A retailer buys an AC from a wholesaler for $₹ 40000$ . He marks the price of the AC $15 %$ above his cost price and sells it to a consumer at $5 %$ discount on the marked price. If the sales are intrastate and the rate of GST is $12 %$ , find
(i) the marked price of the AC.
(ii) the amount which the consumer pays for the AC.
(iii) the amount of tax (under GST) paid by the retailer to the Central Government.
(iv) the amount of tax (under GST) received by the State Government.

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Solution

Step 1: Find the marked price of the AC.
(i) Goods and Services Tax rate, $G S T % = 12 %$
Cost Price of the retailer, $C P = ₹ 40000$
Rate of discount, $d % = 5 %$
The marked price of AC (retailer) $=$ $15 %$ above Cost Price (retailer)
The marked price of AC (retailer), $M P = C P + G S T % o f C P$
$= 40000 + \frac{15}{100} \times 40000 = ₹ 46000$
Step 2: Find the Central Goods and Services Tax (CGST)% and State Goods and Services Tax (SGST)%
Now, the retailer sells it to a consumer at $5 %$ on the marked price.
∴ The selling price of the retailer, $S P = M P - d % o f M P$
$= 46000 - \frac{5}{100} \times 46000 = 46000 - 2300 = ₹ 43700$
According to the question, the sales are intrastate that is why the tax will be given by the seller as the Central Goods and Services Tax (CGST)% and State Goods and Services Tax (SGST)% to the Central and State government respectively.
∴ $C G S T % = S G S T % = \frac{G S T %}{2}$
$= \frac{12}{2} = 6 %$
Step 3: Find the amount which the consumer pays for the AC.
(ii) Now, the amount of SGST and CGST collected by the retailer from the consumer is the output SGST and CGST of the retailer.
$O u t p u t S G S T = O u t p u t C G S T = S G S T % o f S e l l i n g P r i c e$
$= \frac{6}{100} \times 43700 = ₹ 2622$
$A m o u n t p a i d b y t h e c o n s u m e r t o r e t a i l e r = S P + O u t p u t C G S T + O u t p u t S G S T$
$= 43700 + 2622 + 2622 = ₹ 48944$
Step 4: Find the amount of tax (under GST) paid by the retailer to the Central Government.
(iii) According to the question, the cost price of the AC (retailer) = The selling price of the wholesaler.
Now, the amount of SGST and CGST collected by the wholesaler from the retailer is the input SGST and CGST of the retailer.
$I n p u t S G S T = I n p u t C G S T = S G S T % o f C o s t P r i c e o f r e t a i l e r$
$= \frac{6}{100} \times 40000 = ₹ 2400$
Tax paid by the shopkeeper to the Central Government (under GST)
= $O u t p u t C G S T - I n p u t C G S T$
$= 2622 - 2400 = ₹ 222$
Step 5: Find the amount of tax (under GST) received by the State Government.
(iv) The GST amount received by the State Government $= O u t p u t C G S T$
$= ₹ 2622$
Final Answer:
(i) The marked price of the AC is $₹ 46000$ .
(ii) The amount which the consumer pays for the AC is $₹ 48944$ .
(iii) The amount of tax paid by the retailer as Central Goods and Services Tax is $₹ 222$ .
(iv) The GST amount received by the State Government is $₹ 2622$ .

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