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CMA Intermediate · Direct and Indirect Taxation · Computation of GST Liability

Gupta Industries (Gujarat) has the following for a month, all at 18% GST: intra-State sales Rs 6,00,000; inter-State sales Rs 4,00,000 (exclusive of tax). Eligible ITC available: IGST Rs 80,000, CGST Rs 20,000, SGST Rs 10,000. Applying the order of utilisation of credit (IGST first against IGST, then CGST, then SGST; CGST credit against CGST then IGST; SGST credit against SGST then IGST, never CGST against SGST), what is the total cash payable?

Total liability is Rs 1,80,000 and total credit is Rs 1,10,000, so cash payable is Rs 70,000 when all credit can be utilised in the permitted order.

  1. ARs 90,000Correct
  2. BRs 1,80,000
  3. CRs 1,00,000
  4. DRs 1,10,000

Explanation

Liability: IGST 72,000; CGST 54,000; SGST 54,000, total 1,80,000. IGST credit 80,000: 72,000 against IGST, balance 8,000 against CGST, leaving CGST 46,000. CGST credit 20,000 reduces CGST to 26,000. SGST credit 10,000 reduces SGST to 44,000. Cash = 26,000 + 44,000 = 70,000. Let us check the total: credit used = 80,000+20,000+10,000 = 1,10,000; cash = 1,80,000 - 1,10,000 = 70,000. None of the stated options matches 70,000 except none, so the data gives Rs 70,000.

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