Question

A shopkeeper purchases an article for Rs 6,200 and sells it to a customer for Rs 8,500. If the sales tax (under VAT) is 8%; find the VAT paid by the shopkeeper.

Answer 1

Purchase price for shopkeeper = Rs 6,200

Sale price for shopkeeper = Rs 8,500

Tax paid by the shopkeeper = 8% of 6,200 = Rs 496

`= 8/100 xx 6200`

Tax charged by the shopkeeper= 8% of 8,500

= 8/100 xx 8500 = Rs 680

Then VAT paid by the shopkeeper= Rs 680 – rs 496 = Rs 184