Sales Tax Instructions

Sales Tax Instructions, 2009
[Issued by the C. B. R., Islamabad, under the signature of Dr. Ashfaq Ahmed Tunio,
Secretary (ST-L&P), addressed to the Collector of Customs, Sales Tax & Central Excise, Multan.]
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C. NO.1(3)STR/2000 DATED 24 TH MAY, 2004
SUBJECT:- PAYMENT OF SALES TAX BY THE ELECTRICITY
GENERATING UNITS.
I am directed to refer to your letter dated 6 th May, 2004 on the subject cited
above and to state that suppliers of electric power other than WAPDA or KESC may
issue invoices for electricity supplied during a month immediately after the close of the
month.
2. The private power generating units / captive power plants are required to
file sales tax returns and pay sales tax by 15 th of the month following the month in which
the electricity was supplied.
[Issued by the C. B. R., Islamabad, under the signature of Dr. Ashfaq Ahmed Tunio,
Secretary (ST-L&P), addressed to M/s. All Pakistan Textile Mills Association, APTMA House,
Karachi.] Copy of letter No.PO/CC/28/0615, dated 6 th May, 2004 is reproduced below:-
C. NO.PO/CC/28/0615 DATED 6 TH MAY, 2004
SUBJECT:-
PAYMENT OF SALES TAX BY THE ELECTRICITY GENERATING
UNITS
Dear Sir,
We would like to draw your kind attention to a serious problem faced by the power
generating units who are supplying electricity to their sister concerns. Sales Tax Collectorates
have been making cases against the above said units on the premise that these units reported sales
tax of a tax period in sales tax return of the immediately subsequent period, which is not in line
with the provisions of the Act, 1990.
We would like to state that nature of the supply of these units is different than the normal supply
of taxable goods. It is a continuous process and if we strictly follow the provisions of section
2(44)(a) read with section 23(1) of the Sales Tax Act, 1990 then a registered person being a
(Power Provider) is required to issue sales tax invoice for each and every second which is not only
practically impossible but also will serve anybody‘s purpose. The Board is also aware of this fact
and therefore, as per rule 5 of SRO 124(I)/2000 dated 15 th March, 2000 WAPDA and KESC are
required to file monthly return by the 21 st day of the month following the month in which sales tax
was collected. The above said taxpayers, therefore, followed the practice adopted by WAPDA and
KESC and charged tax on monthly basis and deposit the same in monthly return of the tax period
following the month in which electricity was supplied.
It appears that the department is of the view that the above said units should deposit the
tax in the return of the tax period in which electricity was supplied or in other words these units
should pay the tax from their own pocket, which would clearly defeat the whole philosophy of
value added tax scheme. As iterated above Board is also well aware of this fact and that is why as