Tax Book 2023

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

Rs. in 000
Supplies
Manufactured goods

• Local - taxable goods 22,000


• Local - exempt goods 3,000


• Exports 5,000

AbdulGhaffarisregisteredasamanufacturer,undertheSalesTaxAct,1990.Hecarriedoutthefollowingactivitiesduringthe
month of August 2022:

Q.NO. 6 Autumn 2010

Conceptual Approach to Taxes___ _967

• Local - exempt goods 3,000


• Exports 5,000
  Commercial goods 14,000

Purchases
Local purchases of raw material 8,000
Import of raw material 17,000
Commercial import of finished goods 10,000

Other relevant information is as follows:

(i) All the above amounts are exclusive of sales tax.
(ii) Commercial imports are stated at C and F value and are subject to customs duty at the rate of 15%.
(iii) In July 2022, an amount of Rs. 365,000 was carried forward as sales tax credit.
(iv) Sales tax is payable @ 17% except commercial imports which are charged @ 20%.

Required: Compute the following for the month of August 2022:
(a) Sales tax payable / refundable. (b) Input tax credit to be carried forward, if any.

Rs. in '000' Rs. in '000' Rs. in '000'
SALES TAX CREDIT (INPUT TAX) Taxable value Sales tax Sales tax

SALES TAX DEBIT (OUTPUT TAX)

On domestic supplies (manufactured goods U/S 3) 22,000 22,000 3,740
On exempt goods [U/S 13 read with 5th Sche.] 3,000 3,000 -
On supplies of imported goods U/S 3 14,000 14,000 2,380
On exports [U/S 4 read with 5th Schedule] 5,000 5,000 -
6,120
INPUT TAX

Solution

INPUT TAX

Commercial imports @ 20% (10,000 x 1.15) 11,500 2,300

Imports for domestic consumptions @ 17% 17,000 2,890

Local purchases @ 17% 8,000 1,360

Less: Inadmissible import & exempt supplies (Note - 1) (1,133)

Input tax for the month 5,417

Previous month credit brought forward 365

Accumulated credit (A) 5,782

90% of output tax (Rs. 6,120 x 90%) (B) 5,508

Less: Admissible input tax: Lower of (A) or (B) 5,508
Balance sales tax payable (Rs. 6,120 - Rs. 5,508) 612

Sales tax credit carried forwardSales tax credit carried forward (A) less (B)(A) less (B) 274 274

Sales tax refundabe on export sales U/S 10(1) (Note - 1) 708

Conceptual Approach to Taxes___ _967