Page 14 - Ch15_Computation of GST

Output tax payable against which ITC can be set off 68,400 68,400

Less: ITC of tax paid on legal fees paid to senior advocate 4,500 4,500
Output tax payable after set off of ITC [B] 63,900 63,900
Net GST Liability [A]+[B] 68,400 68,400
Notes:-
1) Ü As per section 9(3) of the CGST Act, Services supplied by a director of a company to the said

company are taxable under reverse charge.
Ü Thus, the tax leviable thereon will be paid by the company
2) Ü As per section 9(3) of the CGST Act, Services provided by a senior advocate by way of legal
services are taxable under reverse charge.

Ü Thus, the tax leviable thereon will be paid by Mr. Uttam Kumar.
3) Ü Services provided to a recognized sports body by an individual as a player, referee, umpire,
coach or team manager for participation in a sporting event organized by a recognized sports
body is exempt from GST.
Ü However, services provided as a commentator to a local recognized sports body is taxable.

4) Services by way of coaching in recreational activities relating to sports by charitable entities
registered under section 12AA or 12AB of the Income-tax Act are exempt from GST.
5) The amount available in the electronic credit ledger may be used for making payment towards

output tax.
Ü However, tax payable under reverse charge is not an output tax.
Ü Therefore, tax payable under reverse charge cannot be set off against the input tax credit and
Ü Thus, will have to be paid in cash.

Assumptions taken by ICAI:
Ü It has been assumed that services provided to Kapola Pvt Ltd by Mr.Uttam Kumar are in the capacity of
being a director in the company.

Ü It has been assumed that the turnover of Mr. Uttam Kumar in the previous year 20XX-YY exceeded ₹
20,00,000.
Ü It has been assumed that the matter for which the legal fees is paid to the senior advocate is in the course or
furtherance of business.

CCP 15.01.07.00
Neelkanth Pvt. Ltd., a registered supplier of goods and services at Kolkata has furnished the following
information for the month of February:

S.No. Particulars Amount (`)
(i) Intra-State supply of taxable goods including ₹ 1,00,000 received as advance in January, the invoice 4,00,000
for the entire sale value is issued on 15th February
(ii) Purchase of goods from a composition dealer, registered in Kolkata 5,50,000

(iii) Services provided by way of labour contracts for repairing a single residential unit otherwise than as 1,00,000
a part of residential complex (It is an intra-State transaction)
(iv) Membership of a club availed for employees working in the factory (It is an intra-State transaction) 1,75,000
(v) Goods transport services received from a GTA. GST is payable @12% (It is an inter-State transaction) 2,00,000

(vi) Inter-State services provided by way of training in recreational activities relating to sports 10,000

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