Sales Tax Instructions

Sales Tax Instructions, 2009
An issue has arisen whether vehicles sold by local automobile manufacturers to
leasing companies attract 1.5% further tax under section 3(1A) of the Sales Tax Act,
1990?
2. The matter has been considered and it is clarified that no sales tax is
leviable on ‗financial leases‘ as is evident from the definition of ―supply‖ under section
2(33) of the Sales Tax Act, 1990. It is however, being examined whether, in order to
implement the underlying spirit of this policy, there is any need for issue of a specific
notification or to make amendment in law.
3. In the meanwhile, Collectors are advised not to demand 1.5% further tax
on such transactions between automobile manufacturers and leasing companies nor ask
the leasing companies for registration under Sales Tax Act, 1990 on the plea and they are
engaged in making supplies of taxable goods.
[Issued by the CBR, Islamabad under the signature of Dr. Ashfaq Ahmad Tunio,
Secretary(ST L&P) addressed to DG Intelligence & Investigation, Islamabad/all the Collectors of
Sales Tax. Copy endorsed to SA to FM/PS to Secretary General Finance.]
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C. NO.4(47)STB/98-VOL.I DATED 10 TH FEBRUARY, 2001
SUBJECT:- VERIFICATION REGARDING DEPOSIT OF SALES TAX BY
FIRMS/ SUPPLIERS INTO GOVERNMENT TREASURY.
I am directed to refer to your letter dated 29.01.2001 on the subject cited above to
state that all Government departments and public sector organizations are required to
purchase taxable goods only from registered person against valid tax invoices and on
payment of sales tax. While only a sales tax invoices issued by the registered person may
be sufficient proof in case of established and recognized suppliers, in case of new
suppliers, a copy of Sales Tax Registration Certificate and latest sales tax return may be
demanded. In doubtful case, the documents may be referred to the Collectorate of Sales
Tax having jurisdiction over the registered person (supplier) for verification.
2. It is, therefore, clarified that invoices showing the element of sales tax
are necessary for all Government purchases of taxable goods, but the department
themselves are not bound to verify the deposit of sales tax in to the treasury except in
doubtful cases where they may refer the case to the concerned Collectorate for
verification.
[Issued by the C. B. R., Islamabad, under the signature of Dr. Ashfaq Ahmed Tunio,
Secretary (ST-L &P), addressed to Mr. Sakhawat Hussain, Budget Officer, Director General Inter
Services Intelligence, Islamabad & copy to all the collectors of Sales Tax & Central Excise &
Secretary (Sales Tax Education), CBR.].
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C. NO.5(10)/2001-ACE-III DATED 12 TH FEBRUARY, 2001