Sales Tax Instructions

Sales Tax Instructions, 2009
merely a ‗disguised security‘ against a lease contract, such transactions essentially fall in
the category of ―financial services‖ which do not attract sales tax.
4. It is therefore, clarified that sales tax is not chargeable on such
transactions.
[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.]
********
C.No.1(33)STP/93 DATED 26 TH FEBRUARY, 2001
SUBJECT:- NON-COMPOUNDING OF ADDITIONAL TAX UNDER
SECTION 34 – CLARIFICATION REGARDING.
I am directed to refer to section 7 of Sales Tax (Amendment) Ordinance, 2001
(VII of 2001) where under an explanation has been added to section 34 of the Sales Tax
Act, 1990 to the effect that for the purpose of the said section ―tax due‖ does not include
the amount of penalty. It may be re-called that in the Finance Ordinance, 2000 not only
the rate of additional tax was reduced from 5% to 1.5% of the tax due per month or any
part thereof but also the rate was made simple (non-compound) by omitting the then
existing explanation which included additional tax in the expression ―tax due‖ for the
purpose of section 34.
2. With the insertion of new explanation in section34 vide section 7 of the
Sales Tax (Amendment) Ordinance, 2001, an apprehension has been expressed by some
quarters that this new explanation may not mislead the Sales Tax staff to work out the
amount of additional tax again on compound basis.
3. The issue has been examined in the Board and it is observed that under
section 2(34) only the expression ―tax‖ has been defined, while expression ―tax due‖ has
not been defined anywhere in the Sales Tax Act, 1990. The expression ―tax due‖ read
with sections 11(2) and 26(1) shows that the expression ―tax due‖ means the amount of