A retailer buys an article for Rs 800 and pays the sales tax at the rate of 8%. The retailer sells the same article to a customer for Rs 1,000 and charges sales tax at the same rate. Find:
1) the price paid by a customer to buy this article.
2) the amount of VAT paid by the retailer.
Cost price for retailer = Rs 800
Sales tax paid by retailer = 8% of Rs 800
`= 8/100 xx 800 = "Rs" 64`
Sale price for retailer = Rs 1,000
Tax charged by retailer = 8% of Rs 1,000
= 8/100 xx 1000 = Rs 80
Price paid by customer = Rs 1,000 + Rs 80 = Rs 1,080
VAT paid by retailer = Rs 80 – Rs 64 = Rs 16
Video Tutorials For All Subjects
- Introduction to Sales Tax and Value Added Tax