ICSE Class 10 Answered

A sewing machine manufacturing purchases raw materials worth Rs 5,40,000 for his manufacturing unit from outside the state. The rate of GST is @ 12% . He produced two types of sewing machine, 50 type A whose base price is Rs 5,000, GST @ 12% and 100 type B whose base price is Rs, 10,000, GST @ 18%. He had two clients outside the state and received orders for 10 type A and 20 type B only by client X, 10 each by clent Y. Find (i) input GST  (ii) ouput GST  (iii) GST payable/credit.

Solution:-

Price of raw material = Rs. 540000

Price of sewing machine of type A = Rs. 5000

Price of sewing machine of type A = Rs. 10000

Since sales are occurred in different states,

IGST or GST = 12% on raw materials and on sewing machine of type A and 18 % on sewing machine of type B.

(i) Input GST = 12% on raw materials = 12% of 540000 = 540000 x 12/100 = 64800.

Client X order value = SP of 10 sewing machine A and SP of 20 sewing machine B

= 10 x 5000 + 20 x 10000 = 50000 + 200000

Client Y order value = SP of 10 sewing machine A and SP of 10 sewing machine B

= 10 x 5000 + 10 x 10000 = 50000 + 100000

Total SP of sewing machine A = 50000 + 50000 = 100000

Total SP of sewing machine B = 200000 + 100000 = 300000

(ii)

Output GST = 12% on A + 18% on B = (12% of 100000) + (18% of 300000)

= (100000 x 12/100) + (300000 x 18/100)

= 12000 + 54000 = 66000

Therefore, the output GST is more than the input GST.

(iii)

Thus, GST payable = Output GST – Input GST = 66000 – 64800 = Rs. 1200