Skip to content

CS Executive · Tax Laws and Practice · Levy and Collection of GST

Mehta Enterprises, a composition dealer of goods, had turnover in the State of Rs 40 lakh in the preceding financial year, so the second proviso to section 10(1) lets it supply services (other than restaurant-type supplies) up to the higher of 10% of that turnover or a fixed amount. What is the maximum value of services it may supply in the current year without losing eligibility?

The limit is Rs 5,00,000. The second proviso to section 10(1) permits services up to the higher of 10% of the preceding year's State turnover or five lakh rupees. Ten per cent of Rs 40 lakh is only Rs 4 lakh, so the higher figure applies.

  1. ARs 4,00,000
  2. BRs 5,00,000Correct
  3. CRs 10,00,000
  4. DRs 40,00,000

Explanation

The proviso allows services of value not exceeding the higher of 10% of turnover in the State in the preceding year or Rs 5 lakh. 10% of Rs 40 lakh is Rs 4 lakh, which is lower than Rs 5 lakh, so Rs 5,00,000 applies. Rs 4,00,000 wrongly ignores the 'whichever is higher' wording.

Did you get it right without looking?

One question tells you little. A timed set on Levy and Collection of GST shows your real accuracy, how long you take and where you lose marks.

Practise Levy and Collection of GSTFree diagnostic mock

More Levy and Collection of GST questions