of IGST Act, The activity is an export of service if:
Ø the supplier of service is located in India
Ø recipient of service is located outside India

Ø place of supply of service is outside India (as per section 13(2) of IGST Act, 2017)
Ø payment for service has been received in convertible foreign exchange or in Indian rupees
wherever permitted by Reserve Bank of India and
Ø supplier of service and recipient of service are not merely establishments of distinct person.

Ü As per section 16(1)(a) of IGST Act 2017, Export of services is a zero-rated supply & A zero rated
supply can be supplied without payment of tax under LUT as per section 16(3)(a) of that Act.
3 As per section 2(52) & 2(102) of CGST Act, Shares are neither goods nor services, hence sale of
shares is not liable to GST.
4 Ü As per para 5 of Schedule III to CGST Act 2017, Sale of building is neither a supply of goods

nor a supply of services provided the entire consideration has been received after issue of
completion certificate by competent authority or after its occupation, whichever is earlier.
Ü Hence, the same is not liable to GST

5 Services by way of extending deposits, loans or advances in so far as the consideration is
represented by way of interest are exempt.
6 ÜAs 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.
ÜThe 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.
ÜFurther, 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
services of accepting deposits, extending loans or advances.

ÜTherefore, value of exempt supply in given case will be the:
Øsum of value of output supply on which tax is payable under RCM (₹ 9,00,000),
Øvalue of sale of building (₹ 3,50,000 / 2 x 100 = ₹ 1,75,00,000) and
Øvalue of sale of shares (1% of ₹ 3,75,00,000 = ₹ 3,75,000),

which comes out to be ₹ 1,87,75,000.

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