Question

Goods/services are sold from Agra (U.P.) to Kanpur (U.P.) for Rs. 20,000 and then from Kanpur to Jaipur (Rajasthan). If the rate of GST is 18% and the profit made at Kanpur is Rs. 5,000, find:

1. the net GST payable by the dealer at Kanpur.
2. the cost of goods/services at Jaipur.

Answer 1

When the product is sold from Agra to Kanpur (intra-state transaction).

For the dealer in Agra:

S.P. in Agra = Rs. 20,000

CGST = 9% of Rs. 20,000

= `9/100 xx 20,000`

= 1,800

SGST = 9% of Rs. 20,000

= `9/100 xx 20,000`

= 1,800

When the product is sold from Kanpur to Jaipur (inter-state transaction).

For the dealer in Kanpur:

Input-tax credit = 1,800 + 1,800 = Rs. 3,600

C.P. = Rs. 20,000 and Profit = Rs. 5,000

S.P. = 20,000 + 5,000 = Rs. 25,000

IGST = 18% of 25,000 = Rs. 4,500

1. Net GST paid by the dealer at Kanpur:
   = Output GST – Input GST
   = 4,500 – 3,600
   = Rs. 900
2. The cost of goods/services at Jaipur:
   = S.P. in Kanpur + IGST
   = 25,000 + 18% of 25,000
   = 25,000 + 4,500
   = Rs. 29,500