Sales Tax Instructions

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(i)
Sales Tax Instructions, 2009
Clause (46) of section 2 of the Sales Tax Act, 1990 has been amended,
and a Notification SRO. 445(I)/2004, dated 12th June, 2004 issued
thereunder to exclude forward transactions of commodity trading at the
National Commodity Exchange Ltd. (NCEL) and goods delivered under
Murabaha (a form of Islamic financing arrangement) from the purview
of 'supply'. Thus, such transactions shall not be chargeable to sales tax.
The existing Debit & Credit Note Rules did not provide for all the
situations envisaged under section 9 of the Act. Accordingly, all such
situations in which debit and credit notes are to be issued (as mentioned
in the foregoing provision of law) have been incorporated in Chapter III
of the Sales Tax Rules, 2004 [SRO. 485(I)/2004, dated 12.06.2004]. The
period for issuing such notes has been increased to 180 days (extendible
by the Collector by a further 180 days). Provision has also been made
for circumstances where an unregistered buyer does not issue the debit
note.
C. SIMPLIFICATION MEASURES:
(i)
(ii)
(iii)
New Sales Tax Refund Rules have been notified in Chapter V of the
Sales Tax Rules, 2004 [SRO. 485(I)/2004, dated 12th June, 2004].
These rules mark a radical change in the way refund claims are
processed and sanctions, and are based on automation, risk management
and profiling system. The rules shall come into effect from a date to be
notified by the Board. Collectors are advised to make necessary
arrangements for the smooth introduction of the new refund
management system.
The system of sales tax registration and related processes including
voluntary registration, compulsory registration and de-registration has
been re-engineered by substitution of Chapter III of the Sales Tax Act,
1990. As a result, the statutory provisions have been simplified while
detailed procedures for registration and de-registration have been
notified as Chapter I of the Sales Tax Rules, 2004 [SRO. 485(I)/2004,
dated 12th June, 2004]. The Collectors are advised to thoroughly go
through these rules and take necessary action to ensure that the reengineered
processes are in place from 1st July, 2004 onwards so that
the prospective registrants do not face any inconvenience.
The powers to condone delay under section 74 of the Act have been
delegated to the Collectors by inserting a new provision in the said
section. Collectors should exercise these powers carefully with the aim
to resolve genuine problems of taxpayers.
D. TECHNICAL MEASURES:
(i)
Section 73 of the Act has been substituted and re-worded to allow
taxpayers to transfer the sales tax invoice amount within 180 days of
issuance of the invoice. It also provides for separate declaration of
business bank accounts of the buyer and the supplier. An amendment