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Malik 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 instead of SGST.) |
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Answer» For Malik Gas Agency: Output tax = 5% of 26500 = 5/100 × 26500 = Rs. 1325 Input tax = 5% of 24500 = 5/100 × 24500 = Rs. 1225 ITC for Malik Gas Agency = Rs. 1225. ∴ GST payable = Output tax – ITC = 1325 – 1225 = Rs. 100 CGST = UTGST = \(\frac{\text{GST payable}}{2} = \frac{100}{2}\) ∴ CGST = UTGST = Rs. 50 ∴ The GST to be paid at the rate of 5% is Rs. 100 and hence, CGST and UTGST paid for the transaction is Rs. 50 each. |
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