Tax Book 2023

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

3,748,500
Exempt supplies (Government hospital) - assumed covered under 6th Schedule 3,780,000
24,330,000
582,381

Q.NO.7 Spring 2015

Total supplies (20,000,000 + 3,780,000 + 375,000 + 175,000)
Inadmissible input tax [(3,780,000 ÷ 24,330,000) × 3,748,500]

BashirisregisteredundertheSalesTaxAct, 1990 andisengagedinthebusinessofexportandsupplyofconsumer
goods. Following information has been extracted from his records for the month of February 2023.

Apportionment of input tax: (W-2)
Residual input tax

956 Conceptual Approach to Taxes

Rupees

25,980,000

2,500,000

1,874,000

2,000,000

21,710,000

2,500,000

Following additional information is also available:

Supplies

To registered persons

To unregistered persons

Exempt supplies

(iii)aregisteredsupplierhadsuppliedgoodsworthRs.500,000toBashirinFebruary2023.However,Bashirdidnotreceivethe

Export to USA

Purchases

Purchases from registered person

Import of a machine

(i)suppliestoregisteredpersonsincludegoodsamountingtoRs.300,000whichweresuppliedtoanassociatedcompanyata
special discount of 25%.
(ii)inputtaxamountingtoRs.55,900waspaidinJanuary, 2023 butinadvertentlyitcouldnotbeclaimedinthereturnforJanuary
2023.

(iv) the imported machine was put into operation during February, 2023.
(v) sales tax credit of Rs. 410,000 is to be brought forward from January 2023.

Required:

Mr. Bashir
Computation of Sales tax payable / refundable
For the period of February 2023
Rs.

Solution

(iii)aregisteredsupplierhadsuppliedgoodsworthRs.500,000toBashirinFebruary2023.However,Bashirdidnotreceivethe
sales tax invoice from the supplier.

Sales tax is payable at the rate of 17%. All the above amounts are exclusive of sales tax, wherever applicable.

UndertheprovisionsoftheSalesTaxAct, 1990 andRulesmadethereunder,computesalestaxpayable/refundableandinput
tax credit to be carried forward, if any, for tax period February 2023.

Rs.

Output Tax

Sales to registered persons 4,433,600

Sales to unregistered persons (Note - 2) 425,000

Exempt Supplies -

Export 2,000,000 x 0% -

4,858,600

Input tax

Residual Input tax W-1 3,175,291

Not claimed input tax 55,900

Sales tax credit 410,000

3,641,191

or 90% of 4,858,600 4,372,740 3,641,191

1,217,409

Add: Further Sales Tax 75,000

Less: Input tax on fixed assetsLess: Input tax on fixed assets (374,268)(374,268)

Sales tax payable with return 918,140

Sales tax refundable 248,395

Apportionment of Input tax (W-1)

Taxable Supplies Turnover Input tax Fixed Assets

Reg taxable 26,080,000 2,897,537 341,530

Unregistered 2,500,000 277,755 32,739

Own Use - - -

wholly exempted 1,874,000 208,205 24,541

DTRE Person - -

Zero Rated 2,000,000 222,204 26,191

32,454,000 3,605,700 425,000

(Note - 1) No further tax has been charged on supplies covered under Fifth Schedule to the Sales Tax Act, 1990 by virtue of SRO

(Note - 2) 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.

(Note - 1) 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.

956 Conceptual Approach to Taxes