Page 33 - Chap24Computation of GST

CCP 24.01.11.00
M/s Diva Fashions (Proprietor Ms. Diva), a registered supplier in Ludhiana (Punjab) under GST law,

has made the following supplies in the month of February 20ZZ:
(i) Supply of designer silk dresses packed in designer boxes to a boutique in Mumbai, (Maharashtra)
as per contract entered with the boutique amounting to ₹ 25,00,000.
(ii) Supply of 600 kits (at ₹ 1,000 each kit) amounting to ₹ 6,00,000 to Mrs. Arora in Amritsar

(Punjab). Each kit consisted of 1 silk dupatta, 1 sari brooch and 1 lipstick.
(iii) M/s Diva Fashions organizes a fashion show in Chandigarh. Zion Exports Ltd, a registered entity
in Jaipur (Rajasthan) has sponsored the show for which M/s Diva Fashions received ₹ 7,50,000
from it.

(iv) 200 kits are given as free gifts to customers on the occasion of 5th anniversary of M/s Diva
Fashions. Each kit consists of 1 silk dupatta and 1 sari brooch. Cost of each kit is ₹ 350. The open
market value of such kit of goods and of goods of like kind and quality is not available. Input tax
credit has not been taken on the goods contained in the kit.
(v) Professional services provided free of cost by Ms. Diva to her independent married sister to set up

her own boutique in Delhi. Cost of providing such services is ₹ 1,00,000, but the open market
value of such services and of services of like kind and quality is not available.
(vi) M/s Diva Fashions enters into a contract on 1st February 20XX for 3 years with Miss Shikha, a

local model to act as a brand ambassador for their products for ₹ 1 lakh (exclusive of GST - 18%
IGST, 9% CGST and SGST each) per annum. Miss Shikha terminated the contract on 2nd
February 20ZZ. As per the contract, M/s Diva Fashions received 25% of the total contract fees
paid to Miss Shikha as the contract is terminated before 3 years, on 15th February, 20ZZ. Miss
Shikha had received the contract fee for 2 years at the time of termination of the contract.

Other information is given below -
a) All above amounts are exclusive of GST.
b) Mrs. Arora paid interest of ₹ 8,850 (inclusive of GST) for delay in making payment to M/s Diva
Fashions.

c) Assume rates of GST as under:
S.No. Particulars Rate of Rate of Rate of
IGST CGST SGST

1 Silk Dresses 18% 9% 9%
2 Designer Boxes 28% 14% 14%
3 Silk Dupatta 12% 6% 6%
4 Sari Brooch 18% 9% 9%

5 Lipstick 5% 2.5% 2.5%
6 Sponsorship received from Zion Exports Ltd. 28% 14% 14%
7 Professional services 18% 9% 9%
From the above information, compute the total GST liability of M/s Diva Fashions for the month of
February 2023. Working notes should form part of your answer.

[CA Final May 23 Exam] [CA Final May 19 Exam (old)] [CA Final RTP Nov 18 (Similar)]
Answer :-
Computation of total GST liability of M/s Diva Fashions for the month of February 20ZZ:

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