Integrated Case Studies and Cross-Topic Application
How integrated questions are built
A case study gives one entity and asks for income-tax computation, a GST consequence, and the interaction between the two. Work in a fixed sequence: identify the person and residential status, apply each head of income, apply Chapter VI-A and rebate, then turn to the GST supply, value, place and time of supply, ITC and return.
Recurring interaction points
- Turnover reconciliation: GST turnover is the taxable value excluding GST, while the profit and loss account often includes GST.
- Output GST outstanding at year end is a statutory liability, deductible only on payment u/s 43B.
- ITC that is blocked u/s 17(5) becomes a cost and must be added back in the computation.
- TDS under Section 51 CGST and TDS under the Income-tax Act are separate obligations with different rates and forms.
- Sale of land is outside GST under Schedule III but gives rise to capital gains.
- A composition dealer pays GST on turnover but cannot collect it or claim ITC; opting for 44AD is still possible.
Worked example
A firm's profit and loss account shows receipts of Rs.80 lakh including GST of Rs.9 lakh, and GST paid during the year of Rs.7 lakh. GST turnover is Rs.80 lakh because the tax component is excluded. The Rs.9 lakh output tax is not income. If Rs.1.8 lakh remains unpaid at the year end, it is disallowed u/s 43B and added back.
Traps
- Including GST in receipts or treating output tax as income.
- Claiming credit for blocked ITC and then deducting the same amount as an expense.
- Answering the income-tax part fully and leaving the GST limb unattempted, although marks are split.
- Ignoring dates, which decide both time of supply and advance tax or TDS timing.