In a GST chain, a dealer Mr. Shah purchases an article for ₹ 50,000 and supplies it to another dealer Mr. Paresh at a profit of ₹ 6,000. Mr. Paresh sells it to a consumer Mrs. Gupta at a profit of ₹ 4,000. If the rate of GST is 18% and if all transactions were intrastate, calculate

(i) ITC for Mr. Shah

(ii) Input Tax payable by Mr. Paresh

(iii) Total cost price of the article for Mrs. Gupta

(iv) Output GST for Mrs. Gupta

Given :

Cost price of the article for Mr. Shah is = ₹ 50,000

Profit of Mr.Shah = ₹ 6,000

Selling price of Mr. Shah = ₹ 50,000 + ₹ 6,000 = ₹ 56,000

Cost price of Mr. Paresh (excluding tax) = ₹ 56,000

Profit of Mr. Paresh = ₹ 4,000

Selling price of Mr. Paresh = ₹ 56,000 + ₹ 4,000 = ₹ 60,000

Cost price of the article for Mrs. Gupta (excluding tax) = ₹ 60,000

GST rate = 18%

As the transaction is intra-state so CGST and SGST are applicable

CGST rate = SGST rate = $\dfrac{18}{2}$ = 9%

(i) ITC for Mr. Shah = 18% of ₹ 50,000

$= \dfrac{18}{100} \times 50,000$

= ₹ 9,000.

Hence, ITC for Mr, Shah = ₹ 9,000.

(ii) Cost price for Mr. Paresh (excluding tax) = ₹ 56,000

Input tax paid by Mr. Paresh = 18% of ₹ 56,000

$= \dfrac{18}{100} \times 56,000$

= ₹ 10,080.

Hence, input tax paid by Mr. Paresh = ₹ 10,080.

(iii) Cost price of the article for Mrs. Gupta before tax = ₹60,000.

GST = 18% of ₹ 60,000

$= \dfrac{18}{60,000} \times 60,000$

= ₹ 10,800.

Total cost price for Mrs. Gupta = Cost price + GST

= ₹ 60,000 + ₹ 10,800

= ₹ 70,800.

Hence, cost price for Mrs. Gupta including tax = ₹ 70,800.

(iv) Mrs. Gupta is the end consumer, so no output GST is paid by her.

Hence, Output GST for Mrs. Gupta = ₹ 0.