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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.

A
₹700
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B
₹720
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C
₹740
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D
₹760
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Solution

## The correct option is B ₹720Let the shopkeeper buy the article at ₹x For him CP = ₹x and SP = ₹900 Net CGST paid to the government = ₹16.2, hence Net SGST paid to the government = ₹16.2 So, total GST paid = ₹16.2 + ₹16.2 = ₹32.4 GST on Output - GST on Input = ₹32.4 ⇒18% of ₹900 - 18% of ₹x = ₹32.4 ⇒ 18x100 = ₹ 162 - ₹32.4 = ₹129.6 ⇒ x = ₹720

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