Solutions for Grade 10 Sales Tax and Value Added Tax are available on this page. The answers for all the topics have been prepared by our team of math experts that help the students of class 10 to score better grades in the exams and also become a pro in maths. Most of them feel that maths is a tough subject so keeping this point in mind we have prepared the solutions in a simple manner where you can understand the problem easily. You can find different types of problems in the chapter Sales Tax and VAT.

## Sales Tax and Value Added Tax Topics List

Check out the topics we are going to discuss the concepts in sales tax and value-added tax from the below section. Access the answers on sales tax and value-added tax by clicking on the below-attached links.

- Calculation of Sales Tax
- Sales Tax in a Bill
- Mark-ups and Discounts Involving Sales Tax
- Profit Loss Involving Tax
- Value Added Tax
- Problems on Value Added Tax (VAT)
- Worksheet on Printed Price, Rate of Sales Tax and Selling Price
- Worksheet on Profit/Loss Involving Sales Tax
- Worksheet on Sales Tax and Value-added Tax
- Worksheet on Mark-ups and Discounts Involving Sales Tax

### What is meant by Sales Tax?

Sales Tax is a type of tax paid to an overseeing body for the offer of labor and products. The sales charge is an aberrant expense and is for the most part charged at the mark of purchase or trade of specific available merchandise, charged as a level of the worth of the item.

### What is meant by Value Added Tax?

Value-added tax is just the replacement of sales tax. The Value added tax is a form of sales tax only. The same sales tax is collected by Governments. The only difference is that it is collected in stages rather than at one point from the sale of goods. VAT is a system of collecting sales tax which reduces the scope of under evaluation and tax evasion. The terms related to the Value added tax are dealer, turnover, input tax, output tax.

### What is difference between Sales Tax and Value Added Tax? | Sales Tax Vs. VAT

The table below shows the difference between sales tax and value-added tax.

Sales Tax |
VAT |

Sales tax is collected by the retailer when the final sale in the supply chain is reached. | Value Added Tax is collected by the sellers in each stage of the supply chain. |

The seller should separately state sales tax. | The seller should separately state VAT and include the registration number |

The final customer pays the sales tax. | All the purchasers pay VAT. |

### Example Problems on Sales Tax and Value Added Tax

**Example 1.**

Manufacturer A sells a Printing Machine to a trader B for Rs 1500. Trader B sells it to a trader C at a profit of Rs 600 and trader C sells it to a consumer at a profit of Rs 300. If the rate of VAT is 6%, find

(i) the amount of tax (under VAT) received by the State Government on the sale of this machine.

(ii) the amount that the consumer pays for the printing machine.

**Solution:**

(i) Amount of tax collected by manufacturer A = 6% of Rs 1500

= (6/100 × 1500) = Rs 90

Since the trader B earns a profit of Rs 600, the value added by the dealer B

= Rs 600.

Therefore,Amount of VAT to be paid by B = 6% of Rs 600 = Rs 36.

As the trader C earns a profit of Rs 300, the value added by the dealer C

= Rs 300.

Therefore, the Amount of VAT to be paid by C = 6% of Rs 300 = Rs 18.

Therefore, The amount of tax (under VAT) received by the State Government

= Rs 90+ Rs 36 + Rs 18

=Rs 144.

(ii) The value of the machine paid by the consumer

= the price charged by A + profit of B + profit of C

= Rs 1500 +Rs 600 + Rs 300 = Rs 2400.

Tax paid by the consumer = 6% of Rs 2400

= (6/100 × 2400)

= Rs 144.

Therefore The amount paid by the consumer = Rs 2400 + Rs 144 = Rs 2544.

**Example 2.**

Find the amount paid by Raju to buy a bag whose list price is Rs 850 and the rate of sales tax is 3%.

**Solution:**

Given that

List price of the leather bag = Rs 850

Then, rate of sales tax = 3%

We know that,

Sales tax = (list price × rate of sale tax)/100

= (850 × 3)/100

= Rs 25.4

Then,

The amount paid by Rajesh to buy Leather bag = List price + Sales tax

= Rs 850 + Rs 25.5

= Rs 875.5

**Example 3.**

The price of a cell phone inclusive of sales tax at the rate of 12% is Rs 30,000. Find the basic price of the cell phone.

**Solution:**

Given that

The total cost of a cell phone including sales tax is Rs 30,000

The rate of sales tax is 12%

Let us assume the basic price of a cell phone be y.

Therefore, total price of the cell phone = ₹ (y + ((y × 12)/100))

= ₹ 112y/100

Then, 112y/100 = Rs 30,000

By cross multiplication we get,

112y = 30,000 × 100

114y = 30,00,000

y = 30,00,000/112

y = Rs 26,785.7

Therefore, the basic price of a cell phone is Rs 26785.7

**Example 4.**

The marked price of an article is Rs 16480 and the sales tax on it is Rs 1376. Find the rate of sales tax.

**Solution:**

Given that,

The marked price of an article is Rs 16480

The sales tax = Rs1376

We know that,

Rate of sales tax = (100 × Sale tax) / marked price

= (100 × 1376)/16480

=Rs 8.34%

Therefore, the rate of sales tax is Rs 8.34

**Example 5.**

Find the rate of sales tax of the following items whose marked price and sales tax are given below:

Item Marked Price Sales Tax

Shoes 2380 130

Pencils 3816 254

Pens. 128 34

Diary 340 10

**Solution:**

From the table

Shoes Marked price = 2380

Sales price = 130

We know that,

Rate of sales tax = (100 × Sale tax)/marked price

= (100 × 130)/2380

= 5.46

Therefore, the rate of sales tax is 5.46%

From the table

Pencils Marked price = 3816

Pencils Sales tax = 254

We know that,

Rate of sales tax = (100 × Sale tax)/marked price

= (100 × 254)/3816

= 6.65

Therefore, the rate of sales tax is 6.65%

From the table

Pens Marked price = 128

Pens Sales tax = 34

We know that,

Rate of sales tax = (100 × Sale tax)/marked price

= (100 × 34)/128

= 26.5

Therefore, the sales tax is 26.5 %

From the table

Diary Marked price = 340

Diary Sales tax = 10

We know that,

Rate of sales tax = (100 × Sale tax)/marked price

= (100 × 10)/340

= 2.94

Therefore, the rate of sales tax is 2.94%

### FAQs on Sales Tax and Value Added Tax

**1. What is the difference between sales tax and value-added tax?**

The sales tax is collected on total value, but VAT tax is charged only on the value-added to the products. Sales Tax is easy to calculate while VAT calculation requires time and effort.

**2. Which is better VAT or sales tax?**

If the retailer does not require a sales tax on consumer purchases, that’s tax evasion. By providing credit for taxes paid, the VAT prevents cascading.

**3. What is the formula of VAT in maths?**

VAT (Value Added Tax) = Output Tax – Input Tax