Page 15 - Chap1 Charge of Tax & Concept of Supply

A is the first stage supplier of goods and hence, does not have credit of CGST, SGST or IGST. Thus, the entire
CGST (` 4,500) & SGST (` 4,500) charged will be paid in cash by A to the Central Government and Karnataka
Government respectively.

II. Inter-State supply of goods by B to X Ltd. - Margin @10%

Particulars ₹
Value charged for supply of goods(` 50,000 x 110%) 55,000
Add: IGST @ 18% 9,900
Total price charged by B from X Ltd. 64,900

Computation of IGST payable by B to Central Government in cash
Particulars ₹
IGST payable 9,900
Less: Credit of CGST 4,500

Less: Credit of SGST 4,500
IGST payable to Central Government in cash 900
Credit of CGST and SGST can be used to pay IGST [Section 49(5) of the CGST Act, 2017]. Karnataka
Government will transfer SGST credit of ` 4,500 utilised in the payment of IGST to the Central Government.
III. Intra -State supply of goods by X Ltd. to Y
Particulars ₹

Value charged for supply of goods (` 55,000 x 110%) 60,500
Add: CGST @ 9% 5,445
Add: SGST @ 9% 5,445
Total price charged by X Ltd. from Y 71,390

Computation of CGST and SGST payable X Ltd in cash

Particulars ₹
CGST payable 5,445
Less: Credit of IGST 5,445
CGST payable to Central Government in cash Nil

SGST payable 5,445
Less: Credit of IGST [` 9,900 - ` 5,445] 4,455
SGST payable to Telangana Government in cash 990

Q.20: Decide with reason whether following independent transactions amount to supply or not as per the
provision, rules, circulars and notification issued under the GST law:
(i) Satyam has lent securities to Kala Enterprises for a consideration of ₹ 10,000 towards lending of
securities under the Securities Lending Scheme, 1997 through an approved intermediary. Ignore the
transaction between Satyam and intermediary.
(ii) Patta Limited made supply of goods to its agent, Romi, without consideration. Romi issued invoice for
the further supply of goods to the customers in his own name. Romi also disclosed the name of principal
in the invoice issued.
(iii) Dilasa Limited recruited Miss Chhaya as senior relationship manager. At the time of joining as senior
relationship manager, the company paid ₹ 3,00,000 towards "Not joining'' Milan Limited, a stiff
competitor of Dilasa Limited. [CA Final Nov 24 Exam]
Answer:-
i) Ü Lending of securities under the Securities Lending Scheme is not a transaction in securities as it does not
involve disposal of securities. It is not excluded from the definition of services and amounts to supply.
Ü Consequently, lending of securities for consideration to Kala Enterprise amounts to supply.

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