CMA MAY-2023 EXAMINATION

INTERMEDIATE LEVEL II
FUNDAMENTALS OF TAX, VAT, & PUBLIC FINANCE MANAGEMENT

Course Code : LT234 Total Marks : 100

Reading Time : 15 minutes Writing Time : 180 minutes

Instructions to Candidates
 You MUST NOT write anything during the reading time.
 You should attempt ALL questions.
 Answers should be properly structured and relevant.
 Carefully read ALL the requirements and sub-questions before attempting a specific
question.
 ALL answers must be written in the answer book.
 AVOID WRITING/MARKING on the question paper at any time which may cause disciplinary
action.
 Start answering each question from a fresh sheet.
 Answers should be clearly numbered with the sub-question number.

Allowable Materials
 Writing Stationaries
 Non-programmable Calculator

Assessment Structure
Sub- Expected Time
Marks
question Required
Question 1 Multiple Choice Questions 10 10 20 minutes
Section
Question 2 Modified True/False 5 5 10 minutes
A
Question 3 Matching 5 5 10 minutes
Question 4 Essay/Computational/Case 4 20 32.50 minutes
Section Question 5 Essay/Computational/Case 3 20 32.50 minutes
B Question 6 Essay/Computational/Case 3 20 32.50 minutes
Question 7 Essay/Computational/Case 4 20 32.50 minutes
Revision 10 minutes
Total 100 180 minutes

RESTRICTED USE
This paper MUST NOT BE REMOVED from the examination venue

Do not turn the page until instructed

 SECTION A [20 MARKS]
THERE ARE 3 (THREE) QUESTIONS IN THIS SECTION. ANSWER ALL THE QUESTIONS IN
THE ANSWER SCRIPT FOLLOWING THE EXAMPLE PROVIDED FOR THE SPECIFIC
QUESTION.

QUESTION 1 [10 × 1 = 10 MARKS]

There are ten (10) multiple-choice questions with five options. Pick the option that best explains
the given question. Write your answer on the answer script [DO NOT PUT ANY MARK ON THE
QUESTION PAPER]. Follow the example given below in providing your answer.

Example:
(i) ICMAB stands for the –
(a) Institute of Cost Management Accounting of Bangladesh
(b) Institute of Cost and Management Accountants of Bangladesh
(c) Institute for Cost Managers and Accounting of Bangladesh
(d) Institute of Cost Management Accountants of Bangladesh
(e) Industrial Cost Management Accountants of Bangladesh

Answer: (i) (b)

(i) The rate of tax in Bangladesh for any cash or cash equivalents repatriated to Bangladesh
through Banking channel from any undisclosed offshore assets is
(a) 5%
(b) 7%
(c) 10%
(d) 15%
(e) 20%
(ii) If in a tax period, the sum of input tax and the receivable decreasing adjustments exceeds
the sum of output tax, supplementary duty and adjustments for such tax period, then the
additional amount of money has to be carried forward in the next ____ tax periods.
(a) 3
(b) 5
(c) 6
(d) 8
(e) 10

(iii) A new assessee is required to pay advance income tax if his last year income exceeds
(a) Tk. 6,00,000
(b) Tk. 5,00,000
(c) Tk. 4,00,000
(d) Tk. 3,00,000
(e) Tk. 2,50,000
(iv) From which if the following income, no tax is deducted at source?
(a) Profit from Islamic Bank
(b) Interest on Fixed Deposits
(c) Dividend Income
(d) Interest on Saving Account in Bank
(e) Interest on Pensioner Sanchaypatra

CMA May 2023 Examination, LT234 [Page 2 of 7]

(v) In case of collection of TDS on 25th June, then the sums of TDS have to be deposited to the
National exchequer within
(a) 2 weeks from the end of the month in which the deductions or collection was made.
(b) 3 weeks from the end of the month in which the deductions or collection was made.
(c) 7 days from the date in which the deduction or collection was made
(d) 15 days from the date in which the deduction or collection was made
(e) The next following day in which the deduction or collection was made.
(vi) ACI Ltd.’s total income is Tk. 500,000 (inclusive of Tk. 50,000 as capital gain) for the current
income year. Its total tax liability is
(a) Tk. 1,01,250
(b) Tk. 1,12,500
(c) Tk. 1,08,750
(d) Tk. 1,10,500
(e) Tk. 1,15,000
(vii) Under which section/article of the constitution of the People’s Republic of Bangladesh, the
office of the Auditor General is established
(a) 127
(b) 128
(c) 129
(d) 130
(e) 131
(viii) A weighing machine that has a cost of Tk. 22,000 with a written down value of Tk. 18,000
has been sold out for Tk. 25,000. How much gain should be considered as agriculture
income?
(a) Tk. 7,000
(b) Tk. 25,000
(c) Tk. 3,000
(d) Tk. 4,000
(e) Tk. 18,000
(ix) Which one of the following is an essential characteristic of a private good?
(a) It is produced by the private sector
(b) The user has to pay for it
(c) Consumption of the good by the user has no external effects on the consumption or
productivity of others
(d) Consumption of the good by one user diminishes the quantity available to others
(x) Which one of the following plays the primary stewardship role of public finance in
Bangladesh?
(a) Prime Minister’s Office
(b) Ministry of Finance
(c) National Board of Revenue
(d) Bangladesh Bank

CMA May 2023 Examination, LT234 [Page 3 of 7]

QUESTION 2 [5 × 1 = 5 MARKS]
There are five (5) statements given under the question. Identify the statements as True or False. If
the statement is false, rewrite the statement on the answer script to make it ‘True’. Reasoning is
NOT required. Follow the example given below in providing your answer.

Example:
(a) ICMAB stands for the Industrial Cost Management and Accounting of Bangladesh.
Answer:
(a) False. ICMAB stands for the Institute of Cost and Management Accountants of
Bangladesh.
Note:
 You will not get any mark if you simply rewrite as ICMAB does not stand for the
Industrial Cost Management Accountants of Bangladesh.
 If the statement is true, you need NOT to rewrite the statement rather only mention that
the statement is True.

(a) If a registered person fails to submit the VAT return within the specified date, he may be
imposed a maximum penalty of T. 5,000.
(b) The Bangladesh Model of Avoidance of Double taxation Agreement generally consists of 25
Articles.
(c) Gift Tax Act of Bangladesh came into force on 1st January 1990 in Bangladesh.
(d) 40% of income from sale of tea and rubber should be considered as income under the head
‘Income from Business and Profession’.
(e) If set off is possible in the same year even then you can carry forward losses to next year.
QUESTION 3 [5 × 1 = 5 MARKS]
Match the items of column A with the most suitable items of column B. Match only one item of
column A with one item of column B. Write your answer on the answer script. Follow the example
given below in providing your answer.
Example:
Column A Column B
1. ICMAB (a) Professional accountancy body
(b) University
Answer: 1 (a)

Column A Column B
1. Bangladesh Treasury Bond (a) Tax exempted
2. Penalty for unpaid tax liability (b) Low Taxed Securities
3. Maximum rate of Gift Tax (c) 25%
4. Penalty for non –compliance or irregularity for not (d) 10%
filing the VAT or turnover tax return within the
prescribed time period
5. NBR collect maximum of their revenue (e) Tk. 5,000
(f) 20%
(g) Customs Duty
(h) 15%
(i) VAT

END OF SECTION A

CMA May 2023 Examination, LT234 [Page 4 of 7]

 SECTION B [80 MARKS]

THERE ARE 4 (FOUR) QUESTIONS IN THIS SECTION. ANSWER ALL THE QUESTIONS IN
THE ANSWER SCRIPT. SHOW ALL RELEVANT COMPUTATION.

QUESTION 4 [Marks: 20]

Mrs. TZ Haque works as a managing director of a private limited company. Her sources of income
for the current income year are given below to calculate tax liability:
(a) Basic Salary follows the pay scale of 50,000-5,000X4-70,000. In the last month of the income
year, she received Basic Salary of Tk. 60,000 and the annual incremental rate date is on 1 st
November. She received two bonuses equivalent to two months Basic Salary (One in
November and another one in January); medical allowance is Tk. 10,000 per month. She has
been provided a full time car and fully furnished apartment as rent free accommodation
(Rental value is Tk. 12,000 per month). She contributes 10% of her Basic Salary to
recognized provident fund (RPF). During the year, her interest on RPF@ 16% was Tk. 5,400.
She has received leave encashment of Tk. 10,917 during the year. TDS on her salary
income was Tk. 60,000.
(b) Interest received on Tax Exempted Government Securities is Tk. 5,000; Interest received on
Taxable Government Securities @ 15% is Tk. 1,425; interest received on debenture is Tk.
25,935. Bank has deducted 10% of interest collected as bank charge.
(c) She owns a house at Estakon Garden (municipal Value is Tk. 3,50,000). She has let out the
house for residential purpose at a rate of Tk. 28,000 per month. She received Tk. 50,000 as
advance from the tenant during the year. During the year, she spent for the loan instalment
Tk. 2,40,000 (including principal Tk. 1,70,000); Tk. 65,000 for repair and maintenance and
Tk. 10,000 for city corporation tax.
(d) She has an agricultural land leased at the village at yearly rent amounting Tk. 6,00,000. The
land was leased for four months during the year.
(e) Other Income: Income received from royalty Tk. 9,000; Dividend received from ICB Mutual
Fund Tk. 31,500; Dividend received from a public limited company Tk. 54,000; profit received
from Islami Bank Tk. 18,000. She has participated in SoftBank Quiz Competition in Japan
and won 1st Prize of JPY1,00,000. She has brought the money to Bangladesh through
banking channel and Received Tk. 86,000 after deduction of Bank Charge.
Additional Information:
Investment claim:
(i) Payment of Life Insurance Premium Tk. 12,000 (Policy Value T. 1,00,000).
(ii) Purchase of shares of listed companies Tk. 50,000.
(iii) Purchase of Books and Magazines Tk. 1,000.
(iv) Purchase of shares of Cooperative society Tk. 20,000.
(v) Donation to President’s relief fund is Tk. 10,000.
(vi) Donation to Government Zakat Fund Tk. 20,000.
(vii) Contribution to DPS Tk. 7,000 per month.
(viii) Purchase of Treasury Bond Tk. 10,000.
(ix) Purchase of Gold Tk. 30,000.
(x) Purchase of Furniture Tk. 15,000.
Net Wealth:During the year, her net wealth is amounted to Tk. 9 crore.
Refund Claim: She claimed Tk. 10,000 as tax refund as adjustment of the current year tax.
She has the necessary supporting documents.
Advance Tax: She has paid Tk. 25,000 as advance tax of her 1500cc car.
Required: Calculate her total income and tax liability for the assessment year 2022-23.

CMA May 2023 Examination, LT234 [Page 5 of 7]

QUESTION 5 [Marks: (8+6+6) = 20]
(a) Mollick Stationery (MS) is involved in the business of manufacturing stationery items. On the
sale of Stationery, Mollick Stationery collects VAT @ 15% from its customers. The following
transactions have been shared with you from the accounts department of Mollick Stationery
to compute the VAT liability for the month of April 2023.
Particulars Amount VAT Rate VAT
Stationary exported to Vietnam 5,00,000 0%
Stationary sold to local distributors 20,00,000 15%
Stationary sold to MMZ at reduced rate
(MMZ will deduct VAT at source however MMZ has 1,00,000 7.5%
not paid during January)
Exempted goods used as raw materials 50,000 Exempted
Raw Materials imported from Vietnam 3,50,000 15%
AT paid on raw materials paid from Vietnam 3,00,000 5%
Other raw materials procured from local suppliers
1,50,000 15%
at standard rate
Services procured at standard rate 2,50,000 15%
Purchase air-conditioner for office 60,000 7.5%
Repair of factory premises 20,000 7.5%
VAT collected at source from suppliers during
8,000
January
Issuance of debit note during January 6,000
Issuance of credit note 8,000
Required:
(i) Calculate Net VAT payable when submitting the VAT return for the month of April 2023.
(ii) What will be the VAT liability if they have not filed for time extension to the authority till
May 20, 2023?
(b) Mention the list of documents you have to submit with application for VAT registration to the
concerned Divisional Officer in form “Mushak-2.1”
(c) Describe the various types of duties under the Customs Act, 1969.

QUESTION 6 [Marks: (14+2+4) = 20]

AA, AS and DM are the partners sharing profits and losses in a ratio of 2:2:1. The particulars of
income for the year ended on 30th June, 2022 are as under:
(a) House Property: The firm owns a building consisting of three floors of identical specification,
two of which are used for the firm’s business and one is let out at a rent of Tk. 10,000 per
month. The firm has earned Tk. 30,000 by putting up a display of an advertisement hoarding
of a multinational company on the roof of the building during the year.
(b) Business in Chemical:The trading accounting for the year was as under:
Debit Tk. Credit Tk.
Opening Stock 5,00,000 Sales 54,00,000
Purchases 45,00,000 Closing Stock 6,00,000
Gross Profit 10,00,000
60,00,000 60,00,000
The closing stock has been uniformly valued at 12.50% under cost. Depreciation and other
expenses debited to profit and loss account amount to Tk. 400,000 which included the
following items:
(i) Repairs to Building Tk. 20,000 (Let-out portion is Tk. 8,000 and business portion is Tk.
12,000). Proper books of accounts are not maintained for this expense.

CMA May 2023 Examination, LT234 [Page 6 of 7]

 (ii) Municipal taxes Tk. 27,000 (The tenant paid Tk. 4,000).
(iii) Annual contribution to Chemical Association is Tk. 2,000.
(iv) Contribution to Prime Minister’s Relief fund Tk. 5,000.
(v) Salaries to the Partners: AA-Tk. 24,000; AS-Tk. 48,000 and DM-Tk. 72,000.
(vi) Interest paid on a loan of Tk. 5,00,000 taken for installation of accounting software for
recording purpose of business transactions.
(vii) The firm has received Tk. 10,000 as a compensation from a company for delaying
delivery of the chemical items.
(viii) Loss on speculative transactions is Tk. 1,50,000.
(ix) Gross Receipt during the year Tk. 54,00,000.
(c) Other Information:
AA has no other income. AS has received Tk. 45,000 as royalty and Tk. 9,000 as Dividend
income. DM received Tk. 9,500 as interest on Taxable government securities and Tk. 40,000
as lottery income during the year.
Required:
(i) Compute the taxable income of the firm and net tax liability.
(ii) Compute the amount of profit allocated to each partner.
(iii) Compute the total income of each partner.

QUESTION 7 [Marks: (5+4+6+5) = 20]

(a) Describe the three different types of audits performed by the C&AG office.
(b) What are the key attributes of a good public financial management?
(c) Discuss the roles of the following government entities-
(i) Finance Ministry
(ii) Office of controller general of accounts
(ii) Office of Comptroller and Auditor General
(d) Write short notes on:
(i) PPP (ii) SDGs (iii) iBAS++ ( iv) IPSAS

END OF SECTION B

CMA May 2023 Examination, LT234 [Page 7 of 7]