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Question
A retailer purchased an air conditioner (A.C.) for ₹30000. He marked up its price by 20% and then allows a discount of 10% on the marked price to a customer. If the sale is intra-state and the rate of GST is 28%, find the:
- marked price of A.C.
- total amount paid by the customer including GST.
- tax collected by the central and the state governments respectively.
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Solution
Given Data:
Cost price of the A.C. to the retailer = ₹30000
Percentage markup = 20%
Rate of discount = 10%
Nature of transaction: Intra-state sale
Rate of GST = 28%
(i) Marked Price of the A.C.
Formula: \[\text{Marked Price (M.P.)} = \text{Cost Price} + \left(\frac{\text{Markup}%}{100} \times \text{Cost Price}\right)\]
Substitution: \[\text{Markup Amount} = \frac{20}{100} \times 30000 = ₹6000\]
\[\text{Marked Price} = 30000 + 6000\]
Final Answer (i): \[\text{Marked Price of A.C.} = ₹36000\]
(ii) Total Amount Paid by the Customer (including GST)
Discount allowed on Marked Price:
\[\text{Discount} = \frac{10}{100} \times 36000 = ₹3600\]
Selling Price (Taxable Value to Customer):
\[\text{Selling Price (S.P.)} = \text{M.P.} - \text{Discount}\]
\[\text{Selling Price (S.P.)} = 36000 - 3600 = ₹32400\]
GST Amount: \[\text{GST} = \frac{28}{100} \times 32400 = ₹9072\]
Total amount paid by customer: \[\text{Total Amount} = \text{S.P.} + \text{GST}\]
\[\text{Total Amount} = 32400 + 9072\]
Final Answer (ii): \[\text{Total amount paid by customer} = ₹41472\]
(iii) Tax Collected by Central and State Governments Respectively
For an intra-state sale, the total GST is divided equally between the Central Government (CGST) and the State Government (SGST):
\[\text{Rate of CGST} = \frac{28%}{2} = 14%\]
\[\text{Rate of SGST} = \frac{28%}{2} = 14%\]
Calculation: \[\text{Tax collected by Central Government (CGST)} = \frac{14}{100} \times 32400 = ₹4536\]
\[\text{Tax collected by State Government (SGST)} = \frac{14}{100} \times 32400 = ₹4536\]
Final Answer (iii): \[\text{Central Government (CGST)} = ₹4536\]
\[\text{State Government (SGST)} = ₹4536\]
Notes
If considered as the net tax paid specifically by the retailer on the value addition of ₹2400: Net CGST = ₹336 and Net SGST = ₹336; but the total tax collected by the governments on this retail sale to the consumer is ₹4536 each.
