Question

A is a dealer in Meerut (U.P.). He supplies goods/services, worth Rs. 15,000 to a dealer B in Ratlam (M.P.). Dealer B, in turn, supplies the same goods/services to dealer C in Jabalpur (M.P.) at a profit of Rs. 3000. If rate of tax (under GST system) is 18%, find:

1. The cost (excluding GST) of goods/services to the dealer C in Jabalpur (assuming that the dealer C does not sell the goods/services further).
2. Net tax payable by dealer B.

Answer 1

For A (case of inter-state transaction),

S.P. in Meerut = Rs. 15,000

For B (case of inter-state transaction),

C.P. = Rs. 15,000

IGST = 18% of 15,000

= `18/100 xx 15,000`

= Rs. 2,700

Input tax for B = Rs. 2,700

S.P. in Ratlam = 15,000 + 3,000 = Rs. 18,000

For C (case of intra-state transaction),

C.P. = Rs. 18,000

CGST = 9% of 18,000

= `9/100 xx 18,000`

= Rs. 1,620

SGST = `9/100 xx 18,000`

= Rs. 1,620

Output tax for B = Rs. 1,620 + Rs. 1,620 = Rs. 3,240

1. Cost for the dealer C in Jabalpur:
   = S.P. for the dealer in Ratlam + GST
   = 18,000 + 1,620 + 1,620
   = Rs. 21,240
2. Net GST payable by the dealer B:
   = Output tax – Input tax
   = 3,240 – 2,700
   = Rs. 540