Tax Book 2023

Practice Questions with Solutions Chapter- 06

Input tax

On taxable supplies (working attached) (A) 80,741

90% of output (Rs. 124,100 x 90%) (B) 111 , 690

Less: Admissible input tax: lower of (A) or (B) 80 , 741

Balance sales tax payable 43 , 359

Working

Taxable purchases from registered person (Rs. 220,000 x 17%) 37 , 400

Taxable purchases from non-registered person (Note - 3) -

Purchased raw material (used taxable and exempt supplies) (Rs. 200,000 x 17%) 34,000

Sales tax paid on PTCL dues 6,000

Sales lax paid on factory electricity bill 5,000

Total input tax to be apportioned 82 , 400

Apportionment of residual input tax

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

Residual

input tax

Rs. Rs.

Taxable supplies 730,000 80 , 741

Exempt supplies 15,000 1, 659

745,000 82 , 400

(Note - 1) It is assumed that all the purchases are used for both taxable as well as exempt supplies

(Note – 2) It has been assumed that 3 % further tax u/s 3(1A) is not applicable on local taxable supplies to
unregistered persons by virtue of by virtue of serial 5 of SRO 648(I)/2013 dated July 09, 2013 otherwise
further tax shall be accounted for and paid separately without adjustment of the same against input tax /
refund of the registered person and further it shall also not be considered for the computation of 90%
limitation on output tax.

(Note – 3) As purchases from non-registered persons are without sales tax invoices hence the same shall
be without sales tax u/s 23(2) of the Sales Tax Act, 1990, therefore the question of adjustment of input tax
in not applicable.

(Note – 4 ) As it is case of a manufacturer and none of the clauses under SRO 1190(I)/2019 dated October
02, 2019 is applicable therefore 90% of output tax limitation on input is applicable U/S 8B of the Sales Tax
Act, 1990.

Q.1 3 Mr. Muhammad Shan is a registered manufacturer under the Sales Tax Act, 1990. Data regarding

his business for the month of August 20 22 is as follows.

Rs.

1 Taxable supplies to registered persons on credit basis 3,500,000

(^2) Taxable supplies to non-registered persons from exempted purchases (with Sales Tax) 250,000
3 Sales to retailers 150,000
4
Exempted supplies (Out of purchases from non-registered
persons) 600,000
5 Supplies to DTRE registered person 400,000
6 Zero rated supply 900,000
7 Supplies made for personal use (including the amount of sales tax) 120,000
8 Taxable purchases from registered on credit basis 300,000
9 Purchases from unregistered persons 250,000
10 Imported goods 150,000
11 Acquisition of fixed assets purchased from non-registered persons 800,000
12 Sales tax paid on gas bill consumed in residential colonies 20,000
13 Sales tax paid on electricity bills 50,000
14 Sales tax paid on telephone bills 50,000
15 Sales tax credit 20,000