Manufacturer A sells a washing machine to a trader B for Rs 12,500. Trader B sells it to a trader C at a profit of Rs 800 and trader C sells it to a customer at a profit of Rs 1,300. If the rate of VAT is 8% , find:

i) the amount of VAT received by the state govt on the sale of this machine,

ii) the amount that the consumer pays for the machine.

Amount of tax collected by Manufacturer A = 8% of Rs 12500

 

 

Profit made by trader B = Rs 800

 

∴ profit made by trader B = value added by traders B = Rs 800

 

Amount VAT paid by trader B = 8% of Rs 800

 

Profit made by trader C = Rs 1300

 

∴ Value added by trader C = Rs 1300

 

Amount of VAT paid by trader C = 8% of Rs 1300 

 

(i) Amount of VAT received by the state govt on the sale of machine = Amount of tax collected by Manufacturer A + 

Amount of VAT paid by trader B + Amount of VAT paid by trader C

= Rs (1000 + 64 + 104) = Rs 1168

 

(ii) Amount that the consumer pays for the machine (including)

= Price charged by manufacturer A + Profit of trader B + Profit of trader C

= Rs (12500  + 800 + 1300) = Rs 14600

∴ Tax paid by consumer = 8% of Rs 14600

 

∴ Amount paid by consumer (including VAT)

= Rs 14600 + Rs 1168

= Rs 15768

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The  C.P  at  which  the  manufacturer  sells  :  12,500

Trader  B  to  Trader  c :  profit  of  rs.800

so,12500+800= 13300

Trader  C  to  the  customer :  Profit  of  1300

so ,  13300+1300=  14600

%  of  Vat =  8 %

So ,

14600 *  8/100 =  1168

So  the  amt.  of  VAT =1168,

VAT +  the  amount  =14600+1168 =  15768

The  customer  pays  14600.

Is  it  ryt ??

  • 2

um..gyes so thank u soo much~~ i came across dis ques in some site.. nd cudnt find d answer.. but yeh thank u so much for ur help

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