A shopkeeper sells an article at the listed price of Rs. $1, 500$ and the rate of VAT is $12 %$ at each stage of sale. If the shopkeeper pays a VAT of Rs. $36$ to the Government, what was the price, inclusive of Tax, at which the shopkeeper purchased the article from the wholesaler?

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Solution

Given: Listed price of an article $= R s . 1, 500,$ Rate of VAT $= 12 %$
VAT on the article $= \frac{12}{100} \times 1500, = R s . 180$
Let C.P. of this article be x, then
VAT $= \frac{12}{100} \times x, = R s . \frac{12 x}{100}$
If the shopkeeper pays a VAT $=$ Rs. $36$
Then $180 - \frac{12 x}{100} = 36$
$\frac{18000 - 12 x}{100} = 36$
$18000 - 12 x = 3600$
$∴ 12 x = 18000 - 3600 = 14, 400$
x $= R s . 1, 200$
$∴$ The price at which the shopkeeper purchased the article inclusive of sales tax
$=$ Rs. $1, 200 + \frac{12}{100} \times 1, 200$
$= 1, 200 + 144$
$=$ Rs. $1, 344$ .

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