Value Added Tax (VAT)
Q. If after allowing 20% discount and levying 13% value added tax (VAT), the value of a watch will be Rs. 904 Then Find the value marked price of the watch.
Let the marked price of the watch be Rs.x.
So, discount = 20% of x
=(20/100) * x
Price after discount= x - 0.2x = 0.8x
So, VAT amount = 13% of 0.8x
= (13/100) * 0.8x
Price including VAT =0.8x + 0.104x
(iii) By question,
0.904x = 904 or, x = 904/0.904 or, x = 1000
Hence, the marked price of the watch is Rs. 1000.