Question

Manu purchases some goods for ₹ 2,000 and sells them for ₹ 2,500. If the rate of GST is 18%, the tax liability on Manu is ______.

Options

• ₹ 360

• ₹ 450

• ₹ 90

• ₹ 900

Answer 1

Manu purchases some goods for ₹ 2,000 and sells them for ₹ 2,500. If the rate of GST is 18%, the tax liability on Manu is ₹ 90.

Explanation:

Cost price of some goods for Manu = ₹ 2000

Rate of GST = 18%

Input GST = 18% of ₹ 2000

= `₹(18/100 xx 2000)`

= ₹ 360

Selling price of some goods = ₹ 2500

Output GST = 18% of ₹ 2500

= `₹(18/100 xx 2500)`

= ₹ 450

∴ Tax Liability of Manu = Output GST – Input GST

= ₹ 450 – ₹ 360

= ₹ 90