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A Shopkeeper Buys an Article at a Discount of 30% and Pays Sales Tax at the Rate of 8%. the Shopkeeper, in Turn, Sells the Article to a Customer at the Printed Price and Charges Sales Tax at the Same - ICSE Class 10 - Mathematics

ConceptIntroduction to Sales Tax and Value Added Tax

Question

A shopkeeper buys an article at a discount of 30% and pays sales tax at the rate of 8%. The shopkeeper, in turn, sells the article to a customer at the printed price and charges sales tax at the same rate. If the printed price of the article is ₹ 2,500; find :

(1) the price paid by the shopkeeper.
(2) the price paid by the customer.
(3) the VAT (value added tax) paid by the shopkeeper.

Solution

Printed price of an article = Rs  2500

A purchase price for shopkeeper = Rs 2500 - 30% of Rs 2500

= Rs 2500 - Rs 750 = Rs 1750

Tax paid by the shopkeeper = 8% of Rs 1750

= 8/100 xx 1750 = "Rs"  140

Price paid by shopkeeper = Rs 1750 + Rs 140 = Rs 1890

Sale price for shopkeeper = Rs 2500

Tax paid by customer = 8% of Rs 2500

= 8/100 xx 2500 = "Rs"  200

Price paid by the customer = Rs 2500 + Rs 200 = Rs 2700

VAT paid by the shopkeeper = Tax charged - Tax paid

= Rs 200 - Rs 140 = Rs 60

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Solution A Shopkeeper Buys an Article at a Discount of 30% and Pays Sales Tax at the Rate of 8%. the Shopkeeper, in Turn, Sells the Article to a Customer at the Printed Price and Charges Sales Tax at the Same Concept: Introduction to Sales Tax and Value Added Tax.
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