State how the GST rates will be applicable if CGST is 9%, SGST is 9% and IGST 18% in each of the following situations: Sunita sell goods to Ravindra in Rajasthan worth ₹ 65,000.
In this situation, Sunita (Gujarat) is selling goods to Ravindra (Rajasthan), which is an inter-state transaction.
Since the sale takes place between two different states (Gujarat and Rajasthan), IGST (Integrated Goods and Services Tax) will be applicable on this transaction.
Calculation of GST:
- Value of Goods: ₹ 65,000
- IGST Rate: 18%
- IGST Amount: ₹ 65,% = ₹ 11,700
Therefore, Sunita will charge IGST of ₹ 11,700 on this sale, which will go to the Central Government.
Explanation
The textbook context clearly states that 'IGST is charged on transfer of goods and services from one state to another.' It also provides an example: 'if the goods are transferred from Madhya Pradesh to Rajasthan then this transaction will attract IGST.' In this question, Sunita is in Gujarat and Ravindra is in Rajasthan, making it an inter-state transaction. Hence, IGST at 18% applies instead of CGST + SGST (which would apply for intra-state transactions within the same state).
Solution Steps
Step 1: Identify the location of seller (Sunita in Gujarat) and buyer (Ravindra in Rajasthan)
Step 2: Determine the nature of transaction - Inter-state (between two different states)
Step 3: Apply IGST rate of 18% for inter-state transactions
Step 4: Calculate IGST = ₹ 65,% = ₹ 11,700