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TX E Sales tax

Written by Saad Rahman (ACCA)

ACCA · Taxation (Pakistan) · 6 questions

Name: ____________________   Date: ____________

  1. A registered person has output tax of Rs. 360,000 and input tax of Rs. 270,000. What is the sales tax payable?

    • A Rs. 270,000
    • B Rs. 630,000
    • C Rs. 90,000
    • D Rs. 360,000

  2. A price of Rs. 11,800 includes sales tax at 18 percent. How much of it is sales tax?

    • A Rs. 2,124
    • B Rs. 1,000
    • C Rs. 10,000
    • D Rs. 1,800

  3. A person sells goods for Rs. 500,000 excluding sales tax. The tax rate is 18 percent. What is the output tax?

    • A Rs. 76,271
    • B Rs. 590,000
    • C Rs. 90,000
    • D Rs. 500,000

  4. Why is sales tax called an indirect tax?

    • A It is charged on profits
    • B It is collected by a business from customers and paid to the tax authority
    • C It is paid only by companies
    • D It is paid by employees

  5. Who collects sales tax on services in Pakistan?

    • A The provincial revenue authorities
    • B The courts
    • C Only the FBR
    • D The banks

  6. Input tax is more than output tax in a period. What generally happens to the excess?

    • A It is lost
    • B It is always refunded in cash
    • C It is carried forward
    • D It is added to output tax

Answer key

1. C, 2. D, 3. C, 4. B, 5. A, 6. C

  1. Payable = output tax - input tax.

  2. Tax = 18/118 x 11,800 = 1,800.

  3. 500,000 x 18% = 90,000.

  4. The burden falls on the final consumer.

  5. Sales tax on goods is federal, and on services it is generally provincial.

  6. Refunds are available only in the cases that the law permits.