A shopkeeper sells an article at the listed price of ₹ 1500 and the rate of VAT is 12% at each stage of sale.

A shopkeeper sells an article at the listed price of ₹ 1500 and the rate of VAT is 12% at each stage of sale. If the shopkeeper pays a VAT of ₹ 36 to the Government, what was the amount inclusive of tax at which the shopkeeper purchased the articles from the wholesaler?

Solution:

List price (M.P.) of an article = ₹ 1500
Rate of VAT = 12%
Total VAT = ₹ \frac { 1500 x 12 }{ 100 } = ₹ 180
But VAT paid by the shopkeeper = ₹ 36
Total VAT paid by wholesaler = ₹ 180 – ₹ 36 = ₹ 144
Rate of VAT = 12%
S.P. of the whole seller = \frac { 144 x 100 }{ 12 } = ₹ 1200
Total amount paid by the wholeseller including VAT = ₹ 1200 + ₹ 144 = ₹ 1344

A shopkeeper buys an article whose list price is ₹ 800 at some rate of discount from a wholesaler. He sells the article to a consumer at the list price and charges sales tax at the prescribed rate of 7.5%. If the shopkeeper has to pay a VAT of ₹ 6, find the rate of discount at which he bought the article from the wholesaler.

Solution:

List price (MP) of an article = ₹ 800
S.P. of the shopkeeper = ₹ 800
Rate of VAT = 7.5%
Total VAT = ₹ \frac { 800 x 7.5 }{ 100 } = ₹ 60
VAT paid by the shopkeeper = ₹ 6
VAT paid by the wholeseller = ₹ 60 – ₹ 6 = ₹ 54
Rate of VAT = 7.5%
S.P. of wholeseller

ML Aggarwal Class 10 Solutions for ICSE Maths Chapter 1 Value Added Tax Ex 1 Q8.1

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