Scope and Payment of Tax Chapter- 05
e. How to deal with change in rate of tax during a tax period.
Q. NO. 8(a) SPRING 2017
Under the provisions of Sales Tax Act, 1990 and Rules made thereunder, identify the circumstances in
which:
(i) a registered person is not allowed to reclaim or deduct input tax paid.
(ii) a registered person may be liable for deregistration.
Q. NO. 8(b) SPRING 2017
On 2 June 2016, Abid Limited inadvertently issued a tax invoice with an incidence of sales tax
amounting to Rs. 25,000 as against the applicable tax of Rs. 45,000. The error was detected on 15
February 2017 i.e. after expiry of 180 days.
Advise Abid Limited in the light of Sales Tax Rules, 2006.
Q.6 SPRING 2016 Under the provisions of the Sales Tax Act, 1990 and Rules made thereunder,
briefly describe the following:
(a) How and under what circumstances the Inland Revenue Department may recover the amount of
sales tax from a person without issuing him a show cause notice.
Q. NO. 6 AUTUMN 2015
(b) Baber Associates, who is registered with the Inland Revenue Department for sales tax
purposes, has supplied a heavy duty motor to Mubarak Enterprises on one month’s
credit. However, due to sharp decline in petroleum prices, the price of the motor has reduced
by 10% in the local market. Upon request from Mubarak Enterprises, Baber Associates
has finally agreed to reduce the price of motor by 8%.
In view of the Sales Tax Rules, 2006 describe the procedure which may be followed by both the
parties to give effect to the above price change.Q.NO.8 Spring 2015 Saleem is registered under the Sales Tax Act, 1990 and is engaged in the
business of export and distribution of electronic appliances.
Required:
Under the provisions of the Sales Tax Act, 1990 and Rules made thereunder, advise Saleem on the
following matters:
(a) any six situations in which input tax is not allowed to be adjusted against the output tax liability.
(b) exports which are outside the purview of zero rating.
(c) eligibility for a refund if input tax is paid in excess of the output tax payable for the month.
(d) concept of provisional and final adjustment in relation to ‘Apportionment of input tax’.
Q.NO.5 (b) Autumn 2014 There are certain food items in the inventory of XY Limited (XYL)
which were returned by the customers after the expiry date. Specify the procedure which must be
followed under the Sales Tax Rules, 2006 if XYL wishes to destroy these items.
Q. NO. 10(a) Spring 2014 Under the provisions of Sales Tax Act, 1990:
Identify the situations under which a debit or credit note may be issued by a registered person.
Q.7 (a) Autumn 2012 Identify the goods that shall be charged at the rate of zero per cent under the
Sales Tax Act, 1990.