Question

A shopkeeper in Punjab buys an article at ₹ 4000 from a wholesaler in Rajasthan. The shopkeeper sells the article to a customer in Punjab at a profit of 25% on the cost price. The rate of GST is 18%, then:

1. The price of article inclusive of GST at which the shopkeeper bought it is ______.
   1. ₹ 4,900
   2. ₹ 4,720
   3. ₹ 3820
   4. ₹ 3630
2. The amount of tax under GST paid by shopkeeper to government is ______.
   1. ₹ 120
   2. ₹ 180
   3. ₹ 270
   4. ₹ 360
3. The amount of tax under GST received by Rajasthan government is ______.
   1. ₹ 90
   2. ₹ 180
   3. ₹ 270
   4. Nil 
4. The amount of tax under GST received by central government is ______.
   1. ₹ 1440
   2. ₹ 540
   3. ₹ 720
   4. ₹ 900
5. The amount paid by customer for article is ______.
   1. ₹ 5,900
   2. ₹ 5,800
   3. ₹ 5700
   4. ₹ 5,600
6. For an intra-state sale, the CGST paid by a dealer to the central government is 120. If the marked price of the article is ₹ 2000, the rate of GST is ______.
   1. 6%
   2. 10%
   3. 12%
   4. 16.67%

Answer 1

1. The price of article inclusive of GST at which the shopkeeper bought it is ₹ 4,720.
2. The amount of tax under GST paid by shopkeeper to government is ₹ 180.
3. The amount of tax under GST received by Rajasthan government is Nil.
4. The amount of tax under GST received by central government is ₹ 720.
5. The amount paid by customer for article is ₹ 5,900.
6. For an intra-state sale, the CGST paid by a dealer to the central government is 120. If the marked price of the article is ₹ 2000, the rate of GST is 12%.

Explanation:

1. Inter-state ⇒ IGST @ 18%

18% of 4,000 = 720

Inclusive price = 4,000 + 720 = ₹ 4,720

2. Selling price (before GST)

25% of 4,000 = 1,000

Selling price = 4,000 + 1,000 = ₹ 5,000

Output GST (intra-state) 

18% of 5,000 = 900 

Input tax credit = 720

Net GST paid = 900 − 720

= ₹ 180

3. Inter-state sale ⇒ IGST goes to Central Government, not the state. Therefore, it’s nil.

4. IGST from first sale = ₹ 720

CGST from final sale = 9% of 5,000

Total cental government revenue = 720 + (Output CGST 450 – Input credit 720) 

= 720

5. 5,000 + 900 = ₹ 5,900

6. Intra-state sale

CGST paid = ₹ 120

Marked price = ₹ 2,000

CGST = `"GST rate"/2xx2000`

= 120

`"GST rate"/2 = 120/2000`

= 6%

GST rate = 12%