Question

Ms. Ruhi is a wholesaler. She paid GST of ₹4500 at the time of purchase. She collected GST of ₹6200 at the time of sale.
(i) Find her input tax and output tax.
(ii) Find her payable GST and Input Tax Credit.
[2 Marks]

Answer 1

(i) Input Tax, i.e., tax paid at the time of purchase = ₹4500
Output Tax, i.e., tax collected at the time of sale = ₹6200
[1 Mark]

(ii) Ms. Ruhi's payable GST means, GST to be paid to the government by Ms. Ruhi and is calculated as:

Payable Tax = Output Tax - Input Tax = ₹6200 - ₹4500 = ₹1700
Input Tax Credit (ITC) is same as input tax, hence ITC = ₹4500.
[1 Mark]