CAF-2 · Chapter 18 · Question 6 of 15
XYZ Traders deals in both taxable and exempt supplies. During the month, the value of their taxable supplies was Rs. 6,000,000 and exempt supplies was Rs. 2,000,000. The residual input tax (common input tax not specifically allocable) was Rs. 400,000. How much of this residual input tax can XYZ Traders claim?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) Rs. 300,000
Explanation
If a person deals in taxable and non-taxable supplies, he can reclaim only such portion of input tax as is attributable to taxable supplies. The formula is: (Value of taxable supplies / Value of taxable + exempt supplies) x Residual input tax. (6,000,000 / 8,000,000) x 400,000 = Rs. 300,000.
More Determination of Sales Tax Liability MCQs
- Q8If a customer returns goods to the supplier and the goods are found to be completely unfit for consumption and must be destroyed, what is…
- Q9Under the Sales Tax Rules for Debit and Credit Notes, what is the maximum standard time limit for issuing a debit or credit note to adjust…
- Q10A registered supplier made a supply to an UNREGISTERED person. The unregistered person subsequently returned the goods due to defects…
- Q11If a registered person pays an amount of sales tax less than the tax due as indicated in their own filed sales tax return, what immediate…
- Q12If the federal government changes the standard rate of sales tax (e.g., from 17% to 18%) in the middle of a month (e.g., on the 23rd of…