A manufacturer buys raw material worth 12000 rupees paying GST 5%. He sells the finished product to a dealer in another state at a profit of 30%. The GST charged from the finished product is 18%. Find the net tax paid by the manufacturer to the government.
Answers
Given : A manufacturer buys raw material worth 12000 rupees paying GST 5%. He sells the finished product to a dealer in another state at a profit of 30%. The GST charged from the finished product is 18%
To find : net tax paid by the manufacturer to the government.
Solution:
raw material Cost = Rs 12000
GST 5 % = (5/100)12000 = Rs 600 ( CGST = SGST = Rs 300)
GST Paid by Manufacturer to Raw material Supplier = Rs 600
Profit 30 % = (30/100)12000 = Rs 3600
Selling Price = 12000 + 3600 = Rs 15600
GST 18 % = IGST = (18/100)15600 = Rs 2808
GST Received by Manufacturer = Rs 2808
net tax paid by the manufacturer to the government. = GST Received - Input Tax Credit ( GST Paid to supplier )
= 2808 - 600
= Rs 2208
net tax paid by the manufacturer to the government. = Rs 2208
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