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CMA Final · Indirect Tax Laws and Practice · Zero Rated Supplies and Deemed Exports

Tanvi Software Ltd had the following for a refund period under rule 89(4): payments received in the period for zero-rated services Rs 40,00,000 (all for services completed); payments received in an earlier period as advance for services completed in this period Rs 10,00,000; advances received in this period for zero-rated services not completed by period end Rs 6,00,000. What is the turnover of zero-rated supply of services?

The turnover is Rs 44,00,000. Add payments received in the period of Rs 40 lakh and earlier advances for services completed now of Rs 10 lakh, then reduce by Rs 6 lakh of advances for services not completed in the period.

  1. ARs 56,00,000
  2. BRs 50,00,000
  3. CRs 44,00,000Correct
  4. DRs 34,00,000

Explanation

Aggregate of payments received in the period plus services completed whose advance came earlier, reduced by advances for services not completed: 40,00,000 + 10,00,000 - 6,00,000 = 44,00,000. Option B omits the deduction of advances. Option A adds the advances instead of deducting them.

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