CS Executive · Tax Laws and Practice · Concept of Indirect Taxes at a Glance
Mehta Traders of Surat (Gujarat) sells goods worth ₹2,00,000 to a buyer in Jaipur (Rajasthan). The applicable GST rate is 18%. What is the tax charged and in what form?
The tax is ₹36,000 charged as IGST. The supply moves from Gujarat to Rajasthan, so it is inter-State, and IGST at the full 18% on ₹2,00,000 applies. A CGST and SGST split is used only for intra-State supplies.
- A₹36,000 as IGSTCorrect
- B₹18,000 CGST and ₹18,000 SGST of Gujarat
- C₹18,000 CGST and ₹18,000 SGST of Rajasthan
- D₹36,000 as CGST of Gujarat
Explanation
Supply from Gujarat to Rajasthan is inter-State, so IGST applies at the full rate: 18% of 2,00,000 = ₹36,000. Splitting into CGST and SGST (equal ₹18,000 halves) is the intra-State treatment and is wrong here, whichever State's SGST is named.
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