How much total vat did tata pay to its vendors

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Tata Motors is a major player in automobile manufacturing in India. It has three different manufacturing units that specialize in manufacturing different transportation-related products, such as trucks, engines and axles, commercial vehicles, utility vehicles, and passenger cars. The company buys products that fall under different sections of the Indian government VAT tax code, and therefore the products have different VAT rates. In one particular accounting period, Tata had invoices from four different suppliers (vendors A, B, C, and D) in the respective amounts of $1.5 million, $3.8 million, $1.1 million, and $900,000. The products Tata purchased were subject to VAT rates of 4%, 4%, 12.5%, and 22%, respectively.

(a) How much total VAT did Tata pay to its vendors?

(b) Assume that Tata’s products have a VAT rate of 12.5%. If Tata’s sales during the period were $9.2 million, how much VAT did the Indian Treasury receive from Tata?

Reference no: EM13885849

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