Garment industry

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Amit Goel (Querist)

07 July 2017 Situation: i have purchased the Goods at price of Rs.950 plus taxes@ 5% under GST & Sold the Same goods at price of Rs.1050
Question: Is it reasonable that by just adding margin of Rs.100 my goods are now taxable @ 12 %?
How to handle with this kind if situation?

CA Amrita Chattopadhyay

CA Amrita Chattopadhyay (Expert)

10 July 2017 If you have purchased goods by paying tax, you can take input tax credit. Thus, if the goods are purchased by paying tax and also for selling of the goods you are paying tax. During the payment of GST to Govt. you can pay the differential amount.

Amit Goel

Amit Goel (Querist)

10 July 2017 I am not satisfied with the answer. My Question was to provide the solution for situation.
If we change the Amount of Example let say
Mr. A purchased the garment @ Rs.900 plus % Tax and add margin of Rs.105 . Now Selling price is Rs 1005 plus 12 % tax
on the other hand let say Mr. B sold the same product @ Rs.995 plus 5% tax
in both cases there will be a change in Total Invoice value by approximate of 7%.

As we can look that It will be practically difficult to manage the stock of Price range- Rs.900-1000

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