Sales Tax Instructions

Sales Tax Instructions, 2009
Nooriabad spinning unit to shahkot weaving unit for the manufacture of fabrics. The taxable
goods i.e. fabrics produced at the Shahkot weaving unit from the aforesaid yarn, were taxable
goods i.e., on payment of sales tax on local supplies and as zero-rated on export. No tax invoice
was issued nor any sales tax charged by the Nooriabad spinning unit at the time of the transfer of
yarn. Consequently, the shahkot weaving unit also did not claim any input tax on aforesaid
transfer of yarn. However, on the basis of an internal Audit report Additional Collector.
Collectorate of Sales Tax (East), Karachi, made out and adjudicated a case demanding payment
of sales tax and additional tax on the aforesaid transfer of yarn being in a taxable supply. The
audit team and the adjudicating officer, apparently, took the aforementioned action on account of
separate branch registration by the registered person.
3. Suraj Cotton Mills Limited, the registered person, contends that the transfer in question
is not a taxable activity in the meaning of clause (35) of section 2 of the Act, nor does it constitute
to be a taxable supply in the meaning of clause (33) and (41) ibid. A copy each of the written
arguments on a behalf of the registered person and the impugned order in original No. 20 of 1997
passed by the Additional Collector, Sales Tax (East), Karachi is enclosed for ready reference. In
my opinion the plea of the appellants is in order. However, it is felt that since the case involves a
policy issue in respect of the registration of branches etc., a policy clarification from the Board
appears to be necessary. An early communication in this regard would be highly appreciated.
[Issued by the Collectorate of Customs, Central Excise & Sales Tax (Appeals), Custom
House, Karachi, under the signature of Mrs. Musrrat Jabeen, Collector (Appeals), South Zone.]
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C. NO. 2(19)(STM)/98 DATED 7 TH DECEMBER, 1998
SUBJECT:-
NOTIFICATION NO SRO 826(I)/98, DATED 21.07.1998 ISSUED
UNDER SECTION 60 OF THE SALES TAX ACT, 1990.
I am directed to say that Notification No. SRO 826(I)/98, dated 21.07.1998
issued under section 60 of the Sales Tax Act, 1990, is under review by the Federal
Government. Accordingly, it is directed that no new ―Special Certificate of Registration‖
be issued under the said Notification SRO 826(I)/98 without obtaining specific
permission from the Central Board of Revenue.
2. The Special Certificates of Registration, already issued under SRO
826(I)/98 but surrendered by the parties, may be cancelled as surrendered and audit be
conducted to determine if there remains any dues to be recovered from the party (so
surrendering the certificates) on account of tax-free goods received by them but not
exported.
3. The Board understands that the following are the figures of special
Registration under SRO 826(I)/98: --
S.
No.
Collectorate
No. of
applications
received for
registration
No. of Special
Certificates of
registration
issued
No. of Special
Certificates of
Registration
surrendered
No. of valid
special
Registrations
as of today
(1) (2) (3) (4) (5) (6)
1. Hyderabad 1 Nil Nil Nil
2. Rawalpindi 1 Nil Nil Nil