Tax Book 2023

Practice Questions with Solutions Chapter- 06

Tax on purchases (30,000 x 1 7 %) 5 , 100

Total input tax is allowed as the registered person deals in third

Schedule items and further the available input is less than 90% of

output tax of Rs. 7,650. ____

Balance sales tax payable 3, 400

Q.6: Calculate output tax on following supplies

Sr. #

1 Taxable supplies Rs. 232,000 inclusive of sales tax

2 Local taxable supplies Rs. 116,000 exclusive of sales tax

Solution:

(Note – 1) When value of sales are given including sales tax, then value of sales tax shall be calculated by

using tax fraction formula U/S 2( 36 ) i.e. Sales tax = value including sales tax x 17 / 11 7. [Rs. 232,000 x

17/117 = 33,709].

(Note – 2) Output tax on local taxable supplies without sales tax [Rs. 116,000 x 17% = 19,720]

Q.7 Mr. Kamran is a registered manufacturer under the Sales tax Act, 1990. Data regarding his business

for the month of July 20 22 is as follows:

Sr. # Rs.

1 Taxable supplies to registered persons 500,000

2 Taxable supplies to non-registered persons (including the amount of Sales Tax) 250,000

3 Exempted sales (made from exempt purchases only) 300,000

4 Supplies made to DTRE registered persons 200,000

5 Zero rated supply 450,000

6 Taxable purchases from registered persons 130,000

7 Purchases (for exempt supplies only) 50,000

8 Sales tax paid on factory gas bill consumed in labor residential colonies 2,500

9 Sales tax paid on factory electricity bills (Sales tax registration number is printed on bills) 5,600

10 Sales tax paid on factory telephone bills (Sales tax registration number is printed on bills) 500

11 Sales tax receivable (previous month) 200

Required: Calculate sales tax payable.

Solution:

Output tax Rs.

On taxable supplies to registered persons U/S 3 (Rs. 5 00,000 x 17%) 85 ,000

(^) On taxable supplies to non-registered persons U/S 3 (Rs. 250,000 x 1 7 /11 7 ) (Note - 2 ) 36 , 325
On supplies to DTRE registered persons [U/S 4 read with 5 th Schedule] 0
On zero rates supplies [U/S 4 read with 5th Schedule] 0
121 , 325
Input tax
On taxable purchases used only for taxable local supplies (Note - 3 ) 11 , 566
On factory electricity bills (Note - 4 ) 5.600
On factory telephone bills (Note - 4 ) 500
On factory gas bill of labor colonies (Note – 5 ) 0