- 15 Marks
TAX – May 2023 – L2 – SC – Q6 – Value-Added Tax (VAT)
Compute VAT remittance for Fountain Hotels' July 2022 transactions and explain VAT concepts.
Question
Fountain Hotels Limited is a group of hotels located in many parts of North Central Nigeria, providing accommodation and other hospitality services. It renders its returns at the end of each month in accordance with the Value Added Tax Act 2004 (as amended).
The following are the details of the transactions for the month of July 2022:
- VAT on outdoor catering services: N600,000
- VAT on food: N360,000
- VAT on drinks: N240,000
- VAT on other vatable hotel services: N270,000
- VAT on drinks purchased: N150,000
- VAT on foodstuff purchased: N210,000
- VAT on kitchen equipment: N480,000
- VAT on professional services: N240,000
Additional Information:
- 30% of outdoor catering services were on credit.
- 20% of food and drinks were on credit.
- Other vatable hotel services were paid in full.
- 25% of VAT on drinks and foodstuff purchased were on credit.
- VAT on kitchen equipment and professional services were paid in full.
Required:
a. Compute the VAT remittable to the Federal Inland Revenue Service in respect of July 2022 transactions. (9 Marks)
b. Write short notes on the following:
i. Revenue VAT (2 Marks)
ii. Zero-rated supplies and services (2 Marks)
iii. VAT on exports (2 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Compliance, Hospitality Services, VAT Calculation, VAT on Exports, Zero-rated supplies
- Level: Level 2
- Topic: Value-Added Tax (VAT)
- Series: MAY 2023
Report an error