- 15 Marks
TAX – Nov 2014 – L2 – Q7 – Value Added Tax (VAT)
Calculate the VAT payable for Zuba Construction Company and advise on the timing and contents of a VAT appeal notice.
Question
Zuba Construction Company Limited is an irrigation and building construction company. The company has been in the business for many years.
The company appointed you as the tax representative to provide tax advisory services and deal with the VAT office on its behalf.
On commencement of your assignment, you discovered that there was a dispute on the determination of the amount of VAT payable to the Revenue by the Company. To assist you in the assignment, the following information was made available to you:
| Date | Details | Amount (N) |
|---|---|---|
| 1/8/13 | Bought a concrete mixer | 700,000 |
| 2/8/13 | Bought sand | 40,000 |
| 3/8/13 | Bought gravel | 40,000 |
| 5/8/13 | Bought scaffolding | 1,800,000 |
| 5/8/13 | Bought photocopier machine | 50,000 |
| 7/8/13 | Bought tables | 15,000 |
| 14/8/13 | Bought poker vibrator | 300,000 |
| 14/8/13 | Bought chairs | 20,000 |
| 14/8/13 | Progress payment received | 2,000,000 |
| 24/8/13 | Progress payment received | 1,500,000 |
Additional Note: VAT was paid on all the company’s purchases.
You are required to:
a. Compute VAT payable (if any) for the month of August 2013.
(8 Marks)
b. Advise your client on when and how VAT payment should be made.
(4 Marks)
c. Itemize the contents of a Notice of Appeal against VAT Assessments.
(3 Marks)
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