Sales Tax Instructions

Karachi.
SUB:
Sales Tax Instructions, 2009
SALES TAX REGISTRATION
Please refer our delegation meeting with you on 20 th June, 1998 regarding the subject
cited above. After long and detailed discussion, referring documents and consulting higher
authorities, you, very kindly declared the petroleum dealers exempted from registration of Sales
tax.
Now Shell Pakistan Ltd. Insisting and compelling its dealers for registration, failing
which 1% will be deducted by the Oil CO. itself.
It is pertinent to bring to your kind knowledge in this regard that we, (the petroleum
dealers are already exempted from Turnover tax vide S. R. O. No.622 (enclosed for ready
reference). Moreover, the petroleum dealers are merely commission agents and most of our
turnover (approx 99%) consist on petrol and diesel, which does not fall under the Sales Tax net.
Only lubricants sold through petrol pumps fall under Sales Tax, which is less than 1% of the
entire turnover and would be below the limit of Rs. 5 million annual turnover. Further, the dealers
can‘t. buy products from anywhere except the Oil Marketing Cos. so each dealer‘s turnover can
be verified from the Oil Cos. too. Moreover, it is not practicable and possible to keep record of
thousands of cash memos issued from petrol pumps.
We, therefore earnestly request you, keeping in view the above facts, kindly issue
Notification exempting the petroleum dealers from Sales Tax Registration. Thanks a lot.
Yours sincerely,
(Abdul Sami Khan)
********
C. NO. 3(72) STP/97 DATED 8 TH SEPTEMBER, 1998
SUBJECT:- PAYMENT OF SALES TAX BY GOVERNMENT
DEPARTMENTS, PRIVILEGED AGENCIES AND PRIVILEGED
PERSONNEL.
I am directed to refer to your letter No. Nil dated 29 th August, 1998, on the above
subject and to say that the provisions of the Finance Act, 1998, read with Sales Tax Act,
1990, are very clear and do not require any instructions from any authority for the
implementation of the legislated provisions of the Finance Act, 1990. Effective 1 st July,
1998, taxable supplies to all persons (including Government Departments/Defense
Departments/Autonomous Corporations) authorized to make deduction of advance tax
under section 50(4) of the Income Tax Ordinace,.1979, can be made by only such persons
who are registered under the Sales Tax Act, 1990, and that too against prescribed tax
invoices only. No separate funds are provided in the budget for payment of sales tax on
the purchase of taxable goods as such purchases ought to be of the tax-paid goods only.
2. As regard Diplomat and Diplomatic Missions, the exemption under S.
No. 40 of the sixth schedule to the Sales Tax Act, 1990 and under the Diplomatic and
Consular Privileges Act, 1972, can be claimed by them subject to observance of the
prescribed procedure and issuance of the Exemption Certificate by the Ministry of
Foreign Affairs under section 4 of the said 1972-Act. However, in such cases too, the
sales taxable goods shall be supplied by a person registered under the Sales Tax Act,
1990, against an exempted tax invoice in the prescribed form.