Sales Tax Instructions

Sales Tax Instructions, 2009
―Provided further the buyers or importers of taxable plant and machinery who
intend to make taxable supplies in due course and wish to claim adjustment of tax paid on
the said plant and machinery shall also get themselves registered under this Act.‖
[Published vide Ex. Ord. Gaz. of Pak., 1996, Pt. I, P.313]
APPORTIONMENT OF INPUT TAX RULES, 1996
Notification No. S.R.O. 698(I)/96, dated 22 nd August, 1996. -- In exercise of the powers
conferred by section 50 of the Sales Tax Act, 1990, read with subsection (2) of
section 8 thereof, the Central Board of Revenue is pleased to make the following
rules, namely:-
1. Short tile, 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. Definitions. -- For the purpose of these Rules,--
(a)
(b)
―Act‖ means the Sales Tax Act, 1990; and
―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 dies 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 appropriated according to the following formula:-
Value of taxable supplies
Residual input tax credit on taxable supplies = ……………….……….. x Residual input tax
Value of taxable + exempt supplies
(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.