Question

there was a flat discount on any variety of shoes @ 20% VAT @ 12.5% is applicable on shoes Madhu 5750 it to the shopkeeper what was the market price of the pair of shoes

Answer 1

Let marked Price be 'x'

there was a flat discount on any variety of shoes @ 20% VAT @ 12.5% is applicable on shoes Madhu 5750 it to the shopkeeper

Taxable value = marked price - Discount amount.

= x - discount amount

Discount amount =

Marked price × discount rate

given discount rate = 20%

= x × 20%

=0.2x

Taxable value = x - 0.2x = 0.8x

vat rate = 12.5%

Selling price = Taxable value. + vat amount

vat amount = taxable value × vat rate

= 0.8x × 12.5%

=0.8x × 12.5/100

=10x/100

=0.1x

selling price = 0.8x + 0.1x = 5750

0.9x = 5750

x = 5750/0.9

x = 6389 = Marked price