Question

A shopkeeper in Punjab buys scooty at the printed price of $₹24000$ from a wholesaler in Himachal. The shopkeeper sells scooty to a consumer in Punjab at a profit of $15\%$ on the basic cost price. If the rate of GST is $12\%$, find
(i) the price inclusive of tax (under GST) at which the wholesaler bought the scooty.
(ii) the amount which the consumer pays for the scooty.
(iii) the amount of tax (under GST) received by the State Government of Punjab.
(iv) the amount of tax (under GST) received by the Central Government.

Answer 1

Step 1: Given data

Printed Price of the scooty, $P=₹24000$

Selling Price of the wholesaler, $S{P}_1=P$

Selling Price of the shopkeeper, $S{P}_2=15\%aboveS{P}_1$(∵ Selling Price of the wholesaler = Cost Price of the shopkeeper)

Goods and Services Tax, $GST\%=12\%$

Step 2: Find the amount paid by the shopkeeper to the wholesaler

(i) As the states of the shopkeeper and wholesaler are different i.e., Punjab and Himachal that is why it is an interstate sale due to which the wholesaler has to pay Integrated Goods and Services Tax (IGST) to the Central government as it is applied to interstate sales of goods and services. IGST% is always equal to the GST%.

∴ The price paid by the shopkeeper (including IGST) $=S{P}_1+IGST\%xS{P}_1$

$$\begin{gathered} =24000+\frac{12}{100}\times 24000 \\ =24000+2880 \\ =₹26880 \end{gathered}$$

Step 3: Find the amount paid by the consumer to the shopkeeper

(ii) Now, the shopkeeper sells it at a profit of $15\%$ on its printed price

∴ The Selling Price of the shopkeeper, $S{P}_2=P+Profit\%xP$

$$\begin{gathered} =24000+\frac{15}{100}\times 24000 \\ =24000+3600 \\ =₹27600 \end{gathered}$$

The Selling Price of the shopkeeper including GST $=S{P}_2+GST\%xS{P}_2$

$$\begin{gathered} =27600+\frac{12}{100}\times 27600 \\ =27600+3312 \\ =₹30912 \end{gathered}$$

Step 4: Find the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST)

According to the question, the state of the shopkeeper and consumer is the same i.e., Punjab that is why it is an intrastate sale due to which the tax will be given by the shopkeeper as the Central Goods and Services Tax (CGST)% and State Goods and Services Tax (SGST)% to the Central and State Government respectively.

∴$\mathbf{CGST}\mathbf{\%}\mathbf{=}\mathbf{SGST}\mathbf{\%}\mathbf{=}\frac{\mathbf{GST}\mathbf{\%}}{\mathbf{2}}$

$$\begin{gathered} =\frac{12}{2} \\ =6\% \end{gathered}$$

The amount of SGST and CGST collected by the shopkeeper from the consumer is the output SGST and output CGST of the shopkeeper.

$OutputSGSTofshopkeper=OutputCGSTofshopkeeper=SGST\%ofS{P}_2$

$$\begin{gathered} =\frac{6}{100}\times 27600 \\ =₹1656 \end{gathered}$$

Step 5: Find the tax received by the Punjab Government

(iii) Amount of output CGST and SGST of the shopkeeper, $SGST=CGST=₹1656$(Calculated in the above step).

As the IGST is paid by the wholesaler (last seller of interstate sale) to the Central Government for the interstate sale with the shopkeeper, set off input IGST $₹2880$ against output CGST $₹1656$ i.e, $(2880-1656)=₹1224.$

Here, $₹1224$ is the balanced input IGST of the shopkeeper.

Tax paid by the shopkeeper as SGST to Punjab Government

$=Output\mathit{}SGST\mathit{}of\mathit{}shopkeeper\mathit{-}Balanced\mathit{}Input\mathit{}IGST$

$$\begin{gathered} =1656-1224 \\ =₹432 \end{gathered}$$

Step 6: Find the tax received by the Central Government

(iv) According to the question, the sale is intrastate between the shopkeeper and the consumer and interstate between the shopkeeper and the wholesaler.

As the IGST is paid by the wholesaler (last seller of interstate sale) to the Central Government for the interstate sale with the shopkeeper. Therefore, the shopkeeper will not pay any extra tax to the Central Government as output CGST for selling scooty to the consumer of the same state.

Tax received by the Central Government $=IGSTpaidbythewholesaler+OutputCGSTofshopkeeper$

$$\begin{gathered} =2880+\mathrm{Nil} \\ =₹2880 \end{gathered}$$

Final Answer:

(i) The price inclusive of tax at which the wholesaler sold the scooty is $\mathbf{₹}\mathbf{}\mathbf{26880}$.

(ii) the amount paid by the consumer for the scooty is $\mathbf{₹}\mathbf{}\mathbf{30912}$.

(iii) The amount of tax paid to the Punjab Government by the shopkeeper is $\mathbf{₹}\mathbf{}\mathbf{432}$.

(iv) The amount of tax received by the Central Government as tax is $\mathbf{₹}\mathbf{}\mathbf{2880}$.