Question

A shopkeeper buys an article whose list price is Rs. 800 at some rate of discount from a wholesaler. He sells the article to a consumer at the list price and charges GST at the prescribed rate of 5%. If the shopkeeper has to pay a GST of Rs. 6, find the rate of discount at which he bought the article from the wholesaler.

Answer 1

Step 1:

Given data:

List price of article$=\mathrm{Rs}.800$

Selling price for shopkeeper$=\mathrm{Rs}.800$

Rate of GST$=5\%$

GST paid by shopkeeper$=\mathrm{Rs}.6$

Step 2:

Calculate selling price of wholesaler:

$\begin{array}{rcl}\mathrm{Total}\mathrm{GST}& =& 800\times \frac{5}{100}\\ \mathrm{Total}\mathrm{GST}& =& \mathrm{Rs}.40\end{array}$

Calculate GST paid by wholesaler.

$\begin{array}{rcl}\mathrm{GST}\mathrm{paid}\mathrm{by}\mathrm{wholesaler}& =& 40-6\\ \therefore \mathrm{GST}\mathrm{paid}\mathrm{by}\mathrm{wholesaler}& =& \mathrm{Rs}.34\end{array}$

Selling price of the wholesaler is computed as,

$\begin{array}{rcl}\mathrm{Selling}\mathrm{price}& =& \left(\frac{34\times 100}{5}\right)\\ \therefore \mathrm{Selling}\mathrm{price}& =& \mathrm{Rs}.680\end{array}$

Step 3:

Calculate the rate of discount:

$\begin{array}{rcl}\mathrm{Total}\mathrm{discount}& =& 800-680\\ \therefore \mathrm{Total}\mathrm{discount}& =& \mathrm{Rs}.120\end{array}$

Calculate the rate of discount.

$\begin{array}{rcl}\mathrm{Rate}\mathrm{of}\mathrm{discount}& =& \frac{120}{800}\times 100\\ \therefore \mathrm{Rate}\mathrm{of}\mathrm{discount}& =& 15\%\end{array}$

Hence, the rate of discount is 15%.