Tax Book 2023

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

Product A Product B
Rs. Rs.
Supplies
Local supplies 5,350,000 1,010,000
Export to Thailand 2,550,000 3,950,000

Zainab is registered under the Sales Tax Act, 1990 and is engaged in the manufacture and supply of Products A and B. Following
information has been extracted from her records for the month of August 2022:

Q.NO. 9 Autumn 2012

Conceptual Approach to Taxes___ _963

Export to Thailand 2,550,000 3,950,000
Purchases
Local materials from registered persons
Local materials from unregistered persons
Additional information

(i) Product A is exempt from the charge of sales tax
(ii) Sales tax credit brought forward from previous month amounted to Rs. 262,500.

Required:

(a) Sales tax payable / refundable

(iv)Apurchaseinvoicedated 5 February 2020 amountingtoRs.100,000hadnotbeenclaimedinadvertently.Thisoversightwas
detected in the month of August 2022.

In the light of Sales Tax Act, 1990 and Rules made thereunder, calculate the following for the month of August 2022:

6,000,000

850,000

(iii) Substandard supplies worth Rs. 150,000 were returned to the registered vendors and proper debit and credit notes were issued.

(a) Sales tax payable / refundable
(b) Input tax to be carried forward, if any

(a)
Sales tax
Rs. Rs.
Output tax
Local taxable supplies [U/S 3 (Rs. 1,110,000 x 17%] 188,700
Local exempt supplies [U/S 13 read with 6th Schedule] -
Exports (zero rated) [U/S 4 read with 5th Schedule] -
Total output tax 188,700
Less: Input tax allocated to taxable supplies (Note - 1) 86,633
Input tax brought forward from previous month 262,500
Total input tax

Solution

Input tax brought forward from previous month 262,500

Total input tax 349,133

Input tax to be carried forward (160,433)

(b) Sales tax refundable on export sales U/S 10(1) (Note - 1) 507,311

(Note -1) Apportionment of residual input tax
[U/R 25 of the Sales tax Rules, 2006] Supplies Residul input
tax
Rs. Rs.
Local taxable supplies (Product B) 1,110,000 86,633
Local exempt supplies (Product A) (Note - 3) 5,350,000 417,556
Exports (zero rated) 6,500,000 507,311
12,960,000 *1,011,500

• Input tax on purchases from registered persons i.e. [(6,000,000-150,000+100,000) x 17%] = 1,011,50* Input tax on purchases from registered persons i.e. [(6,000,000-150,000+100,000) x 17%] = 1,011,50 00

(Note - 2)

(Note - 3)

(Note- 4)

Aregisteedpersonisnotentitledtoclaiminputtaxattirbutabletoexemptsuppliesundersection8(2)oftheSalestaxAct,

1990.

NofurthertaxhasbeenchargedonsuppliescoveredunderFifthScheduletotheSalesTaxAct, 1990 byvirtueofSRO

585(I)/2017, Dated: 01/07/2017.

Asthezeroratedsuppliesaremorethan50%ofalltaxablesuppliesunderSRO1190(I)/2019datedOctober02, 2019

therefore 90% limitation is not applicable U/S 8B of the Sales Tax Act, 1990.

Conceptual Approach to Taxes___ _963