Question

The marked price of an article = ₹9000 and rate of GST on it is 18%. A shopkeeper buys this article at a reduced price and sells it at its marked price.

If the shopkeeper pays ₹162 as CGST to the government as part of his net tax liability, find the amount (excluding GST) paid (in ₹) by the shopkeeper for the article.

• A. ₹3600
• B. ₹7200
• C. ₹1800
• D. ₹9800

Answer 1

The correct option is B ₹7200

Let the shopkeeper buy the article at ₹x.

For him CP = ₹x and SP = ₹9000

CGST paid to the government = ₹162

$\Rightarrow$ SGST paid to the government = ₹162

So, total GST paid = ₹162 + ₹162 = ₹324

$\Rightarrow$ GST collected (Input Tax Credit) - GST paid on purchase = ₹324

$\Rightarrow$ 18% of ₹9000 - 18% of ₹x = ₹324

$\Rightarrow \frac{18}{100}\times 9000-\frac{18x}{100}=324$

$\Rightarrow 1620-\frac{18x}{100}=324$

$\Rightarrow$ $\frac{18x}{100}$ = ₹ 1620 - ₹324

$\Rightarrow$ $\frac{18x}{100}$ = ₹1296

$\Rightarrow$ x = ₹7200

So, for the shopkeeper, the cost price of the article is ₹7200.