Taxation - GST Ch 11: Payment Tds Returns - Test 3: answer key

Question 1 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · hard

Scenario. Aryan Steels Ltd, a manufacturer of auto components registered in Maharashtra, opted for the Quarterly Return Monthly Payment (QRMP) scheme for the financial year 2026-27. For the quarter ending September 2026, the company issued B2B invoices worth ₹60,00,000 in July, ₹48,00,000 in August, and ₹55,00,000 in September. On 12th August 2026, the company uploaded invoices worth ₹50,00,000 for July using the Invoice Furnishing Facility (IFF) on the GST portal. The remaining invoices for July were kept for the quarterly GSTR-1. For August, the company uploaded all ₹48,00,000 in the IFF on 11th September 2026. In September, the company issued a debit note of ₹1,00,000 against an invoice issued in August for a price revision. The company paid its tax liability for July on 25th August and for August on 25th September through Form GST PMT-06. The company filed its quarterly GSTR-1 on 12th October and GSTR-3B on 23rd October 2026. The management is reviewing the compliance process and wants to ensure that all filings and payments are made within the statutory time limits. They are also unsure whether the debit note issued in September can be uploaded through the IFF, as it relates to an August invoice. The company seeks clarity on the maximum value that can be uploaded through IFF each month, the due dates for tax payment, and the due date for GSTR-3B. The tax department has been emphasizing on strict adherence to the QRMP scheme provisions to avoid late fees and interest.

What is the maximum value of invoices Aryan Steels Ltd could upload through IFF for the month of July 2026?

1. ₹60,00,000
2. ₹50,00,000 (correct answer)
3. ₹10,00,000
4. ₹48,00,000

Answer: B — ₹50,00,000

Explanation. Section 37 read with Rule 59(2) allows QRMP taxpayers to use IFF for the first two months of the quarter. The maximum value of invoices that can be uploaded through IFF is ₹50 lakhs per month. Since Aryan Steels Ltd issued invoices worth ₹60,00,000 in July, it can upload only up to ₹50,00,000 via IFF. The remaining ₹10,00,000 must be uploaded in the quarterly GSTR-1.

Where it goes wrong. Students often assume the entire invoice value can be uploaded through IFF without considering the ₹50 lakh cap.

Authority. Section 37 of the CGST Act, 2017; Rule 59(2) of the CGST Rules, 2017

Question 2 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

Can Aryan Steels Ltd upload the debit note of ₹1,00,000 issued in September through IFF?

1. Yes, if it pertains to an August invoice.
2. No, IFF is only for invoices, not debit notes.
3. No, IFF is available only for the first two months of the quarter. (correct answer)
4. Yes, but only if uploaded by 13th September.

Answer: C — No, IFF is available only for the first two months of the quarter.

Explanation. IFF is available only for the first two months (M1 and M2) of the quarter. September is the third month (M3) of the July-September quarter. Therefore, the debit note issued in September cannot be uploaded through IFF; it must be reported in the quarterly GSTR-1. Even though it pertains to an August invoice, the month of issuance governs the reporting mechanism.

Where it goes wrong. Students might think debit notes can always be uploaded via IFF or that the invoice month determines the facility.

Authority. Rule 59(2) of the CGST Rules, 2017

Question 3 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

What is the due date for filing GSTR-3B for the quarter ending September 2026 for Aryan Steels Ltd, whose principal place of business is in Maharashtra?

1. 20th October 2026
2. 24th October 2026
3. 22nd October 2026 (correct answer)
4. 13th October 2026

Answer: C — 22nd October 2026

Explanation. For QRMP taxpayers, the due date for filing GSTR-3B is the 22nd or 24th of the month succeeding the quarter, depending on the state. For taxpayers whose principal place of business is in Maharashtra, the due date is the 22nd.

Where it goes wrong. Students often confuse the due date with the 20th (for monthly filers) or 24th (for other states).

Authority. Section 39(1) of the CGST Act, 2017; Rule 61A of the CGST Rules, 2017

Question 4 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

What is the due date for payment of tax for the month of July 2026 under the QRMP scheme?

1. 22nd August 2026
2. 20th August 2026
3. 25th August 2026 (correct answer)
4. 13th August 2026

Answer: C — 25th August 2026

Explanation. Under the QRMP scheme, the taxpayer must pay tax for the first two months of the quarter by the 25th of the succeeding month. For July 2026, the due date is 25th August 2026.

Where it goes wrong. Students might incorrectly assume tax is paid quarterly, or apply the 20th due date meant for monthly filers.

Authority. Section 39(7) of the CGST Act, 2017; Rule 61A of the CGST Rules, 2017

Question 5 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · hard

Scenario. Nandini Real Estates Pvt Ltd, a prominent builder registered in Karnataka, is in the process of finalizing its tax returns for the month of August 2026. During the month, the company received an invoice from Supplier A on 30th August 2026 for construction materials; Supplier A filed its GSTR-1 on 10th September 2026. The company also received an invoice from Supplier B on 31st August 2026 for electrical fittings; Supplier B filed its GSTR-1 on 12th September 2026. Furthermore, the company received an invoice from Supplier C, a QRMP taxpayer, on 28th August 2026 for sanitary ware. Supplier C uploaded the invoice in the Invoice Furnishing Facility (IFF) on 13th September 2026. Nandini also paid Integrated Goods and Services Tax (IGST) on the import of goods on 20th August 2026. The company is confused about which invoices will appear in its auto-generated GSTR-2B for August 2026, which is generated on 14th September 2026. The finance team wants to know if they can claim Input Tax Credit (ITC) on Supplier B's invoice in their GSTR-3B for August 2026, even if it is not reflected in the GSTR-2B. The company is also aware of the new Rule 88D regarding ITC mismatch and wants to understand the nature of GSTR-2B and the consequences of a discrepancy. They are concerned about the static nature of GSTR-2B and the cut-off dates for inclusion of invoices. The management seeks clarity on the legal provisions to avoid any future disputes with the tax department.

Which of the following will reflect in Nandini's GSTR-2B for August 2026?

1. Supplier A's invoice only
2. Supplier A and Supplier B's invoices
3. Supplier B and Supplier C's invoices
4. Supplier A, Supplier C's invoices, and import data (correct answer)

Answer: D — Supplier A, Supplier C's invoices, and import data

Explanation. GSTR-2B for August 2026 is generated on 14th September 2026. It includes invoices from monthly filers uploaded up to 11th September (Supplier A), invoices from QRMP filers uploaded via IFF up to 13th September (Supplier C), and import data. Supplier B filed on 12th September, which is after the 11th cutoff, so it will not appear in August GSTR-2B.

Where it goes wrong. Students might assume all invoices filed before the 14th generation date are included.

Authority. Rule 60(7) of the CGST Rules, 2017

Question 6 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · hard

Can Nandini claim ITC on Supplier B's invoice in its GSTR-3B for August 2026?

1. No, ITC can only be claimed if it is available in GSTR-2B. (correct answer)
2. Yes, as the invoice was received in August.
3. Yes, but only 50% of the ITC.
4. Yes, if the supplier files GSTR-1 by 20th September.

Answer: A — No, ITC can only be claimed if it is available in GSTR-2B.

Explanation. Section 16(2)(aa) read with Rule 36(4) restricts ITC availment to invoices that are furnished by the supplier and appear in the recipient's GSTR-2B. Since Supplier B's invoice is not in the August GSTR-2B, Nandini cannot claim ITC on it in the August GSTR-3B.

Where it goes wrong. Students might think physical receipt of goods and tax invoice is sufficient to claim ITC.

Authority. Section 16(2)(aa) of the CGST Act, 2017; Rule 36(4) of the CGST Rules, 2017

Question 7 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

GSTR-2B is a:

1. Dynamic statement updated in real-time.
2. Static statement generated once a month. (correct answer)
3. Return to be filed by the recipient.
4. Statement for outward supplies.

Answer: B — Static statement generated once a month.

Explanation. GSTR-2B is an auto-generated, static statement that provides details of eligible and ineligible ITC for a particular month. It is generated on the 14th of the succeeding month. Unlike GSTR-2A, which is dynamic and updated in real-time, GSTR-2B is fixed for the month.

Where it goes wrong. Students often confuse GSTR-2B with GSTR-2A or assume it is a return to be filed.

Authority. Rule 60(7) of the CGST Rules, 2017

Question 8 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

If there is a discrepancy between ITC claimed in GSTR-3B and GSTR-2B exceeding the prescribed threshold, what is the consequence?

1. Immediate demand under Section 73.
2. Automatic blocking of GSTR-1.
3. Levy of entire penalty.
4. Intimation under Rule 88D and 7 days to respond. (correct answer)

Answer: D — Intimation under Rule 88D and 7 days to respond.

Explanation. Rule 88D provides a mechanism for dealing with differences in ITC available in GSTR-2B and that availed in GSTR-3B. If the difference exceeds the notified threshold, an intimation is sent to the taxpayer, who must pay the excess ITC with interest or explain the difference within 7 days.

Where it goes wrong. Students might think it leads to immediate demand under Section 73 or automatic blocking of GSTR-1.

Authority. Rule 88D of the CGST Rules, 2017

Question 9 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Which of the following persons is not required to furnish GSTR-1?

1. A person deducting tax at source under Section 51. (correct answer)
2. A registered person paying tax under the regular scheme.
3. A casual taxable person.
4. A person supplying goods through an e-commerce operator.

Answer: A — A person deducting tax at source under Section 51.

Explanation. Section 37(1) requires every registered person to furnish GSTR-1, except specific categories like ISD, NRTP, composition taxpayers, persons deducting TDS, persons collecting TCS, and OIDAR suppliers. A TDS deductor files GSTR-7, not GSTR-1.

Where it goes wrong. Students may wrongly assume all registered persons must file GSTR-1.

Authority. Section 37(1) of the CGST Act, 2017

Question 10 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

What is the maximum time limit for furnishing GSTR-1 for a tax period?

1. 1 year from the due date.
2. 3 years from the end of the financial year.
3. 3 years from the due date. (correct answer)
4. No time limit.

Answer: C — 3 years from the due date.

Explanation. Section 37(5) prescribes a maximum time limit of 3 years from the due date for furnishing GSTR-1 for a tax period. This limit can be extended by the Government.

Where it goes wrong. Students might confuse this with the annual return due date (31st December) or assume a shorter limit.

Authority. Section 37(5) of the CGST Act, 2017

Question 11 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A registered person filed GSTR-1 for July 2026 on 10th August 2026. He wants to amend an invoice of July 2026. By when can he do so using GSTR-1A?

1. By 20th August 2026.
2. Before filing GSTR-3B for July 2026. (correct answer)
3. By 30th November 2027.
4. GSTR-1A cannot be used for July invoices.

Answer: B — Before filing GSTR-3B for July 2026.

Explanation. Rule 59(1) proviso allows a registered person to amend or add details of outward supplies through Form GSTR-1A after filing GSTR-1 for a tax period but before filing GSTR-3B for the same period.

Where it goes wrong. Students might think amendments can be made at any time before the annual return.

Authority. Rule 59(1) of the CGST Rules, 2017

Question 12 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A registered person with turnover of ₹6 crores in the preceding FY is required to mention HSN code in GSTR-1. How many digits are mandatory?

1. 6 digits (correct answer)
2. 4 digits
3. 8 digits
4. No HSN code required

Answer: A — 6 digits

Explanation. As per the notification, taxpayers with aggregate annual turnover exceeding ₹5 crores in the preceding financial year must report 6-digit HSN codes in GSTR-1. Those up to ₹5 crores must report 4-digit codes.

Where it goes wrong. Students might confuse the turnover thresholds or the number of digits.

Authority. Notification No. 78/2020-CT dated 15.10.2020

Question 13 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

For a monthly taxpayer in Delhi, what is the due date for filing GSTR-3B for August 2026?

1. 22nd September 2026
2. 20th September 2026 (correct answer)
3. 24th September 2026
4. 11th September 2026

Answer: B — 20th September 2026

Explanation. For a monthly taxpayer, the due date for filing GSTR-3B is the 20th of the month succeeding the tax period. This applies uniformly across all states.

Where it goes wrong. Students might apply the 22nd or 24th due dates applicable to QRMP taxpayers.

Authority. Section 39(1) of the CGST Act, 2017; Rule 61 of the CGST Rules, 2017

Question 14 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A QRMP taxpayer in Gujarat needs to pay tax for the first month of the quarter. What is the due date?

1. 20th of the succeeding month.
2. 22nd of the succeeding month.
3. 13th of the succeeding month.
4. 25th of the succeeding month. (correct answer)

Answer: D — 25th of the succeeding month.

Explanation. Under the QRMP scheme, the tax for the first two months of the quarter is paid by the 25th of the succeeding month. The due date is delinked from the GSTR-3B filing date.

Where it goes wrong. Students might think the tax is paid along with the quarterly return or by the 20th.

Authority. Rule 61A of the CGST Rules, 2017

Question 15 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A registered person has not furnished GSTR-3B for the previous month. Can he file GSTR-1 for the current month?

1. No, it is blocked under Rule 59(6). (correct answer)
2. Yes, with late fees.
3. Yes, after paying a penalty.
4. Yes, if turnover is below ₹5 crores.

Answer: A — No, it is blocked under Rule 59(6).

Explanation. Rule 59(6) blocks the furnishing of GSTR-1 if the taxpayer has not furnished GSTR-3B for the preceding month. This is a sequential filing requirement.

Where it goes wrong. Students might think late fees can cure the block or that GSTR-1 and GSTR-3B are independent.

Authority. Rule 59(6) of the CGST Rules, 2017

Question 16 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

What is the validity of the Invoice Furnishing Facility (IFF) for a QRMP taxpayer?

1. First month of the quarter only.
2. All three months of the quarter.
3. First two months of the quarter. (correct answer)
4. Throughout the financial year.

Answer: C — First two months of the quarter.

Explanation. Invoice Furnishing Facility (IFF) is an optional facility for QRMP taxpayers to upload invoice details for the first two months (M1 and M2) of the quarter to pass on ITC to recipients. It is not available for the third month.

Where it goes wrong. Students might think IFF is for the entire quarter or for all taxpayers.

Authority. Rule 59(2) of the CGST Rules, 2017

Question 17 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A registered person wants to file a Nil GSTR-1. What is the prescribed mode?

1. Only through the common portal.
2. Through a physical form at the GST office.
3. Through an email to the jurisdictional officer.
4. Through SMS using the registered mobile number. (correct answer)

Answer: D — Through SMS using the registered mobile number.

Explanation. Rule 67A allows taxpayers to file a Nil GSTR-1 through an SMS using the registered mobile number, which is authenticated by OTP. This is a facilitation measure.

Where it goes wrong. Students might think physical filing or portal login is mandatory for Nil returns.

Authority. Rule 67A of the CGST Rules, 2017

Question 18 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

GSTR-3B for a QRMP taxpayer in Himachal Pradesh for the quarter ending December 2026 is due on:

1. 24th January 2027 (correct answer)
2. 22nd January 2027
3. 20th January 2027
4. 13th January 2027

Answer: A — 24th January 2027

Explanation. For QRMP taxpayers, the due date for GSTR-3B is the 22nd or 24th of the month succeeding the quarter. Himachal Pradesh falls in the category of states with a 24th due date.

Where it goes wrong. Students might apply the 22nd due date applicable to states like Maharashtra.

Authority. Rule 61A of the CGST Rules, 2017

Question 19 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A registered person has filed GSTR-1 for August 2026 but not GSTR-3B. Can he file GSTR-1 for September 2026?

1. Yes, as GSTR-1 and GSTR-3B are independent.
2. No, GSTR-1 for September is blocked. (correct answer)
3. Yes, if he pays the tax for August.
4. Yes, with a late fee of ₹200 per day.

Answer: B — No, GSTR-1 for September is blocked.

Explanation. Rule 59(6) restricts filing GSTR-1 for a subsequent tax period if GSTR-3B for the preceding month has not been filed. Therefore, GSTR-1 for September 2026 will be blocked until GSTR-3B for August 2026 is filed.

Where it goes wrong. Students might assume they can file GSTR-1 independently of GSTR-3B.

Authority. Rule 59(6) of the CGST Rules, 2017

Question 20 · 2 marks · Taxation - GST Ch 11: Payment Tds Returns · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

What is the time limit for rectification of errors in GSTR-1 for FY 2026-27?

1. 31st December 2027
2. 31st March 2028
3. 30th September 2027
4. 30th November 2027 or date of filing annual return, whichever is earlier. (correct answer)

Answer: D — 30th November 2027 or date of filing annual return, whichever is earlier.

Explanation. Section 37(3) read with Rule 59 allows rectification of errors in GSTR-1 up to 30th November following the end of the financial year or the date of filing the annual return, whichever is earlier.

Where it goes wrong. Students might think rectification is allowed until the annual return due date (31st December) or for a longer period.

Authority. Section 37(3) of the CGST Act, 2017; Rule 59 of the CGST Rules, 2017