Sales Tax Instructions

(e)
Sales Tax Instructions, 2009
It is also important to mention here that M/s. Afghan Carpets have paid
Rs.135,933/- as sales tax under the above referred sales tax registration
number for the tax period of July, 2000 on 15.08.2000. However, they
have not so far applied, as per the record of this Collectorate, for
registration as retailer under turnover tax scheme.‖
3. After going through the facts of the case it is observed that M/s. Afghan
Carpets were registered with the Collectorate of Sales tax (East), Karachi on 26.12.1992
(Annex-II). The record obtained from Karachi (East), indicates that the said registered
person applied for registration by ticking his business as exporter and retailer [photocopy
of registration application is enclosed (Annex-III)]. This however, does not appear to be
correct as in the year 1992 sales tax had not been extended to retailers and registrations
were done only for the manufacturer. The Sales Tax computer database shows their status
as manufacturer. The supplies by the retailers and distributors were brought under sales
tax net through the Finance Act, 1997.
4. Notwithstanding the business category of the petitioner, tax history of the
firm indicates that they had never paid any tax during all this period [copy of their
computer profile is enclosed (Annex-IV)]. However, during July, 2000 they had filed
return for retailers and deposited Rs.135,933 on account of turnover tax, on the basis of
audit of record of the said registered person, the said Collectorate has determined local
sales amounting to Rs.114,738 million during the period 1998-99 and 1999-2000. The
demand of sales tax on the local supplies made by the petitioner appears to be correct.
Since supplies by the retailers and distributors are subjected to sales tax through Finance
Act, 1997 (effective from 1.7.1998), M/s. Afghan Carpets were required to pay sales tax
at standard rate on their local sales since their annual turnover exceeded Rs.5 million.
Even if the said registered person now wants to opt for turnover tax or enlistment tax that
will be applicable prospectively and they shall have to pay sales tax @15% on their
supplies made during 1998-99 and 1999-2000.
5. In view of the above facts demand raised by the Collector appears to be
lawful. It is, however, proposed that since the matter is sub-judice before Collector
Adjudication, the case may be allowed to be decided there on merit as after the decision
the petitioner will have further forums of appeal as prescribed in the Sales tax Act, 1990.
(STP).]
[Issued by the CBR Islamabad, under the signature of Mr. Abdul Razzaq, Secretary
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C. NO.3(62)STP/97(Pt-2) DATED 19 TH SEPTEMBER, 2000
SUBJECT:-
CHARGEABILITY OF SALES TAX ON WOOD, WOODEN
LOGS AND TIMBER ETC.
Under the provisions of Sales Tax Act, 1990, supply of wood, wooden, logs,
timber, wood dust and wood edges/pieces is chargeable to sales tax. It has however, come
to the notice of the Board that some suppliers are not charging sales tax on such supplies.
The Collectors are therefore, requested to ensure collection of sales tax on supplies of
wood and its products. Audit of all such units for the past three years may also be