GST on Profit or Total Sales Value?

[lakhya phukan]

Say, I bought an item from a whole seller at 5% GST. Total value was Rs. 105. So my input tax credit is Rs. 5. So if I sell the item for Rs. 190, then do I calculate the GST on 190 - 105 = 85 or on total sales values of Rs. 190? My GST rate is also 5%.

AI Summary

Debate on GST Calculation: Should It Be Based on Profit Margin or Total Sales Value? Clarification on ITC Deduction. A discussion on the Goods and Services Tax (GST) focuses on whether GST should be calculated on the profit margin or the total sales value. A participant queries if GST should be based on the difference between the selling price and purchase price or the total sales value. Responses clarify that GST is applied to the total sales value, i.e., Rs. 190 in this case, but the input tax credit (ITC) of Rs. 5 can be deducted from the GST payable. The net GST payable is on the margin after accounting for ITC.