Question

The Marked Price of an article is ₹50000. 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 net tax liability of the dealer to the Government.

• A. ₹1820
• B. ₹1620
• C. ₹1644
• D. ₹1586

Answer 1

The correct option is B ₹1620

MP = ₹50000
Discount = 10%
Price for the Dealer = $\frac{90}{100}\times 50000$ = ₹45000
Dealer sells it at a profit of 20% to customer.
Price for customer = $\frac{120}{100}\times 45000$ = ₹54000
GST at every stage = 18%.
$\therefore$ Net tax liability of dealer = Output GST - Input GST credit (ITC)
= 18% of (54000 - 45000)
= 18% of ₹9000
= $\frac{18}{100}\times 9000$
= ₹1620
$\therefore$ the net tax liability of the dealer to the Government is ₹1620.