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Sales Tax Instructions

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Thanking you.<br />

Yours truly, Abdul Latif Malik), Chairman<br />

<strong>Sales</strong> <strong>Tax</strong> <strong>Instructions</strong>, 2009<br />

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C. NO.4(47)STB/98, VOL. DATED 27 TH MARCH, 1999<br />

SUBJECT:- PURCHASE OF TAXABLE GOODS FROM REGISTERED<br />

PERSONS AND AGAINST PRESCRIBED TAX INVOICES<br />

Reference Chief Ehtesab Commissioner‘s Secretariat U. O. Note No.1/1/98-<br />

General, dated 09.03.1999 on the subject cited above.<br />

2. After amendment in the <strong>Sales</strong> <strong>Tax</strong> Act, 1990, through the provisions of<br />

the Finance Act, 1998, effective 01.07.1998, all the Government departments, DFI‘s<br />

autonomous bodies, banks, semi-government departments etc. were obliged to purchase<br />

taxable goods from registered persons and against sales tax invoices on the one hand and<br />

all the suppliers were required to be registered under the Act, on the other hand even<br />

prior to 01.07.1998, Finance Division had issued two Circulars (copies enclosed)<br />

No.F.4(11)/98-Coord. dated 18.04.1998 and No.5(1)TR-1/96, dated 21.05.1998 advising<br />

Government Departments to purchase tax paid goods only in view of the Cabinet<br />

decision dated 23.08.1997.<br />

3. Since presently all taxable goods (except non-agricultural insecticides<br />

and pesticides which were made taxable in the budget 1998-99) were also taxable prior to<br />

01.07.1998, it is presumed that their quoted/tender prices were inclusive of sales tax<br />

(imported or local in both cases). Section 64-A of the Sale of Goods Act, 1951 comes<br />

into play when sales tax is levied on some goods after a contract for buying/selling has<br />

been signed.<br />

4. For resolving such past issues, CBR has also written letters to the<br />

Auditors General of Pakistan, MAG, AGPR and AG offices (copy of C.No.4/47-STB/98,<br />

dated 13.3.1999 is enclosed for ready reference).<br />

5. Replies to your other queries are as under:-<br />

(i) Under section 3(3)(a) of the <strong>Sales</strong> <strong>Tax</strong> Act, 1990 the suppliers is liable to<br />

pay (in the Treasury) the sales tax due. However, sales tax being an<br />

indirect tax, its incidence is passed on by the registered supplier to the<br />

buyer by separately showing in the prescribed invoice as required under<br />

clause (f) and (ff) of section 23(i) of the Act.<br />

(ii) Firms offering quotations or tender prices can quote the prices inclusive<br />

of <strong>Sales</strong> <strong>Tax</strong>, or exclusive of <strong>Sales</strong> <strong>Tax</strong>, but on the tax invoices, value<br />

and sales tax amounts have to be written/shown separately as required<br />

under section 23 of the <strong>Sales</strong> <strong>Tax</strong> Act, 1990;<br />

(iii) Reply as in para (ii) above.<br />

[Issued by the CBR, Islamabad, under the signature of Mr.Muhammad Tahir, Secretary<br />

(STP), addressed to Mr. Muhammad Tufail, Director (Admn.), Chief Ehtesab Commissioner‘s<br />

Secretariat, Islamabad.]<br />

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