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CA Intermediate · Taxation · Charge of GST

Rao & Co., a registered person in Hyderabad, supplies taxable services worth Rs 4,00,000 (exclusive of tax) at 18% to a registered recipient in Hyderabad. The supplier, not the recipient, is liable to pay tax. Which statement about the levy is correct?

Rao & Co. must charge CGST Rs 36,000 and SGST Rs 36,000. Both supplier and place of supply are in Telangana, so the supply is intra-State, and the total tax of 18% on Rs 4,00,000, which is Rs 72,000, is split equally between CGST and SGST.

  1. ARao & Co. must charge IGST of Rs 72,000
  2. BRao & Co. must charge CGST Rs 36,000 and SGST Rs 36,000Correct
  3. CRao & Co. must charge CGST Rs 72,000 only
  4. DRao & Co. must charge CGST Rs 36,000 and SGST Rs 36,000 only if turnover exceeds Rs 20 lakh

Explanation

Supplier and place of supply are both in Telangana, so it is intra-State. Tax is 18% of 4,00,000 = Rs 72,000, split equally into CGST Rs 36,000 and SGST Rs 36,000. IGST is wrong for an intra-State supply. A registered taxpayer charges tax regardless of turnover thresholds.

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