# Sales Tax/Value Added Tax/Goods and Services Tax

The teacher showed the class a bill in which the following heads were written.

Bill No. | Date |
---|

Menu |
---|

S.No. | Item | Quantity | Rate | Amount |
---|---|---|---|---|

Bill amount + ST (5%) | ||||

Total | ||||

Item 1 | 100 | 10 | ||

Item 2 | 50 | 8 | ||

Item 3 | 75 | 7.5 | ||

Item 4 | 120 | 12 | ||

Item 5 | 200 | 9 |

**Sales tax (ST)** is charged by the government on the sale of an item. It is collected by the shopkeeper from the customer and given to the government. This is, therefore, always on the selling price of an item and is added to the value of the bill. There is another type of tax which is included in the prices known as **Value Added Tax (VAT)**.

From July 1, 2017, Government of India introduced GST which stands for Goods and Services Tax which is levied on supply of goods or services or both.

**Example 4:(Finding Sales Tax) The cost of a pair of roller skates at a shop was ₹ 450. The sales tax charged was 5%. Find the bill amount**.

**Solution:**

- On ₹ 100, the tax paid was ₹ 5
- The sales tax amount is ₹
- Bill amount = (Cost of item)
+ (Sales tax) = ₹ - Thus, the total bill amount is ₹ 472.50

**Example 5: (Value Added Tax (VAT)) Waheeda bought an air cooler for ₹ 3300 including a tax of 10%. Find the price of the air cooler before VAT was added.**

**Solution:**

- The price includes the VAT, i.e., the value added tax
- Thus, a 10% VAT means if the price without VAT is ₹ 100 then price including VAT is ₹
. - Now, when price including VAT is ₹ 110,original price is ₹
. - Hence when price including tax is ₹ 3300, the original price =
× 3300 = ₹100 110 . - Hence the original price of air cooler = ₹
.

**Example 6: Salim bought an article for ₹ 784 which included GST of 12% . What is the price of the article before GST was added?**

**Solution:**

- Let original price of the article be ₹ 100. GST = 12%.
- Price after GST is included = ₹ (100+12) =
- When the selling price is ₹ 112 then original price = ₹ 100.
- When the selling price is ₹ 784, then original price =
× 784 = ₹100 112 . - Thus, original price = ₹ 700.

## THINK, DISCUSS AND WRITE

**1. Two times a number is a 100% increase in the number. If we take half the number what would be the decrease in per cent?**

Let's denote the original number as x.

**Two times the number (2x) represents a 100% increase in the original number.**

Now, if we take half of the number, it becomes

The decrease is the difference between the original number and half the number:

**Decrease** =

The percentage decrease is calculated as:

**Decrease %** =

=

=

**So, taking half the number results in a 50% decrease.**

**2. By what per cent is Rs. 2,000 less than Rs. 2,400 ? Is it the same as the per cent by which Rs. 2,400 is more than Rs. 2,000 ?**

**Percentage Decrease** =

Here, the original value is Rs. 2,400, and the difference is:

**Difference** =

Now, calculate the percentage decrease:

**Percentage Decrease** =

**So, Rs. 2,000 is 16.67% less than Rs. 2,400.**

**By what percent is Rs. 2,400 more than Rs. 2,000 ?**

Now, we calculate the percentage increase using the formula:

Percentage Increase =

Here, the original value is Rs.

Percentage Increase =

**So, Rs. 2,400 is 20% more than Rs. 2,000.**

**Is it the same as the per cent by which Rs. 2,400 is more than Rs. 2,000 ?**

**No, the percentages are not the same. Rs. 2,000 is 16.67% less than Rs. 2,400, but Rs. 2,400 is 20% more than Rs. 2,000**.