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

₹ 700

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₹ 1170

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₹ 470

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None of these

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Solution

The correct option is C
₹ 470

Cost of the article = 10000

Tax paid by Kylie = 7% of ₹ 10,000

= ₹ 700

Selling price of the article = ₹ 13000

Tax charged at 9% = 9% of 13000

= ₹ 1170

Therefore, VAT = tax recovered on sale - Tax paid on purchase.

= ₹ 1170 - ₹ 700

= ₹ 470

Therefore, VAT = ₹ 470

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