A manufacturer sells binoculars for 3750 to a wholesaler, who sells it to a retailer at a profit of 12%. The retailer sells it to the customer at a profit of 600. If the rate of GST is 18% and all sales are intra-state, find (i) the gst paid by the wholesaler to the central government (ii)the price paid by the retailer inclusive of tax (iii) the total gst received by state government (iv) the price paid by the customer
Answers
Step-by-step explanation:
Mark price =Rs.5000
Manufacture sell the article to the wholesaler at a discount of =25%
Price of the article after discount=5000−
100
25
×5000
⇒5000−1250=Rs.3750
Rate of sales tax=8%
∴Tax paid by the wholesaler=8% of 3750
⇒
100
8
×3750=Rs.300
Wholesaler sell the article to retailer at a discount of 15% on M.P
price of the article after discount=5000−
100
15
×5000
⇒5000−750=Rs.4250
Rate of sales tax =8%
∴Tax paid by the retailer=8% of Rs. 4250
⇒
100
8
×4250=Rs.340
(i)VAT paid by the wholesaler
VAT=tax paid by the retailer-tax paid by the wholesaler
VAT=340−300=Rs.40
(ii)VAT paid by the Retailer
Retailer sell the article at marked price at rate of sales tax=8%
∴Tax earned by the retailer=8% of 5000
⇒
100
8
×5000=Rs.400
VAT=Tax earned by the retailer-Tax paid by the retailer
VAT=400−340=Rs.60
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Answer:
(i) The GST paid by the wholesaler to the central government is Rs. 675.
(ii) The price paid by the retailer inclusive of tax is Rs. 4875.
(iii) The total GST received by the state government is Rs. 189.
(iv) The price paid by the customer is Rs. 4800.
Explanation:
Let's begin by finding the cost price of the binoculars for the retailer:
Cost price for wholesaler = Rs. 3750
Profit for wholesaler = 0%
Selling price to retailer = cost price for retailer = 3750
Now, the retailer sells the binoculars at a profit of 12%, so the selling price for the customer is:
Selling price for retailer = 3750 + 12% of 3750 = 3750 + 450 = Rs. 4200
Next, we need to calculate the GST paid by the wholesaler to the central government. The GST rate is 18%, so the GST amount is:
GST paid by wholesaler = 18% of 3750 = Rs. 675
The price paid by the retailer inclusive of tax is the selling price for the retailer plus the GST paid by the wholesaler:
Price paid by retailer inclusive of tax = 4200 + 675 = Rs. 4875
Finally, we need to calculate the price paid by the customer, which is the selling price for the retailer plus the profit made by the retailer:
Price paid by customer = 4200 + 600 = Rs. 4800
To calculate the total GST received by the state government, we need to subtract the central GST amount from the total GST paid by the customer:
Total GST received by state government = 18% of (4800 - 3750) = 18% of 1050 = Rs. 189
Therefore, the answers to the given questions are:
(i) The GST paid by the wholesaler to the central government is Rs. 675.
(ii) The price paid by the retailer inclusive of tax is Rs. 4875.
(iii) The total GST received by the state government is Rs. 189.
(iv) The price paid by the customer is Rs. 4800.
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