A wholesaler dealer purchased spare parts for a scooter. Their taxable price was Rs. \[2,50,000\]. He sold the whole lot to a retailer at a taxable price of Rs. \[2,80,000\]. After selling the lot the retailer got a taxable amount of Rs. \[3,50,000\]. If the rate of GST is $ 28\% $ , how much GST did the wholesaler pay? How much GST did he charge for the retailer? How much of it did he pay to the government?

Question

A wholesaler dealer purchased spare parts for a scooter. Their taxable price was Rs. \[2,50,000\]. He sold the whole lot to a retailer at a taxable price of Rs. \[2,80,000\]. After selling the lot the retailer got a taxable amount of Rs. \[3,50,000\]. If the rate of GST is $ 28\% $ , how much GST did the wholesaler pay? How much GST did he charge for the retailer? How much of it did he pay to the government?

Vedantu Content Team · Accepted Answer

Hint: Compute GST of wholesaler $  = \dfrac{{28}}{{100}} \times 2,50,000 $ . Then find GST charged on retailers$$ = \dfrac{{28}}{{100}} \times 2,80,000$$. Then GST payable to the government = GST charged on the retailer  $  -  $  GST of wholesaler.Complete step-by-step answer:We are given the transactions made by a wholesaler dealer on spare parts of the scooter.We will be computing the GST on these transactions.The rate of GST is given as  $ 28\%  $ .(i) Taxable price on purchase for the wholesaler = Rs. $$2,50,000$$.Therefore, the GST paid by the wholesaler will be  $ 28\%  $  of Rs. $$2,50,000$$ $  = \dfrac{{28}}{{100}} \times 2,50,000 = 70,000 $ Thus, the wholesaler paid GST of Rs. $$70,000$$.This is also the input tax credit of the wholesaler.(ii) The taxable price for which the wholesaler sold the spare parts to the retailer = Rs. $$2,80,000$$.Therefore, the GST collected by the wholesaler from the retailer will be  $ 28\%  $  of Rs. $$2,80,000$$$$ = \dfrac{{28}}{{100}} \times 2,80,000 = 78,400$$Thus, the wholesaler charged the retailer a GST of Rs. $$78,400$$.(iii)The GST payable to the government by the wholesaler = GST charged on the retailer  $  -  $  Input tax credit $    = 78,400 - 70,000   \\   = 8,400   \\   $ Thus the GST paid to the government is Rs.  $ 8,400 $ .Note: Input tax credit is the tax that is paid on a purchase and can be used to reduce the tax to be paid on its sale. For example, if the GST to be paid on the purchase of a good by a trader is Rs. 125. The trader sold the goods to a consumer who was charged a GST of Rs. 180. Then the GST to be paid by the trader to be paid to the government will be $$180 - 125 = 55$$.