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8 - GST-8-EXAMPLES - Email BEFORE The Session

The document provides 5 illustrations with examples of calculating GST payable in different scenarios: 1) The first illustration calculates the net GST payable for a company that purchases raw materials locally and sells goods locally. 2) The second illustration also calculates net GST payable for local purchases and sales, factoring in additional expenses. 3) The third illustration calculates GST payable and input tax credit for a manufacturer that purchases raw materials locally and sells 70% of production locally. 4) The fourth illustration calculates GST payable when purchase is local but sales are inter-state. 5) The fifth and final illustration calculates net GST liability when purchases and sales involve both inter

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Mighty Singh
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876 views2 pages

8 - GST-8-EXAMPLES - Email BEFORE The Session

The document provides 5 illustrations with examples of calculating GST payable in different scenarios: 1) The first illustration calculates the net GST payable for a company that purchases raw materials locally and sells goods locally. 2) The second illustration also calculates net GST payable for local purchases and sales, factoring in additional expenses. 3) The third illustration calculates GST payable and input tax credit for a manufacturer that purchases raw materials locally and sells 70% of production locally. 4) The fourth illustration calculates GST payable when purchase is local but sales are inter-state. 5) The fifth and final illustration calculates net GST liability when purchases and sales involve both inter

Uploaded by

Mighty Singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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GST-8 PRM40 15-3-2021

EXAMPLES FOR CLASS-ROOM PRACTICE

Illustration-1 [Input tax credit]

Vijay Limited situated in Bhopal has presented the following information:

• Purchased raw material within the State for Rs. 2,80,000

• Consultation fee Rs. 35,000

• Storage cost Rs. 32,000

• Transportation cost Rs. 28,000

• Labour cost Rs. 87,500

• Goods sold for Rs. 5,20,500.

Compute Net GST payable. Assume CGST is 5% and SGST is 5%.

Ans. Net GST payable Rs. 2,900 CGST; Rs. 2,900 SGST

Illustration-2 [Net GST Payable]

M/s ABC Ltd. purchased goods for Rs. 2,00,000 locally. It sold goods (locally) for Rs. 3,50,000. It paid
legal fees of Rs. 8,000, storage cost Rs. 15,000, transportation cost Rs. 10,000, wages Rs. 15,000 and
other manufacturing expenses Rs. 16,000. It purchased furniture for its office for Rs. 22,000. If CGST is
6% and SGST is 6%, calculate net GST payable.

Ans. Net GST payable: Rs. 3,840 CGST; Rs. 3,840 SGST

Illustration-3 [ When purchase and supply made Intra-State]


Following are the details of purchases, sales etc. effected by M/s Sood & Co., a registered manufacturer
under the CGST Act, 2017:

1. Purchased raw material ‘A’ from local dealer for Rs. 1,12,000 (inclusive of GST @12%)
2. Purchased raw material ‘B’ from local dealer for Rs. 2,24,000 (inclusive of GST @12%)
3. Purchased capital goods within the State to be used in manufacture of the taxable goods for Rs.
2,80,000 (inclusive of GST @12%). Depreciation @15% to be charged.
4. Other direct and indirect expenses Rs. 62,500
5. Profit margin is considered @5% on total cost.
6. During the month of December, 2018 only 70% production is sold within the State and
applicable GST rate is 6% CGST and 6% SGST.
Calculate the amount of CGST and SGST payable after utilising input tax credit for the month of
December 2018, assuming no opening balance of input tax credit is available.
Ans. ITC carried forward: Rs. 15,360 both CGST and SGST.
Illustration-4 Computation of tax liability [When purchase is Intra-State and supply is Inter-State]
M/s ABC Ltd. a registered manufacturer in the State of Madhya Pradesh provides the following
particulars for the tax period of January 2019.

1. Inputs purchased within State for Rs. 2,24,000 (inclusive of GST @12%)
2. Machinery purchased on 15-1-2019 for Rs. 2,00,000 (excluding 12% GST) from a local dealer in
MP eligible for ITC. Depreciation is @15% p.a.
3. Manufacturing expenses and profits Rs. 1,50,000
4. Goods produced were sold outside MP with IGST @18% on sales.
Calculate the amount of CGST and SGST payable after utilising ITC for the month of January 2019
assuming that no opening balance of ITC is available.

Ans. IGST payable in cash: Rs. 20,400

Illustration-5 [Computation of Net GST liability when Purchase is Inter/Intra-State and supply is Intra-
State]
Mr. Ram of Delhi purchased goods from Mr. Naresh of Mumbai amounting to Rs. 2,36,000 (inclusive of
18% IGST) in the month of February 2020. He also purchased raw material worth Rs. 1,25,000 from local
dealer who has opted for composition scheme. He incurred Rs. 1,50,000 as direct and indirect expenses
and added profit margin @12% of cost.
Mr. Ram sold 70% of finished goods to Mr. Shyam of Agra with IGST @12% payable thereon and
20% of finished goods to Mr. Mohan of Delhi @6% each of CGST and SGST payable.
Compute the net CGST, SGST and IGST liability and input tax credit, if any, for the month of
February 2020.

Ans. Net GST payable in cash: Rs. 4,219 IGST; Rs. 5,746 CGST; Rs. 5,746 SGST

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