#### Question

The marked price of an article is Rs 900 and the rate of sales tax on it is 6%. If on selling the article at its marked price, a retailer has to pay VAT = Rs 4.80; find the money paid by him (including sales tax) for purchasing this article.

#### Solution

The sale price of n article for retailer = Rs 900

Tax charged by retailer = 6% of Rs 900

`= 6/100 xx "Rs" 900 = "Rs" 54`

VAT paid by retailer = Rs 4.80

∴ VAT paid = Tax charge - Tax paid

=> Rs 4.80 = Rs 54 - Tax paid

=> Tax paid = Rs 54 - Rs 4.80 = Rs 49.20

Let cost price = Rs y

∴ 6% of y = Rs 49.20

`=> 6/100 xx y = "Rs" 49.20`

`=> y = "Rs" (49.20 xx 100)/6 = "Rs" 820`

Purchase price for retailer = Rs 820 + Rs 49.20 = Rs 869.20

Is there an error in this question or solution?

Solution The Marked Price of an Article is Rs 900 and the Rate of Sales Tax on It is 6%. If on Selling the Article at Its Marked Price, a Retailer Has to Pay Vat = Rs 4.80; Find the Money Paid by Him Concept: Introduction to Sales Tax and Value Added Tax.