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CMA Final · Indirect Tax Laws and Practice · GST Refunds - Inverted Duty Structure and Zero Rated Supplies

Meera Software Ltd exports services without payment of tax. In the relevant period it received Rs 8,00,000 for services completed in the period, Rs 3,00,000 as advance for services completed in the period (advance received earlier), and Rs 2,00,000 as advances for services not yet completed by period end. Turnover of zero-rated supply of services under rule 89(4) is:

The turnover is Rs 9,00,000. Add payments received in the period (Rs 8,00,000) and completed supplies for which advance was received earlier (Rs 3,00,000), then reduce advances for services not completed in the period (Rs 2,00,000).

  1. ARs 9,00,000Correct
  2. BRs 11,00,000
  3. CRs 13,00,000
  4. DRs 8,00,000

Explanation

The rule adds payments received in the period and supplies completed for which advance was received earlier, then reduces advances for supplies not completed. Rs 8,00,000 is the payments received in the period, and the Rs 2,00,000 uncompleted advance is deducted from it, so the amount is 8,00,000 + 3,00,000 - 2,00,000 = 9,00,000, interpreting the Rs 8,00,000 as including no uncompleted advance. Ignoring the deduction gives 11,00,000.

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