Exerclse

Omega Enterprises has submitted the following data for the month of July 2019.
Rupees
Total Sales registered 6,000,00o

Export Sales 2.500,000o

Exempt Supplies Sles 500,000

Gross Purchases from Registered suppliers 6,500.000

Gross Purchases from Unregistered suppliers 500.000
Purchase Return to Registered suppliers 650,000
Required:
You are required to compute the sales tax liability of Omega Enterprises for the month of July 2019.
For the sake of simplicity ignore the 90% adjustment of input tax against output tax rule as
mentioned in section 8B.
 Chapter 18: Determination of Sales Tax Liability

Answer

Omega Enterprise
Sales tax payable/refundable
July 2019

(Rupees)
Output taxx
Total sales Rs. 6,000.000@ 17% 1.020,00o
Export sales Rs. 2.500.000 @ 0%
Exempt supplies Nil
1.020.000
Less: Input tax (W-1)
(939,250)
Balance payable 80,750
Working
Apportionment of input tax, as per Apportionment of Input Tax Rules, 1996
Residual input tax X value of taxable supplies
value of Taxable supplies +Exempt supplies

Rupees
994,500x 8,500,000_939,250
9,000,000
Residual Input Tax

Gross purchases from Registered suppliers Rs. 6,500,000

Purchase return to registered (650.000)
5,850,000

Inputtax17% Rs.994,500
Monthly adjustment of input tax claimed by a registered person shail be treated as
provisional adjustment and at the end of each financial year, the registered person shall
make final adjustment on the basis of taxable and
exempt supplies made during the course
of that year.

Deduction of input tax from output tax shall not be allowed to person who is not
under Sale Tax Act.
a
registered
 Exercise
results of Nadeem Associates for preparation of sales tax rerul the, month of
Following are
June, 2020

Supplies 75,000,000

Purchases 55,000,000

Sales tax on utilities bills of factory 500,000

Sale returns of April 2020 6,500,00o

Purchase returns of May 2020 1,200,000

Compute sales tax liability of Nadeem Associates

Answer

Particulars Value of supply Sales tax

Output tax on supplies 68,500,000 (i.e. 75,000,000 11,645,000

6,500,000) x 17%

Less input tax 53,800,000 (55,000,000 1,200,000) 9,146,000

x 17%

Less sales tax on utilities 500,000

Net sales tax payable 1,999,00o