Sales Tax Instructions

Sales Tax Instructions, 2009
Pakistan at para 5 of the judgment, while converting petitions into appeals has
categorically accepted the appeals to the extent of 1% further tax imposed in 1998.
2. In view of the position detailed above, it is once again requested that the
subject PDP may please be settled under intimation to CBR and Multan Collectorate.
[Issued by the C.B.R., Islamabad, under the signature of Mr.Muhammad Nazim Saleem,
Secretary (ST-AUDIT),addressed to Mr.Ali Hussain Shah, Dy. Director, office of the Director
General, Audit revenue Receipts, PTA& Audit Building, Mauj-e-Darya Road, Lahore.]
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C.No.3(19)STP/2000 DATED 27 TH FEBRUARY, 2001
SUBJECT:-
WITHHOLDING TAX ON COMMERCIAL & INDUSTRIAL GAS
CONSUMERS UNDER SECTION 50(7G).
I am directed to refer to your letter No.ST/Reg/Value Gas/6/2000 dated 22 nd July,
2000 on the subject cited above and to say that the question whether withholding tax
charged from consumers in the natural gas bills is to be included in the value of supply
for the purpose of levy of sales tax on such gas was considered in the Board (Sales Tax
Wing) in consultation with the Income Tax Wing and the Law & Justice Division. The
Law & Justice Division and Income Tax Wing agree that since withholding tax is merely
a mode of partial advance recovery of income tax from an assessee and not the value of
supply of gas, therefore, the component of withholding tax is not liable to sales tax as
provided in section 2(46) of the Sales Tax Act, 1990.
2. It is, therefore, concluded that legally, withholding tax is an advance
collection of income tax, charged from the consumers of natural gas. It is not levied on
the consumption of gas, and thus cannot be included in the value of supply of gas. Hence,
sales tax cannot be levied or collected on the said withholding tax charged on gas
consumption bills.
[Amended by Sales Tax Ruling/ Instructions No. 11/2003 dt. 12.05.2003]