GST on Profit or Total Sales Value?

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..... GST on Profit or Total Sales Value?
Query (Issue) Started By: - lakhya phukan Dated:- 4-3-2023 Last Reply Date:- 16-3-2023 Goods and Services Tax - GST
Got 7 Replies
GST
Say, I bought an item from a whole seller at 5% GST. Total value was Rs. 105. So my input tax credit is Rs. 5. So if I sell the item for Rs. 190, then do I calculate the GST on 190 - 105 = 85 or on total sales values .....

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..... of Rs. 190? My GST rate is also 5%. Reply By Shilpi Jain: The Reply: You would have to mention GST on Rs. 190 in the invoice. However, while you are paying to the Govt. you end up paying on the margin only since the GST you already paid on your purchase can be set off. That is called input tax credit Reply By lakhya phukan: The Reply: So I have to deduct the input tax credit (which is Rs. 5) f .....

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..... rom the GST on Rs. 190? Reply By KASTURI SETHI: The Reply: NO. You are to pay GST on Rs.190/-. i.e. taxable value. Reply By Shilpi Jain: The Reply: So while filing returns you will actually pay gst on entire 190 but deposit in the cash ledger will be the amount of gst after reducing rs 5 itc. Reply By SIVARAMA KUMAR: The Reply: Assuming Rs.190 is your selling price the Margin would be ( 190- .....

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..... 100) Rs.90 on which the net effect of GST will Operate. Your cost Rs ( 100+ 5) inclusive of ITC and your Selling price ( 190+5%) =199.5. The resultant tax liability will be equal to ( 9.5 - 5)= 4.5 which is 5% on your Margin that is Rs.90 Reply By Nikita Rai: The Reply: GST is a tax on the value addition of goods or services. It is calculated on the selling price of goods or services, which inc .....

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..... ludes the profit margin. The GST payable is calculated by multiplying the taxable value of the supply with the applicable GST rates. Therefore, GST is applicable on the total sales value, which includes the profit margin. Reply By Padmanathan Kollengode: The Reply: You have to collect GST from customer at 5% on Rs.190 i.e. Rs. 9.5. On the other hand, if Rs.190 is inclusive of tax, then tax will .....

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..... be Rs.9.04 (190*5/105) (see Rule 35 of CGST Rules). However, while paying GST to Govt u need to pay only OPT-IPT ie. 9.5 or 9.04 - 5 = 4.5 or 4.04.
Discussion Forum - Knowledge Sharing .....

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