Smt. Malhotra purchased solar panels for the taxable value of Rs 85,000. She sold them for Rs 90,000. The rate of GST is 5%. Find the ITC of Smt. Malhotra. What is the amount of GST payable by her ?

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Solution

Taxable purchase value of the solar panels = Rs 85,000

Rate of GST = 5%

∴ Input tax credit (ITC) = 5% of Rs 85,000 = $\frac{5}{100} \times 85000$ = Rs 4,250

Selling price of the solar panels = Rs 90,000

∴ Output tax = 5% of Rs 90,000 = $\frac{5}{100} \times 90000$ = Rs 4,500

Amount of GST payable = Output tax − Input tax (ITC) = Rs 4,500 − Rs 4,250 = Rs 250

Thus, the amount of ITC is Rs 4,250 and the amount of GST payable by Smt. Malhotra is Rs 250.

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