LM imports luxury goods in bulk. LM repackages the products and sells them toretailers. LM is registered for Value Added Tax (VAT) in Country X.LM imported a consignment of perfume costing $50,000, paying excise duty of 20% ofcost. The consignment was subject to VAT on the total (including duty). LM paid $9,775repackaging costs, including VAT and sold the perfume for $105,800 including VAT.LM had not paid or received any VAT payments to or from the VAT authorities for this consignment. (c) (d)TURN OVER
Required:
(i) Calculate the net VAT due to be paid by LM on the perfume consignment.
(ii) Calculate LM's net profit on the perfume consignment.