Courses
Courses for Kids
Free study material
Offline Centres
More
Store Icon
Store

Manoj buys a leather coat cost Rs 900.at Rs.990 after paying the VAT. Calculate the rate of VAT charged on the coat?

seo-qna
Last updated date: 19th Jul 2024
Total views: 423.3k
Views today: 6.23k
Answer
VerifiedVerified
423.3k+ views
Hint: Use the fact that the VAT% is the VAT amount divided by the cost price of a product. The formula for it is as follows
\[VAT\%=\dfrac{VAT\ amount}{\cos t\ price}\times 100\]
 Now, in this question, we will simply put the values of the respective terms and then we will get the value for the desired value.
Also, the VAT amount is nothing but the new cost price minus the old cost price that is
VAT amount= cost price – the old cost price.

Complete step by step answer:
As mentioned in the question, we have to find the VAT% for the transaction.
Now, we can see that before VAT addition, the cost price is Rs. 900 and after VAT addition, the cost price is Rs. 990.
Hence, we can write the following
VAT amount=Rs.(990-900)
So, on using the formula that is mentioned in the hint, we get the following result
 \[\begin{align}
  & \Rightarrow VAT\%=\dfrac{VAT\ amount}{\cos t\ price}\times 100 \\
 & \Rightarrow VAT\%=\dfrac{90}{900}\times 100=10\% \\
\end{align}\]

Hence, the VAT % in this transaction is 10%.

Note: In this question, it is very important to know all the formulae beforehand and also, the calculations should also be done very carefully as there are very high chances that the students might commit a mistake while solving the question and getting to a solution.
One should have knowledge about VAT(Value Added Tax).
Also, without having clarity in the formulae one could never get to the solution.