Tax Book 2023

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

Taxable Value Sales Tax Rate Sales Tax

2,000,000

150,000

Answer

Sales tax credits - Input Tax
Purchases from registered
Purchases of air conditioners for office use

Computation of sales tax payable/refundable

Faiz & Faraz Associates

For the tax period January 2023

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

946 Conceptual Approach to Taxes

150,000
1,850,000 314,500
Purchases from unregistered Suppliers 450,000 Inadmissible -
Purchases exempt goods from registered suppliers 600,000 exempt -
Invoice issued by Taqi Corporation which was declared blacklisted in next period
Sindh sales tax paid on franchise service - inadmissible -
Total input tax 314,500
Less: Inadmissible/unadjusted input tax (68,431)
Input tax for the month 246,069
Opening balance 265,000
Less: Input tax on goods destroyed (45,000 × 17%) (7,650)
257,350
Accumulated credit 503,419

Local taxable supplies 3,450,000

Sales tax debits - Output Tax

Purchases of air conditioners for office use

Local taxable supplies 3,450,000
Local taxable supplies - to Hafiz Brothers (80,000)
Local taxable supplies - to Ghalib Corporation (225,000)
Local taxable supplies - to Parveen Limited – associated undertaking
(600,000–500,000) 100,000
Local taxable supplies - correction of invoice (540,000–450,000) 90,000
3,335,000 566,950
(Note 1) 1,000,000 U.R 170,000
Local taxable supplies - to Hafiz Brothers 80,000 U.R 13,600
4,415,000
Export (zero rated) 700,000 Z.R -
Consumable goods supplied to exporter under DTRE 500,000 Z.R -
1,200,000
5,615,000 750,550
(100,000) (17,000)
5,515,000 733,550

Output tax for the month
Less: Sales return
Total supplies/Output tax for the month

• unregistered persons

5,515,000 733,550

(503,419)
230,131
Further tax on supplies to unregistered person
(1,000,000+80,000)=1,080,000 × 3% 32,400
Sales tax payable 262,531
Sales tax to be carried forward (503,419–503,419) -
Sales tax refundable [314,500×(700,000+500,000)/5,515,000] 68,431

W-1: Apportionment of input tax Rupees
Residual input tax 314,500
Export and zero rated sales (500,000+700,000) 1,200,000
Total supplies 5,515,000

Total supplies/Output tax for the month

Free replacement of defective parts

Admissible credit [90% of output tax i.e. Rs. (733,550 × 90%= 660,195)
or input tax Rs. 503,419 whichever is lower]

Total supplies 5,515,000
Sales tax refundable [(700,000+500,000)/5,515,000 × 314,500] 68,431

(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.

946 Conceptual Approach to Taxes