Mathematics
The printed price of an article is ₹40000. A wholesaler in Uttar Pradesh buys the article from a manufacturer in Gujarat at a discount of 10% on the printed price. The wholesaler sells the article to a retailer in Himachal at 5% above the printed price. If the rate of GST on the article is 18%, find:
(i) The amount inclusive of tax (under GST) paid by the wholesaler for the article.
(ii) The amount inclusive of tax (under GST) paid by the retailer for the article.
(iii) The amount of tax (under GST) paid by the wholesaler to the Central Government.
(iv) The amount of tax (under GST) received by the Central Government.
GST
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Answer
Given:
The printed price of article is ₹40000. The rate of GST on sale or purchase of article is 18%. Here both the sales from manufacturer to wholesaler and wholesaler to retailer are inter-state, so IGST is levied on these sales at 18%
(i) As the wholesaler buys the article from a manufacturer at 10% discount on the printed price,
∴ Cost price of the article for the wholesaler:
Cost Price for wholesaler = Printed Price-Discount
Amount of IGST collected by manufacturer from wholesaler(or paid by wholesaler to manufacturer)
IGST=18% of 36000 = x 36000 = ₹6480
∴ Amount of Input GST of wholesaler:
Input IGST = ₹6480
The amount inclusive of tax (under GST) which the wholesaler pays for the article:
= Cost price of article for wholesaler + IGST paid by wholesaler
= 36000 + 6480= ₹42480
(ii) As wholesaler sells the article to retailer at 5% above the printed printed price. The selling price of article by wholesaler(or cost price of article for retailer) = Printed Price + Premium
Amount of IGST collected by wholesaler from retailer(or paid by retailer to wholesaler)
IGST=18% of 42000 = x 42000 = ₹7560
∴ Amount of Output GST of wholesaler:
Output IGST = ₹7560
The amount inclusive of tax (under GST) paid by the retailer for the article:
= Cost price of article for retailer + IGST paid by retailer
= 42000 + 7560= ₹49560
(iii) The amount of tax (under GST) paid by the wholesaler to the Central Government:
= Output IGST of wholesaler - Input IGST of wholesaler
= 7560 - 6480 = ₹1080.
(iv) The amount of tax (under GST) received by the Central Government:
= IGST paid by Manufacturer + IGST paid by wholesaler
= 6480 + 1080 = ₹7560.
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