A wholesaler buys a machine from the manufacturer for ₹ 25,000. He marks the price of the machine 20% above his cost price and sells it to a retailer at 10% discount on the marked price. If the rate of GST is 18% and assuming that all transactions occur within the same state, calculate :

(i) the marked price of the machine.

(ii) retailers cost price inclusive of GST.

(iii) the CGST and SGST payable by the wholesaler to the government.

Given :

Wholesaler's cost price = ₹ 25,000

Markup = 20%

Discount to retailer = 10% on marked price

GST rate = 18%

As the transaction is intra-state so CGST and SGST are applicable.

CGST rate = SGST rate = $\dfrac{\text{GST rate}}{2} = \dfrac{18\%}{2}$ = 9%.

(i) Marked Price = Cost Price + 20% of Cost Price

= ₹ 25,000 + (20% of ₹ 25,000)

= ₹ 25,000 + $\dfrac{20}{100} \times 25,000$

= ₹ 25,000 + ₹ 5,000

= ₹ 30,000.

Hence, marked price for the machine = ₹ 30,000.

(ii) Given,

Retailer gets 10% discount on marked price.

Discount = $\dfrac{10}{100} \times 30,000$ = ₹ 3,000

Cost price for retailer (before GST)

= M.P. - Discount

= ₹ 30,000 - ₹ 3,000 = ₹ 27,000

GST = 18% of ₹ 27,000

$= \dfrac{18}{100} \times 27000$

= ₹ 4,860.

Retailer's cost price inclusive of GST = ₹ 27,000 + ₹ 4,860 = ₹ 31,860.

Hence, cost price for retailer inclusive of GST = ₹ 31,860.

(iii) C.P. for wholesaler = ₹ 25,000

Input CGST of the wholesaler = 9% of ₹ 25,000

= $\dfrac{9}{100} \times 25000$

= ₹ 2,250

Input SGST of the wholesaler = 9% of ₹ 25,000

= $\dfrac{9}{100} \times 25000$

= ₹ 2,250

S.P. for wholesaler = ₹ 25,000

Output CGST of the wholesaler = 9% of ₹ 27,000

= $\dfrac{9}{100} \times 27000$

= ₹ 2,430

Output SGST of the wholesaler = 9% of ₹ 27,000

= $\dfrac{9}{100} \times 27000$

= ₹ 2,430

Net CGST payable = Output CGST – Input CGST

= ₹ 2,430 - ₹ 2,250

= ₹ 180

Net SGST payable = Output SGST – Input SGST

= ₹ 2,430 - ₹ 2,250

= ₹ 180

Hence, net CGST payable = net SGST payable = ₹ 180.