Class 10: Sales Tax and Value Added Tax (VAT)

$\displaystyle \textbf{What is Sales Tax?}$
$\displaystyle \text{Sales Tax is the tax levied by the State Government on the sale or purchase of goods}$
$\displaystyle \text{within the state.}$
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$\displaystyle \textbf{Important Terms}$
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$\displaystyle \textbf{Cost Price (C.P.)}$
$\displaystyle \text{The price at which an article is purchased is called its Cost Price (C.P.).}$
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$\displaystyle \textbf{Selling Price (S.P.)}$
$\displaystyle \text{The price at which an article is sold is called its Selling Price (S.P.).}$
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$\displaystyle \textbf{List Price}$
$\displaystyle \text{The price at which a trader or shopkeeper offers an article for sale is called its List Price.}$
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$\displaystyle \textbf{Discount}$
$\displaystyle \text{To increase sales or clear old stock, shopkeepers may offer a rebate on the List Price.}$
$\displaystyle \text{This rebate is called a Discount.}$
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$\displaystyle \textbf{Computation of Sales Tax}$
$\displaystyle \text{Sales Tax is calculated on the Selling Price.}$
$\displaystyle \text{Sales Tax}=\frac{\text{Rate of Sales Tax}\times\text{Selling Price}}{100}$
$\displaystyle \text{Rate of Sales Tax}=\frac{\text{Sales Tax}}{\text{Selling Price}}\times100$
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$\displaystyle \textbf{Value Added Tax (VAT)}$
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$\displaystyle \textbf{What is VAT?}$
$\displaystyle \text{Value Added Tax (VAT) is the tax charged on the value added at each stage of transfer}$
$\displaystyle \text{of goods from the manufacturer to the retailer.}$
$\displaystyle \text{To understand this concept, refer to the table below.}$
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