Lancer D'Souza

The following chart is from the previous article. Did you miss the previous article? Click here and enjoy reading! (A) (B) (C)     (D) Total Price Price without tax Value added 10% Tax Calculation - [A-Previous Tax ‘D’] B+C*10% (B+C+D) Manufacturer 100 10(100*10%=10) 110 (100+10) Wholesaler 110 100(110-10) 40 14(140*10) 154(100+40+14) Retailer 154 140(154-14) 30 17(170*10%) 187 (154+30) [Tax Paid by Manufacturer is Rs 10, tax paid by wholesaler is Rs 4 (14-10) and the tax paid by retailer is Rs 3 (17-14).] From the above we observe that the manufacturer collects the tax from wholesaler of Rs 10 and pays to the government. So,  the tax contribution from the manufacturer is zero. 

There are 21 offences under section 122 of GST.  Fake/wrong invoices 1.Supplying goods and/or services without issuing an invoice or issuing an incorrect or false invoice 2.Issuing an invoice without supplying goods and/or services 3.Issuing an invoice or document by using the identification number of another person 

GST (Goods and Services Tax) in simple words, “Single Taxation”. What do you mean by “Single Taxation”??? If you are a wholesaler, you buy a product from Manufacturer for Rs 110(Manufacturer is already paid 10% tax). Your additional charges (value added) say, Rs 30. Now the tax is calculated only on your additional charges Rs 30 (i.e. Rs 3) not on 140. Why not on 140??? Because the amount of Rs 110 is already inclusive of tax and it is taxed in the hand of manufacturer. So, there is no tax on tax; only single tax. Find Chart 3 which gives easy explanation how GST is calculated.

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