VAT paid by the wholesaler is

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A wholesaler buys a computer from a manufacturer for ₹ 40000. He marks the price of the computer 20% above his cost price and sells it to a retailer at a discount of 10% on the marked price. The retailer sells the computer to a consumer at the marked price. If the rate of sales tax (under VAT) is 10% at every stage, then choose the correct answer from the given four options.

VAT paid by the wholesaler is
(a) ₹ 4000
(b) ₹ 4320
(c) ₹ 320
(d) ₹ 480

Solution:

(c) ₹ 320

VAT paid by the wholesaler = ₹ 43200 x \\ \frac { 10 }{ 100 }
= ₹ 4320
VAT already paid = ₹ 4000
Net VAT paid by = ₹ 4320 – ₹ 4000
= ₹ 320

VAT paid by the retailer is
(a) ₹ 4000
(b) ₹ 4320
(c) ₹ 320
(d) ₹ 480

Solution:

(d) ₹ 480

VAT paid by retailer = 48000 x \\ \frac { 10 }{ 100 } = ₹ 4800
VAT already paid = ₹ 4320
Net VAT to be paid = ₹ 4800 – 4320
= ₹ 480

Consumer’s cost price inclusive of VAT is
(a) ₹ 47520
(b) ₹ 48000
(c) ₹ 52800
(d) ₹ 44000

Solution:

(c) ₹ 52800

Sol. Sale price to consumer = ₹ 4800
VAT paid by the consumer = ₹ 48000 x \\ \frac { 10 }{ 100 }
= ₹ 4800
Consumers cost price inclusive of VAT = ₹ 48000 + ₹ 4800
= ₹ 52800

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