a manufacturer buys raw materials worth Rs 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 sail is intra-state.
Answers
Given : a manufacturer buys raw materials worth Rs 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%
To find : net tax paid by the manufacturer to the government.
Solution:
raw material Cost = Rs 8000
GST 5 % = (5/100)8000 = Rs 400 ( CGST = SGST = Rs 200)
GST Paid by Manufacturer to Raw material Supplier = Rs 400
Profit 25 % = (25/100)8000 = Rs 2000
Selling Price = 8000 + 2000 = Rs 10000
GST 12 % = (12/100)10000 = Rs 1200 ( CGST = SGST = Rs 600)
GST Received by Manufacturer = Rs 1200
net tax paid by the manufacturer to the government. = GST Received - Input Tax Credit ( GST Paid to supplier )
= 1200 - 400
= Rs 800
(400 to State Government & 400 to central Government)
net tax paid by the manufacturer to the government. = Rs 800
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