Tax Book 2023

Chapter 12 Solved Past Papers Sales Tax Numericals of ICMAP Stage IV - (2003 to 2018)

Sale return during the month

Product A 50

Product B 30

Sales tax paid on electricity bill 15

Further information:

·         Product B is exempt from the sales tax.

·         Sales tax credit brought forward from previous month amounted to Rs. 25 million.

·         An  import bill dated November 10, 2022 amounting  to Rs. 25 million had  not been claimed

inadvertently. This oversight was detected during the month.

·         Sales  tax  is  payable  at  the  rate  of  17%.  All  the  above  amounts  are  exclusive  of 

sales tax.

Required:

In the light of the Sales Tax Act, 1990 and rules made there under, calculate the following for the

month of May 2023;

·         Sales tax payable / refundable

·         Input tax to be carried forward, if any.

Solution:

Conceptual Approach to Taxes____1031

Solution:

HASSAN ASSOCIATES

SALES TAX LIABILITY

TAX PERIOD: MAY 2023

OUTPUT TAX Rs. "000" Rs. "000"

On total taxable supplies [(800+250) x 17%](Note - 1) 179

Less: Return (50 x 17%) (9)

170

INPUT TAX

On taxable supplies only for product A U/S 3 153

On taxable supplies U/S 3 (W - 2) 54

Add: sales tax credit brought forward from previous month 25

(A) 232

90% of output tax (Note - 2) (B) 153

Less admissible tax credit: lower of (A) or (B) 153

Balance sales tax payable 17

Sale tax excess payment carry forward (A - B) 79

WORKING

W-1

Residual input tax :

Import for taxable & exempt goods ( 450 x 17%) 77

Sale tax on electricity bill 15

Less: Import bill un claimed ( 25 x 17%) (4)

Total residual input tax 87

Conceptual Approach to Taxes____1031