M/s Vijay works registered in the state of Maharashtra, provides following details for the month of August. Calculate its net Tax Liability for the month of August 2023.

Steps to Solve

1. Calculate Total Sales Tax

   For the sales made, calculate the GST for each transaction.

   • Sold Goods @ 5% GST: [ 3,60,000 \times 0.05 = 18,000 ]

   • Sold Goods @ 28% GST: [ 2,40,000 \times 0.28 = 67,200 ]

   • Total Sales Tax = ( 18,000 + 67,200 = 85,200 )

2. Calculate Total Purchase Tax

   For the purchases made, calculate the GST for each transaction.

   • Purchased goods @ 12% GST: [ 8,60,000 \times 0.12 = 1,03,200 ]

   • Purchased goods @ 28% GST: [ 9,00,000 \times 0.28 = 2,52,000 ]

   • Total Purchase Tax = ( 1,03,200 + 2,52,000 = 3,55,200 )

3. Calculate Total Service Tax from Provided Services

   Calculate the GST for the services provided.

   • Provided Services @ 18% GST: [ 4,80,000 \times 0.18 = 86,400 ]

   • Provided Services @ 12% GST: [ 12,00,000 \times 0.12 = 1,44,000 ]

   • Total Service Tax = ( 86,400 + 1,44,000 = 2,30,400 )

4. Calculate Total Tax Credits on Services Availed

   Calculate the GST for the services availed.

   • Availed Services @ 18% GST: [ 70,000 \times 0.18 = 12,600 ]

   • Availed Services @ 5% GST: [ 55,000 \times 0.05 = 2,750 ]

   • Total Tax Credits = ( 12,600 + 2,750 = 15,350 )

5. Calculate Net Tax Liability

   The net tax liability can be calculated as follows:

   [ \text{Net Tax Liability} = \text{Total Sales Tax} + \text{Total Service Tax} - \text{Total Purchase Tax} - \text{Total Tax Credits} ]

   Substituting the calculated values:

   [ \text{Net Tax Liability} = 85,200 + 2,30,400 - 3,55,200 - 15,350 ]