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Business Mathematics and Basic Statistics · Class 11 Commerce

Ch 3Sales Tax, VAT and GST — Class 11 Business Mathematics and Basic Statistics, concept-first.

Sales Tax is an indirect tax levied by a government on the sale of goods, collected by the seller from the buyer at the time of sale and then remitted (paid over) to the government.

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Concepts

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Key concepts

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Sales Tax Computation

Sales Tax = sale price × rate/100, added to the sale price to get the tax-inclusive price the buyer pays. When only the tax-inclusive price is known, the sale price before tax is recovered by dividing out the (1 + rate/1…

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Chapter contents

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1

Sales Tax — Meaning and Computation

Sales Tax is an indirect tax levied by a government on the sale of goods, collected by the seller from the buyer at the time of sale and then remitted (paid over) to the government.

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Value Added Tax (VAT) — Output Tax, Input Tax and Net Payable

Value Added Tax (VAT) replaced the old single-point Sales Tax system in Indian states, precisely to remove the cascading (tax-on-tax) problem described in §1.

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Goods and Services Tax (GST) — CGST and SGST

Goods and Services Tax (GST), introduced across India from July 2017, took the same input-tax-credit idea behind VAT and extended it into a single, nationwide indirect tax covering both goods and serv…

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Comparing Sales Tax, VAT and GST

The three systems described in §1–§3 are best understood side by side — not as three unrelated formulas, but as three successive attempts to tax the sale of goods (and, with GST, services too) while p…

Exercises

+Show 5 questions5 questions
  1. Q9A shopkeeper sells an article with a list price of Rs 2,400 and charges sales tax at 6%. Find the sales tax amount and the total price paid…Free
  2. Q10A customer pays Rs 1,050, inclusive of sales tax at 5%, for an article. Find the sale price (before tax) and the tax amount.Free
  3. Q11A dealer buys goods for Rs 3,000 (excluding VAT) and sells them for Rs 3,800 (excluding VAT), both taxed at VAT rate 10%. Find the net VAT p…Preview
  4. Q12A supplier sells goods worth Rs 5,000 (excluding tax) within the same state at a GST rate of 12% (6% CGST + 6% SGST). Find the CGST amount,…Preview
  5. Q13For a single sale of goods worth Rs 10,000 (excluding tax) taxed at 10%, with no earlier purchase involved (so there is no input tax credit…Preview

More questions

+Show 8 questions8 questions
  1. Example 1A trader sells an article with a list price (sale price before tax) of Rs 1,500 at a sales tax rate of 8%. Find (i) the amount of sales tax,…Free
  2. Example 2The price of a television set, inclusive of sales tax at 12%, is Rs 22,400. Find the sale price (the price before tax) of the television set…Free
  3. Example 3A wholesaler purchases goods for Rs 8,000 (excluding VAT) and pays VAT at 10% on this purchase. He sells the same goods to a retailer for Rs…Free
  4. Example 4A dealer buys goods worth Rs 5,000 (excluding VAT) and adds a margin of Rs 1,200 before selling. If VAT is charged at 12.5% on both the purc…Preview
  5. Example 5A retailer sells goods worth Rs 4,000 (excluding tax) within the same state, and GST is charged at 18%. Find the total GST amount and its sp…Preview
  6. Example 6An invoice shows the total amount payable for a product, inclusive of CGST and SGST at 6% each (12% total GST), as Rs 3,360. Find the base p…Preview
  7. Example 7A dealer purchases goods for Rs 6,000 (excluding GST) and pays GST at 18% (9% CGST + 9% SGST) on the purchase. He sells the goods for Rs 7,5…Preview
  8. Example 8Goods pass through three stages before reaching the final consumer, with a tax rate of 10% at every stage. Manufacturer M sells to Wholesale…Preview