Itc
This query is : Resolved
13 January 2018
Dairy Don paid an input tax of Rs.25. They charged Rs.600 plus GST to their client. Assume the GST is 5%. What is the input tax credit?
A)25
B)30
A manufacturer bought Raw Materials worth Rs.500 to make pressure cooker. Assume the GST is 18%. The manufacturer would have paid GST of Rs.90. He decides to sell it to a distributor at Rs.800 plus GST. Then the tax on it work out to Rs.144. How much can the manufacturer can claim input tax credit?
A)54
B)90
A)25
B)30
A manufacturer bought Raw Materials worth Rs.500 to make pressure cooker. Assume the GST is 18%. The manufacturer would have paid GST of Rs.90. He decides to sell it to a distributor at Rs.800 plus GST. Then the tax on it work out to Rs.144. How much can the manufacturer can claim input tax credit?
A)54
B)90
13 January 2018
you can claim as ITC of the amount of tax you have paid as buyer.In first scenario ITC amount is 25. In the second case ITC amount is 90..
13 January 2018
thanks mam
15 January 2018
Any one discuss this tooics
02 August 2024
To determine the Input Tax Credit (ITC) in the given scenarios, we need to apply the GST principles. Here’s how you can calculate the ITC for each case:
### 1. Dairy Don Input Tax Credit
**Details Provided:**
- Input Tax Paid: Rs. 25
- Amount Charged to Client: Rs. 600
- GST Rate: 5%
**GST Calculation:**
1. **GST on Sale to Client:**
- GST Rate: 5%
- GST Amount = Rs. 600 × 5% = Rs. 30
2. **Input Tax Credit:**
- Input Tax Credit is the GST paid on inputs (purchases) that can be offset against the GST payable on sales.
- Since Dairy Don paid Rs. 25 as input tax and the GST collected from the client is Rs. 30, the ITC is Rs. 25.
**Answer:**
A) Rs. 25
### 2. Manufacturer Input Tax Credit
**Details Provided:**
- GST on Raw Materials (Input Tax Paid): Rs. 90
- Sale Price to Distributor: Rs. 800 plus GST
- GST Rate: 18%
- GST on Sale Price: Rs. 144
**GST Calculation:**
1. **GST on Sale to Distributor:**
- Sale Price = Rs. 800
- GST Rate = 18%
- GST Amount = Rs. 800 × 18% = Rs. 144
2. **Input Tax Credit:**
- The input tax credit is the GST paid on the raw materials which is Rs. 90. The GST collected from the sale is Rs. 144, and the ITC available is Rs. 90.
**Answer:**
B) Rs. 90
### 1. Dairy Don Input Tax Credit
**Details Provided:**
- Input Tax Paid: Rs. 25
- Amount Charged to Client: Rs. 600
- GST Rate: 5%
**GST Calculation:**
1. **GST on Sale to Client:**
- GST Rate: 5%
- GST Amount = Rs. 600 × 5% = Rs. 30
2. **Input Tax Credit:**
- Input Tax Credit is the GST paid on inputs (purchases) that can be offset against the GST payable on sales.
- Since Dairy Don paid Rs. 25 as input tax and the GST collected from the client is Rs. 30, the ITC is Rs. 25.
**Answer:**
A) Rs. 25
### 2. Manufacturer Input Tax Credit
**Details Provided:**
- GST on Raw Materials (Input Tax Paid): Rs. 90
- Sale Price to Distributor: Rs. 800 plus GST
- GST Rate: 18%
- GST on Sale Price: Rs. 144
**GST Calculation:**
1. **GST on Sale to Distributor:**
- Sale Price = Rs. 800
- GST Rate = 18%
- GST Amount = Rs. 800 × 18% = Rs. 144
2. **Input Tax Credit:**
- The input tax credit is the GST paid on the raw materials which is Rs. 90. The GST collected from the sale is Rs. 144, and the ITC available is Rs. 90.
**Answer:**
B) Rs. 90
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