Question

Goods from Delhi are sold to Ranchi (Jharkhand) for ₹ 20,000 and then from Ranchi to Cuttack (Odisha). If the rate of GST is 18% and the profit made at Ranchi is ₹ 5,000, then:

1. the net GST payable by the dealer in Ranchi is:
   1. ₹ 1000
   2. ₹ 900
   3. ₹ 850
   4. ₹ 875
2. the cost of goods at Cuttack is:
   1. ₹ 26,250
   2. ₹ 27,800
   3. ₹ 29,500
   4. ₹ 31,200

Answer 1

i. Given,

Goods from Delhi are sold to Ranchi (Jharkhand) for ₹ 20,000 and then from Ranchi to Cuttack (Odisha).

Rate of GST = 18%

Transaction from Delhi to Ranchi :

This is an interstate transaction.

IGST % = GST % = 18%

IGST = `18/100 xx 20000`

IGST = ₹ 3,600

GST paid by dealer in Ranchi = ₹ 3,600

Transaction from Ranchi to Cuttack :

Profit made by dealer in Ranchi = ₹ 5,000

Goods cost for dealer in Cuttack (without tax) = ₹ 20,000 + ₹ 5,000

= ₹ 25,000

This is an interstate transaction.

IGST % = GST % = 18%

IGST = `18/100 xx 25000`

IGST = ₹ 4,500

GST charged by dealer in Ranchi = ₹ 4,500

Net GST payable by dealer in Ranchi = GST charged by dealer in Ranchi – GST paid by dealer in Ranchi

= ₹ 4,500 – ₹ 3,600

= ₹ 900

Hence, option b is the correct option.

ii. Cost of goods at Cuttack = Goods cost for dealer in Cuttack (without tax) + IGST

= ₹ 25,000 + ₹ 4,500

= ₹ 29,500

Hence, option c is the correct option.