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TAX3701 ASSIGNMENT 1 SEMESTER 2 OF 2024
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Seeta (Pty) Ltd (‘Seeta’) is a shoe manufacturing company that manufactures shoes for the local,
African, and overseas markets. Seeta is a registered VAT vendor on an invoice basis with a two-month
VAT period. The following amounts were extracted from the receipts and payments for the two-month
period to 31 January 2024. All amounts are inclusive of VAT where applicable, unless otherwise
stated.
Purchases R865 000
Additional information:
80% of the stock was purchased from local suppliers and 20% from a supplier in China.
10% of the stock ordered from China (not yet deducted in the purchases amount given), was returned
as damaged on arrival. Debit note DB200 was issued.
What is the input VAT claimable on the purchases? Round your answer to the nearest rand.
A. R112 826.
B. R129 750
C. R125 950
D. R103 800
Question 2
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Which one of the following deductions is not prohibited in terms of section 23?
A. Portion of private expenses that were utilised for business purposes
B. The value for any insurance policy ceded to an employee director, their family, or a retirement
fund of which they are members
C. Expenses incurred in respect of exempt income
D. Bribes
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On which date should Seeta (Pty) Ltd pay the VAT due to SARS for the two-month VAT period ending
31 January 2024 if the return is submitted via e-filing and the payment is submitted electronic funds
transfer?
A. 25 February 2024
B. 31 March 2024
C. 21 March 2024
D. 29 February 2024
, Question 4
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Seeta (Pty) Ltd (‘Seeta’) is a shoe manufacturing company that manufactures shoes for the local,
African, and overseas markets. Seeta is a registered VAT vendor on an invoice basis with a two-month
VAT period. The following amounts were extracted from the receipts and payments for the two-month
period to 31 January 2024. All amounts are inclusive of VAT where applicable, unless otherwise
stated.
December 2023 January 2024
Bad debts recovered (R) 2 240 2 480
Included in bad debts recovered during January is an amount from a Botswana customer. The original
sale amount was R920 and only 80% of the debt was recovered.
What is VAT on the bad debts recovered?
A. R520 Input VAT
B. R616 output VAT
C. R520 Output VAT
D. R Nil-exempt
Question 5
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Various court cases have tested the practical application of the principles of the general deduction
formula. Which one of the following is one of the most notable cases?
A. Port Elizabeth Electric Tramway Co Ltd v CIR 8 SATC 13 (in the production of income)
B. Caltex Oil (SA) Ltd V SIR 37 SATC 1) v (actually incurred)
C. Joffe & Co (Pty) Ltd v CIR 13 SATC 354 (expenditure and losses)
D. All of them
Question 6
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Mojako (Pty) Ltd has an interest in a share-block company (from which it operates) and it paid levies of
R21 775 for the 2024 year of assessment. The trustees of the share-block company imposed a 15%
penalty on the amount paid due to late payment. Which of the following amounts is claimable in terms
of the general deduction formula for the 2024 year of assessment?
A. R25 041
B. R21 775
C. Rnil – deduction prohibited in terms of section 23(a)
D. Rnil – deduction prohibited in terms of section 23(c)
.
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