A family went to a restaurant for dinner. The bill amounting ₹ 3000 was handed which was not inclusive of the 4% value added tax (VAT). The new bill would be:
Rs 3395
Rs 3595
VAT is calculated on the selling price. Since the billing amount is the selling price, the VAT is added to the billing amount itself.
VAT = 4100×3000 = ₹ 120
Overall bill = 3000 + 120 = ₹ 3120