Question

Producer p sells a T.V to a trader Q for 12500 .Trader q sells it to a trader r at profit of 800 and trader r sells it to a customer at profit of 1300 if the rate of GST is 8% find amount of tax received by State Government on the sale of this T.v ​

Answer 1

Explanation:-

Let's firstly understand what is GST and how is it applicable!

The full form of GST is Goods and Services Tax. It is a type of indirect tax which is applicable when we consume goods or services. It is a value added tax. It has been replaced by many custom duties and additional taxes.

There are three categories of GST:-

• CGST - Central Goods and Services Tax (levied on intra-state (within state) sale)

• SGST - State Goods and Services Tax (levied on intra-state sales)

• IGST - Integrated Goods and Services Tax (levied on inter-state (outside state) sale)

Note: The total GST in an intra-state sales comprises of both CGST and SGST where CGST = SGST and CGST + SGST = GST.

Types of GST :-

The two types of GST is input GST and Output GST.

• The tax payable by the person who has consumed goods or services is called Input GST.

• The tax receivable by the person who has provided goods or services is called output GST.

We have acquired basic knowledge of GST, now let us solve the given problem!

Solution:-

In the question, we are given that a producer 'P' sells a T.V. to a trader Q for ₹ 12,500. Trader 'Q' sells it to a trader R at a profit of ₹ 800 and trader 'R' sells it to a customer at a profit of ₹ 1,300. Given that the GST is applied @ 8% and the transaction is an intra-state sales.

Producer P sells to Q

Amount of GST collected by P from Q

⇒ 4% of 12,500

⇒ 4/100 × 12,500

⇒ 4 × 125

⇒ 1,000 _______(1.)

Trader Q sells to R

Amount of GST collected by Q from R

⇒ 4% of 800

⇒ 4/100 × 800

⇒ 4 × 8

⇒ 32 _________(2.)

Trader R sells to customer

Amount of GST collected by R from customer

⇒ 4% of 1,300

⇒ 4/100 × 1,300

⇒ 4 × 13

⇒ 52 _________(3.)

Adding (1.) , (2.) and (3.) will give us the total GST collected by state government on the sale of this T.V.

Therefore the total GST collected = 1084

Note : GST is always collected from the successive units on the basis of the value added i.e. the amount of profit.

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