Legt2751 Mid Sem

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A s ae o . s h r d n. .

SCHOOL OF BUSINESS LAW AND TAXATION

GST Free Supplies

diffe.irom npur Taxed Supprtes for cST pu.poses in rhar:

LEGT 2751 BUSINESS TAXATION
MIJI,TIPI,IE CHOICE TEST 52
2OO9

(a)

Wilh an nput laxed suppy the enlerpnse makno the supoiv does nol charge GST on lh6 supply and does not gei an nput tax credit for GST paid on pu.chas€s lhat reate to the input iax€d supply With a GSTffee suppy lh€ ontsrprise making the suppy do€s nol charge Gst on rhe suppy and does not pay GsT on ts purchases lhar relate io lhe suppy charqe GST oi the suppy and do€s not get an nput tax cr€dit for the GST pad on lne purchases that rerate 1o the suppy. With a csTf@e suppy tlre enloDrs€ maklng lhe supply does nol charae GsT on the suppy blt geG an input lax cedl lor the purchases rhat retab to lh€

FEEDBACK TO STUDENTS
I hc rvcnsc

wlh

an inpul taxed suppy tlre enteQ se makng the suppy does nol

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th. igh$tmrk wb

18/20

rhc lbllowingiocumcituo x,is

Wilh a GST ti€e supply lhe enterpdse makng the suppy does not pay GSTon ls purchas€s but musl charge GSI on ils suppties Wlthen npul taxed supply rhe €nt€lpris€ maki.g (he supply does nol charoe Gsr on the supply and does notgol.n npul lax credit for GST pa d on puEhases thal relate to $e nputlax€d slppy

(r) (b)
r,

comncnron hoq $cll studq,ls!sawhol.pc'romrcdon cnch
lrchils orthc romcr rnswcr rbr
cach qucstioni and

J rbJ ".o-!dc qc, fn cd l q Fri l ' srrdcns vho lailcd rhc ra should .onracr John Taylor via c mail d.hiled fcedback .rtr . r'Lf\r.ntr b rtunsc an xppolntmcnt to obtain l \Fl'n
'
aborl thcn pcrlbnaicc n
rhc tc$.

wirh a GsT fiee suppiy rhe enteDdse does notcha.ge GsT on rhe suppty bul gels an input l.x credit for the purchases thal €bte to rhe suppy With an npul laxed supply the enteFrise makng tho suppy does not charge GsT on the suppy and does nol pay GsT on rhe purchases ihar

(e)

None orlhe above.

'norc

Mosr studenis answeiedihis quesrion

corecny.

'\or

.-f [-\ r-l-l

(- a-.>

-

'input taxed suryly' an.J'GSr tee suwty arc input tax.d supply' is b convey that GST is payzble on yout pLtchases (ioputs) but that tou .1o n6t cha/ge cST on youl input tated sales and do n6t ger ao input ta' credit lor th. csf th.t you paid on wu. putchas.s. Hence you inputs ate taxed but your Bales arc not. fhe csf fi@ is n.ant to conwy that you don t charge GSf on yo'l sates but get a credit for the GsI pald on yout inputs. fhis credit can be ofiset against GST payable on othet sales that you nay nake th.t arc not csr iee ot input tated, lf yout GSf lnprt ta' crediE exceed Wut othet cST liabitities the excess is refundable. Hence there has be.n no GST o, the purcha.e an.t sate tmnsaction. 13

Cotect answet

sonewh.t nislddlng. rhe

!b).

The

tens

tm

ft.nt

lffi

The ment goods arcumentfor laxaton suggests ihal:

(a)

Thal setoi.es sucrr as heatth and €dudalion. shoLd be prcvided by govemment as padcu ar users cannot be erc uded

rom benefitng nom

LEGT 275

L

Muhiplc Choicc 1n*. Sl 1003

A s ae o . s h r d n. .

oo,e rc.r r. 1 on.r p .-. p:
dd

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be o.o, a6d o!
be1.r,.e har QUESTION'THREE

'"ltF.l

*ruc€s lch€s helt(h trd education. shoutd dever be prcvided by govehmenl as parr c! ar us€rs dannot be exctuded trom beneii( ng flo; Thal

Thlt seruices such as heafih and educaUon sho!d etherb€ prcvjded or \,brdr.o

61ed b-.4

b, 9o,4 re I

I

rr

d

rhe

!o cure, i-La,.e.

_q

re both esid€nts ot rhe newty ,ndependent cou.t[, Euphora anler.ddE-ao. ,0 ,u.- o. $50000 aln ,"orh de Fd ro I T cataru oc a t.d, -e orL.al,t a. d ..o, d dno.agp. . ^d. dE rddaEubh'roae $ro0.o0011.qa:{torro-;"oron ile ecr-,-1-ru-o'ld bdn., Jrar'neE'o o.a1ld....!irdtal q d.pdar,.r r " o'2506 Ioa t sf ,e tsr".. r tr,"d dr d ra.e or'o;o Ior $I the Luon.,,in Amie and Jane

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