Tax Book 2023

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

(Note - 1)Apportionment of residual input tax Supplies Residual input tax

[U/R 25 of the Sales tax Rules, 2006] Rs. Rs.

Imports for domestic consumption 17,000 2,890

Local purchases 8,000 1,360

25,000 4,250

Total sales other than sales of commercial goods 30,000

Inadmissible input tax

Exempt supplies (3,000 / 30,000 x 4,250) 425

968 Conceptual Approach to Taxes

Exempt supplies (3,000 / 30,000 x 4,250) 425

Exports (5,000 / 30,000 x 4,250) (Note - 3) 708

1,133

(Note - 2)

(Note - 2)

(Note - 3)

(Note- 4)

Ascommercialimportssubjectto3%additionaltaxarelessthan50%ofalltaxablepuchasesunderSRO1190(I)/2019

dated October 02, 2019, therefore 90% limitation is applicable U/S 8B of the Sales Tax Act, 1990.

A registeed person is not entitled to claim input tax attirbutable to exempt supplies U/S 8(2) of the Sales Tax Act, 1990.

NofurthertaxhasbeenchargedonsuppliescoveredunderFifthScheduletotheSalesTaxAct, 1990 byvirtueofSRO

585(I)/2017, Dated: 01/07/2017.

Asthezeroratedsuppliesarelessthan50%ofalltaxablesuppliesunderSRO1190(I)/2019datedOctober02,2019,

therefore 90% limitation is applicable U/S 8B of the Sales Tax Act, 1990.

Rs. in million
Export sales – manufactured goods 30
Local sales of exempt manufactured goods 20
Taxable supplies – manufactured goods 120
Taxable supplies – commercial imports 60

Purchases
Local purchases of raw material from:

Registered persons 160
Unregistered persons 50

Q.NO. 8 Spring 2010

Mr.KaleemisregisteredundertheSalesTaxAct, 1990 asamanufactureraswellasacommercialimporter.Hehasprovidedyou
the following information for the month of February 2023:

Unregistered persons 50
Commercial imports 40

Rs. Rs.
Sales tax liability:
Output tax local manufactured taxable supplies U/S 3 (Rs. 120,000,000 x 17%) 20,400,000
Output tax local supplies out of commercial imports U/S 3 (Rs. 60,000,000 x 17%) 10,200,000
30,600,000

Alltheaboveamountsareexclusiveofsalestax.CommercialimportshavebeenstatedatCandFvalueandaresubjecttocustoms
duty at the rate of 10%. There was no stock of commercial imports at the beginning or end of the month.

Required:ComputethesalestaxliabilityofMr.Kaleemalongwithinputtaxtobecarriedforward(ifany)inhissalestaxreturnfor
the month of February 2023. (Ignore the efect of minimum value addition in case of commercial imports).

Solution

Input tax on commercial imports (44,000,000 x 17% without value addition) 7,480,000
Input tax against local taxable supplies (Note - 1) 19,200,000
(A) 26,680,000
90% of output tax (Rs. 30,600,000 x 90%) (B) 27,540,000
Less admissible input tax: lower of (A) or (B) 26,680,000
Balance sales tax payable 3,920,000

Sales tax refundable on exports U/S 10(1) (Note - 1) 4,800,000

968 Conceptual Approach to Taxes