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CA Final · Indirect Tax Laws · Charge of GST

Shree Ganesh Traders, a registered dealer in Pune, supplies goods within Maharashtra. Its supplies include (i) taxable machinery parts, (ii) alcoholic liquor for human consumption sold to a hotel, and (iii) packaging material. Under section 9(1) of the CGST Act, 2017, on which of these supplies is central tax leviable?

Central tax is leviable on the machinery parts and the packaging material, but not on alcoholic liquor for human consumption. Section 9(1) taxes all intra-State supplies except alcoholic liquor for human consumption, so only the first and third supplies attract CGST.

  1. AOnly (i) and (iii), as alcoholic liquor for human consumption is excluded from the levyCorrect
  2. BAll three, as every intra-State supply of goods is taxable
  3. COnly (i), as packaging material is not a taxable supply
  4. DOnly (ii), since liquor is taxed at the highest notified rate

Explanation

Section 9(1) levies CGST on all intra-State supplies of goods or services or both, except supply of alcoholic liquor for human consumption. Machinery parts and packaging material are taxable. The option taxing all three ignores the express exclusion for liquor.

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