Goods and Services Tax

Exercise 1

Question 1

An article is marked at ₹15000. A dealer sells it to a consumer at 10% profit. If the rate of GST is 12%, find:

(i) the selling price (excluding tax) of the article.

(ii) the amount of tax (under GST) paid by the consumer.

(iii) the total amount paid by the consumer.

Answer

Marked price of the article = ₹15000
Profit = 10%
Rate of GST = 12%

(i) Selling price of the article (excluding tax) = Marked Price + Profit

$= 15000 + \Big(\dfrac{10}{100} \times 15000\Big) \\[0.5em] = 15000 + 1500 \\[0.5em] = \bold{₹16500}$

(ii) The amount of tax (under GST) paid by the consumer

$= 12% \text{ of } ₹16500 \\[0.5em] = ₹\Big(\dfrac{12}{100} \times 16500\Big) \\[0.5em] = \bold{₹1980}$

(iii) The total amount paid by the consumer = Selling price of the article + GST paid by the consumer
= ₹16500 + ₹1980
= ₹18480

Question 2

A shopkeeper buy goods worth ₹4000 and sells these at a profit of 20% to a consumer in the same state. If GST is charged at 5%, find:

(i) the selling price (excluding tax) of the goods.

(ii) CGST paid by the consumer.

(iii) SGST paid by the consumer.

(iv) the total amount paid by the consumer.

Answer

Purchase price of goods = ₹4000
Profit Percentage = 20%
Rate of GST = 5%

As the sales are intra-state and the rate of GST is 5%, so GST comprises of CGST at 2.5% and SGST at 2.5%

(i) The selling price (excluding tax) of the goods = Purchase price + Profit

$= 4000 + \Big(\dfrac{20}{100} \times 4000\Big) \\[0.5em] = 4000 + 800 \\[0.5em] = \bold{₹4800}$

(ii) CGST = 2.5% of 4800 = $\dfrac{2.5}{100}$ x 4800 = ₹120

(iii) SGST = 2.5% of 4800 = $\dfrac{2.5}{100}$ x 4800 = ₹120

(iv) The total amount paid by the consumer = Selling price of the goods + GST paid by the consumer
= ₹4800 + CGST paid by the consumer + SGST paid by the consumer
= ₹4800 + ₹120 + ₹120
= ₹5040

Question 3

The marked price of an article is ₹12500. A dealer in Kolkata sells the article to a consumer in the same city at a profit of 8%. If the rate of GST is 18%, find

(i) the selling price (excluding tax) of the article.

(ii) IGST, CGST and SGST paid by the dealer to the Central and State Governments.

(iii) the amount which the consumer pays for the article.

Answer

Marked price of the article = ₹12500
Profit = 8%
Rate of GST = 18%

(i) Selling price of the article (excluding tax) = Marked Price + Profit

$= 12500 + \Big(\dfrac{8}{100} \times 12500\Big) \\[0.5em] = 12500 + 1000 \\[0.5em] = \bold{₹13500}$

(ii) As the sales are intra-state and the rate of GST is 18%, so GST comprises of CGST at 9% and SGST at 9%

IGST = Nil (∵ sale is intra-state)

CGST = 9% of 13500 = $\dfrac{9}{100}$ x 13500 = ₹1215

SGST = 9% of 13500 = $\dfrac{9}{100}$ x 13500 = ₹1215

∴ Amount of tax paid by the dealer to the Central and State Governments:

CGST = ₹1215 to the Central government and

SGST = ₹1215 to the State government

(iii) The total amount paid by the consumer = Selling price of the article + GST paid by the consumer
= ₹13500 + CGST paid by the consumer + SGST paid by the consumer
= ₹13500 + ₹1215 + ₹1215
= ₹15930

Question 4

A shopkeeper buys an article from a wholesaler for ₹20000 and sells it to a consumer at 10% profit. If the rate of GST is 12%, find the tax liability of the shopkeeper.

Answer

Purchase price of the article = ₹20000
Profit = 10%
Rate of GST = 12%

Amount of GST paid by the shopkeeper to the wholesaler

$= 12% \text{ of } ₹20000 \\[1em] = ₹\Big(\dfrac{12}{100} \times 20000\Big) \\[1em] = ₹2400$

∴ Input GST of the shopkeeper = ₹2400

Selling price of the article (excluding tax) = Purchase Price + Profit

$= 20000 + \Big(\dfrac{10}{100} \times 20000\Big) \\[0.5em] = 20000 + 2000 \\[0.5em] = \bold{₹22000}$

Amount of GST collected by the shopkeeper from the consumer

$= 12% \text{ of } ₹22000 \\[1em] = ₹\Big(\dfrac{12}{100} \times 22000\Big) \\[1em] = ₹2640$

∴ Output GST of the shopkeeper = ₹2640

Tax liability of the shopkeeper = Output GST - Input GST
= ₹2640 - ₹2400
= ₹240

Question 5

A dealer buys an article for ₹6000 from a wholesaler. The dealer sells the article to a consumer at 15% profit. If the sales are intra-state and the rate of GST is 18%, find

(i) input CGST and input SGST paid by the dealer.

(ii) output CGST and output SGST collected by the dealer.

(iii) the net CGST and SGST paid by the dealer.

(iv) the total amount paid by the consumer.

Answer

Purchase price of the article = ₹6000
Profit = 15%
Rate of GST = 18%

As the sales are intra-state and the rate of GST is 18%, so GST comprises of CGST at 9% and SGST at 9%.

(i) Input CGST paid by the dealer

$= 9% \text{ of } ₹6000 \\[1em] = ₹\Big(\dfrac{9}{100} \times 6000\Big) \\[1em] = \bold{₹540}$

Input SGST paid by the dealer

$= 9% \text{ of } ₹6000 \\[1em] = ₹\Big(\dfrac{9}{100} \times 6000\Big) \\[1em] = \bold{₹540}$

(ii) Selling price of the article (excluding tax) = Purchase Price + Profit

$= 6000 + \Big(\dfrac{15}{100} \times 6000\Big) \\[0.5em] = 6000 + 900 \\[0.5em] = \bold{₹6900}$

Output CGST collected by the dealer

$= 9% \text{ of } ₹6900 \\[1em] = ₹\Big(\dfrac{9}{100} \times 6900\Big) \\[1em] = \bold{₹621}$

Output SGST collected by the dealer

$= 9% \text{ of } ₹6900 \\[1em] = ₹\Big(\dfrac{9}{100} \times 6900\Big) \\[1em] = \bold{₹621}$

(iii) Net CGST paid by the dealer = Output CGST - Input CGST
= ₹(621 - 540)
= ₹81

Net SGST paid by the dealer = Output SGST - Input SGST
= ₹(567 - 540)
= ₹81

(iv) The total amount paid by the consumer = Selling price of the article + GST paid by the consumer
= ₹6900 + CGST collected by the dealer + SGST collected by the dealer
= ₹6900 + ₹621 + ₹621
= ₹8142

Question 6

A manufacturer buys raw material worth ₹7500 paying GST at the rate of 5%. He sells the finished product to a dealer at 40% profit. If the purchase and the sale both are intra-state and the rate of GST for the finished product is 12%, find:

(i) the input tax (under GST) paid by the manufacturer.

(ii) the output tax (under GST) collected by the manufacturer.

(iii) the tax (under GST) paid by the manufacturer to the Central and State Governments.

(iv) the amount paid by the dealer for the finished product.

Answer

Value of raw material = ₹7500
Rate of GST on raw material = 5%
Profit on finished product = 40%
Rate of GST on finished product = 12%

(i) The input tax (under GST) paid by the manufacturer:

As the purchase is intra-state and the rate of GST is 5%, so GST comprises of CGST at 2.5% and SGST at 2.5%.

Input CGST paid by the manufacturer

$= 2.5% \text{ of } ₹7500 \\[1em] = ₹\Big(\dfrac{2.5}{100} \times 7500\Big) \\[1em] = \bold{₹187.50}$

Input SGST paid by the manufacturer

$= 2.5% \text{ of } ₹7500 \\[1em] = ₹\Big(\dfrac{2.5}{100} \times 7500\Big) \\[1em] = \bold{₹187.50}$

(ii) The output tax (under GST) collected by the manufacturer:

Selling price of the product (excluding tax) = Purchase Price + Profit

$= 7500 + \Big(\dfrac{40}{100} \times 7500\Big) \\[0.5em] = 7500 + 3000 \\[0.5em] = \bold{₹10500}$

As the sale is intra-state and the rate of GST is 12%, so GST comprises of CGST at 6% and SGST at 6%.

Output CGST collected by the manufacturer

$= 6% \text{ of } ₹10500 \\[1em] = ₹\Big(\dfrac{6}{100} \times 10500\Big) \\[1em] = \bold{₹630}$

Output SGST collected by the manufacturer

$= 6% \text{ of } ₹10500 \\[1em] = ₹\Big(\dfrac{6}{100} \times 10500\Big) \\[1em] = \bold{₹630}$

(iii) The tax (under GST) paid by the manufacturer to the Central and State Governments:

Net CGST paid by the manufacturer = Output CGST - Input CGST
= ₹(630 - 187.5)
= ₹442.5

Net SGST paid by the manufacturer = Output SGST - Input SGST
= ₹(630 - 187.5)
= ₹442.5

∴ Amount of tax paid by the manufacturer to the Central and State Governments:

CGST = ₹442.5 to the Central government and

SGST = ₹442.5 to the State government

(iv) The amount paid by the dealer for the finished product
= Selling price of the finished product + GST paid by the dealer
= ₹10500 + CGST collected by the manufacturer + SGST collected by the manufacturer
= ₹10500 + ₹630 + ₹630
= ₹11760

Question 7

A manufacturer sells a T.V. to a dealer for ₹18000 and the dealer sells it to a consumer at a profit of ₹1500. If the sales are intra-state and the rate of GST is 12%, find:

(i) the amount of GST paid by the dealer to the State Government.

(ii) the amount of GST received by the Central Government.

(iii) the amount of GST received by the State Government.

(iv) the amount that the consumer pays for the T.V.

Answer

It is a case of intra-state transaction of goods and services:
SGST = CGST = $\dfrac{1}{2}$ x GST

As the sales are intra-state and the rate of GST is 12%, so GST comprises of 6% as CGST and 6% as SGST. Manufacturer sells the TV to dealer for ₹18000, amount of GST collected by manufacturer from dealer(or paid by dealer)

CGST = 6% of 18000 = $\dfrac{6}{100}$ x 18000 = ₹1080

SGST = 6% of 18000 = $\dfrac{6}{100}$ x 18000 = ₹1080

∴ Amount of Input GST of dealer:

Input CGST = ₹1080
Input SGST = ₹1080

Manufacturer will pay 1080 as CGST and 1080 as SGST.

Since the dealer sells the TV to a consumer at a profit of 1500, the selling price of TV by dealer (or cost price of TV to the consumer)
= 18000 + 1500 = ₹19500.

The amount of GST collected by dealer (or paid by consumer):

CGST = 6% of 19500 = $\dfrac{6}{100}$ x 19500 = ₹1170

SGST = 6% of 19500 = $\dfrac{6}{100}$ x 19500 = ₹1170

∴ Amount of output GST of dealer:

Output CGST = ₹1170
Output SGST = ₹1170

(i) Amount of GST paid by dealer to the State Government
= SGST paid by dealer to the State Government
= Output SGST - Input SGST = 1170 - 1080 = ₹90.

(ii) Amount of GST received by the Central Government:
= CGST paid by Manufacturer + CGST paid by Dealer
=1080 + 90 = ₹1170

(iii) Amount of GST received by the State Government:
= SGST paid by Manufacturer + SGST paid by Dealer
= 1080 + 90 = ₹1170

(iv) The amount which the consumer pays for the TV
= Cost price of TV + CGST paid by consumer + SGST paid by consumer
= 19500 + 1170 + 1170 = ₹21840

Question 8

A shopkeeper buys a camera at a discount of 20% from a wholesaler, the printed price of the camera being ₹1600. The shopkeeper sells it to a consumer at the printed price. If the sales are intra-state and the rate of GST is 12%, find:

(i) GST paid by the shopkeeper to the Central Government.

(ii) GST received by the Central Government.

(iii) GST received by the State Government.

(iv) the amount at which the consumer bought the camera.

Answer

It is a case of intra-state transaction of goods and services:
SGST = CGST = $\dfrac{1}{2}$ x GST

Given:
Printed price of the camera = 1600
Rate of discount shopkeeper = 20%
Cost Price of camera for shopkeeper = Printed Price - Discount

$= 1600 - \Big(\dfrac{20}{100} \times 1600\Big) \\[0.5em] = 1600 - 320 \\[0.5em] = ₹1280$

As the sales are intra-state and the rate of GST is 12%, so GST comprises of 6% as CGST and 6% as SGST. Wholesaler sells the camera to shopkeeper for ₹1280, amount of GST collected by wholesaler from shopkeeper(or paid by shopkeeper)

CGST = 6% of 1280 = $\dfrac{6}{100}$ x 1280 = ₹76.80

SGST = 6% of 1280 = $\dfrac{6}{100}$ x 1280 = ₹76.80

∴ Amount of Input GST of Shopkeeper:

Input CGST = ₹76.80
Input SGST = ₹76.80

Since the Shopkeeper sells the camera to a consumer at printed price, the amount of GST collected by shopkeeper (or paid by consumer):

CGST = 6% of 1600 = $\dfrac{6}{100}$ x 1600 = ₹96

SGST = 6% of 1600 = $\dfrac{6}{100}$ x 1600 = ₹96

∴ Amount of output GST of shopkeeper:
Output CGST = ₹96
Output SGST = ₹96

(i) GST paid by shopkeeper to the Central Government
= CGST paid by shopkeeper to the Central Government
= Output CGST - Input CGST = 96 - 76.80 = ₹19.20

(ii) GST received by the Central Government:
= CGST paid by Wholesaler + CGST paid by Shopkeeper
=76.80 + 19.20 = ₹96

(iii) GST received by the State Government:
= SGST paid by Wholesaler + SGST paid by Shopkeeper
=76.80 + 19.20 = ₹96

(iv) The amount which the consumer pays for the camera
= Cost price of camera + CGST paid by consumer + SGST paid by consumer
=1600 + 96 + 96 = ₹1792

Question 9

A dealer buys an article at a discount of 30% from the wholesaler, the marked price being ₹6000. The dealer sells it to a consumer at a discount of 10% on the marked price. If the sales are intra-state and the rate of GST is 5%, find:

(i) the amount paid by the consumer for the article.

(ii) the tax (under GST) paid by the dealer to the State Government.

(iii) the amount of tax (under GST) received by the Central Government.

Answer

It is a case of intra-state transaction of goods and services:
SGST = CGST = $\dfrac{1}{2}$ x GST

Given:
Marked price of the article = ₹6000
Rate of discount for dealer = 30%
Cost Price of article for dealer = Marked Price - Discount

$= 6000 - \Big(\dfrac{30}{100} \times 6000\Big) \\[0.5em] = 6000 - 1800 = ₹4200$

As the sales are intra-state and the rate of GST is 5%, so GST comprises of 2.5% as CGST and 2.5% as SGST. Wholesaler sells the camera to dealer for ₹4200, amount of GST collected by wholesaler from dealer(or paid by dealer)

CGST = 2.5% of 4200= $\dfrac{2.5}{100}$ x 4200 = ₹105

SGST = 2.5% of 4200= $\dfrac{2.5}{100}$ x 4200 = ₹105

∴ Amount of Input GST of dealer:

Input CGST = ₹105
Input SGST = ₹105

Since the dealer sells the article to consumer at a discount of 10% on marked price, the selling price of article by dealer (or cost price for consumer):
= Marked Price - Discount $= 6000 - \Big(\dfrac{10}{100}\times6000\Big) \\[0.5em] = 6000 - 600 \\[0.5em] = ₹5400$

The amount of GST collected by dealer (or paid by consumer):

CGST = 2.5% of 5400= $\dfrac{2.5}{100}$ x 5400 = ₹135

SGST = 2.5% of 5400= $\dfrac{2.5}{100}$ x 5400 = ₹135

∴ Amount of output GST of dealer:

Output CGST = ₹135
Output SGST = ₹135

(i) the amount paid by the consumer for the article.
= Cost price of article for consumer + CGST paid by consumer + SGST paid by consumer
=5400 + 135 +135 = ₹5670

(ii) the tax (under GST) paid by the dealer to the State Government.
= Output SGST of dealer - Input SGST of dealer
=135 - 105 = ₹30

(iii) the amount of tax (under GST) received by the Central Government.
= CGST paid by Wholesaler + CGST paid by dealer
=105 + 30 = ₹135

Question 10

The printed price of an article is ₹50000. The wholesaler allows a discount of 10% to a shopkeeper. The shopkeeper sells the article to a consumer at 4% above the marked price. If the sales are intra-state and the rate of GST is 18%, find:

(i) the amount inclusive of tax (under GST) which the shopkeeper pays for the article.

(ii) the amount paid by the consumer for the article.

(iii) the amount of tax (under GST) paid by the shopkeeper to the Central Government.

(iv) the amount of tax (under GST) received by the State Government.

Answer

It is a case of intra-state transaction of goods and services:
SGST = CGST = $\dfrac{1}{2}$ x GST

Given:
Marked price of the article = ₹50000
Rate of discount for shopkeeper = 10%
Cost Price of article for shopkeeper = Marked Price - Discount

$= 50000 - \Big(\dfrac{10}{100} \times 50000\Big) \\[0.5em] = 50000 - 5000 \\[0.5em] = ₹45000$

As the sales are intra-state and the rate of GST is 18%, so GST comprises of 9% as CGST and 9% as SGST. Wholesaler sells the article to shopkeeper for ₹45000, amount of GST collected by wholesaler from shopkeeper(or paid by shopkeeper)

CGST = 9% of 45000 = $\dfrac{9}{100}$ x 45000 = ₹4050

SGST = 9% of 45000 = $\dfrac{9}{100}$ x 45000 = ₹4050

∴ Amount of Input GST of Shopkeeper:

Input CGST = ₹4050
Input SGST = ₹4050

Since the shopkeeper sells the article to customer at a premium of 4% on marked price, the selling price of article by shopkeeper ( or cost price for consumer) = Marked Price + Premium

$= 50000 + (\dfrac{4}{100}\times50000) \\[0.5em] = 50000 + 2000 \\[0.5em] = ₹52000$

The amount of GST collected by shopkeeper (or paid by consumer):

CGST = 9% of 52000 = $\dfrac{9}{100}$ x 52000 = ₹4680

∴ Amount of output GST of Shopkeeper:

Output CGST = ₹4680
Output SGST = ₹4680

(i) the amount inclusive of tax (under GST) which the shopkeeper pays for the article.
= Cost price of article for Shopkeeper + CGST paid by shopkeeper + SGST paid by shopkeeper
= 45000 + 4050 + 4050 = ₹53100

(ii) the amount paid by the consumer for the article.
= Cost price of article for consumer + CGST paid by consumer + SGST paid by consumer
=52000 + 4680 + 4680 = ₹61360

(iii) the amount of tax (under GST) paid by the shopkeeper to the Central Government.
= Output CGST of Shopkeeper - Input CGST of Shopkeeper
= 4680 - 4050 = ₹630.

(iv) the amount of tax (under GST) received by the State Government.
= SGST paid by Wholesaler + SGST paid by Shopkeeper
= 4050 + 630 = ₹4680.

Question 11

A retailer buys a T.V. from a wholesaler for ₹40000. He marks the price of T.V. 15% above his cost price and sells it to a consumer at 5% discount on marked price. If the sales are intra-state and the rate of GST is 12%, find:

(i) the marked price of the T.V.

(ii) the amount which the consumer pays for the T.V.

(iii) the amount of tax (under GST) paid by the retailer to the Central Government.

(iv) the amount of tax (under GST) received by the State Government.

Answer

It is a case of intra-state transaction of goods and services:
SGST = CGST = $\dfrac{1}{2}$ x GST

Given:
Cost Price of T.V. for retailer = ₹40000
Premium percentage by retailer = 15%
Marked price of the T.V by retailer = Cost Price + Premium

$= 40000 + \Big(\dfrac{15}{100}\times40000\Big) \\[0.5em] = 40000 + 6000 \\[0.5em] = ₹46000$

As the sales are intra-state and the rate of GST is 12%, so GST comprises of 6% as CGST and 6% as SGST. Wholesaler sells the T.V. to retailer for ₹40000, amount of GST collected by wholesaler from retailer(or paid by retailer)

CGST = 6% of 40000 = $\dfrac{6}{100}$ x 40000 = ₹2400

SGST = 6% of 40000 = $\dfrac{6}{100}$ x 40000 = ₹2400

∴ Amount of Input GST of retailer:

Input CGST = ₹2400
Input SGST = ₹2400

Since the retailer sells the T.V. to consumer at a discount of 5% on marked price, the selling price of T.V. by retailer (or cost price for consumer) = Marked Price - Discount

$= 46000 - (\dfrac{5}{100}\times46000) \\[0.5em] = 46000 - 2300 \\[0.5em] = ₹43700$

The amount of GST collected by retailer (or paid by consumer):

CGST = 6% of 43700 = $\dfrac{6}{100}$ x 43700 = ₹2622

SGST = 6% of 43700 = $\dfrac{6}{100}$ x 43700 = ₹2622

∴ Amount of output GST of retailer:

Output CGST = ₹2622
Output SGST = ₹2622

(i) the marked price of the T.V.
= ₹46000

(ii) the amount which the consumer pay for the T.V.
= Cost price of T.V. for consumer + CGST paid by consumer + SGST paid by consumer
=43700 + 2622 + 2622 = ₹48944

(iii) the amount of tax (under GST) paid by the retailer to the Central Government.
= Output CGST of retailer - Input CGST of retailer
=2622 - 2400 = ₹222

(iv) the amount of tax (under GST) received by the State Government.
= SGST paid by Wholesaler + SGST paid by retailer
= 2400 + 222 = ₹2622

Question 12

A shopkeeper buys an article from a manufacturer for ₹12000 and marks up its price by 25%. The shopkeeper gives a discount of 10% on the marked up price and he gives a further off-season discount of 5% on the balance to a customer of T.V. If the sales are intra-state and the rate of GST is 12%, find:

(i) the price inclusive of tax (under GST) which the consumer pays for the T.V.

(ii) the amount of tax (under GST) paid by the shopkeeper to the State Government.

(iii) the amount of tax (under GST) received by the Central Government.

Answer

It is a case of intra-state transaction of goods and services:
SGST = CGST = $\dfrac{1}{2}$ x GST

Given:
Cost Price of T.V. for shopkeeper = ₹12000
Premium percentage by shopkeeper = 25%
Marked price of the T.V by shopkeeper = Cost Price + Premium $= 12000 + \Big(\dfrac{25}{100}\times12000\Big) \\[0.5em] = 12000 + 3000 \\[0.5em] = ₹15000$

As the sales are intra-state and the rate of GST is 12%, so GST comprises of 6% as CGST and 6% as SGST. Manufacturer sells the T.V. to shopkeeper for ₹12000, amount of GST collected by manufacturer from shopkeeper(or paid by shopkeeper)

CGST = 6% of 12000 = $\dfrac{6}{100}$ x 12000 = ₹720

SGST = 6% of 12000 = $\dfrac{6}{100}$ x 12000 = ₹720

∴ Amount of Input GST of shopkeeper:

Input CGST = ₹720
Input SGST = ₹720

Since the shopkeeper sells the T.V. to consumer at a discount of 10% on marked price, and further off season discount of 5% on balance, the selling price of T.V. by shopkeeper (or cost price for consumer) = Balance = Marked Price - Discount

$= 15000 - \Big(\dfrac{10}{100}\times15000\Big) \\[0.5em] = 15000 - 1500 \\[0.5em] = ₹13500$

Selling Price by shopkeeper (or cost price for consumer) = Balance Price - Off season discount

$= 13500 - (\dfrac{5}{100}\times13500) \\[0.5em] = 13500 - 675 \\[0.5em] = ₹12825$

The amount of GST collected by shopkeeper (or paid by consumer):

CGST = 6% of 12825 = $\dfrac{6}{100}$ x 12825 = ₹769.50

SGST = 6% of 12825 = $\dfrac{6}{100}$ x 12825 = ₹769.50

∴ Amount of output GST of shopkeeper:

Output CGST = ₹769.50
Output SGST = ₹769.50

(i) the price inclusive of tax (under GST) which the consumer pays for the T.V.
= Cost price of T.V. for consumer + CGST paid by consumer + SGST paid by consumer
= 12825 + 769.50 + 769.50 = ₹14364

(ii) the amount of tax (under GST) paid by the shopkeeper to the State Government.
= Output SGST of shopkeeper - Input SGST of shopkeeper
= 769.50 - 720 = ₹49.50

(iii) the amount of tax (under GST) received by the Central Government.
= CGST paid by manufacturer + CGST paid by shopkeeper
= 720 + 49.50 = ₹769.50

Question 13

The printed price of an article is ₹40000. A wholesaler in Uttar Pradesh buys the article from a manufacturer in Gujarat at a discount of 10% on the printed price. The wholesaler sells the article to a retailer in Himachal at 5% above the printed price. If the rate of GST on the article is 18%, find:

(i) The amount inclusive of tax (under GST) paid by the wholesaler for the article.

(ii) The amount inclusive of tax (under GST) paid by the retailer for the article.

(iii) The amount of tax (under GST) paid by the wholesaler to the Central Government.
(iv) The amount of tax (under GST) received by the Central Government.

Answer

Given:
The printed price of article is ₹40000. The rate of GST on sale or purchase of article is 18%. Here both the sales from manufacturer to wholesaler and wholesaler to retailer are inter-state, so IGST is levied on these sales at 18%

(i) As the wholesaler buys the article from a manufacturer at 10% discount on the printed price,

∴ Cost price of the article for the wholesaler:

Cost Price for wholesaler = Printed Price-Discount

$= 40000 - \Big(\dfrac{10}{100} \times 40000\Big) \\[0.5em] = 40000 - 4000 \\[0.5em] = ₹36000$

Amount of IGST collected by manufacturer from wholesaler(or paid by wholesaler to manufacturer)
IGST=18% of 36000 = $\dfrac{18}{100}$ x 36000 = ₹6480

∴ Amount of Input GST of wholesaler:

Input IGST = ₹6480

The amount inclusive of tax (under GST) which the wholesaler pays for the article:
= Cost price of article for wholesaler + IGST paid by wholesaler
= 36000 + 6480= ₹42480

(ii) As wholesaler sells the article to retailer at 5% above the printed printed price. The selling price of article by wholesaler(or cost price of article for retailer) = Printed Price + Premium

$= 40000 +(\dfrac{5}{100}\times40000) \\[0.5em] = 40000 + 2000 \\[0.5em] = ₹42000$

Amount of IGST collected by wholesaler from retailer(or paid by retailer to wholesaler)
IGST=18% of 42000 = $\dfrac{18}{100}$ x 42000 = ₹7560

∴ Amount of Output GST of wholesaler:

Output IGST = ₹7560

The amount inclusive of tax (under GST) paid by the retailer for the article:
= Cost price of article for retailer + IGST paid by retailer
= 42000 + 7560= ₹49560

(iii) The amount of tax (under GST) paid by the wholesaler to the Central Government:
= Output IGST of wholesaler - Input IGST of wholesaler
= 7560 - 6480 = ₹1080.

(iv) The amount of tax (under GST) received by the Central Government:
= IGST paid by Manufacturer + IGST paid by wholesaler
= 6480 + 1080 = ₹7560.

Question 14

A dealer in Delhi buys an article for ₹16000 from a wholesaler in Delhi. He sells the article to a consumer in Rajasthan at a profit of 25%. If the rate of GST is 5%, find:

(i) the tax (under GST) paid by the wholesaler to Governments.

(ii) the tax (under GST) paid by the dealer to the Government.

(iii) the amount which the consumer pay for the article.

Answer

(i) As the dealer in Delhi buys the article for ₹16000 from a wholesaler in Delhi, so this sale is intra-state.
Rate of GST is 5%. So GST comprises of CGST at 2.5% and SGST at 2.5%

CGST collected by the wholesaler = 2.5% of 16000 = $\dfrac{2.5}{100}$ x 16000 = ₹400

SGST collected by the wholesaler = 2.5% of 16000 = $\dfrac{2.5}{100}$ x 16000 = ₹400

∴ Amount of tax paid by the wholesaler to the Central and State Governments:

CGST = ₹400 to the Central government and

SGST = ₹400 to the Delhi government

(ii) Selling price of the article by the dealer to the consumer = Purchase price + Profit

$= 16000 + \Big(\dfrac{25}{100} \times 16000\Big) \\[0.5em] = 16000 + 4000 \\[0.5em] = \bold{₹20000}$

As the dealer sells the article to a consumer in Rajasthan, so this sale is inter-state.
Rate of GST is 5%. So, on this sale IGST is levied at 5%.

IGST collected by the dealer from the consumer = 5% of 20000 = $\dfrac{5}{100}$ x 20000 = ₹1000

Input GST of the dealer = CGST + SGST = ₹400 + ₹400 = ₹800

Output GST of the dealer = IGST = ₹1000

Net tax liability of the dealer = Output GST - Input GST
= ₹1000 - ₹800 = ₹200

∴ The dealer pays ₹200 IGST to the Central Government.

(iii) The total amount paid by the consumer = Selling price of the article + GST paid by the consumer
= ₹20000 + IGST collected by the dealer
= ₹20000 + ₹1000
= ₹21000

Question 15

A shopkeeper in Delhi buys an article at the printed price of ₹24000 from a wholesaler in Mumbai. The shopkeeper sells the article to a consumer in Delhi at a profit of 15% on the basic cost price. If the rate of GST is 12%, find:

(i) The price inclusive of tax (under GST) at which the wholesaler bought the article.

(ii) The amount which the consumer pays for the article.

(iii) The amount of tax (under GST) received by the State Government of Delhi.

(iv) The amount of tax (under GST) received by the Central Government.

Answer

(i) Given:
The printed price of article is ₹24000. The rate of GST on sale or purchase of article is 15%. Here the sales from wholesaler to shopkeeper is inter-state, so IGST is levied on that sale at 12%.

Amount of IGST collected by wholesaler from shopkeeper(or paid by shopkeeper to wholesaler)
IGST=12% of 24000 = $\dfrac{12}{100}$ x 24000 = ₹2880

∴ Amount of Input IGST of shopkeeper:

Input IGST = ₹2880

The amount inclusive of tax (under GST) at which the wholesaler bought the article:
= Cost price of article for wholesaler + IGST paid by wholesaler
= 24000 + 2880= ₹26880

(ii) As shopkeeper sells the article to consumer at 15% above the basic cost price. The selling price of article by shopkeeper(or cost price of article for consumer) = Cost Price + Premium

$= 24000 + \Big(\dfrac{15}{100}\times24000\Big) \\[0.5em] = 24000 + 3600 \\[0.5em] = ₹27600$

As the shopkeeper sells the article to consumer in Delhi, so the sale is intra-state

∴ GST will be applied which as CGST at 6% and SGST at 6%.

The amount of GST collected by shopkeeper (or paid by consumer):

CGST = 6% of 27600 = $\dfrac{6}{100}$ x 27600 = ₹1656

SGST = 6% of 27600 = $\dfrac{6}{100}$ x 27600 = ₹1656

∴ Amount of Output GST of shopkeeper:

Output CGST = ₹1656
Output SGST = ₹1656

The amount which the consumer pays for the article: = Cost price of article for consumer + CGST paid by consumer + SGST paid by consumer
= 27600 + 1656 + 1656 = ₹30912

(iii) Since the transactions include both IGST and GST we need to apply input GST credit rules:

First set off Input IGST against Output CGST:

Balance Input IGST = Input IGST - Output CGST
= 2880 - 1656 = ₹1224

Then set off Balance Input IGST against output SGST

∴ The amount of tax (under GST) received by the State Government of Delhi:

Output SGST - Balance Input IGST
= 1656 - 1224 = ₹432

(iv) The amount of tax (under GST) received by the Central Government.
= IGST received from wholesaler + CGST received from shopkeeper = 2880 + 0 = ₹2880

Question 16

A dealer in Maharashtra buys an article from a wholesaler in Maharashtra at a discount of 25%, the printed price of the article being ₹20000. He sells the article to a consumer in Telengana at a discount of 10% on the printed price. If the rate of GST is 12, find:

(i) the tax (under GST) paid by the wholesaler to Governments.

(ii) the tax (under GST) paid by the dealer to the Government.

(iii) the amount which the consumer pays for the article.

Answer

(i) As the dealer in Maharashtra buys an article from a wholesaler in Maharashtra, so this sale is intra-state.
Rate of GST is 12%. So GST comprises of CGST at 6% and SGST at 6%.

Printed price of the article = ₹20000
Discount = 25%

Purchase price of the article for the dealer = Printed price - Discount

$₹20000 - \Big(\dfrac{25}{100} \times ₹20000\Big) \\[0.5em] = ₹20000 - 5000 \\[0.5em] = \bold{₹15000}$

CGST collected by the wholesaler = 6% of 15000 = $\dfrac{6}{100}$ x 15000 = ₹900

SGST collected by the wholesaler = 6% of 15000 = $\dfrac{6}{100}$ x 15000 = ₹900

∴ Amount of tax paid by the wholesaler to the Central and State Governments:

CGST = ₹900 to the Central government and

SGST = ₹900 to the Maharashtra government

(ii) The dealer sells the article at a discount of 10% on the printed price.

∴ Selling price of the article by the dealer to the consumer = Printed price - Discount

$= ₹20000 - \Big(\dfrac{10}{100} \times ₹20000\Big) \\[0.5em] = ₹20000 - 2000 \\[0.5em] = \bold{₹18000}$

As the dealer in Maharashtra sells the article to a consumer in Telengana,, so this sale is inter-state.
Rate of GST is 12%. So, on this sale IGST is levied at 12%.

IGST collected by the dealer from the consumer = 12% of 18000 = $\dfrac{12}{100}$ x 18000 = ₹2160

Input GST of the dealer = CGST + SGST = ₹900 + ₹900 = ₹1800

Output GST of the dealer = IGST = ₹2160

Net tax liability of the dealer = Output GST - Input GST
= ₹2160 - ₹1800 = ₹360

∴ The dealer pays ₹360 IGST to the Central Government.

(iii) The total amount paid by the consumer = Selling price of the article + GST paid by the consumer
= ₹18000 + IGST collected by the dealer
= ₹18000 + ₹2160
= ₹20160

Question 17

Kiran purchases an article for Rs 5310 which includes 10% rebate on the marked price and 18% tax (under GST) on the remaining price. Find the marked price of the article.

Answer

Given:
Rate of GST = 18%
Rebate(or discount) = 10% on Marked Price

Let the marked price be P
Cost price of the article = Marked Price - Discount

$= \text{P} - 10% \text{ of P} \\[1em] = \text{P} - \Big(\dfrac{10}{100}\Big) \times \text{P} \\[1em] = \Big(\dfrac{90\text{P}}{100}\Big) \\[1em] =0.9\text{P}$

Amount of GST on cost price of article = 18% of 0.9P

Amount paid by Kiran = Cost Price + GST = 5310

$\Rightarrow 0.9\text{P} + \Big(\dfrac{18}{100}\times0.9\text{P}\Big) = 5310 \\[0.5em] \Rightarrow 0.9\text{P} + 0.162\text{P} = 5310 \\[0.5em] \Rightarrow 1.062\text{P} = 5310 \\[0.5em] \Rightarrow \text{P} = \dfrac{5310}{1.062} = \bold{₹5000}$

Question 18

A shopkeeper buys an article whose list price is ₹8000 at some rate of discount from the wholesaler. He sells the article to a consumer at the list price. The sales are intra-state and the rate of GST is 18%. If the shopkeeper pays a tax (under GST) of ₹72 to the State Government, find the rate of discount at which he bought the article from the wholesaler.

Answer

Given:
List Price of the Article = ₹8000
Let discount rate be $x$ %

Cost price of article for shopkeeper = List Price - Discount

$= 8000 - \Big(\dfrac{x}{100}\times8000\Big) \\[0.5em] = 8000 - 80x$

As the sales are intra-state and the rate of GST is 18%, so GST comprises of 9% as CGST and 9% as SGST. wholesaler sells the article to shopkeeper for $8000 - 80x$ , amount of GST collected by wholesaler from shopkeeper(or paid by shopkeeper)

CGST = $9$ % of $(8000 - 80x)$ = $\dfrac{9}{100}\times(8000 - 80x)$ = $(720 - 7.2x)$

SGST = $9$ % of $(8000 - 80x)$ = $\dfrac{9}{100}\times(8000 - 80x)$ = $(720 - 7.2x)$

∴ Amount of Input GST of shopkeeper:

Input CGST = $720 - 7.2x$
Input SGST = $720 - 7.2x$

Cost Price for Consumer = List Price of the article (as given in question) = 8000

The amount of GST collected by shopkeeper (or paid by consumer):

CGST = 9% of 8000 = $\dfrac{9}{100}$ x 8000 = ₹720

SGST = 9% of 8000 = $\dfrac{9}{100}$ x 8000 = ₹720

∴ Amount of Output GST of shopkeeper:

Output CGST = ₹720
Output SGST = ₹720

As the shopkeeper pays a tax (under GST) of ₹72 to the State Government:

Tax paid to state government by shopkeeper = Output SGST of shopkeeper - Input SGST of shopkeeper = ₹72

$\Rightarrow 720 - (720 - 7.2x) = 72. \\[0.5em] \Rightarrow 7.2x = 72 \\[0.5em] \Rightarrow x=\dfrac{72}{7.2} =\bold{10}%$

Multiple Choice Questions

A retailer purchases a fan for ₹1500 from a wholesaler and sells it to a consumer at 10% profit. If the sales are intra-state and the rate of GST is 12%, then choose the correct answer from the given four options for question 1 to 6:

Question 1

The selling price of the fan by the retailer (excluding tax) is

₹1500
₹1650
₹1848
₹1800

Answer

Given:

Cost price for retailer = ₹1500
Profit % of retailer on cost price = 10%

∴ Selling price of the fan by retailer (excluding tax) = Cost Price + Profit

$= 1500 + 10% \text{ of } 1500 \\[1em] = 1500 + \Big(\dfrac{10}{100}\times1500\Big) \\[1em] = 1500 + 150 \\[1em] = \bold{₹1650}$

∴ Option 2 is the correct option.

Question 2

The selling price of the fan including tax (under GST) by the retailer is

₹1650
₹1800
₹1848
₹1830

Answer

From Question 1:
Selling price of the fan for retailer or cost price of the article for consumer = ₹1650

As the sales are intra-state and the rate of GST is 12%, so GST comprises of 6% as CGST and 6% as SGST. Retailer sells the fan to consumer for ₹1650, amount of GST collected by retailer from consumer(or paid by consumer):

CGST = 6% of 1650 = $\dfrac{6}{100}$ x 1650 = ₹99

SGST = 6% of 1650 = $\dfrac{6}{100}$ x 1650 = ₹99

∴ The Output Tax (under GST) for retailer:
Output CGST = 99
Output SGST = 99

∴ The selling price of the fan including tax (under GST) by the retailer is

= Cost price of fan for consumer + CGST paid by consumer + SGST paid by consumer
= 1650 + 99 + 99 = ₹1848

∴ Option 3 is the correct option.

Question 3

The tax (under GST) paid by the wholesaler to the Central Government is

₹90
₹9
₹99
₹180

Answer

Given:

Selling price (excluding tax) for wholesaler = ₹1500

As the sales are intra-state and the rate of GST is 12%, so GST comprises of 6% as CGST and 6% as SGST. Wholesaler sells the fan to retailer for ₹1500, amount of GST collected by wholesaler from retailer (or paid by retailer):

CGST = 6% of 1500 = $\dfrac{6}{100}$ x 1500 = ₹90

SGST = 6% of 1500 = $\dfrac{6}{100}$ x 1500 = ₹90

∴ The Input Tax(under GST) for retailer:
Input CGST = 90
Input SGST = 90

∴ The tax (under GST) paid by the wholesaler to the Central Government is = CGST = ₹90

∴ Option 1 is the correct option.

Question 4

The tax (under GST) paid by the retailer to the State Government is

₹99
₹9
₹18
₹198

Answer

From Question 1 and Question 3:

For Retailer:
Input SGST = 90
Output SGST = 99

The tax (under GST) paid by the retailer to the State Government is

Output SGST - Input SGST
= 99 - 90 = ₹9

∴ Option 2 is the correct option.

Question 5

The tax (under GST) received by the Central Government is

₹18
₹198
₹90
₹99

Answer

From Question 3:
The tax (under GST) paid by the wholesaler to the Central Government is = ₹90

From Question 4:
The tax (under GST) paid by the retailer to the State Government is = ₹9

as CGST = SGST
∴ The tax (under GST) paid by the retailer to the Central Government is = ₹9

The tax (under GST) received by the Central Government is
= CGST paid by the wholesaler + CGST paid by the retailer
= 90 + 9 = ₹99

∴ Option 4 is the correct option.

Question 6

The cost of fan to the consumer inclusive of tax is

₹1650
₹1800
₹1830
₹1848

Answer
From Question 1:
Selling price of the fan for retailer or cost price of the article for consumer = ₹1650

CGST = 6% of 1650 = $\dfrac{6}{100}$ x 1650 = ₹99

SGST = 6% of 1650 = $\dfrac{6}{100}$ x 1650 = ₹99

∴ The cost of fan to the consumer including of tax is

= Cost price of fan for consumer + CGST paid by consumer + SGST paid by consumer
= $1650 + 99+99=$ ₹ $\bold{1848}$

∴ Option 4 is the correct option.

A shopkeeper bought a TV from a distributor at a discount of 25% of the listed price of ₹32000. The shopkeeper sells the TV to a consumer at listed price. If the sales are intra-state and the rate of GST is 18%, then choose the correct answer from the given four options for questions 7 to 11:

Question 7

The selling price of TV including tax(under GST) by the distributor is

₹32000
₹24000
₹28320
₹26160

Answer

Given:
Listed price of TV = ₹32000
Discount given by distributor to shopkeeper = 25% of Listed price $= \Big(\dfrac{25}{100}\Big) \times 32000 \\[0.5em] = 0.25 \times 32000 \\[0.5em] = ₹8000$

Selling price for distributer excluding tax (or cost price for shopkeeper) = Listed Price - Discount
= 32000 - 8000
= ₹24000

As the sales are intra-state and the rate of GST is 18%, so GST comprises of 9% as CGST and 9% as SGST. Distributor sells the TV to shopkeeper for ₹24000, amount of GST collected by distributor from shopkeeper(or paid by shopkeeper):

CGST = 9% of 24000 = $\dfrac{9}{100}$ x 24000 =₹2160

SGST = 9% of 24000 = $\dfrac{9}{100}$ x 24000 =₹2160

∴ The Input Tax(under GST) for shopkeeper:
Input CGST = 2160
Input SGST = 2160

∴ The selling price of TV including tax (under GST) by the distributor = Selling Price + CGST + SGST
= 24000 + 2160+2160
= ₹28320

∴ Option 3 is the correct option.

Question 8

The tax (under GST) paid by the distributor to the State Government is

₹4320
₹2160
₹2880
₹720

Answer

From Question 7:

As the sales are intra-state and the rate of GST is 18%, so GST comprises of 9% as CGST and 9% as SGST. Distributor sells the TV to shopkeeper for ₹24000, amount of SGST collected by distributor from shopkeeper (or paid by shopkeeper):

SGST = 9% of 24000 = $\dfrac{9}{100}$ x 24000 = ₹2160

∴ Option 2 is the correct option.

Question 9

The tax (under GST) paid by the shopkeeper to the Central Government is

₹720
₹1440
₹2880
₹2160

Answer

Given:

Selling Price of shopkeeper without tax to consumer = Listed Price = ₹32000

As the sales are intra-state and the rate of GST is 18%, so GST comprises of 9% as CGST and 9% as SGST. Shopkeeper sells the TV to consumer for ₹32000, amount of SGST collected by shopkeeper from consumer(or paid by consumer):

SGST = 9% of 32000 = $\dfrac{9}{100}$ x 32000 = ₹2880

CGST = 9% of 32000 = $\dfrac{9}{100}$ x 32000 = ₹2880

The Output Tax(under GST) for shopkeeper:
Output CGST = 2880
Output SGST = 2880

From Question 7:

The Input Tax(under GST) for shopkeeper:
Input CGST = 2160
Input SGST = 2160

The tax (under GST) paid by the shopkeeper to the Central Government = Output CGST - Input CGST
= 2880 - 2160
= ₹720

∴ Option 1 is the correct option.

Question 10

The tax (under GST) received State Government is

₹5760
₹4320
₹1440
₹2880

Answer

From Question 7:

Amount of tax(under GST) paid by distributor to the State Government = ₹2160

From Question 9L

The tax (under GST) paid by the shopkeeper to the Central Government = ₹720
As CGST = SGST

The tax (under GST) paid by the shopkeeper to the State Government = ₹720

The tax (under GST) received by State Government = SGST paid by distributor + SGST paid by shopkeeper
= 2160 + 720
= ₹2880

∴ Option 4 is the correct option.

Question 11

The price including tax(under GST) of the TV paid by the consumer is

₹28320
₹37760
₹34880
₹32000

Answer

Given:

Listed price of TV = ₹32000

Selling price for shopkeeper excluding tax (or cost price for consumer) = Listed Price = ₹32000

As the sales are intra-state and the rate of GST is 18%, so GST comprises of 9% as CGST and 9% as SGST. Shopkeeper sells the TV to consumer for ₹32000, amount of GST collected by shopkeeper from consumer(or paid by consumer):

CGST = 9% of 32000 = $\dfrac{9}{100} \times$ 32000 = ₹2880

SGST = 9% of 32000 = $\dfrac{9}{100} \times$ 32000 = ₹2880

∴ The price including tax (under GST) of the TV paid by the consumer is = Cost Price + CGST + SGST
= 32000 + 2880 + 2880
= ₹37760

∴ Option 2 is the correct option.

Chapter Test

Question 1

A shopkeeper bought a washing machine at a discount of 20% from a wholesaler, the printed price of the washing machine being ₹18000. The shopkeeper sells it to a consumer at a discount of 10% on the printed price. If the sales are intra-state and the rate of GST is 12%, find:

(i) the price inclusive of tax (under GST) at which the shopkeeper bought the machine.

(ii) the price which the consumer pays for the machine.

(iii) the tax (under GST) paid by the wholesaler to the State Government.

(iv) the tax (under GST) paid by the shopkeeper to the State Government.

(v) the tax (under GST) received by the Central Government.

Answer

It is a case of intra-state transaction of goods and services:

SGST = CGST = $\dfrac{1}{2} \times$ GST

Given:
Printed price of the washing machine = ₹18000
Rate of discount for shopkeeper = 20%
Cost Price of washing machine for shopkeeper = Printed Price - Discount

$= 18000 - \Big(\dfrac{20}{100} \times 18000 \Big) \\[0.5em] = 18000 - 3600 \\[0.5em] = ₹14400$

As the sales are intra-state and the rate of GST is 12%, so GST comprises of 6% as CGST and 6% as SGST. Wholesaler sells the washing machine to shopkeeper for ₹14400, amount of GST collected by wholesaler from shopkeeper (or paid by shopkeeper)

CGST = 6% of 14400 = $\dfrac{6}{100} \times$ 14400 = ₹864

SGST = 6% of 14400 = $\dfrac{6}{100} \times$ 14400 = ₹864

∴ Amount of Input GST of Shopkeeper:

Input CGST = ₹864
Input SGST = ₹864

Since the shopkeeper sells the article to consumer at a discount of 10% on printed price, the selling price of article by shopkeeper ( or cost price for consumer) = Printed Price - Discount

$= 18000 - \Big(\dfrac{10}{100}\times18000\Big) \\[0.5em] = 18000 - 1800 \\[0.5em] = ₹16200$

The amount of GST collected by shopkeeper (or paid by consumer):

CGST = 6% of 16200 = $\dfrac{6}{100} \times$ 16200 = ₹972

SGST = 6% of 16200 = $\dfrac{6}{100} \times$ 16200 = ₹972

∴ Amount of output GST of Shopkeeper:

Output CGST = 972
Output SGST = 972

(i) the price inclusive of tax (under GST) at which the shopkeeper bought the machine
= Cost price of washing machine for Shopkeeper + CGST paid by shopkeeper + SGST paid by shopkeeper
= 14400 + 864 + 864
= ₹16128

(ii) the price which the consumer pays for the machine
= Cost price of washing for consumer + CGST paid by consumer + SGST paid by consumer
= 16200 + 972 + 972
= ₹18144

(iii) the tax (under GST) paid by the wholesaler to the state Government.

Calculated above:

= ₹864.

(iv) the tax (under GST) paid by the shopkeeper to the State Government.
= Output SGST of Shopkeeper - Input SGST of Shopkeeper
= 972 - 864 = ₹108.

(v) the tax (under GST) received by the Central Government.
= CGST paid by Wholesaler + CGST paid by Shopkeeper
= 864 + 108 = ₹972.

Question 2

A manufacturer listed the price of his goods at ₹1600 per article. He allowed a discount of 25% to a wholesaler who in turn allowed a discount of 20% on the listed price to a retailer. The retailer sells one article to a consumer at a discount of 5% on the listed price. If all the sales are intra-state and the rate of GST is 5%, find:

(i) the price per article inclusive of tax (under GST) which the wholesaler pays.

(ii) the price per article inclusive of tax (under GST) which the retailer pays.

(iii) the amount which the consumer pays for the article.

(iv) the tax (under GST) paid by the wholesaler to the State Government for the article.

(v) the tax (under GST) paid by the retailer to the Central Government for the article.

(vi) the tax (under GST) received by the State Government.

Answer

It is a case of intra-state transaction of goods and services:

SGST = CGST = $\dfrac{1}{2} \times$ GST

Given:

Listed Price of article by manufacturer = ₹1600

Discount percentage given by manufacturer to wholesaler = 25%

Cost Price for wholesaler = Listed Price - Discount

$= 1600 - \Big(\dfrac{25}{100}\times1600\Big) \\[0.5em] = 1600 - 400 \\[0.5em] = ₹1200$

As the sales are intra-state and the rate of GST is 5%, so GST comprises of 2.5% as CGST and 2.5% as SGST. Manufacturer sells the article to wholesaler for ₹1200, amount of GST collected by manufacturer from wholesaler(or paid by wholesaler)

CGST = 2.5% of 1200 = $\dfrac{2.5}{100} \times$ 1200 = ₹30

SGST = 2.5% of 1200 = $\dfrac{2.5}{100} \times$ 1200 = ₹30

∴ Amount of Input GST of wholesaler:

Input CGST = ₹30
Input SGST = ₹30

Since the wholesaler sells the article to retailer at a discount of 20% on listed price, the selling price of article by wholesaler (or cost price for retailer) = Listed Price - Discount

$= 1600 - \Big(\dfrac{20}{100}\times 1600\Big) \\[0.5em] = 1600 - 320\\[0.5em] = ₹1280$

The amount of GST collected by wholesaler (or paid by retailer):

CGST = 2.5% of 1280 = $\dfrac{2.5}{100}\times$ 1280 = 32

SGST = 2.5% of 1280 = $\dfrac{2.5}{100}\times$ 1280 = 32

∴ Amount of output GST of wholesaler(or input GST of retailer):

Output CGST = 32
Output SGST = 32

Since the retailer sells the article to consumer at a discount of 5% on listed price, the selling price of article by retailer (or cost price for consumer) = Listed Price - Discount

$= 1600 - \Big(\dfrac{5}{100}\times1600\Big) \\[0.5em] = 1600 - 80 \\[0.5em] = ₹1520$

The amount of GST collected by retailer (or paid by consumer):

CGST = 2.5% of 1520 = $\dfrac{2.5}{100} \times$ 1520 = 38

SGST = 2.5% of 1520 = $\dfrac{2.5}{100} \times$ 1520 = 38

∴ Amount of output GST of retailer:

Output CGST = 38
Output SGST = 38

(i) the price per article inclusive of tax (under GST) which the wholesaler pays.
= Cost price of article for wholesaler + CGST paid by wholesaler + SGST paid by wholesaler
= 1200 + 30 + 30 = ₹1260

(ii) the price per article inclusive of tax (under GST) which the retailer pays.
= Cost price of article for retailer + CGST paid by retailer + SGST paid by retailer
= 1280 + 32 + 32 = ₹1344

(iii) the amount which the consumer pays for the article.
= Cost price of article for consumer + CGST paid by consumer + SGST paid by consumer
=1520 + 38 + 38 = ₹1596

(iv) the tax (under GST) paid by the wholesaler to the State Government for the article.
= Output SGST of wholesaler - Input SGST of wholesaler
= 32 - 30= ₹2

(v) the tax (under GST) paid by the retailer to the Central Government for the article.
= Output CGST of retailer - Input CGST of retailer
= 38 - 32= ₹6

(vi) the tax (under GST) received by the State Government.
= SGST paid by the manufacturer + SGST paid by the wholesaler + SGST paid by the retailer
= 30 + 2 + 6= ₹38

Question 3

Mukerjee purchased a movie camera for ₹25488, which includes 10% rebate on the list price and 18% tax (under GST) on the remaining price. Find the marked price of the camera.

Answer

Given:

Rate of GST = 18%

Rebate (or discount) = 10% on Marked Price

Let the marked price be be P

Cost price of the article = Marked Price - Discount

$= \text{P} - 10% \text{ of P} \\[1em] = \text{P} - \Big(\dfrac{10}{100}\Big) \times \text{P} \\[1em] = \dfrac{100\text{P} - 10\text{P}}{100} \\[1em] = \dfrac{90\text{P}}{100} \\[1em] = 0.9\text{P}$

Amount of GST on cost price of article = 18% of 0.9P

Amount paid by Mukerjee = Cost Price + GST = 25488

$\Rightarrow 0.9\text{P}+ \Big(\dfrac{18}{100}\times0.9\text{P}\Big) = 25488 \\[1em] \Rightarrow 0.9\text{P}+ 0.162\text{P} = 25488 \\[1em] \Rightarrow 1.062\text{P} = 25488 \\[1em] \Rightarrow \text{P} = \dfrac{25488}{1.062} = \bold{₹24000}$

Question 4

The marked price of an article is ₹7500. A shopkeeper buys the article from a wholesaler at some discount and sells it to a consumer at the marked price. The sales are intra-state and the rate of GST is 12%. If the shopkeeper pays ₹90 as tax (under GST) to the State Government, find:

(i) the amount of discount.

(ii) the price inclusive of tax (under GST) of the article which the shopkeeper paid to the wholesaler.

Answer

Given:

Marked Price of the article = ₹7500

Let discount rate be $x$ %

Cost price of article for shopkeeper = Marked Price - Discount

$= 7500 - \Big(\dfrac{x}{100}\times7500\Big) \\[1em] = ₹(7500 - 75x)$

As the sales are intra-state and the rate of GST is 12%, so GST comprises of 6% as CGST and 6% as SGST. wholesaler sells the article to shopkeeper for $7500 - 75x$ , amount of GST collected by wholesaler from shopkeeper(or paid by shopkeeper)

CGST = 6% of $(7500 - 75x) = \Big(\dfrac{6}{100}\Big)\times(7500 - 75x) = ₹(450 - 4.5x)$

SGST = 6% of $(7500 - 75x) = \Big(\dfrac{6}{100}\Big)\times(7500 - 75x) = ₹(450 - 4.5x)$

∴ Amount of Input GST of shopkeeper:

Input CGST = $₹(450 - 4.5x)$
Input SGST = $₹(450 - 4.5x)$

Cost Price for Consumer = Marked Price of the article (as given in question) = ₹7500

The amount of GST collected by shopkeeper (or paid by consumer):

CGST = 6% of 7500 = $\dfrac{6}{100}\times$ 7500 = ₹450

SGST = 6% of 7500 = $\dfrac{6}{100}\times$ 7500 = ₹450

∴ Amount of Output GST of shopkeeper:

Output CGST = ₹450
Output SGST = ₹450

As the shopkeeper pays a tax (under GST) of ₹90 to the State Government:

Tax paid to state government by shopkeeper = Output SGST of shopkeeper - Input SGST of shopkeeper = ₹90

$\Rightarrow 450 - (450 - 4.5x) = 90 \\[0.5em] \Rightarrow 4.5x = 90 \\[0.5em] \Rightarrow x = \dfrac{90}{4.5} = 20%$

(i) the amount of discount = Rate of discount x Marked Price

$= 20% \text{ of Marked Price} \\[1em] = \Big(\dfrac{20}{100}\Big) \times 7500 \\[1em] = \bold{₹1500}$

(ii) the price inclusive of tax (under GST) of the article which the shopkeeper paid to the wholesaler = Cost price of article for shopkeeper + CGST paid by shopkeeper + SGST paid by shopkeeper

$= (7500 - 75x) + (450 - 4.5x) + (450 - 4.5x) \\[1em] = (7500 - (75\times20)) + (450 - (4.5\times20)) + (450 - (4.5\times20)) \\[1em] = 6000 + 360 + 360 = \bold{₹6720}$

Question 5

A retailer buys an article at a discount of 15% on the printed price from a wholesaler. He marks up the price by 10% on the printed price but due to competition in the market, he allows a discount of 5% on the marked price to a buyer. If the rate of GST is 12% and the buyer pays ₹468.16 for the article inclusive of tax (under GST), find

(i) the printed price of the article.

(ii) the profit percentage of the retailer.

Answer

Given:

Rate of GST = 12%

Discount for retailer = 15% on Printed Price

Let the printed price be be P

Cost price of the article for retailer = Printed Price - Discount

$= \text{P} - 15% \text{ of P } \\[1em] = \text{P} - \Big(\dfrac{15}{100}\Big) \times \text{P} \\[1em] = \dfrac{100\text{P} - 15\text{P}}{100} \\[1em] = \dfrac{85\text{P}}{100} \\[1em] = 0.85\text{P} \\[1em]$

Amount of GST on cost price of article paid by retailer (or collected by the wholesaler)

$= 12% \text{ of } 0.85 \text{P} \\[1em] = \dfrac{12}{100}\times{0.85\text{P}} \\[1em] = 0.102\text{P}$

Since the retailer marks the price at 10% premium on printed price = Marked Price = Printed Price + Premium

$= \text{P} + 10% \text{ of P} \\[1em] = \text{P} + \Big(\dfrac{10}{100} \times P\Big) \\[1em] = \dfrac{\text{100P} + \text{10P}}{100} \\[1em] = \dfrac{110\text{P}}{100} \\[1em] = 1.1\text{P}$

Discount given by retailer on marked price to the buyer = 5%

$= 5% \text{ of Marked Price} \\[1em] = 5% \text{ of } 1.1\text{P} \\[1em] = \dfrac{5}{100}\times{1.1\text{P}} \\[1em] = \dfrac{5.5\text{P}}{100} \\[1em] = 0.055\text{P}$

Cost Price of the article for the buyer = Marked Price- Discount

$= 1.1\text{P} - 0.055\text{P} \\[1em] = 1.045\text{P}$

Amount of GST on cost price of article paid by buyer (or collected by the retailer)

$= 12% \text{ of } 1.045\text{P} \\[1em] = \dfrac{12}{100}\times{1.045\text{P}} \\[1em] = 0.1254\text{P}$

(i) The printed price of the article.

Amount paid by buyer for the article = Cost Price + GST = 468.16

$\Rightarrow 1.045\text{P} + 0.1254\text{P} = 468.16 \\[1em] \Rightarrow 1.1704\text{P} = 468.16 \\[1em] \Rightarrow \text{P} = \dfrac{468.16}{1.1704} = \bold{₹400}$

(ii) The profit percentage of the retailer.

Cost Price of the article for the buyer = 1.045P = 1.045 x 400 = ₹418

Cost Price of the article for the retailer = 0.85P = 0.85 x 400 = ₹340

Profit of the retailer = Selling Price of the article for the retailer (or cost price of buyer) - Cost price of the article for the retailer
= 418 - 340 = ₹78

Profit % of the retailer $= \dfrac{\text{Profit}}{\text{Cost}}\times{100} \\[1em] = \dfrac{78}{340}\times{100} \\[1em] = \dfrac{390}{17} \\[1em] = \bold{22\dfrac{16}{17}}\%$