Very basic question on gst

210 views 3 replies

Yogesh

139 Points Joined January 2016

I wnat to ask very basic question of GST

If a retailer having T/o > 20 Lac ( he will have to registration in GST).

Now, supose he is selling Goods on which MRP is printed Let say Rs. 50/- (where it is mentined inclusive of all taxes)

He is getting Rs. 50 from Customer.

How he will charge GST on such products? as he can't sell for more than MRP, if he will charge GST price will be more than Rs 50, which is not posssible, as we know.

Will it (GST) 50*12/112 = 5.36 ?? AM i correct or not???

One another Question will he charge CGST and SGST simultaneously i.e. will the rate be 12+12=24%????

Please clarify. Thanks....

Replies (3)

The retailer need not bother about the inclusive of all taxes portion. If he had purchased the product for say Rs 40, then he would have paid Rs 4.80 (40*12%) as Input GST . The 12% will be divided by Central and State Government upon agreed terms (not yet fixed).

On sale he will collect Rs 6 (50*12%) This will be output tax payable. As ITC of Rs 4.8 is available the net amount paid to Government is Rs 1.20.

IGST can be set off against all types of GST. CGST and SGST cant be cross set off. Same side set off along with IGST set off is possible.

Hoping it clarifies your doubt.