Question

The cost of an article is $Rs6,000$ to a distributor.He sells it to trader at Rs $7,500$ and the trader sells it to customer for $Rs8,000$. If the VAT rate is $12.5\%$; find the VAT paid by trader.

• A. $10$
• B. $68.50$
• C. $52.50$
• D. $62.50$

Answer 1

Answer: (D)

$62.50$

$\Rightarrow$ $ForTrader$

$\Rightarrow$ Cost price of an article = Rs. 7500

$\Rightarrow$ Tax paid = 12.5% of 7500

$\Rightarrow$ Tax paid = $\frac{12.5}{100}\times 7500=Rs.937.50$

$\Rightarrow$ Selling price of an article = Rs. 8000

$\Rightarrow$ Tax charged = 12.5% of 8000

$\Rightarrow$ Tax charged = $\frac{12.5}{100}\times 8000=Rs.1000$

$\Rightarrow$ VAT paid by trader = $1000-937.50=Rs.62.50$