Sales Tax Instructions

Sales Tax Instructions, 2009
[Issued by the CBR, Islamabad, under the signature of Mr. Ahad Nawaz, Secretary
(STP), addressed to the Collector of Sales Tax, Lahore/Karachi (East/West).]
Copy of letter U. O. No.1(1)/M(J)/97 dated 19.1.1997 is reproduced below:-
U. NO.1(1)/M(J)/97 DATED 19 TH JANUARY, 1997
SUBJECT:
QUASI JUDICIAL PROCEDURES INVOLVING EXEMPTION FROM
TAX
It has been observed that a large number of cases coming before adjudicating/appellate
authorities involve claim of exemption from tax. However, the law as interpreted by the
Honourable Supreme Court of Pakistan is not well known to the quasi judicial officers.
2. The observation of the Honorable Supreme Court of Pakistan in Messer Bisvil
Spinners Ltd. Versus Superintendent, Central Excise & Land Customs Circle, Shiekupura and
another (PLD 1988 SC 370) are instructive may usefully to be reproduced below:-
―As a general rule grants of tax exemptions are given a rigid interpretation against the
assertion of the taxpayer and in favour of the taxing power. The basis for rules of a strict
construction of positive revenue laws the burdens of taxation should be distributed
equally and fairly among the members of the society.‖
3. The Honourable Supreme Court of Pakistan M/s. Army Welfare Sugar Mills Ltd.
and others versus Federation of Pakistan and others, held, ―there are two basic principles of
construing a provision of a statute involving exemption from payment of a tax, namely the first
rule is that the burden of proof is on the person who claims exemption. The second rule is that a
provision relating to grant of exemption is to be construed strictly against the person asserting
and in favour of taxing officer.‖
(Dr. M. M. Younas),
Member (Judicial-Customs).]
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C. NO.1(8)STM/96 DATED 25 TH FEBRUARY, 1997
SUBJECT:- RECOVERY OF ARREARS OF SALES TAX
I am directed to refer to CBR‘s letter of even number dated 28 th October, 1996 on
the subject cited above and to advise you as follows:-
(i)
(ii)
A crucial crash programme should be launched in the coming months to
maximize recovery of sales tax arrears, pressing the private importers
and factory owners through embargo on clearances.
As regards court case, each case should be individually scrutinized by the
Collectorate to see whether stays have constitutionally expired and
whether out of court settlement can be made. Encashment of bank
guarantees/surety instruments should be made in cases whether stays