Question

A manufacturing company ‘P’ sells a Desert cooler to a dealer A for ₹ 8100 including sales tax (under VAT). The dealer A sells it to a dealer B for ₹ 8500 plus sales tax and the dealer B sells it to a consumer at a profit of ₹ 600. If the rate of sales tax (under VAT) is 8%, find
(i) the cost price of the cooler for dealer A.
(ii) the amount of tax received by the Government.
(iii) the amount which the consumer pays for the cooler.

Answer 1

Manufactures ‘P’ selling price for Desert cooler including sales tax (VAT) = ₹ 8100
Rate of sales tax (VAT) = 8%
(i) ∴ Sale price excluding VAT 

= `(8100 xx 100)/(100 + 8)`

= `(8100 xx 100)/(108)`
= ₹7500
Cost price of dealer A = ₹ 7500
and sale price of dealer A = ₹ 8500
Gain
= ₹ 8500 – ₹ 7500
= ₹ 1000
or cost price of dealer B = ₹ 8500
Gain = ₹ 600
S.P. of dealer B
= ₹ 8500 + ₹ 600
= ₹ 9100
Consumers cost price
= ₹ 8500 + ₹ 600
= ₹ 9100
(ii) Tax paid to the Govt.

= `₹7500 xx (8)/(100) + (1000 xx 8)/(100) + (600 xx 8)/(100)`

= ₹ 600 + ₹ 80 + ₹ 48
= ₹ 728
The amount which the consumer pays
= ₹ 7500 + ₹ 1000 + ₹ 600 + ₹ 728
= ₹ 9828.