I have an interesting question to put forward to you all.
A person wants to buy an article which costs only Rs 100. The shopkeeper tells him that he will give 20 percent discount and charge 10 percent tax. The shopkeeper leaves it entirely on the person to ask for either discount first followed by tax or tax first and discount later.
The calculation goes as under
Case A: If discount is first the cost gets reduced to 80 Rs and @ 10 % tax rates its net Rs 88.
Case B: If tax is applied first the cost goes to Rs 110 as @10% tax rate tax will be Rs 10. Now apply discount of 20 % the net cost is 110 – 20 % of 110 = Rs 88
So in both cases the net cost is same. But the question is what option the customer should go for?
If one carefully observes in Case A the tax going to government is Rs 8 and shopkeeper keeps Rs 80
But in case B the tax going to government is Rs 10 and shopkeeper keep Rs 78.
So ethically in support of government one should chose option B.
A Good teacher must teach students such practical aspects and also value added to the topic.