Tax Book 2023

Chapter 07 Solved Past Papers Sales Tax Numericals of CA Mod- C

07

Chapter

Conceptual Approach to Taxes___ _941

Note: All the following questions have been solved under the Sales Tax Act effective from July 1st 2022.

Rs. in million

Taxable goods from registered persons (20% of these goods were returned to suppliers) 320

Taxable goods from unregistered persons 32

Exempt goods from registered persons 56

Electrical and sanitary fittings (60% used in factory building and 40% used in office building) 17

Q.5 (b) March 2022

Kazmi Traders (KT) is registered under the Sales Tax Act, 1990. KT is engaged in the business of manufacturing and

supply of paper products. Following information is available from KT’s records for the month of February 2023:

SOLVED PAST PAPERS SALES TAX NUMERICALS OF

CAF-6 (2003 TO 2022)

Electrical and sanitary fittings (60% used in factory building and 40% used in office building) 17

Plant and machinery 84

Supplies

Taxable goods to registered persons (10% of these goods were returned by the customers)

Exports

Required:

Electricity bill paid in February 2023 includes sales tax of Rs. 1.36 million. 60% of the amount was related to the factory

building while remaining amount was related to the office building.

All the above figures are exclusive of sales tax, except where it is specified otherwise. Sales tax is payable at the rate of

17%.

In the light of the provisions of the Sales Tax Act, 1990 and Rules made thereunder, compute the amount of sales tax

Kazmi Traders

Computation of tax payable / refundable

For the tax period February 2023

Taxable

Amount

Sales Tax @

17%

Input Tax

Taxable goods from registered persons

256

(320×80%) 43.52

In the light of the provisions of the Sales Tax Act, 1990 and Rules made thereunder, compute the amount of sales tax

payable by or refundable to KT and input tax to be carried forward, if any, for the tax period February 2023. (Show all

relevant exemptions, exclusions and disallowances)

Answer

Rs. in million

Taxable goods from registered persons (320×80%) 43.52

Taxable goods from unregistered persons 32 -

Exempt goods from registered persons 56 -

Electrical and sanitary fitting 17 -

Electricity bills 1.36

44.88

Less: Refundable input tax (for zero rated) W-1 (15.82)

29.06

Output Tax:

Taxable goods to registered persons

180

(200×90%) 30.60

Exports 98 -

30.60

Admissible credit (90% of output tax i.e. 27.54(30.6×90%) or input tax

27.54

Sales tax payable 3.06

Less: input tax on fixed assets (taxable supplies) (W-1) (9.25)

Sale tax to be carried forward (fixed asset portion only) 6.19

Sale tax to be carried forward (29.06–27.54) 1.52

Total sale tax to be carried forward 7.71

Sales tax refundable on zero rated supplies [15.82 (W-1) + 5.03 (W-1)] 20.85

Admissible credit (90% of output tax i.e. 27.54(30.6×90%) or input tax

i.e. Rs. 29.06, whichever is lower

Conceptual Approach to Taxes___ _941