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M/s. Jay Chemicals purchased a liquid soap having taxable value Rs $8000$ and sold it to the consumer for the taxable value Rs. $10000$. Rate of GST is $18\% $, find the CGST and SGST payable by M/s. Jay Chemical.

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Last updated date: 29th Feb 2024
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IVSAT 2024
Answer
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Hint: In this question by using the concept of percentage we have to calculate the values of CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) for the given product. Since the taxable values of the cost price and the selling price of the product are given, we can use these values to find the values of the input tax and the output tax applied on these prices. Then the Net GST can be calculated using these values of input tax and output tax. The relationship among the Net GST, CGST and SGST can be given as following –
${\text{GST = CGST}} + {\text{SGST}}$
And,
$
{\text{CGST = SGST}}\\
{\text{ = }}\dfrac{{{\text{GST}}}}{{\text{2}}}
$

Complete step-by-step answer:
Given:
The rate of GST applied on the Jay Chemical liquid soap $ = 18% $
The taxable purchase price of the liquid soap $ = {\text{Rs}}{\text{. 8}}000$
And, the taxable selling price of the cosmetics $ = {\text{Rs}}{\text{. }}10000$
Then,
The input tax applicable on the purchase price
$
 = {\text{18% of the taxable purchase price}}\\
 = {\text{ 18% of Rs}}{\text{. 8000}}\\
 = \dfrac{{18}}{{100}} \times 8000\\
 = {\text{Rs}}{\text{. }}1440
$
Similarly,
The output tax applicable on the selling price
$
= {\text {18% of the taxable selling price}}\\
= {\text{18% of Rs}}{\text{. 10000}}\\
= \dfrac{{18}}{{100}} \times 10000\\
= {\text{Rs}}{\text{. 1800}}
$
So, the total GST payable by M/s. Jay Chemical is given by-
$
\Rightarrow {\text{GST = Rs}}{\text{. 1800 - Rs}}{\text{. 1440}}\\
\Rightarrow {\text{GST = Rs}}{\text{. 360}}
$
And we also know that,
The amount of CGST = The amount of SGST
$\Rightarrow {\text{CGST = SGST}}$
Also, we know that the total GST is the sum of CGST and SGST.
The amount of GST = The amount of CGST + The amount of SGST
So, substituting the values we get,
$
\Rightarrow { \text{GST = CGST + SGST}}\\
\Rightarrow { \text{GST = 2CGST}}
$
Or,
$\Rightarrow {\text{CGST = }}\dfrac{{{\text{GST}}}}{{\text{2}}}$
Substituting the value of GST, we get,
$
\Rightarrow {\text{CGST }} = {\text{ SGST}}\\
= \dfrac{{{\text{Rs}}{\text{. }}360}}{2}\\
= {\text{Rs}}{\text{. 18}}0
$
Therefore, the amount of CGST and SGST payable by M/s. Jay Chemical is ${\text{Rs}}{\text{. 180}}$.
So, the correct answer is “Rs. 180”.

Note: Since according to the question we do not have to calculate the value of the IGST applied on the cosmetics, we can neglect the value of IGST in the formula for the total GST. So, the formula for total GST becomes,
${\text{GST = CGST + SGST}}$
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