The printed price of a bicycle is $₹ 60000$ . The manufacturer allows a discount of $25 %$ to a dealer Sanjeev. The dealer Sanjeev sells the article to another dealer Mohit at a discount of $12 %$ on the marked price. The dealer Mohit sells it to a consumer at $5 %$ above the printed price. If all the sales are intrastate and the rate of GST is $18 %$ , find
(i) the price of the bicycle inclusive of tax (under GST) paid by dealer Sanjeev.
(ii) the price of the bicycle inclusive of tax (under GST) paid by dealer Mohit.
(iii) the amount in which the consumer pays for the bicycle.
(iv) the amount of tax (under GST) paid by dealer Sanjeev to the Central Government.
(v) the amount of tax (under GST) paid by dealer Mohit to the State Government.
(vi) the amount of tax (under GST) received by the Central Government.

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Solution

Step 1: Given data
Marked Price of bicycle, $M P = ₹ 60000$
Rate of discount by the manufacturer, $d_{1} % = 25 % o n M P$
Rate of discount by Sanjeev (First dealer), $d_{2} % = 12 % o n M P$
Rate marked above MP by Mohit (Second dealer), $r % = 5 %$
Rate of GST, $G S T % = 18 %$
Step 2: Find the price of the bicycle paid by the first dealer Sanjeev.
(i) Selling Price of the manufacturer, $S P_{1} = M P - d_{1} % o f M P$
$= 60000 - \frac{25}{100} \times 60000 = 60000 - 15000 = ₹ 45000$
The price paid by Sanjeev (including GST) $= S P_{1} + G S T % o f S P_{1}$
$= 45000 + \frac{18}{100} \times 45000 = 45000 + 8100 = ₹ 53100$
Step 3: Find the price of the bicycle paid by the second dealer Mohit.
(ii) Now, Sanjeev (First dealer) sells it to Mohit (Second dealer) at a discount of $12 %$ on the marked price.
∴ The Selling Price of the Sanjeev, $S P_{2} = M P - d_{2} % o f M P$
$= 60000 - \frac{12}{100} \times 60000 = 60000 - 7200 = ₹ 52800$
The price paid by Mohit (including GST) $= S P_{2} + G S T % o f S P_{2}$
$= 52800 + \frac{18}{100} \times 52800 = 52800 + 9504 = ₹ 62304$
Step 4: Find the Central Goods and Services Tax (CGST)% and State Goods and Services Tax (SGST)
Now, the second dealer, Mohit sells it to a consumer at $r %$ above the marked price.
∴ The Selling Price of the Mohit, $S P_{3} = M P + r % o f M P$
$= 60000 + \frac{5}{100} \times 60000 = 60000 + 3000 = ₹ 63000$
According to the question, the sales are intrastate that is why the tax will be given by the seller as the Central Goods and Services Tax (CGST)% and State Goods and Services Tax (SGST)% to the Central and State Government respectively.
∴ $C G S T % = S G S T % = \frac{G S T %}{2}$
$= \frac{18}{2} = 9 %$
Step 5: Find the amount in which the consumer pays for the bicycle.
(iii) Now, the amount of SGST and CGST collected by the second dealer, Mohit (seller) from the consumer (buyer) is the Output SGST and Output CGST of Mohit.
$O u t p u t S G S T o f M o h i t = O u t p u t C G S T o f M o h i t = S G S T % o f S P_{3}$
$= \frac{9}{100} \times 63000 = ₹ 5670$
∴ Amount paid by the consumer to Mohit $= S P_{3} + O u t p u t C G S T o f M o h i t + O u t p u t S G S T o f M o h i t$
$= 63000 + 5670 + 5670 = ₹ 74340$
Step 6: Find the amount of tax (under GST) paid by the first dealer Sanjeev to the Central Government.
(iv) Now, for the manufacturer (seller) and Sanjeev (buyer) transactions, the amount of SGST and CGST collected by the manufacturer from the first dealer Sanjeev is the Input SGST and CGST of Sanjeev.
$I n p u t S G S T o f S a n j e e v = I n p u t C G S T o f S a n j e e v = S G S T % o f S P_{1}$
$= \frac{9}{100} \times 45000 = ₹ 4050$
Now, the amount of SGST and CGST collected by the first dealer Sanjeev (seller) from the second dealer Mohit (buyer) is the Output SGST and Output CGST of Sanjeev.
$O u t p u t S G S T o f S a n j e e v = O u t p u t C G S T o f S a n j e e v = S G S T % o f S P_{2}$
$= \frac{9}{100} \times 52800 = ₹ 4752$
∴ Tax paid by the Sanjeev to the Central Government (under GST)
$= O u t p u t C G S T o f S a n j e e v - I n p u t C G S T o f S a n j e e v$
$= 4752 - 4050 = ₹ 702$
Step 7: Find the amount of tax (under GST) paid by the second dealer Mohit to the State Government.
(v) For the sale between the first dealer Sanjeev (seller) and the second dealer Mohit (buyer), the amount of SGST and CGST collected by Sanjeev from Mohit is the Input SGST and CGST of Mohit.
$I n p u t S G S T o f M o h i t = I n p u t C G S T o f M o h i t = S G S T % o f S P_{2}$
$= \frac{9}{100} \times 52800 = ₹ 4752$
and $O u t p u t S G S T o f M o h i t = O u t p u t C G S T o f M o h i t = ₹ 5670 (∵ C a l c u l a t e d i n s t e p 5)$
∴ Tax paid by the Mohit to the State Government (under GST)
$= O u t p u t C G S T o f M o h i t - I n p u t C G S T o f M o h i t$
$= 5670 - 4752 = ₹ 918$
Step 8: Find the amount of tax (under GST) received by the Central Government.
(vi) The amount of tax received by the Central Government $= O u t p u t C G S T o f M o h i t$
$= ₹ 5670 (∵ C a l c u l a t e d i n s t e p 5)$
Final Answer:
(i) The price of the bicycle inclusive of tax (under GST) paid by the dealer Sanjeev is $₹ 53100$ .
(ii) The price of the bicycle inclusive of tax (under GST) paid by the dealer Mohit is $₹ 62304$ .
(iii) The amount which the consumer pays is $₹ 74340$ .
(iv) The amount of tax paid by Sanjeev as Central Goods and Services Tax is $₹ 702$ .
(v) The amount of tax paid by Mohit as State Goods and Services Tax is $₹ 918$ .
(vi) The amount of tax received by the Central Government is $₹ 5670$ .

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