Sales Tax Instructions

Sales Tax Instructions, 2009
2. The meetings commenced with recitations from Holy Quran. Issues of
steel melters were discussed in the first meeting. Mr. Masood Gul, Chairman, PSMA
stated that about 60% raw material (steel scrap) of steel melting industry is being
procured from open sources domestically without any tax invoices due to which reason
the steel melters have to manage untrue tax invoices from different channels such as
commercial importers and ship-breakers etc. He said that the steel melters are forced to
indulge in this illegal practice to get input adjustment and to make steel manufactured
from local scrap competitive. Mr. Masood Gul emphasized that this unlawful input tax
credit can be stopped only if steel scrap is exempted from sales tax at import stage. Mr.
Masood Gul pointed out that if this measure is taken, the melters will be able to
contribute a minimum amount of Rs. 700 million as sales tax on ―Ingots‖. Mr. Iftihar
Qutab, Additional Collector, Sales Tax (West), Karachi however, alternatively proposed
that input tax adjustments in case of steel melting industry may be prohibited by the
Federal Government in terms of Section 8(1)(b) of the Sales Tax Act, 1990. Mr. Masood
Gul requested that each Sales Tax Collectorate should nominate one Assistant/Deputy
Collector to exclusively deal with the problems of steel sector.
3. After detailed discussion on the issues relating to Steel Melters, the
following recommendations were agreed in the meeting for approval by CBR:
(i)
(ii)
(iii)
(iv)
Appropriate measures may be taken by CBR to curtail malpractice of
bogus/fake invoices arranged by steel melters in case of locally
purchased steel scrap.
Each of the Collectorates of Sales Tax (Lahore, Gujranwala, Karachi
(East) & (West) will exclusively depute on Assistant/Deputy Collector to
liaise with PSMA for solving problems faced by the steel sector.
PSMA will furnish month-wise and unit-wise details of electricity units
consumed and profile of units regarding WAPDA‘s reference with
complete address. The Additional Collectors of said Collectorates will
work out the tax liability of each unit on the basis of electricity
consumption (1330 units per MT effective from 25.10.1997) and convey
the same to the Association and the Association will ensure payment
thereof on or before 30.5.1998.
In the aforesaid cases, the adjudication orders will be passed in each case
by the competent sales tax officer. The concerned units will however, not
deposit additional tax and penalty if adjudged in the adjudication orders.
The amounts of additional tax and penalty will be considered to be
waived by the Board in case where principal sales tax is paid by the 30 th
May, 1998.
4. The Chairman PSRMA, Mian Nasir Jabran circulated a copy of the
Association‘s memorandum and issues stated therein were discussed in the meeting. The
following recommendations were agreed in the meeting for approval by CBR: