Question

A retailer buys an article from a wholesaler for ₹ 10000. He marks the price of the article 15% above the cost price and sells it to a customer at 5% discount on the marked price. If the sales are intra-state and the rate of GST is 12%, find:

1. the amount which the customer pays for the article.
2. the amount of tax (under GST) paid by the retailer to the Central government.
3. the amount of tax (under GST) received by the State government.

Answer 1

MP = 10,000 + (15% of 10,000)

= 10,000 + 1,500 

= ₹ 11,500

Discount = 5% of 11,500

= ₹ 575

SP = 11,500 – 575

= ₹ 10,925

For the Retailer’s Purchase (Input Tax):

Input CGST = 6% of 10,000

= ₹ 600

Input SGST = 6% of 10,000

= ₹ 600

For the Customer’s Purchase (Output Tax):

Output CGST = 6% of 10,925 

= ₹ 655.5

Output SGST = 6% of 10,925 

= ₹ 655.5

(i) Amount = 10,925 + (655.5 + 655.5)

= 10,925 + 1,311

= ₹ 12,236

(ii) Tax to Central Govt = Output CGST − Input CGST

= 655.5 − 600

= ₹ 55.5

(iii) Total SGST received = ₹ 655.5