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Ronald1969
Brass Contributor
Feb 22, 2020
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Formula for finilazing resale value of product and to know the profit after Tax dues

Hello,

Can someone please help me with the below detailed issue; I need a formula for this calculation.

 

I am a re-seller and I purchase from the Distributor. The MRP (Maximum Retail Price)  is  printed on the boxes and the MRP is inclusive of 18% tax. Suppose the MRP is Rs. 10000

 

The Distributor sells it to the re-seller at Dealers Price and not at MRP and the re-seller further sells it to his customer at MRP rate.

 

I pay tax to the Government by claiming input credit, that is, the tax paid to the distributor when I bought the product from him for onward sell.

 

Example:

MRP printed on the on the product is – Rs. 1000

Dealer sells it to me for - Rs. 800

I sell it to my customer with 10% discount on MRP, that is, for Rs. 900

 

The unseen breakup of rates:

a) Product cost Rs. 847.457 + Tax @ 18% Rs = 152.542 (Roundup Rs. 1000)

b) Dealer Price Rs. 677.966 + Tax @18% Rs = 122.033 (Roundup Rs. 800)

c) Sold at Rs. Rs. 762.711 + Tax @ 185 = 137.288 ( (roundup Rs. 900)

 

Tax due to the Government from me:

                                 Tax Charged to customer by re seller Rs. 137.288

                                 Tax already paid through the distributor Rs. 122.033

                                 Tax Due to pay    137-122= Rs. 15

How we arrive at profit :

 

Collected from resale =                                        Rs. 900

Paid to Distributor  =                                           Rs. 800

Balance Tax Due to Government                          Rs.  15

Total Cost to me =                                     (Rs. 800+Rs. 15)

Profit in the above sell is : (9.44%) Rs.85  (Rs.900-Rs. 800-Rs.15=Rs 85)

 

In view of above, I am seeking help to do a formula, which may be like this;

 

I should be able to choose option to give discount on MRP and then I should know how much profit I will earn on the product. or any other format to know my profit while fixing a price for resale.

 

 

 
 
 
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  • Ronald1969 Had seen your question pop-up in another unrelated thread yesterday. Thanks for re-posting it in a new one. The attached workbook may have the formulae you are asking for. I kept your example on the side, so that it was easier to compare your request with the outcome of the formulae.

6 Replies

  • Riny_van_Eekelen's avatar
    Riny_van_Eekelen
    Platinum Contributor

    Ronald1969 Had seen your question pop-up in another unrelated thread yesterday. Thanks for re-posting it in a new one. The attached workbook may have the formulae you are asking for. I kept your example on the side, so that it was easier to compare your request with the outcome of the formulae.

    • Ronald1969's avatar
      Ronald1969
      Brass Contributor
      Thanks for your help. In fact, I am feeling very happy to use Excel. Earlier I was not aware that such dynamic personalities like you are always available to help people like me. You have assisted me even earlier. Thank you.