Question

For a dealer $A$, the list price of an article is Rs. $9000$, which he sells to dealer $B$ at some lower price. Further, dealer $B$ sells the same article to a customer at its list price. If the GST is $18\% $ and dealer $B$ paid a tax, under GST, equal to Rs. $324$ to the government, find the amount (inclusive of GST) paid by dealer $B$.

Answer 1

Hint: We will assume the Cost price for dealer $B$ be $x$. After that, we will calculate the GST paid by both the dealers. Now we will calculate the total cost of the beard by the second dealer.

Complete step-by-step answer:
Given that the GST is $18\% $.
Let us first consider things for dealer $A$:
List price for $A = 9000$
Let the selling price in rupees $ = x$
$ITC = 0.18x$
Also for dealer $B$, the cost price will be equal to the sale price of dealer $A$.
That is, cost price of dealer $B = x$
For $B$, the selling price $ = 9000$
GST paid $ = \dfrac{{18}}{{100}} \times 9000$
On simplifying this, we get
GST paid by B $ = 1620$
We know that,
$Output\,tax - ITC = tax\,paid\,to\,government$
Therefore, substituting the values, we get
$
   \Rightarrow 1620 - 0.18x = 324 \\
   \Rightarrow 0.18x = 1620 - 324 \\
   \Rightarrow 0.18x = 1296 \\
   \Rightarrow x = \dfrac{{1296}}{{0.18}} = 7200 \\
 $
Now the GST on $7200 = 7200 \times 0.18 = 1296$
Amount paid by dealer $B = x + 1296 = 7200 + 1296 = 8496$
Hence, the amount paid by the dealer $B$ is $8496$ rupees.

Note: We must remember that $Output\,tax - ITC = tax\,paid\,to\,government$. In addition, the GST is applied on the cost price.