Question

A shopkeeper buys a camera at a discount of 20% from the wholesaler, the printed price of the camera being Rs 1,600 and the rate of sales tax being 6%. The shopkeeper sells it to a buyer at the printed price and charges tax at the same rate. Find:

The price at which the camera can be bought from the shopkeeper.

The VAT (Value Added Tax) paid by the shopkeeper.

Answer 1

Printed price of camera = Rs 1,600

Discount% = 20%

Selling price for the wholesaler = 1600 - 20% of 1600

`= 1600 - 20/100 xx 1600`

`= 1600 - 320`

= 1280

Tax charged by the wholesaler = 6% of 1280

`= 6/100 xx 1280`

= 76.80

Purchase price for the shopkeeper

= Rs 1280 + Rs 76.80 = Rs 1356.80

Selling price for the shopkeeper =  Rs 1600

Tax charged by the shopkeeper = 6% of 1600

`= 6/10 xx  1600`

= 96

Purchase price for a customer = Rs 1600 + Rs 96 = Rs 1696

The price at which the camera can be bought from the shopkeeper is Rs 1696

VAT paid by the shopkeeper = Tax charged - Tax paid

= Rs 96 - Rs 76.80 = Rs 19.20

The VAT (Value Added Tax) paid by the shopkeeper is Rs 19.20.