Question

A manufacturer sells a dish washer to a wholesaler for ₹ 18000. The wholesaler sells it to a dealer at a profit of ₹ 1500 and the dealer sells it to a consumer at a profit of ₹ 2500. If the rate of GST is 12% and assuming that all transactions occur within the same state, calculate

1. the total amount of GST received by the central and the state governments on the sale of this dish washer from the manufacturer to the consumer. 
2. the amount paid by the consumer for the dish washer.

[Hint: The total GST received by the government is the GST amount on the final price at which the end-user/consumer purchases.]

Answer 1

Given:

Manufacturer → Wholesaler: selling price = ₹ 18,000.

Wholesaler → Dealer: profit = ₹ 1,500.

Dealer → Consumer: profit = ₹ 2,500.

GST rate = 12% and all transactions are intra‑state, so GST = 6% CGST + 6% SGST.

Step-wise calculation:

1. Wholesaler’s selling price to dealer 

= ₹ 18,000 + ₹ 1,500

= ₹ 19,500

2. Dealer’s selling price to consumer, pre‑tax 

= ₹ 19,500 + ₹ 2,500 

= ₹ 22,000

3. Total GST on final (taxable) price 

= 12% of ₹ 22,000 

= 0.12 × 22,000

= ₹ 2,640

4. Since intra‑state, split equally:

CGST = 6% of ₹ 22,000

= ₹ 1,320

SGST = 6% of ₹ 22,000

= ₹ 1,320

5. Amount paid by consumer = pre‑tax price + GST 

= ₹ 22,000 + ₹ 2,640 

= ₹ 24,640