Q.For a single sale of goods worth Rs 10,000 (excluding tax) taxed at 10%, with no earlier purchase involved (so there is no input tax credit at this stage), show that the tax payable is the same whether computed as Sales Tax, VAT, or GST (split as 5% CGST + 5% SGST). Then explain briefly why the three systems would start to give different answers from the second stage of sale onward.

With no earlier tax to credit, all three systems reduce to the same plain percentage calculation at this first stage.

Sales Tax: 10,000 × 10/100 = Rs 1,000.

VAT: output tax = 10,000 × 10/100 = Rs 1,000; since there is no earlier purchase, input tax credit = 0, so net VAT payable = 1,000 − 0 = Rs 1,000.

GST: CGST = 10,000 × 5/100 = Rs 500; SGST = 10,000 × 5/100 = Rs 500; total = Rs 1,000, with no input credit either.

All three give exactly Rs 1,000 — because with no prior purchase, there is nothing yet for VAT/GST's input-credit mechanism to credit, so all three formulas reduce to the same plain percentage-of-sale-price calculation. …

A student might wrongly conclude from this example that Sales Tax, VAT and GST are "basically the same" — they agree only because this problem is deliberately the FIRST stage of a chain, with nothing yet to credit. The moment a second stage with an earlier purchase is introduced (as in Worked Example 8), the syste …