Tax Book 2023

Chapter 12 Solved Past Papers Sales Tax Numericals of ICMAP Stage IV - (2003 to 2018)

Input tax:

Purchase of raw materials used in taxable supplies (N - 2) 546,429

Purchase of raw materials used in exempt supply -

(A) 546,429

90% of output tax (N - 1) (B) 765,000 546,429

Less: Admissible input tax lowe of (A) or (B)

Balance sales tax liability 303,571

Sales tax refundable (Note 2) 218,571

(N - 1)

(N - 2) Apportionment of taxable supplies input tax:

[U/R 25 of the Sales Tax Rules, 2006]

Supplies Input tax

Rs. Rs.

Asthezeroratedsuppliesarelessthan50%ofalltaxablesuppliesunderSRO1190(I)/2019

datedOctober02,2019,therefore90%limitationisapplicableU/S8BoftheSalesTaxAct,

1990.

Conceptual Approach to Taxes____1037

Local supplies (net) 5,000,000 546,429

Zero rated supplies 2,000,000 218,571

7,000,000 765,000

(N - 3)

Winter - 2008 Q. 5

Rupees Rupees

Purchase of goods to be used for taxable supplies 600,000

Purchase of goods to be used for exempt supplies 900,000

Purchase of goods to be used for both taxable and exempt supplies 3,000,000

Total input tax on all purchases 675,000

Supply of wholly taxable goods 1,500,000

Supply of wholly exempt goods 1,800,000

Supply of partly taxable and partly exempted goods:

KarsazLimitedbeinganunlistedcompanyisengagedsimultaneouslyinmanufacturingandsupplyof

taxableaswellasexemptedgoods.SummaryofitstransactionsforthemonthofOctober 2022 isgiven

below:

No further tax has been charged on supplies covered under Fifth Schedule to the Sales Tax

Act, 1990 by virtue of SRO 585(I)/2017, Dated: 01/07/2017.

Taxable supplies 3,750,000

Exempt supplies 750,000

4,500,000

Required:

Compute the sales tax liability of the company for the tax period. (Show proper workings)

Solution

Karsaz Limited

Computation of sales tax liability

For the tax period October 2022

Conceptual Approach to Taxes____1037