PRICE OF THE PRODUCT UNDER PRE AND POST GST

[RameshBabu Kari]

Dear Expert,

If the price of the product was Rs.10,000/- which was pre-gst price including vat to the customer in the market. Price of the same product will be the same ₹ 10,000/- even post gst ?

i.e Post gst price of the product, if gst rate is 18% = price of the product is ₹ 10,000/-(cost = 8200 + cgst 900 + sgst 900)

or

Post gst price = 11800/=(10,000+1800)

Which one is correct ? and is there any wrong on the 11800/- of the product to the custome ? Please clarify with applicable provisions and rules of gst.

[KASTURI SETHI]

Rs.10000/- was inclusive of VAT. Now VAT stands subsumed into GST. VAT is replaced by GST. VAT was on lower side and GST rate is on higher side. You are to pay GST on transaction value in the post GST period. Today if your transaction value remains the same ₹ 8200/- first calculation is correct. In common parlance, transaction value means whatever amount you charge (Basic Price excluding tax), on that amount you will compute GST and deposit.

If your transaction value has not changed/increased in post GST period, then second calculation is wrong.

[DR.MARIAPPAN GOVINDARAJAN]

In GST there is no cum-tax-value. The value of supply is to be noted in the invoice and the GST rate is to be indicated.

In your case the value of the product is ₹ 8200/-

If the tax rate is 18% as mentioned by you the GST is 8200 x 18% = 1476

Total of the invoice - 8200 + 1476 = ₹ 9676/-

[Kishan Barai]

Nice explained by sir but if your sales price is 10,000 INR

Then you can show cost 8474.57 + 18% GST (1525.42) = 10,000 INR

Thank You

AI Summary

Transaction value governs GST liability; if gross price is unchanged, GST is computed on the underlying pre-tax value. Post-GST pricing depends on the transaction value stated on the invoice; GST is computed on that declared value. If a seller keeps the gross customer price unchanged after VAT is subsumed, the taxable base must be derived from that gross price and GST applied accordingly. Alternatively, the seller may adjust the gross price upward so GST is calculated on a higher transaction value. The invoice must show the value of supply, the GST rate, and the tax amount.