|Class 8 Maths Comparing Quantities||Sales Tax/Value Added Tax|
Sales Tax/Value Added Tax
ST means Sales Tax, which we pay when we buy items. The sales Tax is charged by the Government on
the sale of an item.
Sales Tax = Tax % of Billing Amount
Now a days, the prices include the tax known as Value Added Tax (VAT).
Problem: I purchased a hair-dryer for ₹ 5,400 including 8% VAT. Find the price before VAT was added.
C.P. = ₹ 5,400 and Rate of VAT = 8%
Let C.P. without VAT is ₹100, then price including VAT = 100 + 8 = ₹ 108
When price including VAT is ₹ 108, then original price = ₹ 100
When price including VAT is ₹ 1, then original price = 100/108
When price including VAT is ₹ 5400,
then original price = (100/108) * 5400
= 100 * 50
= ₹ 5000