Q.Pass journal entries in the books of a Gujarat trader for the following intra-state transactions:

The cost of the goods sold is half of ₹25,000, i.e. ₹12,500, so the sale value is that cost plus the stated profit, before GST at 6%+6% is added on top. …

Step 1 — Record the purchase. CGST = 25,000 × 6% = ₹1,500. SGST = 25,000 × 6% = ₹1,500. Total invoice value = 25,000 + 1,500 + 1,500 = ₹28,000, paid in cash.

(Being goods purchased locally for cash, GST paid)

Step 2 — Determine the sale value. Half of the goods purchased were sold; the cost of half the goods = 25,000 ÷ 2 = ₹12,500. The sale is made at a profit of ₹5,000 over this cost, so the basic sale value = 12,500 + 5,000 = ₹17,500.

Step 3 — Compute tax on the sale. CGST = 17,500 × 6% = ₹1,050. SGST = 17,500 × 6% = ₹1,050. Total invoice value = 17,500 + 1,050 + 1,050 = ₹19,600, on credit.

(Being half the goods sold on credit at a profit of ₹5,000, GST charged) …

First work out the basic sale value from cost plus stated profit before applying any GST rate, since the tax rate applies to the b …

A common error is applying GST on the full original purchase value (₹25,000) instead of on the cost of only the half actually sold (₹12,500). Another is treating the ₹5,000 profit itself as taxable separat …