Question

Ms. Beauty Product paid 18% GST on cosmetics worth Rs.6000 and sold to a customer for Rs.10000. What are the amounts of CGST and SGST shown in the tax invoice issued?

Answer 1

Hint: We have the idea that tax is paid on the selling items. And CGST and SGST are the same for the article. They have asked for the tax amount shown in the invoice of the customer. So we will calculate the tax on 10000.

Complete step-by-step answer:
Given that, Ms. Beauty Product bought cosmetics worth Rs.6000.
She paid 18% GST. Then she sold the cosmetics to a customer for Rs.10000.
Customer also paid the tax. Now we have to find the amount of tax mentioned in the invoice or bill.
Tax is calculated for the customer. So we will calculate it at 10000.
Total GST = \[18\% of10000 = \dfrac{{18}}{{100}} \times 10000 = 1800\]
But GST= SGST + CGST
Thus SGST=CGST= \[\dfrac{{1800}}{2} = 900\]
Thus amounts of CGST and SGST shown in the invoice will be Rs.900 each.

Note: Here Ms. Beauty product also paid tax but we have to calculate the tax paid by the customer. So don’t calculate the tax on Rs.6000.
CGST stands for Central Goods and Service Tax and is charged by the central government whereas SGST stands for State Goods and Service Tax and is charged by the state government.