A manufacturer buys raw material for Rs. $60, 000$ and pays $4 %$ tax. He sells the ready stock for Rs. $92, 000$ and charges $12.5 %$ tax. Find the VAT paid by the manufacturer.

Rs.

1100

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Rs.

5500

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Rs.

6300

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Rs.

9100

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Solution

The correct option is D Rs. $9100$
VAT=Output tax-Input tax
Input tax $= 4 % o f 60, 000$
$= \frac{4}{100} \times 60000 = R s . 2400$

Output tax $= 12.5 % o f 92000$

$= \frac{12.5}{100} \times 92000 = 11500$
VAT $= 11500 - 2400 = R s .9100$

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A manufacturer buys raw material for Rs. 60,000 and pays 4% tax. He sells the ready stock for Rs. 92,000 and charges 12.5% tax. Find the VAT paid by the manufacturer.

The correct option is D Rs. 9100VAT=Output tax-Input taxInput tax=4% of 60,000 =4100×60000=Rs.2400Output tax=12.5% of 92000 =12.5100×92000=11500VAT=11500−2400=Rs.9100

A manufacturer buys raw material for Rs. $60, 000$ and pays $4 %$ tax. He sells the ready stock for Rs. $92, 000$ and charges $12.5 %$ tax. Find the VAT paid by the manufacturer.

The correct option is D Rs. $9100$
VAT=Output tax-Input tax
Input tax $= 4 % o f 60, 000$
$= \frac{4}{100} \times 60000 = R s . 2400$

Output tax $= 12.5 % o f 92000$

$= \frac{12.5}{100} \times 92000 = 11500$
VAT $= 11500 - 2400 = R s .9100$