Sales Tax Instructions

Sales Tax Instructions, 2009
4. Since, the supplies had already been made, any amount of tax would
have to be paid by the person from their own resources without being recovered from the
customers. It would, therefore, be difficult to recover any further amount from them other
than that they are willing and able to pay. The realistic course, therefore, would be to
consider the case as one under section 36(2) of the Act and recover dues from the
persons, instead of pursuing a course of prolonged and fruitless litigation, which may
ultimately prove futile. This will enable quick settlement of the case, avoid prolonged
litigation, benefit the exchequer and free the Collectorate to pursue other cases. There are
several procedures for such action where the Board has settled with taxpayer in order to
resolve issues instead of unnecessarily prolonging them. Similar strategies for recovery
are pursued by banks and even by NAB in plea bargain cases. In case of chronic noncomplaint
sectors like the weaving, processing, steel and retails sectors, the Government
has followed a policy of extending amnesties / relief measures in order to gradually coax
them into the tax net. Such measures include fixed or simplified tax schemes, amnesties
of past liabilities, waiver of further tax, additional tax and penalty, allowing adjustment of
input tax or trade discounts, reducing the demand to that actually proved by records or to
that based on turnover declared to income tax department, etc.
5. It is, therefore, advised that unless the Collectorates has enough evidence
for proving the fact of making supplies, and of mens rea in a court of law, the case may
be treated as one under section 36(2) of the Act, and the licensee of M/s. Medora may be
asked to deposit the amount of sales tax accordingly, and to avail the benefit under
S.R.O.247(I)/2004, dated 5-5-2004.
[Issued by the Government of Pakistan, (Revenue Division), Central Board of Revenue,
[Sales Tax Wing], under the signature of Dr. Ashfaq Ahmed Tunio, Secretary (ST-L&P),
addressed to the Collector (Enforcement), Sales Tax House, Near Nipa Square, Karachi.]
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C. NO.2(1)STP/2000(Pt.I) DATED 12 TH JUNE, 2004
SUBJECT:- REQUEST TO CLARIFY THAT A RETAILER IS ENTITLED TO
CLAIM ADJUSTMENT OF INPUT TAX PAID ON RAW
MATERIALS AND CONVERSION CHARGES PAID TO THE
VENDORS AGAINST OUTPUT TAX CHARGED ON SUPPLIES
MADE THROUGH RETAIL OUTLETS.
I am directed to refer to your letter dated 21.04.2004 on the subject cited above
and to say that a registered retailer may purchase raw material and get goods
manufactured from registered vendors against sales tax invoices and subsequently take
input tax adjustment thereon, subject to conditions under section 7 and 8 of the Sales Tax
Act, 1990.
[Issued by the C. B. R., Islamabad, under the signature of Dr. Ashfaq Ahmed Tunio,
Secretary (ST-L&P), addressed to M/s. Sefam (Private)Limited, Lahore.]
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