Instructions
Read all questions carefully. You have exactly 2 hours to complete this paper. Write your answers for all sections (MCQ, Descriptive, and Practical) on a physical paper or in a document, save it as a PDF, and upload it at the end of the exam. When the timer reaches zero, the questions will vanish, and you will only see the upload page.
MCQ Questions
Choose the correct option for each question.
1. According to the definition provided in the GST law, which of the following is specifically included within the expression 'services'?
A. The provision of actionable claims in all forms.
B. The transfer of title in goods for consideration.
C. Facilitating or arranging transactions in securities.
D. The simple exchange of money between two legal tenders without any fee.
2. Under the GST definition of 'family', which group of relatives is only included if they are wholly or mainly dependent on the person?
A. Only the person's parents and siblings.
B. Spouse and children.
C. All first-degree and second-degree relatives.
D. Parents, grand-parents, brothers, and sisters.
3. A charitable hospital receives a donation from a benefactor and, in gratitude, places a small nameplate in the lobby stating 'Donated by Mr. X'. Why is this transaction not subject to GST?
A. Charitable institutions are exempt from all GST regulations.
B. The donation is used for philanthropic purposes and there is no quid pro quo.
C. All nameplates are considered part of the building and not a service.
D. The value of the nameplate is less than 50,000.
4. When are art works sent by an artist to a gallery for exhibition considered a 'supply' under GST?
A. Only when a buyer selects the art work and a sale takes place.
B. Once the art work has been displayed for more than 30 days.
C. When the gallery charges the artist an exhibition fee.
D. At the moment the art works are delivered to the gallery.
5. Is the 'No Claim Bonus' (NCB) offered by an insurance company to the insured considered a consideration for a supply?
A. No, because there is no supply provided by the insured to the insurance company.
B. Yes, because the insured provides a service of refraining from lodging a claim.
C. Yes, it is treated as a discount for a mixed supply.
D. No, but only if the bonus amount is less than 18% of the premium.
6. A company transfers goods from its registered factory in Haryana to its own registered depot in Delhi. How is this transaction treated under GST?
A. It constitutes a supply because the locations are treated as distinct persons.
B. It is only a supply if a profit margin is added to the transfer value.
C. It is a non-taxable movement as it is within the same legal entity.
D. It is treated as a gift and is exempt if the value is under 50,000.
7. In the case of 'Buy One Get One Free' offers, how is the taxability determined under GST?
A. The transaction is split into two invoices, one for the paid item and one for the free item.
B. It is treated as two goods supplied for a single price, classified as a composite or mixed supply.
C. The free item is treated as a supply without consideration and is exempt.
D. GST is only charged on the item that has the higher market value.
8. Which of the following would be classified as a 'Mixed Supply' under GST?
A. A laptop supplied with a dedicated laptop bag.
B. A television sold with a standard 1-year warranty.
C. Hotel accommodation provided with a mandatory complimentary breakfast.
D. A gift pack containing chocolates, canned juices, and a toy balloon for a single price.
9. A supplier charges a 'late fee' for a delayed payment on an electricity bill. How is this fee taxed?
A. It is treated as a separate service of 'tolerating an act' and taxed at 18%.
B. It is only taxable if it exceeds 10% of the original bill amount.
C. It is exempt from GST as it is a penalty for breach of contract.
D. It is taxed at the same rate as the principal supply (electricity).
10. When a bank imposes a penalty for the 'dishonour of a cheque', why is this penalty not taxable under GST?
A. The penalty is for 'not tolerating' the act, and thus there is no agreement for a supply of service.
B. Financial penalties are generally excluded from the scope of GST.
C. The service is provided by the government and is part of the negative list.
D. It is considered an actionable claim under Schedule II.
11. A Del-credere Agent (DCA) issues an invoice for goods in their own name and also provides a short-term loan to the buyer to ensure timely payment. How is the interest on this loan treated for GST purposes?
A. The interest is added to the value of the supply of goods.
B. Only interest above the market rate is taxable.
C. The interest is treated as a separate supply of agency services to the principal.
D. The interest is exempt as it relates to a pure loan transaction.
12. Which of the following is treated as 'neither a supply of goods nor a supply of services' under Schedule III?
A. The temporary transfer of an intellectual property right.
B. Services of funeral, burial, crematorium, or mortuary.
C. The sale of a building where 10% of the consideration is received before the completion certificate.
D. Renting of immovable property for commercial use.
Descriptive Questions (5 Marks each)
Provide detailed answers for the following.
Q1. Compare the GST implications for the importation of services when made with consideration [Section 7(1)(b)] versus when made without consideration [Schedule 1].
Q2. Enumerate and briefly explain the four specific activities that are treated as a supply even when they are conducted without any consideration.
Q3. Define "Composite Supply" and "Mixed Supply" under Section 8. Explain the criteria used to distinguish between them and how the tax liability is determined for each.
Q4. What is the purpose of Schedule III? Identify at least five activities that are specifically excluded from being treated as either a supply of goods or a supply of services.
Practical Questions
Analyze the scenarios and provide provisions for your answers.
Q5. "Damodar Private Ltd.", registered in Delhi, transfers finished goods to its registered branch in West Bengal without any payment. Does this qualify as a supply? Support your answer with relevant provisions.
Q6. A business entity permanently transfers an old laptop (used in the office) to a charitable trust for free.
Case A: The entity had previously availed Input Tax Credit (ITC) on the laptop.
Case B: The entity had not availed ITC on the laptop.
Determine if Case A & Case B qualifies supply.
Q7. An employer gives a gold chain worth ₹45,000 to an employee as a Diwali gift. Later in the same financial year, the employer gives the same employee a mobile phone worth ₹10,000 as a performance bonus. Discuss whether these gifts are treated as supplies.
Q8. An agent receives goods from a principal to sell to a third party. Determine if this is a "Deemed Supply" under Schedule I if:
• Scenario 1: The agent issues the invoice to the customer in the name of the principal.
• Scenario 2: The agent issues the invoice to the customer in their own name.