Page 118 - ICSE Math 8

Calculation of tax

As mentioned above, tax is calculated on the selling price. Taxes vary depending upon the type of product.
Some products are partially or totally free from tax.

Thus, tax can be calculated as:
Rate of tax × Selling price
Tax =
100
Tax
Rate of tax = × 100%
Selling price
Amount paid by the customer = Selling price + Tax, if any.

Maths Info

Goods and Services Tax (GST)
GST is an indirect tax that replaced multiple existing taxes (central excise duty, services
tax, VAT, etc.). It is levied by the central and the state governments of India. The tax
became effective from 1 July 2017. The rates of GST are different for different items.

Example 14: Sonu bought a shirt listed at ` 850 for ` 892.50 after paying tax. What is the rate of tax?
Solution: List price = ` 850; S.P. = ` 892.50

 892 50 850. − 
∴ Rate of tax =   × 100% = × 100% = 5%
 850 
∴ The rate of tax is 5%.
Example 15: Sunita bought a saree for ` 3,696 including 12% tax and a salwar suit for ` 567 including 5%
tax. Find the printed price (without Tax) of the saree and salwar suit together.
Solution: Let the printed price (M.P.) of the saree be ` x.
12
Rate of Tax = 12%; Tax = 12% of x = x
100
Ê 12 ˆ 112
∴ S.P. of saree = ` x + 100 x = ` 100 x
˜
Á
¯
Ë
But the given S.P. of the saree is ` 3,696.
112 3 696 100, ×
∴ x = 3,696 ⇒ x = = ` 3,300
100 112
∴ M.P. of the saree = ` 3,300

Let the printed price (M.P.) of the salwar suit be ` y.
Rate of Tax = 5%

∴ Tax = 5% of ` y = `   5 × y = ` 1 y

 100  20
Ê 1 ˆ Ê 21 ˆ
y
S.P. of the salwar suit = ` y + 20 y = ` Á Ë 20 ¯ ˜
˜
Á
Ë
¯
But the S.P. of the salwar suit is given as ` 567.
21 567 20×
∴ y = 567 ⇒ y = = ` 540
20 21
⇒ M.P. of the salwar suit = ` 540
Hence, the printed price of the saree and salwar suit together = ` 3,300 + ` 540 = ` 3,840

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