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CA Intermediate · Taxation · GST in India - An Introduction

Aarav Pvt. Ltd. of Pune supplies taxable goods worth Rs 5,00,000 to a dealer in Pune at 18% GST. Later the same goods of the same value are sold to a dealer in Hyderabad, Telangana, at the same rate. Considering only the tax charged on these two supplies, which is correct?

The Pune sale attracts CGST Rs 45,000 and SGST Rs 45,000, while the Hyderabad sale attracts IGST Rs 90,000. At 18% on Rs 5,00,000 the total tax is Rs 90,000; intra-State supplies split it equally and inter-State supplies bear it entirely as IGST.

  1. APune sale: CGST Rs 45,000 plus SGST Rs 45,000; Hyderabad sale: IGST Rs 90,000Correct
  2. BPune sale: IGST Rs 90,000; Hyderabad sale: CGST Rs 45,000 plus SGST Rs 45,000
  3. CPune sale: CGST Rs 90,000 plus SGST Rs 90,000; Hyderabad sale: IGST Rs 90,000
  4. DBoth sales: IGST Rs 90,000 each

Explanation

Total GST is 18% of 5,00,000 = Rs 90,000. The Pune sale is intra-State, so the rate splits equally: CGST 9% = Rs 45,000 and SGST 9% = Rs 45,000. The Hyderabad sale is inter-State, so IGST at 18% = Rs 90,000. Option 3 wrongly charges the full rate under each of CGST and SGST.

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