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.

• A. 1620

Answer 1

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%.

$\therefore$ Amount of GST paid by the dealer

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

= $18\%of(₹54000-₹45000)$

$=18\%of₹9000$

$=\frac{18}{100}\times 9000$

$=₹1620$