A manufacturing company sells a T.V. to a trader A for ₹ 18000. Trader A sells it to a trader B at a point of ₹ 750 and trader B sells it to a consumer at a profit of ₹ 900. If the rate of sales tax (under VAT) is 10%, find
(i) the amount of tax received by the Government.
(ii) the amount paid by the consumer for the T.V.
Solution:
Sale price of a T.V. to trader A = ₹ 18000
Rate of VAT tax = 10%
(i) Total tax paid to Govt. = ₹ (I800 + 75 + 90) = ₹ 1965
(ii) Amount paid by the consumer to trader B = ₹ 18000 + 750 + 900 + Tax 1965 = ₹ 21615