CMA JANUARY 2023 EXAMINATION

INTERMEDIATE LEVEL II
FUNDAMENTALS OF TAX, VAT, & PUBLIC FINANCE MANAGEMENT

Course Code : LT234 Total Marks : 100

Reading Time : 15 minutes Writing Time : 180 minutes

Instructions to Candidates
 You MUST NOT write anything during the reading time.
 You should attempt ALL questions.
 Answers should be properly structured and relevant.
 Carefully read ALL the requirements and sub-questions before attempting a specific
question.
 ALL answers must be written in the answer book.
 AVOID WRITING/MARKING on the question paper at any time which may cause
disciplinary action.
 Start answering each question from a fresh sheet.
 Answers should be clearly numbered with the sub-question number.

Allowable Materials
 Writing Stationaries
 Non-programmable Calculator

Assessment Structure
Sub- Expected Time
Marks
question Required
Question 1 Multiple Choice Questions 10 10 20 minutes
Section
Question 2 Modified True/False 5 5 10 minutes
A
Question 3 Matching 5 5 10 minutes
Question 4 Essay/Computational/Case 3 20 32.50 minutes
Section Question 5 Essay/Computational/Case 2 20 32.50 minutes
B Question 6 Essay/Computational/Case - 20 32.50 minutes
Question 7 Essay/Computational/Case - 20 32.50 minutes
Revision 10 minutes
Total 100 180 minutes

RESTRICTED USE
This paper MUST NOT BE REMOVED from the examination venue

Do not turn over the page until instructed

 SECTION A [20 MARKS]
THERE ARE 3 (THREE) QUESTIONS IN THIS SECTION. ANSWER ALL THE
QUESTIONS IN THE ANSWER SCRIPT FOLLOWING THE EXAMPLE PROVIDED FOR
THE SPECIFIC QUESTION.
QUESTION 1 [10 × 1 = 10 MARKS]
There are ten (10) multiple-choice questions with five options. Pick the option that best
explains the given question. Write your answer on the answer script [DO NOT PUT ANY
MARK ON THE QUESTION PAPER]. Follow the example given below in proving your
answer.

Example:
(i) ICMAB stands for the –
(a) Institute of Cost Management Accounting of Bangladesh
(b) Institute of Cost and Management Accountants of Bangladesh
(c) Institute for Cost Managers and Accounting of Bangladesh
(d) Institute of Cost Management Accountants of Bangladesh
(e) Industrial Cost Management Accountants of Bangladesh
Answer: i (b)
(i) Which schedule is prepared to assess the income from hose property?
(a) 24A
(b) 24B
(c) 24C
(d) 24D
(e) 25
(ii) The TDS rate for paying to a resident any sum by way of interest or share of profit on
any saving deposits or fixed deposits or any term deposit maintained with any bank
where the payee is recognized providentfund, approved gratuity fund,
approvedsuperannuation fund or pension fund is
(a) 1%
(b) 3%
(c) 5%
(d) 10%
(e) 15%
(iii) The applicable income tax rate for any cooperative society registered under the
Cooperative Society Act, 2001 is
(a) 10%
(b) 13%
(c) 15%
(d) 20%
(e) 25%
(iv) The rate of surcharge on wealth for an assessee whose net wealth is Tk. 60 crore is
(a) 25%
(b) 30%
(c) 35%
(d) 40%
(e) 45%
(v) At present excise duty is imposed on
(a) Cloth goods
(b) Bank deposit and services rendered by Airlines Company
(c) Cigarette
(d) Salt and paper
(e) None of above

CMA January 2023 Examination, LT234 [Page 2 of 7]

(vi) The Value Added Tax is an expense to be suffered by:
(a) The final consumer of the goods on which they are levied
(b) All traders, registered for VAT, dealing with goods on which they are levied
(c) Limited companies dealing with goods on which they are levied
(d) All traders dealing with goods on which they are levied
(e) None of above
(vii) VAT is replaced by very popular tax revenue source:
(a) Excise duty
(b) Supplementary duty
(c) Safeguard Duty
(d) Sales Tax
(e) Travel tax
(viii) Perquisites includes following except-
(a) Leave Encashment
(b) Rent free accommodation
(c) Concession rate accommodation
(d) Basic Salary
(e) House rent
(ix) How much on interest on RPF will add to calculate tax payable income-
(a) interest 14.5%
(b) Interest excedding 14.5%
(c) Interest excedding 1/3 of basic salary
(d) Lower of b and c
(e) None of above
(x) Who formulates and amends the Finance Act?
(a) The ministry of finance
(b) The ministry of planning
(c) The Planning Commission
(d) The National Board of Revenue
(e) The National Ecoomic Council
QUESTION 2 [5 × 1 = 5 MARKS]
There are five (5) statements given under the question. Identify the statements as True or
False. If the statement is false, rewrite the statement on the answer script to make it ‘True’.
Reasoning is NOT required. Follow the example given below in proving your answer.

Example:
(a) ICMAB stands for the Industrial Cost Management and Accounting of Bangladesh.
Answer:
(a) False. ICMAB stands for the Institute of Cost and Management Accountants
of Bangladesh.
Note:
 You will not get any mark if you simply rewrite as ICMAB does not stand for the
Industrial Cost Management Accountants of Bangladesh.
 If the statement is true, you need NOT to rewrite the statement rather only
mention that the statement is True.
(a) Supplementary duty is imposed as per the Customs Act, 1969.
(b) Where a refund due to an assessee is not paid within two months of the date of claim
for refund, 5% simple interest will be payable to assessee.
(c) In case of capital gain arises after five years from acquisition, the applicable tax rate for
individual is 15% or average rate which one is lower.
(d) The VAT is charged by the government and borne by a shopkeeper.
(e) Interest and penalties are subject to VAT in the months they are collected.

CMA January 2023 Examination, LT234 [Page 3 of 7]

QUESTION 3 [5 × 1 = 5 MARKS]
Match the items of column A with the most suitable items of column B. Match only one item
of column A with one item of column B. Write your answer on the answer script. Follow the
example given below in proving your answer.

Example:

Column A Column B
1. ICMAB (a) Professional accountancy body
(b) University

Answer: 1 (a)

Column A
1. Transfer pricing
2. TDS on House property income
3. VAT is calculated both in
4. Custom collects
5. Banks, Telecommunication
companies and cigarette companies
Column B
(a) Import stage and domestic stage
(b) External users of tax information
(c) are subject to higher tax rates
(d) Arm’s length price
(e) 5%
(f) 25%
(g) Maximum of NBR’s total revenue
(h) None of above

END OF SECTION A

CMA January 2023 Examination, LT234 [Page 4 of 7]

 SECTION B [80 MARKS]
THERE ARE 4 (FOUR) QUESTIONS IN THIS SECTION. ANSWER ALL THE QUESTIONS
IN THE ANSWER SCRIPT. SHOW ALL RELEVANT COMPUTATION.
QUESTION 4
Mr. J Sharif is an executive of a private bank. His pay scale is 16000-2000X4-24000. In the
last month of Income year he received basic salary of Tk. 24,000 per month. Annual salary
increment date is 1stMarch. His other income for the income year 2021-2022 includes:
House rent allowance is 55% of Basic Salary; Medical allowance Tk. 3,000 per month;
Dearness allowance @ 5% of Basic Salary; Two festival bonus each equal to one month's
Basic Salary (1st one is on 1/12/21 and 2nd one is on 5/4/2022); Interest from Recognized
Provident Fund Tk. 12,000@16%; Performance bonus equal to three month's Basic Salary
given on 30/6/22; He contributes to old age fund @ 5% of basic salary. His employer
provides him a car for full timeuse. He also received Tk. 1,000 per month as entertainment
allowance out of which he spends Tk. 4,000 during the year. He withdrew two month's basic
salary in advance on 1/2/2022 and contributes to Recognized Provident Fund (RPF) @ 10%
of Basic Salary and his employer also contributed the same amount. Tk. 500 was deducted
each month as TDS from his salary income by his employer.
Mr. J Sharif received interest from tax-exempt government securities Tk. 10,000, interest
from taxable government securities Tk. 9,500 and interest from debentures Tk. 19,000 in his
bank account. Bank charge collection fees of Tk. 1,350 against the all interest collected by
the bank. Mr. J Sharif borrowed Tk. 10,000 @ 12% to finance investment in debentures.
His incomes from other sources are: dividend from a public limited company is Tk. 4,500;
interest in fixed deposits Tk. 2,700; interest in post office savings bank Tk. 1,800;
remuneration for exam script evaluation T. 1,000; prize of wining prize bond lottery Tk.
24,000; Sale of fish of pond Tk. 1,000; income from copyright Tk. 4,000. During the year he
has purchased jewellery of Tk. 125,000, source of which is unexplained;
Mr. J Sharif made and incurred investment and expenses during the said year for: Life
insurance premium Tk. 30,000 (policy value Tk. 250,000); Purchase of Shares of a
cooperative society Tk. 40,000; Purchase of Share from IPO Tk. 25,000; Donation to
Educational and Religious institutions Tk. 8,000; donation to Zakat fund Tk. 35,500; donation
to a local club Tk. 9,000; Spent a sum of Tk. 15,000 as educational expenses of his children;
Purchase of ICB certificate Tk. 20,000 and Contribution to group insurance Tk. 2,000.
Mr. J Sharif lives in Dhaka. His net wealth is TK. 21 crore.
Ascertain his total income and tax liability to be paid in the assessment year of 2022-2023.
[Marks: 20]
QUESTION 5
(a) Explain the procedures of determining the value of imported goods for charging VAT.
(b) Discuss the provisions of the cancellation of the registration for Value Added Tax.
(c) Explain the various types of duties as per the Customs Act, 1969.
(d) Shimul Enterprise has Tk. 30,000 debit balance in its VAT current account at 01 July
2021. Following transactions were occurred during the month of January, 2023:
(i) Deposit to treasury account Tk. 10,000 on 02 January
(ii) Sales Tk. 200,000 excluding VAT on 7 January
(iii) Purchases Tk. 100,000 excluding VAT 15 January
(iv) Sales Tk. 250,000 excluding VAT on 20 January
(v) Sold good returned worth Tk. 25,000 on 25 January
(vi) Purchase of goods Tk. 175,000 excluding VAT on 29 January
(vii) Shimul Enterprise sold amounting Tk. 100,000 excluding VAT on 30 January to
Abdullah Ltd.
Required:
Record the above transactions in VAT current account and show what will be closing
balance in the VAT current account at the end of January.
[Marks: (4 X 5) = 20]

CMA January 2023 Examination, LT234 [Page 5 of 7]

QUESTION 6
(a) Define the term Public Financial Management. Describe the attributes of good
Financial Management systems.
(d) Describe the regulatory framework of Budgeting in Bangladesh. Explain the Medium
Term Budget Framework.
(c) How ‘Zero Rate of VAT’ differs from ‘Exemption of VAT’?
(d)Fragile Co. has imported 15,000 mother boards @ C&F value of USD 50.00 per board.
The relevant exchange rate is USD 1= Tk. 78. The Co. has paid insurance cost 1% of
C&F value. For this import, the tax authority has determined “duty paid value” equal to
89,956,912.5 Tk. Further, the tax authority has determined the rate of “supplementary
duty” which is 30% less than the “custom duty” applicable for this import (i.e. SD=CD
rate-0.30). Calculate cost of one board including all taxes (without VAT) and the total
VAT payable at import stage assuming company is subject to 5% IDSC on their import
and VAT rate is 12%.
[Marks: 4+4+4+8 = 20]
QUESTION 7

Moklas Ltd. is a non-listed manufacturing multinational company doing business in

Bangladesh for last 10 years. The company filed return of income for the assessment year
2022-23. Showing income of Tk. 46,000,000. Examination of the audited statement of
accounts filed with the return of income revealed the following:

(a) During the year the company received dividend amounting to Tk. 220,000 against the
purchased share of a private limited company. The dividend is included in net profit.
Tax was not deducted at source.
(b) Salary includes Tk. 330,000 paid to employees against which tax was not deducted at
source. Annual perquisites enjoyed by MD and CFO amounts to Tk. 1,150,000.
(c) The company sold a scientific apparatus for Tk. 600,000 which was allowed earlier as
expenditure against calculation of profit.
(d) The company has a trading liability with one overseas company to the tune of Tk.
180,000 which has been totally waived by the overseas company under special
agreement during the year.
(c) During the year the company claimed the following expenses:
Head office expenses (paid to group HQ, Hong Kong) Tk. 3,000,000
Management expenses (paid to Thailand) Tk. 1,900,000
Total Tk. 4,900,000
(e) Royalty paid Tk. 1,300,000.
(f) During the year, the company also paid the following expenses:
Fees for technical services Tk. 1,650,000
Technical know-how fee Tk. 875,000
Total Tk. 2,525,000
(g) Annual depreciation charged to the account is Tk. 2,350,000 but tax depreciation
amounts to Tk. 2,100,000.
(i) The company recovered Tk. 120,000 from bad debt that was written off earlier and
allowed as deduction.
(j) The company showed expenditure on foreign travels for holidaying and recreation of an
employee and his dependents and the amount spent was Tk. 400,000. The basic salary of
that employees was Tk. 120,000. The travel was not oftener than once in two years.
(k) Tk. 15,000 has been donated to a non-recognized school.
(l) A fine of Tk. 80,000 paid for violation of customs law charged to P&L Account.

CMA January 2023 Examination, LT234 [Page 6 of 7]

(m) The company sold a motor vehicle for Tk. 870,000. Original cost of the vehicle was Tk.
1,250,000 and the written down value was Tk. 825,000. That has not been reflected in
the accounts.
(n) A sum of Tk. 10,000 in respect of travelling expenses is not supported by legal
vouchers.
(o) Repair and operating expenses included Tk. 25,000 spent for the installation of a
machine in the factory.
(p) Total gross receipt of the company is Tk. 95,00,00,000.
Required:
From the above information, compute the total income and tax liability of the company.
[Marks: 20]

END OF SECTION B

CMA January 2023 Examination, LT234 [Page 7 of 7]