Q. Mr. Arun, a registered supplier, is engaged in selling sweets. The sweets are sold in boxes and the cost of each sweet box is ` 500. In order to increase his turnover, he purchased certain juice cans @ ` 20 each and added juice can with every sweet box as a gift. A sweet box along with free juice can is sold at ` 500 each. Which of the statements is correct ? (Solved)
1. He is liable to pay tax on ` 520 and eligible to claim input tax credit on purchase of juice cans
2. He is liable to pay tax on ` 500 and not eligible to claim input tax credit on purchase of juice cans
3. He is liable to pay tax on ` 500 and also eligible to claim input tax credit on purchase of juice cans
4. Either (a) or (b)
- c. He is liable to pay tax on ` 500 and also eligible to claim input tax credit on purchase of juice cans