Question

A wholesaler of clocks in Jaipur (Rajasthan) purchased a vintage clock for ₹ 2000 and supplied it to a dealer in Ratlam (MP) for ₹ 2400. This clock was sold by the Ratlam dealer to an end-user in Delhi for ₹ 3000. If the rate of GST is 18%, calculate: 

1. the net IGST, CGST and SGST payable by Ratlam dealer.
2. the total cost of the clock for the end-user in Delhi.

Answer 1

Given:

Wholesaler in Jaipur (Rajasthan) sold to dealer in Ratlam (M.P.) at ₹ 2400.

Ratlam dealer sold to end‑user in Delhi at ₹ 3000.

GST rate = 18%. (Inter‑state sales incur IGST; intra‑state sales would split into CGST + SGST.)

Step-wise calculation:

1. Input tax for Ratlam dealer (tax charged when dealer bought from Jaipur):

Purchase price = ₹ 2400 (inter‑state), so input = IGST @18% of ₹ 2400

Input IGST = 18% × 2400

= 0.18 × 2400

= ₹ 432

2. Output tax collected by Ratlam dealer (tax charged when selling to Delhi end‑user):

Selling price = ₹ 3000 (inter‑state), so output = IGST @18% of ₹ 3000

Output IGST = 18% × 3000

= 0.18 × 3000

= ₹ 540

3. Net tax payable by Ratlam dealer:

Net IGST = Output IGST – Input IGST

= ₹ 540 – ₹ 432

= ₹ 108

Since both transactions are inter‑state, CGST = 0 and SGST = 0 for the dealer (no CGST/SGST output payable).

4. Total cost to the end‑user in Delhi:

End‑user pays selling price + IGST on that sale

= ₹ 3000 + ₹ 540

= ₹ 3540