Question

A furniture dealer in Delhi supplied goods worth ₹ 450000 to a dealer in Chennai and sold goods worth ₹ 600000 in retail within Delhi. The total value of his receipts was ₹ 800000. If he purchases his entire stock from a manufacturer in Delhi, then find the net IGST, CGST and SGST payable by him. The rate of GST is 12%.

Answer 1

1. Calculate Output Tax (Liability)

The dealer has two types of sales:

Inter-state Supply (Delhi to Chennai): Attracts IGST at 12%.

Output IGST = 12% × 4,50,000

= 54,000

Intra-state Supply (Within Delhi): Attracts CGST and SGST at 6% each.

Output CGST = 6% × 6,00,000

= 36,000

Output SGST = 6% × 6,00,000

= 36,000

2. Calculate Input Tax Credit (ITC)

The dealer purchased stock worth ₹ 8,00,000 from a manufacturer in Delhi (intra-state purchase), so he paid CGST and SGST at 6% each.

ITC CGST = 6% × 8,00,000

= 48,000

ITC SGST = 6% × 8,00,000

= 48,000

3. Compute Net GST Payable

According to GST offset rules, ITC of CGST must be used to pay CGST first, then IGST. Similarly, ITC of SGST must be used to pay SGST first, then IGST.

For CGST:

Net CGST = Output CGST – ITC CGST

= 36,000 – 48,000

= –12,000

For SGST:

Net SGST = Output SGST – ITC SGST

= 36,000 – 48,000

= –12,000

Net SGST payable = ₹ 0

For IGST:

The remaining CGST and SGST credits are used to offset the IGST liability.

Net IGST = Output IGST – (Remaining CGST ITC + Remaining SGST ITC)

Net IGST = 54,000 – (12,000 + 12,000)

= 54,000 – 24,000

= 30,000

Net IGST payable = ₹ 30,000