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The printed price of an article is ₹ 60000. The wholesaler allows a discount of 20% to the shopkeeper. The shopkeeper sells the article to the customer at the printed price. Sales tax (under VAT) is - Mathematics

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Question

The printed price of an article is ₹ 60000. The wholesaler allows a discount of 20% to the shopkeeper. The shopkeeper sells the article to the customer at the printed price. Sales tax (under VAT) is charged at the rate of 6% at every stage. Find :
(i) the cost to the shopkeeper inclusive of tax.
(ii) VAT paid by the shopkeeper to the Government.
(iii) the cost to the customer inclusive of tax.

Sum
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Solution

Printed price of an article = ₹ 60000
Rate of discount allowed = 20%
Total discount

= ₹ 60000 x `(20)/(100)` 
= ₹ 12000
S.P. after discount
= ₹ 60000 – ₹ 12000
= ₹ 48000
Rate of VAT = 6%
(i)  Amount paid by the shopkeeper

= ₹ 48000 + ₹ 48000 x `(6)/(100)`
= ₹ 48000 + ₹ 2880
= ₹ 50880
(ii) The price at which the shopkeeper sold to the customer = ₹ 60000
Profit
= ₹ 60000 – ₹ 48000
= ₹ 12000
VAT paid by the customer to the Govt.
= ₹ 12000 x `(6)/(100)` 
= ₹ 720
(iii) Total cost to the customer = ₹ 60000 + VAT inclusive of tax

= ₹ 60000 + `(60000 xx 6)/(100)`
= ₹ 60000 + ₹ 3600
= ₹ 63600.

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Chapter 1: Value Added Tax - Exercise 1.1

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ML Aggarwal Understanding Mathematics [English] Class 10 ICSE
Chapter 1 Value Added Tax
Exercise 1.1 | Q 5

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