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GST Calculation

A dealer in C...

Question

A dealer in Chennai(TN) sells goods to a dealer in Bengaluru for ₹35000. The dealer in Bengaluru(Karnataka) makes a profit of ₹5000 on these goods and sells it to a dealer in Jaipur (Rajasthan). If the rate of GST at each stage is 18%, find the Net Tax liability of the dealer in Bengaluru.

A

₹500

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B

₹900

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C

₹450

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D

₹360

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Solution

The correct option is C ₹450
The GST calculated here will be on profit made by the dealer in Bengaluru because the Input Tax Credit will be subtracted (availed) from the Output tax.
Total GST = 18%
Net Tax Liability for the dealer in Bengaluru = $\frac{18}{100} \times 5000$ = ₹900.

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