Question

A retailer buys an article at its listed price from a wholesaler and sells it to a consumer in the same state after marking up the price by 20%. The list price of the article is 2500 and the rate of GST is 12%. What is the tax liability of the retailer to the central government?

विकल्प

• ₹ 0

• ₹ 15

• ₹ 30

• ₹ 60

Answer 1

₹ 30

Explanation:

Purchase price = ₹ 2,500. 

GST @12% on purchase = 0.12 × 2,500 = ₹ 300 

⇒ CGST = ₹ 150, SGST = ₹ 150.

Selling price after 20% markup = 2,500 × 1.20 = ₹ 3,000. 

GST @12% on sale = 0.12 × 3,000 = ₹ 360 

⇒ CGST = ₹ 180, SGST = ₹ 180.

Retailer claims input credit of CGST ₹ 150 against output CGST ₹ 180. 

So, net CGST payable to the central government = 180 – 150 = ₹ 30.