Indirect_CA

Question Papers of PCC and UPCC/AT(Service Tax and Vat portion of 25 marks only)

CA Integrated PCC and Accountant Technician

CA IPCC/AT November 2009

Q5. Answer the following : (a) Should Service tax be paid even, if it is not collected from the client or Service Receiver ? (b) Mr. Raju is a multiple service provider and files only a single return. State with reasons whether he can do so ? (c) Explain the term “Vocational Training Institute” under the provisions of Service tax. (d) State with reason in brief whether the following statement is true or false with reference to the provisions of Service Tax - Mr. Salim, an architect has received the fees of Rs. 4,48,500 after the deduction of Income Tax of Rs. 51,500. The Service Tax is payable on Rs. 4,48,500. (2 x 4 = 8 marks).

Q 6. (a) Rosy Tours Co. has arranged three package tours during F Y 2008-09. The particulars of the Services and Charges are as under : (i) Tour 1: April, 2008 – Charges received Rs. 3.5 Lacs The package includes transportation, accommodation, food, tourist guide and entry fees for monuments (ii) Tour 2 : October, 2008 – Charges received Rs. 6.5 Lacs. The package includes transportation and accommodation for stay (iii) Tour 3 : December, 2008 – Charges received Rs. 4 Lacs. The charges are solely for arranging accommodation for stay. However, the bills issued to the clients do not mention it clearly that the charges are solely for arranging the accommodation for stay. All the charges are excluding service tax. The rate of service tax is 12% Education cess. Compute the taxable services and tax thereon (8 marks)

Q 6(b) Answer the following: (i) Whether export service provided by Service Provider is excluded for the purpose of Payment of Service Tax ? (ii) List the documents to be submitted alongwith the First Service Tax Return. (iii) What is the due date for payment in case of e-payment of Service Tax ? (3 x 3 = 9 marks)

Q 7. Answer the following : (a) What are the Different rate under VAT system ? (b) Under what circumstances registration can be cancelled under VAT ? (c) Briefly explain the income variant of VAT (d) State with reasons in brief whether the following statements is true or false with reference to the provision of Value Added Tax. - The Vat Rate on sale of Lottery Ticket is 4% (2 x 4 = 8 marks)

Q 8(a) Mr. X, a manufacturer sells goods to Mr. B, a distributor for Rs. 2,000 (excluding of VAT). Mr. B sells goods to Mr. K, a wholesale dealer for Rs. 2,400. The wholesale dealer sells the goods to a retailer for Rs. 3,000, who ultimately sells to the consumers for Rs. 4,000. Compute the Tax Liability, input credit availed and tax payable by the manufacturer, distributor, wholesale dealer and retailer under Invoice method assuming VAT rate @ 12.5% (8 marks)

Q8(b) Answer the following : (i) What are the different stages of VAT? Can it be said that entire burden fall on the final consumer? (ii) Discuss filing of Return under VAT (iii) List out six purchases which are not eligible for input tax credit (3 x 3 = 9 marks).

CA PCC November 2009

Q 6. Ms. Priyanka, a proprietress of Royal Security Agency received Rs 100,000 by an account payee cheque, as advance while signing a contract from proceeding taxable services; she receive Rs. 5,00,000 by credit card while providing the service and another Rs.5,00,000 by a pay order after completion of service on January 31, 2009. All three transactions took place during financial year 2008-2009. She seek your advice about her liability towards value of taxable service and the service tax payable by her (5 marks)

Q 7 Mr. Goenka, a trader selling raw materials to a manufacturer of finished products. He imports his stock in trade as well as purchases the same from the local markets. Following transaction took place during financial year 2008-09 - (1) Cost of imported materials (from other State) excluding tax - Rs 1.00.000 (2) Cost of local materials including VAT – Rs 2.25.000 (3) Other expenditure includes storage, transport, interest and loading and unloading and profit earned by him - Rs 87.500. Calculate the VAT and invoice value charged by him to a manufacturer. Assume the rate of VAT @12.50% (5 marks)

Q 8.Answer the following (a) Ms. Amrapali, a registered Service Provider did not render any services during the financial year 2008-09. Whether she is required to file service tax return ? (b) VAT would increase the working capital requirements and the interest burden. Discus. (c) Mr. Bharat is a registered Service Provider. He transfers his business to Mr. Rakesh on 31st July, 2008. Explain the requirement to be complied with by Mr. Bharat and Mr. Rakesh on such transfer under the provisions of Service tax. (d) Write the provisions on liability for payment of Services provided abroad. (e) Which Act and Rule governs the levy of Service tax in India ? (5 x 3 = 15 marks)

CA PCC June 2009

Q6. Answer any five of the following : (a) Mr. X, a service provider who pays service tax regularly, was of the opinion that a particular service was not liable for service tax. He, therefore, did not charge service tax in his bill. He received the bill amount without service tax. How will service tax liability of Mr. X be determined in such case? (b) Whether service tax return can be furnished after the due date? (c) How can the excess payment of service tax be adjusted? (d) Discuss the accountability of an “input service distributor” who may not be liable to pay service tax. (e) Discuss the word “Transparency” in the context of VAT system (f) When does a small service provider require to register under the Service Tax Act, but not liable to collect and pay Service Tax? (10 marks).

Q 7 (a) Compute the VAT amount payable by Mr. A who purchases goods from a manufacturer on payment of Rs. 2,25,000 (including VAT) and earn 10% profit on sale to retailer? VAT rate on purchase and sale is 12.5%. (b) An unregistered “Service provider” provides following details in respect of taxable services provided during the Financial Year 2008-09 - * 30/06/2008 – Advance received from a customer – Rs.1,00,000/- * 30/09/2008 – Part payment received against a bill of Rs. 9,50,000 raised on a customer - Rs. 5,00,000 * 31/12/2008 – Money received against taxable services provided during December, 08 – Rs. 3, 00,000 * 31/01/2009 – Taxable services rendered during January, 09 – Rs. 1,00,000 * 31/03/2009 – Taxable services provided during March, 09 – Rs. 2,00,000. The service tax provider complies with the provisions of registration and collection of service tax as per service tax laws. He gets registered during the year. He received the money against the bills raised during the months January and March 2009. Compute the service tax liability of service provider for the year 2008-09 considering the rate of service tax @ 12.36% (3+3 = 6 marks)

Q 8. Answer any three of the following – (a) How the value of taxable services determined when the consideration against taxable services is received in other than monetary terms? (b) What are the sources of Service Tax Law? (c) How can an auditor play role to ensure that the tax payers discharge their tax liability properly under the VAT system? (d) Discuss the ‘Subtraction method’ for computation of VAT (3 x 3 = 9 marks).

CA PCC May, 2008

Q6) Answer any five of the following: (a) Briefly explain the nature of the service tax (b) A particular service has been brought into service tax net with effect from 1/6/2007. Mr. Vignesh has provided this service on 20/5/2007, the payment for the same was received on 10/6/2007. Is the service tax payable on the same? (c) Mr. Saravanan has collected sum of Rs. 15000 as a service tax from a client mistakenly, even though no service tax is chargeable for such service. Should the amount so collected be remitted to the credit of the central Government? (d) Who are the persons liable to file service tax return? (e) Briefly explain the income variant of VAT (f) What are the demerits of VAT from the view point that it is form of consumption tax? (2 x 5 = 10 marks)

Q7) Ms Priya rendered taxable services to a client. A bill of Rs. 40000 was raised on 29/4/2007. Rs. 15000 was received from a client on 1/5/2007 and the balance on 23/5/2007. No service tax was separately charged in the bill. The questions are: (a) Is Ms Priya liable to pay service tax, even though the same has not been charged by her? (b) In case she is liable, what is the value of taxable services and the service tax payable? (2+4 = 6 marks)

Q8) Answer any three of the following: (a) Briefly explain the charge of service tax (b) Mr. Vasudevan has rendered freely, a service to a client which is taxable, but has not charged or received any fee from a client. Is service tax payable on such free services? (c) What are the different stages of VAT? Can it be said that the entire burden falls on the final consumer? (d) Briefly explain, how VAT helps in checking tax evasion and in achieving neutrality (3 x 3 = 9 marks)

CA – PCC November 2007

Q 6 Answer the following : (a) Where a service provider maintains books of account on mercantile basis relating to taxable services provided by him, will service tax be payable on accrual basis? (b) What are the documents to be submitted alongwith service tax return ? (c) What are the due dates for filing of service tax returns? (d) Is a service provider allowed to pay service tax on a provisional basis ? (e) Does the VAT system bring certainty to a great extent ? (f) Can VAT be said to be non-beneficial as compared to single stage- last point system ? (2 marks each)

Q 7 (a) J.C. Professionals, a partnership firm, gives the following particulars relating to the services provided to various clients by them for the half-year ended on 30.09.06: (i) Total bills raised for Rs. 8,75,000 out of which bill for Rs. 75,000 was raised on an approved International Organisation and payments of bills for Rs. 1,00,000 were not received till 30.09.06. (ii) Amount of Rs. 50,000 was received as an advance from XYZ Ltd. on 25.09.06 to whom the services were to be provided in October, 06. You are required to work out the : (a) taxable value of services (b) amount of service tax payable. (3 marks)

Q 7 (b) Compute the invoice value to be charged and amount of tax payable under VAT by a dealer who had purchased goods for Rs. 1,20,000 and after adding for expenses of Rs. 10,000 and of profit Rs. 15,000 had sold out the same. The rate of VAT on purchases and sales is 12.5% (3 marks)

Q 8 Answer the following : (a) Who is liable to pay service tax in relation to services provided by a goods transport agency? (b) What are the due dates for payment of service tax ? (c) Briefly explain the Invoice method of computing tax liability under the VAT system. What are its other names ? (d) What are the different variants of VAT, and how is deduction available for tax paid on inputs including capital inputs? (3 marks each)