Given:

A MANUFACTURER buys raw material worth 8000, paying GST at the rate of 5%.

He sells the finished product to a dealer at a profit of 25% .

The GST charged for the finished product is 12% .

To find:

Find the net GST paid by the manufacturer to the government if the SCALE is intra-state.

Solution:

A manufacturer buys raw material worth 8000

⇒ C.P = RS. 8,000.

paying GST at the rate of 5%

⇒ GST = 8000 × 5% = 8000 × 5/100

GST = Rs. 400.

He sells the finished product to a dealer at a profit of 25%

⇒ profit = 25% = Gain%

S.P = SP = [(100 + Gain%) / 100] × CP.

= (100 + 25) / 100 × 8000

S.P = Rs. 10,000.

The manufacture will charge the dealer the tax he paid to buy the raw materials.

⇒ Net S.P = Rs. 10,000 + Rs. 400

Net S.P = Rs. 10,400.

⇒ Net profit = Rs. 10,400 - Rs. 8000 =

Net profit = Rs. 2400.

Out of this profit equal proportion of MONEY will be given to the central and state government.

The GST charged for the finished product is 12%

So divide 12% in the ratio 1/6 to get center - CGST and state - SGST.

Net GGST= 1/6 × 2400 = Rs. 400.

Net SGST= 1/6 × 2400 = Rs. 400.