CAF-2 · Chapter 18 · Question 15 of 15
A manufacturer makes taxable supplies to an unregistered distributor. The manufacturer issues sales tax invoices but fails to mention the CNIC or NTN of the unregistered distributor on the invoices. What is the consequence of this failure under Section 8?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) The input tax attributable to supplies made to the unregistered distributor will be disallowed on a pro-rata basis.
Explanation
A registered person shall not be entitled to deduct input tax attributable to supplies made by a manufacturer or importer to an unregistered distributor, on a pro-rata basis, for which sale invoices do not bear the NIC number or NTN of the recipient.
More Determination of Sales Tax Liability MCQs
- Q2Alpha Ltd purchased taxable raw materials worth Rs. 500,000 from a registered supplier on credit. The tax invoice was issued on 1 January…
- Q3Which of the following input taxes is strictly INADMISSIBLE under Section 8 of the Sales Tax Act, 1990?
- Q4A registered manufacturer has an output tax liability of Rs. 1,000,000 for the month of August 2026. The input tax paid on raw materials…
- Q5Following up on the 90% input tax restriction under Section 8B, which of the following input tax claims is EXEMPT from this 90% limitation?
- Q6XYZ Traders deals in both taxable and exempt supplies. During the month, the value of their taxable supplies was Rs. 6,000,000 and exempt…