Sales Tax Instructions

Sales Tax Instructions, 2009
C. NO. 3(36)STP/99 DATED 20 TH OCTOBER, 2004
SUBJECT:-
CONCEPT OF BOOK ADJUSTMENTS AND PAYMENTS
UNDER THE SALES TAX ACT, 1990
I am directed to refer to subject cited above.
2. Under the provisions of section 73 read with section 7 of the Sales Tax
Act, 1990, the buyer is entitled to claim input tax credit, adjustment or deduction or
refund, if payment for the transaction exceeding value of fifty thousand rupees, is
transferred from the buyer‘s business bank account to the seller through a banking
instrument.
3. During the audit of a registered person, a question has arisen whether the
provisions of the aforesaid sections would be considered fulfilled in the following
conditions:-
(i)
(ii)
(iii)
(iv)
The supplier, a separate sales tax entity, being a subsidiary, supplies its total
taxable production to its parent company.
The supplier is situated within the premises of the parent company, is
managed by the same management for all administrative and management
purposes.
The parent company makes payment from its business bank account for the
purchases made by the subsidiary company (the supplier) from the debt owed
to it on account of receipt of taxable supplies, probably to reduce duplication
of banking transactions and after book adjustments, makes the remaining
payment to its subsidiary company.
No payment of amount exceeding fifty thousand rupees has been made in
cash.
4. An expert opinion of your organization is solicited whether the payments
made by the parent company from its own business bank account to the suppliers of its
subsidiary company, from the debt it owes to its subsidiary company, when the
subsidiary company is managed and administered by the same administration, sufficient
to fulfill the conditions of the aforesaid provisions of the statute read with book
adjustments in terms of the accounting principals?
[Issued by the Central Board of Revenue, under the signature of Mr. Aamer Amin Bhatti,
Secretary (ST-L&P), addressed to Mr. Shabbar Zaidi, M/s. A. F. Ferguson & Co. State Life
Building No.1-C, I. I. Chundrigar Road, P. O. Box 4716, Karachi.]
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C. No.1(17)CEB/96-Pt DATED 25 TH OCTOBER, 2004
SUBJECT:- CED ON INTERNET SERVICE PROVIDERS (ISPs) AND DATA