GST Question:-

Let us consider that goods worth Rs. 10,000 are sold by manufacturer A from
Maharashtra to Dealer B in Maharashtra.
Dealer B resells them to Trader C in Rajasthan for Rs. 17,500.

Trader C finally sells to end user D in Rajasthan for Rs. 30,000.

Suppose the applicable tax rates for the goods sold are CGST= 9%,
SGST=9%, and IGST=9+9=18%

Since A is selling this to B in Maharashtra itself, it is an intra-state sale and so,

CGST@9% and SGST@9% will apply.

Dealer B (Maharashtra) is selling to Trader C (Rajasthan). Hence, this is an

interstate sale, with  IGST@18%.

Trader C (Rajasthan) is selling to end user D also in Rajasthan. Once again it

is an intra-state sale and hence, CGST@9% and SGST@9% will apply.
How SGST, CGST and IGST will be collected?

*** Any IGST credit will first be applied to set off in this order:

 First set off against IGST liability.

 Then either set off with CGST or SGST liability, at your preference.

Know further about how ITC optimisation works by reading our article
about ITC optimisation under GST.
GST being a consumption-based tax the state where the goods were
consumed(Rajasthan) will receive GST. By that logic, Maharashtra (where
goods were sold) should not get any taxes. State Rajasthan and Central
Government should have got (30,000*9%) = 2,700 each.
Thus, Maharashtra (exporting state) will have to transfer credit of SGST of Rs.
900 (used in payment of IGST) to the Centre.
In turn, Central Government will transfer to state Rajasthan (importing state)
Rs. 450 IGST.

The above example shows the need for 3 taxes: SGST, CGST, and IGST. All
3 together will serve the two purposes of GST:
 One Nation, One Tax – so all taxes on all purchases are available as
credits.
 Dual tax system – both Centre and states have their revenue.

GST is a completely new tax with new concepts like ‘place of supply’ and new
tax structures. This creates confusion with taxpayers who may end up paying
the wrong type of GST.