Sales Tax Instructions

Sales Tax Instructions, 2009
I am directed to refer to Federal Government‘s Notification No.S.R.O.
389(I)/2001, dated 18 th June, 2001 and to say that a question has raised as to whether
supplies of goods specified in the said notification which are chargeable @ 20% also
attract further tax in terms of section 3(1A) of the Sales Tax Act, 1990 if supplied to unregistered/non-enrolled
persons.
2. It is clarified that clause (b) of sub-section (2) of section 3 of the Sales
Tax Act, 1990 only empowers the Federal Government to alter the rate(s) of tax on
taxable goods and is not a charging provision by itself. The rates of tax are primarily
prescribed under sub-sections (1), (2)(a), (4) and (5) of section 3 besides the rate of
further tax given in section 3(1A). The Federal Government, in exercise of the powers
under section 3(2)(b) can change the rate(s) of tax prescribed under any of the
aforementioned sub-sections.
3. Under SRO.389(I)/2001, dated 18 th June, 2001 the Federal Government
has increased the rate of tax to 20% from the 15% chargeable under section 3(1) on items
specified therein. This change of rate does not change the charging provision nor it
affects the nature of the tax. Therefore, further tax shall continue to be attracted in terms
of section 3(1A) in case of supplies made to un-registered and non-enrolled persons
subject to the exceptions given therein, irrespective of the change of rate of tax by the
Federal Government.
[Issued by the CBR, Islamabad under the signature of Dr. Ashfaq Ahmed Tunio,
Secretary (ST L&P) addressed to all the Collectors of Sales Tax of Customs/Sales Tax. Copy
endorsed to DG Intelligence & Investigation, Islamabad/DG Inspection & Internal Audit,
Karachi/DG Training & Research, Islamabad/all the Collectors of Adjudication.]