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CA Intermediate Exam  >  CA Intermediate Tests  >  Taxation for CA Intermediate  >  Test: Value of Supply - CA Intermediate MCQ

Test: Value of Supply - CA Intermediate MCQ


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10 Questions MCQ Test Taxation for CA Intermediate - Test: Value of Supply

Test: Value of Supply for CA Intermediate 2024 is part of Taxation for CA Intermediate preparation. The Test: Value of Supply questions and answers have been prepared according to the CA Intermediate exam syllabus.The Test: Value of Supply MCQs are made for CA Intermediate 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Value of Supply below.
Solutions of Test: Value of Supply questions in English are available as part of our Taxation for CA Intermediate for CA Intermediate & Test: Value of Supply solutions in Hindi for Taxation for CA Intermediate course. Download more important topics, notes, lectures and mock test series for CA Intermediate Exam by signing up for free. Attempt Test: Value of Supply | 10 questions in 10 minutes | Mock test for CA Intermediate preparation | Free important questions MCQ to study Taxation for CA Intermediate for CA Intermediate Exam | Download free PDF with solutions
Test: Value of Supply - Question 1
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What is the term used to describe the mechanism in GST where the supplier of goods/services is liable to pay tax?

Detailed Solution for Test: Value of Supply - Question 1
The mechanism in GST where the supplier of goods/services is liable to pay tax is called "Forward charge." Under this mechanism, the supplier is responsible for collecting and remitting the tax.
Test: Value of Supply - Question 2
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In the case of reverse charge mechanism in GST, who is liable to pay the tax?

Detailed Solution for Test: Value of Supply - Question 2
In the case of the reverse charge mechanism in GST, the recipient of goods/services is liable to pay the tax instead of the supplier. This mechanism is typically applied to specific services and scenarios as mentioned in the text.
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Test: Value of Supply - Question 3
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Which of the following is NOT an example of a service to which the reverse charge mechanism applies in GST?

Detailed Solution for Test: Value of Supply - Question 3
Restaurant services are not typically subject to the reverse charge mechanism in GST. The reverse charge mechanism applies to certain specific services, as listed in the text, but restaurant services are not included.
Test: Value of Supply - Question 4
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What is the significance of applying the reverse charge mechanism in GST?
Detailed Solution for Test: Value of Supply - Question 4
One of the significant purposes of applying the reverse charge mechanism in GST is to increase tax revenues. It helps in ensuring that tax liability is met by the recipient in certain cases, which can lead to increased tax collections.
Test: Value of Supply - Question 5
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When does the time of supply for vouchers in GST occur, according to Section 12(4) of the CGST Act?
Detailed Solution for Test: Value of Supply - Question 5
According to Section 12(4) of the CGST Act, the time of supply for vouchers in GST occurs on the date of issue of the voucher if the supply is identifiable at that time.
Test: Value of Supply - Question 6
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What is the method used to determine the value of supply under GST when the consideration is not wholly in money?
Detailed Solution for Test: Value of Supply - Question 6
When the consideration for a supply is not wholly in money, the value of supply under GST can be determined using the "residual method." This method is used when other valuation methods are not applicable.
Test: Value of Supply - Question 7
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What component is excluded from the value of supply under GST as per Section 15(2)(a) of the CGST Act?
Detailed Solution for Test: Value of Supply - Question 7

Under Section 15(2)(a) of the CGST Act, the value of supply includes:

  1. Taxes, duties, cesses, fees, and charges under any other laws (except GST itself, which is charged separately in the invoice).

    • This makes option a included in the value of supply.

  2. Interest, late fee, or penalty for delayed payment of consideration is added to the value of supply.

    • This makes option c included in the value of supply.

  3. Cost of production (or any additional charges incurred by the supplier on behalf of the recipient) can also be included as per the nature of the supply.

    • This makes option d included in the value of supply.

However, GST Compensation Cess is excluded from the value of supply, as it is a separate levy specifically for compensating states for revenue loss under GST. Hence, option b is the correct answer.

Test: Value of Supply - Question 8
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What is the method used to determine the value of supply under GST when the value cannot be determined by other prescribed methods?
Detailed Solution for Test: Value of Supply - Question 8
The "residual method" is used to determine the value of supply under GST when the value cannot be determined by other prescribed methods. It is a fallback method when other methods are not applicable.
Test: Value of Supply - Question 9
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What is the definition of "related parties" under GST?
Detailed Solution for Test: Value of Supply - Question 9
Under GST, "related parties" are defined as parties with specific relationships as defined in the GST Act. These relationships are outlined in the text and include officers or directors of one another's businesses, legally recognized partners, employer-employee relationships, and more.
Test: Value of Supply - Question 10
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Value of supply shall be the transaction value, if __________________
Detailed Solution for Test: Value of Supply - Question 10

The correct answer is:

c. Both (a) and (b)

Under Section 15 of the CGST Act, the value of supply is the transaction value, which means the price actually paid or payable for the goods or services, provided:

  1. The transaction is between unrelated parties:
    If the parties are related, the transaction value may not reflect the true value, and valuation rules apply.

  2. Price is the sole consideration:
    If the consideration includes non-monetary elements, valuation rules are used to determine the value of supply.

Both conditions (a) and (b) must be satisfied for the value of supply to be the transaction value. Hence, the correct answer is c. Both (a) and (b).

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