A manufacturer listed the price of his goods at ₹1600 per article. He allowed a discount of 25% to a wholesaler who in turn allowed a discount of 20% on the listed price to a retailer. The retailer sells one article to a consumer at a discount of 5% on the listed price. If all the sales are intra-state and the rate of GST is 5%, find:

(i) the price per article inclusive of tax (under GST) which the wholesaler pays.

(ii) the price per article inclusive of tax (under GST) which the retailer pays.

(iii) the amount which the consumer pays for the article.

(iv) the tax (under GST) paid by the wholesaler to the State Government for the article.

(v) the tax (under GST) paid by the retailer to the Central Government for the article.

(vi) the tax (under GST) received by the State Government.

It is a case of intra-state transaction of goods and services:

SGST = CGST = $\dfrac{1}{2} \times$ GST

Given:

Listed Price of article by manufacturer = ₹1600

Discount percentage given by manufacturer to wholesaler = 25%

Cost Price for wholesaler = Listed Price - Discount

$= 1600 - \Big(\dfrac{25}{100}\times1600\Big) \\[0.5em] = 1600 - 400 \\[0.5em] = ₹1200$

As the sales are intra-state and the rate of GST is 5%, so GST comprises of 2.5% as CGST and 2.5% as SGST. Manufacturer sells the article to wholesaler for ₹1200, amount of GST collected by manufacturer from wholesaler(or paid by wholesaler)

CGST = 2.5% of 1200 = $\dfrac{2.5}{100} \times$ 1200 = ₹30

SGST = 2.5% of 1200 = $\dfrac{2.5}{100} \times$ 1200 = ₹30

∴ Amount of Input GST of wholesaler:

Input CGST = ₹30
Input SGST = ₹30

Since the wholesaler sells the article to retailer at a discount of 20% on listed price, the selling price of article by wholesaler (or cost price for retailer) = Listed Price - Discount

$= 1600 - \Big(\dfrac{20}{100}\times 1600\Big) \\[0.5em] = 1600 - 320\\[0.5em] = ₹1280$

The amount of GST collected by wholesaler (or paid by retailer):

CGST = 2.5% of 1280 = $\dfrac{2.5}{100}\times$ 1280 = 32

SGST = 2.5% of 1280 = $\dfrac{2.5}{100}\times$ 1280 = 32

∴ Amount of output GST of wholesaler(or input GST of retailer):

Output CGST = 32
Output SGST = 32

Since the retailer sells the article to consumer at a discount of 5% on listed price, the selling price of article by retailer (or cost price for consumer) = Listed Price - Discount

$= 1600 - \Big(\dfrac{5}{100}\times1600\Big) \\[0.5em] = 1600 - 80 \\[0.5em] = ₹1520$

The amount of GST collected by retailer (or paid by consumer):

CGST = 2.5% of 1520 = $\dfrac{2.5}{100} \times$ 1520 = 38

SGST = 2.5% of 1520 = $\dfrac{2.5}{100} \times$ 1520 = 38

∴ Amount of output GST of retailer:

Output CGST = 38
Output SGST = 38

(i) the price per article inclusive of tax (under GST) which the wholesaler pays.
= Cost price of article for wholesaler + CGST paid by wholesaler + SGST paid by wholesaler
= 1200 + 30 + 30 = ₹1260

(ii) the price per article inclusive of tax (under GST) which the retailer pays.
= Cost price of article for retailer + CGST paid by retailer + SGST paid by retailer
= 1280 + 32 + 32 = ₹1344

(iii) the amount which the consumer pays for the article.
= Cost price of article for consumer + CGST paid by consumer + SGST paid by consumer
=1520 + 38 + 38 = ₹1596

(iv) the tax (under GST) paid by the wholesaler to the State Government for the article.
= Output SGST of wholesaler - Input SGST of wholesaler
= 32 - 30= ₹2

(v) the tax (under GST) paid by the retailer to the Central Government for the article.
= Output CGST of retailer - Input CGST of retailer
= 38 - 32= ₹6

(vi) the tax (under GST) received by the State Government.
= SGST paid by the manufacturer + SGST paid by the wholesaler + SGST paid by the retailer
= 30 + 2 + 6= ₹38