Tax Book 2023

Chapter 30 Solved Past Papers Income Tax Numericals of ICMAP Stage IV - (2003 to 2018)

(d)

Q. NO. 3SPRING 2015

Thus,infact,thereisshortfalloccurredonthepartofSLasSLclaimedinputtaxonlyto

theextentofstandardsalestaxat17%assalestaxshallbepaidonretailpriceofimport

of the finished chemicals.

Clause(c)ofthedefinitionoftermmanufacturerorproducerasprovidedundersection

2(16)oftheSalesTaxAct, 1990 inter-aliaincludetheprocesses ofpackaging,bottling

orrepacking. SinceSLimportedthefinishedchemicalsindrumsandthenpackedthe

sameinPakistaninretailpacksi.ebottlesof5-10litres,assuchSLissellingfinished

chemicals in the same state as commercial importer.

Value Addition Sales Tax:

2023 to 31-12-2023 Assumed that tax paid with the return)

Thetaxadvisorsof SL advised thatthe minimum value addition salesat therateof 3%in

additiontosalestaxatstandardrateof17%isnotapplicableonimportoffinishedchemicalsdue

to following reasons:

Conceptual Approach to Taxes _____767

Q. NO. 3SPRING 2015

Notes Rupees Rupees

Gross Profit 7,000,000

Other 1 1,000,000

8,000,000

Salaries 2 1,400,000

3 1,750,000

4 200,000

5 300,000

Operating

Maxo Packaging Limited (MPL) was incorporated on July 18, 2018 as a public limited

company undertheCompanies Ordinance, 1984.MPLhasenlisted itsshares onallthreeStock

Exchanges ofPakistan on August 31, 2022.The company supplies bagsto sugar,wheat,

chemical and othersectors. MPLis asingle source that meets cement packagingneedswith

itsduallinesofbusinessfor kraftpaperand polypropylene products. ThetotalsalesofMPLfor

the financial year ended on June 30, 2023 were Rs. 12,000,000.

Mr. lftikhar hasbeenworking asthe Tax Manager ofthe MPL and the General Manager

Finance hasdirected himtoprepare provisional income taxliabilityofthe companyfor the

accounting yearendedon June30, 2023. In this regardMr. lftikhararranged apreliminary

meetingwith the company's Tax Consultant and providedfollowing information to theTax

Consultant for the calculation of provisional income tax liability for the tax year 2023:

Provision for doubtful debts

Legal and professional fees

Depreciation

5 300,000

600,000

7 180,000

8 250,000 (4,680,000)

3,320,000

9 300,000

3,020,000

642,500

2,377,500

Financial charges

Profit before tax

Provision for taxation

Office rent

Donation to university

Other expenses

Operating Profit

Profit after tax

Legal and professional fees

Conceptual Approach to Taxes _____767