Question

Renna buys certain goods for ₹4,000 and sells them to Ashok at a profit of ₹500. If Ashok does not sells the goods further and rate of GST = 5%, the output GST for Ashok is ______.

Options

• ₹225

• ₹175

• ₹25

• ₹00

Answer 1

Renna buys certain goods for ₹4,000 and sells them to Ashok at a profit of ₹500. If Ashok does not sells the goods further and rate of GST = 5%, the output GST for Ashok is ₹00.

Explanation:

Step 1: Renna’s Sale to Ashok

• Cost Price (CP) = ₹4,000

• Profit = ₹500

• Selling Price (SP) before GST = ₹4,000 + ₹500 = ₹4,500

• GST @ 5% on SP = ₹4,500 × 5% = ₹225

So, Ashok buys the goods for ₹4,500 + ₹225 = ₹4,725

Step 2: Ashok’s Output GST

Ashok does not make any sale and therefore does not charge GST to anyone.

Output GST for Ashok = ₹0