Sales tax (ST) is charged by the government on the sale of an item. It is collected by the shopkeeper from the customer and given to the government. This is, therefore, always on the selling price of an item and is added to the value of the bill. There is another type of tax which is included in the prices known as Value Added Tax (VAT).
From July 1, 2017, Government of India introduced GST which stands for Goods and Services Tax which is levied on supply of goods or services or both.
Example : (Finding Sales Tax) The cost of a pair of roller skates at a shop was Rs. 450. The sales tax charged was 5%. Find the bill amount.
Solution: On Rs.100, the tax paid was Rs. 5.
On Rs.450 , the tax paid would be = Rs. `5/100 xx 450`
= Rs. 22.50
Bill Amount = cost of items + Sales tax = Rs.450 + Rs.22.50 = Rs.472.50.
Example : (Value Added Tax (VAT)) Waheeda bought an air cooler for Rs. 3300 including a tax of 10%. Find the price of the air cooler before VAT was added.
Solution: The price includes the VAT, i.e., the value added tax. Thus, a 10% VAT means if the price without VAT is Rs. 100 then price including VAT is Rs. 110.
Now, when price including VAT is Rs. 110, original price is Rs. 100.
Hence when price including tax is 3300, the original price = Rs. `100/110 xx 3300 ` = Rs.3000.
Example : Salim bought an article for Rs. 784 which included GST of 12% . What is the price of the article before GST was added?
Solution: Let original price of the article be Rs. 100. GST = 12%.
Price after GST is included = Rs. (100+12) = Rs. 112
When the selling price is Rs. 112 then original price = Rs. 100.
When the selling price is Rs. 784, then original price = Rs.`100/12 xx 784 `= Rs.700
Shaalaa.com | Sales Tax and VAT
A colour TV is available for Rs 13440 inclusive of VAT. If the original cost of TV is Rs 12000, find the rate of VAT.
An article was purchased for ` 1239 including GST of 18%. Find the price of the
article before GST was added?
Sunita purchases a bicycle for Rs 660. She has paid a VAT of 10%. Find the list price of the bicycle?
Rajeeta purchased a set of cosmetics. She paid Rs 165 for it including VAT. If the rate of VAT is 10%, find the sale price of the set.
Rakesh goes to a departmental store and purchases the following articles:
(i) biscuits and bakery products costing Rs 50, VAT @ 5%,
(ii) medicines costing Rs 90, VAT @ 10%,
(iii) clothes costing Rs 400, VAT @ 1%, and
(iv) cosmetics costing Rs 150, VAT @ 10%.
Calculate the total amount to be paid by Rakesh to the store.
Manoj buys a lather coat costing Rs 900 at Rs 990 after paying the VAT. Calculate the rate of VAT charge on the coat.
Rajat goes to a departmental store and buys the following articles:
|Item||Price per item||Rate of VAT|
| 2 Pairs of shoes
| Rs 800
Calculate the total amount he has to pay to the store.