CMA Intermediate · Direct and Indirect Taxation · Computation of GST Liability
Rao & Co. (Hyderabad) supplied goods worth Rs 3,00,000 (exclusive of tax) at 5% GST, intra-State, and later issued a credit note of Rs 20,000 (value before tax) for sales returns within the same month, which is eligible for adjustment. What is the net output GST (CGST + SGST combined) after adjusting the credit note?
Original output GST is 5% of Rs 3,00,000, which is Rs 15,000. The eligible credit note for Rs 20,000 reduces the tax by Rs 1,000, so net output GST is Rs 14,000, split equally between CGST and SGST.
- ARs 15,000
- BRs 14,000Correct
- CRs 1,000
- DRs 16,000
Explanation
Original GST = 3,00,000 x 5% = 15,000. Credit note tax = 20,000 x 5% = 1,000. Net = 14,000. Rs 15,000 ignores the credit note; Rs 1,000 is only the credit note tax.
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