Question

Prasad purchased a washing machine from Maharashtra Electronic Goods. The discount of \[5\% \] was given on the printed price of \[Rs40,000\] Rate of GST charged was\[28\% \]. What will be the purchase price of the washing machine? Also find the amount of CGST and SGST shown in the tax invoice.

Answer 1

Hint: For solving this question we will firstly calculate price after calculating \[5\% \] of the given selling price. We will get the discounted price. It will be calculated by subtracting \[5\% \] of the cost with \[Rs40,000\]. Then lastly \[28\% \] of less SP will be calculated then for getting the final GST amount will be subtracted from the original price.

Formula used:
The formula used to calculate the purchase price is
\[{\text{Taxable value of washing machine + Amount of GST on washing machine }}\]
While for calculating Amount of CGST and SGST the formula used is
\[\dfrac{1}{2} \times {\text{Amount of GST on product }}\]


Complete step by step answer:
Since we know that the printed price on the washing machine is \[Rs40,000\]
The discount offered on washing machine is \[5\% \] of \[Rs40,000\] which means
\[\dfrac{5}{{100}} \times 40,000 = Rs2,000\]
So now as per calculations taxable value on washing machine will be \[Rs40,000 - Rs2,000 = Rs38,000\]
Now as we know that rate of GST charged was \[28\% \]
So amount of GST on washing machine will be \[28\% \]of \[Rs38,000\]
\[\dfrac{{28}}{{100}} \times 38,000 = Rs10,640\]
Therefore we can calculate the purchasing price by adding taxable value of washing machine and amount of GST on washing machine
\[Rs38,000 + Rs10,640 = Rs48,640\]
As we know that amount of \[CGST = SGST\]
\[
   \Rightarrow \dfrac{1}{2} \times {\text{Amount of GST on washing machine}} \\
   \Rightarrow \dfrac{1}{2} \times 10,640 \\
   \Rightarrow Rs{\text{ }}5,320 \\
 \]

It means that the amount of CGST is \[Rs{\text{ }}5,320\] and amount of SGST is \[Rs{\text{ }}5,320\] in the tax invoice.

Note: Remember that amount of SGST is equal to CGST which means \[CGST = SGST\]
We should not get confused between the marked and selling price. The price marked by the seller on the product is marked price while the price after discount on which the product has been sold by seller is selling price. To calculate GST on products we can also add the CGST and SGST. This means that
\[5,320 + 5,320 = 10,640\] so the amount of GST on washing machine is \[{\text{Rs 10,640}}\]