Sales Tax Instructions

Sales Tax Instructions, 2009
C. NO.1/560STT/98 DATED 4 TH MAY, 2000
SUBJECT:-
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EXEMPTION OF SALES TAX ON IMPORTERS OF CKD KITS
OF TRACTORS
I am directed to your letter No.MDPT/DGAR/149/99/1638, dated 20.03.2000
and to state that in terms of Sr. No.40 of the Sixth Schedule to the Sales Tax Act, supply
of tractors, bulldozers and combined harvesters (for agricultural purposes) and ―CKD kits
thereof‖ imported by recognized local manufacturers as per their approved deletion
programme, are exempt from sales tax. It means that only CKD kits of tractors,
bulldozers and combined harvesters, which are in accordance with the approved deletion
programme are covered for exemption. This automatically excludes the individual
components/parts from availing the benefit of Sr. No.49 of the Sixth Schedule.
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[Issued by the C. B. R., Islamabad, under the signature of Mr. Nisar Muhammad,
Secretary (STT), addressed to the Collector of Customs, Sales Tax & C.E., L.M.Q. Road, Multan,
with reference to his letter No.MDPT/DGAR/149/99/1638, dated 20.03.2000. Copy of letter is
reproduced below:-
C. NO.MDPT/DGAR/149/99/1638 DATED 20 TH MARCH, 2000
SUBJECT: EXEMPTION OF SALES TAX ON IMPORTERS OF CKD KITS OF TRACTORS
Kindly refer to the above cited subject.
2. It is submitted that under SRO 502(I)/94, dated 09.06.1994, the components imported for
the manufacturer of Tractors are exempt from customs duties leviable under the First Schedule to
the Customs Act, 1969. Sales Tax is exempt under serial No.49 of the Sixth Schedule to the Sales
Tax Act, 1990, as under:-
Serial No.49
Supply of tractors, bulldozers and combined harvester for agricultural purpose and CKD kits
thereof imported by recognized local manufacturers as per their approved deletion program
subject to the same conditions as are envisaged for the purpose of exemption under the Customs
Act.
84.29, 8433.5100, 8701.9019 and 8701.9012
3. M/s. Al-Ghazi Tractors (Pvt.)Ltd. are recognized manufacturers / assemblers of Fiat
Tractors. They import components for manufacturing/assembling of tractors as per their deletion
programme. These components are imported generally in the form of CKD kits but M/s. Al-Ghazi
Tractors Limited also import some individual components like cam shoft, differentials, different
kinds of gears etc. from other manufacturers as well. This Collectorate extends exemption of sales
tax under serial No.49 of the Sixth Schedule to the Sales Tax Act, 1990 on these components/parts,
which are constituent parts of CKD kits. The contention of the importer is that CKD kits are
imported in parts from various foreign supplies because of the fact that these suppliers are located
in more than one country.
4. The audit however, raised the objection to the exemption of Sales Tax under the Sixth
Schedule of the Sales Tax Act, 1990 on these individual components on the plea that subject goods
are parts of tractors and are not CKD kits. The Collectorate is of the opinion that the imported
goods are individual components / parts which are used in the manufacturing/assembling of
tractors as per deletion programme. Hence these are covered under the Sixth Schedule to the
Sales Tax Act, 1990/