Question

A manufacturer marks an article for Rs. 10,000. He sells it to a wholesaler at 40% discount. The wholesaler sells this article to a retailer at 20% discount on the marked price of the article. If retailer sells the article to a customer at 10% discount and the rate of sales tax is 12% at each stage, find the amount of VAT paid by the:

(i) Wholesaler

(ii) (ii) retailer

Answer 1

VAT paid by wholesaler = Rs. 960 − Rs. 720 = Rs. 240

VAT paid by retailer = Rs. 1080 − Rs. 960 = Rs. 120