Calculating the Price of a Washing Machine Before GST

When dealing with consumer goods like washing machines, understanding the intricacies of GST (Goods and Services Tax) is crucial. This article will guide you through the process of calculating the list price of a washing machine before GST is applied, using the example where the sales price inclusive of GST is 28,320, with an SGST rate of 9%.

Understanding GST and How It's Applied

Goods and Services Tax (GST) is a multi-stage tax levied on goods and services at each stage of the supply chain. In this scenario, the GST is split into two components: CGST and SGST, each charged at 9%, bringing the total GST rate to 18%.

Given Information

The total sales price inclusive of GST is 28,320. The SGST is calculated as 9% of the list price. Since both CGST and SGST are applied, the total GST rate here is 18%, which is 9% 9%.

Calculating the List Price

Let's denote the list price of the washing machine as P. The GST amount on the list price would be:

GST 0.18 × P

The total sales price including GST can be expressed as:

Sales Price P GST P 0.18P 1.18P

Given that the sales price is 28,320, we can set up the equation:

1.18P 28,320

Solving for the List Price

To find the list price P, we need to solve the equation:

P 28,320 / 1.18

Upon calculation:

P ≈ 24,000

Therefore, the price of the washing machine before GST is approximately 24,000.

Explanation of the Calculation

The calculation involves understanding that the sale price inclusive of GST (1.18 × P) is equal to 28,320. By dividing 28,320 by 1.18, we get the original list price of 24,000.

Key Takeaways:- The list price without GST is 24,000.- The SGST rate is 9%.- The total GST rate is 18% (9% CGST 9% SGST).

Generalizing the Calculation for Other Products

The same method can be applied to calculate the list price for other goods with similar tax structures. Simply divide the total sales price by (1 GST rate).

Summary

In this article, we've provided a step-by-step explanation to determine the list price before GST for a washing machine, given the total sales price and GST rate. Understanding this concept is essential for consumers, businesses, and professionals involved in the sales and purchasing of goods subject to GST.