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021025
GOVERNMENT OF PAKISTAN REVENUE DIVISION CENTRAL BOARD OF REVENUE
Sales Tax Ruling/ Instruction No. 65/2002
(SALES TAX WING)
C. No.3(62)STP/97(Pt-I)(Vol-V)
Islamabad, the 25th October,2002.
To:
The Collectors,
Sales Tax & Central Excise,
Peshawar, Lahore, Rawalpindi, Gujranwala,
(East) Karachi, (West) Karachi,.
The Collector,
Customs, Sales Tax & Central Excise,
Hyderabad, Multan, Quetta.
The Collector,
Collectorate of Sales Tax,
Faisalabad.
Subject:
CLARIFICATION REGARDING LEVY OF FURTHER TAX UNDER SECTION 3(13 A) OF THE SALES TAX ACT, 1990 ON SUPPLIES MADE TO BANKS.
I am directed to refer
to the subject noted above and to say that a question has arisen as to whether
future tax under section 3(1A) of the Sales Tax Act, 1990 is chargeable on
taxable supplies made by a registered person to a person who is not taxable to
obtain registration under the Sales Tax Act, 1990; being not involved in taxable
activities. The matter was referred to Law & Justice Division for their views
and advice. The advice received is reproduced below: -
“The question for determination by this Division referred by the CBR is as to
whether or not supplies made to the persons who are not required to be
registered under Sales Tax Act, 1990 by virtue of exemption of sales tax or of
being involved in non-taxable activities are chargeable to further tax @ 3%
under sub-section (1A) of section 3 of the said Act.
Under section 3(1A) of the said Act, taxable supplies made in Pakistan to a
person other than a registered person are, subject to exceptions contained
therein, chargeable with further tax. A person who is not required to be
registered is essentially a person who are not required to be registered will be
chargeable with further tax @ 3% under section 3 sub-section (1A) of the Sales
Tax Act, 1990 subject to exception contained therein”.
2. In the light of above advice, the Board has concluded that the ruling already
issued by the Board vide C. No. 1(33) STP/93(Vol-II), dated 04-07-1998 and of
even number 01-08-1998 (copies enclosed) is not sustainable under the Sales Tax
Law. The Board is, therefore, pleased to withdraw the said ruling with immediate
effect. Henceforth, all supplies, except retailers, will charge and pay further
tax on taxable supplies made to the consumers from general public or to
persons/organizations.
(ABDUL RASHID SHEIKH)
Secretary (ST-L&P)
GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE
C. No. 1(33) STP/93
Islamabad, the 4th July, 1998.
To :
A.F. Ferguson & Co.,
Chartered Accountants,
Stated Life Building 1-C, Off. I.I. Chundrigar Road,
KARACHI. Fax: 021-242-7938
2. M/s Firhaj Footwear (Pvt) Ltd,
6-K, main Boulevard, Gulberg – II
LAHORE. Fax : 042-527-0147
SUBJECT:
LEVY OF FATHER TAX ON ONE PERCENT ON SALES MADE BY MANUFACTURERS DIRECTLY TO THE CONSUMERS.
I am directed to refer
to M/s. A.F. Ferguson & Company’s letter No. DST 070 dated 30.06.1998 and M/s.
Firhaj Footwear’s letter No. FFI/Jul-1-15/360/98 dated 01.07.1998 on the above
subject and to say that a manufacturer-cum-retailer has the option either to
retain his single registration or to get his retail business registered
separately. In the later case, his retail business will be governed by Retail
Tax Rules, 1998.
2. However, if he has one single registration for all his operations including
manufacture and retail, he shall be required to submit monthly returns. He may
make direct sales to the ordinary consumer without charging 1% further tax
provided that: -
(i) the sales is genuinely made to ordinary consumer for his final consumption
and is not in bulk/wholesale quantities;
(ii) the sales price on which 12.5% tax is levied, is genuinely the consumers
price which the general body of retail traders charge from the general body of
consumers.
3. Cases not covered by the aforesaid provisos and also the sales made to
non-registered wholesalers, stockists, distributors, dealers and retailers shall
be charged to 1% further tax.
(AKHTAR ALI)
SECRETARY (STP)
GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE
(SALES TAX WING)
C. No. 1(33) STP/93-Vol.II
Islamabad, the 1st August, 1998.
To :
The Collectorate of Sales Tax,
Customs House, Nabha Road,
LAHORE.
SUBJECT:
LEVY OF FURTHER TAX ON ONE PERCENT ON SALES MADE BY MANUFACTURERS DIRECTLY TO THE CONSUMERS.
I am directed to refer
to Collectorate of Sales Tax, Lahore’s letter No.IV(2)ST/53/98/300, dated 14th
July, 1998 on the above subject and to say that no restrictions can be imposed
on a manufacturer selling his goods to ordinary consumers, occasionally or on
regular even if he sells some of his produce to some of the consumers. That is
why he has been required to submit sales tax return on monthly basis under all
circumstances. He is to be treaded as a manufacturer and not as a retailer, for
all practical purposes, notwithstanding his act of sales to a few consumers
directly of the goods at consumer’s retail price and not in wholesale/commercial
quantities.
2. Since no bar can be placed on a manufacturer to sell his goods t wholesalers
only, it has been laid down in Board’s letter of even number dated 4th July,
1998 that 1% further tax shall not be charged subject to the two conditions,
namely :-
(i) the sales tax genuinely made to ordinary consumer for his final consumption
and is not bulk/wholesale quantities; and
(ii) the sales price on which 12.5% tax is levied, is genuinely the consumers
price which the general body of retail traders charge from the general body of
consumers.
3. It has further been laid down in the said letter that the cases not covered
by the aforesaid provisos and also the sales made to non-registered wholesalers,
dealers, distributors and retailers shall be charged to 1% further tax.
View-point of the Collectorate is, therefore, not confirmed in this regard.
(AKHTAR ALI)
Secretary (STP)
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