Question

A Manufacturer listed the price of his goods at ₹ 1600 per article. He allowed a discount of 25% to a
wholesaler who in turn allowed a discount of 20% on the listed price to a retailer. The retailer sells one
article to a consumer at a discount of 5% on the listed price. If the sales are intrastate and the rate of
GST is 5% find:
i) The price per article inclusive of tax (under GST) which the wholesaler pays.
ii) The price per article inclusive of tax (under GST) which the retailer pays.
iii) The amount which the consumer pays for the article
iv) The tax (under GST) paid by the wholesaler to the State Government for the article.
v) The tax (under GST) paid by the retailer to the Central Government for the article.
vi) The tax (under GST) received by the State Government.

Answer 1

Given :  A Manufacturer listed the price of his goods at ₹ 1600 per article. He allowed a discount of 25% to a  wholesaler who in turn allowed a discount of 20% on the listed price to a retailer. The retailer sells one

article to a consumer at a discount of 5% on the listed price.

To find : i) The price per article inclusive of tax (under GST) which the wholesaler pays.

ii) The price per article inclusive of tax (under GST) which the retailer pays.

iii) The amount which the consumer pays for the article

iv) The tax (under GST) paid by the wholesaler to the State Government for the article.

v) The tax (under GST) paid by the retailer to the Central Government for the article.

vi) The tax (under GST) received by the State Government

Solution:

GST = CGST + SGST

GST Paid = GST Received - Input Tax Credit  

Input Tax Credit is GST Paid while buying

List Price  Rs 1600

Discount = 25 %

=> Discount = 1600  - (25/100)1600 = Rs 1200

GST = 5 %

Whole Seller Pays  = 1200 + (5/100)1200 = Rs 1260

GST Paid by Whole Seller to State Government =  (5/200)*1200 = Rs 30

Discount = 20 %

=> Discount = 1600 - (20/100)1600 = Rs 1280

GST = 5 %

Retailer Pays  = 1280 + (5/100)1280 = Rs 1344

Paid by Retailer to Central Government  =  (5/200)*1280  - 30  = Rs 2

Discount = 5 %

=> Discount = 1600 - (5/100)1600 = Rs 1520

GST = 5 %

Consumer Pays  = 1520 + (5/100)1520 = Rs 1596

Tax received by State Government  =  (5/200)1520  =  Rs 38

or 30  + (32 - 30)  + (38  - 32)  = Rs 38

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