Sales Tax Instructions

Sales Tax Instructions, 2009
C.No.3(36)STP/99(Pt.II) DATED 28 TH DECEMBER, 2001
SUBJECT:-
IMPLICATION OF SECTION 73 OF THE SALES TAX ACT.
I am directed to refer to your letter C.No.IVA-ST(12)EST/04/2001/ 3457, dated
1 st December, 2001, on the subject cited above and to say that the various issues and
difficulties concerning section 73 of the Sales Tax Act, 1990 are under consideration of
the Board and appropriate action will be taken in due course.
2. However, the Board is pleased to clarify that if a banking instrument has
been issued within 120 days but encashed later, input tax should not be denied. Section
73 refers to ‖transfer of the payment in favour of the seller from the business account of
the buyer‖. The section does not require deposit of the tax in the account of the supplier
within 120 days. Thus, if a bank draft or a pay order is issued within 120 days from the
business account of the buyer in favour of the seller, input tax/refund will remain
available irrespective of the fact whether the amount was deposited. However, it must be
ensured that the amount is ultimately deposited in the seller‘s account, and the
cheque/bank draft/pay order is not cancelled.
3. These instructions may be circulated to all concerned.
[Withdrawn vide Sales Tax Ruling/Instruction No. 68/2002 dated 13.11.2002]
[Issued by the CBR, Islamabad under the signature of Dr. Ashfaq Ahmed Tunio,
Secretary (ST-L&P) addressed to the Collector of Sales Tax Lahore. Copy endorsed to all other
Collectors of Sales Tax.]
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