Tax Book 2023

Chapter 12 Solved Past Papers Sales Tax Numericals of ICMAP Stage IV - (2003 to 2016)

Rs. Rs.

Output tax:

On supply of wholly taxable goods U/S 3 255,000

On supply of wholly exempt goods [U/S 6 read with 6th Schedule] -

On supply of partly taxable and partly exempted goods

Taxable supplies U/S 3 637,500

Exempt supplies [U/S 6 read with 6th Schedule] -

892,500

Input tax:

On purchase of goods to be used for taxable supplies (W-1) 90,000

On purchase of goods to be used for exempt supplies -

On share of taxable supplies in purchase of goods for both 375,000

taxable and exempt supplies (W - 2) (A) 465,000

90% of output tax (N - 1) (B) 803,250

Less admissible input tax lower of (A) or (B) 465,000

Balance sales tax liability 427,500

Working:

1038___Conceptual Approach to Taxes

Total purchases (600,000 + 900,000 + 3,000,000) 4,500,000

Total input tax on all purchases 675,000

W - 1:

Tax on purchase of goods to be used for taxable supplies

(675,000 / 4,500,000 x 600,000) 90,000

W - 2:

Tax on purchase of goods for both taxable and exempt supplies

(675,000 / 450,0000 x 3,000,000) 450,000

This input tax of Rs. 450,000 shall be allowed proportionately:

(450,000 x 3,750,000 / (3,750,000 + 750,000) ) 375,000

(N - 1)

(N - 2)

Winter - 2004 Q. 6

90% restriction u/s 8B on input tax in case of a company is applicable subject to

restriction, limitations and conditions of the Sales Tax Act, 1990.

AsitiscaseofamanufacturerandnoneoftheclauseunderSRO1190(I)/2019datedOctober

02, 2019 isapplicabletherefore90%ofoutputtaxlimitationoninputisapplicableU/S8Bofthe

Sales Tax Act, 1990.

In addition to the above he provided following further information:

1. All imported goods were sold during the month of import i.e. July, 2022.


2. There were no opening or closing inventories.

Mr.FakharRizviisacommercialimporteroftaxablegoods.DuringthemonthofJuly, 2022 heimported

goodsvaluingRs.1,500,000.Ontheseimportshepaidcustomduty@10%,generalsales@17%and

income tax @ 5.5%. He also opted to pay Sales Tax on value addition at the time of imports.

1038___Conceptual Approach to Taxes