Table of Contents
Summary of Chapter
Theory Part:
Introduction to GST:
GST is an indirect tax levied by the government on goods and services, replacing multiple previous taxes.
It is a single, streamlined tax applied at every stage of value addition.
Types of GST:
CGST (Central GST): Collected by the Central Government on intra-state sales.
SGST (State GST): Collected by the State Government on intra-state sales.
IGST (Integrated GST): Collected by the Central Government on inter-state sales (transfers to the State later).
GST Rates:
Multi-tiered structure: 0%, 5%, 12%, 18%, and 28%.
Some items like petroleum and liquor are exempt.
GST Computation:
Output GST (on sales) – Input GST (on purchases) = GST Payable (if output > input).
If input > output, the difference is carried forward as GST credit.
IGST Calculation: IGST Rate = CGST Rate + SGST Rate
(e.g., if CGST = 2.5% and SGST = 2.5%, IGST = 5%).
GST vs. VAT:
GST is charged at the point of sale, while VAT was destination-based.
Formulas for GST Calculation
Key Takeaways and Illustrative Solved Examples :
- GST is calculated on the transaction value.
- Input GST credit reduces the final GST liability.
- IGST applies to inter-state transactions.
Example 1:
Sales Amount within State = ₹1,00,000
Purchase Amount within State = ₹80,000
GST Rate = 18% (CGST = 9%, SGST = 9%)
Solution:
| Particulars | Amount (₹) | CGST (₹) | SGST (₹) | Total (₹) |
| Output GST | 1,00,000 | 9,000 | 9,000 | 18,000 |
| Input GST | 80,000 | 7,200 | 7,200 | 14,400 |
| GST Payable | 1,800 | 1,800 | 3,600 |
Example 2:
Sales Amount within State = ₹60,000
Purchase Amount within State = ₹70,000
GST Rate = 18% (CGST = 9%, SGST = 9%)
Solution:
| Particulars | Amount (₹) | CGST (₹) | SGST (₹) | Total (₹) |
| Output GST | 60,000 | 5,400 | 5,400 | 10,800 |
| Input GST | 70,000 | 6,300 | 6,300 | 12,600 |
| GST Payable | 0 | 0 | 0 | |
| GST Credit | 900 | 900 | 1,800 |
Example 3:
Sales Amount outside State = ₹1,00,000
Purchase Amount outside State = ₹60,000
GST Rate: CGST = 9%, SGST = 9% ⇒ IGST = 18%
Solution:
| Particulars | Amount (₹) | Tax Rate | Tax (₹) |
| Output GST | 1,00,000 | 18% | 18,000 |
| Input GST | 60,000 | 18% | 10,800 |
| GST Payable | 7,200 |
Example 4:
Sales Amount outside State = ₹1,00,000
Purchase Amount outside State = ₹1,20,000
GST Rate: CGST = 9%, SGST = 9% ⇒ IGST = 18%
Solution:
| Particulars | Amount (₹) | Tax Rate | Tax (₹) |
| Output GST | 1,00,000 | 18% | 18,000 |
| Input GST | 1,20,000 | 18% | 21,600 |
| GST Payable | 0 | ||
| GST Credit | 3,600 |
Example 5:
Sales Amount outside State = ₹1,50,000
Purchase Amount within State = ₹1,00,000
GST Rate: CGST = 9%, SGST = 9%, IGST = 18%
Solution:
| Particulars | IGST (₹) |
| Output IGST | 27,000 |
| Input GST | 0 |
| IGST Payable | 27,000 |
| Less: CGST Credit | 9,000 |
| Less: SGST Credit | 9,000 |
| Balance IGST Payable | 9,000 |
Example 6. The base price of ACTIVA-5G is ₹ 42,000. If the GST is chargeable at the rate of 28%. Find : (i) Total GST (ii) CGST (iii) SGST (iv) The total amount the buyer has to pay for it.
Example 7 : The catalogue price of a computer set is ₹ 45000. The shopkeeper gives a discount of 7% on the listed price. He gives a further off-season discount of 4% on the balance. However, GST @ 28% is on computer. Find (i) the amount of GST he has to pay. (ii) the final price he has to pay for the computer set.
Example 8 : Mr Purohit purchased a car of ₹ 5,36,500, at a discount of 10%. Insurance cover premium of the car is 4% of the discounted value. Rate of GST is 28% on car and 18% on the insurance premium. Find (i) Total CGST (ii) Total SGST (iii) Total amount paid by Mr Purohit
Example 9 Mrs. Sarin bought the following articles from a departmental store :
| Item | Quantity | Rate per item (₹) | Rate of GST |
| Shirts | 4 | ₹ 1,200 | 18% |
| Pair of Shoes | 2 | ₹ 950 | 12% |
| Mobile Phone | 1 | ₹ 18,000 | 28% |
| Food Grains | 4 | ₹ 520 | NIL |
Calculate:
(i) Amount of GST
(ii) The total bill paid, including GST
Solution:
| Item | Unit Price (₹) | Quantity | Taxable Amount (₹) | GST Rate | GST Amount (₹) | Total Amount (₹) |
| Shirts | 1,200 | 4 | 4,800 | 18% | 4,800 × 18% = 864 | 4,800 + 864 = 5,664 |
| Pair of Shoes | 950 | 2 | 1,900 | 12% | 1,900 × 12% = 228 | 1,900 + 228 = 2,128 |
| Mobile Phone | 18,000 | 1 | 18,000 | 28% | 18,000 × 28% = 5,040 | 18,000 + 5,040 = 23,040 |
| Food Grains | 520 | 4 | 2,080 | NIL | 0 | 2,080 |
Example 10 : Nishita goes to a shop to buy a coat costing ₹ 944. The rate of CGST is 9%. She tells the shopkeeper to allow a discount on the price of the coat to such an extent that she pays ₹ 944 inclusive of GST. Find the discount on the price of the coat.
Example 11 : A shopkeeper marks up the price of his goods by 10% above the List price and then gives a discount of 5%. GST is @ 12% on the goods. Find the list price of the goods if the consumer pays ₹ 1254 as SGST. Also find the final price consumer has to pay.
Exanple 12 : Akhilesh buys the following electrical items from an electrical shop.
| Item | Quantity | Rate | GST | Discount |
| Fan | 5 | ₹ 1540 each | 18% | 10% |
| Tubes | 1 dozen | ₹ 50 each | 12% | 10% |
| L.E.D Bulbs | 2 dozen | ₹ 180 per dozen | 5% | NIL |
Find
(i) Total taxable amount
(ii) Total discount amount
(iii) Total amount paid including GST.
Example 13 : Mr Sudhir Thapa took health insurance policy for his family and paid ₹1800 as CGST. Find the annual premium of the health policy. Also find the total amount including GST paid by him for this policy, rate of GST being 18%.
Exercise 01
Question 01
Mr. Abdul a manufacturer sells his products worth ₹2,25,000 within the state. He buys goods worth ₹1,20,000 within the state. If the rate of GST is at 12% on the raw materials and 18% on the finished products, find the amount of GST he has to pay.
Answer –
Question 02
A shoe manufacturer purchases goods worth ₹90,000 from the markets within the state. He sells his product in the neighbourhood market for ₹78,000. If the common rate of GST is @ 18%, find the GST payable/ GST credit for the above transaction.
Answer –
Question 03
Mrs Lata has a leather coat manufacturer unit in state A. She buys raw materials worth ₹80,000 from a supplier from state B at a discount of 10%. She sells her product worth ₹2,20,000 outside the state. If the rate of CGST @ 2.5%, find the IGST payable/credit of Mrs Lata.
Answer –
Question 04
Mrs Salim, biscuit manufacturer buys raw goods worth ₹1,40,000 from different markets within the state having GST @ 5%. He sold packet biscuits worth ₹2,10,500 in the markets of the neighbouring state. Rate of GST on packet biscuits is 12%. Find the amount of IGST payable by him.
Answer –
Question 05
A sewing machine manufacturer purchases raw materials worth ₹5,40,000 for his manufacturing unit from outside the state. The rate of IGST is @ 12%. He produced two types of sewing machine, 50 type A whose base price is ₹5000, GST @ 12% and 100 type B whose base price is ₹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 client Y. Find (i)GST payable/credit (ii)input GST (iii) Output GST
Answer –
Question 06
The sales price of a washing machine, inclusive of GST, is ₹28,320. If the SGST is charged at the rate of 9% of the list price, find the list price of the washing machine.
Answer –
Question 07
Radhika buys crockery having marked price ₹4,500. She gets a discount of 12%. If the CGST is @ 6%, find the amount she is required to pay for the crockery. Also find the amount of SGST.
Answer –
Question 08
The list price of a Dell laptop is ₹84,000. The dealer gives a discount of 20% on the listed price. Не also offers 10% additional discount on the balance. However, GST @ 28% is charged on Laptop. Find (i) the taxable amount. (ii) the total amount of GST the customer has to pay. (iii) final price he has to pay to the dealer including GST.
Answer –
Question 09
Mrs Sarita buys goods worth ₹6,500 from Easy day store. She gets a rebate of 10% on ₹5000 as a member and a flat discount of ₹50 on the remaining. If the GST is charged @ 18% find the total amount she has to pay for the goods.
Answer –
Question 10
A retailer marked up the price of his goods by 20% above the list price and offers two successive discounts of 10% and 5% on the marked price. GST is @ 18% on the goods. Find the list price of goods if the consumer pays ₹4617 as CGST. Also find the final price consumer has to pay for the goods.
Answer –
Question 11
Anil went to a shop to buy a bicycle costing ₹10,620. The rate of CGST is 9%. He asks the shopkeeper to reduce the price of the bicycle to such an extent so that he has to pay ₹10,620 inclusive GST. Find the reduction needed in the price of the bicycle.
Answer –
Question 12
The price of a mobile phone is ₹32,000 inclusive of 28% GST on the list price. Vineeta asks for a discount on the list price so that after charging the GST, the final price becomes the list price. Find (i) the amount of discount which Vineeta got from the shopkeeper, (ii) the amount of SGST on the discounted value of the mobile.
Answer –
Question 13
A calculator manufacturer’s manufacturing cost of a calculator is ₹900 and GST is 18%. He manufactured 120 such calculators. He marked up each by 50% and sold to a dealer at a discount of 10%. Find the final price dealer paid for the calculators. Also find the total GST received by the State Government.
Answer –
Question 14
The manufacturer produces television sets at a cost of ₹32,000. He sells it to a distributor at a profit of ₹2,000, distributor sells it to a wholesaler at a profit of ₹2500, and wholesaler sells to a retailer at a profit of ₹3,000. Finally retailer sells to consumer at a profit of ₹3500 and rate of GST is 18%. Find (i) the final amount which consumer pays for the article (ii) total GST amount.
Answer –
| Person | Cost Price | Profit | Selling Price |
| Manufacturer | 32,000 | 2,000 | 34,000 |
| Distributor | 34,000 | 2,500 | 36,500 |
| wholesaler | 36,500 | 3,000 | 39,500 |
| Retailer | 39,500 | 3,500 | 43,000 |
Consumer will get the Television at the Cost Price of ₹43,000
Final Amount (Bill Price) = ₹43,000 + 18% of ₹43,000
= 43,000 + 7,740
Final Amount (Bill Price) = ₹50,740
GST amount = ₹7,740
Question 15
‘A’ manufactures washing machines at a cost of ₹11,000. He sells to ‘B’, and ‘B’ sells to ‘C’, ‘C’ sells it to ‘D’. The GST rate is 28%, and the profit is ₹1500 at each stage of selling chain. Find (i) the total amount of GST; and (ii) the price including GST ‘D’ paid for the washing machine.
Answer –
Question 16
The manufacturer sold a TV to a wholesaler at a profit of ₹1000, whose manufacturing cost is ₹15,000. The wholesaler sold it to a trader at a profit of ₹1000. If the trader sold it to the customer at a profit of ₹1500. Find (i) Total GST collected by the State Government at the rate of 28%. (ii) The amount that the customer paid for the TV.
Answer –
Question 17
Mr T N Naim purchased sportbike for his son at a discount of 15%, having ex-showroom price ₹4,00,500. Insurance cover premium of the bike is 8% of the discounted value. The cost of accessories is ₹20,000. Dealer offered 5% discount on accessories. Rate of GST is 28% on the bike and 18% on the insurance premium and 12% on the accessories. Find (i) Total amount of GST to (the nearest rupee) (ii) Total amount (to nearest rupee) including the insurance premium paid by Mr T N Naim.
Answer –
Question 18
A person bought the following stationary items:
| Item | Quantity | Rate |
| Chelpark Ink | 10 bottles | ₹85 each |
| Pens | 6 Dozens | ₹200 per dozen |
| Erasers | 8 Dozens | ₹50 per dozen |
| Sharpeners | 10 Dozens | ₹40 per dozen |
| Pencils | 12 Dozens | ₹120 per dozen |
If the SGST is @2.5%, find the amount paid by him for his purchase. Also find the amount of GST paid by him.
Answer –
Question 19
Mr. Gupta bought the following articles from the departmental store:
| Items | Qty | Rate per item (₹) | Discount | GST Rate |
| Cosmetics | 2 | 690 | 5% | 18% |
| Tea Set | 1 | 1500 | 10% | 12% |
| Shirts | 4 | 1200 | 10% | 12% |
| Packed Dry fruits | 4 | 800 | 25% | 18% |
| Unpacked food grains | 1 | 560 | 10% | Nil |
Find : (i) Total bill amount. (ii) Total amount of GST
Answer –
Question 20
Mr. Madhukar buys following goods from Big Bazaar :
| Items | Cost | GST Rate | Discount |
| Readymade Garments | ₹4500 | 12% | 10% |
| Microwave | ₹25,600 | 25% | 25% |
| Stationary | ₹3400 | 5% | Nil |
| Grocery | ₹2400 | 5% | Nil |
| Bakery items (unpacked) | ₹1200 | Nil | Nil |
Find (i)Total Bill amount (ii)Total taxable amount (iii) Total Discount Amount (iv) Total GST Amount.
Answer –
Question 21
Mr C S Chand took a health insurance policy of his family. Sum insured for self and spouse is ₹500,000 each, ₹200,000 for his two children. However, insurance company offered 10% discount on the total sum insured, and calculated the premium amount @12% thereafter. If the GST is @18% on health insurance premium, find the total amount including GST he has to pay to the insurance company to buy the policy.
Answer –
Question 22
A courier company at Delhi has 4 types of services for it’s clients. A industrial house has given following orders. Find the amount of the bill :
| Type of Services | A | B | C | D |
| Number of services | 28 | 32 | 16 | 9 |
| Cost of each service (₹) | 80 | 150 | 200 | 400 |
| Discount (%) | Nil | Nil | 5 | 10 |
| GST(%) | 5% | 5% | 12% | 18% |
Answer –
| A | B | C | D | |
| No. of Service | 28 | 32 | 16 | 9 |
| Cost per Service | ₹ 80 | ₹ 150 | ₹ 200 | ₹ 400 |
| Total Cost | ₹ 2,240 | ₹ 4,800 | ₹ 3,200 | ₹ 3,600 |
| Discount (%) | 00 | 00 | 5 | 10 |
| Discount (₹) | 00 | 00 | ₹ 160 | ₹ 360 |
| Final Price | ₹ 2,240 | ₹ 4,800 | ₹ 3040 | ₹ 3,240 |
| GST (%) | 5% | 5% | 12% | 18% |
| GST (₹) | ₹ 112 | ₹ 240 | ₹ 364.8 | ₹ 583.2 |
| Amt. Payable per Service | ₹ 2,352 | ₹ 5,040 | ₹ 3,404.8 | ₹ 3,823.2 |
Total Amount Payable (Billed Amount)
= ₹ (2,352 + 5,040 + 3,404.8 + 3,823.2)
= ₹ 14,620