Question

A cycle manufacturer in Ghaziabad (UP) sold a cycle to a dealer in Agra (UP) for ₹ 16000. This cycle was then sold to a dealer in Ujjain (M.P) for ₹ 17500. If the GST rate for cycle is 12%, calculate

1. the net GST payable at Agra.
2. input Tax Credit for the dealer in Ujjain.

Answer 1

Given:

Manufacturer (Ghaziabad, UP) → Dealer A (Agra, UP): selling price = ₹ 16,000 (exclusive of GST).

Dealer A (Agra, UP) → Dealer B (Ujjain, MP): selling price = ₹ 17,500 (exclusive of GST).

GST rate = 12%.

Step-wise calculation:

1. GST on purchase at Agra (input tax for Dealer A)

Since Ghaziabad → Agra is intra‑state (both in UP), GST 12% splits as:

CGST = 6% of ₹ 16,000

= 0.06 × 16,000

= ₹ 960

SGST = 6% of ₹ 16,000

= ₹ 960

Total input GST = ₹ 960 + ₹ 960

= ₹ 1,920

2. GST on sale by Dealer A to Ujjain (output tax for Dealer A)

Agra → Ujjain is inter‑state (UP → MP)

So, IGST = 12% of ₹ 17,500

= 0.12 × 17,500

= ₹ 2,100

3. Net GST payable by Dealer A at Agra

Net GST payable = Output GST – Input GST

= ₹ 2,100 – ₹ 1,920

= ₹ 180

Mechanically, IGST collected ₹ 2,100 can be set off against available CGST/SGST credits totaling ₹ 1,920, leaving net IGST payable ₹ 180.

4. Input Tax Credit for Dealer in Ujjain (Dealer B)

Dealer B pays GST on purchase from Agra = IGST 12% on ₹ 17,500 = ₹ 2,100.

That IGST ₹ 2,100 is Dealer B’s input tax credit can be claimed as ITC subject to normal GST documentary/registration conditions.