Question

A company provided Z-security services for the taxable value of Rs. 64,500. Rate of GST is 18%. Company had paid GST of Rs. 1550 for laundry services and uniforms etc. What is the amount of ITC (input Tax Credit)? Find the amount of CGST and SGST payable by the company.

Answer 1

Hint: The total payable amount is the amount of Output tax minus the ITC. The input tax is the input tax credit. Input tax credit is the money we pay for laundry services, uniforms etc. The amount of CGST and SGST is half the amount of GST each.

Complete step-by-step answer:
We are given that a company provided Z-security services for the taxable value of Rs. 64,500 and the Rate of GST is 18%. Company had paid GST of Rs. 1550 for laundry services and uniforms etc.
We have to find the amount of ITC, payable amount of CGST and SGST.
The amount of ITC is the input tax in which the company had paid for laundry services and uniforms which is Rs. 1,550.
The taxable value of services is Rs. 64,500.
Rate of GST is 18%.
$\Rightarrow$ 18% of 64,500 is $ \dfrac{{18}}{{100}} \times 64,500 = Rs.11,610 $
The amount of output tax (GST) is Rs. 11610.
The GST payable amount is output tax (GST) minus ITC, which is
 $ \Rightarrow 11,610 - 1,550 = Rs.10,060 $
The amount of CGST payable is half the amount of payable GST, which is
 $ \Rightarrow \dfrac{{10,060}}{2} = Rs.5,030 $
The amount of SGST payable is half the amount of payable GST, which is
 $ \Rightarrow \dfrac{{10,060}}{2} = Rs.5,030 $
The input tax credit is Rs. 1,550, CGST payable is Rs. 5,030 and SGST payable is Rs. 5,030.

Note: The full form of GST is Goods and Services Tax. GST is an indirect tax imposed on the supply of goods and services. There are 3 types of GST. They are CGST (Central GST), SGST (State GST), IGST (Integrated GST). Input tax credit states that at the time of paying output tax, you can reduce the tax you have already paid on inputs and pay the remaining amount.