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Mathematics

A dealer in Maharashtra buys an article from a wholesaler in Mumbai at a discount of 20%, the printed price of the article being ₹ 20,000. He sells the article to a customer in Telangana at a discount of 10% on the printed price. If the rate of GST is 12%, find :

(i) The tax (under GST) paid by wholesaler to the Government.

(ii) The tax (under GST) paid by the dealer to the Government.

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

GST

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Answer

(i) As the dealer in Maharashtra buys an article from a wholesaler in Maharashtra, so this sale is intra-state.

Rate of GST is 12%. So GST comprises of CGST at 6% and SGST at 6%.

Printed price of the article = ₹ 20,000

Discount = 20%

Purchase price of the article for the dealer = Printed price - Discount

= ₹ 20,000 - 20% of ₹ 20,000

= ₹ 20,000 - 20100×20000\dfrac{20}{100} \times 20000

= ₹ 20,000 - ₹ 4,000

= ₹ 20,000 - ₹ 4,000

= ₹ 16,000

CGST collected by the wholesaler = 6% of 16000 = 6100\dfrac{6}{100} x 16000 = ₹ 960

SGST collected by the wholesaler = 6% of 16000 = 6100\dfrac{6}{100} x 16000 = ₹ 960.

Hence, tax paid by the wholesaler to the government is CGST = ₹ 960 and SGST = ₹ 960.

(ii) The dealer sells the article at a discount of 10% on the printed price.

∴ Selling price of the article by the dealer to the consumer = Printed price - Discount

= ₹ 20,000 - 10% of ₹ 20,000

= ₹ 20,000 - 10100×20,000\dfrac{10}{100} \times 20,000

= ₹ 20000 - ₹ 2,000

= ₹ 18,000

As the dealer in Maharashtra sells the article to a consumer in Telengana, so this sale is inter-state.

Rate of GST is 12%. So, on this sale IGST is levied at 12%.

IGST collected by the dealer from the consumer = 12% of ₹ 18,000

= 12100\dfrac{12}{100} x ₹ 18,000

= ₹ 2160.

Input GST of the dealer = CGST + SGST = ₹ 960 + ₹ 960 = ₹ 1,920

Output GST of the dealer = IGST = ₹ 2,160

Net tax liability of the dealer = Output GST - Input GST

= ₹ 2,160 - ₹ 1,920 = ₹ 240

Hence, the dealer pays ₹ 240 IGST to the Central Government.

(iii) The total amount paid by the consumer = Selling price of the article + GST paid by the consumer

= ₹ 18,000 + ₹ 2,160

= ₹ 20,160

Hence, the amount which the consumer pays for the article = ₹ 20,160.

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