CWA ICWA Exam Papers Inter Group II
Applied Indirect Taxes June 2011
This Paper has 43 answerable questions with 1 answered.
Time Allowed : 3 Hours Full Marks : 100
The figures in the margin on the right side indicate full marks.
Answer Question No. 1 which is compulsory and any five from the rest.
Wherever required the candidate may make suitable assumptions and state them clearly in the answers.
All Questions relate to the assessment Year 2011–12 unless stated otherwise in the question.
1. (a) Fill in the blanks: 1×7=7
(i) Central excise is a duty on excisable goods manufactured or produced in India, other than—————-. (0)
(ii) Indian customs waters extend up to ————— nautical miles beyond territorial waters. (1)
(iii) Offences under CST are———-but are bailable. (0)
(iv) Registration of service tax is granted by—————of central excise. (0)
(v) Bill of entry can be submitted———–days prior to expected date of arrival of vessel. (0)
(vi) Article having eight digit code where customs duty rate is specified in the customs tariff is termed as————. (0)
(vii) For stock transfer of goods out of the state, input tax paid in excess of ———— will be eligible for tax credit. (0)
(b) State with reasons whether the following statements are true or false (Answer with out reasoning will not receive any credit). 2×5=10
(i) Materials used for maintaining factory buildings are eligible for cenvat credit. (0)
(ii) Second hand goods imported are not chargeable to customs duty. (0)
(iii) Subsidy given by government to manufactures to compensate cost of production will form Part of sale price. (0)
(iv) A service provider can opt for centralized registration under service tax even if he does not have any centralized billing system. (0)
(v) Under VAT system there will be compulsory assessment at the end of each year. (0)
(c) (i) what is the significance of taxable event in central excise? 2 (0)
(ii) State briefly the basic requirements of principle of natural justice in the context of adjudication in indirect taxes. 2 (0)
(iii) Define ‘appropriate state’ under the CST Act. 2 (0)
(iv) Which committee recommended the introduction of service Tax? 1 (0)
(v) What are the three variants of VAT? 1 (0)
2. Write brief notes on following: 5×3=15
(a) Subtraction method of VAT; (0)
(b) ‘Provisional Assessment’ under Rule 7 of the central excise Rules, 2002; (0)
(c) Refund of special CVD paid on goods imported by a trader. (0)
3. (a) A trader supplies raw material of Rs.1,150 to processor. Processor Processes the raw material and supplies finished product to the trader. The processor charges Rs.450.Which include Rs.350 as processing expenses and Rs.100 as his (processor`s) profit. Transport cost for sending the raw material to the Factory of processor is Rs.50.Transport charges for returning the finished product to the trader from the premises of the processer is Rs.60.The finished product is sold by the trader at Rs.2, 100 from his premises. He charges VAT separately in his invoice at applicable rates. The rate of duty is 16% plus education cess as applicable. What is the AV, and what is total duty payable? 4 (0)
(b) Explain use of C, F and H form under CST Act. 4 (0)
(c) Explain provisions in Cenvat Credit Rules in respect of ‘input service distributor’. 7 (0)
4. (a) Discuss provisions for valuation of exports, if value cannot be determined on basis of transaction Value. 6 (0)
(b) An assesse cleared various manufactured final products during June, 2010.The duty payable for June, 2010 on his final products was as follows: Basic Rs.1, 00, 000, education cess as applicable. During the month, he received various inputs on which total duty paid by suppliers of inputs Was as fallows: Basic duty Rs.25, 000, Education cess Rs.500, SAH education cess Rs.250.Excise duty Paid on capital goods received during the month was as follows: Basic duty Rs.6000, Education cess Rs.120, SAH education cess Rs.60.Service taxpaid on input services as follows: service tax Rs.5000 Education cess Rs.100, SAH education cess Rs.50.How much duty the assesse will be required to Pay by GAR 7 challanfor the month of June, 2010, if assesse had no opening balance in his PLA Account? What is last date for payment? 5 (0)
(c) Explain the term “joint venture in India” under the explanation to section 28 E (c) of the Customs Act 1962 for the purpose of advance ruling. 2 (0)
(d) Transfer of property in goods without consideration is chargeable to CST.Do you agree? Discuss. 2 (0)
5. (a) W dispatches goods from Karnataka to Orison and raises on X in Madhya Pradesh,W charges 4% CST and pays the same in Karnataka. During movement of goods, X sells goods to Y in west Bengal and Y Ultimately sells goods to Z in Orison.Z takes delivery of goods and the movement of goods comes to end. Sale from X to Y and Y to Z is by transfer of documents. Explain the form to be issued so that The subsequent sales are exempt from central sales tax. 5 (0)
(b) State importance of tax invoices for VAT and requirements of the invoice. 5 (0)
(c) Explain provisions in respect of exemption from service tax available to a small service provider. 5 (0)
6. (a) Mr.X, a manufacturer sells goods to Mr.B a distributor for Rs.2000.(Excluding of VAT).Mr.B sells Goods to Mr.k, a wholesale dealer for Rs.2400.The wholesale dealer sells the goods to a retailer For Rs.3000, who ultimately sells to the consumers for Rs.4000.compute the tax liability, input Credit availed and tax payable by the manufacturer, distributor,wholesale dealer and retailer under in voice method assuming VAT rate @12.5%. 4 (0)
(b) What is the difference between short levy and short payment? 2 (0)
(c) FOB value of 1000 kgs goods exported is Rs.1,00,000.Rate of duty drawback on such export is Rs.30 Per kg.Market price of goods is Rs.25, 000 (in wholesale market).
Ascertain whether the exporter is entitled to duty drawback in the above case,and if yet,what the quantum of such duty drawback is. 2 (0)
(d) If any excisable goods are exempted from duty of excise absolutely, the manufacturer of such goods will be bound to avail the exemption. Comment . 2 (0)
(e) Ware house goods can be transferred from one warehouse to another under the customs Act 1962 Do you agree? Discuss. 2 (0)
(f) An assesse purchased inputs weighing 200 Kg.The duty paid on inputs was Rs.2000.During transit from supplier to the factory of manufacture .10 Kg of the inputs were destroyed. The destroyed quantity of inputs does not qualify to be ‘inputs’ within the meaning of the Cenvat Credit Rules, 2004. Discuss. 2 (0)
(g) Special audit under sections 14 A and 14AA of the central Excise Act, 1944 can be done by a cost Accountant only. Comment. 1 (0)
7. (a) Discuss briefly the power of the appellate tribunal to order “rectification of mistake” under Customs Act. 5 (0)
(b) Define residential complex for purpose of service tax. 5 (0)
(c) Explain situations where the provisions of unjust enrichment under section 11 B (2) of the Central Excise Act, 1944 will not apply and the applicant will be entitled to refund. 5 (0)
8. (a) Electronic control corporation is a dealer in an electronic product,chargeable to CST at 2%.For the Year ended 31–03–2010,the dealer has shown total turnover (including CST) at Rs.19,38,000.In the above ,the dealer has treated the following amounts thus:
(i) Dharmada collected from buyers ,shown separately in invoice Rs. 15,000
(ii) Weight charges incidental to sale Rs. 6,000
(iii) Central excise duty collected (including cess) Rs. 1,03,000
The dealer has recorded the following amount in separate folios in the ledger:
(i) Packing charges (these have been collected from buyer through debit notes) Rs. 20,000
(ii) Cash discount allowed to buyer Rs. 9,000
(iii) Indemnity/guarantee charges collected from buyer to cover loss during transit Rs. 6,000
(iv) Marine insurance premium for transporting goods to the premises of
buyer collected from buyers Rs. 18,500
Determine the total and taxable turn over under CST Act, 1956 for the financial year 2009–10.
You are required to show the treatment of each and every item distinctly.
(b) Calculate the value of taxable service of Robin Transport Company engaged in the business of transport of goods by road .Give reasons for taxability or exemption of each item. No freight is received from any of the specified category of consignor/consignee. Suitable assumption may be made where ever required .Robin does not avail Cenvat credit.
(i) Total freight charges received by Robin during the year 6,75,000
(ii) Freight charges received for transporting fruits 62,500
(iii) Freight collected for transporting small consignment for
Persons who paid less than Rs.750 for each consignment 37,500
(iv) Freight collected for transporting goods in small vehicles
For person who paid less than Rs.1500 per trip 75,000
(c) Assessable value of certain goods imported from USA is Rs.5,00, 000.The packet contains 5000 Pieces with maximum retail price of Rs.200 each. The goods are assessable under section 4A of Central Excise Act, 1944 after allowing an abatement of 40%.The excise duty rate is 10% ad Valorem.Calculate the amount of additional duty of customs under section 3 (1) of the customs Tariff Act, 1975 assuming basic customs duty @10%ad valorem 5 (0)