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Question

The MP of an article = ₹900 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 ₹16.2 as CGST to the government as part of his net tax liability, find the amount (exclusive of GST) paid by the shopkeeper.

[3 Marks]

[3 Marks]

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Solution

Let the shopkeeper buy the article at ₹x

For him CP = ₹x and SP = ₹900 [0.5 Marks]

Net CGST paid to the government = ₹16.2, hence Net SGST paid to the government = ₹16.2 [0.5 Marks]

So, total GST paid = ₹16.2 + ₹16.2 = ₹32.4 [0.5 Marks]

GST on Output - GST on Input = ₹32.4 [0.5 Marks]

⇒18% of ₹900 - 18% of ₹x = ₹32.4 [0.5 Marks]

⇒ 18x100 = ₹ 162 - ₹32.4 = ₹129.6

⇒ x = ₹720

Hence, the amount paid by the shopkeeper is ₹720. [0.5 Marks]

For him CP = ₹x and SP = ₹900 [0.5 Marks]

Net CGST paid to the government = ₹16.2, hence Net SGST paid to the government = ₹16.2 [0.5 Marks]

So, total GST paid = ₹16.2 + ₹16.2 = ₹32.4 [0.5 Marks]

GST on Output - GST on Input = ₹32.4 [0.5 Marks]

⇒18% of ₹900 - 18% of ₹x = ₹32.4 [0.5 Marks]

⇒ 18x100 = ₹ 162 - ₹32.4 = ₹129.6

⇒ x = ₹720

Hence, the amount paid by the shopkeeper is ₹720. [0.5 Marks]

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