Question

Motilal Shah paid Rs. $7,000$ as a tax on purchase and collected Rs. $9,000$ as a tax on sale. Find the M-VAT payable by Motilal Shah.

Answer 1

Tax paid at the time of purchase $=$ Rs. $7,000$.
Tax collected at the time of sale $=$ Rs. $9,000$.
M-VAT payable by Motilal Shah $=$ Tax collected on sale $-$ Tax paid on purchase
$=(9,000-7,000)=2,000$
Hence, M-VAT payable by Motilal Shah is Rs. $2,000$.