Sales Tax Instructions

Sales Tax Instructions, 2009
I am directed to refer your letter No Tax /25/281, dated 16 th July, 1998 on the
above subject and to say that all wholesalers, dealers, commission agents, etc., making
taxable supplies, are required to be registered under the Sales Tax Act, 1990, and should
pay sales tax on supply of taxable goods. Similarly, retailers with a total annual turnover
exceedingly Rs. 5 million are also required to be registered and pay sales tax accordingly.
Further, in terms of the proviso to section 3(1A) of the Act, the one per cent further tax is
chargeable if taxable supplies are made to non-registered persons except: --
(i)
(ii)
when supplies are made by a person registered as a retailer; or
by a registered person to a person whose income is not liable to income
tax under the income tax laws.
2. In view of the above, all petroleum dealers, if also dealing in sales
taxable goods may be advised to get themselves registered and pay sales tax on their
taxable supplies. In any case, there will be no tax on most of their petroleum products
(except the taxable lubricants, greases, etc.) which are otherwise exempt from sales tax
under Sixth Schedule to the Act.
3. Notification No. SRO 622(I)/94 dated 23 rd June, 1994 relates to income
tax and does not apply to matters relating to the Sales Tax Act, 1990.
[Issued by the C.B.R., Islamabad, under the signature of Mr. Muhammad Tahir,
Secretary (STP), addressed to the President, Karachi Chamber of Commerce & Industry, Karachi
with there letter No. Tax/25/281 dated 16 th July, 1998 and letter No. Nil, dated 13 th June 1998 are
reproduced below:-
LETTER NO.TAX/25/281, DATED 16 TH AUGUST, 1998
The Collector,
Collectorate of Sales Tax (West) Karachi,
Karachi.
SUB: SALES TAX REGISTRATION
Please find enclosed herewith a copy of letter dated 13 th July, 1998 of Pakistan
Petroleum Dealers Association on the above subject, addressed to Mr.Muhammad Saleem, Asst.
Collector of Sales Tax (West), and a copy also enclosed to us.
In this respect I wish to state that the Petroleum Dealers are already exempted vide SRO
622(I)/94, dated 23 rd June, 1994.
Moreover, Petroleum Dealers are normally commission agents and most (99%) of their
turnover consist on sale from Petrol and Diesel, which do not fall under the sales tax net. Only
Lubricants sold through Petrol Pump fall under the sales tax, which is less than 1% of the entire
turnover and would be below the limit of Rs.5 million annual turnover.
In view of this and other cogent reasons given in the above referred letter, the Chamber
forwards it to your good-self to kindly issue a Notification exempting the Petroleum Dealers from
the sales tax registration.
Thanking you,
Yours faithfully,
(Mohammad Hanif Janoo)
********
LETTER NO.NIL, DATED 13 TH JULY, 1998
Mr. Muhammad Saleem,
Asstt. Collector of Sales Tax (West),