A shopkeeper buys a camera at a discount of 20% from the wholesaler, the printed price of the camera being ₹ 1600 and the rate of sales tax is 6%. The shopkeeper sells it to the buyer at the printed price and charges sales tax at the same rate. Find

(i) the price at which the camera can be bought.

(ii) the VAT (Value Added Tax) paid by the shopkeeper.

#### Solution

The printed price of the camera (MP) = ₹ 1600

Rate of discount = 20%

∴ Sale price

= `("MP" xx (100 - "D"%))/100`

= `(1600(100 - 20))/(100)`

= `(1600 xx 80)/(100)`

= ₹1280

Rate of S.T. = 6%

∴ Total S.T.

= ₹`(1280 xx 6)/100`

= ₹76.80

In second case,

Sale price = ₹1600 , Rate of sales tax = 6%

∴ Total S.T.

= ₹`(1600 xx 6)/(100)`

= ₹96

(i) Price of camera

= ₹ 1600 + ₹ 96

= ₹ 1696

(ii) VAT paid by the shopkeeper

= ₹ 96 – ₹ 76.80

= ₹ 19.20.