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.$\left[3Marks\right]$

Answer 1

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
$\left[0.5Marks\right]$

So, total GST paid = ₹162 + ₹162 = ₹324
$\left[0.5Marks\right]$

$\Rightarrow$ GST collected (Input Tax Credit) - GST paid on purchase = ₹324
$\left[0.5Marks\right]$

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

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

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

$\Rightarrow$ x = ₹7200
$\left[1Mark\right]$

So, for the shopkeeper, the cost price of the article is ₹7200.
$\left[0.5Marks\right]$