Question

The total value (with GST) of a remote-controlled toy car is Rs. 1770. Rate of GST is 18% on toys. Find the taxable value, CGST and SGST for this toy-car.

Answer 1

Hint: Assume the taxable value of the toy car be Rs. ‘$x$’. Calculate the sum of $x$ and 18% of $x$ and equate this to the total value of a remote-controlled car. Find $x$ to get the taxable value. Assume that CGST and SGST are equal. Find the value of 18% of $x$ and the half of this value will be CGST and half SGST.

“Complete step-by-step answer:”
First we will understand the terms given in the question. Taxable value means the sum or value of foreign transaction which is liable for the tax. Now, CGST or Central Goods and Service Tax and SGST or State Goods and Service Tax are categories of GST. Both these sub-taxes are charged on intrastate transactions, on all types of sales, purchases, transfers, imports and other services.
Now, we come to the question. Let us assume that the taxable value of a toy car is Rs. $x$. Therefore, GST will be 18% of $x$. Mathematically,
$
 \Rightarrow x+18\%\text{ of }x=1770 \\
 \Rightarrow x+\dfrac{18x}{100}=1770 \\
\Rightarrow \dfrac{118x}{100}=1770 \\
\Rightarrow x=\dfrac{1770\times 100}{118} \\
 \Rightarrow x=1500 \\
$
Hence, the taxable value of the toy car is Rs. 1500.
Now, assume that CGST and SGST are equal and are Rs. $y$. Since, GST on the toy is 18% of $x$. Therefore,
$
 \Rightarrow CGST+SGST=18\%\text{ of }x \\
 \Rightarrow y+y=\dfrac{18}{100}\times 1500 \\
 \Rightarrow 2y=270 \\
 \Rightarrow y=135 \\
$
Hence, CGST and SGST are Rs. 135 each.

Note: We have assumed that CGST and SGST are equal because there is no information provided about them. So, if distribution of GST and SGST are not provided then we must assume them equal. Also, GST is the sum of CGST and SGST.