A shopkeeper sells an article for ₹16800 with GST = 12%. A customer willing to buy this article, asks the shopkeeper to reduce the price of the article so that he pays only ₹17875.2 including GST. If the shopkeeper agrees for this, how much reduction will the shopkeeper give?

₹840

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₹960

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₹720

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₹744

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Solution

The correct option is A ₹840
Let the reduction given by shopkeeper be ₹ x.
Reduced price of the article = ₹(16800 - x)
Clearly, the reduced price of the article + GST on it should be = ₹17875.20
$\Rightarrow$ ₹(16800 - x) + 12% of ₹(16800 - x) = ₹17875.20
Solving we get :
16800 - x + 2016 - $\frac{12 x}{100}$ = 17875.20
$\Rightarrow$ $\frac{112 x}{100}$ =₹18816 - ₹17875.20 = ₹940.80
$\Rightarrow$ x = $\frac{94080}{112}$ = ₹ 840

Hence, reduction given by the shopkeeper = ₹840

Alternate method :
Let the reduced price be ₹x
Reduced Price + GST on it = ₹17875.2
x + 12% of x = ₹17875.2
$\Rightarrow$ $\frac{112 x}{100}$ = ₹17875.2
$\Rightarrow$ x = ₹15960
Reduction given by the shopkeeper = ₹16800 - ₹15960 = ₹840

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