Question

A is a manufacturer of T.V sets in Delhi. He manufacturers a particular brand of T.V set and marks it at \[Rs.75000\]. He then sells this T.V set to a wholesaler B in Punjab at a discount of $30\% $. The wholesaler B raises the marked price of the T.V set bought by $30\% $ and then sells it to dealer C in Delhi. If the rate of GST=$5\% $ find tax (under GST) paid by wholesaler B to the government.

Answer 1

Hint: Here, two purchases are happening. A sells the T.V to B and B sells it to C. We need to find the tax paid by B to the government. This will be equal to the difference of tax paid by B when purchasing T.V from A and tax charged by B when selling T.V to C.

Formula used:
For selling an article,
${\text{Discount = Marked price - Selling price}}$
For buying an article,
${\text{Discount = Marked price - Cost price}}$

Complete step-by-step answer:
Given that initially A sets a marked price of $Rs.75000$ and he sells it to be at a discount of $30\% $.
Therefore, the discount B got $ = \dfrac{{30}}{{100}} \times 75000 = 30 \times 750 = 22500$
For buying an article,
${\text{Discount = Marked price - Cost price}}$
$ \Rightarrow {\text{Cost price of B}} = {\text{Marked price - discount}}$
$ \Rightarrow {\text{CP of B = 75000 - 22500 = 52500}}$
Also it is given that GST rate is $5\% $.
So the GST paid by B for this purchase will be $5\% $ of the cost price.
$ \Rightarrow GST{\text{ paid by B = }}\dfrac{5}{{100}} \times 52500 = 5 \times 525 = 2625$
This gives B paid GST of $Rs.2625$.
Now, B sells T.V by increasing the marked price by $30\% $.
Then the selling price of B is equal to sum of initial marked price and $30\% $ of initial marked price.
Initial marked price is equal to $Rs.75000$.
Therefore, the marked price set by B $ = 75000 + 30\% {\text{ of 75000}}$
$ \Rightarrow {\text{Marked price set by B = 75000 + }}\dfrac{{30}}{{100}} \times 75000 = 75000 + 22500 = 97500$
Also given that B sells the T.V set to C.
Here, there is no information about any discount made by B. So we can assume the selling price of B (which is equal to the cost price of C) is the same as the marked price.
So, GST charged by B on selling of T.V will be $5\% $ of this marked price.
$ \Rightarrow {\text{GST charged by B = 5% of 97500 = }}\dfrac{5}{{100}} \times 97500 = 5 \times 975 = 4875$
We are asked to find the GST paid by B to the government.
This will be equal to the difference of GST charged by B on selling TV to C and GST paid by B when buying TV from A.
$ \Rightarrow GST{\text{ paid by B to government = 4875 - 2625 = 2250}}$
$\therefore $ The answer is $Rs.2250$

Note: Here a possible mistake we can make is when calculating the selling price of B. It is said that B raises the marked price by $30\% $. It means the new marked price is $130\% $ of the initial marked price. We may think that this extra $30\% $ is made on the cost price of B. This is wrong.
If it is said that the discount is $30\% $, then we can simply take the selling price as $(100 - 30)\% = 70\% $ of the marked price.