Billy buys an article for ₹ 10000 and pays 7% tax. She sells the same article for ₹ 13000 and charges 9% tax. Find the VAT paid by her.

₹ 500

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₹ 470

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₹ 450

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₹ 440

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Solution

The correct option is B
₹ 470

Cost of the article = ₹ 10000

Tax paid byBilly = 7% of ₹ 10000

= $\frac{7}{100} \times$ 10000

= ₹ 700

Selling price of the article = ₹ 13000

Tax charged at 9% = 9% of 13000

= $\frac{9}{100} \times$ 13000

= ₹ 1170

$∴$ VAT = Tax recovered on sale - Tax paid on purchase.

= ₹ 1170 - ₹ 700

= ₹ 470

$∴$ VAT = ₹ 470

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