Sales Tax Instructions

Sales Tax Instructions, 2009
In this scenario, being a registered person the instant case would fall under section 49(2) of the
Sales Tax Act, 1990. The apparent interpretation of words ―sales tax chargeable on taxable goods
or part thereof shall be accounted for and paid by the registered person‖ used in sub-section (2) is
that sales tax chargeable on purchase of plant and machinery shall be accounted for by the buyer
and will be paid by him if the said plant and machinery is subsequently supplied by him to some
other person (but not as an ongoing concern). This interpretation finds strength from the fact that
tax is chargeable at the time of supply and obvious interpretation of words ―accounted for and will
be paid by him‖ will be that tax will be paid at the time of next supply. It means that although tax
will be accounted for but will not be paid for the time being i.e. till the time the plant and
machinery is finally disposed of. By this analogy if this plant and machinery is again sold to
another registered person as an on-going concern, it will be accounted for in the accounts of next
buyer but no tax will be required to be collected/paid immediately.
4. Board is requested to consider the matter and give an authoritative ruling on the subject
for guidance of this and all other Collectorates.
[Issued by Collectorate of Sales Tax & Central Excise Lahore, under the signature of Mr.
Akhtar Ali, Collector addressed to Dr. Ashafq Ahmed Tunio, Secretary (ST L & P), CBR with
reference to letter from M/s C.A. Textile dated 10.12.2001].
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SALES TAX RULING/INSTRUCTION NO.7/2002
C. No. 1(82)STT/96 DATED 18 TH JANUARY, 2002
SUBJECT:- CIVIL APPEAL NO. 11-S OF 2001.
I am directed to enclose a copy of judgement dated 7 th January, 2002 of the
Honourable High Court in Civil Appeal No. 11-S of 2001 and to say that the High Court
has set aside the judgement dated 22 nd December, 2000 passed by the Customs, Excise &
Sales Tax Appellate Tribunal, Lahore Bench, Lahore.
2. The High Court has held that ―Gypsum‖ constitutes taxable goods and
that supply of ―Gypsum‖ in Pakistan is a taxable supply. It is a complete misconception
to urge that sales tax on ―Gypsum‖ is a levy on any kind of mining activity.
3. In the light of this judgement Collectors are advised to:
i) recover sales tax not paid by taxpayers on supply of ―Gypsum‖ on the
basis of Appellate Tribunal‘s order;
ii) quote the aforesaid judgement in all appeals filed against similar
judgements of Appellate Tribunal, Lahore in case of other minerals,
including coal;
iii) stress upon taxpayers that sales tax is chargeable on all taxable supplies
including those of minerals, as sales tax is levied on supplies of taxable
goods and not on mining/excavation activities.
[Issued by the CBR, Islamabad under the signature of
Secretary ST-L&P addressed to all the Collectors.]
Dr. Ashfaq Ahmed Tunio,