Page 24 - F6 Slide - VAT Part 3 - Lecture Day 5

Solution

(a) ABC CC will be required to account for output tax

equal to the notional input tax claimed of R737. The

output tax is based on the purchase price, irrespective

of the selling price.

(b) ABC CC will again be required to account for

output tax equal to R737, although the selling price of

the goods is less than the purchase price. The output

tax is based on the original purchase price,

irrespective of the selling price.