Taxation - GST Ch 11: Payment Tds Returns - Test 4: answer key

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

Scenario. Aryan Steels Ltd, a registered manufacturer of auto components in Maharashtra, had an aggregate turnover of ₹4.8 crore in the financial year 2025-26. Consequently, it opted for the Quarterly Return Monthly Payment (QRMP) scheme for the financial year 2026-27. For the quarter ending June 2026, the company's actual tax liabilities were: April ₹1,20,000, May ₹1,50,000, and June ₹1,80,000. In the previous quarter (January-March 2026), the company had paid a total tax of ₹3,00,000 in cash through its GSTR-3B return. For the months of April and May 2026, the company decided to discharge its liability using the Fixed Sum Method under the QRMP scheme. It deposited the fixed sum amount on 24th May 2026 and 24th June 2026, respectively. The company filed its quarterly GSTR-3B for the April-June 2026 quarter on 22nd July 2026. The management is reviewing its compliance to ensure it has correctly calculated the fixed sum, adhered to the due dates, and understood the interest implications, given that the fixed sum paid was lower than the actual monthly liability for both April and May.

Is Aryan Steels Ltd eligible to opt for the QRMP scheme for the financial year 2026-27?

1. No, as its turnover exceeds ₹2 crore.
2. Yes, as its aggregate turnover is up to ₹5 crore in the preceding financial year. (correct answer)
3. No, as the scheme is only for taxpayers with turnover up to ₹1.5 crore.
4. Yes, but only if it has filed all returns for the previous year.

Answer: B — Yes, as its aggregate turnover is up to ₹5 crore in the preceding financial year.

Explanation. The QRMP scheme is available to registered persons whose aggregate annual turnover (PAN based) is up to ₹5 crore in the preceding financial year. Aryan Steels Ltd had a turnover of ₹4.8 crore in FY 2025-26, which is within the threshold, making it eligible to opt for the scheme.

Where it goes wrong. Students may confuse the ₹5 crore threshold with the ₹2 crore exemption limit for GSTR-9.

Authority. Rule 61A of the CGST Rules, 2017

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

What is the fixed sum amount that Aryan Steels Ltd was required to deposit for the month of April 2026?

1. ₹1,05,000 (provisional)
2. ₹42,000
3. ₹1,05,000 (correct answer)
4. ₹3,00,000

Answer: C — ₹1,05,000

Explanation. Under the Fixed Sum Method, the taxpayer must deposit an amount equal to 35% of the tax paid in cash in the return for the preceding quarter (if the previous return was quarterly). The tax paid in cash in the Jan-Mar 2026 quarter was ₹3,00,000. The fixed sum is 35% of ₹3,00,000 = ₹1,05,000.

Where it goes wrong. Students may calculate 35% of the current month's liability (₹1,20,000) or the previous quarter's total liability, instead of 35% of the *cash* liability of the preceding quarter.

Authority. Rule 61A of the CGST Rules, 2017; Circular No. 143/13/2020-GST

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

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

1. 20th May 2026
2. 22nd May 2026
3. 24th May 2026
4. 25th May 2026 (correct answer)

Answer: D — 25th May 2026

Explanation. Under the QRMP scheme, the registered person is required to pay the tax due for the first two months of the quarter by the 25th day of the month succeeding such month. Therefore, the due date for April 2026 is 25th May 2026.

Where it goes wrong. Students may incorrectly apply the 20th due date applicable to monthly GSTR-3B filers.

Authority. Rule 61A of the CGST Rules, 2017

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

What is the interest implication if the actual tax liability for April was ₹1,20,000, but the company paid the fixed sum of ₹1,05,000 on 24th May 2026?

1. No interest is payable, provided the entire liability for the quarter is discharged in GSTR-3B by the due date. (correct answer)
2. Interest is payable on ₹15,000 from 25th May 2026 till the date of payment in GSTR-3B.
3. Interest is payable on ₹1,20,000 from 21st May 2026 till the date of payment.
4. A penalty of ₹10,000 is applicable for short payment.

Answer: A — No interest is payable, provided the entire liability for the quarter is discharged in GSTR-3B by the due date.

Explanation. Under the Fixed Sum Method of QRMP, no interest is payable if the tax due is paid by depositing the auto-calculated fixed sum by the due date. Even if the actual liability for the month is higher, no interest is charged provided the taxpayer discharges the entire liability for the quarter in Form GSTR-3B by its due date.

Where it goes wrong. Students may incorrectly assume interest applies to the shortfall (₹15,000) immediately, ignoring the quarterly reconciliation provision of the Fixed Sum Method.

Authority. Circular No. 143/13/2020-GST

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

Scenario. Nandini Real Estates Pvt Ltd, a registered entity in Karnataka, reported an aggregate turnover of ₹1.8 crore for the financial year 2025-26. For the month of March 2026, the company had no outward supplies and no tax liability. Despite this, it filed its Nil GSTR-3B on 15th May 2026, whereas the due date was 20th April 2026. For the financial year 2025-26, the company is uncertain about its obligation to file the annual return in Form GSTR-9. Later, due to a strategic restructuring, the company voluntarily applied for cancellation of its GST registration on 10th August 2026. The proper officer issued the final cancellation order on 25th August 2026. The company wants to ascertain the deadline for filing its final return in Form GSTR-10. Additionally, during a routine internal review, the company discovered a minor error in an invoice reported in its GSTR-1 for November 2025. The finance team wants to know the maximum time limit available to rectify this error in a subsequent return.

What is the amount of late fee payable by Nandini Real Estates Pvt Ltd for the delayed filing of the Nil GSTR-3B for March 2026?

1. ₹500
2. ₹500 (₹250 CGST + ₹250 SGST) (correct answer)
3. ₹1,000
4. Nil

Answer: B — ₹500 (₹250 CGST + ₹250 SGST)

Explanation. For a Nil return, the late fee is ₹20 per day (₹10 CGST + ₹10 SGST), subject to a maximum cap of ₹500 (₹250 CGST + ₹250 SGST). The delay was from 21st April to 15th May (25 days). The calculated fee is 25 × ₹20 = ₹500, which is exactly the cap.

Where it goes wrong. Students may calculate the fee at the regular rate of ₹50 per day or miss the maximum cap of ₹500.

Authority. Section 47 of the CGST Act, 2017; Notification No. 07/2023 CT dated 31.03.2023

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

Is Nandini Real Estates Pvt Ltd required to file the annual return in Form GSTR-9 for FY 2025-26?

1. Yes, as all registered persons must file GSTR-9.
2. Yes, as its turnover exceeds ₹1 crore.
3. No, as it is a company registered under the Companies Act.
4. No, as its aggregate turnover is up to ₹2 crore. (correct answer)

Answer: D — No, as its aggregate turnover is up to ₹2 crore.

Explanation. For financial year 2024-25 onwards, registered persons whose aggregate turnover in any financial year is up to two crore rupees are exempted from filing the annual return in Form GSTR-9. Since Nandini's turnover is ₹1.8 crore, it is exempt.

Where it goes wrong. Students may think GSTR-9 is mandatory for all or confuse the threshold with the ₹5 crore limit for GSTR-9C.

Authority. Notification No. 14/2025-CT dated 26.09.2025 (or relevant notification for FY 2024-25 onwards)

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

What is the deadline for Nandini Real Estates Pvt Ltd to file its final return in Form GSTR-10?

1. 25th November 2026 (correct answer)
2. 10th November 2026
3. 31st December 2026
4. 31st March 2027

Answer: A — 25th November 2026

Explanation. The final return in Form GSTR-10 must be filed within three months of the date of cancellation or the date of the order of cancellation, whichever is later. The cancellation order was issued on 25th August 2026. Three months from this date is 25th November 2026.

Where it goes wrong. Students may calculate three months from the date of application (10th August) instead of the date of the cancellation order.

Authority. Section 45 of the CGST Act, 2017; Rule 81 of the CGST Rules, 2017

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

What is the maximum time limit available to Nandini Real Estates Pvt Ltd to rectify the error in the invoice reported in GSTR-1 for November 2025?

1. 31st December 2026
2. 31st March 2027
3. 30th November 2026 (correct answer)
4. 30th September 2026

Answer: C — 30th November 2026

Explanation. Rectification of errors or omissions in GSTR-1 must be made in the return for the tax period during which the error is noticed. The maximum time limit is the 30th day of November following the end of the financial year to which such details pertain, or the date of filing the relevant annual return, whichever is earlier. Since the error pertains to FY 2025-26, the limit is 30th November 2026.

Where it goes wrong. Students may assume the deadline is 31st December or confuse it with the annual return due date.

Authority. Section 37(3) of the CGST Act, 2017

Question 9 · 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 with a turnover of ₹4 crore in FY 2025-26 opts for the QRMP scheme. During the quarter ending September 2026, his turnover crosses ₹5 crore. What is the consequence?

1. He can continue the QRMP scheme for the entire financial year.
2. He must switch to monthly filing from the first month of the succeeding quarter. (correct answer)
3. He must immediately file GSTR-3B for the current month.
4. His registration will be cancelled.

Answer: B — He must switch to monthly filing from the first month of the succeeding quarter.

Explanation. If the aggregate turnover of a registered person crosses ₹5 crore during a quarter, he shall not be eligible for furnishing the return on a quarterly basis from the first month of the succeeding quarter. He must opt for monthly filing from that point.

Where it goes wrong. Students may think the scheme lapses immediately mid-quarter or continues till the end of the financial year.

Authority. Rule 61A of the CGST Rules, 2017

Question 10 · 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 QRMP taxpayer under the Fixed Sum Method paid ₹50,000 for April and May, based on the system-generated challan. However, the actual tax liability for April was ₹60,000 and for May was ₹70,000. He files his quarterly GSTR-3B on the due date and discharges the remaining liability. Is any interest applicable?

1. No interest is applicable as the fixed sum was paid on time and the total liability was discharged by the due date. (correct answer)
2. Interest is applicable on the shortfall of ₹10,000 for April and ₹20,000 for May.
3. Interest is applicable on the entire actual liability for April and May.
4. Penalty is applicable for underpayment.

Answer: A — No interest is applicable as the fixed sum was paid on time and the total liability was discharged by the due date.

Explanation. Under the Fixed Sum Method, no interest is payable if the tax due is paid by depositing the auto-calculated fixed sum by the due date, even if the actual liability for the month is higher. This is provided the entire liability for the quarter is discharged in Form GSTR-3B by the due date.

Where it goes wrong. Students may assume interest applies to the monthly shortfall, ignoring the quarterly reconciliation feature of the QRMP scheme.

Authority. Circular No. 143/13/2020-GST

Question 11 · 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 due date for filing the annual return in Form GSTR-9 for the financial year 2026-27?

1. 31st March 2028
2. 30th September 2027
3. 30th November 2027
4. 31st December 2027 (correct answer)

Answer: D — 31st December 2027

Explanation. The annual return for a financial year must be filed by 31st December of the next financial year. Therefore, for FY 2026-27, the due date is 31st December 2027.

Where it goes wrong. Students often confuse the due date for GSTR-9 with the due date for GSTR-9C or the tax audit date.

Authority. Section 44 of the CGST Act, 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 company has an aggregate turnover of ₹6 crore in FY 2026-27. Which of the following statements is correct regarding its annual return obligations?

1. It is not required to file GSTR-9.
2. It must file GSTR-9 but not GSTR-9C.
3. It must file GSTR-9 along with a self-certified reconciliation statement in GSTR-9C. (correct answer)
4. It must file GSTR-9C but not GSTR-9.

Answer: C — It must file GSTR-9 along with a self-certified reconciliation statement in GSTR-9C.

Explanation. All registered persons must file GSTR-9. Additionally, a self-certified reconciliation statement in Form GSTR-9C is required if the aggregate turnover during the financial year exceeds ₹5 crore. Since the turnover is ₹6 crore, both GSTR-9 and GSTR-9C are mandatory.

Where it goes wrong. Students may forget the ₹5 crore threshold for GSTR-9C or assume GSTR-9C replaces GSTR-9.

Authority. Section 44 of the CGST Act, 2017

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.

A taxpayer's GST registration was cancelled on 1st April 2026, and the order of cancellation was issued on 15th May 2026. What is the due date for filing the final return in Form GSTR-10?

1. 15th August 2026 (correct answer)
2. 1st July 2026
3. 15th July 2026
4. 31st July 2026

Answer: A — 15th August 2026

Explanation. The final return must be filed within three months of the date of cancellation or the date of the order of cancellation, whichever is later. The order date (15th May 2026) is later. Three months from 15th May 2026 is 15th August 2026.

Where it goes wrong. Students may calculate three months from the date of cancellation (1st April), leading to 1st July.

Authority. Section 45 of the CGST Act, 2017

Question 14 · 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 regular taxpayer with an aggregate turnover of ₹4 crore in the preceding financial year fails to furnish GSTR-3B for a period of 100 days. What is the maximum late fee payable under Section 47?

1. ₹2,000
2. ₹5,000 (correct answer)
3. ₹10,000
4. ₹1,000

Answer: B — ₹5,000

Explanation. For a registered person whose aggregate turnover in the preceding FY is more than ₹1.5 crore but up to ₹5 crore, the late fee is ₹50 per day (₹25 CGST + ₹25 SGST), subject to a maximum cap of ₹5,000 (₹2,500 CGST + ₹2,500 SGST). For 100 days, the fee would be ₹5,000, which hits the maximum cap.

Where it goes wrong. Students may apply the ₹2,000 cap (for turnover up to ₹1.5 crore) or the ₹10,000 cap (for turnover above ₹5 crore).

Authority. Section 47 of the CGST Act, 2017; Notification No. 07/2023 CT dated 31.03.2023

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 taxpayer discovers an error in the GSTR-1 filed for July 2025. He wants to rectify it. What is the maximum time limit for doing so, assuming he files his annual return for FY 2025-26 on 1st December 2026?

1. 31st December 2026
2. 31st March 2027
3. 30th November 2026 (correct answer)
4. 1st December 2026

Answer: C — 30th November 2026

Explanation. The rectification must be made by the earlier of: (i) 30th November following the end of the financial year, or (ii) the date of filing the annual return. Here, the annual return is filed on 1st December 2026, so the earlier date is 30th November 2026.

Where it goes wrong. Students may choose the annual return date (1st December) or the statutory deadline (31st December), forgetting the 'whichever is earlier' rule.

Authority. Section 37(3) of the CGST Act, 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.

Under the QRMP scheme, what is the due date for payment of tax for the first month of a quarter by a taxpayer opting for the Self-Assessment Method?

1. 20th of the succeeding month
2. 22nd of the succeeding month
3. 24th of the succeeding month
4. 25th of the succeeding month (correct answer)

Answer: D — 25th of the succeeding month

Explanation. Under the QRMP scheme, regardless of whether the taxpayer chooses the Fixed Sum Method or the Self-Assessment Method, the tax for the first two months of the quarter must be paid by the 25th day of the succeeding month.

Where it goes wrong. Students may think the due date differs based on the method chosen or apply the 20th date for monthly filers.

Authority. Rule 61A 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 QRMP taxpayer had paid a tax of ₹4,00,000 in cash in the previous quarter (April-June). What is the fixed sum amount he is required to deposit for the first month of the current quarter?

1. ₹1,40,000 (correct answer)
2. ₹2,00,000
3. ₹1,00,000
4. ₹4,00,000

Answer: A — ₹1,40,000

Explanation. The fixed sum is 35% of the tax paid in cash in the return for the preceding quarter (if the return was furnished quarterly). 35% of ₹4,00,000 = ₹1,40,000.

Where it goes wrong. Students may calculate 35% of the total tax liability, including ITC, instead of just the cash component.

Authority. Circular No. 143/13/2020-GST

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.

A QRMP taxpayer under the Self-Assessment Method failed to pay the tax for the first month of the quarter by the 25th. He paid it on the 30th. What is the interest implication?

1. No interest as it is a QRMP taxpayer.
2. Interest at 18% p.a. is payable for the period of delay under Section 50. (correct answer)
3. Interest at 24% p.a. is payable.
4. A fixed penalty of ₹5,000 is applicable.

Answer: B — Interest at 18% p.a. is payable for the period of delay under Section 50.

Explanation. Under the Self-Assessment Method, if the tax for the first two months of the quarter is not paid by the 25th, interest is payable as per Section 50 (18% p.a.) for the period of delay. The exemption from interest is only available under the Fixed Sum Method if the fixed sum is paid on time.

Where it goes wrong. Students may wrongly assume all QRMP taxpayers are exempt from interest for monthly payments.

Authority. Section 50 of the CGST Act, 2017; Circular No. 143/13/2020-GST

Question 19 · 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 entities is exempt from filing the annual return under Section 44?

1. A company with a turnover of ₹10 crore.
2. A partnership firm with a turnover of ₹3 crore.
3. A government department whose books of account are subject to audit by the CAG. (correct answer)
4. An input service distributor.

Answer: C — A government department whose books of account are subject to audit by the CAG.

Explanation. The department of the Central/State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India (CAG) or an auditor appointed for auditing local authorities, are exempt from furnishing the annual return, including the self-certified reconciliation statement.

Where it goes wrong. Students may think all government departments are exempt, but the exemption is specifically tied to CAG audit.

Authority. Section 44 of the CGST Act, 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 late fee for delayed filing of Form GSTR-10?

1. ₹50 per day up to a maximum of ₹2,000.
2. ₹100 per day up to a maximum of ₹5,000.
3. ₹200 per day (₹100 CGST + ₹100 SGST) up to a maximum of 0.5% of turnover.
4. ₹200 per day (₹100 CGST + ₹100 SGST) up to a maximum of ₹5,000. (correct answer)

Answer: D — ₹200 per day (₹100 CGST + ₹100 SGST) up to a maximum of ₹5,000.

Explanation. The late fee for delayed filing of GSTR-10 is ₹100 per day under CGST and an equal amount under SGST, aggregating to ₹200 per day, subject to a maximum cap of ₹5,000 (₹2,500 CGST + ₹2,500 SGST).

Where it goes wrong. Students may confuse the late fee for GSTR-10 with GSTR-9 or apply the percentage-based cap.

Authority. Section 47 of the CGST Act, 2017