Question

A shopkeeper sells an article at its list price (Rs 3,000) and charges sales tax at the rate of 12%. If the VAT paid by the shopkeeper is Rs 72, at what price did the shopkeeper buy the article inclusive of sales tax?

Answer 1

The sale price of an article for retailer = Rs 3000

Tax charged by retailer = 12% of Rs 3000

`= 12/100 xx "Rs"  3000 = "Rs"  360`

VAT paid by retailer = Rs 72

∴ VAT paid = Tax charged - Tax paid

=> Rs 72 = Rs 360 - Tax paid

=> Tax paid = Rs 360 - Rs 72 = Rs 288

Let cost price = Rs y

∴ 12% of y = Rs 288

`=> 12/100 xx y = "Rs"  288`

`=> y = "Rs"  (288 xx 100)/12 = "Rs"  2400` 

Purchase price for retailer =  Rs 2400 + Rs 288 = Rs 2688