Tax Book 2023

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

i. Supplies made during the month amount to Rs. 95 million. Details of supplies made are as follows:

Rs. in million

Exports 50

Q.NO. 8 Spring 2007:
Mr.Adamisaregisteredpersonandengagedinthesupplyofvarioustypesofappliancesforlastmanyyears.Hehasprovidedyou
the following information for the month of February 2023:

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Exports 50
Exempt supplies 10
Supplies to registered person 30
Supplies to unregistered person 5
ii. During the month, he has made an adjustment of Rs. 500,000 through credit note in a registered
person’s balance.
iii. Following purchases were made during the month:

• From registered persons 45


• From unregistered persons 15

iv. All goods purchased from unregistered persons are exclusively used for making taxable supplies.

v. AnamountofRs.3,000,000ispayabletoaregisteredpersonsinceDecember20,2022.Theinputtaxonthepurchase
as accounted for in the relevant tax period.

vi. Mr. Adam is also required to pay the following:
Rupees

Arrears 500,000
Surcharge 70,000
Penalty 30,000
Compute Mr. Adam’s sales tax liability.

Sales tax liability:
Output tax U/S 3 (Rs. 35,000,000 x 17%) (Note - 3 & 6) 5,950,000
Less: credit note adjustment [U/S 9 read with Rule 22] (Rs. 500,000 x 17%) 85,000
5,865,000
Input tax (Note - 1) 2,818,421
3,046,579

Solution

3,046,579

Arrears 500,000
Surcharge 70,000
Penalty 30,000
Payable 600,000
Sales tax payable 3,646,579

Sales tax refundable on exports U/S 10(1) (Note - 1) 4,026,316
Input tax:
Input tax (45,000,000 x 17%) 7,650,000
7,650,000
(Note - 1)Apportionment of residual input tax Supplies Residul input
[U/R 25 of the Sales tax Rules, 2006] tax
Rs.Rs. Rs.Rs.
Taxable local supplies 35,000,000 2,818,421
Exports 50,000,000 4,026,316
Exempt supplies (Note - 4) 10,000,000 805,263
95,000,000 7,650,000
(Note - 2)

(Note - 3)

(Note - 4)A registeed person is not entitled to claim input tax attirbutable to exempt supplies U/S 8(2) of the Sales Tax Act, 1990.

Ithasbeenassumedthat3%furthertaxu/s3(1A)isnotapplicableonlocaltaxablesuppliestounregisteredpersons

underSRO648(I)/2013datedJuly09, 2013 otherwisefurthertaxshallbeaccountedforandpaidseperatelywithout

adjustmentofthesameagainstinputtax/refundoftheregisteredpersonandfurtheritshallalsonotbeconsideredfor

the computation of 90% limitation on output tax.

Asthezeroratedsuppliesaremorethan50%ofalltaxablesuppliesunderSRO1190(I)/2019datedOctober02,2019,

therefore 90% limitation is not applicable U/S 8B of the Sales Tax Act, 1990.

(Note - 4)

(Note- 5)

(Note - 6) 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.

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.

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