Understanding Sales Tax and Tax-Free Items

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Sales tax is a form of tax that is levied on the sale of goods and services. In this context, we will explore two practical scenarios where we need to calculate the cost of tax-free items based on the given tax rate and the amount of sales tax paid. Here’s how to approach such problems step by step.

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The First Example

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Rahul went to a shop and bought things worth Rs. 24, out of which Rs. 0.30 went on sales tax on taxable purchases. If the tax rate was 6%, then what was the cost of the tax-free items?

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Given Information:

r r r Total Worth: Rs. 24r Tax Paid: Rs. 0.30r Tax Rate: 6%r r r

Calculation:

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The tax rate can be expressed as a fraction: 6/100. To find the original cost of the taxable items before tax, we can set up the equation:

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Tax on taxable items: 6/100 x 0.30

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Solving for x:

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x 0.30 / (6/100) 0.30 * (100/6) 5.00

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The total cost of taxable items is Rs. 5.00, and the tax-free items cost is the total minus the cost of taxable items:

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Total - Taxable Items Cost 24 - 5 19.70

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Therefore, the cost of the tax-free items is Rs. 19.70.

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The Second Example

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Through a given condition, we understand that 6% of the taxable items amounts to Rs. 0.30. This implies the taxable items are valued at Rs. 5.00. Here's the step-by-step solution:

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Given Information:

r r r Total Worth: Rs. 25r Tax Paid: Rs. 0.30r Tax Rate: 6%r r r

Calculation:

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The taxable items cost is calculated as:

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Amount of taxable purchase 0.30 / (6/100) 5.00

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Since the total cost is Rs. 25, the cost of tax-free items is:

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25 - 5 20

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Therefore, the cost of the tax-free items is Rs. 20.

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The Third Example

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In another situation, the question provides a total purchase value, tax rate, and amount of sales tax. Let's break down the given conditions:

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Given Information:

r r r Total Purchase: Rs. 25r Sales Tax: Rs. 0.30r Tax Rate: 6%r r r

Calculation:

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First, determine the value of the taxable items:

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Amount of taxable purchase 0.30 / 6 5.00

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The cost of tax-free items is:

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Total - Taxable Items Cost 25 - 5 20

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Therefore, the cost of the tax-free items is Rs. 20.

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Conclusion

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By carefully applying the given tax rate and the amount of sales tax, we can accurately determine the cost of tax-free items. In all the scenarios mentioned, we can infer the cost of tax-free items as Rs. 20/- by performing the necessary calculations.

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Related Keywords: sales tax, tax-free items, cost calculation

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