LUMS

ACCOUNTING & FINANCE (ACCT 370)

AUTUMN SESSION (2019)

ASSIGNMENT B- 15%

To be submitted definitely by the 27th session. Every student is individually

required to read the proposition and answer the questions. Obtain a print-out
and work out the answers in the spaces provided. Add more sheets, if required
for question 4.

M/S Al-Khair Paper Works, got itself registered with the Sales Tax
Department on 16 December 2018. It is engaged in the business of producing
and supplying both books (exempt) and stationery items (taxable). The firm
commenced production/sale from January 2019. It procured heavy duty paper
for Rs. 9 million inclusive of GST in December 2018 for production until May
2019. Of this, 70% was used for manufacturing taxable supplies. It also
utilized common inputs for producing books and stationery items as per
follows:

December 2018
Item Value GST Total Price
Ink 400,000 68,000 468,000
Printing plates 800,000 136,000 936,000
Chemical 300,000 51,000 351,000
Glue 100,000 17,000 117,000
Thread 50,000 8,500 58,500
Electricity 20,000

January 2019
Item Value GST Total Price
Electricity 100,000

February 2019
Item Value GST Total Price
Chemical 10,000 1,700 11,700
Gum 45,000 7,650 52,650
Thread 5,000 850 5,850
Electricity 30,000
 March 2019
Item Value GST Total Price
Electricity 25,000

April 2019
Item Value GST Total Price
Ink 300,000 51,000 351,000
Plates 100,000 17,000 117,000
Electricity 40,000

May 2019
Item Value GST Total Price
Electricity 68,000 468,000

Details of month-wise sales exclusive of GST are as follows:

Month Taxable Supply Exempt Supply

January 15,000,000 500,000
February 20,000,000 1,000,000
March 5,000,000 3,000,000
April 4,000,000 0
May 6,000,000 700,000

In the light of the above, answer the following questions with reference to provisions of the
Sales Tax Act:

1) When would the firm start submission of its sales tax returns? 5 marks

_____________________________________________________________________

2) What is the adjustable input tax related to paper alone? 3 marks

_____________________________________________________________________
3) Mention the amount of GST/output tax against each period’s supply: 5 marks

Month Taxable Supply GST

January 15,000,000

February 20,000,000

March 5,000,000

April 4,000,000

May 6,000,000

4) What would be the amount of tax deposited in the government treasury for tax
periods December 2018 to May 2019? 12 marks