CAF-2 TX & CAF-7 CL CAF 2 TAX PRACTICES MASTER SHEETS BY SIR TARIQ TUNIO MASTER

SHEET
BY SIR TARIQ TUNIO
03322130867 SALES TAX PRACTICAL – KEY POINTS (PART 01) 15
1.1 FOUNDATIONAL CONCEPTS OF SALES TAX 1.3 THIRD SCHEDULE OF SALES TAX ACT, 1990 1.5 MODEL SALES TAX CALCULATION
► Sales Tax Types Two Types: (1) Sales tax on goods (Federal 1. Fruit juices and vegetable juices 12. Perfumery and cosmetics MR TAXPAYER
2. Ice cream 13. Tea CALCULATAION OF SALES TAX LIABILTY, REFUND & CARRY FORWARD
subject) & (2) Sales tax on services
FOR AUGUST 2023
(Provincial subject) 3. Aerated waters or beverages. 14. Powder drinks
► Consumption Tax Sales tax is a tax on consumption 4. Syrups and squashes. 15. Milky drinks INPUT TAX
► Indirect Tax Person such as e.g. manufacturer, 5. Cigarettes. 16. Toilet paper and tissue paper - Local Purchases from RP (100 x 18%) [To claim IPT, Mr. Taxpayer must also be a RP] 18
17. Spices sold in retail packing - Imports (100 x 18%) [+ 3% value addition tax in case of commercial imports] 18
distributor or retailer pays sales tax to the
6. Toilet soap bearing brand names and trade - Unclaimed IPT if claimed within 6 months (100 x 18%) 18
government and passes it on to the
marks
consumers. - IPT on credit purchases (IPT payable by buyer to supplier [in 180 days] but supplier must 18
7. Detergents 18. Shoe polish and shoe cream
► Taxpayer A taxpayer is referred to as a ‘Registered have paid it to FBR) 100 x 18%
8. Shampoo 19. Fertilizers
Person’ 9. Toothpaste 20. Cement sold in retail packing - Sales Tax on services used in making taxable supply [100 x 16%(P+B)/15%(K)/13%(S)] 16
► Tax Period A month 10. Shaving cream 21. Mineral/Bottled water - Federal Excise Duty in Sales Tax Mode on goods & services purchased (100 x 18%) 18
► Time of Supply Goods are delivered or made available 11. Motorcycles 22. Auto rickshaws - Sales tax paid to supplier located in AJK under STA-1990 as adapted by AJK (100 x 18%) 18
(whichever is earlier) 23. Household electrical goods, including air conditioners, refrigerators, - IPT paid on local purchase / imports of capital goods (e.g. machine) 100 x 18% 18
► Reporting A registered person e-files a Return deep freezers, televisions, recorders and players, electric bulbs, tube- - Not Admissible: Local Purchases from Un-registered Person -
► Due Date (Payment) 15th of the next month lights, electric fans, electric irons, washing machines and telephone sets. - Not Admissible: Purchases/ Imports without proper documents -
► Due Date (Return 18th of the next month 24. Household gas appliances, including cooking range, ovens, geysers - Not Admissible: Unclaimed IPT claimed after 6 months -
and gas heaters
Filing) - Not Admissible: IPT Credit Not Allowed under § 8 -
25. Foam and spring mattresses and other foam products for household
- Not Admissible: IPT paid on goods returned & destroyed being unfit for consumption -
1.2 SALES TAX IN THIRD SCHEDULE METHOD (METHOD 1) use
26. Paints, distempers, enamels, pigments, colours, varnishes, gums, - Not Admissible: Purchase payment > Rs.50K paid otherwise than banking channel e.g. paid -
Who is liable to pay § Manufacturer or
resins, dyes, glazes, thinners, blacks, cellulose lacquers and polishes sold in cash (Exception: Payment for Utilities)
§ Importer (in case of imported goods)
in retail packing. - Not Admissible: IPT claimed on credit purchases but payment outstanding for >180 days -
Tax rate § 18% (if goods listed in 3rd Schedule only)
26. Lubricating oils, brake fluids, transmission fluid, and other vehicular - Less: Purchase returns if proper Dr./Cr. Notes are issued (100 x 18%) (18)
§ Reduced rate specified in 8th Schedule if
fluids sold in retail packing INPUT TAX FOR THE MONTH 124
goods are listed in 3rd Schedule as well as 8th 27. Storage batteries excluding those sold to automotive manufacturers
Schedule or assemblers
Amount subject to tax Retail price OUTPUT TAX
28. Tyers and tubes excluding those sold to automotive manufacturers or
Goods subject to tax Goods listed in the 3rd Schedule to STA-1990 - Local supplies to registered person (200 x 18%) 36
assemblers
Procedural Tax amount is required to be legibly, 29. Biscuits in retail packing with brand name - Local supplies to unregistered person (200 x 18%) 36
requirements prominently and indelibly printed or embossed 30. Tiles - Discount (Not mentioned on invoice or in excess of normal business practice) (20x18%) 3.6
by manufacturer or importer on each article, 31. Auto-parts, in retail packing, excluding those sold to automotive - Goods manufactured given free to friend/director etc. or self-supplied (10 x 18%) 1.8
packet, container, package, cover or label. manufacturers or assemblers - Exports (200 x 0%) 0
- Exempt supplies (100) -
- Federal Excise Duty in Sales Tax Mode on goods & services supplied (200 x Various%) 36
1.4 VALUE ADDED TAX METHOD (METHOD 2) - Sales Tax on Services Rendered in ICT (200 x 18%) 36
SUPPLY CHAIN PURCHASES INPUT TAX SUPPLIES OUTPUT TAX S.T. LIABILITY PAID TO FBR - Less: Sale returns if proper Dr./Cr. Notes are issued (100 x 18%) (18)
FORESTER 00 00 100,000 18,000 18,000 18,000 OUTPUT TAX FOR THE MONTH 131.4
FURNITURE MAKER 100,000 18,000 180,000 32,400 14,400 14,400
RETAILER 180,000 32,400 220,000 39,6000 7,200 7,200 LESS: ADMISSIBLE IPT [W-1/W-2]
- Relating to other than Fixed Assets 89.45
39,600
- Relating to Fixed Assets [ + B/F IPT Relating to Fixed Assets If Any] 13.22
SALES TAX LIABILITY 28.73
1.8 INPUT TAX & OUTPUT TAX 1.7 W-1 APPORTIONMENT OF INPUT TAX
Add: FURTHER TAX – 4% of supplies to un-registered person or RPs not on ATL (200 x 4%) 8
INPUT TAX, in relation to a registered person, means: - Total Input 124
Add: PENALTY/ Default Surcharged/Fees 1
§ Sales tax, on supply of goods to the person, levied under STA-90
- Less: Capital Goods/Fixed Assets (18) [ii]
TOTAL/GROSS SALES TAX LIABILITY 37.73
§ Sales tax, on import of goods by the person, levied under STA-90 - Input Tax other than Capital Goods 106
REFUND (17.70 + 3.18) 20.88
§ Excise duty in sales tax mode on manufacture/ production of goods, or - Less: Input Allocated to Taxable Supply (06)
rendering/providing of services, levied under F.E. Act, 2005 - Less: Input Allocated to Zero Rated (00) SALES TAX CARRY FORWARD 00
§ Provincial sales tax on services rendered or provided to the person and
§ Sales tax on goods supplied to the person from AJK, whereon tax is - Less: Input Allocated to Exempt Supply (00)
levied under STA-1990 as adapted in AJK. - Residuary IPT 100 [i] 1.6 W-2 RESTRICTION ON IPT EQUAL TO 90% OF OUT
OUTPUT TAX, in relation to a registered person, means:
- IPT Apportioned to Taxable Supply 73.45
Taxable Supply Zero-rated Supply Exempt Supply - Add: IPT Allocated to Taxable Supply 06
§ Sales tax, on supply of goods made by person, levied under STA-90 (830/1130=0.734) (200/1130=0.176) (100/1130=0.088) - Add: Brought Forward Input Tax [Data from question] 10
§ Tax levied under in sales tax mode as duty of excise on
manufacture/production of goods or rendering/providing of services by Res/IPT [i] 100 73.45 17.70 8.85 ACCUMULATED INPUT TAX 89.45
the person under F.E. Act 2005 Cpt Goods [ii] 18 13.22 03.18 1.59 - 90% of OPT (131.4 x 90%) 118.26
§ Sales tax on services rendered/provided by person levied under - Sales Tax Carried Forward 00
Islamabad Capital Territory (Tax on Services) Ordinance, 2001.
- Admissible IPT (w/e/l) 89.45