The total amount of VAT paid should be Rs 1168. The final buyer should be paying Rs 22968 for the washing machine. Here is how to derive this answer:

A sells the washing machine to B for 12500 plus Rs 1000 in VAT (12500*.08). So B pays Rs 13500.

B adds to that Rs 800 of profit and sells it to C. The VAT on this transaction is 800*.08 = 64. So now the total VAT so far is 1064. The price that C pays is 13500 + 800 + 64 = 21564.

C adds Rs 1300 to the price, making 22864. He pays VAT on the 1300 (1300*08 = 104). So now the total VAT is 1168 Rupees. 22864 + 104 = 22968