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# Sales Tax / Value added Tax

Sales Tax

It is charged by the government on the sale of an item. It is collected by the shopkeeper from the customer and given to the Government.

VAT: Valued Added Tax.

The prices include the tax is known as VAT.

The adjacent bill shows that 2% VAT is collected from the customer and added to the bill amount.

 HOTEL SARAVANA BHAVAN K.K. NAGAR CHENNAI - 78 TIN # 33741460553 sT # AABFH3049MST001 TAX INVOICE B.No: 1.151179 Dt: 14-09-08 Ti: 8:08;50 Bck:37 TAKE AWAY #.  CD      Name          VAT %     RATE     QTY        AMT     Rs. 1 1405    Mini Tiffin (P) 2.00        51.00    1.00                  51.00 2 31       Plain Dosai     2.00       21.50     1.00                  21.50                                              _____________________                                SUBTOTAL                2.00                  72.50                                                                                      1.45                                              _____________________                            GRASS TOTAL                                     74.00 THANK YOU VISIT AGAIN Ph: 24374387 Email id: 222.saravanabhavan.com

Example

(Finding Sales Tax) The cost of a pair of shoes at a shop was Rs. 1450. The sales tax charged was 8%. Find the bill amount.

Solution

On Rs. 100, tax paid was Rs. 8

On Rs. 1450, the tax paid would be

Bill amount = cost of item + sales tax.
= Rs. 1450 + Rs. 116 = Rs. 1566

Example:
(Value Added Tax). Reena bought a washing machine for Rs. 9800 including a tax of 10%. Find the price of washing machine before VAT was added.

Including VAT, price of washing machine = Rs. 9800

10% of 9800 = Rs. 980

Price, Before VAT added = 9800 - 980
= Rs. 8820