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Question
A retailer buys a TV from a manufacturer for ₹ 25,000. He marks the price of the TV 20% above his cost price and sells it to a consumer at 10% discount on the marked price. If the sales are inter-state and rate of GST is 12%, find:
- the marked price of the TV.
- consumer’s cost price of TV inclusive of tax under GST.
- GST paid by the retailer to the Central and State Governments.
Solution
i. C.P of a TV for retailer = ₹ 25000
M.P of TV = C.P + 20% of C.P
= ₹ 25000 + 20% of ₹ 25000
= `₹ 25000 + 20/100 xx 25000`
= ₹ 30000
ii. Consumer's cost price = M.P - Discount
= ₹ 30000 - 10% of ₹ 30000
= `₹ 30000 - 10/100 xx 30000`
= ₹ 30000 - ₹ 3000
= ₹ 27000
Rate of GST = 12%
Consumer's cost price of TV inclusive of Tax = ₹ 27000 + 12% of ₹ 27000
= `₹ 27000 + 12/100 xx 27000`
= ₹ 27000 + 3240
= ₹ 30240
iii. Transaction is inter-state.
∴ IGST = Output IGST - Input IGST
= 12% of ₹ 27000 - 12% of ₹ 25000
= `12/100 xx 27000 - 12/100 xx 25000`
= ₹ 3240 - ₹ 3000
= ₹ 240
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