Question

A shopkeeper sells an article at its marked price (Rs. 7,500) and charges sales-tax at the rate of 12% from the customer. If the shopkeeper pays a VAT of Rs. 180; calculate the price (inclusive of tax) paid by the shopkeeper.

Answer 1

Since, the shopkeeper sells the articles ₹ 7,500 and charges sales-tax at the rate of 12 %.

∴ Tax charged by the shopkeeper = 12% of ₹ 7,500

= `(12)/(100) xx ₹7,500`

= ₹ 900

∵ VAT = Tax charged - Tax paid
⇒ ₹ 180 = ₹ 900 - Tax paid

⇒ Tax paid by the shopkeeper
= ₹ 900 - ₹ 180
= ₹ 720

If the shopkeeper buys the article for x Tax on it = 12% of ₹ x = ₹ 720
⇒ `(12)/(100) xx ₹ x = ₹720`
⇒ x = ₹ 6,000

∴ The price (inclusive of tax) paid by the shopkeeper
= ₹ 6,000 + ₹ 720
= ₹ 6,720

Alternatively:
The price (inclusive of tax) paid by the shopkeeper
= ₹ 6,000 + 12% of ₹ 6,000
= ₹ 6,000 + ₹ 720
= ₹ 6,720