Question

Suppose a retailer incurs the following expenses on selling a pack of noodles.
Cost price ₹20
(+) Cost and profit ₹10
(=) Value of output ₹30

What will happen if the retailer does not submit the bill after paying the GST?

• A. The retailer has to pay a tax on ₹30.
• B. The retailer has to pay a tax on ₹10.
• C. The GST will be documented.
• D. The retailer has to pay a penalty of ₹30.

Answer 1

The correct option is A The retailer has to pay a tax on ₹30.

The GST is paid on the value added on the cost price. The retailer is expected to submit the bill. In this case, the retailer should have paid a GST only on ₹10, but because he/she did not submit the bill, he/she will have to pay a GST on ₹30. This way the retailer cannot enjoy the benefits of GST.