Page 24 - Chapter 6_Value of Supply

You are required to determine the gross GST liability [CGST & SGST and/or IGST] of Kaushal Manufacturers
Ltd. for the month of January.
Note:
(i) All the given amounts are exclusive of GST, wherever applicable.
(ii) Assume the rates of GST to be as under:
Goods/services supplied CGST SGST IGST

Electronic home appliances 2.5% 2.5% 5%
Repair and maintenance services 9% 9% 18%
You are required to make suitable assumptions, wherever necessary. [CA Final RTP Nov 21 ]

Answer:-
Computation of gross GST Liability of Kaushal Manufacturers Ltd. for the month of January:-

Particulars IGST( )₹ CGST( )₹ SGST( )₹

Supply of electronic home appliances to consignment agents - 4,95,000
Cardinal Electricals Pvt. Ltd. and Rochester Technos of [99,00,000×
5%]
Punjab and Madhya Pradesh [Note - 1]

Supply of electronic home appliances to Ronn Technomart of 1,50,000
[30,00,000
Noida, Uttar Pradesh [Note - 2]
× 5%]
2,10,000 2,10,000
Supply of electronic home appliances to wholesale dealers of
[84,00,000 [84,00,000
such appliances in Delhi [Note - 3] × 2.5%] × 2.5%]

Electronic home appliances supplied to Anchor Electricals
Nil
Inc., USA under LUT [Note - 4]

75,600 75,600
Supply of repair and maintenance services to Unitech Ltd., an
[8,40,000 [8,40,000
electronic appliance manufacturer, located in Delhi [Note - 5] × 9%] × 9%]

Advance received for repair and maintenance services 63,000 63,000
supplied to Orelec Ltd., a electronic appliances manufacturer, [7,00,000 × [5,00,000
located in Delhi [Note - 6] 9%] × 9%]

Advance received for electronic home appliances to be
supplied to Novick Electricals, a wholesale dealer of Nil
electronic appliances in Gurgaon, Haryana [Note - 7]

Total GST liability 6,45,000 3,48,600 3,48,600

Notes:-

Ü Supply from Principal to Agent (Rule 29, CGST Rules 2017) – Value shall be Open Market Value (OMV) or
90% of the price at which the agent sells to unrelated customers. Since OMV is unavailable, value of supply to
Cardinal Electricals Pvt. Ltd. & Rochester Technos = ₹99,00,000 (90% of ₹(40L + 70L)). IGST @ 5% applies
(inter-State supply).
Ü Supply to Related Person (Rule 28, CGST Rules 2017) – As per Section 15, CGST Act, if a person controls
another (e.g., owns shares), they are related persons. Kaushal Manufacturers Ltd. owns 75% of Ronn
Technomart, making them related. Since Ronn Technomart is not eligible for full ITC, the invoice value
cannot be deemed OMV. Taxable value: ₹30,00,000 (OMV). IGST @ 5% applies (inter-State supply).

Ü Supply to Wholesale Dealers (Intra-State, Delhi) – CGST 2.5% + SGST 2.5%.

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