Sales Tax Instructions

Sales Tax Instructions, 2009
their purchases or at the time of import. Similarly, retailers with an annual turnover
exceeding Rs.5 million are required to register themselves and pay sales tax accordingly.
2. With reference to your queries raised in the letter under reference,
following is pointed out: --
(i)
(ii)
(iii)
There is no need for a separate definition of commercial importer. All
importers, except those dealing exclusively in exempt goods e.g. medicine,
fertilizers, pesticides etc. are required to register and pay sales tax not only at
the import stage and also at the next stage of supply of these goods in the
local market, whether to wholesalers or retailers. Therefore, as already
pointed out, deduction of input tax is available.
Commercial importers, after import, are supplying their goods either to
wholesalers, dealers, and commission agents or to retailers. In certain cases,
such importers may also be involved in retail supplies to general consumers.
In all such cases, their supplies are taxable supplies.
The terms like ―General Sales Tax‖ and ―Value Added Tax‖, being used in
the country, in fact refer only to the sales tax leviable under Sales Tax Act,
1990. These two terms as such do not appear in the Act. It is only the sales
tax, which has been imposed in a VAT-mode and is being charged.
Any other query may be addressed to the Taxpayers Information Centers
established in each Collectorate of Sales tax in Pakistan.
[Issued by the C.B.R., Islamabad, under the signature of Mr. Muhammad Tahir,
Secretary (STP), addressed to M/s. Pakistan Automobile Spare Parts Importers & Dealers
Association, 52-General Bus Stand, Badami Bagh, Lahore with reference to their letter dated
16.07.98.] Copy of letter is reproduced below: --
DATED 16 TH JULY, 1998
Chief Sales Tax,
Central Board of Revenue, Islamabad.
SUBJECT: IMPOSITION OF GENERAL SALES TAX ON COMMERCIAL IMPORTERS.
This is in reference to SRO 1333(I)/97, dated 31-12-1997 and now SRO 583(I)/98 dated
12-6-1998 wherein Commercial Importers (Auto Parts, Bearing, Tyres) have been brought into
the purview of Section 3-AA of Sales Tax Act, 1990 read with Section 26-AA under and Retail Tax
Rules, 1998, wherein goods and persons have been specified who are required to pay this Tax. We
respectfully submit as under:-
(1) That we are commercial importers of Auto Parts, which do not require any
Manufacturing process and as such are not Taxable. Therefore, this is a separate
category of importers who cannot be treated at per with the importers of paper,
chemical or hardware where the goods in question are otherwise taxable.
(2) That under this scheme the Govt. requires the Commercial Importers (Auto Parts). To
opt for voluntary registration under section 18 if the Sales Tax Act, 1990 (optional)
under the provisions of this SRO the persons required to be enrolled for payment of
Retail Tax can exercise this option.
Our questions under this SRO relate to the imposition, data collection and finally
liability. Our first question is that under the Finance Act, 1996, 12.50% tax at source