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Question

A product is sold from Kanpur(UP) to Banaras(UP) for ₹1200 and then from Banaras to Ranchi(Jharkhand) at a profit of ₹400. If the rate of GST is 18% , find the net GST payable at Banaras.
  1. ₹36
  2. ₹124
  3. ₹144
  4. ₹72


Solution

The correct option is D ₹72
When the product is sold from Kanpur to Banaras (It is an intra-state transaction).
For the Dealer in Kanpur, SP = ₹1200
CGST = SGST = 9% of ₹1200 = ₹108

When the product is sold from Banaras to Ranchi(It is an Inter-state transaction).
For the Dealer in Banaras :
Input Tax Credit(ITC) = ₹108 + ₹108 = ₹216
CP = ₹1200. 
Profit = ₹400
SP = CP + Profit = ₹1200 + ₹400 = ₹1600
IGST = 18% of ₹1600 = 18100×1600 = ₹288
Net GST payable at Banaras = Output GST - ITC
= ₹288 - ₹216 = ₹72

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