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I think there is a mistake in the article
by Yuri Pinheiro on May 11, 2005 11:43 AM Permalink
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I think there is a mistake in the calculation for Example B
I think it works this way.....
Correct me if i am wrong.
Example B
(Rs)
Basic purchase price
10,000
Add 12.5 per cent VAT
1,250
VAT inclusive purchase price
11,250
Less VAT input
1,250
VAT free purchase price
10,000
Add overheads
100
Total
10,100
Add 20 per cent profit margin
2,020
Total
12,120
Basic selling price
12,120
Add 12.5 per cent VAT
1,515
VAT inclusive selling price
13,635
Hence the difference from Example A and B ends up being Rs.1688
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