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Sales Tax Instructions

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

Mr. Tahir Kamal<br />

Deputy Director<br />

********<br />

C. NO.3(2)STP/99, DATED 22 ND APRIL, 1999<br />

SUBJECT:-<br />

SALES TAX ON DELIVERY CHARGES ON GOODS SUPPLIED<br />

I am directed to refer to your letter No.KST-SL-2241, dated 05.03.1999 on the<br />

above subject and to say that value of supply has been defined under section 2(46), as<br />

under:-<br />

―Value of supply‖ means, in respect of a taxable supply, the consideration<br />

in money including all Federal and Provincial duties, if any, which the<br />

supplier receives from the recipient for that supply but excluding the<br />

amount of tax‖.<br />

2. The tax has to be assessed on the total amount charged for the supply<br />

(including all duties etc. but excluding the amount of sales tax). The consideration in<br />

money is for the taxable supply and not for the bare taxable goods. Therefore, all charges,<br />

received for the supply of taxable goods, from part of the ―value of supply‖.<br />

3. In case, the supplies are sold / delivered at buyers premises, the total<br />

consideration in money charged (including delivery charges) will be included in the<br />

―value of supply‖ for assessment of the tax.<br />

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

(STP), addressed to M/s. Taseer Hadi Khalid & Co., Beaumont Road, Karachi, with their letter<br />

No.KST-SL-2241, dated 5 th March, 1999.] Copy of letter is reproduced below:-<br />

C. NO.KST-SL-2241, DATED 5 TH MARCH, 1999<br />

Mr. Muhammad Tahir,Secretary (STP),<br />

Central Board of Revenue,<br />

Islamabad.<br />

SUBJECT:<br />

SALES TAX DELIVERY CHARGES ON GOODS SUPPLIED<br />

The purpose of writing this letter is to seek your guidance on the issue of applicability of sales tax<br />

on the delivery charges paid by the purchaser to the seller. This matter was already discussed with<br />

you on phone however for the sake of clarity the clarification is being sought. The situation is as<br />

follows:-<br />

The goods/supplies sold are also delivered by the seller at the premises of buyers and the seller<br />

recovers the delivery charges from the buyer for these particular delivery services rendered by<br />

him. The amount billed for these delivery charges are shown on invoice separate from the value of<br />

goods.<br />

<strong>Sales</strong> tax is chargeable on the value of taxable supplies under section 3 of the <strong>Sales</strong> <strong>Tax</strong> Act, 1990.<br />

Sub-section 46 of section 2 of the <strong>Sales</strong> <strong>Tax</strong> Act, 1990 defines the value of supply which is<br />

reproduced for a ready reference:<br />

―Value of supply‖ means, in respect of a taxable supply, the consideration in money including all<br />

Federal and Provincial duties, if any, which the supplier receives from the recipient for that<br />

supply but excluding the amount of tax‖.

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