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Question
A wholesaler buys a computer from a manufacturer for ₹ 40000. He marks the price of the computer 20% above his cost price and sells it to a retailer at a discount of 10% on the marked price. The retailer sells the computer to a consumer at the marked price. If the rate of sales tax (under VAT) is 10% at every stage, then choose the correct answer from the given four options
VAT paid by the wholesaler is
Options
₹4000
₹4320
₹320
₹480
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Solution
VAT paid by the wholesaler
= ₹43200 x `(10)/(100)`
= ₹4320
VAT already paid
= ₹4000
Net VAT paid by
= ₹4320 – ₹4000
= ₹320.
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