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# A Manufacturer Marks an Article for Rs 10,000. He Sells It to a Wholesaler at 40% Discount. the Wholesaler Sells this Article to a Retailer at a - ICSE Class 10 - Mathematics

ConceptIntroduction to Sales Tax and Value Added Tax

#### Question

A manufacturer marks an article for Rs 10,000. He sells it to a wholesaler at 40% discount. The wholesaler sells this article to a retailer at a discount of 20% on the marked price. If the retailer sells the article to a customer at 10% discount and the rate of sales tax is 12% at each stage; find the amount of VAT paid by the (i) wholesaler (ii) retailer.

#### Solution

Marked price of an article = Rs 10000

Sale price for manufacture

= 10000 - 40% "of"  10000

= 10000 - 40/100 xx 10000

= 10000 - 4000

= 6000

Tax paidby wholesaler

= 12% of 6000

= 12/100 xx 6000

= 720

Sale price for the wholesaler

= 10000 - 20% of 10000

= 10000 - 20/100 xx 10000

= 10000 - 2000

= 8000

Tax paid by the ratailer

= 12 % "of"  8000

= 12/100 xx 8000

= 960

Sale price for the retailer

= 10000 - 10% "of"  10000

= 10000 - 10/100 xx 10000

= 10000 - 1000

= 9000

Tax paid by the customer = 12% of 9000

= 12/100 xx 9000

= 1080

VAT paidf VAT paid by wholesaler = Rs 960 – Rs 720= Rs 240

VAT paid by retailer = Rs 1080 – Rs 960= Rs 120

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Solution A Manufacturer Marks an Article for Rs 10,000. He Sells It to a Wholesaler at 40% Discount. the Wholesaler Sells this Article to a Retailer at a Concept: Introduction to Sales Tax and Value Added Tax.
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