Sales Tax Instructions

Sales Tax Instructions, 2009
SALES TAX CIRCULAR NO.2/1996 DATED 21ST NOVEMBER, 1996
SUBJECT:- LEVY OF SALES TAX ON BUSINESS OR NON-BUSINESS USE
OF GOODS PRODUCED IN THE COURSE OF BUSINESS.
The definition of ―supply‖ under section 2(33)(a) of the Sales Tax Act, 1990
provides that ―putting to private, business or non-business use of goods produced or
manufactured in the course of business‖ amounts to supply. The definition of ―taxable
supply‖ means a supply of taxable goods.
2. Some questions have raised about the tax liability on the in-house use of
cotton seed to produce oil cake and cotton seed oil and poultry feed to produce poultry
birds.
3. In each of these cases of in-house use , the definition of supply under
section 2(33)(a) is attracted. It is of no consequence that any cotton ginner-cum-oil
expeller did not make any sale of cotton seed but used it to produce cake and oil: or the
poultry feed was not sold but used in-house to produce poultry birds. In each case there
was a ―supply‖ of cotton seed and poultry feed as per the aforesaid definition. Also in
each case the goods used in-house for production or manufacture of exempt goods.
4. It is clarified that where in such situations, the goods to be produced are
not exempt from sales tax, no sales tax is payable except on the supply of final product.
5. The purpose of this Circular is to bring the correct position, which has
been always so, to the notice of all concerned.
[Issued by the CBR, Islamabad under the signature of Mr Ahad Nawaz, Secretary (STP),
vide C.No.3(59)STP/96. addressed to all the Collectors.]
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C. NO.2(77)STP/95 DATED 24 TH NOVEMBER, 1996
SUBJECT:- ISSUANCE OF REPLACEMENT INVOICES BY COMMERCIAL
IMPORTER ON IMPORTED STOCKS PRODUCED 90 DAYS
PRIOR TO REGISTRATION
I am directed to refer to your letter C. No.25(I)/Tech/East/96 dated 3 rd October,
1996 on the subject cited above and to say that commercial importers, distributors and
wholesalers who seek voluntary registration in terms of section 18 of the Sales Tax Act,
1990, will issue replacement invoice in respect of such taxed goods as are imported or
purchased by them (against Bill of Entry or Tax Invoice, as the case may be, in their own
items) after they are registered.