Question

Pawan purchased a washing machine when a discount of 5% was given on its marked price of Rs. 42,000. The rate of GST was 18%. Find:
1) The price paid by Pawan
2) The amount of CGST and SGST is shown in the tax invoice.

Answer 1

Hint:

Complete step by step answer:
 (i) The marked price of the washing machine is Rs. 42,000.
A discount of 5% has been given on the marked price. So, the selling price of the washing machine will be given as:

$
  SP = MP - 5\% {\text{ of }}MP \\
   = 42000 - \dfrac{5}{{100}} \times 42000 \\
   = 42000 - 2100 \\
   = 39900 - - - - (i) \\
 $

Now, Pawan has to pay the GST amount on the selling price of the washing machine, which is Rs. 39900. Also, it is given in the question that the GST is 18% of the price of the washing machine. So, the GST amount is calculated as:

$
  GST = 18\% {\text{ of }}SP \\
   = \dfrac{{18}}{{100}} \times 39900 \\
   = 7128 - - - - (ii) \\
 $

Now, the final cost price of the washing machine to Pawan is the summation of the selling price for the seller and the GST amount.
So, from equation (i) and (ii):

$
  CP = SP + GST \\
   = 39900 + 7128 \\
   = 47028 \\
 $

Hence, the cost of the washing machine to Pawan is Rs. 47028.

(ii) As calculated in part (i) of the solution, the total GST amount given by Pawan for the washing machine is Rs. 7128.
By Governmental Law, GST has been equally divided as CGST (Central) and SGST (State). Here, a total of 18% GST has been taken from Pawan, which will be equally divided into CGST and SGST as:

$
  CGST = SGST = \dfrac{{GST}}{2} \\
   = \dfrac{{7128}}{2} \\
   = 3564 \\
 $

Hence, CGST and SGST shown in the tax invoice are Rs. 3564 each.

Note: Students should not get confused with the marked price and the selling price. These are two different terms; marked price is the price that has been marked by the seller on this product but selling price id=s the price after discount that has been sold by the seller.