Practice Questions with Solutions Chapter- 065 A manufacturer is liable to be registered who is not running a cottage industry;
6 A In this case manufacturer is required to be registered as he does not fall in the
definition of cottage industry. (cottage industry is not liable to be registered)
(Cottage industry means a manufacturer whose all supplies during the last 12 months
ending any tax period does not exceed Rs. 8 million or who does not have industrial gas
or electricity connection, is located in a residential area and does not have a total
labour force of more than ten workers).
B In this case manufacturer is required to be registered as he does not fall in the
definition of cottage industry. (cottage industry is not liable to be registered)
C In this case manufacturer is required to be registered as he does not fall in the
definition of cottage industry. (cottage industry is not liable to be registered)
7 Mr. Zahid is a retailer (other than dealing only in exempt supplies) hence liable to be
registered if he will met any one of the eight pre-conditions specified in the Definition of Tier
1 retailers in section 2(43A) of the Sales Tax Act, 1990.
8 A distributor is required to be registered irrespective of its turnover
9 Mr. Zahid is a retailer (other than dealing only in exempt supplies) hence liable to be
registered if he will met any one of the eight pre-conditions specified in the Definition of Tier
1 retailers in section 2(43A) of the Sales Tax Act, 1990.
10 An importer is required to be registered irrespective of its turnover.
11 Cottage industry is not required to be registered.
12 Total supplies (including zero rated supplies) of the manufacturer is Rs. 6,000,000, that is
less than Rs. 8 ,000,000, so if the manufacturer will fulfil all the remaining preconditions of
cottage industry then he will not be liable to be registered.
13 Mr. Kamran is required to be registered as he is a manufacturer and has industrial
electricity connection.
14 A commercial exporter is not required to be registered, however if he wants to claim refund
of input tax then he must get himself registered.Q.2: Compute sale tax liability of Mr. Aslam (registered manufacturer) for the month of July 20 22 from
following information.
Rs.
Sales to registered persons 650,000
Purchases from registered persons 300,000
Purchases from non-registered persons 100,000Solution:
Output tax:
On sales to registered persons U/S 3 (Rs. 65 0,000 x 1 7 %) 11 0, 500
Less: Input tax
On purchases from registered person (300,000 x 1 7 %) 51 ,000
On purchases from non-registered persons (Note- 1 ) -
Total input tax 51 ,000
Limitation on input tax upto 90% of output tax u/s 8B of the
Sales the Sales Tax Act, 1990 (Rs. 11 0, 5 00 x 90%) 99 , 450
Input tax is fully admissible as it is less than 90% of output tax. ______
Sales tax payable 59 , 500
(Note – 1) As purchases from non-registered persons are without sales tax invoices hence the
same shall be without sales tax u/s 23(2) of the Sales Tax Act, 1990, therefore the question of
adjustment of input tax in not applicable.