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A manufacturer marks an article at Rs 5000, He sells it to a wholesaler at a

discount of 25% on the marked price and the wholesaler sells it to a retailer at a

discount of 15% on the marked price. The retailer sells it to a consumer at the

marked price. if all the sales are intra-state and the rate of GST is 12%, find:

(i) The amount inclusive of tax (under GST) which the wholesaler pays for the

article.

(ii) The amount inclusive of tax (under GST) which the retailer pays for the article.

(iii) The amount of tax (under GST) which the wholesaler pays to the Central

Government.

(iv) The amount of tax (under CS?) which the retailer pays to the State

Government.

Answer:

It is a case of intra-state transaction of goods and services.

SGST = CGST = ½ GST

Given:

(i) The amount inclusive of tax (under GST) which the wholesaler pays for the article.

It is given that, Marked price of an article by the manufacturer = ₹5000

Discount given by manufacturer = 25% of ₹5000

= (25/100) × 5000

= ₹1250

CP of article for wholesaler = ₹5000 - ₹1250 = ₹3750

Discount given by wholesaler to retailer = 15% of ₹5000

= (15/100) × 5000

= ₹750

CP of article for retailer = ₹5000 - ₹750 = ₹4250

CP of article for consumer without tax = ₹5000

Rate of GST = 12%

Amount of GST paid by wholesaler = 12% of ₹3750

= (12/100) × 3750

= ₹450

The amount inclusive of tax (under GST) which the wholesaler pays for the article =

₹3750 + ₹450 = ₹4200

(ii) The amount inclusive of tax (under GST) which the retailer pays for the article.

Amount of GST paid by retailer = 12% of ₹4250

= (12/100) × 4250

= ₹510

The amount inclusive of tax (under GST) which the retailer pays for the article =

₹4250 + ₹510 = ₹4760

(iii) The amount of tax (under GST) which the wholesaler pays to the Central

Government.

Amount of GST paid by wholesaler to manufacturer,

CGST = SGST = 6% of ₹3750

= (6/100) × 3750

= ₹225

Amount of GST paid by retailer to wholesaler,

CGST = SGST = 6% of ₹4250

= (6/100) × 4250

= ₹255

The amount of tax (under GST) which the wholesaler pays to the Central Government =

₹255 - ₹225 = ₹30

(iv) The amount of tax (under CS?) which the retailer pays to the State Government.

Amount of GST paid by retailer to wholesaler,

CGST = SGST = 6% of ₹4250

= (6/100) × 4250

= ₹255

Amount of GST collected by retailer,

CGST = SGST = 6% of ₹5000

= (6/100) × 5000

= ₹300

The amount of tax (under CS?) which the retailer pays to the State Government =₹300 - ₹255 = ₹45

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