Question

Milk Gas Agency (Chandigarh Union Territory) purchased some gas cylinders for industrial use for $Rs.24,500$ and sold them to the local customers for $Rs.26,500$. Find the GST to be paid at the rate of $5\%$ and hence the CGST and UTGST to be paid for this transaction. (for Union Territories there is UTGST) insted of

Answer 1

Input tax (tax paid at the time of purchase) = $5$% of Rs $24,500$

= $\frac{5}{100}\times 24500$ = Rs $1,225$

Output tax (tax paid at the time of sale) = $5$% of Rs $26,500$

= $\frac{5}{100}\times 26500$ = Rs $1,325$

$\therefore$ GST payable = Output tax - Input tax

= Rs $1,325$ - Rs $1,225$ = Rs $100$.

CGST payable = UTGST payable

= $\frac{100}{2}$ = Rs $50$.

Thus, the CGST payable by Malik Gas agency is of Rs $50$ and the UTGST payable by Mailk Gas agency is Rs $50$.