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

Under section 52 of the CGST Act, 2017, an e-commerce operator collects tax at a notified rate (not exceeding one per cent) on the net value of taxable supplies. During a month, registered suppliers made taxable supplies of Rs 40,00,000 through the operator, of which goods worth Rs 4,00,000 were returned to the suppliers in the same month. The notified collection rate is 0.5%. What amount must the operator collect and pay to the Government?

The collection is on net value of taxable supplies, being aggregate supplies less those returned in the month. Net value is Rs 36,00,000, and at 0.5% the operator must collect and pay Rs 18,000 within ten days after month end.

  1. ARs 20,000
  2. BRs 18,000Correct
  3. CRs 16,000
  4. DRs 18,000 only if the supplies were not returned

Explanation

Net value = 40,00,000 - 4,00,000 returned = 36,00,000. At 0.5%, the amount is Rs 18,000. Rs 20,000 uses the gross value, ignoring returns. The amount is paid within ten days after the end of the month.

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