Sales Tax Instructions

Sales Tax Instructions, 2009
-- your name, address and enrollment number.
-- name and address of the recipient.
-- date of issue of the invoice.
-- description and quantity of goods.
-- value of goods.
The specimen invoice at 6page 9] of this leaflet is for illustration only.
4. What does the time of supply mean ?
This is the time when a supply of goods is treated to be taking place. It is called the ―Tax
point‖. You must account for sales tax in the tax period in which the tax point occurs at
the rate in force at that time. The tax point usually is the date when you send the goods to
your customer or they take them away. Where they are not taken away, the date when
you make them available for your customer to use. If you either receive advance payment
or issue a tax invoice before the goods are supplied or made available to your customer,
the tax point is the date of receipt of advance payment or date of issue of tax invoice,
whichever is earlier. Where only part payment is received in advance, the supply would
be deemed to be of a proportionate quantity. Where goods are supplied under hire
purchase agreement, the time of supply would be when the agreement was reached.
5. How do I work out my output tax?
When a registered person makes taxable supplies, he charges tax to his customers. This is
called the output tax. Output tax is worked out by multiplying rate of tax with the value
of supplies.
6. How do I record my sales?
You must issue tax invoices for all your taxable supplies including exports. Your
summary should be in the same order as your copy of invoices and show separate totals
for:
-- sales tax on your sales.
-- sales tax-exclusive values of what you have sold.
-- any exempt sales.
-- any credits allowed to your customers.
-- if you give any goods away or take or take any goods from your stock for
private use, you must record.
-- what the goods were.
-- the date you took the goods from stock.
-- the rate and amount of tax chargeable.
-- their cost exclusive of sales tax.
-- Remember: if you allowed a credit to a customer, any sales tax on the
credit note will reduce the amount of sales tax you have to pay in the tax
period in which you issue the credit note. No input tax credit is allowed
in respect of goods given away or taken into private use.
7. How do I record my purchases?
Your suppliers‘ tax invoices will give you all the details you need. Just
make a summary of the invoices in the same manner as you keep them.
You can make a list of the invoices as you receive them or you may be
able to deduct input tax as you pay your suppliers. You may find it useful
to number the invoices and record the same numbers against the entries
in your summary. Your summary must show separate totals for:--