Definitions Flashcards
Input Tax in relation to a registered person
reverse for output tax
Tax levied under:
- Sales Tax Act on - supply of goods to the person (including AJK)
& imports by person
- Federal Excise Act, 2005
- on services in ISB
Supply definition (3 in def, 4 in list)
- Sale
- transfer of the right to dispose of goods as owner
- Sale/Transfer under hire purchase agreement
&
- Putting produced goods in personal, business, non-business use
- Auction/Disposal of goods to satisfy debt
- Possession of taxable goods before cessation of registration
- Manufacture of goods of another person (TOLL)
What is not a taxable activity (3)
- Employee’s services to employer.
- Individual’s recreational pursuits or hobby
- Other than individual’s recreational pursuits or hobby
Manufacturer/ Producer (4 points)
- Engages in production of goods
- with or without his own RM
- disposes assets in fiduciary capacity as assignee, trustee, liquidator
- has patent, proprietary right
Manufacturer/ Producer (4 points)
- Engages in production of goods
- with or without his own RM
- disposes assets in fiduciary capacity as assignee, trustee, liquidator
- has patent, proprietary right
Manufacture/ Produce (5 points)
- Converting an article into a distinct one
- article changed/reshaped to change usability
- incidental to manufactured product
- printing, publishing, lithography, engraving
- assembling, bottling, cutting, repacking, packaging, and mixing
Retail Price (3)
- Price fixed by manufacturer or imported
- includes all charges and taxes excluding sales tax
- at which a particular variety of items should be sold to end consumers.
Cottage Industry (4 conditions)
Manufacturing concern:
- no industrial electricity/gas connection
- workers not exceeding 10
- annual turnover not exceeding 10 million
- situated in a residential area
Tax Fraud (2 def, 2 point)
Knowingly, dishonestly, fraudulently, without any lawful excuse:
Any act or omission to take any action in contravention of law with intention of:
- understating tax liability for 2 consecutive Tax periods
- overstating tax credits or refunds to cause loss of Govt. revenue
Value of supply (3 points)
- consideration in money
- including all Fed and Prov duties
- excluding the amount of sales tax
Conditions for exclusion of Trade discount from value of supply (2 points)
- Tax invoice shows the discounted price
- Amount of discount is in conformity with normal business practice
Exception of discount
- cash discount is not allowed Trade discount not allowed on: - On 3rd Schedule items - not on tax invoice - not in conformity with the normal business practices
Associates and exception
One (or both) may reasonably be expected to act in accordance with the intention of the other (or a 3rd person)
Exception: Employee and employer
