vat is a new method of realising tax on the sale/ purchase of goods.A manufacturing company sold a commodity to
its distributor for Rs. 22, 000 including VAT.
The distributor sold the commodity to a retailer
for Rs. 22, 000 (excluding tax) and the retailer sold it to the consumer for Rs. 25, 000 plus tax under VAT.
If the rate of tax at each stage is 10%,
what was the:
i) Sale price of the commodity
for the manufacturer?
ii) The amount of VAT paid by the retailer?
