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Question

The Marked Price of an article is ₹50,000. A wholeseller sells it to a dealer at 10% discount. The dealer further sells it to a customer at 20% profit. If the rate of GST at each stage is 18%, find the amount of GST(in ₹) paid by the dealer.
  1. 1620

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Solution

The correct option is A 1620
Marked Price of the article

= ₹50,000

Discount = 10%

Cost price for the dealer

= ₹50,000 - (10% of ₹50,000)

= ₹45000

Now, dealer sells it at a profit of 20% to a customer.

Cost price for customer

= ₹45000 + (20% of ₹45000)

= ₹54000

Given that GST rate at every stage is 18%.

Amount of GST paid by the dealer

= GST collected by the dealer (Input Tax Credit, ITC) - GST paid by the dealer while purchasing

= 18% of (5400045000)

=18% of 9000

=18100×9000

=1620

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