Question

A retailer buys an air conditioner from a whole sailer for Rs 35000 and sells it to a consumer at a profit of 8%. If the rate of GST is 28%, calculate the tax liability of the retailer​

Answer 1

Given : A retailer buys an air conditioner from a whole sailer for Rs 35000 and sells it to a consumer at a profit of 8% . rate of GST is 28%

To find : calculate the tax liability of the retailer​

Solution:

A retailer buys an air conditioner from a whole seller for Rs 35000

8 % Profit  = (8/100) 35000  =  Rs 2800

GST Rate = 28 %

GST on Rs 35000 was already paid by retailer  while buying

So His GST liability is only on Profit Pat

GST on 2800  = (28/100) * 2800  =  Rs 784

GST liability of the retailer​ = Rs 784  

GST Liability = GST received -  ITC  ( Input Tax credit )

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Answer 2

Answer:

Purchase price of air conditioner = ₹ 35000, rate of GST = 28%

Amount of GST paid by the retailer to the wholesaler

= 28% of ₹ 35000 = ₹ ( 28/100×35000 ) = ₹ 9800

Input GST of the retailer = ₹ 9800

The retailer sells the air conditioner to a consumer at 8% profit,

profit of the retailer = 8% of ₹ 35000 = ₹ ( 8/100×35000) = ₹2800

Selling price of air conditioner = C.P. + profit

= ₹35000+₹2800 = ₹37800

Amount of GST collected by the retailer from the consumer

=28% of ₹37800 = ₹(28/100×37800) =₹10584

Output GST of retailer = ₹10584

Tax liability of the retailer = Output GST- Input GST

= ₹10584 - ₹9800 = ₹784