Accountancy Forum

what is meant by "taxable at zero percent"...reference to sales tax
...how does zero rated supplies and exempt supplies differs

Ace

it means a supply, which is charged to tax at the zero percentage under section 4 of the sales tax act 1990.
according to section 4 supply of the following goods shall be charged to tax at the rate of zero persentage.
1 goods exported out of pakistan
2 goods specified in the fifth schedule
3 supply of stores and provisions for consumption aboard a conveyance proceeding to a destination outside pakistan
4 such other goods as the fedral goverment may notify.

the following supply of goods shal not be rated as zero rated supply
1 the goods tht are exported but have been or intended to be re-impoted in pakistan
2 the goods tht have been entered for export but are not exported
3 the goods which have been exported to a country , specified by the federal goverment.


regrads

Never seek advice from a Chartered Accountant. They are trained to find problems not solutions.

AOA.

The main difference b/w zero rated supplies and exempt supplies is that in case of zero rated input tax is claimable whereas in case of exempt supplies input tax is not claimable rather it becomes part of total cost of a unit/product.

ICAP is the best.

I am naratting it to u in the scenario of Uk Tax System As i have rcently Attempted The Taxation Paper..

The differense lies in the fact that

0 rated supplies are taxable supplies which are charged at tax at rate of 0 %.

While xempt Supplies arent
1. taken into A/c when dete rminig the traders Taxable Income
2.No Tax is charged Into It
3. Input VAT coudnt be recovered on them.

thanks.........


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Thanks both of u..

Ace

U r welcome........

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