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Question

# The printed price of an article is Rs 60,000. The wholesaler allows a discount of 20% to the shopkeeper. The shopkeeper sells the article to the customer at the printed price. Sales tax (under VAT) is charged at the rate of 6% at every stage. Find : (i) The cost to the shopkeeper inclusive of tax. (ii) VAT paid by the shopkeeper to the Government. (iii) The cost to the customer inclusive of tax [3 MARKS]

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Solution

## Each subpart: 1 Mark The printed price of an article = Rs 60,000 Discount given by wholesaler =20% Total discount =60,000×20100=Rs 12,000 So, selling price =Rs 60,000−Rs 12,000=Rs 48,000 VAT=Rs48,000×6100=Rs 2,2880 VAT paid to wholesaler by shopkeeper = Rs 2,880 (i) Cost to the shopkeeper inclusive of tax = Rs 48,000 + Rs 2,880 = Rs 50,880 (ii) VAT paid to shopkeeper by customer =Rs60,000×6100=Rs 3,600 VAT paid by shopkeeper to the Government = Rs 3,600−Rs 2,880=Rs 720 (iii) Cost to the customer inclusive of tax =Rs 60,000+Rs 3,600=Rs 63,600

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