1
Question
Taxes as old indirect tax system (all amount in ₹):
Cost price 121
(+) Cost 9
(=) Value of output 130
(+) Taxes @ 10% 13
(=) Selling price 143
Assuming the same cost price, cost, and tax rate, what will the goods and services tax be?
Taxes as old indirect tax system (all amount in ₹):
Cost price 121
(+) Cost 9
(=) Value of output 130
(+) Taxes @ 10% 13
(=) Selling price 143
Assuming the same cost price, cost, and tax rate, what will the goods and services tax be?
Open in App
Solution
The correct option is C ₹0.9
As goods and services tax is charged on value addition, a 10% tax will be calculated on ₹9 and not on ₹130.
Cost price 121
(+) Cost and profit 9
(=) Value of output 130
(+) Taxes @ 10% on ₹9 0.9
(=) Selling price 130.9
This reduces the overall price from ₹143 to ₹130.9.
As goods and services tax is charged on value addition, a 10% tax will be calculated on ₹9 and not on ₹130.
Cost price 121
(+) Cost and profit 9
(=) Value of output 130
(+) Taxes @ 10% on ₹9 0.9
(=) Selling price 130.9
This reduces the overall price from ₹143 to ₹130.9.
Suggest Corrections
0
Similar questions
View More
Join BYJU'S Learning Program
Explore more
Join BYJU'S Learning Program
