Tax Book 2023

Chapter 07 Solved Past Papers Sales Tax Numericals of CA Module C

Taxable Value Sales Tax Rate Sales Tax

----------------- Rupees -----------------

Sales tax credits - input tax

Purchases from registered suppliers 25,000,000 4,250,000

Answer

Mr. Khan

Computation of sales Tax payable / Refundable

For the tax period August 2022

944 Conceptual Approach to Taxes

Purchases from registered suppliers 25,000,000 4,250,000

Purchases from unregistered suppliers - packing material 9,500,000 inadmissible -

Purchases goods used exclusively for making exempt supplies 1,500,000 inadmissible -

Cash payment of electricity bill inclusive of sales tax - 350,000

Fixed assets (Machinery) 2,700,000 459,000

Total input tax 38,700,000 5,059,000

Less: Inadmissible/unadjusted input tax (Note 1) (887,762)

Input tax for the month 4,171,238

Add: Input tax brought forward from previous month 595,000

Accumulated credit 4,766,238

Sales tax debits - output tax

Local taxable supplies - registered suppliers 1,426,810

(15,118,000–4,225,000–2,500,000)(15,118,000–4,225,000–2,500,000) 8,393,000

Local taxable supplies - registered suppliers (4,225,000×0.9÷0.65) 5,850,000 994,500

• unregistered persons (Note 1) 10,150,000 1,725,500
  24,393,000 -
  Export (zero rated) 5,000,000 -
  Exempt supplies (Rs. 4,500,000) - -
  Output tax for the month 29,393,000 4,146,810
  Less: Sales return - taxable supplies -900,000 (153,000)
  Total supplies / Output tax for the month 28,493,000 3,993,810

(3,594,429)

399,381

Input tax on fixed assets (378,454)

20,927

Further tax on supplies to unregistered persons = 10,150,000 × 3% 304,500

Admissible credit (90% of output tax i.e. Rs. 3,594,429 (3,993,810 × 90%) or input tax

excluding Fixed Assets (4,766,238 – 378,454 = 4,387,784) which ever is lower.

Further tax on supplies to unregistered persons = 10,150,000 × 3% 304,500
Sales tax payable 325,427
Sales tax to be carried forward (4,766,238–3,594,429 – 378,454 ) 793,355
Sales tax refundable (5,059,000×5,000,000/28,493,000) 887,762
Note 1: Apportionment of input tax
Residual input tax 5,059,000
Total supplies 28,493,000
Inadmissible input tax i.e. Export [(5,000,000/28,493,000)×5,059,000] 887,762

(Note - 1) Assumed that supplies invoices to un registered persons have NTN or CNIC of recipients, as applicable only on

distributors otherwise proportionate input tax shall be disallowed under section 8(1)(m) of the Sales Tax Act, 1990.

944 Conceptual Approach to Taxes