Question

The rate of GST on the stainless steel utensil is $18\% $, then the rate of State GST is:
A. $18\% $
B. $9\% $
C. $36\% $
D. $0.9\% $

Answer 1

Hint:The total GST actually consists of the central GST and the state GST. The central government and the state government equally divide this GST. This means that each rate is half of this$18\% $. This information can be used to solve the desired question.


Complete step-by-step answer:
It is given that the rate of GST on the stainless steel utensil is$18\% $.
GST is the tax paid to the government. Also this tax has various types based on the type of purchase. (Example$ = $inter-state tax)
The GST is actually paid on both, the central and the state government.
So, this tax is divided into two parts as it is being divided in two bodies.
In India, the state and the central government receive an equal amount of GST. Therefore, each of them receives half of the $18\% $ that is charged.
 Total GST $ = $ central GST $ + $ state GST.
It can be rightly said that GST is paid in two equal shares. The first share is paid to the central and second to the state government.
So,
Rate of GST$ = $ rate of the central GST $ + $ rate of state GST.
Since these shares are equal,
Rate of the state GST $ = $ rate of central GST$ = $ $\dfrac{{18\% }}{2}$
Rate of state GST$ = $ $9\% $.

So, the correct answer is “Option B”.

Note:The student should know that GST is the new system and should not confuse it with VAT(value added tax).GST is the simple system in which tax is collected as a whole amount and then it is equally shared between state and central government.A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale.