Alpha Ltd dispatched on 10.09.2019 raw material to Beta Ltd for conversion into finished product. Beta Ltd manufactured and supplied finished goods to Alpha Ltd on 10.01.2021. The input tax credit on raw materials @ 5% w
CS Executive · Tax Laws · PYQS · June 2021
Alpha Ltd dispatched on 10.09.2019 raw material to Beta Ltd for conversion into finished product. Beta Ltd manufactured and supplied finished goods to Alpha Ltd on 10.01.2021. The input tax credit on raw materials @ 5% was ₹3 lakhs. The finished goods were sold on 17.01.2021 for ₹100 lakhs and output tax was @ 12%. What would be the net output tax liability?
Answer & Explanation:
Correct Answer: Option (B)
Official answer key: (B). Official source note: Correct Answer is option B as Output Tax: 12% of ₹ 100 Lakhs = ₹ 12 Lakhs; Less: Input Tax Credit - ₹ 3 Lakhs; The net output tax liability will be ₹ 9 Lakhs.
Topics: GST
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