Goods And Services TaX (GST)

Learning Outcomes
• Introduction to GST • Meaning and Understanding of GST
• GST Rate Structure • GST Transactions: Input and Output GST
• Types of GST • Objectives of GST

INTroduction to GST
Tax is the fee charged by the government from the citizens on a product, service or income. The main
purpose of collecting taxes is to use it in doing various development and social works.
There are generally two types of taxes, i.e., direct tax and indirect tax.

Direct Tax
If a tax collected by the central or state government is based on an individual’s income or a company’s
income, it is called the direct tax. For example, income tax, capital gained tax, banking cash transaction tax,
corporate tax, etc. are the direct taxes.

Indirect Tax
If a tax is charged on the price of goods or services by the government, it is called the indirect tax. The
indirect taxes are charged starting from the manufacturing of goods passing through distributors (retailers)
to the final consumers. There are different types of indirect taxes levied on the public.
Recently, an indirect tax called Goods and Services Tax abbreviated as GST is introduced all over India
by merging all indirect taxes levied by central and state government into single one.
Before discussing the salient features of the GST, let us first know some indirect taxes levied earlier.
Sales Tax: Charged on the sale of goods imposed by the union government.
Service Tax: Charged on the services like banking and financial, telephone, advertising, health centres, etc.
Value Added Tax (VAT): Charged on the sales just like sales tax, but it is imposed by the state government.
Custom Duty (Goods): Charged on the imported goods from other countries to India.
Excise Duty: Charged on goods manufacturing within the boundaries of the country.
Entertainment Tax: Charged on the financial transactions related to the entertainment like movie
tickets, theaters, etc.
Property Tax: Imposed on the properties of the property owners.

1
MEANING AND UNDERSTANDING of GST
The full form of GST is Goods and Services Tax. The GST is an indirect tax imposed from 1st July, 2017
and applicable all over India by merging all the indirect taxes levied by the central and state government
into single one.
Indirect Taxes Single Indirect Tax
Sales Tax
VAT
Service Tax
Custom Duty GST
Excise Duty
Entertainment Tax
Property Tax
Thus by the introduction of the GST, all the indirect taxes clubbed into the single tax, that is GST. Now,
all the indirect taxes (involving at each stage of the production cycle — buying raw materials, processing,
manufacturing, warehousing and sale to the final consumer) are submessed to a single tax, i.e., GST.
Look and observe the following diagrammatic representation to compare tax patterns before and
after GST:
Before GST
Buying Raw
Materials 1

VAT

VAT + Sale to Sale to

Manufacturer VAT
Excise duty Wholesaler Retailer
2 3 4
VAT

Final Sale to
5 Consumer

Under GST
Buying Raw
Materials 1

Sale to Sale to
Manufacturer GST GST
Wholesaler Retailer
2 3 4
GST

Final Sale to
5 Consumer

2 Innovative Mathematics-IX
GST RATEs STRUCTURE
The GST slabs are pegged at 0%, 5%, 12%, 18% and 28%. Given below illustrates a sample tax structure
for some common-use items. (Note: The rates of GST are subject to change from time to time as decided by
the government.)

GST @ 0%

• Milk • Jaggery • Salt • Lassi • Kajal

• Fresh Vegetables • Prasad • Tender Coconut Water
• Unbranded and not packed in container: Honey and Paneer

GST @ 5%
• PDS Kerosene • Coal • Tea • Spectacles
• Domestic LPG • Cashew Nuts • Raisin
• Packed Paneer • Edible Vegetable Oil
• Agarbatti • Footwear (< ` 500)
• Milk Food for Babies • Apparels (< ` 1000)
• Coir Mats, Matting and Floor Covering

GST @ 12%

• Butter • Ghee • Almonds • Mobiles

• Umbrella • Packed Coconut Water
• Preparations of Vegetables, Fruits, Nuts or other parts of
plants including Pickles Murabba, Chutney, Jam, Jelly

GST @ 18%

• Hair oil • Toothpaste • Computers

• Pasta • Ice-cream • Printers
• Staplers • CCTV • Aluminum Foils
• Corn Flakes
• Computer Monitor (< 17 inches)

GST @ 28%
• Small Cars
• High-end Motocycles
• Consumer durables such as AC and Fridge
• Luxury and sin items like BMWs
• Cigarettes and Aerated Drinks

Goods and Services Tax (GST) 3

GST TRANSACTIONS: INPUT AND OUTPUT GST
The process of payment and collection of GST on the purchase and sale of goods respectively is called
the GST transactions.
GST is paid on the purchase of goods and services and it is collected from the customers on sale of
goods and services. The GST paid (termed as Input GST) is set off against the GST collected (termed as
Output GST.)
As such, the GST paid on purchase (Input GST) is not a Cost for the purchaser but is an Asset, since it
can be set off against the GST collected on sales (Output GST). Similarly, the GST collected on sales (Output
GST) is not an income of the seller but is a liability.

Note
In certain cases, the GST paid cannot be set off against the GST collected. In such cases, the GST paid on
purchase of goods and services is a Cost for the purchaser. Following are the cases, where the GST paid
on purchase of goods and services cannot be set off against the GST collected.
 Food and Beverage Expenses (Restaurant Bills)
 Payment for Health Insurance
 Payment of Membership Fee of a Club, Health and Fitness Centre
 Repairs and Maintenance of Building
 Purchase of Vehicles
 Free Gift to Staff
 Payment for goods and services for Personal Use.

To Understand Input Tax Credit (ITC) while Calculating

the Tax (GST) to be Paid
To understand what is Input Tax Credit (ITC), consider the following illustration about the transaction
of the input and output taxes of a manufacturer on the purchase and sale of goods respectively:
Input (A, B and C) Output

Input Tax (Input GST) paid on the

purchase of A is ` 100.

Input Tax (Input GST) paid on

Output Tax (Output GST) = ` 450
purchase of B is ` 120.

Input Tax (Input GST) paid on

purchase of C is ` 80.

Thus, during the whole transaction, the net GST to be paid by the manufacturer
= Output GST – Total Input GST = ` 450 – (` 100 + ` 120 + ` 80)
= ` 450 – ` 300 = ` 150
Here, the input GST of ` 300 is taken as the Input Tax Credit (ITC) and it is subtracted from the output
GST to find the net GST (i.e., ` 150) to be paid by the manufacturer during the whole transaction.

4 Innovative Mathematics-IX
 Note
GST NOT LEVIED
GST is not levied in the following cases:
 Amount introduced into the business by proprietor as Capital.
 Amount withdrawn by the proprietor for Personal use.
 Amount deposited into Bank.
 Amount withdrawn from Bank.
 Amount paid to Creditors and discount received.
 Amount received from Debtors and discount allowed.
 Bad debts written off and bad debts recovered.
 Payment of Wages and Salary
 Payment of Electricity and Water Bills
 Payment of Travelling Expenses

TYpES OF GST
As per the rule, there are three types of taxes applicable under GST, i.e., CGST, SGST (or UTGST)
and IGST.
• Central GST (CGST): It is collected by the Central Government on an intra-state sale. For example,
a dealer of West Bengal sells goods to a dealer (or consumer) in West Bengal worth ` 5,00,000. Let the
rate of GST on the goods be 12%. Then, this rate will comprise of CGST at 6% and SGST at 6%. The
seller has to collect 12% of ` 5,00,000 i.e. ` 60,000, out of which ` 30,000 will be CGST which will go
to the Central Government and ` 30,000 will be SGST which will go to the West Bengal Government.
• State GST (SGST) or Union Territory GST (UTGST): Both these taxes are levied on intra-state sales,
i.e, within the same state or within the same union territory. For example, a dealer of Maharashtra
sells goods to a dealer or consumer in Maharashtra (or a dealer of the union territory Chandigarh
sells goods to a dealer or consumer in Chandigarh) worth ` 5,00,000. Let the rate of GST on the goods
be 12%. Then, this rate will comprise of CGST at 6% and SGST (or UTGST) at 6%. The seller has to
collect 12% of ` 5,00,000 i.e. ` 60,000, out of which ` 30,000 will be CGST which will go to the Central
Government and ` 30,000 will be SGST which will go to the Maharashtra Government (or to the
government of the union territory Chandigarh).
• Integrated GST (IGST): It is levied on inter-state sales —Sales of goods and services outside the state
(i.e., from one state to another state). The IGST is also levied on import of goods and services into
India and export of goods and services from India. For example, a dealer of Uttar Pradesh sells goods
to a dealer in Tamil Nadu worth ` 5,00,000. Let the rate of GST be 18%. Then, the seller has to collect
18% of ` 5,00,000 i.e. ` 90,000 as the IGST, which entirely will go to the Central Government only.

Note
If the rate of GST is 12%, then it will comprise of 6% CGST + 6% SGST for an intra-state sale or 12%
IGST for an inter-state sale.
Similarly, if the GST rate is 18%, it will comprise of 9% CGST + 9% SGST for an intra-state or 18% IGST
for an inter-state sale, so on.

Goods and Services Tax (GST) 5

Difference between Different Types of GST
Given below is a tabular representation showing the difference between different types of GST:

Types of CGST SGST IGST UGST/UTGST

Differences
Applicable Intra-state Intra-state Inter-state (between two states Within one
transactions (Within (Within or one state and one UT) and Union
(Goods & one state) one state) imports Territory (UT)
Services)
Collected by Central Govt. State Govt. Central Govt. UT Govt.
Benefitting Central Govt. State Govt. Central Govt. & State Govt. UT Govt.
Authority
Tax Credit Use CGST SGST IGST UTGST
Priority IGST IGST CGST IGST
SGST
Similar to every other type of tax, the GST also has provisions to give the benefits of tax credits. The
credits will be applicable to the subsequent taxes on the same product or service. All three IGST, SGST and
CGST credits are usable against each other. Any IGST credit will be first used to deal with IGST tax, then
CGST, and then to set off SGST.

OBJECTIVES (OR MERITS) OF GST

There are so many objectives of GST. If it is implemented successfully and effectively, it would bring
growth and happiness for people. Some main objectives are stated as follows:
• Decrease in the Cost of Goods: The cost of goods will decrease, as the cascading effect of taxes
(i.e., tax on tax) is eliminated in the GST regime. In the pre-GST regime, there were so many indirect taxes
levied by both centre and state. For example, the Centre charged excise duty on goods manufacturing
and States charged VAT on the same goods. This lead to a tax on tax also called the cascading effect of
taxes. The GST avoids this cascading effect, since the tax is calculated only on the value added at each
stage of transfer of ownership.
• Competitiveness of Goods: The exclusion of cascading effects till the level of final consumers will
significantly improve the competitiveness of original goods and services in market, which leads to
beneficial impact to the GDP growth of the country.
• Ease of Doing Business: GST harmonizes tax administration between the Centre and the States,
which will improve the ease of doing business.
• Reduce Tax Evasion: The electronic means of return filing and assessment will reduce tax evasion and
compliance cost.
• Transparency: The tax system becomes more transparent, regular and predictable.

6 Innovative Mathematics-IX
Example 1: A dealer in Karnataka sells goods to a consumer in Karnataka as per the following table:
Selling price GST rate
` 80,000 12%

Find the shares of GST for both state and central governments.
Solution: As it is an intra-state sales dealing, the type of GST applicable is for both CGST and SGST.
So, CGST = SGST = 6% of ` 80,000
= 6 × ` 80,000 = 4,800.
100
Thus, the shares of GST are as following,
Selling price CGST SGST rate
` 80,000 ` 4,800 ` 4,800

Example 2: A medicine wholesaler in Haryana sells a medicine to a dealer in Uttar Pradesh listed at
` 2,500. If the rate of GST is 18%, calculate the cost of the medicine for the dealer. Who will
get this GST, Haryana or Uttar Pradesh or the Central Government?
Solution: Since the goods (medicine) is sold from one state (Haryana) to another state (Uttar Pradesh),
the Central Government of India will get the GST called IGST.
Now, we have:
IGST = 18% of ` 2,500 = 18 × ` 2,500 = ` 18 × 25 = ` 450
100
So, the cost of the medicine for the dealer including IGST = ` 2,500 + ` 450 = ` 2,950.
Example 3: The business details of ‘Mukherjee Traders’ in West Bengal are as follows:
Sales amount within state = ` 6,00,000
Purchase amount within state = ` 7,00,000
Given GST rate: CGST 9%, SGST 9%. Calculate to determine whether GST is to be paid by
the ‘Mukherjee Traders’.

Solution: 9% of ` 6,00,000 = 9 × 600000 = ` 54,000

100
9% of ` 7,00,000 = 9 × 700000 = ` 63,000
100
To determine whether the GST is payable, we prepare the following table.
Particulars Amount CGST SGST Total GST
Output GST ` 6,00,000 ` 54,000 ` 54,000 ` 1,08,000
Input GST ` 7,00,000 ` 63,000 ` 63,000 ` 1,26,000
GST payable – 0 0 0
GST credit – ` 9,000 ` 9,000 ` 18,000

Goods and Services Tax (GST) 7

 From the table, it is clear that the GST is not payable for the ‘Mukherjee Traders’, rather there
is a total GST credit of ` 18,000 (CGST = ` 9,000 and SGST = ` 9,000). Since the total input
GST ` 1,26,000 is more than the total output GST ` 1,08,000, the GST is not payable, rather it
becomes credit.

Example 4: A dealer in Punjab sold goods listed at ` 80,000 to a retailer in Delhi at a profit of 25% on
cost, less 10% discount. If the rate of both CGST and SGST is 6% each, find the cost price
of the goods for the retailer.
Solution: List price of the goods = ` 80,000
On adding a profit of 25%, the cost becomes ` 80,000 + 25 × ` 80,000
100
= ` 80,000 + ` 20,000 = ` 1,00,000
Then on offering a discount of 10%, the cost becomes
` 1,00,000 – 10% of ` 1,00,000 = ` 1,00,000 – ` 10,000 = ` 90,000
Since it is an inter-state sale for the dealer of Punjab, we have
IGST (i.e., Output IGST) = 12% of ` 90,000 [As IGST = CGST + SGST = 6% + 6% = 12%]

= 12 × ` 90,000 = ` 10,800 Note

100
This means that the dealer of Punjab would sale the Here, the tax (i.e., Output IGST) of
goods to the retailer of Delhi on adding the IGST of ` 10,800 would be paid by the retailer
` 10,800 to ` 90,000.
of Delhi while buying goods, which
in turn is received by the central
Hence, the cost price of the goods for the retailer of government via the dealer of Punjab.
Delhi = ` 90,000 + ` 10,800 = ` 1,00,800

Example 5: An intra-state transaction is shown below, where a dealer purchases water bottles. If the
rate of GST is 5%, find the amount of bill to be paid by the dealer.
Marked price (MRP) of each
Quantity(No. of items) Discount%
bottle (in `)
(i) 18 150 10
(ii) 24 240 20
(iii) 30 100 30
(iv) 12 120 20

Solution: Given GST is equal to 5%.

(i) For 18 items, the selling price, CGST and SGST are calculated as follows:
MRP of each item is ` 150 and the discount is 10%.
Total MRP = 18 × 150 = ` 2700
Discount = 10% of 2,700 = 10 × 2700 = ` 270
100
Selling price = MRP – Discount = 2700 – 270 = ` 2,430
The CGST is 2.5% of the selling price since the GST is equal to 5%.
CGST = SGST = 2.5% of 2,430 = 2.5 × 2430 = ` 60.75
100

8 Innovative Mathematics-IX
 (ii) For 24 items, the selling price, CGST and SGST are calculated as follows:
MRP of each item is ` 240 and the discount is 20%.
Total MRP = 24 × 240 = ` 5760
Discount = 20% of 5,760 = 20 × 5760 = ` 1,152
100
Selling price = MRP – Discount = 5760 – 1152 = ` 4,608
CGST = SGST = 2.5% of 4,608 = 2.5 × ` 4608 = ` 115.2
100
(iii) For 30 items, the selling price, CGST and SGST are calculated as follows:
MRP of each item is ` 100 and the discount is 30%.
Total MRP = 30 × 100 = ` 3000
Discount = 30% of 3000 = 30 × 3000 = ` 900
100
Selling price = MRP – Discount = 3000 – 900 = ` 2100
CGST = SGST = 2.5% of 2100 = 2.5 × 2100 = ` 52.5
100
(iv) For 12 items, the selling price, CGST and SGST are calculated as follows:
MRP of each item is ` 120 and the discount is 20%.
Total MRP = 12 × 120 = ` 1,440
Discount = 20% of 1440 = 20 × ` 1,440 = ` 288
100
Selling price = MRP – Discount = 1440 – 288 = ` 1152
CGST = SGST = 2.5% of 1,152 = 2.5 × 1152 = ` 28.8
100
Now, we have the following:

Quantities MRP Total MRP Discount % Discount Selling CGST SCGST

18 150 2700 10 270 2430 60.75 60.75
24 240 5760 20 1152 4608 115.2 115.2
30 100 3000 30 900 2100 52.5 52.5
12 120 1440 20 288 1150 28.8 28.8
Total 10290 257.25 257.25

 Amount of bill to be paid by the dealer = SP + CGST + SGST + IGST

= 10,290 + 257.25 + 257.25 + 0 = ` 10,804.5.
Example 6: The transactions of a dealer in Rajasthan showing the purchase and sale of some machinery
parts within the same state are given in the following table.
Cost price Discount GST Selling price Discount GST
` 4,50,000 20% 18% ` 6,00,000 30% 18%
(i) Determine whether there is a tax payable or tax credited/creditable during the
wholle transaction.
(ii) Find the overall profit % or loss %.

Goods and Services Tax (GST) 9

Solution: As it is an intra-state dealing, the type of GST applicable would be both CGST and SGST.
The net cp = ` 4,50,000 – 20% of ` 4,50,000
= ` 4,50,000 – 20 × ` 4,50,000 = ` 4,50,000 – ` 90,000
100
= ` 3,60,000
The applicable taxes are given by:
CGST = SGST = 9% × ` 3,60,000 = ` 32,400
Total input GST = Input CGST + Input SGST = ` 32,400 + ` 32,400
= ` 64,800
Hence, the total cp = ` 3,60,000 + ` 64,800 = ` 4,24,800.
Now we have:
Net SP = ` 6,00,000 – 30% × ` 6,00,000 = ` 6,00,000 – ` 1,80,000
= ` 4,20,000
The applicable taxes as given by:
CGST = SGST = 9% × ` 4,20,000 = ` 37,800
Total Output GST = Output cgst + Output Sgst = ` 37,800 + ` 37,800
= ` 75,600
Hence, the total SP = ` 4,20,000 + ` 75,600 = ` 4,95,600.
Hence whole transactions are shown in the following table.
Cost price (CP) ` 4,50,000
Discount ` 90,000
Net CP ` 3,60,000
Total input GST (CGST + SGST) ` 64,800
Total CP ` 4,24,800
Selling price (SP) ` 6,00,000
Discount ` 1,80,000
Net SP ` 4,20,000
Total output GST (CGST + SGST) ` 75,000
Total SP ` 4,95,600
Tax payable (Tax to be paid) ` 75,600 – ` 64,800 = ` 10,800
Profit % 4,95,600 – 4,24,800 × 100%
4,24,800
70,800 × 100% = 16.67%.
4,24,800
(i) Since total output GST > total input GST, we have:
Tax payable (tax to be paid) = ` 10,800.
(ii) Since total SP > total CP, we have:
Profit % = 16.67%.

10 Innovative Mathematics-IX
 E x e r c i se 1
1. A shopkeeper in Bihar buys some garment items from a dealer in the same state as follows:

Cost price of garment items (in `) Rate of SGST Rate of CGST

2,00,000 5% 5%

(i) Find the total GST to be paid by the shopkeeper.

(ii) What is the total cost price of the garment items?

2. A medicine wholesaler in Madhya Pradesh sells a medicine to a dealer in Uttar Pradesh as follows:

Price of the medicine (in `) Rate of GST

30,000 18%
(i) Who will get this GST, Madhya Pradesh or Uttar Pradesh or the Central government, how much?
(ii) Find the total price of the medicine including GST.

3. A dealer sells some hardware items to a retailer in the same state as follows:

Price of the hardware items (in `) Rate of GST

8,00,000 18%

(i) Find all the applicable taxes collected.

(ii) What is the total price of the hardware items including GST?

4. Rajender buys a coloured printing machine from a dealer with marked price (MP) and taxes as listed below:

MP of the printing machine (in `) Rate of SGST Rate of CGST

40,00,000 9% 9%

Calculate:
(i) Total GST paid.
(ii) Total bill amount including GST.

5. The business details of ‘Shine & Co’ in Gujarat are as follows:

Sales amount within state = ` 8,50,000
Purchase amount within state = ` 9,00,000
Given GST rate: CGST 9%, SGST 9%.
Calculate to determine whether GST is to be paid by ‘Shine & Co’. If yes, find the amount of GST payable.

6. Given below shows the inter-state business transactions of ‘Kathuria & Sons’—
Sales amount of goods = ` 12,50,000
Purchase amount of goods = ` 10,00,000
Assuming CGST @ 6% and SGST @ 6%, calculate to determine whether GST is to be paid by ‘Kathuria & Sons’. If
yes, find the payable tax.

Goods and Services Tax (GST) 11

 7. Iqbal bought some glass plates as follows:

Quantity (No. of glass plates) Marked price (MP) of each plate (in `) Discount%
(i) 24 240 20
(ii) 30 100 30

If the rate of GST is 5%, find the amount of bill paid by Iqbal.

8. Monika bought the following household needs from a departmental store.

[Link]. Items Cost amount (in `) Rate of GST Discount%

1. Groceries 2700 5% 10
2. Cosmetics 1440 5% 20

Find the:
(i) Total GST paid.
(ii) Total bill amount paid by Monika including GST.

9. A furniture store sells three varieties of dining tables to customers with list price (LP) and discount as follows:

Variety A B C
LP of the dining table 7200 6250 4800
Discount % 20 40 30
Rate of GST 18% 18% 18%

If a customer buys all these three dining tables, find the bill amount is to be paid to the furniture store.

10. A retailer buys three types of calculators from a dealer as follows:

Type No. of calculators Marked price of each calculator (in `) Discount

I 47 600 10%
II 35 420 10%
III 20 350 20%

If the rate of GST is 18%, calculate the billing amount to be paid by the retailer.

11. A dealer in Kolkata sold some stationery items as follows to a retailer in Bhubaneswar with discount given on the
selected items.

Items No. of pieces Rate per piece (in rupees) Discount

1. Water bottle 10 180
2. Geometry Box 20 260 20%
3. Lunch Box 30 310
4. Jug 20 175 30%

If the rate of CGST was 9%, do as directed:

(i) What type of GST was applicable in this sales dealing, how much?
(ii) Find the total amount of bill paid by the retailer.

12 Innovative Mathematics-IX
12. A manufacturer in Kerala made a deal in sales on a heavy electric motor with a wholesaler in the same state as
follows:

Marked price (MP) of the motor (in `) Profit on MP Discount

2,40,000 25% 12%

If the rate of each for CGST and SGST was 6%, calculate the:
(i) Total GST paid.
(ii) Total bill amount including GST paid by the wholesaler.

13. A dealer in Delhi finalised a deal in sales on a laptop with a retailer in Uttar Pradesh as follows:

List price (LP) of the laptop (in `) Profit on LP Discount

90,000 30% 10%

Given, the rate of CGST = 9%, do as directed:

(i) What type of GST is levied here in this deal, how much?
(ii) Calculate the bill amount including GST paid by the retailer.

14. Bhanupriya, a wholesaler in Chennai supplied four types of ball-point pen to Ganeshan (a dealer in the same city)
with applicable discounts and taxes as follows:

Type Number of pieces Rate per piece (in `) Discount Rate of GST
A 150 28 20 28
B 360 18 10 12
C 480 12 20 18
D 120 12 5 12

Calculate the total:

(i) GST paid.
(ii) Bill amount paid by Ganeshan for this deal in sales.

15. An intra-state transaction given below shows the purchase and sale of some cars by Vinit (a dealer in Mumbai).

CP (in `) Discount Rate of SGST SP (in `) Discount Rate of SGST

4,50,00,000 15% 14% 6,00,00,000 25% 14%
Find the:
(i) all applicable GST paid.
(ii) SP (selling price) of the cars for the dealer Vinit.

16. ‘Gajendra Book Store’ in Bhubaneswar bought some books from a retailer in Kolkata and then sold them to ‘Khan
Brothers’ in Bhubaneswar as shown below.

CP (in `) Discount Rate of CGST SP (in `) Discount Rate of GST

3,00,000 20% 6% 4,25,000 20% 12%
(i) What types of GST were levied, how much?
(ii) Find the CP (cost price) of the books for ‘Khan Brothers’.

Goods and Services Tax (GST) 13

 miscellaneous exercise
(A) Multiple Choice Questions
Choose the correct option.
1. Which of the following taxes are replaced by the GST?
(a) Service tax (b) Central excise tax (c) Entertainment tax (d) All the above taxes
2. What are the proposed benefits of GST?
(a) Overall reduction in prices for consumers
(b) Reduction in multiplicity of taxes, cascading and double taxation
(c) Decrease in ‘black’ transactions. (d) All the above
3. On which of the following payments the GST is not levied?
(a) Purchasing computer set (b) Food bill in hotel (c) Electricity bill (d) Selling electric generator

(B) Assertion and Reason: Type I Competency-based Learning

Direction: Read two statements— Assertion (A) and Reason (R) in a question and choose the correct option out of the
following options.
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true.
1. A: If SGST is applicable on ` 1800 at 9%, then GST is ` 3600.
R: The GST is applicable while selling an article.
2. A: A manufacturer pays an extra amount of ` 700 while buying some row materials for ` 100000.
R: The manufacture pays the extra amount as GST at 5%.
3. A: If the cost of a T. V. is ` 17000, then the CGST paid at 7.5 % is ` 1275.
R: The rate of GST is 15%.

(C) Assertion and Reason: Type II Competency-based Learning

Direction: Read two statements— Assertion (A) and Reason (R) in a question and choose the correct option out of the
following options.
(a) Both A and R are true. (b) Both A and R are false.
(c) A is true, but R is false. (d) A is false, but R is true.
1. A: A shopkeeper buys a water purifier machine from a dealer for ` 10000 and pays GST at 28%. The shopkeeper
has paid ` 2800 as GST and ` 1400 as SGST.
R: For an intra-state transaction, GST = 2 × SGST.
2. A: The net GST to be paid by a dealer = Total Input GST – Total Output GST
R: When output GST is more than Input GST, no GST is to be paid.
3. A: The marked price of a calculator is ` 800 and 8% discount is offered on it. If rate of GST is 12%, the amount of
GST payable while buying it is ` 96.
R: GST is single indirect tax levied by the Central and State Government.

14 Innovative Mathematics-IX
(d) Higher Order Thinking Skills Competency-based Learning

1. The marked price of a bed is ` 25000. The shopkeeper gives a discount of 8% on the marked price, then gives a
further discount of 4% on the balance. If the GST @ 28% is applicable, find the amount of SGST that a buyer has to
pay and final price to be paid for the bed. (The whole transaction is intra-state.)
2. A shopkeeper marks up the price of his goods by 10% above the list price and offers two successive discounts of
10% and 10% on the marked price. The GST applicable is @ 18%. Find the list price of the goods, if the consumer
pays ` 8019 as GST. Also, find the total price that the consumer pays for the goods.

(E) Case Study Experiential Learning

Direction: Read the paragraph based on a shopping experience by a person and answer the questions that follow.
Mr. Dutta goes to a departmental store and first buys some household items as listed in the following table. Then, he
buys some more items from there.

Item Quantity Cost of per item (`) Discount GST

Tea Bags 2 packets 180 each 5% 5%

Hand wash 2 bottles 130 each 0 12%

Shampoo 1 850 20% 12%

Unpacked food 1 760 10% 0

Butter 2 80 0 12%

(i) The total bill to be paid by Mr. Dutta is

(a) ` 2275.10 (b) ` 2250.10 (c) ` 3725.10 (d) ` 2225.10
(ii) He wants to buy 2 shirts each marked with ` 1200, but shopkeeper offers 25% discount. If the GST is 12%, how
much does he pay for buying shirts?
(a) ` 2116 (b) ` 2412 (c) ` 2016 (d) ` 2600.10
(iii) He then buys a mobile phone for his daughter. Using an offer of rebate for ` 220 through a shopping card, he pays
` 34000 including of GST @18%. The list price of the mobile is
(a) ` 34000 (b) ` 33780 (c) ` 28000 (d) ` 29000
(iv) Mr Dutta then eventually goes to a restaurant there giving flat ` 50 discount on each item. He orders 1 cheese-
onion pizza which is listed at ` 450. If the rate of SGST is 2.5% and Mr Dutta pays 1 note of ` 200, how much
balance amount he has to pay by his debit/credit card?
(a) ` 175 (b) ` 220 (c) ` 270 (d) ` 225.50

Goods and Services Tax (GST) 15

 SUMMARY: Chapter at a Glance
▶ The GST (Goods and Services Tax) is an indirect tax imposed in whole India from 1st July, 2017 by merging all the
indirect taxes levied by the Central and State government into single one.

▶ The GST rates are 0%, 5%, 12%, 18% and 28%, which are imposed on the respective items categorized by the govt.

▶ The process of payment and collection of GST on the purchase and sale of goods respectively is called the GST
transactions.

▶ The GST paid in purchasing goods is called the input GST and that collected in selling goods is called the output GST.

▶ As per the rule, there are three types of taxes applicable under GST — CGST, SGST and IGST, where CGST and
IGST are collected by the Central Govt. and SGST is collected by the State Govt.

▶ Full Forms: CGST Central GST, SGST State GST, IGST Integrated GST

▶ During an intra-state sale or purchase, (CGST + SGST) is applicable.

▶ During an inter-state sale or purchase, the IGST is applicable only.

answers
EXERCISE 1 15. (i) Input CGST = Input SGST = 5355000,
Output CGST = Output SGST = 6300000
1. (i) 20,000 (ii) 2,20,000
(ii) 57600000
2. (i) Central Govt., IGST = 5400
16. (i) Input IGST = 28800,
(ii) 35400 Output CGST = Output SGST = 20400
3. (i) CGST = 72000, SGST = 72000 (ii) 380800
(ii) 944000
M iscellaneous E xercise
4. (i) 720000 (ii) 4720000
(A) Multiple Choice Questions
5. GST is not payable, as output GST < input GST
1. (d) 2. (d) 3. (c)
6. GST is payable (i.e., IGST = 30000),
(B) Assertion and Reason: Type I
as output IGST > input IGST.
1. (b) 2. (c) 3. (a)
7. 7043.40
(C) Assertion and Reason: Type II
8. (i) 179.10 (ii) 3759.10
1. (a) 2. (b) 3. (d)
9. 15186.60
(D) Higher Order Thinking Skills
10. 52167.80
1. SGST = ` 3091.20, Final price = ` 28262.40
11. (i) IGST: 3187.80 (ii) 20,897.80
2. ` 50000, ` 52569
12. (i) 55,680 (ii) 2,95,680
(E) Case Study
13. (i) IGST: 34,254 (ii) 1,24,254 (i) (a) (ii) (c) (iii) (d) (iv) (b)
14. (i) 2634.24 (ii) 17,802.24

16 Innovative Mathematics-IX