A manufacture of furniture sells a sofa set to a retailer for Rs 23000.the retailer, inturn, sells the sofa set to a customer for Rs 29000.find the VAT rate as percent,if the retailer pays Rs 520 as VAT.
Answer
To find the VAT rate as a percentage, we need to determine the amount of VAT paid in relation to the selling price.
1. Calculate the selling price of the sofa set by adding the VAT paid by the retailer:
Selling Price = Cost Price + VAT
Selling Price = Rs 23000 + Rs 520
Selling Price = Rs 23520
2. Calculate the VAT rate as a percentage:
VAT Rate = (VAT Paid / Selling Price) * 100
VAT Rate = (Rs 520 / Rs 23520) * 100
Now we can calculate the VAT rate.
VAT Rate = (520 / 23520) * 100
VAT Rate = 0.022 * 100
VAT Rate = 2.2%
Therefore, the VAT rate is 2.2%.