GST Questions for Job Interview | GST INTERVIEW QUESTIONS

Summary

This video provides a detailed guide for junior accountants preparing for interviews, focusing on GST-related questions and answers. Key topics include calculating taxable values using invoice values, journal entries, GST filing deadlines, understanding CGST, SGST, and IGST, and differentiating between input goods and capital goods. The video also covers concepts like the Forward Charge Mechanism (FCM), Reverse Charge Mechanism (RCM), and eligible vs. ineligible credits. Viewers will gain practical insights into GST entries in accounting software and essential tips to clear interviews with a strong understanding of GST laws and practices.

Takeaways

• 😀 Understand how to calculate taxable value using invoice value and GST rate, ensuring clear knowledge of how to derive the taxable amount from the total including GST.
• 😀 Be prepared for common GST-related journal entries like purchase, sales, and reverse charge entries, understanding the need to include CGST, SGST, and IGST correctly.
• 😀 Know the due dates for GST returns such as GSTR-1 (monthly or quarterly), and the deadlines for payments like GST payments due by the 20th or 13th of each month.
• 😀 Recognize the difference between intra-state and inter-state sales, and the corresponding GST charge (CGST & SGST for intra-state, IGST for inter-state).
• 😀 Familiarize yourself with the Forward Charge Mechanism (FCM) and Reverse Charge Mechanism (RCM), knowing when and how they apply in transactions.
• 😀 Learn the process of set-off rules, particularly how input tax credits from IGST, CGST, and SGST are set off against each other, and when they cannot be offset.
• 😀 Understand block credits and ineligible ITC, identifying goods and services for which input tax credits cannot be claimed, such as motor vehicles and certain services.
• 😀 Be aware of services covered under RCM, including transportation services, legal services, and security services, and when the recipient is liable to pay the tax.
• 😀 Know the circumstances in which input tax will exceed output tax, and the conditions under which this situation arises, such as buying more than selling.
• 😀 Understand the relevance of e-way bills for the movement of goods, and why they are crucial for compliance, preventing fraudulent activities like cancellation of invoices.

Q & A

How do you calculate taxable value from the invoice value and GST rate?

To calculate the taxable value from the invoice value, divide the invoice value (which includes GST) by 105 and then multiply by 100. For example, if the invoice value is ₹21,000 with a GST rate of 5%, the taxable value would be ₹20,000. The formula is: (Invoice Value / 105) * 100.

What are the typical journal entries in GST for purchases and sales?

For purchases, the journal entry is: Debit Purchase Account, Debit Input CGST, Debit Input SGST, Credit Creditor Account. For sales, the entry is: Debit Debtor Account, Credit Sales Account, Credit Output CGST, Credit Output SGST. For interstate sales, the entry would involve Output IGST instead of CGST and SGST.

What is the due date for GST returns like GSTR-1 and GSTR-3B?

GSTR-1 is due on the 11th of the following month for monthly returns, and GSTR-3B is due by the 20th of the month. For quarterly returns, GSTR-1 is due by the 13th of the month following the quarter. GSTR-3B’s due date for quarterly filers is also the 20th.

What is the difference between CGST, SGST, and IGST?

CGST and SGST are applicable for intrastate transactions (within the same state), whereas IGST applies for interstate transactions (between different states). CGST and SGST are shared between the central and state governments, while IGST is collected by the central government and then apportioned between states.

Explain the Forward Charge and Reverse Charge Mechanism (RCM) in GST.

In the Forward Charge Mechanism, the supplier collects GST from the buyer and remits it to the government (e.g., when you purchase goods from a retailer). In Reverse Charge Mechanism (RCM), the recipient of the goods or services is responsible for paying the tax directly to the government (e.g., in cases of certain services like goods transport or legal services).

How are set-off rules applied in GST?

In GST, set-off is applied to offset the input tax paid on purchases with the output tax collected on sales. IGST input tax is set off first, followed by CGST and SGST in their respective order. CGST and SGST cannot offset each other.

What are block credits and which items are ineligible for ITC?

Block credits are goods or services for which input tax credit (ITC) cannot be claimed. Examples include motor vehicles (used for personal purposes), food and beverages, club memberships, and beauty treatments. Even if these goods/services are used for business purposes, they do not qualify for ITC.

What are the services covered under Reverse Charge Mechanism (RCM)?

Services that fall under RCM include goods transport agency services, legal services, renting of motor vehicles, and certain services from unregistered suppliers. In these cases, the recipient of the service is liable to pay the tax instead of the supplier.

What is the maximum time period allowed to claim missed ITC?

If you miss claiming ITC for a particular financial year, you can claim it by November 30th of the following financial year. This allows businesses to correct their ITC claims within the prescribed time frame.

What is the difference between input goods and capital goods in GST?

Input goods are raw materials or consumables used in the production of final goods or services (e.g., plastic pellets used to make plastic bottles). Capital goods, on the other hand, are assets like machinery or equipment used in the manufacturing process (e.g., machinery used in a plastic bottle manufacturing factory).