Question

A manufacturer buys raw material worth 8000, paying GST at the rate of 5%.He sells the finished product to a dealer at a profit of 25% .The GST charged for the finished product is 12% .Find the net GST paid by the manufacturer to the government if the scale is intra-state.

(please use the required gst formulas)
(Answer in my textbook is -:
net cgst=400, net sgst=400)
(please give the solution step by step)
Answer this question ASAP​

Answer 1

Answer:

Okay

C.P=8,000. GST (paid by the manufacturer=5%)= 400.

profit=25%

S.P= 125/100×8000= 10,000.[Use formula SP = [(100 + Gain%) / 100] * CP.]

Now obviously the manufacture would charge the dealer the tax he paid to buy the raw materials.

Net S.P= 10,000+400=10,400.

Net profit= 10,400-8000=2400.

Out of this profit equal proportion of Money will be given to the central and state government.

So we can divide 12% in the ratio 1/6 for state and centre.

So :

Net GGST= 1/6×2400=400.

Net SGST= 1/6×2400=400.