Tax Book 2023

Chapter 07 Solved Past Papers Sales Tax Numericals of CA Module C

Mulaqat Associates (MA)

Computation of Net Sales Tax Liability

For the tax period February 2023

SALES TAX CREDIT (INPUT TAX) Sales Tax Amount of Sales
Rate Tax
605,000 17% 102,850

Taxable Value
Taxable goods from registered suppliers [650,000 - 45,000]

ANSWER

954 Conceptual Approach to Taxes

605,000 17% 102,850
Furniture for use in marketing manager's office 45,000 inadmissible -
Taxable goods from un-registered suppliers 150,000 inadmissible -
Exempt goods from registered suppliers 100,000 - -
Import of raw material 280,000 17% 47,600
Purchase of cement [being personal in nature] [150 x 500] 75,000 inadmissible -
Advance against purchase of packing material 268,000 17% 45,560
196,010
Add: Credit brought forward from previous month 245,000
Less: input tax on chemicals destroyed (120,000)
125,000
Input Tax for the month (Accumulated credit) 321,010

SALES TAX DEBIT (OUTPUT TAX)
Jet fuel to Pak Airways 800,000 0% -
Taxable goods to registered customers 500,000 17% 85,000
Taxable goods to Cottage Ind. In Bela (Note -1) 200,000 17% 34,000

Taxable goods from registered suppliers [650,000 - 45,000]

Taxable goods to registered customers 500,000 17% 85,000
Taxable goods to Cottage Ind. In Bela (Note -1) 200,000 17% 34,000
Taxable goods to un-registered - end consumers (Note - 1) 175,000 17% 29,750
Raw material to insurance company [treated as supply] 90,000 17% 15,300
Taxable goods to Bali Traders 290,000 17% 49,300
Taxable goods on two months credit 52,000 17% 8,840
Free samples of detergent Zeta 65,000 17% 11,050
Debit note issued to Hali Brothers 35,000 17% 5,950
Caramel ice cream [4,000 x 160] 640,000 17% 108,800
Output tax for the month 347,990

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  (313,191)
  Sales tax payable 347,990 - 313,191 = 34,799 34,799
  Input tax to be carried forward [321,010 - 313,191] 7,819

  
  

Furthertaxonsuppliestoun-registeredendconsumers-Notrequiredtobe
registered [175,000 x 0%]
Admissible credit (lower of 321,010 or 90% of 347,990 = 313,191

Further tax on supplies to cottage Ind. - not required to be registered
[200,000 x 0%]

Input tax to be carried forward [321,010 - 313,191] 7,819

(Note - 1) Assumed that supplies invoices to un registered persons have NTN or CNIC of recipients, as applicable only on

distributors otherwise proportionate input tax shall be disallowed under section 8(1)(m) of the Sales Tax Act, 1990.

954 Conceptual Approach to Taxes