Mathematics
A wholesaler A sells a machine to a retailer B for ₹ 5,000 and retailer B sells it to a consumer at a profit of ₹ 1,000. If the GST rate is 12%, calculate the tax liability of the retailer B.
GST
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Answer
Given:
Retailer B's cost = ₹ 5,000
Profit for retailer B = ₹ 1,000
Selling Price of Retailer B = ₹ 5,000 + ₹ 1,000 = ₹ 6,000
GST charged by Retailer B = 12% of ₹ 6,000
= x 6,000
= ₹ 720
GST paid by Retailer B = 12% of ₹ 5,000
= x 5,000
= ₹ 600
Tax Liability of Retailer B = GST charged - GST paid
= ₹ 720 - ₹ 600
= ₹ 120.
Hence, tax liability of the retailer B = ₹ 120.
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