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Q1 Goods Purchased from A LTD

PARTICULARS QTY RATE AMT
PLASTIC (In Kg) 200 5 1000
CGST 3%     30
SGST 2%     20
TOTAL     1050

Suppose Company Wants 200 Kg to Sell it to B LTD at Rs 7 per kg

Make Sales Bill and Tax Computation Assuming he is a Normal Dealer

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Sales Bill

PARTICULARS QTY RATE AMT
PLASTIC (In Kg) 200 7 1400
CGST 3%     42
SGST 2%     28
TOTAL     1470

Tax Payable Under Normal Scheme

PARTICULARS AMT CGST SGST TOTAL
OUTPUT GST 1400 42 28 70
LESS INPUT GST 1000 30 20 50
GST PAYABLE   12 8 20

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He is a Composition Dealer and Tax Rate is 1%

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Sales Bill

PARTICULARS QTY RATE AMT
PLASTIC (In Kg) 200 7 1400
TOTAL     1400

Tax Payable Under Composition Schem

PARTICULARS AMT RATE GST
OUTPUT GST 1400 1% 14
LESS INPUT GST     N/A
GST PAYABLE     14

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In Which Option less GST is payable

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Type of Dealer GST Payable
Normal Dealer 20
Composition Dealer 12

Less tax is payable under Compositon Scheme

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In Which Option Company earns more Profit

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PARTICULARS Sales  Amt Purchase Amt Profit
Normal Dealer 1400 1000 400
Composition Dealer 1388 1050 338

Company earns More Profit in Normal Scheme

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Which Option Will buyer prefer if buyer is not Registered in GST?

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In this Case,total amount including taxes is called Purchase Price

PARTICULARS Purchase Price
Normal Dealer 1470
Composition Dealer 1400

Purchase from Composition Dealer is less expensive

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Which Option Will buyer prefer if buyer is Registered in GST?

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In this Case,Purchase Price excluding taxes is Purchase Price

PARTICULARS Purchase Price
Normal Dealer 1400
Composition Dealer 1400

Hence,it makes no difference to Buyer

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Q 2 Goods Purchased from A LTD

PARTICULARS QTY RATE AMT
PLASTIC (In Kg) 200 5 1000
CGST 3%     30
SGST 2%     20
TOTAL     1050

Suppose Company Wants 200 Kg to Sell it to B LTD at Rs 300 Profit

Make Sales Bill and Tax Computation Assuming he is a Normal Dealer

-a-

Sales Bill

PARTICULARS QTY RATE AMT
PLASTIC (In Kg) 200 6.5 1300
CGST 3%     39
SGST 2%     26
TOTAL     1365

Tax Payable Under Normal Scheme

PARTICULARS AMT CGST SGST TOTAL
OUTPUT GST 1300 39 26 65
LESS INPUT GST 1000 30 20 50
GST PAYABLE   9 6 15

-ea-

He is a Composition Dealer and Tax Rate is 1%

 

  Particular Amount
Actual Purchase Price 1050.00
Profit Required 300.00
Price Exlusing GST 1350.00
GST Amt (1/99) 13.64
Total Sales Price 1363.64

-a-

Sales Bill

PARTICULARS QTY RATE AMT
PLASTIC (In Kg) 200 6.818182 1363.64
TOTAL     1363.636

Tax Payable Under Composition Scheme

PARTICULARS AMT RATE GST
OUTPUT GST 1363.64 1% 13.64
LESS INPUT GST     N/A
GST PAYABLE     13.64

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In Which Option less GST is payable

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Type of Dealer GST Payable
Normal Dealer 15
Composition Dealer 13.64

Less tax is payable under Compositon Scheme

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In Which Option Company earns more Profit

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PARTICULARS Sales  Amt Purchase Amt Profit
Normal Dealer 1300 1000 300
Composition Dealer 1350 1050 300

Company earns Equal Profit in Both Option

-ea-

Which Option Will buyer prefer if buyer is not Registered in GST?

-a-

In this Case,total amount including taxes is called Purchase Price

PARTICULARS Purchase Price
Normal Dealer 1365
Composition Dealer 1363.636

Purchase from Composition Dealer is less expensive

-ea-

Which Option Will buyer prefer if buyer is Registered in GST?

-a-

In this Case,Purchase Price excluding taxes is Purchase Price

PARTICULARS Purchase Price
Normal Dealer 1300
Composition Dealer 1363.636

Hence,it Is cheaper to buyer from Normal Dealer under Composition Scheme.

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Q 3 Goods Purchased from A LTD

PARTICULARS QTY RATE AMT
PLASTIC (In Kg) 200 5 1000
CGST 3%     30
SGST 2%     20
TOTAL     1050

Suppose Company Wants 50 Kg to Sell it to B LTD at Rs 100 Profit

Make Sales Bill and Tax Computation Assuming he is a Normal Dealer

-a-

Sales Bill

PARTICULARS QTY RATE AMT
PLASTIC (In Kg) 50 7 350
CGST 3%     10.5
SGST 2%     7
TOTAL     367.5

Tax Payable Under Normal Scheme

PARTICULARS AMT CGST SGST TOTAL
OUTPUT GST 350 10.5 7 17.5
LESS INPUT GST 1000 30 20 50
GST PAYABLE       -32.5
GST CREDIT   19.5 13  

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He is a Composition Dealer and Tax Rate is 1%

Particular Amount
Actual Purchase Price 262.50
Profit Required 100.00
Price Exlusing GST 362.50
GST Amt (1/99) 3.66
Total Sales Price 366.16

-a-

Sales Bill

PARTICULARS QTY RATE AMT
PLASTIC (In Kg) 200 1.830808 366.16
TOTAL     366.1616

Tax Payable Under Composition Scheme

PARTICULARS AMT RATE GST
OUTPUT GST 366.16 1% 3.66
LESS INPUT GST     N/A
GST PAYABLE     3.66

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In Which Option less GST is payable

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Type of Dealer GST Payable
Normal Dealer -32.5
Composition Dealer 3.66

Less tax is payable under Compositon Scheme

-ea-

In Which Option Company earns more Profit

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PARTICULARS Sales  Amt Purchase Amt Profit
Normal Dealer 350 250 100
Composition Dealer 362.5 262.5 100

Company earns Equal Profit in Both Option

-ea-

Which Option Will buyer prefer if buyer is not Registered in GST?

-a-

In this Case,total amount including taxes is called Purchase Price

PARTICULARS Purchase Price
Normal Dealer 367.5
Composition Dealer 366.1616

Purchase from Composition Dealer is less expensive

-ea-

Which Option Will buyer prefer if buyer is Registered in GST?

-a-

In this Case,Purchase Price excluding taxes is Purchase Price

PARTICULARS Purchase Price
Normal Dealer 350
Composition Dealer 366.1616

Hence,it Is cheaper to buyer under Composition Scheme

-ea-

  1. GST - Goods and Services Tax, India
  2. GST Computation & Accounting
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CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 7 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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