Question

A manufacturer marks a mobile for ₹ 6000. He sells it to a wholesaler at 25% discount. The
wholesaler sells it to a retailer at 20% discount on market price. If the retailer sells it at market price
and GST charged is 12% at every stage, find the GST paid to the government:
(i) by the wholesaler (ii) by the retailer

Answer 1

Final Answer:

(i) The GST paid to the government by the wholesaler is ₹ 540.

(ii) The GST paid to the government by the retailer is ₹ 576.

Given:

A manufacturer marks the price of a mobile for ₹ 6000.

He sells it to the wholesaler with a 25% discount.

Then the wholesaler sells it to the retailer with a 20% discount on market price.

Again, the retailer sells it at the market price and also the GST charged is 12% at every stage.

To Find:

(i) The GST paid to the government by the wholesaler.

(ii) The GST paid to the government by the retailer.

Explanation:

The concepts essential for the solution are the following.

• The full form of GST is Goods and Services Tax.
• The GST is applicable on the selling price.
• The selling price is obtained by subtracting the discount from the marked price.

Step 1 of 4

As per the given data in the problem, the marked price is ₹ 6000.

When the manufacturer sells the mobile to the wholesaler with a 25% discount, the selling price (in ₹) is

$=(100-25)\% \times 6000\\= 75\% \times 6000\\=0.75 \times 6000\\=4500$

Step 2 of 4

Using  the information in the given problem, the following is obtained.

When the wholesaler sells the mobile to the retailer at a 20% discount, the selling price (in ₹) is

$=(100-20)\% \times 6000\\= 80\% \times 6000\\=0.80 \times 6000\\=4800$

Step 3 of 4

In continuation with the above calculation on the selling price, the GST paid to the government by the wholesaler (in ₹) is

$=12\% \times 4500\\=0.12 \times 4500\\=540$

Step 4 of 4

Continuing with the above calculation on the selling price, the GST paid to the government by the retailer (in ₹) is

$=12\% \times 4800\\=0.12 \times 4800\\=576$

Therefore, the required correct answer in the parts (i) and (ii) are ₹ 540 and  ₹ 576 respectively in absence of GST credit.

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