A Dealer Mr. Sudhir sells an electric iron for 2550. For a particular customer Mr. Gupta, he reduced the price of the iron in such a way that Mr. Gupta has to pay only 2224 including GST. If the rate of GST is 18%. Calculate the amount of reduction allowed by Mr. Sudhir.
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Step-by-step explanation:
Input GST = 12% on raw material = 12% of 120000 = 120000 x 12/100 = 14400
Output GST = 18% on finished product = 18% of 225000 = 225000 x 18/100 = 40500
Here, output GST is more than input GST.
Thus, GST Payable = Output GST – Input GST = 40500 – 14400 = Rs. 26100.
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