Sales Tax Instructions

Sales Tax Instructions, 2009
I am directed to refer to your letter dated 04.09.2004 on the subject cited above
and to clarify that in terms of sub-rule (3) of rule 20, when read in conjunction with the
preceding sub-rule of rule 20 of the Special Procedure Rules, 2004, if the goods supplied
are returned by the buyer, the supplier is required to issue a Credit Note, indicating
receipt of goods and he shall correspondingly reduce the amount of output tax in his
return for that tax period.
[Issued by the Government of Pakistan, Central Board of Revenue, [Sales Tax Wing],
under the signature of Mr. Aamer Amin Bhatti, Secretary (ST-L&P), addressed to Mr. Shahid M.
Khan, Director Finance, Indus Motor Company Ltd., Karachi.] Copy of letter written to the CBR:
Mr. Shahid Ahmad,
Member, Sales Tax
Central Board of Revenue
Islamabad.
CREDIT & DEBIT NOTE – CLARIFICATION ON PERIOD OF ADJUSTMENT
Reference to the Revised Credit and Debit Note brought about vide SRO 485(I)/2004
dated June 12 th 2004.
As per the revised procedures, supplies returned by unregistered persons are also being
catered for in the Credit & Debit Note Rules.
As regards the procedure for adjustment of Sales Tax in the Monthly Tax Returns, it is
our understanding that the Output tax will be adjusted, on basis of Credit Note issued by the
Company, for the tax period in which the Supplies are returns and / or cancelled.
The confusion is created on plain reading of rule 20(3) of Chapter III of above SRO,
which seems to imply that the originally return, for the tax period in which supply / payment was
received, needs to be retrospectively changed (i.e. would require revision of previous returns),
which we understand could not have been the intention of the law.
Your clarification with regard to above is requested for removing this confusion and for a
better and clearer understanding of the Credit & Debit Note and Destruction of Goods Rules.
Best Regards.
For Indus Motor Co. Ltd.,
Shahid M. Khan
Director Finance
********
C. NO. 3(12)ST-L&P/02 (PT) DATED 18 TH OCTOBER, 2004
SUBJECT:-
SPECIAL PROCEDURE FOR PAYMENT OF SALES TAX BY
RETAILERS ON VALUE ADDITION BASIS
I am directed to refer to subject cited above and to say that the different retail
sectors including retailers of motor-cycles, rubber tyres, mild steel products, locally
manufactured, electronic appliances of domestic use and in tin free steel had repeatedly
approached the Board to reconsider the minimum value addition bench-mark of 10%
especially for their sectors, as their value addition at retail stage was not more than 3% to
4%. On the recommendation of the Federation of Chambers of Commerce & Industry and
realizing the bench-mark of 10% value addition was not pragmatic for these sectors, the
minimum bench-marks for these sectors have been revised by suitably amending rule 19