Question

A shopkeeper buys an article at a discount of 30% and pays GST at the rate of 5%. The shopkeeper sells the article to a consumer at 10% discount on the list price and charges GST at the same rate. If the list price of the article is Rs. 3,000, find:
(i) the price inclusive of GST paid by shopkeeper.
(ii) the price paid by consumer.
(iii) the VAT paid by the shopkeeper.

Answer 1

Step 1: Given information:

The list price of an article$=\mathrm{Rs}.3,000$

Rate of discount$=30\%$

GST rate$=5\%$

Step 2: Calculate the price paid by the shopkeeper:

The amount of discount is computed as;

$$\begin{gathered} \mathrm{Amount}=3,000\times \frac{30}{100} \\ \mathrm{Amount}=\mathrm{Rs}.900 \end{gathered}$$

The cost price of the shopkeeper ;

$$\begin{gathered} \mathrm{C}.\mathrm{P}=\mathrm{List}\mathrm{price}-\mathrm{Discount} \\ \mathrm{C}.\mathrm{P}=3,000-900 \\ \mathrm{C}.\mathrm{P}=\mathrm{Rs}.2,100 \end{gathered}$$

GST, paid by the shopkeeper;

$$\begin{gathered} \mathrm{GST}=2,100\times \frac{5}{100} \\ \mathrm{GST}=\mathrm{Rs}.105 \end{gathered}$$

So, the price paid by the shopkeeper ;

$$\begin{gathered} \mathrm{Price}=\mathrm{C}.\mathrm{P}+\mathrm{GST} \\ \mathrm{Price}=2,100+105 \\ \mathrm{Price}=\mathrm{Rs}.2,205 \end{gathered}$$

Step 3: Calculate cost price paid by the consumer:

Since, discount given to the consumer is $10\%$.

C.P of the consumer is computed as;

$$\begin{gathered} \mathrm{C}.\mathrm{P}=\frac{3,000\times (100-10)}{100} \\ \mathrm{C}.\mathrm{P}=\frac{3,000\times 90}{100} \\ \mathrm{C}.\mathrm{P}=\mathrm{Rs}.2,700 \end{gathered}$$

GST for consumer;

$$\begin{gathered} \mathrm{GST}=2,700\times \frac{5}{100} \\ \mathrm{GST}=\mathrm{Rs}.135 \end{gathered}$$

Total price paid by consumer $=2,700+135=\mathrm{Rs}.2,835$

Step 4:

Calculate VAT paid by shopkeeper:

$$\begin{gathered} \mathrm{VAT}=\mathrm{GST}\hspace{0.17em}\mathrm{recovered}-\mathrm{GST}\hspace{0.17em}\mathrm{paid} \\ \mathrm{VAT}=135-105 \\ \mathrm{VAT}=\mathrm{RS}.30 \end{gathered}$$

Final Answer :

(i) The price inclusive of GST paid by the shopkeeper is $\mathrm{Rs}.2,205$.

(ii) The price paid by the consumer is .$\mathrm{Rs}.2,835$

(iii) The VAT paid by the shopkeeper is $\mathrm{Rs}.30$.