Question

Malik Gas Agency (Chandigarh Union Territory) purchased some gas cylinders for industrial use for rupees 24,500, and sold them to the local customers for rupees 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.) Solve the word problem

Answer 1

Dear Student,

◆ Answer -

GST = 100 Rs

CGST = 50 Rs

UTGST = 50 Rs

◆ Explanation -

In such cases tax is payable on the profit and not on total price.

Taxable income by Malik Gas Agency is -

Taxable income = Selling price - Cost price

Taxable income = 26500 - 24500

Taxable income = 2000 Rs

So now GST to be paid will be -

GST = taxable income × rate of GST

GST = 2000 × 5/100

GST = 100 Rs

Half of this will be UTGST and half will be CGST.

CGST = UTGST = GST / 2

CGST = UTGST = 100 / 2

CGST = UTGST = 50 Rs

Hope this helps you...

Answer 2

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