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030430

SALES TAX RULING/
INSTRUCTIONS NO. 10/2003

Government of Pakistan
Revenue Division
Central Board of Revenue
(Sales Tax Wing)
 

C.No.3/46-STB/99.                                                                                                         Islamabad, the 30th April, 2003.

To 

(1)     The Collectors,
            Collectorate of Customs, Sales Tax & 
            Central Excise,Hyderabad/Multan/Quetta.
  (2)      The Collectors,Collectorate of Sales Tax &
            Central Excise, (West/East)Karachi/Gujranwala/Lahore/
            Peshawar/Rawalpindi.
  (3)      The Collector,Collectorate of Sales Tax, 
             Faisalabad.
  (4)      The Collector,Large Tax Payers Units,
             PIC Towers, 32-A, Lalazar, 
             Karachi.

SUBJECT: ZERO RATED SUPPLY OF PETROLEUM PRODUCTS TO EXPORT PROCESSING ZONES.

        I am directed to refer to the above cited subject and to state that a question has arisen as to whether supply of POL products i.e. Furnace Oil, HSD, LDO, motor gasoline, lube oils, lubricants and greases to        Export Processing Zones (EPZ) are zero-rated in terms of Sr.No.5 of the Fifth Schedule to the Sales Tax Act, 1990.

2. The issue has been examined and the Board is of the opinion that supply of such POL products if consumed in the manufacture/production of goods is indeed zero-rated. However in case a part of such zero-rated supply is consumed for purposes other than manufacture of exportable goods i.e. consumption in office buildings/residential colonies, the quantity of HSD/Furnace Oil used in such non-zerorated activity will be determined using the following formula:-

Value of POL consumed in non-zerorated activity = Power consumed in non-zerorated activity

(in KWHR)Total Power Generated (in KWHR) X Total value of POL consumed in power generation


The amount of Sales Tax worked out @ 15% will be paid deposited by 15th of every month by the units located in EPZ, under Sales Tax head of account No. 0220000.

(Dr.Fareed Iqbal Qureshi)
Secretary (STB)
Tel#9219641

Copy for information and necessary action to:-

1. The Secretary, Ministry of Petroleum & Natural Resources, Government of Pakistan, Islamabad.
2. The Executive Director, MCC Resources Development Company (PVT) Limited, House No.19, Street         No. 20, F-7/2, Islamabad.
3. The General Manager(Investment Promotion), Export Processing Zones Authority, Landhi Industrial Area      Extension Mehran Highwary, P.O.Box 17011,Karachi - 75150.

(Dr.Fareed Iqbal Qureshi)
Secretary (STB)

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