Question

The cost of an article is $Rs6,000$ to a distributor.He sells it to trader at $Rs7,500$ and the trader sells it to customer for $Rs8,000$. If the VAT rate is $12.5\%$; find the VAT paid by distributor.

• A. Rs. 167.50
• B. Rs.177.50
• C. Rs. 180.50
• D. Rs. 187.50

Answer 1

The correct option is D Rs. 187.50

Vat rate = $12.5\%$

Cost paid by distributor= $Rs6000$

Then VAT paid by distributor=$\frac{12.5}{100}\times 6000=750$ Rs

Cost paid by trader= $Rs7500$

VAT paid by trader=$\frac{12.5}{100}\times 7500=937.50$Rs

Therefor VAT paid by Distributor= $Rs750$

And VAT paid by trader = $Rs937.50$