Question

Pawan medical' supplies medicine. On some medicines the rate of GST is 12%, then what is the rate of CGST and SGST?

Answer 1

Hint: We will use the formula of GST to find the CGST and SGST. GST is the goods and services tax, SGST is the State goods and services tax and CGST is the central goods and services tax.

Formulas used:
\[{\rm{SGST}} = {\rm{CGST}}\]
\[{\rm{GST}} = {\rm{SGST}} + {\rm{CGST}}\]

Complete step-by-step answer:
The Goods and Services Tax is the tax applicable to any item or service when it is bought or sold. We know that this tax is paid to the government.
Some part of the Goods and Services Tax goes to the Central Government and it is called the Central Goods and Services Tax or CGST.
Some part of the Goods and Services Tax goes to the State Government and it is called the State Goods and Services Tax or SGST.
Both the central and state government get an equal share of the Goods and Services Tax. 50% of the Goods and Services Tax goes to the Central Government and 50% of the Goods and Services Tax goes to the State Government.
We know that the amount of both the Central Goods and Services Tax and the State Goods and Services Tax is equal. So using the first formula, we can assume that \[{\rm{CGST}} = {\rm{SGST}} = x\].
We will substitute \[x\] for CGST, \[x\] for \[{\rm{SGST}}\] and 12 for GST in the second formula:
\[12 = x + x\]
We will add the like terms on the right-hand side:
$\Rightarrow$ $12 = 2x$
We will divide both sides of the equation by 2 and find \[x\]:
$\Rightarrow$ $\dfrac{{12}}{2} = \dfrac{{2x}}{2}$
$\Rightarrow$ $6 = x$
The CGST and the SGST are both 6%.

Note: As we know that the CGST and SGST are equal and are half the GST, we can find them by straight away dividing the GST by 2:
\[\begin{array}{c}\dfrac{{{\rm{GST}}}}{{\rm{2}}} = {\rm{CGST}} = {\rm{SGST}}\\{\rm{ }}\Rightarrow \dfrac{{{\rm{12}}}}{{\rm{2}}} = {\rm{CGST}} = {\rm{SGST}}\\{\Rightarrow \rm{6}} = {\rm{CGST}} = {\rm{SGST}}\end{array}\]