Question

A shopkeeper buys an article from a manufacturer for ₹ 100000. He marks the price of article 20% above the cost price. He sells it to a customer at 10% discount on the marked price. If the rate of GST is 12% and sales are intra-state, then:

1. The marked price of article is ______.
   1. ₹ 110000
   2. ₹ 120000
   3. ₹ 124000
   4. ₹ 125000
2. The selling price of the article for shopkeeper excluding GST is ______.
   1. ₹ 108000
   2. ₹ 110000
   3. ₹ 103000
   4. ₹ 116000
3. The amount of customer paid inclusive GST is ______.
   1. ₹ 108960
   2. ₹ 116320
   3. ₹ 120960
   4. ₹ 124480
4. The GST paid by shopkeeper to central government is ______.
   1. ₹ 120
   2. ₹ 240
   3. ₹ 360
   4. ₹ 480
5. The total GST paid by shopkeeper to central and state government is ______.
   1. ₹ 960
   2. ₹ 480
   3. ₹ 720
   4. ₹ 240

Answer 1

1. The marked price of article is ₹ 120,000.
2. The selling price of the article for shopkeeper excluding GST is ₹ 108000.
3. The amount of customer paid inclusive GST is ₹ 120960.
4. The GST paid by shopkeeper to central government is ₹ 480.
5. The total GST paid by shopkeeper to central and state government is ₹ 960.

Explanation:

(1) Cost price = ₹ 100000

Mark-up = 20% above cost price

20% of 1,00,000 = ₹ 20,000

Marked Price = 1,00,000 + 20,000

= ₹ 1,20,000

(2) Discount = 10% of MP 

Discount = 0.10 × 1,20,000

= ₹ 12,000

Selling Price = MP – Discount

= 1,20,000 – 12,000

= ₹ 1,08,000

(3) GST Amount = SP × GST Rate

= 1,08,000 × 0.12

= ₹ 12,960

Total Amount = SP + GST Amount

= 1,08,000 + 12,960

= ₹ 1,20,960

(4) Net GST Payable = Output GST – Input GST

= 12,960 – 12,000

= ₹ 960

CGST = `"Net GST Payable"/2`

= `960/2`

= ₹ 480

(5) Net GST = Output Tax – Input Tax 

= 12,960 – 12,000

= ₹ 960