Sales Tax Instructions

Sales Tax Instructions, 2009
SALES TAX RULING/INSTRUCTION No.27/2002
C.No. 4(47)STB/98(Pt-II) DATED 2 ND APRIL, 2002
SUBJECT:-
REGISTRATION OF CONTRACTORS WITH SALES TAX
DEPARTMENT.
I am directed to refer to your letter No.6000/GST/06/E-6, dated 14 th February,
2002 on the subject cited above and to say that the clarifications provided to the officials
who had earlier visited CBR were actually as follows:-
i) All Government departments, including defence organizations, are
required to purchase taxable goods only from registered persons on
payment of sales tax, and against tax invoices. Therefore para (a) of
your letter is correct;
ii)
there is no sales tax on repair of goods, vehicles etc. However, if the
person making repairs also provides spare parts, replacement parts, or
any other taxable goods, the same are chargeable to sales tax on their
value. If the parts/materials used in repair are provided by the department
(which obviously must be purchased on payment of sales tax from some
registered person) and the contractor only provides/renders repair
services, such contractor is not required to be registered. Therefore para
(b) of your letter is correct to this extent;
(iii)
there is no sales tax on immovable property such as buildings and roads
etc., since these are excluded from the definition of ‗goods‘ under the
Sales Tax Act, 1990. Therefore, no sales tax is payable when a contractor
constructs a building or a road for a Government organization. However,
any subsequent supply and installation of airconditioners, fire fighting
equipment, etc. for such buildings is taxable, as such goods are not
‗immovable property‘.