Question

4. An article is available for 1.650 inclusive of 10% VAT. Find the list price. What will be its price if the rate of
VAT changes to 12%?



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Answer 1

Since, the shopkeeper sells the article for Rs. 7,500 and charges sales-tax at the rate of 12%.

∴ Tax charged by the shopkeeper=12% of Rs.7,500

=

100

12

× Rs.7,500=Rs.900

∵ VAT = Tax charged - Tax paid

⇒ Rs.180=Rs.900−Tax paid

⇒ Tax paid by the shopkeeper=Rs.900−Rs.180=Rs.720

If the shopkeeper buys the article for Rs. x

Tax on it = 12% of Rs. x = Rs. 720 ⇒x= Rs.6,000

∴ The price (inclusive of tax) paid by the shopkeeper = Rs. 6,000+Rs.720=Rs.6,720

I hope this helps you