Question

The marked price of an article is Rs.10,000. A buys it at 30% discount on the marked price and sells it at 10% discount on the marked price. If the rate of tax under VAT is 5%, find the amount of VAT paid by A.

Open in App

Solution

M.P. of an article = Rs. 10,000

A purchased it at discount of = 30%

C.P. of an article

= M.P. - Discount rate × M.P.100

= Rs.10,000 - 30×10,000100

= Rs.10,000 - Rs.300 = Rs. 7000

Tax rate = 5%

Tax paid by A = C.P. ×Tax rate100

= Rs. 7000 ×5100=Rs.350

Now, A sold the article at 10% discount

\therefore S.P. of an article

= M.P. - Discount rate × M.P.100

= Rs. 10,000 - 10×10,000100

= Rs. 10,000 - Rs. 1000 = Rs. 9000

Tax charged by A = S.P. ×Tax rate100

= Rs. 9000 ×5100 = Rs. 450

\therefore VAT paid by A =Tax charged -Tax paid

= Rs. 450- Rs.350 = Rs.100

4

View More

Join BYJU'S Learning Program

Join BYJU'S Learning Program