Sales Tax Instructions

Sales Tax Instructions, 2009
The careful, and liberal study of the above para clearly indicates that the exemption of
sales tax is admissible to the following:-
(i) Plant and machinery imported by the manufacturers of taxable supply,
or
(ii) Plant and machinery supplied t the manufacturer of taxable goods.
It may be mentioned here as defined under section 2 of the Sales tax Act, 1990 ―taxable
supply‖ means a supply of taxable goods made in Pakistan by an importer, manufacturers,
wholesaler (including dealer), distributor inclusive of zero rate supply other than supply (goods)
exempted under section 13 of the Sales Tax Act, 1990. Formula for determination the scope of
taxable supply with the Customs House is to consider all the items (goods) except mentioned in
Schedule-VI to the Sales Tax Act.
Registered person means a person who is registered or is liable to the registered under
the Sales Tax Act, 1990.
Now the main dispute is with regard to the plant and machinery supplied to
manufacturers of taxable supply.
In the enclosed cases the importer / attorneys themselves are not involved in
manufacturing of goods in some cases some importers are interested to install their industry. It is
clear that these looms obviously shall be installed in any Textile Industry and fabric shall be made
which is taxable product as is evident that sale tax is charged at the import of fabric. As regard to
the registered person, in the cases where B/E has been filed directly in the name of importer, they
are registered with the Sales Tax Collectorate and for the B/E filed through attorney, the attorney
are registered. After having been registered the importers are liable to file return on monthly
basis. Further there has not been mentioned specifically in the SRO or Board‘s letter that the
importers other than manufacturers are not entitled for exemption of Sales Tax.
In addition to the above, it is added that we had a number of meeting with the Sales Tax
Collectorate for issuance of necessary clarification with regard to the correct implementation of
SRO 582(I)/98 and registration of importer who make imports under NRI Scheme. The Assistant
Collector, Sales Tax East have issued a letter No.11(3023)Reg. No./HQ/E/98, dated 17 th July,
1998 (copy attached) confirming that the machinery which is used in the manufacturing of taxable
supply, is not chargeable to Sale Tax regardless the importer is manufacturer or otherwise. We
have also discussed that mater with number of the importers and others but no one is able to give
a clear guidance.
In view of above explanation we need your guidance that a person imported textile
machinery which produce taxable goods / supplies under NRI Scheme who also himself registered
in Sale Tax can be eligible for benefit of SRO. 582(I)/98, dated 12 th June, 1998.
Yours faithfully,
for M/s. Muhammad Iqbal & Co.]
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C.No.2(65)STP/95 DATED 5 TH SEPTEMBER, 1998
SUBJECT:-
CLARIFICATION OF LEVY OF SALES TAX UNDER FINANCE
ACT, 1998 IN GOODS MANUFACTURED IN NON-TAXABLE
AREA (MINGORA, SWAT) ON THEIR SALES IN TARIFF
AREA.
I am directed to refer to your letter No.MGC/CBR/003/PS/TCL/98, dated
23.07.1998 on the above subject and to say that the provisions of the Sales Tax Act,
1990, have not been extended to the areas included in FATA, PATA and Northern Areas
of Pakistan.