Question

‘Tiptop Electronics’ supplied an AC of 1.5 ton to the company. Cost of the AC supplied is Rs. 51,200 (with GST). Rate of CGST on AC is 14%. Then find the following amounts as shown in the tax invoice of tiptop Electronics.
A. Rate of SGST
B. Rate of GST on AC
C. Taxable value of AC
D. Total amount of GST
E. Amount of CGST
F. Amount of SGST

Answer 1

Hint: This problem deals with GST, which is Goods and Services Tax. It is an indirect tax used in India on the supply of goods and services. Here CGST and SGST are the taxes collected by the central and the state respectively. Here the taxable value of any good is obtained by the difference of the cost of the good with GST and the amount of GST.Here the rate of CGST on any good is the same as the SGST on that particular good.

Complete step-by-step solution:
A. Rate of SGST
We know that SGST is the same as the CGST.
Given that CGST on AC is 14%, hence SGST also will be the same.
$\because $CGST = 14%
$ \Rightarrow $SGST = CGST
$\therefore $SGST = 14%
B. Rate of GST on AC
GST is given by the sum of CGST and SGST.
We know that CGST = SGST = 14%
$ \Rightarrow $GST = CGST + SGST
$ \Rightarrow $GST= $14\% + 14\% $
$\therefore $GST= $28\% $
C. Taxable value on AC
Let the taxable value be = $x$
We know that the taxable value of AC is the difference of cost of AC with GST and the amount of GST.
$ \Rightarrow $Taxable value of AC = cost of AC with GST – amount of GST
We know that GST is equal to 28% of the taxable value, as given below:
$ \Rightarrow $ amount of GST = $28\% $ of $x$
$\therefore x = 51200 - \dfrac{{28x}}{{100}}$
Simplifying the above equation,
\[ \Rightarrow 100x = 100\left( {51200} \right) - 28x\]
\[ \Rightarrow 128x = 5120000\]
\[ \Rightarrow x = \dfrac{{5120000}}{{128}}\]
$\therefore x = 40,000$
Hence the taxable value on AC is Rs.$40,000$
D. Total amount of GST
We found that taxable value is Rs.40,000.
Here GST is 28% of taxable value.
$ \Rightarrow $GST = $\dfrac{{28}}{{100}} \times 40,000$
$\therefore $GST = $11,200$
E. Amount of CGST
We know that CGST is 14% of the taxable value.
Here taxable value is Rs.40,000
$ \Rightarrow $CGST = $\dfrac{{14}}{{100}} \times 40,000$
$\therefore $CGST = $5,600$
F. Amount of SGST
We know that SGST is the same as CGST.
$ \Rightarrow $SGST = CGST
$\therefore $SGST = $5,600$

Note: There are three types of GST which are CGST, SGST and IGST. CGST, central GST collected by the center. SGST is state GST collected by the state. IGST is charged on inter-state goods/services transactions. GST is a comprehensive, multistage, destination-based tax. It is comprehensive because it has subsumed almost all the indirect taxes except a few states.