Clarification on VAT on Discounted Price

I bought an apparel at Lifestyle. The MRP was 5995. Discount displayed was 10%. There was no mention whether it was on MRP or extra taxes would be charged. They gave a discount on MRP and then added 5% VAT on discounted price. The calculation was 5995-(10%*5995)=5395.50+(5%*5395.50)=5665.28.

As far as I understand, it does not matter what is the discounted price companies have to pay VAT on the original base price. By that logic
5% VAT on MRP of 5995 = 5/105*5995 = 285.48
Thus, Base price would be 5995-285.48=5709.52
After Discount of 10% on Base price, the price would be 5709.52-(10%*5709.52)=5138.57
Now adding the VAT on Base price=5138.57+285.48=5424.05. So, why is the company charging 241.23 extra.


Comments

Leave a Reply

Your email address will not be published. Required fields are marked *