A shopkeeper sells an article at the listed price of Rs.1500 and the rate of value added tax is 12% at every stage of sale. If the shopkeeper pays a Value added tax of Rs. 36 to the Government, what was the price, inclusive of Tax, at which the shopkeeper purchased the article from the wholesaler?
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To find out the price inclusive of tax at which the shopkeeper purchased the article from the wholesaler, we need to consider the rate of value added tax (VAT) and the tax paid by the shopkeeper.
Let's assume the price inclusive of tax at which the shopkeeper purchased the article from the wholesaler is P (in Rs).
Given that the VAT rate is 12% and the shopkeeper paid a VAT of Rs. 36, we can calculate the price of the article excluding tax as follows:
Price excluding tax = P - (12% of P)
Price excluding tax = P - (0.12P)
Price excluding tax = P - 0.12P
Price excluding tax = 0.88P
The tax paid by the shopkeeper is given as Rs. 36, so we can set up the equation:
0.12P = 36
Now we can solve for P:
P = 36 / 0.12
P = 300
Therefore, the shopkeeper purchased the article from the wholesaler at a price inclusive of tax of Rs. 300.