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Question
A shopkeeper in Punjab buys an article at a printed price of ₹ 20,000 from a wholesaler in Delhi. The shopkeeper sells the article to a customer in Punjab at a profit of 25% on the cost price. If the rate of GST is 18%, find:
- the price of the article (inclusive of GST) for the shopkeeper.
- the amount of tax, under GST, paid by the shopkeeper to the government.
Solution
i. Given: M.P of an article = ₹ 20,000
Profit % = 25%
GST = 18%
Since the transaction is inter-state.
∴ IGST = 18% of ₹ 20,000
= `₹ 18/100 xx 20,000`
= ₹ 3,600
Thus, the C.P of the article (including IGST)
= ₹ 20,000 + ₹ 3,600
= ₹ 23,600
ii. S.P of an article to the customer = ₹ 20,000 + 25% of ₹ 20,000
= `₹ 20,000 + 25/100 xx 20,000`
= ₹ (20,000 + 5,000)
= ₹ 25,000
∴ IGST (output) = 18% of ₹ 25,000
= `₹ 18/100 xx 25,000`
= ₹ 4,500
Thus, the amount of tax under GST paid by the shopkeeper to the Government = Output GST - Input GST
= ₹ (4,500 - 3,600)
= ₹ 900
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