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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.
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Solution
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.
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