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960822
GOVERNMENT OF PAKISTAN
CENTRAL BOARD OF REVENUE
NOTIFICATION
Islamabad, the 22nd August,1996.
SALES TAX
S.R.O.698(I)/96.- In exercise of the
powers conferred by section 50 of the Sales Tax Act,1990, read with
sub-section(2) of section 8 thereof, the Central Board of Revenue is pleased to
make the following rules, namely.-
1. Short title, application and commencement.- (1) These rules may be
called Apportionment of Input Tax Rules, 1996.
(2) These shall apply to the registered persons who make taxable and exempt
supplies simultaneously.
2. Definition.- For the purpose of these Rules,-
(a) "Act" means the Sales Tax Act,1990; and
(b) "residual input tax" means the amount of tax paid on raw materials,
components and capital goods being used for taxable as well as exempt supplies
but does not include the input tax paid on raw materials used wholly for making
taxable or exempt supplies.
3. Determination of input tax.- (1) Input tax paid on raw materials
relating wholly to the taxable supplies shall be admissible under the law.
(2) Input tax paid on raw materials relating wholly to exempt supplies shall not
be admissible.
(3) The amount of input tax incurred for making both exempt and taxable supplies
shall be apportioned according to the following formula:-
| Residual input tax credit on taxable supplies = | Value of
taxable supplies ___________________ Value of taxable + exempt supplies |
x Residual input tax |
(4) Monthly adjustment of input tax claimed by
a registered person under these rules shall be treated as provisional adjustment
and at the end of each financial year, the registered person shall make final
adjustment of the basis of taxable and exempt supplies made during the course
of that year.
(5) Any input tax adjustment claimed wrongfully on account of incorrect
application of formula spelled out in sub-rule (3) shall be punishable under the
respective provisions of law irrespective of the fact that the claim was
provisional
[C.No.1/43-STB/96]
( LUTFULLAH VIRK )
Secretary(Sales Tax)
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