Sales Tax Instructions

(iv)
Sales Tax Instructions, 2009
Is the difference between the prices form the time of supply by the
manufacturer to the distributor and then by retailer to the consumer not to be
accounted for as value addition separately at the levels of distributor and
retailers?
2. In case of input tax adjustment on empty bottles, DRRA Lahore and
Karachi had raised certain objections in different Collectorates. The issue needs to be
evaluated in the light of these objections and the final outcome.
3. The Collectors are requested to examine the issues raised in para 1 and 2
above and send their detailed comments and report to the Board at an early date.
4. It is however confirmed that input tax adjustment is not admissible on
marketing material (in this case refrigeration‘s) as already clarified by the Board vide
letter C. No.2(5)-STP/99, dated 27 th March, 2000 (copy enclosed).
[Issued by the C. B. R., Islamabad, under the signature of Mr. Abdul Razzaq, Secretary
(STP), addressed to the Collector of ST&CE, Peshawar, Rawalpindi, Gujranwala, Karachi (East),
Lahore; the Collector of Customs, ST &CE, Multan, Hyderabad, Quetta; the Collector of Sales
Tax, Faisalabad & copy to Collector of Sales Tax & Central Excise (West Karachi.] Copy of letter
C. No.1(6)-Collector/STW/CBR /2000, dated 10.05.2000 is reproduced below:-
C.NO.1(16)-OLLECTOR/STW/CBR/2000 DATED 10 TH MAY, 2000
SUBJECT:
EVASION OF SALES TAX AND CENTRAL EXCISE DUTY BY BEVERAGE
MANUFACTURERS
It is to report that a survey was conducted by this Collectorate for ascertaining the actual
retail prices in the local market and it was found that the prices being actually charged by the
dealers-cum-retailers are 20 to 25% higher than the retail prices declared and printed by the
manufacturers of aerated beverages. A meeting of local manufacturers of aerated beverages was
therefore called on 01.05.2000 in the chamber of the undersigned and the following issues were
discussed:
(i) The retail prices declared and printed by beverage manufacturers are much less than the
prices actually being charged by the retailers. The manufacturers admitted that the prices charged
by the retailers are higher than the printed prices but they maintained that the retailer prices
actually charged varied from retailer to retailer and area-to-area. They also claimed that they
have no control on the retailers and therefore cannot ensure that the aerated beverages are sold
at the printed prices on crown corks. They also contended that the example of cigarettes being
sold at the printed retail price all over the country cannot be applied in the case of aerated
beverages because of tough competition among the beverage manufacturers. The representatives
of M/s. Coca Cola also showed their inability to agree to a retail price near to the actually being
charged by the retailer in Karachi on the ground that their Corporation has network on all
Pakistan basis and prices cannot be fixed /agreed by manufacturers of Coca Cola beverages of
Karachi.
(ii) The representatives of beverage manufacturers were also informed that this Collectorate
has received a credible information that no sales tax was being paid on the sale of refrigerators
and empty bottles to their retailers/buyers of beverages. The representatives accepted that no
output tax was being recorded in their documents and paid to the treasury. They however
contended that the imported refrigerators were being used by the dealers/retailers on their behalf