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Question
The monthly expenditure (Rs.) of a family on some important items and the Goods and Services Tax (GST) rates applicable to these items is as follows:
| Item | Monthly Expense (Rs) | GST Rate % |
| Cereals | 1500 | 0 |
| Eggs | 250 | 0 |
| Fish, Meat | 250 | 0 |
| Medicines | 50 | 5 |
| Biogas | 50 | 5 |
| Transport | 100 | 5 |
| Butter | 50 | 12 |
| Babool | 10 | 12 |
| Tomato Ketchup | 40 | 12 |
| Biscuits | 75 | 18 |
| Cakes, Pastries | 25 | 18 |
| Branded Garments | 100 | 18 |
| Vacuum Cleaner, Car | 1000 | 28 |
Calculate the average tax rate as far as this family is concerned.
Sum
Solution
| Monthly Expenditure (w) | GST Rate % (X) | WX | |
| Cereals | 1500 | 0 | 0 |
| Eggs | 250 | 0 | 0 |
| Fish, Meat | 250 | 0 | 0 |
| Medicines | 50 | 5 | 2.5 |
| Biogas | 50 | 5 | 2.5 |
| Transport | 100 | 5 | 5 |
| Butter | 50 | 12 | 6 |
| Babool | 10 | 12 | 1.2 |
| Tomato Ketchup | 40 | 12 | 4.8 |
| Biscuits | 75 | 18 | 13.5 |
| Cakes, Pastries | 25 | 18 | 4.5 |
| Branded Garments | 100 | 18 | 18 |
| Vacuum Cleaner, Car | 1000 | 28 | 280 |
| Total | 3500 | 338 |
The average tax rate for this family: `338/3500 = 0.0966` or 9.66%
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Inflation and Index Numbers
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Chapter 8: Index Numbers - Exercise [Page 121]
