The marked price of an article is Rs.7,000 and is available at 20% discount. Manoj buys this article and then sold it at its marked price. If the rate of tax at each stage is 10%, find the VAT paid by Manoj.

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Solution

M.P. an article = Rs. 7000
Discount rate = 20%
C.P. for Manoj = Rs. 7000- 20% of Rs. 7000
= Rs. 7000 - Rs. 1400 = Rs. 5600
\therefore Tax paid by Manoj = Rs. \frac{5600 \times 10}{100} = Rs. 560
S.P. of an article = Rs. 7000
Tax charged by Manoj = Rs. \frac{7000 \times 10}{100} Rs. 700
VAT paid = Tax charged - Tax paid
= Rs. 700 - Rs.560 = Rs.140

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