Question

Janhavi Gas Agency purchased some gas cylinders for Rs. 500000 and sold them to the customers for Rs. 590000. Find the amount of GST payable and the amount of ITC 5% GST is applicable.

Answer 1

Given that, Janhavi Gas Agency purchased some gas cylinders for ₹ 5,00,000, and GST applicable is 5%.

∴ Input tax (ITC) = 5% of 5,00,000

= `5/100 xx 5,00,000`

= ₹ 25,000

Janhavi Gas Agency sold the gas cylinders for ₹ 5,90,000

∴ Output tax for Janhavi Gas Agency

= 5% of 5,90,000

= `5/100 xx 5,90,000`

= ₹ 29,500

GST payable = Output tax – Input tax (ITC)

= 29,500 – 25,000

= ₹ 4500

∴ GST payable for Janhavi Gas Agency is ₹ 4,500 and ITC is ₹ 25,000.