Sales Tax Instructions

Sales Tax Instructions, 2009
copy to Collector of Sales tax & Central Excise, Peshawar, Rawalpindi, Gujranwala,
(East)Karachi, (West) Karachi, Lahore, Quetta, Faisalabad, Multan.]
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C.No.1(26)STR/2000 DATED 11 TH JUNE, 2001
SUBJECT:- EXCISE DUTY ON SERVICES.
You are aware that Central Excise Duty has been leviable on telecommunication
services for several years. During the budget 2000-01, some changes were made in the
excise law to provide for the application of GST mode of collection on certain
‗communication services‘.
2. With the passage of time, the following questions have cropped up:-
(i)
(ii)
(iii)
Whether the amended provisions of section 3 of the Central Excises Act,
1944 only envisage that records are to be kept in sales tax mode and
monthly tax return is to be filed as per sales tax procedure, etc.
Whether the concept of input tax and output tax is to apply i.e. can the
providers of telecommunication services deduct from the central excise
duty charged by them to their customers, the sales tax paid as per
invoices under the Federal or Provincial legislations covering sales tax
on goods and services respectively?
Whether in case of those registered persons who hold ―invoices‖ issued
by providers of telecommunication services, the invoiced amount of
central excise duty can be treated as input tax adjustable against their
output tax liability?
3. The entire matter has been carefully examined by the Board in
consultation with legal experts. The following item-wise picture has emerged:-
(i) That the amendment made in section 3 of the Central Excises Act, 1944
in Budget 2000-01 has not altered the fact that the ―levy‖ on
‗telecommunication services‘ is of central excise duty and only the
methodology for accountal of this levy, its collection, invoicing, deposit,
etc., is to be as per sales tax procedures.
(ii) Resultantly, the providers of ‗telecommunication services‘ cannot deduct
from the central excise duty charged by them, the amounts of sales tax