Question

A dealer supplied goods/services worth ₹ 20000 in interstate transactions and worth another ₹ 3000 in transactions within the state. The total value of his receipts of goods/services within the state was ₹ 18000. Find the net IGST, CGST and SGST payable by the dealer, if the rate of GST is 18%.

Answer 1

1. Calculate Output GST

Output GST is the tax collected on sales. For interstate sales, the full 18% is collected as Integrated Goods and Services Tax (IGST). For intrastate sales, the 18% is split equally into 9% Central GST (CGST) and 9% State GST (SGST).

Output IGST: 18% of 20,000 = 3,600

Output CGST: 9% of 3,000 = 270

Output SGST: 9% of 3,000 = 270

2. Calculate Input Tax Credit (ITC)

ITC is the tax already paid on purchases. Since the receipts (purchases) of ₹ 18,000 were within the state, the tax is split into CGST and SGST.

Input CGST: 9% of 18,000 = 1,620

Input SGST: 9% of 18,000 = 1,620

3. Set off Intrastate Tax

The dealer first uses the input credit to pay off the taxes collected within the state (CGST and SGST).

Net CGST Payable: 270 (Output) – 1,620 (Input)

= –1,350   ...(Net payable is ₹ 0, with ₹ 1,350 excess credit remaining)

Net SGST Payable: 270 (Output) – 1,620 (Input)

= –1,350   ...(Net payable is ₹ 0, with ₹ 1,350 excess credit remaining)

4. Set off IGST with Excess Credit

The remaining input credits from CGST and SGST are then used to reduce the IGST liability.

Total Unutilized ITC: 1,350 (CGST) + 1,350 (SGST) = 2,700

Net IGST Payable: 3,600 (Output IGST) – 2,700 (Total Excess ITC) = 900

The net IGST, CGST and SGST payable by the dealer are ₹ 900, ₹ 0 and ₹ 0 respectively.