A product is sold from Kannauj(UP) to Banaras(UP) for ₹12000 and then from Banaras to Ranchi(Jharkhand) at a profit of ₹4000. If the rate of GST is 18% , find the net GST payable at Banaras.
The correct option is C ₹720
When the product is sold from Kannauj to Banaras (It is an intra-state transaction).
For the Dealer in Kannauj, SP = ₹12000
CGST = SGST = 9% of ₹12000 = ₹1080
When the product is sold from Banaras to Ranchi(It is an Inter-state transaction).
For the Dealer in Banaras :
Input Tax Credit(ITC) = ₹1080 + ₹1080 = ₹2160
CP = ₹12000.
Profit = ₹4000.
SP = CP + Profit = ₹12000 + ₹4000 = ₹16000
IGST = 18% of ₹16000 = 18100×16000 = ₹2880
∴ Net GST payable at Banaras = Output GST - ITC
= ₹2880 - ₹2160 = ₹720