Q.A 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 payable by the dealer, using both the output-input method and the value-added method, and confirm both give the same answer.

Compute output tax and input tax first, then cross-check against the value-added shortcut.

Output-input method: input tax = 3,000 × 10/100 = Rs 300; output tax = 3,800 × 10/100 = Rs 380; net VAT payable = 380 − 300 = Rs 80.

Value-added method: value added = 3,800 − 3,000 = Rs 800; VAT on value added = 800 × 10/100 = Rs 80. …

Reporting the output tax (Rs 380) alone as the amount payable, forgetting to subtract the input tax credit already available from the earlier pur …