alleryIf GST paid on raw materials is recoverable as input credit, the inventory cost is:
AGross of GST input
BAlways weighted average
CNet of recoverable GST
DEqual to selling price
Answer & Solution
Correct answer: C. Net of recoverable GST
1. Taxes recoverable from authorities are not part of inventory cost.
2. Recoverable GST input credit is subtracted, so cost is recorded net of GST.
3. For purchase ₹10,000 + GST ₹1,800 credit, inventory cost is ₹10,000.
_Source: ICAI BoS Foundation Paper 1, Ch 4 "Inventories", §3 cost of purchase_
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