Question

Goods/services are sold from Agra (U.P.) to Kanpur (U.P.) for Rs.20000 and then from Kanpur to Jaipur (Rajasthan). If the rate of GST is 18% and the profit made at Kanpur is Rs.5000, find:
(i) The net GST payable by the dealer at Kanpur.
(ii) The cost of goods/services at Jaipur.

Answer 1

From the question, when the product is sold from Agra to Kanpur (intra-state transaction)
For the dealer in Agra:
S.P in Agra = Rs. 20000
CGST $=9\%$ of Rs. $20000=\frac{9}{100}\times 20,000=1800$
SGST $=9\%$ of Rs. $20000=\frac{9}{100}\times 20,000=1800$
Now, when the product is sold from Kanpur to Jaipur (inter-state transaction)
For the dealer in Kanpur
Input-tax credit $=1800+1800=$ Rs. 3600
C. P. $=$ Rs. 20000 and Profit $=$ Rs. 5000
So, the S.P. $=20,000+5000=$ Rs. 25000
IGST $=18\%$ of $25,000=$ Rs. 4500
Therefore,
(i) Net GST paid by the dealer at Kanpur
$$\begin{array}{cc}& =\text{Output GST}-\text{Input GST}\\ & =4500-3600\\ & =\text{Rs.}900\end{array}$$
(ii) The cost of goods/services at Jaipur
$$\begin{array}{cc}& =S.\text{P. in Agra}+\text{IGST}\\ & =25,000+18\%\text{of}25000\\ & =25,000+4500\\ & =\text{Rs.}29500\end{array}$$