Practice Questions with Solutions Chapter- 06
Note:
Supplies to hospital run by NPO are exempt at serial number 165 of Table I of sixth Schedule to the
Sales tax Act, 1990.
As the zero rated supplies are less than 50% of all taxable supplies under SRO 1190(I)/2019 dated
October 02, 2019, therefore 90% limitation is applicable U/S 8B of the Sales Tax Act, 1990.
It has been assumed that 3 % further tax is applicable on local taxable supplies to unregistered
persons and the same shall be accounted for and paid separately without adjustment of the same
against input tax / refund of the registered person and further it shall also not be considered for the
computation of 90% limitation on output tax.
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.
No further tax has been charged on supplies covered under Fifth Schedule to the Sales Tax Act,
1990 by virtue of SRO 585(I)/2017, Dated: 01/07/2017.
Q.1 0 Mr. Hashmi is registered as wholesaler-cum-retailer under the Sales Tax Act, 1990. Data regarding
his business is given below for the month of August 2022 :
Rs.
1 Taxable supplies to registered person 400,000
2 Taxable supplies to non-registered person 28,000
4 Taxable purchases from registered person 150,000
5 Taxable purchases from non-registered person 290,000
6 Taxable purchases from wholesaler 60,000
7 Sales tax paid on PTCL dues 6,000
8 Sales tax paid on electricity bill 5,000
9 General sales tax paid on Sui Gas bill 6,000Note: Sales tax registration number is printed on utility bills. Calculate his sales tax liability for August
2022.Solution
Output tax
On taxable supplies to registered person U/S 3 (Rs. 400,000 x 17%) 68 ,000
On taxable supplies to non-registered person U/S 3 (Rs. 28,000 x
17%) (Note – 2 ) 4, 760
72 , 760
Less: Input tax
On taxable purchases from registered person (Rs. 150,000 x 17%) 25 , 500
On taxable purchases from non-registered person (Note – 3 ) 0
On taxable purchases from wholesaler (Rs. 60,000 x 17%) 10 , 200
On PTCL dues (Note – 4) 0
On electricity bills paid (Note – 4) 0
On sui gas bills paid (Note – 4) 0
Total input tax 35 , 700
Balance sales tax payable 37 ,060(Note – 1 ) As it is case of a wholesaler-cum-retailers under SRO 1190(I)/2019 dated October 02, 2019,
therefore 90% limitation is not applicable U/S 8B of the Sales Tax Act, 1990.
(Note – 2 ) It has been assumed that 3 % further tax is not applicable on local taxable supplies to
unregistered persons under by virtue of serial 5 of SRO 648(I)/2013 dated July 09, 2013 otherwise further
tax shall be accounted for and paid separately without adjustment of the same against input tax / refund of
the registered person and further it shall also not be considered for the computation of 90% limitation on
output tax.