Tax Book 2023

Chapter 07 Solved Past Papers Sales Tax Numericals of CA Mod- C

Question No. 7 March 2018

1,000,000

500,000

700,000

Supplies

Taxable goods to registered customers

Taxable goods to un-registered customers

Consumable goods supplied to exporter under DTRE

Export

Faiz Associates (FA) is a partnership concern and registered under the Sales Tax Act, 1990 as manufacturer-cum-distributor.
Following information has been provided by FA for the month of January 2023:

Purchases

Rupees

3,450,000

Conceptual Approach to Taxes___ _945

Additional information:
(i)          Supply of taxable goods to registered customers include the following:

An invoice erroneously issued for Rs. 450,000 whereas the correct amount of the invoice was Rs. 540,000.

Goods having market value of Rs. 600,000 which were supplied to Parveen Limited, an associated company, for Rs. 500,000.

Goods amounting to Rs. 80,000 sold to Hafiz Brothers (HB) on 31 January 2023. HB started business in January 2023 and had filed
an application for registration under the Sales Tax Rules 2006 on 30 January 2023. However, no sales tax registration number was
issued till 31 January 2023.

Exempt goods from registered suppliers 600,000

Input tax brought forward from December 2022

2,000,000

450,000

Sale to Ghalib Corporation of goods worth Rs. 225,000. The contract for sale has been signed but neither invoice was issued nor
any delivery and payment was made in January 2021.

265,000

Purchases

Taxable goods from registered suppliers

Taxable goods from un-registered suppliers

an invoice of Rs. 500,000 dated 22 January 2023 issued by Taqi Corporation (TC).
However, TC was blacklisted by the Commissioner on 6 February 2023.

any delivery and payment was made in January 2021.
(ii)   Purchases from registered suppliers include:
purchase of two air-conditioners amounting to Rs. 150,000 for FA’s new office.

(iii)  FA destroyed certain goods worth Rs. 45,000 after following the due process under the Sales Tax Rules, 2006. Input tax on 
these goods was claimed in December 2022.
(iv)  Free replacement of defective parts costing Rs. 400,000 relating to goods which were sold under 1-year warranty. The market 
value of such parts was Rs. 550,000.
(v)   A debit note for Rs. 100,000 issued by a customer in respect of goods returned was duly settled and the relevant credit note 
has been issued within the stipulated time.
(vi)  During the month, FA paid Sindh Sales Tax worth Rs. 8,500 on franchise services. Under the Sindh Sales Tax Laws, such tax is 
not an admissible credit.

All the above figures are exclusive of sales tax, wherever applicable. Sales tax is payable at the rate of 17%.

Required:
Compute sales tax payable by or refundable to Faiz Associates along with input tax to be carried forward, if any, in the sales tax
return for the month of January 2023. Note : Show all relevant exemptions, exclusions and disallowances.

Conceptual Approach to Taxes___ _945