Page 30 - F6 Slide - VAT Part 2 - Lecture Day 5
P. 30
Solution
Output tax
Sale of milk (zero-rated) nil
Input tax
Purchase of cows (R114 000 × 14/114) 14 000
Fuel (zero-rated) nil
Purchase of packing materials (R57 000 × 14/114)
7 000
Total input tax 21 000
An amount of R21 000 is to be refunded by SARS (Rnil –
R21 000) (21 000)
Note
It should be clear from the example that although Mark Model made
zero-rated supplies, these supplies are also regarded as taxable
supplies and that he will still be able to claim the input tax incurred in
making these supplies.
