Rakesh purchased goods from Ramesh for ₹4,50,000 which included amount of VAT charged at the rate of 12.5%. Rakesh after the purchases has made sales of 20% of goods to a trader in his own state and balance 80% of goods

Computation of Input VAT Credit Particulars Amount (INR) Amount (INR) Tax paid on goods purchased (₹4,50,000 * 12.5 / 112.5) 50,000 Sale price of goods within the state being 20% of the goods by adding margin of @ 20% (₹4,00,000 * 20%) + 20% margin 96,000 Vat payable on sale of goods within the state (₹96,000 * 12.5%) 12,000 Sale price of goods outside the state being 80% of the goods by adding margin of @ 25% (₹4,00,000 * 80%) + 25% margin 4,00,000 CST payable on sale of goods outside the state (₹4,00,000 * 2%) 8,000 Total VAT and CST payable (₹12,000 + ₹8,000) 20,000 Input tax credit to be carried forward (₹50,000 - ₹20,000) 30,000 Note: Interstate sale were made against valid C forms. So, 2% has been charged.