Sale Value 50
Trade discount 5
Cash discount 8
Tax rate 17.5%
Value inclusive of sale tax ??????
sales tax rule says always use the net amount to calculate the sales tax.i.e after deduction of all discounts trade and cash dicounts.so the calculation is as follows:
50-5-8=37*17.5/117.5= 5.51(sales tax)
43.5 is the correct answer?
First, deduct the trade discounts from price: 50-5=45 then deduct cash discount: 45-8=37
Then calculate vat: 37*17.5%=6.475
And Now the last part, the value of invoice or The Value inclusive of sales tax= 45 + 6.475=51.475