Question

A dealer buys an article for ₹ 24000 in U.P. from a wholesaler in U.P. He sells the article to a consumer in Delhi at a profit of 25%. If the rate of GST is 5%, find:

1. the tax (under GST) paid by the wholesaler to government.
2. the tax (under GST) paid by the dealer to the government.
3. the amount which the consumer pays for the article.

Answer 1

(i) Cost Price Dealer = ₹ 24,000

GST rate = 5%

Tax paid by wholesaler = 5% of 24,000

Tax = `5/100xx24000`

= 1,200

(ii) Profit = 25% of 24,000 

= 6,000

Selling Price = 24,000 + 6,000

= 30,000

Output IGST = 5% of 30,000 = 1,500

Input tax credit (ITC) = 1,200

Tax paid by Dealer = Output tax – ITC

= 1,500 – 1,200

= 300

(iii) SP for consumer = 30,000

IGST = 1,500

Total Amount = 30,000 + 1,500

= 31,500